Dynamic debt runs and financial fragility: Evidence from the 2007 ABCP crisis

We use the 2007 asset-backed commercial paper (ABCP) crisis as a laboratory to study the determinants of debt runs. Our model features dilution risk: maturing short-term lenders demand higher yields in compensation for being diluted by future lenders, making runs more likely. The model explains the observed tenfold increase in yield spreads leading to runs and the positive relation between yield spreads and future runs. Results from structural estimation show that runs are very sensitive to leverage, asset values, and asset liquidity, but less sensitive to the degree of maturity mismatch, the strength of guarantees, and asset volatility.     

Designing experiences strategically

Companies willing to enter into the experience economy have available procedures for experience design and evaluation but not for strategic decision-making on what experiences to incorporate into their offering. This study presents a procedure for identifying experiences and for assessing their customer value. The fieldwork consists of a logbook technique for experience identification and their subsequent strategic assessment considering people's perceptions of the influence each experience has in their quality-of-life, their interest in living each experience, and their previous knowledge of each experience. The paper focuses on experiences related to environmental design. In that setting, the procedure led to the identification of 13 different experiences. A clustering analysis identified six groups of experiences accordingly to the perception of 142 persons interviewed: experiences that have a ready market, experiences with a market to captivate, experiences with a potential market, experiences indifferent for a given market, experiences with lost clients and experiences that need a better adjustment to the market.     

Not all group members are created equal: heterogeneous abilities in inter-group contests

Experimental Economics - Competition between groups is ubiquitous in social and economic life, and typically occurs between groups that are not created equal. Here we experimentally investigate the...     

Global value chains and inward foreign direct investment in the 2000s

In this paper, we make use of recent data published by the World Input‐Output Database to: (i) provide evidence on trade in value added of the major Organization for Economic Co‐operation and Development (OECD) member countries and major emerging economies (designated by OE country group), namely by measuring the degree of participation in global value chains (GVCs) at the country and sectoral levels; and (ii) estimate whether the GVC participation of OE countries has positively influenced foreign direct investment (FDI) inward stocks in the 2000s. The pooled regression model estimated shows that the country′s degree of GVC participation has contributed positively for bilateral FDI inward stocks, after controlling for other possible FDI determinants.     

Why hasn’t tax competition triggered a race to the bottom? Some quantitative lessons from the EU

The integration of European financial markets in the early 1980s created an environment of near-perfect capital mobility across countries that had harmonized indirect taxes but maintained large differences in factor taxes. The years that followed witnessed several rounds of competition in capital taxes with puzzling results. Instead of the dreaded “race to the bottom” in capital taxes, the UK lowered its capital tax to a rate closer to those of France, Germany and Italy, while capital taxes changed slightly in these countries. The UK increased its labor tax marginally, but the other countries increased theirs sharply. This paper shows that these results are consistent with the quantitative predictions of a dynamic, Neoclassical general equilibrium model of tax competition that incorporates the key international externalities of tax policy operating via relative prices, wealth distribution and fiscal solvency. Tax competition is modeled as a one-shot game over time-invariant capital taxes with dynamic payoffs relative to a status quo calibrated to European data. The calibration is preceded by an empirical analysis that shows that the relationship linking taxes to labor supply and the investment rate in the model are in line with empirical evidence and that domestic taxes seem to respond to foreign taxes. The solutions of the games show that when countries compete over capital taxes adjusting labor taxes to maintain fiscal solvency, there is no race to the bottom and the Nash equilibrium is close to observed taxes. In contrast, if consumption taxes adjust to maintain fiscal solvency, competition over capital taxes triggers a “race to the bottom,” but this outcome entails large welfare gains. Surprisingly, the gains from coordination are small in all of these experiments.     

