How do manufacturing exports react to the real exchange rate and foreign demand? The Chilean case

How do manufacturing exports react to the real exchange rate and to foreign demand? We investigate this question with a Chilean panel data spanning from 2003Q1 to 2016Q4, using publicly available data. In the long term, we find that exports strongly co-integrate with external demand, whereas not with the level of the real exchange rate. The short-run elasticities of manufacturing exports differ in size: (a) the elasticity of foreign demand—approximated by trading partners' activity aggregates—ranges between 0.8 and 1.4; and (b) the elasticity with respect to the bilateral real exchange rate is comprehended in the interval [0.4–0.6]. Core estimated elasticities pass usual robustness checks. The fall in manufacturing exports' growth in 2014–16 is consistent with a persistent slowdown in foreign demand, which has been partially offset by an average depreciation of the bilateral real exchange rate (with respect to destination countries of these exports). The transience of the effect of the real exchange rate is coherent with its exhibited stationarity and also consistent with its role of shock absorber.     

A pairs trading strategy based on linear state space models and the Kalman filter

Among many strategies for financial trading, pairs trading has played an important role in practical and academic frameworks. Loosely speaking, it involves a statistical arbitrage tool for identifying and exploiting the inefficiencies of two long-term, related financial assets. When a significant deviation from this equilibrium is observed, a profit might result. In this paper, we propose a pairs trading strategy entirely based on linear state space models designed for modelling the spread formed with a pair of assets. Once an adequate state space model for the spread is estimated, we use the Kalman filter to calculate conditional probabilities that the spread will return to its long-term mean. The strategy is activated upon large values of these conditional probabilities: the spread is bought or sold accordingly. Two applications with real data from the US and Brazilian markets are offered, and even though they probably rely on limited evidence, they already indicate that a very basic portfolio consisting of a sole spread outperforms some of the main market benchmarks.     

Searching most influential variables to brand loyalty measurements: An exploratory study

This research attempts to detect some brand loyalty key specific antecedent variables based on three groups of measurements: consumer involvement, perceived brand value (consumer brand equity), and customer satisfaction. Questions that drove the study were: which variables from which of the three dimensions would have the major effect on loyalty measurements? Would the explicatory variables be consistent across all product categories? 649 respondents were divided into six product categories. Regression models were obtained for each product category and for each loyalty measurement. Perceived brand value variables tended to have the higher impact on loyalty measurements. Self-identification with the brand (self-congruence) and perceived brand quality tended to be the variables with the major effect on loyalty measurements across all product categories.     

The Marisol case: Challenges of international growth for a successful Brazilian designer apparel firm

Marisol has forged a successful legacy in Brazil in the market for clothes with a sophisticated, stylish look. Success in Brazil enabled the firm to garner overseas customers. The establishment of subsidiaries in Argentina, Italy and Mexico, as well as sales operations in several countries – including Chile, Colombia, Spain, and the USA, among others – represented important steps in Marisol's internationalization. Marisol's executives have to decide on several issues: how to consolidate their position in the USA market and in other countries? What modes of operation – own stores, franchisees, multi-brand stores, private label supply – to use in which countries? Which brands to launch abroad and whether to adapt them to local tastes, while exploiting the image of Brazilianness?     

The Reverse Logistic Process of an Automobile Supply Chain Network Supported by a Collaborative Decision-Making Model

Decision system technologies have long since been a strong support to model and solve planning complexities in the supply chain in a collaborative context. Moreover, one of the main topics to emerge is reverse logistics, which is becoming more relevant in supply chains in terms of the logistics process of removing new or used products from their initial point. Therefore, to present the main aspects that should be considered to share the decision information, which is already used among the members of the supply chain, a study of reverse logistics has been carried out to discover how decision-making activities support the process in supply chains. Furthermore, a simulation experiment has been performed with both the DGRAI 3.0 tool and Rockwell Arena 11^® to observe the quality evolution of decision making and the economical impact that the proposed collaborative model will have on the current system. Moreover, this research work shows that a clear impact will appear on the decisional quality at the bottom levels of the supply chain than on the decisional quality of the whole system. The main work hypothesis is that the logistic process costs must lower given the implementation of the proposed collaborative model.     

Market Orientation Adoption among Rural Tourism Enterprises: The Effect of the Location and Characteristics of the Firm

This paper highlighted the importance of market orientation as a strategy for the success of rural tourism enterprises. The purpose of the work was to identify an explanatory model for the market orientation adopted by rural tourism enterprises. The explanatory factors identified were as follows: category; information and communications technology use; and the entrepreneur's gender. It was also found that the location of the enterprise relative to its competitors may also influence market orientation adoption. A spatial econometric model was used that took into account the characteristics of the rural tourism enterprise and its physical location, in terms of their effect on market orientation adoption. Copyright © 2013 John Wiley & Sons, Ltd.     

Some remarks on ranking opportunity sets and Arrow impossibility theorems: correspondence results

An earlier work by Dutta and Sen provides characterizations of a set of decision rules for the ranking of opportunity sets. This paper begins by demonstrating the redundancy of one of the axioms in the said characterizations and goes on to analyze in detail one of the theorems, the Generalized Utilitarian rules theorem, which is incorrect. Basically, we find that one of the axioms that the authors provide is not in all cases satisfied for the Utilitarian rules. In this paper, we discuss this issue before proposing an alternative characterization which preserves the spirit of the original authors.     

Cointegrated Periodically Collapsing Bubbles in the Exchange Rate of “BRICS”

We test the occurrence of periodically recurring rational bubbles in the exchange rate of each of the “BRICS” countries currency relative to the US dollar. The forward exchange rate is used as a proxy for the expected exchange rate, different Purchasing Parity Power (PPP)-based rules for the fundamental exchange rate are considered, and its initial value is endogenously determined. For the chosen model, the regime switching equation satisfactorily fits the data, confirming the presence of rational bubbles for all countries. The dynamics of the exchange rate series for each country is interpreted with the help of the estimated bubbles. The bubbles are compared across countries, found to be cointegrated, and this is interpreted as evidence of the international transmission of exchange rate shocks between these countries.     

An optimal auction with identity‐dependent externalities

We analyze the problem of a seller of multiple identical units of a good who faces a set of buyers with unit demands, private information, and identity‐dependent externalities. We derive the seller's optimal mechanism and characterize its main properties. We show that the probability that a buyer obtains a unit is an increasing function of the externalities he generates and enjoys. Also, the seller's allocation of the units of the good need not be ex post efficient. As an illustration, we apply the model to the problem faced by a developer of a shopping mall who wants to allocate and price its retail space among anchor and non‐anchor stores. We show that a commonly used sequential mechanism is not optimal unless externalities are large enough.     

Stochastic comparisons of distorted distributions,coherent systems and mixtures with ordered components

A distribution function F is a generalized distorted distribution of the distribution functions \(F_1,\ldots ,F_n\) if \(F=Q(F_1,\ldots ,F_n)\) for an increasing continuous distortion function Q such that \(Q(0,\ldots ,0)=0\) and \(Q(1,\ldots ,1)=1\). In this paper, necessary and sufficient conditions for the stochastic (ST) and the hazard rate (HR) orderings of generalized distorted distributions are provided when the distributions \(F_1,\ldots ,F_n\) are ordered. These results are used to obtain distribution-free ordering properties for coherent systems with heterogeneous components. In particular, we determine all the ST and HR orderings for coherent systems with 1–3 independent components. We also compare systems with dependent components. The results on distorted distributions are also used to get comparisons of finite mixtures.