Information asymmetry,information dissemination and the effect of regulation FD on the cost of capital

This paper considers the impact of Regulation Fair Disclosure (FD) on firms’ information environments and costs of capital. For NYSE/Amex firms we find little evidence of a change in the cost of capital attributable to Regulation FD. For Nasdaq firms we find that Regulation FD increased firms’ costs of capital by 10–19 basis points per annum though the statistical significance of this change is modest for some of our models. We also show substantial cross-sectional variation in the cost of capital changes. We find that cost of capital changes were negatively related to both pre-regulation firm size and PIN. In addition to the findings regarding Regulation FD, this research contributes to a growing literature that documents links between firms’ information environments and their costs of capital.     

Macroeconomic Policy Making,Exchange Rate Adjustment and Current Account Imbalances in Emerging Markets

Given a series of crisis events after 2007 the discussion about the adjustment channels of current account imbalances has been revived. We examine the role of exchange rates vs macroeconomic policies as determinants of current accounts for a set of 86 mainly emerging market economies between 1990 and 2013 to identify adjustment channels for global imbalances. We find that nominal exchange rates are not the main determinant of current account positions. Instead, depending on the region, monetary and/or fiscal policies are identified as the main driving force of current accounts. For East Asia and the oil exporting countries sterilization policies, i.e. relatively tight monetary policies, are the main determinants. In contrast for many European periphery countries fiscal policy stances are at the core of current account positions. Only for the Latin American countries does the exchange rate play a significant role as determinant of current account positions.     

The development of olive tourism in Western Australia: a case study of an emerging tourism industry

The recent development of olive growing in Western Australia, and its amalgamation with tourism and hospitality, provides opportunities for growers to showcase their products and for visitors to experience olive‐tasting and learn about an ancient food culture and rural activity ‘transplanted’ into the ‘New World’ from its ‘Old World’ roots. The present study examines the dimensions of this emerging niche market in Western Australia. Face‐to‐face and telephone interviews were conducted among 23 small olive‐growing operations located in this region to understand their scope for developing olive tourism. Overall, respondents' comments suggest that their involvement in olive tourism and hospitality could substantially provide benefits for visitors to rural areas and become a complementary alternative to other activities. To fulfil this potential, however, growers heavily rely on greater collaboration within their own industry, as well as on local authorities and tourism bodies in ways that include assistance, partnerships and promotion. Moreover, collaboration between olive growers and regional/tourism stakeholders, as well as government support may not only contribute to the sustainability of olive growing, but also to the emergence of olive tourism. In turn, these developments may also help develop a culinary identity and a tourism concept that may help minimise the threats of outside competition (cheaper olive imports) and rural decline. Copyright © 2010 John Wiley & Sons, Ltd.     

Access to Bottleneck Inputs under Oligopoly: A Prisoners' Dilemma?

We analyze the incentives of vertically integrated oligopolists to concede access to their bottleneck inputs to an entrant in the downstream market. First, two vertically integrated incumbents make access price offers to an entrant that chooses which one to accept, if any. Second, firms compete on Salop's circle. The firms may be asymmetrically located on the circle, to reflect differences in consumer shares. For some levels of asymmetry, the incumbents face a prisoners' dilemma with respect to conceding access to their bottleneck inputs. Entry by a downstream firm may lead to lower retail prices. However, entry may also lead to higher retail prices for the access provider and for the entrant. We also consider the cases where there are several incumbents and where the entrant makes the access price offers.     

Incentives to invest and to give access to non-regulated new technologies

We analyze the incentives of a vertically integrated firm, which is a regulated monopolist in the wholesale market and competes with an entrant in the retail market, to invest and to give access to a new wholesale technology. The new technology represents a non-drastic innovation that produces retail services of a higher quality than the old technology, and is left unregulated. We show that for intermediate values of the access price for the old technology, the vertically integrated firm may decide not to invest. When investment occurs, the vertically integrated firm may be induced to give access to the entrant for a low access price for the old technology. Furthermore, when both firms can invest, investment occurs under a larger set of circumstances, and it is the entrant the firm that invests in more cases. We also discuss the implications for the regulation of the old technology.     

