Television-Induced Tourism: Evidence from Croatia

Atlantic Economic Journal - This paper analyzes the extent to which the filming of the popular television show Game of Thrones affected tourism in the Croatian city of Dubrovnik. Using monthly data...     

Not Every Kind of Outward FDI Increases Parent Firm Performance: The Case of New EU Member States

Using a large firm-level dataset we investigate what kind of firms from new EU member states from Central and Eastern Europe (CEECs) tend to invest abroad (testing of self-selection hypothesis), and what is the impact of outward FDI on their productivity (testing of learning-by-investing hypothesis). We find that the best firms tend to self-select into outward FDI. There is also a positive effect of outward FDI on productivity growth of investing firms from CEECs, the strongest being in the case of Estonia, Romania, Czech Republic, and Slovakia. The positive impact of becoming a first-time foreign investor is relatively long lasting, but comes into effect only in investments in Western European or other CEECs and in the case of manufacturing subsidiaries.     

Rainbow trend options: valuation and applications

Asset selection and timing decisions are major investment concerns. To resolve these issues simultaneously, a new class of rainbow trend options is proposed. The diversification effect of rainbow options can reduce the importance of asset selection decisions and trend options can mitigate unfavorable effects on market entry and exit decisions. We consider a general framework to facilitate the derivation of analytic pricing formulas for simple, pure, and Asian rainbow trend options using the martingale pricing method. The properties of these options and their Greeks are analyzed. We also investigate the performance of the dynamic delta hedging strategy for issuers of rainbow trend options. Last, this paper explores the applications of rainbow trend options for hedging price risks, designing executive stock options, modifying countercyclical capital buffer proposed by Basel Committee, and acting as control variates of the Monte Carlo simulation.     

Audit Partner Disciplinary Actions and Financial Restatements

This study investigates the signalling role and rectification effectiveness of an audit partner disciplinary system. The signalling role refers to whether sanctions reflect the poor audit quality of disciplined audit partners, and rectification effectiveness addresses whether disciplinary actions enhance subsequent audit quality. The sample consists of Taiwanese listed companies, in the period 2000 to 2006, where the identities of audit partners who sign audit reports and who are sanctioned are accessible. Empirical results indicate that in the pre‐sanction period, the probability of financial restatements by clients of disciplined audit partners is significantly higher than that of non‐disciplined audit partners. The more severe or frequent the sanctions, the higher the likelihood of financial restatements in the pre‐sanction period. These findings imply that audit partner disciplinary actions can serve as a signal of lower audit quality provided by those partners. The rectification effectiveness of disciplinary actions is examined from two perspectives: (1) the effects on subsequent improvements of audit quality of disciplined audit partners; and (2) audit quality enhancement of successor non‐disciplined audit partners who accept clients from disciplined audit partners. Empirical results show a lower probability of restating financial statements audited by disciplined audit partners after sanctions. We also find a lower likelihood of restating financial statements audited by successor non‐disciplined audit partners in the post‐sanction period. Both findings support our conclusion that audit partner sanctions improve audit quality. Overall, audit partner disciplinary actions can signal lower quality audit partners and are effective in enhancing audit quality.     

Fiscal policy,government debt,and economic growth in the Kaleckian model of growth and distribution

This article presents the Kaleckian model of growth and distribution that sets a budget deficit ratio as an indicator of fiscal policy and examines the short- and long-run effects of an increase in budget deficits and a rise in income tax rates on the economy. The key short-run outcomes are as follows. First, expanded budget deficits have a positive effect on the rate of capacity utilization. Second, the tax rate for wage income does not affect the rate of capacity utilization, whereas the tax rate for capital income has a favorable impact on it. This result implies that raising the tax rate for capital income can be an important policy instrument for stimulating the economy. Third, we find that the economy exhibits a wage-led aggregate demand in the short run. The main long-run results are as follows. First, the effect of expanded budget deficits on the growth rate is ambiguous, since a higher debt burden negatively influences the rate of capacity utilization and hence economic growth, despite the increase in demand caused by government borrowing. A higher budget deficit ratio thus raises the growth rate only if a certain condition is satisfied. Second, the tax rate for capital income has a positive impact on the growth rate. Third, the economy shows a wage-led growth in the long run.     

Testing for Bubbles in Housing Markets: A Panel Data Approach

We employ recently developed cross-sectionally robust panel data tests for unit roots and cointegration to find whether house prices reflect house related earnings. We use U.S. data for Metropolitan Statistical Areas, with house price measured by the weighted-repeated-sales index and cash-flows by market tenants’ rents. In our full sample period, an error-correction model is not appropriate, i.e. there is a bubble. We then combine overlapping 10-year periods, price–rent ratios, and the panel data tests to construct a bubble indicator. The indicator is high for the late 1980s, early 1990s and since the late 1990s. Finally, evidence based on panel data Granger causality tests suggests that house price changes are helpful in predicting changes in rents and vice versa. CERGE-EI is a joint workplace of the Center for Economic Research and Graduate Education, Charles University, and the Economics Institute of the Academy of Sciences of the Czech Republic.     

壳聚糖对水中重金属吸附性能的研究进展

为了有效处理水中重金属污染和提高虾头虾壳中壳聚糖的利用效率,本文对提取壳聚糖的化学降解法、微生物培养法、酶解法和微波技术法进行综述,分析壳聚糖的吸附原理、最优吸附条件和壳聚糖复合材料的优点,发现化学降解法为目前普遍使用的壳聚糖提取方法,溶液的pH值、反应温度、吸附剂用量及壳聚糖复合物的种类均会影响壳聚糖对水中重金属的吸...     

Applying jump-diffusion processes to liquidate and convert venture capital

This study attempts to apply real options and expand the model designed by Lin and Huang [Lin, T.T., Huang, Y.T.: J. Technol. Manage. 8(3), 59–78 (2003)], which helps venture capital (VC) companies to optimize project exit decisions. The expected discounted factor and a jump-diffusion process combine to assess the value of a start-up company, and determine the threshold of the exit timing of liquidation or convertibility for establishing the optimal disinvestment evaluation model for VC companies. When the project value is below V_L^*V_L^\ast, the VC company carries out liquidation, but when the project value exceeds V_C^*V_C^\ast, the VC company performs convertibility. The project value is ranging between (V_L ^*,V_C^*)\left({V_L ^\ast,V_C^\ast}\right), and the best choice is holding the decision and waiting to carry out the rights of liquidation and convertibility next time. Besides, this work attempts to identify the expected discounted time in terms of the investment time for VC companies.