Cross-regional comparative study on digital finance and finance efficiency in China: The eastern and non-eastern areas

Digital finance is expected to improve the financial development of economic backward regions through its inclusive nature. Therefore, this paper selects the financial data of 30 provinces in China from 2011 to 2017 to evaluate regional finance disparities with the inclusion of digital finance, using the meta-frontier slack-based measure dynamic DEA model. The results are as follows. (1) The overall financial efficiency, input efficiency, output efficiency, and TGR in the eastern region are better than those in the non-eastern region. (2) With the inclusion of digital finance, the finance efficiency gaps in the eastern and non-eastern regions have expanded.     

A PRIMER ON MATHEMATICAL MODELLING IN ECONOMICS

Abstract The Commission on Graduate Education in Economics had raised several concerns regarding the role of mathematics in graduate training in economics ( Krueger, 1991 ; Colander, 1998, 2005 ). This paper undertakes a detailed scrutiny of the notion of a utility function to motivate and describe the common patterns across mathematical concepts and results that are used by economists. In the process one arrives at a classification of mathematical terms which is used to state mathematical results in economics. The usefulness of the classification scheme is illustrated with the help of a discussion of Arrow's impossibility theorem. Common knowledge of the patterns in mathematical concepts and results could be effective in enhancing communication between students, teachers and researchers specializing in different sub‐fields of economics.     

The pricing of firms with expected losses/profits: The role of January

We examine the role of January in the relation between expected losses/profits and future stock returns. We predict and find that the relation between expected losses/profits and future returns reverses from the usual positive relation in non‐January months to a negative one in January. The reverse January relation is consistent across sample years, is observed in the United States and international markets, and is incremental to other variables associated with January returns. At least part of the reverse January relation is explained by tax‐loss selling. Further analysis shows that the reverse January relation results in a temporary price drift away from fundamental value. In other words, we find that abnormal positive (negative) future returns do not always indicate past under(over)valuation. Overall, our results illustrate the importance of controlling for the effect of January when examining how investors price expected losses/profits.     

Does the source of debt financing affect default risk?

We examine whether the source of debt financing is important for assessments of firms’ default risk. This study reveals that during the 2007–2010 financial crisis, firms that depend mainly on financing from banks suffer higher increases in default risk than do firms with no such dependence. Conversely, firms that rely solely on financing from public debt markets do not experience significant increases in default risk. These findings suggest that the bank supply shock theory explains the transmission of financial shocks to the real economy. Finally, firms that depend on bank financing cannot offset the adverse impacts of bank lending shocks by substituting bank loans with publicly traded debt.     

Personalities of Travel Agents with Strong Sales Records in Taiwan

Studies have shown that a certain personality leads to higher job performance. This finding has led many companies to use personality traits when they hire employees. Despite abundant studies on personality, little is known about suitable personality traits for travel agents, especially in Taiwan. With 230 travel agents working in sales departments for corporate clients and transient travelers in Taiwan, their personalities, actual sales records, and managers’ performance evaluations were used to identify significant personality traits affecting job performance. The results reflect different personality traits for travel agents working with corporate clients and individual transient travelers. The results revealed that travel agents working with corporate contracts have strong commanding and continuative personalities but weak innovative and independent personalities. On the contrary, the agents working with transient travelers showed strong innovative, commending, independent, and sympathy personalities but a weak deliberate personality. Based on the findings, the implications are discussed.     

An investigation of international hotel productivity considering quasifixed inputs and negative outputs

This paper explores the productivity of international hotels by considering the number of guest rooms and the area of the catering department as quasifixed inputs, because neither can be easily changed over a short period. We introduce a range-adjusted measure model to incorporate both quasifixed inputs and negative outputs and propose a nonradial Malmquist productivity index to estimate dynamic productivity. The results show that chain-operated hotels were unable to generate operational synergy to enhance their competitiveness, but their productivity outperformed that of independently operated hotels in cross-period aspect. Finally, we provide improvement suggestions for managers.     

Empirical mode decomposition–based least squares support vector regression for foreign exchange rate forecasting

To address the nonlinear and non-stationary characteristics of financial time series such as foreign exchange rates, this study proposes a hybrid forecasting model using empirical mode decomposition (EMD) and least squares support vector regression (LSSVR) for foreign exchange rate forecasting. EMD is used to decompose the dynamics of foreign exchange rate into several intrinsic mode function (IMF) components and one residual component. LSSVR is constructed to forecast these IMFs and residual value individually, and then all these forecasted values are aggregated to produce the final forecasted value for foreign exchange rates. Empirical results show that the proposed EMD-LSSVR model outperforms the EMD-ARIMA (autoregressive integrated moving average) as well as the LSSVR and ARIMA models without time series decomposition.     

DECENTRALIZED ONE-TO-MANY BARGAINING

We study a one-to-many bargaining model in which one active player bargains with every passive player on how to share the surplus of a joint project. The order of bargaining is not fixed and the active player decides whom to bargain with in each period. Our model admits a rich set of equilibria and we identify the upper and lower bounds of equilibrium payoffs. We also examine whether two natural ordering protocols often assumed in existing studies can sustain endogenously. Although the queuing protocol may indeed arise in an equilibrium, the rotating protocol is in general not self-enforcing.     

Jump risk of Presidential election: evidence from Taiwan stock and foreign exchange markets

This article employs jump-diffusion models, including the ARJI model and the GARCH-jump model, to examine jump intensity and volatility of Taiwan stock and foreign exchange markets during a Presidential election period. The empirical results indicate that, firstly, the ARJI model fits data better than the GARCH-jump model. Secondly, the Presidential election events enhance the jump intensity of both markets and the jump-induced variance is higher than diffusion-induced variance. It reveals the importance of the discrete jump process during a Presidential election period, and might provide some implications for option pricing or hedging strategy. Due to the intervention of the Central Bank in the foreign exchange market during a Presidential election period, the results indicate that jump intensity and volatility of jump size are more moderate.