Time-varying integration,interdependence and contagion

Bekaert et al. (2005) define contagion as “correlation over and above what one would expect from economic fundamentals”. Based on a two-factor asset pricing specification to model fundamentally-driven linkages between markets, they define contagion as correlation among the model residuals, and develop a corresponding test procedure. In this paper, we investigate to what extent conclusions from this contagion test depend upon the specification of the time-varying factor exposures. We develop a two-factor model with global and regional market shocks as factors. We make the global and regional market exposures conditional upon both a latent regime variable and three structural instruments, and find that, for a set of 14 European countries, this model outperforms more restricted versions. The structurally-driven increase in global (regional) market exposures and correlations suggest that market integration has increased substantially over the last three decades. Using our optimal model, we do not find evidence that further integration has come at the cost of contagion. We do find evidence for contagion, however, when more restricted versions of the factor specifications are used. We conclude that the specification of the global and regional market exposures is an important issue in any test for contagion.     

The packaging industry is not carried away by public opinion

The size and composition of our bin has changed over the years, as a result of the evolution of our way of living and our consumption habits. The wider range of goods now offered to consumers has resulted in significant augmentation of waste discarded in the form of packaging. The latter is estimated to represent about 30% by weight of total domestic waste. More than ever concerned about environmental issues, the public, alarmed by the media, has shown a strong interest in the problem of waste and waste management. Packaging is now felt as excessive, wasteful and bad for the environment, in particular plastic packaging since plastics are not as easily recycled as other materials. This paper, which includes the results of a consumer survey, brings to light the attitude and misconception of European consumers towards packaging and packaging materials and gives another insight into the problem.     

Children and advergames: the role of product involvement,prior brand attitude,persuasion knowledge and game attitude in purchase intentions and changing attitudes

The central aim of this study is to build upon previous research by investigating the role of product involvement, prior brand attitude, persuasion knowledge and game attitude in the brand attitude changes and purchase intentions of children after playing an advergame. In all, 279 respondents between the ages of 10 and 12 years participated in the study. First, they were asked to complete a pre-test survey addressing product involvement and prior brand attitude towards several products and brands. Two weeks later, the respondents were asked to play an advergame and complete a survey addressing brand attitude, purchase intention, persuasion knowledge and attitude towards the game. Our analysis reveals that a positive attitude change is more likely when the game player has already evaluated the brand positively. Furthermore, game attitude is positively related to attitude changes towards the advertised brands, consistent with affect transfer theory. Counterintuitively, a higher level of persuasion knowledge is associated with a higher intention to buy the advertised product. Finally, children who had a more positive attitude towards the game were more likely to report higher purchase intentions, indicating that games which provide good experiences positively influence behavioural intentions. We conclude the paper by discussing the study's limitations and suggestions for future research.     

Governance and Globalisation

Unlike the large literature on ‘democracy and trade’, there is a much smaller literature on the effect of the level of democracy in a nation on the level of its foreign direct investment (FDI) inflow. These few studies reveal mixed empirical results, and surprisingly only one study has examined bilateral FDI flows. Moreover, few of these studies use multiple governance indicators separating the ‘pluralism’ effect of democratic institutions from the ‘good governance’ effect, there are no studies on democratic institutions’ various effects on the level of FDI relative to trade, and there are no studies of democratic institutions’ various effects on the selection of countries into FDI. We focus on three contributions. First, we examine the simultaneous effects of the World Bank's (six) Worldwide Governance Indicators (WGIs) – which allow separating the effects of pluralism from those of five other good governance measures – on bilateral trade, FDI and FDI relative to trade using state‐of‐the‐art gravity specifications. Second, we find strong evidence that – after accounting for host governments’ effectiveness in various roles of good governance – a higher level of pluralism as measured by the WGIs’ Voice and Accountability Index reduces trade levels, likely by increasing the ‘voice’ of more protectionist less‐skilled workers, but not FDI levels. Moreover, we find qualitatively different effects of other WGIs – such as political stability – on trade versus FDI flows. Third, we account for firm heterogeneity alongside a large number of zeros in bilateral FDI flows using recent advances in gravity modelling. We distinguish between the (country) intensive and extensive margins and show that pluralism affects FDI inflows negatively at the intensive margin, but positively at the extensive margin.     

Sport participation and the social and physical environment: explaining differences between urban and rural areas in the Netherlands

In this study, we investigated the intensity of sport participation in the Netherlands comparing urban and rural areas. Using a socio-ecological theoretical model, we focussed on the extent to which the rural–urban divide in sport participation is explained by micro-level (socio-demographics), meso-level (safety and socio-economic status of neighbourhoods) and exo-level (variety and proximity of sport facilities) characteristics. We tested our theoretical expectations using representative data on 17,910 Dutch inhabitants between 6 and 79 years of age. Our study reconfirmed the importance of individual socio-demographics (micro-level), such as age, education and household income for sports participation. Furthermore, our results showed that weekly sport participation was more common in rural than in urban areas. This rural–urban divide in sport participation especially was attributed to social environmental factors (meso-level); physical conditions of the environment provided no explanation. Our findings should, however, not be taken as a denial of the importance of the physical environment (exo-level). This study was conducted in the Netherlands, a country with a high density, abundant sport facilities and a supportive sport climate. Moreover, variety of sport facilities nearby proved significant in explaining an individual’s monthly sport participation. To conclude, this study enhances our understanding of the rural–urban divide in sport participation and highlights the importance of especially meso-level features in addition to the socio-demographics. It thus may inform policymakers to critically assess sport promotion policies.     

The role of technology in the creation and capture of value

We use Adam Smith's pin factory to examine how people and things interact in the process of value creation. We introduce the concept of the market efficient unit of interaction to help us understand how technology connects to the processes of value creation and capture. Finally, we draw these strands together into a model which shows how changes in technology impact the market efficient unit of interaction, and how this in turn affects the distribution of exchange value.