Closed-Form Mortgage Valuation Using Reduced-Form Model

Valuing mortgage-related securities is more complicated than valuing regular defaultable claims due to the borrower's prepayment behavior as well as the possibility of default. Some researchers use a structural-form model to obtain the closed-form formulas for the mortgage value. With this method, however, it is difficult to identify the critical region of early exercise. As an alternative, the reduced-form model developed in this article is able to value the mortgage without setting boundary conditions, and it can thereby accurately handle the multidimensional space of correlated state variables. The purpose of this article is to derive a closed-form solution of the mortgage valuation equation under a general reduced-form model that embeds relevant economic variables. This new approach enables portfolio managers to undertake sophisticated portfolio optimization and hedging analyses. An implementation procedure for the model is also provided to demonstrate how the valuation framework can be utilized in practical applications.     

Effects of enforcement on illegal markets: Evidence from migrant smuggling along the southwestern border

The paper analyzes the effects of tighter border control on the illegal crossing market between Mexico and the United States. Combining panel data on illegal migrants with enforcement statistics, the effects of enforcement are found to be moderate: prices of border smugglers (‘coyotes’) increased by only 17%, while the demand for smugglers has remained unchanged. Enforcement has however shifted illegal migrants to remote crossing places. Border crossing is now more time-intensive with higher prices for coyotes and risk of death. This geographic substitution raised migration costs by $140, more than twice the effect of enforcement on smuggling prices.     

Does high supply chain integration enhance customer response speed?

The capability of customer response speed is commonly employed by firms that wish to strengthen their relationship with customers in order to maintain a high level of service in a hypercompetitive environment of rapidly changing technology. Improved customer response speed also helps manufacturers respond more rapidly to satisfy customer needs. However, does high level of supply chain integration with customers have positive impact on customer response speed? This study proposes a conceptual model to examine antecedents to better firm performance, with customer response speed as a mediator. The conceptual model was empirically tested using data collected from 809 manufacturing companies in the Greater China Region. The results show that the nature of the relationship between customer integration and customer response speed may vary substantially from one area to another. Also, customer response speed mediates between customer integration and firm performance in China and Taiwan.     

It Takes Three to Tango: Exploring the Interplay among Training Intensity,Job Autonomy,and Supervisor Support in Predicting Knowledge Sharing

This study explored whether the relationship between perceived training intensity and knowledge sharing is prone to combined moderating influences. We operationalized perceived training intensity as a challenge stressor, in accordance with the challenge‐hindrance framework of work stressors. The results of a study of 129 employees from three Norwegian service industries revealed a positive relationship between perceived training intensity and supervisor‐rated knowledge sharing for employees reporting high levels of perceived job autonomy and high levels of perceived supervisor support. In contrast, we found a negative relationship between perceived training intensity and supervisor‐rated knowledge sharing for employees reporting high levels of perceived job autonomy and low levels of perceived supervisor support. These findings suggest that supervisors are of vital importance in facilitating knowledge sharing among employees in settings where developmental challenges are prevalent and perceptions of job autonomy are high. Implications for future research and practice are also discussed. © 2014 Wiley Periodicals, Inc.     

Family life in grocery stores – a study of interaction between adults and children

Today the family is seen as a unit for food choice and consumption. The influence of family members on food choice comprises several stages that can be carried out both in the private home and in the public sphere, such as the grocery store. This makes the grocery store a context in which ordinary family life can be observed. The aim was to study families and the interaction between children and adults in the grocery store, focusing on young people's involvement in food shopping. Hidden observation and family interview methods were used. A total of 338 people were observed in seven different grocery stores in Stockholm during the summer and autumn of 2003. Seven family interviews, involving a total of 29 persons, were conducted in Uppsala in the spring of 2003. In the interviews, parents reported avoiding shopping for food together with children as they experienced it as stressful and exhausting. The observations showed that family life in the grocery store comprises not only the food purchase, but also bringing up children and consumer education. Young people's involvement in the food purchase varied depending on their age and the specific product. The different behaviour observed may be interpreted as reflecting the variation in ways of bringing up children at home. Another conclusion is that a public place such the grocery store facilitates pedagogical situations and can work as a tool for informal education.     

When hubs forget,lie, and play favorites: Interpersonal network structure,information distortion,and organizational learning

The interpersonal network structure of an organization directly influences the diffusion and recombination of ideas and can thus facilitate or impede organizational learning. Most interpersonal networks have ‘hubs’—individuals who have significantly more connections than does the average member. This raises important questions about how hubs influence organizational learning outcomes. Does the presence of hubs improve or impair performance? What happens if hubs forget or misrepresent information that is transmitted through the network? Using simulation models, we find that moderately hubby networks outperform both very hubby and democratic networks. We also find that moderate amounts of information omission or misrepresentation can be surprisingly beneficial to performance, though the patterns of their effects are strikingly different. Copyright © 2013 John Wiley & Sons, Ltd.     

When bad news is sugarcoated: Information distortion,organizational search and the behavioral theory of the firm

Most work in strategy and organization theory assumes that performance feedback is straightforward to interpret and truthfully reported. We raise the following question: How might the systematic distortion of negative performance information affect organizational learning and future performance? We formulate a model where (1) members do not always report the truth about what they know about their performance level, especially when performance is below aspiration and (2) their propensity to distort information is subject to social influence. We find that organizations that are characterized by a high level of information distortion tend to perform more poorly but that the effect of a low rate of sugarcoating may, in some conditions, be more benign than the literatures seem to suggest. Copyright © 2013 John Wiley & Sons, Ltd.     

The Development of the Economy of Taiwan

The development of the Taiwanese economy over the past five decades was manifested in rapid growth, export expansion, stable prices, full employment, and relatively equitable income distribution. In this development, the government has played an important role. This paper sets out to report the important features of the Taiwanese economy during the post-war period to 1998, and to examine the policies which crucially contributed to its successful development.     

A simple and effective evolutionary algorithm for multiobjective flexible job shop scheduling

This paper addresses the multiobjective flexible job shop scheduling problem (MOFJSP) regarding minimizing the makespan, total workload, and maximum workload. The problem is solved in a Pareto manner, whose goal is to seek for the set of Pareto optimal solutions. We propose a multiobjective evolutionary algorithm, which utilizes effective genetic operators and maintains population diversity carefully. A main feature of the proposed algorithm is its simplicity—it needs only two parameters. Performance of our algorithm is compared with seven state-of-the-art algorithms on fifteen popular benchmark instances. Only our algorithm can find 70% or more non-dominated solutions for every instance.     

Regime-switching effects of debt on real GDP per capita the case of Latin American and Caribbean countries

In this paper, we try to investigate how the debt and real GDP per capita relationship varies with indebtedness levels and other country characteristics in a balanced panel of 21 developing Latin American and Caribbean countries over the period 1992–2006. The empirical results indicate that there exist two threshold values of 32.88% and 55.89%. The latter is lower than the Maastricht criterion and Stability and Growth Pact of a total external Debt per GDP ratio at 60% in the OECD countries. Both thresholds divide our panel into three regimes. In the middle (stimulus) regime, the Debt per GDP ratio has a positive impact on real GDP per capita, which is consistent with the stimulus view (Eisner, 1984). However, the impact becomes negative and consistent with the crowding-out view (Friedman, 1977, 1985) in the left and right (crowding-out) regimes. Based on our findings, we find no supportive evidence for Ricardian view (Barro, 1989). Therefore, our empirical results have important implications for fiscal policymakers in these Latin American and Caribbean countries.