Planning a Master’s Level Curriculum According to Career Space Recommendations Using Concept Mapping Techniques

Nowadays the European Universities are worried about how to adapt higher education to the new European Higher Education Area, as proposed in the Bologna Magna Charta Universitatum of 1998, and signed by 32 European Education Ministers. One of the key points in this higher education reform was the introduction of new Master’s level curricula. These Masters will look for the professional specialization and they will have to be adapted to the specific skills demanded by the society. This paper presents the results from a cooperation project – funded by the AECI (International Cooperation Spanish Agency) and developed between the University of Seville (Spain) and the Catholic University of Asuncion (Paraguay) – by about the planning of a new master’s level curriculum in digital signal processing (DSP) area, taking into account the Bologna principles and the conclusions obtained by the Career Space Consortium. A scientific method from social science, known as concept mapping techniques, was used to perform this planning. Basically, the idea of concept mapping consists of compiling the opinion from actors belonging to different environments (lecturers, researchers, workers, businessmen, etc.) related to DSP applications. The compiled data were statistically computed to cluster the opinions of the different agents. The result will be a master’s level curricula adapted to the environment requirements and the social settings.     

A Scale for Measuring Consumer Perceptions of Corporate Social Responsibility Following the Sustainable Development Paradigm

The aim of this research is to develop and validate a measurement scale for consumer’s perceptions of corporate social responsibility (CSRConsPerScale) using the three-dimensional social, environmental and economic conceptual approach as a theoretical basis. Based on the stages of measurement scale creation and validation suggested by DeVellis (Scale development: theory and applications, 1991) and supported by Churchill Jr.’s (J Mark Res 16(1):64–73, 1979) suggestions, five different empirical studies are developed expressly and applied to consumers of tourist services. This research involves 1147 real tourists from 24 countries in two different cultural and geographical contexts. A three-dimensional 18-item scale is proposed for measuring consumer perceptions of corporate social, environmental and economic responsibilities. This paper presents the complete development of the scale, as well as the implications and limitations of the main findings and the managerial implications.     

The Role of Self-Definitional Principles in Consumer Identification with a Socially Responsible Company

This research analyses the influence of the perception of Corporate Social Responsibility (CSR image) on consumer–company identification (C–C identification). This analysis involves an examination of the influence of CSR image on brand identity characteristics which provide consumers with an instrument to satisfy their self-definitional needs, thereby perceiving the brand as more attractive. Also, the direct and mediated influences (through their effect on brand attitude), of CSR-based C–C identification on purchase intention are analysed. The results offer empirical evidence that CSR generates more C–C identification because it improves brand prestige and distinctiveness; brand coherence is also a powerful antecedent of brand attractiveness in the context of CSR communication. Finally, CSR-based C–C identification is able to generate directly better attitude towards the brand and greater purchase intention.     

Precautionary demand for foreign assets in Sudden Stop economies: An assessment of the New Mercantilism

Financial globalization had a rocky start in emerging economies hit by Sudden Stops. Foreign reserves have grown very rapidly since then, as if those countries were practicing a New Mercantilism that views foreign reserves as a war chest for defense against Sudden Stops. This paper conducts a quantitative assessment of this argument using a stochastic intertemporal equilibrium framework in which precautionary foreign asset demand is driven by output variability, financial globalization, and Sudden Stop risk. In this framework, credit constraints produce endogenous Sudden Stops. We find that financial globalization and Sudden Stop risk can explain the surge in reserves but output variability cannot. These results hold using the intertemporal preferences of the Bewley–Aiyagari–Hugget precautionary savings model or the Uzawa–Epstein setup with endogenous impatience.     

The functional-psychological continuum in the cognitive image of a destination: A confirmatory analysis

This paper analyses the cognitive component of the image of a destination from a dual perspective. Firstly, we study its composition by positing three positions on a continuum: functional, mixed and psychological, which are analysed using confirmatory factor analysis. Secondly, we study the influence of these components on tourists' overall image of the destination and on their future behaviour intentions, using structural equation analysis. The results show that the psychological and functional components exercise the greatest influence on the overall image of the destination. Overall image was found to influence future behaviour intentions consistently, while the functional component is relevant for revisit intention and the psychological component for the intention to recommend.