Leveraging competitiveness upon national cultural traits: the management of people in Brazilian companies

This paper aims to discuss the leveraging of competitiveness upon cultural traits. Since the globalization process has raised a series of challenges for companies around the world, companies have sought to respond mainly through the adoption of management practices proved to be successful elsewhere. However, due to the anchoring of many management practices, especially those of human resources, in the socio-cultural context of a country, the import and/or transfer of management practices between different contexts risk resulting in changes which may be only superficial. There are, however, some exceptions. Some managers have chosen to build their companies' competitiveness through management practices firmly anchored on the cultural traits of their countries, instead of looking for practices from successful companies. This process is obviously not simple because it requires from company leaders first the capacity to re-signify the cultural trait in a different manner, i.e. to perceive it as a source of competitiveness for the company and, second, the competence to build a management practice upon this cultural trait so that it will leverage the competitiveness of the company. In order to illustrate how typical cultural traits from a country may leverage the competitiveness of a company, we present the case of Natura, a Brazilian cosmetics manufacturer, which has constructed much of its competitiveness through the adoption of management practices anchored in some typical Brazilian cultural traits. The analysis of the case demonstrates that this process of developing competitive management practices is feasible, but it must be based upon a solid system of values that the team leader practises or wants practised. Otherwise, it is unlikely that the management practices will stand or that people will be committed to them.     

Analysing pollution by way of vertically integrated coefficients, with an application to the water sector in Aragon

In this paper, we adopt Pasinetti's approach of vertically integratedsectors in order to disaggregate pollution into its most significantcomponents. Vertical integration allows us to obtain five components(and at least five measurement indices) corresponding to eachsector and each type of pollution. These indices overcome someof the deficiencies of the traditional Rasmussen-type coefficients.The empirical application is carried out by reference to thewater sector in Aragon, a region which lies in north-easternSpain, for five polluting factors, namely: water returns, biologicaloxygen demand at five days (BOD5), suspended solids (SS), nitratesand phosphates.     

Rational speculation and exchange rates

Models of exchange rates have typically failed to produce results consistent with the key fact that real and nominal exchange rates move in ways not closely connected to current (or past) macroeconomic variables. Models that rely on the same shocks to drive fluctuations in macroeconomic variables and exchange rates typically imply counterfactually-strong co-movements between them. We develop a model in which new information leads agents to change their rational beliefs about risk premia on foreign exchange markets. These changes in risk premia work through asset markets to cause real and nominal exchange rates to change without corresponding changes in GDP, productivity, money supplies, and other key macro variables.     

The future of olive groves on sloping land and ex-ante assessment of cross compliance for erosion control

Under the past Common Agricultural Policy (CAP) olive oil subsidy regime, farmers were eligible for subsidies on the basis of the amount of olive oil they produced. This led to an intensification of production, particularly on flat land, and had in most cases negative environmental effects, such as more soil erosion on sloping land and more pollution. With the decoupling of agricultural support under the newly established rules of the CAP, formalised in 2005, cross compliance measures have become obligatory.In this paper an ex-ante assessment is made of the application of cross compliance for soil erosion control (natural cover crops and terrace maintenance) in hilly and mountainous olive groves in Trás-os-Montes in Portugal. A linear programming model was developed to assess the various socio-economic and environmental effects of four different development scenarios for olive groves. The scenarios were developed on the basis of changing market prices, wage rates and subsidies; their effects included shifts towards intensification, abandonment and organic farming. Simulations considering a minimum return to labour constraint showed very high levels of abandonment, particularly in combination with cross compliance obligations. However, even without this minimum return to labour constraint, abandonment would reach more than 20% in three out of the four scenarios. The model showed that cross compliance obligations could be quite effective in reducing erosion, but that they would depress income in all scenarios as a result of higher abandonment and lower percentage shifts towards intensive systems.     

The nexus between firm-supply-chain relationships and the potential for tourism development: A case study approach

This exploratory study examines the importance of firm-supply chain relationships for tourism development. Based upon prior observations, two firms seeking to boost their tourism offerings and operating in a popular Vietnamese tourist destination were selected. Semi-structured face-to-face and online interviews were conducted and complemented by on-site visits, and firm information. Various salient dimensions emerged from the data analysis. The ‘performance catalyst’ and ‘detectable value adding’ dimensions underscore the supply chain's benefits, while the ‘discerning relations’ dimension highlights deeper relationships through mutual support, building trust, or demonstrating care. Conceptually, the study proposes a framework with associated theoretical and practical implications.