An investor sentiment barometer — Greek Implied Volatility Index (GRIV)

In this paper, we propose a new measure of Greek equity market volatility based on the prices of FTSE/ATHEX-20 index options. Greek Implied Volatility Index is calculated using the model-free methodology that involves option prices summations and is independent from the Black and Scholes pricing formula. The specific method is applied for the first time in a peripheral and illiquid market as the Athens Exchange.The empirical findings of this paper show that the proposed volatility index includes information about future realized volatility beyond that contained in past volatility. In addition, our analysis indicates that there is a statistically significant negative and asymmetric contemporaneous relationship between the returns of the implied volatility index and the underlying equity index. Finally, the volatility transmission effects on the Greek stock exchange from two leading markets, namely the New York Stock Exchange and the Deutsche Börse, are tested and documented.     

Domestic firms competing with multinational enterprises: The relevance of resource-accessing alliance formations

The literature includes several papers that compare multinational enterprises (MNEs) to local firms along several dimensions such as financial strength or production capacity. Nevertheless, the focus on how latter firms compete against the former is often missing in the literature; local firms are typically seen as inferior in terms of resources and thus, unable to compete against MNEs. This paper aims at revisiting this competitive ‘battle’. Through a case-based design in a ‘multinational’ domestic market that seems to favour MNEs, we explore how local firms respond to MNEs’ purported superiority. Findings indicate that local firms respond through alliance formations that enable them to access fitting resources and counter ownership advantages of MNEs. Therefore, resource-accessing strategies spearheaded by local firms suggest that ownership advantages should not be inherently translated into competitive advantages for the MNEs. Implications for international business are discussed and avenues for further research are suggested.     

Monetary policy and asset prices

The purpose of this paper is study the effect of monetary policy on asset prices. We study the properties of a monetary model in which a real asset is valued for its rate of return and for its liquidity. We show that money is essential if and only if real assets are scarce, in the precise sense that their supply is not sufficient to satisfy the demand for liquidity. Our model generates a clear connection between asset prices and monetary policy. When money grows at a higher rate, inflation is higher and the return on money decreases. In equilibrium, no arbitrage amounts to equating the real return of both objects. Therefore, the price of the asset increases in order to lower its real return. This negative relationship between inflation and asset returns is in the spirit of research in finance initiated in the early 1980s.     

Myopia and Addictive Behaviour

We present a theory of addictive behaviour which can account for addicts' apparent disregard for the future consequences of their current actions. The discounting of future utility is increasing in past consumption, indicating increasingly myopic behaviour as consumption increases. The intertemporal complementarity generated by the endogenous discounting produces multiple steady states which can account for the simultaneous existence of myopic addicts and non-myopic non-addicts within a time consiste nt expected utility framework. The theory also accounts for the probabilistic incidence of addiction and successful rehabilitation and the possibility of recurrence.     

Is there a “reform fatigue” in the euro area?

The absence of monetary policy within a currency union increases the need for structural reforms that make the participating economies more flexible. However, the absence of exchange rate risk with respect to the other members of the union may reduce the urgency for such reforms. A number of other considerations also suggest that theory is ambiguous about the impact of participating in a currency union on progress in structural reforms. This paper addresses this issue empirically for the euro area. The results suggest that reforms in the euro area seem to have decelerated following the introduction of the euro, but from a fast pace. The paper discusses a number of possible explanations, including “reform fatigue,” the absence of “market punishment,” and “good-times” complacency. Estimates from an empirical growth model suggest that the slowing of reforms may slow down annual output growth by up to 0.2%. However, the results are preliminary and depend on the area of reform considered. Furthermore, the reform dynamics may change with the euro area starting slowing at the end of 2007.     

How Robust is the Growth-Openness Connection? Historical Evidence

Previous literature has established a positive correlation between openness to international trade and GDP per capita growth for developed and developing economies in recent decades. However, looking at historical evidence from 1870 to the present, this paper finds no support for a positive growth-openness connection before 1970. In fact, the correlation is negative for the period 1920–1940. Cross-country growth regressions estimated for the period 1920–1990 suggest that the positive correlation between openness and growth is only a recent phenomenon. The paper provides useful conclusions regarding the robustness not only of the openness variables but also of other growth determinants.     

The effects of fiscal policy on consumption in recessions and expansions

This paper explores in a yearly panel of nineteen OECD countries from 1970–2002 the effects of fiscal policy changes on private consumption in recessions and expansions. In the presence of binding liquidity constraints on households, fiscal policy is more effective in boosting private consumption in recessions than in expansions. The effect is more pronounced in countries characterized by a less developed consumer credit market. This happens because the fraction of individuals that face binding liquidity constraints in a recession will consume the extra income generated following an unanticipated tax cut or government spending increase.     

Green Consumption Behavior Antecedents: Environmental Concern,Knowledge, and Beliefs

The present study adds to the evolving literature on green consumer behavior by examining through statistically robust methods the effect and interrelationships of the key constructs of environmental concern, consumer environmental knowledge, beliefs about biofuels, and behavioral intention (i.e., willingness to use and pay) in the context of biofuels. Data were collected through a survey of 1695 respondents. Hypotheses are based on a literature review and a pilot study, and the conceptual structural model developed is tested through structural equation modeling. Results show that concern for the environment has a positive and direct impact on environmental knowledge, beliefs, and behavioral intention. Also, demographics determine levels of concern for the environment and environmental knowledge. All constructs associate positively with one another delineating that the interdependencies between them are important when accounting for environmental behavior. Future research should validate present results with the use of cross‐cultural samples and investigate whether environmental concern increases due to social desirability response bias.     

The role of voluntary sport organisations in leveraging the London 2012 sport participation legacy

ABSTRACT

This study aimed to understand the perceptions of national Voluntary Sport Organisations (VSOs) managers towards a mega sports event and identify the components they felt enhanced or inhibited their organisations capacity to implement a sport participation legacy. London 2012 was the first Olympic Games to explicitly attempt to deliver this type of legacy, and an exploratory, online mixed-method survey examined the perceptions of 105 senior managers from 37 VSOs, post-event. Principal Component Analysis identified four distinct factors: ‘objectives, standards & resources’, ‘event capitalisation & opportunities’, ‘monitoring & evaluation’ and ‘club engagement & implementation’, explaining 51.5% of the variance. Also, relevant organisational characteristics such as sport type, funding and sport size were examined to investigate the influence this had on their capacity. From these findings, the main recommendations are that future mega sport event hosts should: 1) Engage and consult with multiple stakeholders to engender sustained sport participation. 2) Set clear and monitorable objectives. 3) Establish funding and support mechanisms relevant to each sport. 4) Engage non-competing sports in the leveraging process. 5) Finally, event organisers should try to ensure personnel consistency.