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.     

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.     

Probabilistic Bounds on the Virtual Multipliers in Data Envelopment Analysis: Polyhedral Cone Constraints

The paper is concerned with the incorporation of polyhedral cone constraints on the virtual multipliers in DEA. The incorporation of probabilistic bounds on the virtual multipliers based upon a stochastic benchmark vector is demonstrated. The suggested approach involves a stochastic (chance constrained) programming model with multipliers constrained to the cone spanned by confidence intervals for the components of the stochastic benchmark vector at varying probability levels. Consider a polyhedral assurance region based upon bounded pairwise ratios between multipliers. It is shown that in general it is never possible to identify a center-vector defined as a vector in the interior of the cone with identical angles to all extreme rays spanning the cone. Smooth cones are suggested if an asymmetric variation in the set of feasible relative prices is to be avoided.     

Expiration day effects of stock index derivatives in Germany

There is a significant increase in trading volume on quarterly futures expiration days in Germany. Delays in the opening for the majority of index stocks indicate that a large part of this extraordinary volume is indeed traded right at the opening of the market. an increase in trading activity is also observed over the 10-minute settlement period for index options. Volatility remains unchanged around the expiration of a futures contract. an increase is found for the 10-minute settlement period of DAX options. Return reversals as the measure for the economic costs of contract expirations are significantly higher when a futures contract expires at the open. When an option expires at the close no clear pattern for reversals can be found.     

Notes and Communications

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Notes and Communications