The Impacts of Surrender Options on Reserve Durations

Estimating the interest rate risk of life insurance reserves is essential for insurers, and surrender options are critical to the estimation. This article advances our understanding of how surrender options affect the durations of reserves. We identify a pattern of the reserve duration with respect to the interest rate that is important in explaining how surrender rate levels and the interest-rate sensitivity of surrenders affect reserve durations. We further found that the surrender behavior that is more positively related to the interest rate produces larger/smaller effective dollar durations when the interest rate is low/high.     

The Influence of Constraints and Self-Efficacies on Participation in Regular Active Recreation

This study examined the ways in which perceived constraints and self-efficacies associated with participation in active recreation influenced Hong Kong and Australian university students' interest, intention, and participation in regular active recreation. The study indicated that perceived constraints have weak negative effects whereas self-efficacies have stronger positive effects on students' interest, intention, and participation in regular active recreation. Time efficacy, persistence efficacy, and activity efficacy emerged as important indirect motivators of active recreation engagement. The influences of constraints and self-efficacies on active recreation participation mainly occurred indirectly through adjustments in participation interest and intention.     

Selecting an Optimal Region by Fuzzy Group Decision Making: Empirical Evidence from Medical Investors

Since China opened its medical services market in 1989, its health care industry has become the focus of international investment. This study employs the fuzzy analytic hierarchy process to establish an evaluation model of optimal region selection for joint-venture hospitals or clinics in China. On the basis of the combined perspectives of thirty experts, this study adopts six criteria and nineteen sub-criteria for selection. It considers the Surrounding Bohai Bay (SBB), Yangtze River Delta (YRD), Pearl River Delta (PRD), and other economic zones as potential locations for the establishment of medical institutions. The findings reveal that government policies, demand conditions, and investment strategy are relatively highly weighted criteria. The order of priority for economic zone selection is as follows: YRD, PRD, SBB, and other economic zones. These results can help foreign investors in selecting appropriate investment regions.     

Bridge the Gaps: From Deficiency to Superior Service

In the face of ever intense competition and limited resources, it is management's primary concern to seek out accurate and effective ways for uncovering deficient service quality attributes and the real causes behind them. The purpose of this study is, therefore, to develop a two-phased service quality strategy model to identify defective service attributes and uncover their root causes by integrating the importance-performance gap analysis model, service triangle and gap analysis. A survey conducted on the guests, front-line servers and managers from nine different restaurant outlets of three similar international hotels in Taiwan is presented to empirically substantiate the suitability and practicality of this proposed model. The findings demonstrated that the model was fitted for the hotel in question to identify its defective service quality attributes, prioritize their order of improvement and consequently reveal the causes behind by analyzing the existence of the gaps among customers, managers and front-line servers. The managerial implication for restaurant managers is to reallocate resources and efforts in service areas that require immediate improvement. With this particular model, management now can serve their customers well even with limited resources.     

‘Paradigms of development: The East Asian debate’: A comment

Abstract

Sanjaya Lall's contribution to the debate on the role of industrial policy in economic development (Oxford Development Studies, 24, pp. 111–131,1996) is criticized. Part of the argument concerns the nature of development experience in Hong Kong, where deindustrialization is not regarded as a sign of lack of industrial policy, as argued by Lall. More generally, the article contends that selective intervention is not necessarily the key to capturing the benefits of dynamic comparative advantage, that intervention costs can be large, and that governments can have difficulty in devising and implementing plans for the development of technological capability.     

Strategic debt service and investment decisions

Firms alter investing decisions when there is debt in the capital structure. Security design features can exacerbate the situation. This article studies how strategic debt service may affect investment distortions resulting from debt financing in a dynamic framework. When the production decision involves an expansion option, the shareholders’ option to strategically default on the outstanding debt eliminates bankruptcy costs but, in contrast to previous literature where production decisions are fixed, leads to suboptimal investing decisions. This is due to higher wealth transfers from shareholders to debt holders upon exercise of the growth option. Strategic debt service, therefore, may reduce the value of the firm. The setting of an endogenous production set offers a potential explanation for empirical observations of wide credit spreads and low leverage.     

