Inflation and Structural Change in 50 Developing Countries

This study provides evidence on whether the inflation rate is stationary or nonstationary using quarterly inflation rate data from 50 developing countries. As Johansen [Johansen, Soren. “Testing Weak Exogeneity and Order of Cointegration in UK Money Demand Data,” Journal of Policy Modeling, 14, 3, June 1992, pp. 313–334] put it, “some time series such as the log of prices (P), have the property that even the inflation rate ΔP is nonstationary, whereas the second difference Δ²P is stationarity.” Results from fractional integration analyses provide evidence of long memory and confirm that the nonstationarity threshold of d³0.5 is satisfied in the majority of the cases. Results from recursive analyses indicate that, despite the finding that structural changes influence the behavior of the estimated integration parameters, evidence of long memory and nonstationarity can be found in each subsample as well as the full sample data.     

Credit Management: An Examination of Policy Choices, Practices and Late Payment in UK Companies

A central element in developing credit management policy involves design choices on the extent to which credit activities are best managed internally or through specialist market intermediaries. This paper draws on the findings of a survey on the credit management practices and policies of large UK companies to: (1) Examine the type of firm most likely to enter into specialist external credit management structural arrangements; and (2) Identify contextual and credit policy choices influencing the credit period taken and late payment of debts. The study found that specialist intermediaries are not particularly common in large firms. The paper also identifies a number of contextual and policy variables that help explain variation in debtor days and late payment by customers.     

Asymmetric mean-reversion and contrarian profits: ANST-GARCH approach

This paper investigates the time-series evidence of asymmetric reverting patterns in stock returns that is attributable to “contrarian profitability.” Using asymmetric nonlinear smooth-transition (ANST) GARCH(M) models, we find that, for monthly excess returns of US market indexes over the period of 1926:01–1997:12, negative returns on average reverted more quickly, with a greater reverting magnitude, to positive returns than positive returns revert to negative returns. The results are quite consistent when the models are implemented not only for the different sample periods, such as 1926:01–1987:09 and 1947:01–1997:12, but also for portfolios with different characteristics, such as different firm-size portfolios and Fama–French risk-adjusted factor portfolios. We interpret the asymmetrical reversion as evidence of stock market overreaction.     

Relative performance of dynamic portfolio insurance strategies: Australian evidence

This paper simulates the performance of synthetic put portfolio insurance and Constant Proportion Portfolio Insurance (CPPI) using Australian data for the period from 1992 to 2000. These strategies are implemented by trading in the index and bills and simulation is conducted across 18 scenarios. We find that while the CPPI dominates in scenarios using daily rebalancing, the synthetic put strategy delivers better outcomes when value based triggers are used. More importantly, although the two per cent market move trigger emerges as the optimal rebalancing choice, overall, neither strategy appears justifiable in terms of achieving downside protection or allowing upside gain.     

Is asymmetric mean-reverting pattern in stock returns systematic? Evidence from Pacific-basin markets in the short-horizon

This paper applies asymmetric nonlinear smooth transition generalized autoregressive conditional heteroskedasticity (ANST-GARCH) models to the analysis of mean-reversion and time-varying volatility in weekly index returns of the stock markets of nine countries in the Pacific-basin. It finds that the returns exhibit an asymmetric pattern of return reversals, viz., on average, a negative return reverts more quickly, with a greater magnitude, to a positive return than a positive return reverting to a negative one. The asymmetric pattern of return reversals is directly associated with the unequal pricing behavior on the part of investors. Following a negative return shock, investors do not appear to require any additional premium to the leverage effect; instead they actually neutralize the risk in the form of a reduced premium! The reduction in risk premium causes not only the current stock price to rise but also the realized negative return to revert faster with a greater magnitude.     

