The process of conflict in buyer‐seller relationships at domestic and international levels: A comparative analysis

Despite the fact that conflict is an essential behavioural dimension underlying the buyer‐seller relationship, no empirical work has as yet been conducted on the comparison of conflictual processes between different types of marketing channels. This paper attempts to compare exporter‐importer and exporter‐domestic customer business partnerships, regarding the dimension of conflict throughout its various stages of growth and development. The study was carried out on a sample of 53 indigenous Greek manufacturing firms. Contrary to prior expectations, it was found that the exporter‐importer (E‐I) kind of relationship was not characterized by higher levels of conflictual processes than those in the domestic type of business association. Surprisingly, the study results also showed that in a substantial number of conflict areas, the domestic relationship category was governed by significantly higher levels of conflictual processes compared with those in the E‐I kind of business partnership. The managerial implications of the research findings are discussed and avenues for future research directions are outlined.     

Why Are U.S. Stocks More Volatile?

U.S. stocks are more volatile than stocks of similar foreign firms. A firm's stock return volatility can be higher for reasons that contribute positively (good volatility) or negatively (bad volatility) to shareholder wealth and economic growth. We find that the volatility of U.S. firms is higher mostly because of good volatility. Specifically, stock volatility is higher in the United States because it increases with investor protection, stock market development, new patents, and firm‐level investment in R&D. Each of these factors is related to better growth opportunities for firms and better ability to take advantage of these opportunities.     

Inflation Forecast Targeting: An Alternative Approach to Estimating the Inflation‐Output Variability Tradeoff

We suggest a new way of computing the inflation‐output variability tradeoff under inflation forecast targeting. Our approach is based on dynamic, stochastic simulations of the average inflation rate over a two‐year horizon using the moving average representation of a vector autoregressive (VAR) model. Using real‐time data over two samples, we estimate the inflation‐output variability tradeoff for the United States and show that it has shifted favorably over time. We analyze the policy interventions required to achieve target inflation in each sample and compare these interventions over time.     

Does mandatory food safety training and certification for restaurant employees improve inspection outcomes?

The purpose of this study was to explore the relationship between mandatory food safety training and certification and inspection results of chain restaurants and independent restaurants, using current food safety inspection results of food service establishments in Central Florida. More specifically, this study examines whether there is any statistically significant difference in the violation frequency among chain and independent restaurants. Reducing the risk of any foodborne illness is a critical strategy that industry stakeholders should pursue in an area dominated by tourism such as Orlando, Florida. A one-way ANOVA was used to determine the differences between the two types of restaurants. Findings indicate that there is significant difference between chain and independent restaurants for critical violations. No difference was found when comparing chain verses independent restaurants for non-critical violations.     

Exchange rate determination: a theory of the decisive role of central bank cooperation and conflict

Economists’ faith that variable exchange rates benevolently equilibrate has been empirically disconfirmed. That faith is here tackled at its theoretical core with an exchange rate model that although ultra abstract, includes the undeniable fundamentals of market power and differential goals of central bankers and large-scale private players. It permits a game theoretic analysis under the assumption that all agents maximize their payoffs. The paper then relaxes the assumption of maximising agents, allowing for a more complex and thus realistic second version of the model that is interpretable within SKAT, the Stages of Knowledge Ahead Theory of risk and uncertainty. In an experimental setting, this second version of the model points to: a) the inability of agents in central banks, governments and the private real and financial sectors to operate in maximising ways; b) destructive central bank conflict; and c) the widely discrepant outcomes arising from the dynamics of individual personality differences. The paper’s theoretical and empirical findings thus both point to the merits of a single world currency.     

Asymmetric pricing of implied systematic volatility in the cross‐section of expected returns

Assuming a symmetric relation between returns and innovations in implied market volatility, Ang, A., Hodrick, R., Xing, Y., and Zhang, X. (2006) find that sensitivities to changes in implied market volatility have a cross‐sectional effect on firm returns. Dennis, P., Mayhew, S., and Stivers, C. (2006), however, find an asymmetric relation between firm‐level returns and implied market volatility innovations. We incorporate this asymmetry into the cross‐sectional relation between sensitivity to volatility innovations and returns. Using both portfolio sorting and firm‐level regressions, we find that sensitivity to VIX innovations is negatively related to returns when volatility is rising, but is unrelated when it is falling. The negative relation is robust to controls for other variables, suggesting only the increase in implied market volatility is a priced risk factor. © 2010 Wiley Periodicals, Inc. Jrl Fut Mark 31:34–54, 2011     

The Notching Rule for Subordinated Debt and the Information Content of Debt Rating

This paper provides new evidence regarding the information content of debt ratings. We show that noninvestment grade subordinated issues are consistently priced too high (the yield is too low), and the reverse is true for some investment grade bonds. We relate this empirical bias to a notching rule of thumb that is used in order to rate subordinated debt without expending additional resources for information production. We propose an explanation for these findings based upon a balance between an attempt to please the companies that pay the raters versus a concern for lawsuits and regulatory investigations should ratings be too optimistic.     

Evaluating the Effect of Affinity Card Programs on Customer Profitability Using Propensity Score Matching

Affinity card programs have become popular in recent times and account for one fifth of all credit card accounts. There is no research that links affinity card programs to customer profitability. Moreover, little is known about what type of affinity card programs would lead to higher profit. Using a large proprietary dataset we answer the above questions. We also apply propensity score matching, a relatively new technique, to control for selection bias in addressing the above issues. Contrary to previous research and common belief, we show that affinity card customers are no more profitable than non-affinity card holders. We also show that sports-based affinity programs are the least profitable and surprisingly, alumni-based affinity programs also do poorly relative to other types of affinity. On the positive side, affinity card customers are lower risk and help to lower the average risk of the portfolio of customers.     

Trading for the future: Signaling in permit markets

Permit markets are celebrated as a policy instrument since they allow (i) firms to equalize marginal costs through trade and (ii) the regulator to distribute the burden in a politically desirable way. These two concerns, however, may conflict in a dynamic setting. Anticipating the regulator's future desire to give more permits to firms that appear to need them, firms purchase permits to signal their need. This raises the price above marginal costs and the market becomes inefficient. If the social cost of pollution is high and the government intervenes frequently in the market, the distortions are greater than the gains from trade and non-tradable permits are better. The analysis helps to understand permit markets and how they should be designed.     

Managing Perplexity: Lessons from Inside the Romanian Business Culture

Despite the passage of several decades since the revolution of 1989, there is little professional literature designed to prepare foreign investors for the Romanian business culture. Visitors to this nation discover a friendly people who engage in business practices often characterized as perplexing, frustrating, and imbued with self-defeating actions. The communist period in Romania's history imbedded unethical behavior into the nation's culture, including the morally ambiguous practice of favor trading. This paper describes this central business activity and how it shapes business dealings and often undermines opportunities. The cultural context that created the favor trading environment is discussed, and methods for managing this perplexing practice are explained.