Modeling diffusion of multi-generational LCD TVs while considering generation-specific price effects and consumer behaviors

An effective diffusion model characterized by the technology-induced function diversification and cost reductions can be developed to reflect whether competition exists among multiple generations of technology and to interpret how price reductions stimulate consumption. New technology can enhance the production skill levels of LCD TV manufacturing, enabling successive generation of LCD TV to become larger-sized than the previous generation, reducing the overall cost in manufacturing process and resulting in the price reduction of LCD TVs. However, previous diffusive predictions of LCD TVs using conventional multi-generational models ignore the price effect on market potentials and generational substitutions, so a novel generation-specific multi-generational model for the first time incorporating heterogeneous price elasticity and consumer behaviors across various LCD TV sizes is constructed in this work. This study applies nonlinear least square method to simulate the parameters of our modified model and further compares the accuracy between our modified model and the existing models. Analytical results indicate that price reduction strongly correlates with LCD TV sales, implying that price reductions increase the market potential of each LCD TV generation. Our modified model performs superior to the conventional multi-generational model in terms of predicting future shipment orbits of 26-, 42-, and 46-in. LCD TVs.     

Foreign Investment,Technology Transfer and Foreign Capital Impact Function

This paper analyzes the optimal capital accumulation of a small open economy by incorporating the impact of technology transfer that accompanies foriegn ivestment. Assuming that technology transfer depends on the extent of foreign ownership, it is shown that, whenever there is technology transfer through foreìgn participation, the optimal rule suggests that a host country maintain some foreign capital in the steady state. The concept of the foreign capital impact function is introduced to capture possible negative effects in addition to the positive effects of foreign investment. The impact of foreign investment is shown to involve an externality, calling for government intervention for a social optimum. [110]     

An Exploratory Study of the Otaku Adolescent Consumer

High accessibility to Internet technology and popularization of focus media has given rise to various emerging subcultures among the younger generation who constantly seek novelty. The otaku is such an adolescent subculture of avid collectors who have a special lifestyle and who are obsessed with anime products. This study explores this specific adolescent segment's traits and purchasing behavior patterns. A focus‐group interview was conducted with some adolescent otaku to allow them to express their opinions and purchasing behaviors. Then, a questionnaire was developed based on the interview's findings, and data from a survey of 105 respondents were collected. Exploratory factor analysis was applied to extract the otaku's trait factors, while confirmatory factor analysis and structural equation modeling were used for the verification of the scale and structural model, respectively. The results show that the adolescent otaku present an obsessive preference for visual perception. The main factor influencing the otaku's purchasing intentions in terms of animation, comics, and games (ACG) is their strong interest in and participation willingness toward ACG. Strategic marketing directions applied to this adolescent group should emphasize information visualization to entice their buying behavior.     

Fiscal incentives and political budget cycles in China

Political budget cycles in democracies have been extensively analyzed, but few studies of non-democracies exist. This paper explores political budget cycles in China’s provinces. Using data from Chinese provinces from 1980 to 2006, the analysis finds that the effects of a provincial leader’s tenure on political budget cycles are minimal, implying a weak causal relationship between spending composition and a politician’s time in office at the provincial level. However, there exists a national coordinated cycle associated with the timing of the National Congress of the Communist Party (NCCP). Two years prior to the NCCP, politicians are likely to shift public spending toward capital expenditures, such as innovation funds and capital construction, and away from current expenditures, such as agricultural subsidies. The opposite pattern occurs during the year of the NCCP, when politicians increase current expenditures, such as social expenditures and government administration, and decrease capital expenditures. The increased capital expenditures 2 years prior to the NCCP are accompanied by an increase in taxation and total aggregate spending. The empirical results indicate that provincial budget cycles are mainly driven by national policies rather than by provincial leaders’ personal career incentives. Chinese leaders’ fiscal behaviors are constrained by the dynamics of the national leadership transition, resulting in similar distortions to those found in the democratic countries.