Exploring the Attitudes of Bottled Wine Distributors Toward Wine Producers in the Portuguese Wine Sector

The wine sector has unique features that have not been deeply studied. This study aims to explore the attitudes of bottled wine distributors toward wine producers in the Portuguese wine sector. Eleven interviews (about 60 min each) were carried out with all major wine distributor managers. The transcribed interviews were analyzed using qualitative software. Content analysis shows that distributors develop six main attitudes toward producers: (a) Long-term Relationship, (b) Cooperation, (c) Interdependence, (d) Product Quality, (e) Trust, and (f) Brand Image. Findings may help managers of the wine sector and promote favorable relationships with the distributing customers.     

Layoff victim's employment relationship with a new employer in Korea: effects of unmet tenure expectations on trust and psychological contract

Existing studies of psychological contract have largely focused on the effects of contract breach on employees' attitudes and the contract itself involving the same employer. Given that both workforce mobility and downsizing activities are increasing, it is important to understand how individuals' past employment experiences shape their relationships with their employers. The present study focuses on the effect of prior layoffs on relationships with new employers. We posit that furloughed workers experience layoff as a breach of the psychological contract of job security they have entered into with their employer. Longitudinal data collected from individuals who were re-employed following a layoff revealed that unmet tenure expectations in an employment relationship result in reduced trust in a new employer, which in turn negatively impacts the quality of psychological contracts with the new employer. The results also show that the relationship between unmet tenure expectations and trust was moderated by individual attributions regarding the cause of the layoff. The present findings suggest that the negative impact of contract breach experienced with one organization may carry over to subsequent organizational contexts.     

Moderating effects of consumer empowerment on the relationship between involvement in eco‐friendly food and eco‐friendly food behaviour

This study investigates the moderating effect of consumer empowerment on the relationship between involvement in and purchase behaviour towards eco‐friendly food. It uses the generalized linear model, with data from the 2017 Research on Food Consumption. The results showed that gender is related only to involvement in eco‐friendly food and this involvement is higher for women than for men. Moreover, involvement in eco‐friendly food, purchase empowerment, engagement empowerment and frequency of buying eco‐friendly food increase as age increases, with the highest increases observed at ages 40–49 and 50–59; the score for those older than these age groups was much lower, resembling an inverted U shape. Groups with high education and income levels presented high scores for involvement in eco‐friendly food, purchase empowerment, engagement empowerment and frequency of buying eco‐friendly food. Regarding the effects of involvement in eco‐friendly food, purchase empowerment and engagement empowerment on the frequency of buying eco‐friendly food, the main effects of involvement in eco‐friendly food and purchase empowerment as well as the interactive effects between involvement in eco‐friendly food and engagement empowerment were statistically significant.     

Evaluating the purchase behaviour of organic food by young consumers in an emerging market economy

Promoting consumer purchase behaviour of eco-friendly products is key to environmental sustainability. This research aims to investigate how different factors may enhance or impede young consumers’ intentions to purchase a specific type of eco-friendly product, i.e. organic food. Data were obtained from 289 respondents in an emerging market economy, i.e. Vietnam. Multivariate data analysis using structural equation modelling revealed that food safety concern, health consciousness and media exposure to food messages played integral roles in the formation of attitude towards organic food. Interestingly, consumers’ environmental concern and food taste were of little value in predicting their attitude. Notably, perceived barriers (i.e. high price, inadequate availability, poor labelling and extra time required) significantly impeded both attitude and purchase intention towards organic food. The insights gained from this research extend current knowledge about pro-environmental behaviour in developing countries and they have important practical implications for marketers and other key stakeholders.     

Corporate Governance and Financial Peer Effects

Growing evidence suggests that managers select financial policies partially by mimicking policies of peer firms. We find that these peer effects in capital structure choice are unique to firms operating under weak external corporate governance. Cross-sectional tests suggest that this finding is best explained by a quiet life hypothesis in which managers may be able to avoid the effort required to optimize financial policies and the scrutiny of market participants. Leverage ratios of mimicking firms display less sensitivity to a profitability shock. Finally, mimicking correlates to higher financing costs and lower future profitability, especially if it results in high leverage.