Corporate Hedging Policy and Equity Mispricing

We show that firms’ use of derivatives is negatively associated with stock mispricing. This result is consistent with the notion that hedging improves the transparency and predictability of firms’ cash flows resulting in less misvaluation. Furthermore, we show that the negative relationship between mispricing and hedging is particularly strong when market value is below fundamental value, which is consistent with prior evidence that hedging has a positive impact on firm valuation. Finally, we provide evidence that a “spread‐out” hedging policy that entails the use of a variety of derivative contracts can be more effective in reducing mispricing.     

The Value of Investor Protection: Firm Evidence from Cross-Border Mergers

International law prescribes that in a cross-border acquisitionof 100% of the target shares, the target firm becomes a nationalof the country of the acquiror, and consequently subject toits corporate governance system. Therefore, cross-border mergersprovide a natural experiment to analyze the effects of changesin corporate governance on firm value. We construct measuresof the change in investor protection in a sample of 506 acquisitionsfrom 39 countries. We find that the better the shareholder protectionand accounting standards in the acquiror's country, the higherthe merger premium in cross-border mergers relative to matchingdomestic acquisitions.     

The Impact of Employees' and Managers' Training on the Performance of Small‐ and Medium‐Sized Enterprises: Evidence from a Randomized Natural Experiment in the UK Service Sector

We investigate the relationship between employees' and managers' training and firm performance using a policy intervention that randomly assigned training support to small‐ and medium‐sized enterprises in the UK accommodation and food service sector. Because the number of firms self‐selected into training exceeded available places, training was randomly assigned to some firms, resulting in a randomized natural experimental design that allowed us to identify the average effect of training on treated firms. Our empirical results suggest that employees' training had a stronger positive impact on firms' labour productivity and profitability than that of managers'.     

A life history approach to perceptions of global climate change risk: young adults’ experiences about impacts,causes, and solutions

Although the general acceptance of human-influenced global climate change within the technical sphere of science is important to consider, public perceptions of global climate change risks, impacts, causes, and solutions are as important to policy actions as scientific findings. Yet, studies analyzing climate change risk perceptions suffer from a number of limitations or use only a handful of approaches. Using a limited life history approach, this article answers calls for additional qualitative approaches in risk perception research. This article (1) introduces risk perception researchers to the limited life history method; (2) discovers that young adults articulate climate change solutions at the individual level, often as consumers, and blend their responses to climate change risks and advocacy for solutions with a general, environmentally friendly orientation, a ‘green posture;’ and (3) contends the key sources informing young adults’ perceptions about climate change risk have changed significantly from previous studies.     

Federal tax competition and the efficiency consequences for local taxation of revenue equalization

Recent work has shown that a system of equalization grants can neutralize the efficiency loss caused by tax competition among lower-level governments. These models, however, ignore the vertical tax externalities that occur when the federal and lower-level governments levy taxes on the same base. This paper incorporates equalization grants into a standard capital tax competition model in which there are horizontal tax externalities between jurisdictions and vertical tax externalities between the levels of government. It is shown that, even in the presence of vertical tax externalities, an efficient level of lower-level government taxation can be achieved with a modifying version of a standard equalization grant formula.     

A Family of Differential Input Demand Systems with Application to Greek Agriculture

This paper develops a family of input demand systems via alternative parametrisations of Theil's differential model. Each member of this family is as flexible as any other locally flexible functional form. More importantly, selection among the competing family members is possible via simple parameter restrictions. The family of differential input demand systems is applied to the agricultural sector in Greece for the period 1961–96. Formal tests suggest that the model with the CBS-type effects dominates the alternative models. Divisia and price elasticities are calculated from the selected model and a decomposition of changes in the demand for inputs into technical change, total input volume, substitution, and residual effects is performed. The empirical results are quite reasonable. Overall, the analysis in this paper indicates that, in certain cases, the differential approach may provide an attractive alternative to the dual approach in modelling production behaviour.     

Testing for the LOP under nonlinearity: an application to four major EU pork markets

This article develops an econometric procedure to test the validity of the Law of One Price (LOP) under nonlinearity and to distinguish between its strong and its weak version. The procedure is applied to four major EU pork markets using weekly prices from 1991 to 2008. The empirical results suggest that the markets are well integrated, with deviations from the steady‐state price differentials corrected nonlinearly. The LOP is valid for all market pairs and for the pair Germany–Spain it holds in its strong version.     

Trends in tourism planning and development

A number of tourism planning principles is considered and reference is made to the methodology of ekistics (the study of human settlements). Patmos, a Greek island, is taken as a case study, and the results of this tourism project are assessed in relation to the planning principles and methodology outlined.