Persistency of financial distress amongst Italian households: Evidence from dynamic models for binary panel data

This paper builds on existing studies on households’ financial distress and provides new evidence on the determinants of financial hardship in Italy and its persistence over time. It suggests a quantitative definition of financial distress based on the distribution of net wealth, and tests whether the probability of experiencing financial difficulty is persistent over time, using (random and fixed effects) dynamic models for binary panel data. The analysis exploits the longitudinal component of the Bank of Italy Survey on Household Income and Wealth for the period 1998–2006. Its results show that, after accounting for unobserved heterogeneity, past values of the outcome variable play a large part in explaining the probability of experiencing financial distress. In addition, the probability of financial vulnerability decreases with income and greater sophistication of the household portfolio and, at least in one of the model specifications, increases in areas with higher unemployment rates.     

The growth of China and India: implications and policy reform options for Malaysia

This study explores the trade‐related impacts of rapid growth of China and India on the Malaysian economy and evaluates policy options to better position Malaysia to take advantage of these changes. Higher growth in China and India is likely to raise Malaysia's national income and to expand Malaysia's natural resource and agricultural exports, while putting downward pressure on exports from some manufacturing and service sectors. Increases in the quality and variety of exports from China and India are likely to increase substantially the overall gains to Malaysia. The expansion of the natural resource sectors and the contraction of manufacturing and services reflect a Dutch‐disease effect that will raise the importance of policies to facilitate adaptation to the changing world economy and improve competitiveness. Most‐favoured‐nation (MFN) liberalisation would increase welfare, and, by increasing competitiveness, raise output and exports of key industries. Preferential liberalisation with India and completely free trade with China would provide greater market access gains than MFN reform, but neither would be as effective in increasing income as MFN liberalisation, and free trade agreements would lead to greater competitive pressure on many of Malaysia's industries than MFN liberalisation. Increased investments in education and infrastructure could boost manufacturing and services sectors in Malaysia, while improving trade logistics would benefit sectors with high transport costs, including the agricultural and resource‐based industries.     

Interbank market liquidity and central bank intervention

We develop a simple model of the interbank market where banks trade a long term, safe asset. When there is a lack of opportunities for banks to hedge idiosyncratic and aggregate liquidity shocks, the interbank market is characterized by excessive price volatility. In such a situation, a central bank can implement the constrained efficient allocation by using open market operations to fix the short term interest rate. It can be constrained efficient for banks to hoard liquidity and stop trading with each other if there is sufficient uncertainty about aggregate liquidity demand compared to idiosyncratic liquidity demand.     

Phasing Out Market Mechanisms in the Italian National Health Service

The Italian National Health Service introduced quad-markets, regionalization, and managerialism in the 1990s. Under quasi-markets, large providers have been separated from purchasers and funded by 'activity'—the quantity, mix, and possibly appropriateness of services provided. Under regionalization, each of Italy's 21 regional governments is able to design its own funding arrangements. The regions have generally been trying to mitigate the effects of quasi-markets and are now increasingly 'governing' them. The system is producing some desirable results, including a shift from ordinary to same-day hospitalizations and a reduction in length of stay. Hospital admissions increased initially, but only where the regions encouraged this. Financial effects are more controversial.     

The Application for and the Awarding of Low-Interest Credits to Finance R&;D Projects

The objective of this paper is twofold: first, to analyze the determinants of firms’ applications for low-interest credits to finance their research and development projects; and second, to study the award decision by the public agency. The results obtained for a sample of Spanish firms suggest that young firms, exporters, companies that belong to a high or medium-tech industry, and especially firms with previous experience in similar programs have a higher probability of applying for a credit. As for the award process, the most important effects are related to the technological and economic potential of the proposal, providing evidence that the agency tries to select the best projects.     

Do strained bilateral relations affect tourists’ desire to visit a country that is a target of animosity?

ABSTRACT

This study examines the attractiveness of destination tourism offerings when the destination country and the source market country are engaged in ongoing political and economic conflict. The study is set in the Russia–United States (US) context, where Russia is the tourism-generating region and the US are the vacation destination. Specifically, the study investigates how the desire of Russian tourists to vacation in the US is affected by perceptions of the US as a country and as a vacation destination, animosity toward the US, and Russian tourists? level of national attachment and ethnocentric tendencies. The study found that country image, destination image, and general animosity have a direct effect on intention to visit. The effects of consumer ethnocentrism and national situational animosity on intention to visit are mediated by destination image and country image respectively.     

Consumer Preference for Status Symbolism of Clothing: The Case of the Czech Republic

During the past three decades, consumer demand for luxury goods has been growing on a global scale. The luxury and status market base has expanded beyond the traditional affluent consumer segment to include an increasingly heterogeneous group of consumers. Despite the substantial size, greater reach, and significant growth of the luxury goods market, status consumption has been treated as an atypical and peripheral subject in consumer research. The authors develop a conceptual model of psychological determinants of status seeking through consumption. The model considers the effects of three general traits (namely, status concern (SC), public self‐consciousness (PSC), and self‐esteem (SE)) and one consumption‐related consumer trait (namely, susceptibility to normative social influence (SNSI)) on preference for status meaning, which in turn influences consumer interest in the product. The conceptual model is tested with data from a survey of 1000+ respondents drawn from the Czech Republic, a country where the recent market liberalization has unleashed an inflow of luxury goods from marketers from the West. Face‐to‐face home‐based structured interviews were conducted by an international market research agency. The hypothesized causal relationships are all supported. The effects of SC, PSC, and SE on SNSI and preference for status meaning (PSM) are significant and in the expected direction. Additionally, SNSI is found to exert a significant positive influence on PSM, and these two constructs, in turn, have significant positive effects on consumer interest in clothing. The conceptual model and empirical evidence enhance the existing knowledge of the antecedents and outcomes of status consumption. The study advances a better understanding of the psychology of consumer adoption of status consumption; equally important, it also highlights the value of extending consumer theories from established to emerging market economies and back again from still‐evolving to long‐standing marketplaces.     

Social and Political Risks: Factors Affecting FDI in China's Mining Sector

Political risk can be defined as the potential for uncertainty and harm to business/economic operations that arise from political (governmental and other) behavior and events. These risks typically stem from factors such as economic structures, government institutions, policies, and societal characteristics, and are becoming more of a concern to prospective investors in a changing global political economy. This article seeks to expand upon the framework of political risk analysis by looking at “softer,” nonquantifiable risk factors. Through the analysis of foreign business experiences in China, we aim to demonstrate, via a qualitative case study of foreign direct investment (FDI) in the Chinese mining sector, that in addition to typical financial, operational, and geological factors, firms should be better aware of the particular sociopolitical and cultural risks that can harm their investments in a given industry. This study draws on primary fieldwork, focuses on micropolitical risks to the industry, and stresses that multinational corporations (MNCs) could be more cognizant of the many societal factors that can influence an investment success. © 2016 Wiley Periodicals, Inc.     

Project analysis using a linear approach (P.A.U.L.A.)

We define a general model (called PAULA) for the valuation, optimal management and selection among mutually exclusive safe projects. By exploiting the formal and financial features of the associated linear problems (primal and dual), we put forward two proposals to define an optimal internal financial law (IFL). They may be used to reduce the multiplicity of the IFLs and to avoid economically arbitrary outcomes.Research projectsCariplo andMurst.