Quantitative Restrictions in the Presence of Cost-Based Informational Asymmetries

This study introduces a cost-based informational asymmetry into a two-period model where a domestic (incumbent) firm's behavior in the first period affects the entry decision of a foreign firm in the second period. The effects of import quota policy within this environment are examined and compared to the standard, full-information effects. When quota quantities are set exogenously, the standard effects of quota policy may be significantly altered depending on whether or not policy induces the domestic firm to signal cost structure. For example, higher quotas may discourage foreign entry because of the induced signaling effects of quota policy.     

Are Tax Effects Important in the Long-Run Fisher Relationship? Evidence from the Municipal Bond Market

Are nominal bonds appropriately discounted for taxes? Empirical estimates of the response of nominal interest rates to changes in inflation, the Fisher effect, have failed to produce a definitive answer. Four reasons have been put forward as possible explanations: (i) Tobin effects, (ii) fiscal illusion, (iii) peso problems, and (iv) different estimators. Utilizing data on taxable and tax-exempt bond interest rates and several different estimators, we find that the Fisher effect estimates are always larger for the taxable bond relative to the tax-exempt bond, suggesting that fiscal illusion and different estimators cannot account for the previous results.     

An integrated model of sales managers’ communication practices

Drawing from several diverse streams of research, the authors develop the rationale and empirical background for considering the role of sales manager communication practices. Using a multifaceted conceptualization of communication as its base, the study justifies, proposes, and evaluates a model describing the relations among sales managers’ communication practices and salesperson ambiguity, satisfaction, performance, and commitment. The results support the hypothesized model and suggest that sales manager communication practices are associated with these important salesperson job outcomes. Mark C. Johlke is an assistant professor of marketing in the Cameron School of Business at the University of North Carolina at Wilmington, Wilmington, North Carolina. Dale F. Duhan is an associate professor of marketing and director of International Bussiness Programs in the College of Business Administration at Texas University, Lubbock, Texas. Roy D. Howell is dean of the College of Business Administration at Texas Tech University, Lubbock, Texas. Robert W. Wilkes is the United Supermarkets professor of marketing and marketing area coordinator in the College of Business Administration at Texas Tech University, Lubbock, Texas.     

Should You Spin Off Your Internet Business?

The purpose of most corporate spin-offs is to unlock the shareholder value of a business unit that is not critical to the parent company's success. Internet spin-offs raise additional problems, partly because they are so new. This article sets out a multi-dimensional framework to help managers decide how to structure their internet businesses: whether to keep them integrated into the parent company, to establish them as wholly-owned subsidiaries or to spin them off 'wholly or partially'. The authors argue that companies must weigh the trade-offs between what they call the 'three Cs': control, currency and culture. The collapse of internet stock prices in April/May 2000 reduced but did not eliminate then 'currency' attraction of the spin-off option. But issues of control and culture were always just as important. Above all, the decision must be made in the context of a company's total 'digital agenda': that is, as part of a company's overall strategy for creating and sustaining value in the new economy.     

ARE ASIA‐PACIFIC REAL EXCHANGE RATES STATIONARY? A REGIME‐SWITCHING PERSPECTIVE

This paper tests for long‐run purchasing power (PPP) among nine Asia‐Pacific countries. Non‐stationarity of the real exchange rate is tested within a Markov regime‐switching framework. Two new concepts of PPP are defined that allow for real exchange behaviour to switch between stationary and non‐stationary regimes (partial PPP) or between stationary regimes of differing degrees of persistence (varied PPP). The results indicate that each country is characterized by at least one stationary regime. Indeed, five countries are characterized by two such regimes. Further analysis indicates that the Asian crisis of 1997 gave mixed impetus to the achievement of long‐run PPP.     

External Audit Fee Levels in NHS Trusts

This article discusses the external auditing regime of NHS trusts and analyses the fees charged by their auditors. It adapts approaches developed in the private sector to investigate audit fees paid by NHS trusts and finds that, while similar factors are associated with the audit fees of trusts, there is no evidence of a 'Big 6' premium and trust audit fees are significantly lower than those of similar private sector organizations. Explanations for this are sought in the different natures of public and private sector audits, which indicate that differences in fees might be anticipated in the public sector, especially with the presence of a quasi-regulator in the form of the Audit Commission.     

Toward a theory of customer engagement marketing

Customer engagement marketing—defined as a firm’s deliberate effort to motivate, empower, and measure customer contributions to marketing functions—marks a shift in marketing research and business practice. After defining and differentiating engagement marketing, the authors present a typology of its two primary forms and offer tenets that link specific strategic elements to customer outcomes and thereby firm performance, theorizing that the effectiveness of engagement marketing arises from the establishment of psychological ownership and self-transformation. The authors provide evidence in support of the derived tenets through case illustrations, as well as a quasi-experimental field test of the central tenet of engagement marketing.     

Banking on the FED: QE1-2-3 and the Rebalancing of the Global Economy

Growing income inequality in most countries in the 1990s and 2000s led to a global shortfall between supply and demand. The US economy bridged this shortfall domestically and globally by blowing successive equity market and housing bubbles, but these produced ever more severe financial crises. Rebalancing after the 2008 crisis required trade surplus countries to expand their non-traded sectors, but rebalancing is never immaculate. Instead, the Federal Reserve Bank's three rounds of Large-Scale Asset Purchases, or quantitative easing, shifted investment flows towards some developed and developing economies. As a matter of accounting, capital inflows led to shrinking trade surpluses in those countries. However, their relatively undeveloped securities markets mean that rebalancing largely occurred through rising housing prices, mirroring the same unsustainable phenomenon the USA experienced in the 2000s. In effect, the USA shifted part of its unsustainably large non-traded sector back to trade surplus countries by causing the real-estate part of the non-traded sector in surplus countries to expand. However, this is not a sustainable solution to global trade and financial imbalances in the long run, and risks producing the same kind of crises the USA experienced in 2008.