The external and domestic side of macroeconomic adjustment in China

This paper sheds new light on the external and domestic dimension of China’s exchange rate policy. It presents an open-economy model to analyse the macroeconomic adjustment process in China under both flexible and fixed exchange rate regimes. The model-based results indicate that persistent current account surpluses in China cannot be rationalized, under general circumstances, by the occurrence of permanent technology or labour supply shocks. As a result, to understand the macroeconomic adjustment process in China it is necessary to mimic the effects of potential inefficiencies, which induce the subdued response of domestic absorption to permanent income shocks, thereby causing the observed positive unconditional correlation of the trade balance and output. The paper argues that these inefficiencies can be potentially seen as a by-product of the fixed exchange rate regime, and can be approximated by a stochastic tax on domestic consumption or a time-varying transaction cost technology related to money holdings. Our results indicate that a fixed exchange rate regime with financial market distortions, as defined above, might induce negative effects on GDP growth in the medium term compared with a more flexible exchange rate regime.     

Integrating art as a trans‐boundary element in a radical innovation framework

Companies have learned that radical innovations (RIs) are a prerequisite to grow organically. However, companies struggle to identify and introduce RIs, as their inherent high uncertainties and novelty challenge established organisations and management routines. To address the first challenge, companies need to take a holistic approach and design a trans‐boundary environment of creativity, trans‐disciplinary and entrepreneurial spirit. This environment attracts and retains visionary people, fosters generation of new opportunities and cultivates adaptability. By adapting evaluation metrics for RI, setting up flexible processes, and promoting trans‐disciplinary exchange, the second challenge can be addressed. Increased research has concentrated on several aspects of RI lately, but so far a combining framework is missing. Our paper bridges this gap by developing an improved theoretical framework, enhancing the existing literature and introducing art as a method to advance trans‐disciplinary interchange. In a case‐study approach, we have applied our framework to the research and development department of Vodafone Research and Development, Germany, as they integrate art methodically in their research and development process. Analysing their RI capabilities, we identify the trans‐disciplinary exchange with artists as a novel initiator and driver of RI, which has not yet been adequately considered.     

The impact of off-balance-sheet activities on banks returns: An application of the ARCH-M to Canadian data

This paper revisits the impact of off-balance-sheet (OBS) activities on banks risk-return trade-off. Recent studies (e.g., Stiroh and Rumble, 2006) show that increasing OBS activities does not necessarily yield straightforward diversification benefits for banks. However, introducing a risk premium in the standard banks returns models, and resorting to an ARCH-M procedure, Canadian data suggest that banks risk-return trade-off displays a structural break around 1997. In the second subperiod of our sample (1997–2007), we find that the noninterest income generated by OBS activities no longer impacts banks returns negatively. While during the first period (1988–1996) the volatility variable is not significant in any returns equations, a risk premium eventually emerges, pricing the risk associated to OBS activities.     

Longitudinal satisfaction measurement using latent growth curve models and extensions

Latent growth curve modeling (LGCM) is used to describe changing latent aspects over time manifested in observed indicators. A case study of satisfaction indicators of cinema visitors observed over 12 months is used to detect such transitions from excitement factors to performance factors to basic factors, as mentioned in the Kano-model. The sample is split up into groups depending on slope trajectories and intercepts. More precisely, a growth mixture model (GMM) with random slopes and random intercepts is incorporated offering the possibility of visualizations including individual intercept and slope values. This figure allows deeper insight into the modifications of time.     

Quo Vadis,marketing? Toward a relationship marketing paradigm

The marketing mix and its 4Ps have remained the marketing paradigm for decades. In the article it is argued that the foundation for this paradigm is weak and that it has had negative effects on marketing research and practice. Contemporary research into services marketing and industrial marketing demonstrates that a new approach to marketing is required. This new approach is based on building and management of relationships. A paradigm shift in marketing is under way. The thoughts and actions of marketing academics and practitioners should not be constrained by a paradigm from the 1950s and 1960s.     

Market Response to Investor Sentiment

This paper reconsiders the effect of investor sentiment on stock prices. Our main contribution is that, in addition to the intermediate term return predictability, we also analyze the immediate price reaction to the publication of survey‐based investor sentiment indicators. We find that the sign of the immediate market response is the same as that of the predictability at intermediate time horizons. This is consistent with underreaction to cash flow news or with investor sentiment being related to mispricing. It is inconsistent with the alternative explanations of a rational response to cash flow news or sentiment indicators providing information about future expected returns.