What Do Current Account Reversals in OECD Countries Tell Us About the US Case?

This study examines macroeconomic developments around reversals in current account deficits in 29 OECD countries over four decades and draws some inferences for the present US deficit. Estimates of a probit model indicate that the deepness of the deficit itself, absence of spare production capacity and a beginning real depreciation are factors that increase the likelihood of a current account reversal in the following year. For the US each of these three indicators of a reversal are now on, making a near reversal probable. Over the past 40 years half of the current account deficit reversals in the OECD area were followed by a recession in the countries concerned.     

Prediction of stock market turning points

This study investigates possible systematic relationships between the Dow Jones Industrial Average (DJIA) and its price/earnings (P/E) ratio, its dividend yield (D/P) ratio, and the Federal Funds Rate. Weekly data for this study were obtained fromTechnical Trends andBarrons covering a time period from February 23, 1985 to September 23, 1994. It was found that the P/E ratio led the market by about eight months with a correlation coefficient of 0.35, the D/P ratio led the market by 21 months with a correlation coefficient of 0.55, and that the Funds Rate led the market by five months with a correlation coefficient of –0.33.Any errors found in this paper are the sole responsibility of the author. The author would like to express sincere appreciation to John R. McGinley, Jr., Editor ofTechnical Trends, for providing the data series used in this study. Also, the author would like to thankBarrons for supplying a number of additional data items. Special appreciation goes to Melissa Luo who so diligently and carefully performed all the statistical calculations.     

From consensus to fragmentation: The dynamics of paradigm change in Israel

This paper reports on the evolution of spatial planning approaches in Israel with emphasis on the relationship between planning and ideology. The major characteristics of planning studied are: (1) the role of planning; (2) the planning process and methodology; (3) the problems and goals of planning; (4) planning concepts at the national and regional level. The main findings of the research identify four major periods which represent phases in the process of paradigm change: the phase of Grand-Ideas, the phase of Action, the phase of Professionalization, and finally the phase of Ad-hocism. The development of these phases is related to geopolitical changes, socio-economic conditions, the social climate, and the planners' background. These phases are examined in the light of the theoretical framework proposed by Kuhn concerning the development of scientific paradigms.     

Firm exit after distress: differentiating between bankruptcy, voluntary liquidation and M&A

This paper examines firm-level determinants of mature firm exits after economic distress. Using nested logit models and a sample of 6,118 distress-related exits in Belgium, we analyze the type of exit that distressed firms experience. We show that 41% of the firms in our sample exit through a court driven exit procedure (mainly bankruptcy), 44% are voluntarily liquidated and 14% are acquired, merged or split (hereafter M&A). Distressed firm exit follows two distinct stages. First, a firm either decides to exit voluntarily or is forced into bankruptcy, which is the least efficient exit strategy. Compared to bankruptcy, the probability of a voluntary exit increases with higher levels of cash, lower leverage, holding no secured debt and being embedded in a group. If a firm exits voluntarily, it enters a second stage and decides either to exit through voluntary liquidation or through a M&A. Conditional on not going bankrupt, the likelihood of voluntary liquidation compared to M&A increases with higher levels of cash or secured debt, with smaller size and with an absence of group relations. We contribute to the firm exit literature by jointly analyzing three exit types and showing that bankruptcy and voluntary liquidation are fundamentally different exit routes. While voluntary liquidation is an important exit route for distressed firms, most previous studies have failed to distinguish between bankruptcy and liquidation. We hence contribute to the exit literature by showing that bankruptcy, voluntary liquidation and M&A are fundamentally distinct exit routes for distressed firms, driven by different firm level characteristics and following a two-stage process.     

Litigation risk: Measurement and impact on M&A transaction terms

The purpose of the paper is to propose an original proprietary proxy of a firm's litigation risk. We extend the scope of litigation risk outside of the conflicts with shareholders and the domain of security litigation. We demonstrate that the source of the risk of litigation can be found in the firm's policies and in its management's operational or strategic decisions, even if a sector conditioning effect exists. Based on a sample of 465 US M&A transactions between 2000 and 2014, we provide evidence that the level of litigation risk, at the acquirer's level, has a positive and significant impact on the takeover premium. We also provide evidence that a significant relationship exists between the acquirer's litigation risk and the means of payment. An extension of the sample to international transactions is used as a robustness check; it confirms the previous results.     

The impact of abusive supervision and co-worker support on hospitality and tourism student employees’ turnover intentions in Ecuador

Ram (2015. Hostility or hospitality? A review on violence, bullying and sexual harassment in the tourism and hospitality industry. Current Issues in Tourism. doi:10.1080/13683500.2015.1064364) posits that violence and harassment are areas of concern within the hospitality industry, and scholarly interest in abusive supervision in the workplace has grown since the last decade. This study extends Ram's (2015. Hostility or hospitality? A review on violence, bullying and sexual harassment in the tourism and hospitality industry. Current Issues in Tourism. doi:10.1080/13683500.2015.1064364) assertion by examining the effect of abusive supervision experiences on student employees’ turnover intentions in a hospitality and tourism context in a high power distance culture, Ecuador. The results showed that abusive supervision was positively related to turnover intentions, and its effect was stronger than co-worker support, with the abusive supervision–turnover intentions relationship being fully mediated by perceived organizational support (POS). In addition, co-worker emotional support was found to attenuate the negative effects of abusive supervision on POS. All in all, the findings highlight the roles of POS in explaining the relation between abusive supervision and turnover intentions and co-worker emotional support in buffering the negative effect of abusive supervision. The important role of culture is discussed.