Corruption’s impact on foreign portfolio investment

Corruption has significant effects on a nation’s financial markets through its adverse impact on foreign portfolio investment (FPI). Yet, the effects of corruption on FPI are nonlinear and reverse J-shaped, with intermediate levels of corruption yielding the most negative effects. Highly transparent nations, where a “level playing field” exists between foreign and local investors due to lack of information asymmetries related to corruption, attract the most foreign investment. However, at the margin, very corrupt countries attract more investment than moderately corrupt countries because a “perverse level playing field” in the former countries may put foreigners and locals on an even footing in terms of resolving asymmetric information problems. This nonlinear pattern is consistent with foreign investors’ desire to trade in markets where they are not at an informational disadvantage.     

Super returns to Super Bowl ads?

This paper uses a natural experiment—the Super Bowl—to study the causal effect of advertising on demand for movies. Identification of the causal effect rests on two points: 1) Super Bowl ads are purchased before advertisers know which teams will play; 2) home cities of the teams that are playing will have proportionally more viewers than viewers in other cities. We find that the movies in our sample experience on average incremental opening weekend ticket sales of about $8.4 million from a $3 million Super Bowl advertisement.     

Desire for Visual Aesthetics (DVA) in the Store Environment: Concept and Measurement

The article describes the development, purification, and validation of a reliable self-report scale designed to measure the Desire for Visual Aesthetics (DVA) in the store environment. There is limited literature on the subject and a measurement scale has eluded both academicians and practitioners that could help measure the need for aesthetics in the retailing environment and help marketers decide on the level and type of aesthetics for the different segments in the target market/s and also the different type of retail stores. We used 3 focus groups, 8 individual interviews, and 891 surveys to develop, purify, and validate the 9-item Likert type scale. We also provide evidence for dimensionality, reliability, and validity. The scale could be used by academicians and practitioners alike, and could replace single items to measure the concept.     

Earnings Management through Specific Accruals and Discretionary Expenses: Evidence from U.S. Agribusiness Firms

This study examines both accruals based earnings management (AEM) and real earnings management (REM) in U.S. agribusinesses. In particular, the focus is on agribusinesses that report low earnings quality, defined as firms with extreme level of accruals compared to their peers. The cross‐sectional modified Jones model (Jones 1991; Dechow et al 1995) is used to test for AEM. To capture REM practices, we implement the discretionary expenses model by Roychowdhury (2006). We find evidence of AEM and find no evidence of REM in agribusinesses. In addition, our results show that managers might be managing earnings through specific accruals doubtful accounts receivable provisions and special items.     

Can tourism be part of the decarbonized global economy? The costs and risks of alternate carbon reduction policy pathways

Global leaders agree on the need to substantially decarbonize the global economy by 2050. This paper compares potential costs associated with different policy pathways to achieve tourism sector emission reduction ambitions (?50% by 2035) and transform the sector to be part of the mid-century decarbonized economy (?70% by 2050). Investment in emissions abatement within the tourism sector, combined with strategic external carbon offsets, was found to be approximately 5% more cost effective over the period 2015–2050 than exclusive reliance on offsetting. The cost to achieve the ?50% target through abatement and strategic offsetting, while significant, represents less than 0.1% of the estimated global tourism economy in 2020 and 3.6% in 2050. Distributed equally among all tourists (international and domestic), the cost of a low-carbon tourism sector is estimated at US$11 per trip, equivalent to many current travel fees or taxes. Exclusive reliance on offsetting would expose the sector to extensive and continued carbon liability costs beyond mid-century and could be perceived as climate inaction, increasing reputational risks and the potential for less efficient regulatory interventions that could hinder sustainable tourism development. Effective tourism sector leadership is needed to develop a strategic tourism policy framework and emission measurement and reporting system.     

Pseudo panel data estimation technique and rational addiction model: an analysis of cigarette,alcohol and coffee demands

We use a pseudo‐panel data approach to analyze the relationship between the consumptions of cigarettes, alcohol, and coffee in a rational addiction framework. We find that while cigarette and coffee demands fit well with the rational addiction model, alcohol demand conforms to a model with inventory effects. The results suggest that alcohol consumption increases the marginal utility derived from consumption of cigarettes. Increasing alcohol prices would decrease not only the consumption of alcohol, but also the consumption of cigarettes. On the other hand, increasing cigarette prices do not have the same effect on consumption of alcohol. The cross‐price elasticity of coffee with respect to cigarette price is positive and significant which suggests that coffee substitutes for cigarettes when cigarette prices increase. The cross‐price elasticity of alcohol with respect to coffee price is found to be negative and significant. On the other hand, Morishima elasticities of substitution indicate that cigarette, alcohol and coffee substitute each other along the indifference curve when relative prices change.     

Identifying New Product Successes in China

To examine the generalizability of the work of Cooper regarding the correlates of new product success and failure, Mark Parry and Michael Song surveyed new product development managers at 129 state-owned enterprises in the People's Republic of China. Their analysis of 258 reported product successes and failures indicated that relative product advantage and the acquisition of marketing information were highly correlated with new product success, just as in Canada. In addition, several factors not significantly correlated with success in Canadian firms emerged as significant correlates of success in the PRC. These included the level of competitive activity, the timing of the product launch, and the level of proficiency in executing activities in the early stages of the product development process.     

The R&D Effectiveness Index: A Metric for Product Development Performance

Measuring the overall success of product development efforts has been frustrating because there is no generally recognized metric to measure effectiveness. The R&D Effectiveness Index is introduced to address this need. It measures effectiveness by comparing the profit from new products to the investment in new product development. The article provides the details for calculating the index along with alternative interpretations. Michael McGrath and Michael Romeri report that this index was validated through a study of 45 electronic systems companies. They found a strong relationship between the R&D Effectiveness Index and other performance factors and believe that the R&D Effectiveness Index can be used to compare performance, measure improvement, and evaluate business units. Its application is illustrated in a case study.     

The multiple filter test for change point detection in time series

A framework for the detection of change points in the expectation in sequences of random variables is presented. Specifically, we investigate time series with general distributional assumptions that may show an unknown number of change points in the expectation occurring on multiple time scales and that may also contain change points in other parameters. To that end we propose a multiple filter test (MFT) that tests the null hypothesis of constant expectation and, in case of rejection of the null hypothesis, an algorithm that estimates the change points.The MFT has three important benefits. First, it allows for general distributional assumptions in the underlying model, assuming piecewise sequences of i.i.d. random variables, where also relaxations with regard to identical distribution or independence are possible. Second, it uses a MOSUM type statistic and an asymptotic setting in which the MOSUM process converges weakly to a functional of a Brownian motion which is then used to simulate the rejection threshold of the statistical test. This approach enables a simultaneous application of multiple MOSUM processes which improves the detection of change points that occur on different time scales. Third, we also show that the method is practically robust against changes in other distributional parameters such as the variance or higher order moments which might occur with or even without a change in expectation. A function implementing the described test and change point estimation is available in the R package MFT.