OPTIMAL DIVIDEND POLICY WITH MEAN-REVERTING CASH RESERVOIR

Motivated by empirical evidence and economic arguments, we assume that the cash reservoir of a financial corporation follows a mean reverting process. The firm must decide the optimal dividend strategy, which consists of the optimal times and the optimal amounts to pay as dividends. We model this as a stochastic impulse control problem, and succeed in finding an analytical solution. We also find a formula for the expected time between dividend payments. A crucial and surprising economic result of our paper is that, as the dividend tax rate decreases, it is optimal for the shareholders to receive smaller but more frequent dividend payments. This results in a reduction of the probability of default of the firm.     

EXPLAINING THE GROWTH OF GOVERNMENT SPENDING IN SOUTH AFRICA

What determines government spending in South Africa? The paper estimates the determinants of real per capita government spending in the Republic of South Africa using annual data for the period 1960‐2007, a tumultuous period during which South Africa experienced a variety of internally imposed changes (e.g. the abolition of apartheid, changes in political institutions) and externally generated shocks (e.g. war, oil shocks). Using multivariate cointegration techniques, we find that per capita government spending, per capita income, the tax share and the wage rate are cointegrated, a result that supports the notion that government spending is associated not only with per capita income and the true cost of government service provision as given by the wage rate but also with the fiscal illusion caused by budget deficits. We also find evidence that per capita government spending was positively affected by external shocks. These external shocks seem to play a significant role in explaining the dynamics of government spending growth.     

Collaboration and the Emerging Craft Brewing Industry: An Exploratory Study

In adopting various elements associated with the theory of collaboration, this exploratory study investigates collaboration in the context of predominantly micro- and small craft breweries. The findings revealed that collaboration within other brewers helped increase product quality, gain basic knowledge of new recipes, and enhance strategic knowledge about the industry. The applicability of the elements related to the theory of collaboration was confirmed. For instance, the element of stakeholders of a problem domain was aligned with the notion that craft brewery operators’ actions, including collaboration, can have significant impacts on the problem domain that brought them together.     

Imagery and Consumption of Wine: A Southern United States Case Study

The present study examines images that wine evokes among frequent and non-frequent wine consumers, as well as factors driving wine choices (e.g., type of wine, country/region) and the level of consumption of wines from different regions?/?countries. The findings indicate that regardless of respondents' wine consumption level, wine evokes various positive memories, particularly related to pleasure, special occasions, relaxation food, and travel. However, lack of consumption experience of wines from different origin is noticed among the more frequent consumers. The importance of education is therefore emphasised to create a long-term link between the wine product and consumers.     

An interview with Luis Raúl Pericchi

Luis Raúl Pericchi Guerra was born in Caracas, Venezuela, on 11 March 1952. He completed a B.S. in Mathematics in 1975 at the Universidad Simón Bolívar in Caracas, an M.S. in Statistics at the University of California Berkeley in 1978 and a Ph.D. in Statistics at Imperial College London in 1981. After graduating from Imperial College, Luis Raúl went back to Universidad Simón Bolívar. There, he played a key role in the developing of graduate programmes in Statistics and single handedly built an internationally recognised group focused on Bayesian statistics. In 2001, he moved to the Universidad de Puerto Rico in Rio Piedras to become the Chair of the Mathematics Department. At Universidad de Puerto Rico, he was instrumental in the establishment of a Ph.D. track in Computational Mathematics and Statistics. Luis Raúl has published over 120 papers in statistical and domain-specific journals, making significant contributions to several areas of Bayesian statistics (especially in the areas of model selection and Bayesian robustness) and their application (especially in hydrology). He is a Fellow of the American Statistical Association, the International Society for Bayesian Analysis, the John Simon Guggenheim Memorial Foundation and an Elected Member of the International Statistical Institute. This conversation took place over multiple sessions during the 2022 O'Bayes meeting in Santa Cruz, California, and the months that followed.