The Rise and Decline of Small‐Scale Sugarcane Production in South Africa: A Historical Perspective

South Africa's sugar industry has long been distinguished by its large number of small‐scale sugarcane growers (SSGs) farming on ‘communal’ land and its peculiar privately administered regulatory structure. In recent years, however, the numbers of small‐scale growers have declined precipitously. This paper argues that the relationship between the rise and fall of SSG production and the industry's governing regulatory structure is closer than usually appreciated. The emergence of SSG production in the late 1970s and the 1980s can be traced to industry‐subsidized initiatives, disguised as small‐scale credit, to bring commercially inalienable Bantustan land into cane production with strong miller oversight. From the late 1980s to 1990s, however, the elimination of these subsidies encouraged millers to subcontract support to farmers, while simultaneously instigating an increase in SSG numbers by removing restrictions on grower registration. Although low rainfall is a central proximal factor in the rapid decline of the SSGs in the 2000s, their rapid increase was structurally fragile.     

An assessment of the Bank of Canada's term PRA facility

This paper empirically assesses the effectiveness of the Bank of Canada's term Purchase and Resale Agreement (PRA) facility in reducing funding pressures, as measured by the CDOR-OIS spread. It examines the behaviour of this spread around both term PRA announcement dates and term PRA operation dates, using an event-study methodology to control for developments in other money markets as well as proxies for Canadian banking sector credit risk. Overall, there is robust evidence that the term PRA announcements reduced bank funding costs at both 1-month and 3-month terms, whereas we find no evidence of an impact from term PRA operations.     

The effects of open skies agreements on transatlantic air service levels

This paper examines the effects of Open Skies agreements on service levels in transatlantic aviation markets. Our route analysis reveals that Open Skies agreements between European countries and the US have resulted in both increases and decreases in service levels. Of the 22 European countries with US Open Skies agreements in place by 2007, only seven demonstrated increases in service levels while six showed reductions. Five countries saw no significant change and the remaining four have yet to receive direct transatlantic service, suggesting that liberalization alone does not lead to service level increases.     

A Markov switching analysis of contagion in the EMS

This paper applies the multivariate version of the Forbes and Rigobon (2002) contagion test, as proposed by Dungey et al. (2005a), to detect contagion effects in the Exchange Rate Mechanism (ERM) of the European Monetary System (EMS). Crisis and non-crisis observations are determined endogenously via a Markov-switching vector autoregression (MSVAR). We show that the MSVAR is suitable for this purpose, as it does particularly well in identifying the 11 realignments of the ERM. We examine whether Denmark’s rejection of the Maastricht Treaty and Italy’s competitiveness problems affected other EMS participants and find evidence for contagion.     

Neoclassical vs evolutionary theories of financial constraints: Critique and prospectus

Empirical models based on neoclassical theory predict that if investment is sensitive to current financial performance, this is a sign that something is ‘wrong’ and is to be regarded as a problem worthy of a policy intervention. Evolutionary theory, however, refers to the principle of ‘growth of the fitter’ to interpret investment-cash flow sensitivities as the workings of a healthy economy. In particular, I attack the neoclassical assumption of rational profit-maximizing firms. Such an assumption is not a helpful starting point for empirical studies into firm growth. One caricature of neoclassical theory could be “Assume firms are perfectly efficient. Why aren’t they getting enough funding?”, whereas evolutionary theory considers that firms are heterogeneous and that not all firms should grow. This essay highlights how interpretations and policy interventions can be framed by the initial modelling assumptions, even though these latter are often chosen with analytical tractability in mind rather than realism.     

Local trader profitability in futures markets: Liquidity and position taking profits

This study examines the profitability of local traders on floor‐traded futures markets. Using unique data from the period of floor trading on the Sydney Futures Exchange, local income is decomposed into liquidity and position‐taking profit components. Locals on the trading floor are found to make significant position‐taking profits. Moreover, the ability of locals on the floor to derive position‐taking profits is positively related to order‐flow related information, and negatively related to the presence of exogenous information, local liquidity profits and the length of a locals inventory cycle. Accordingly, this paper characterizes locals as active informed traders. © 2009 Wiley Periodicals, Inc. Jrl Fut Mark 30:1–24, 2010     

Does delaying service-failure resolution ever make sense?

Conventional wisdom suggests that service providers should respond to their failures as quickly as possible. Some research, however, points out that delaying resolutions may produce highly desirable results. The study here investigates these competing views by examining under which conditions an immediate or a delaying resolution produces more positive consumer responses in term of re-patronage and negative word-of-mouth intentions. Based on the concept of service separation, this research identifies an interaction effect between service separation (separated service, non-separated service) and response timing (immediate response, delaying response) on consumers' post-consumption intention. This research also finds that the relationship between service separation-response timing interaction and consumer response is mediated by consumers' negative emotions. This study contributes to refining our understanding of consumer psychology in service recovery. Practically, the studies also enable service providers to better allocate their resources to recover different types of services' failure.     

Fair trade new product development

Recently, there has been a significant increase in the market for fair trade products. However, there is a discrepancy between the stated purchase intention of consumers and their actual purchase behaviour with respect to fair trade. This article takes an operational and strategic view of this issue and argues that one significant reason for this lies in the limited range of fair trade products currently available. Next, a strategic framework for fair trade new product development is presented and explored. Finally, key operational criteria for fair trade product selection are discussed using a case study example to support the conclusions.