Competitive inventory management in Treasury markets

We decompose US Treasury bid-ask spreads into inventory, adverse selection and order processing costs by using the fact that inventory trades have different effects on spreads than do proprietary trades. We exploit this asymmetry and develop a technique to identify the three components of the spread in order to test three hypotheses: dealers make larger changes to inventory (1) following macroeconomic announcements (2) at the start and toward the end of the New York trading hours, and (3) when transaction sizes are relatively large. We test these predictions using GovPX data for on-the-run 2-year and 10-year Treasury Notes. All three predictions are supported. We also assess how primary dealers react to the Federal Reserve’s open market operations (OMOs). Our findings reveal interesting intraday patterns in the inventory component for both securities.     

RATIONAL TIMING OF CALLS OF CONVERTIBLE PREFERRED STOCKS

Conversion-forcing calls of convertible preferred stocks are re-examined focusing on the value of the conversion option impounded in the preferred price. This amount represents the preferred shareholder wealth potentially transferable to common stockholders. Capture of this wealth underlies the theoretical motivation for calling and forcing conversion as soon as possible. Most of the preferred issues examined exhibit nonpositive average option values throughout all but short periods; hence, no wealth transfer opportunity exists for immediate calls. Issues that exhibit positive option values are called quickly. In contrast to interpretations that have persisted for over fifteen years, our results reveal no substantial delays in calling convertible preferred stocks.     

The Role of Advertising Educators as Problem Solvers in the Field of Advertising

Abstract

Nationally syndicated product-media data services are very useful for analyzing the nature of target markets. They are not, however, generally considered useful for estimating television reach and frequency. This paper explains how selectivity indices derived from national product-media data can be combined with data from more specialized television-usage data services to yield an estimate of target market ratings. The paper describes a pilot study designed to test the plausibility of this approach.     

Monetary Policy Rules for Transition Economies: An Empirical Analysis

In this paper, we investigate the monetary policy reaction functions for the new European Union member states. We find interesting differences when looking at both interest rates (the Taylor rule) and monetary base (the McCallum rule) as monetary policy rules. Monetary aggregate is more likely to react to the deviation of inflation from its target, while short‐term interest rates are highly sensitive to the deviation of exchange rates in the Czech Republic, Poland, Slovakia, and Slovenia. For Hungary and Romania, both interest rates and money are responsive to inflation. In empirical literature, much attention is paid to the use of the Taylor‐type rule for developed economies. However, our empirical results raise questions on the reliance of this rule for these transition economies.     

The Strategic Implications of EMU for European Banking

This paper reviews the broad impact of the European SMP (Single Market Programme) and approach of EMU (European Monetary Union) on European bank strategies.

Select but key aspects of the competitive strategies that banks might pursue in this ‘New Europe’ are then considered. Within this review; the key strategic question is explored whether banks necessarily have to be bigger in order to be more efficient and even ultimately to survive in a post-EMU world. It is argued thut efficiency considerations should dominnte over size per se. The strategic perspective that will be developed is to

view EMU as the next stage on from the present SMF! This perspective avoids the mistake of visuulising any kind of EMU as likely to precipitate dramatic ‘breaks’ in the present

strategic development of European banking. Since the SMP is well advanced, we already have some experience of the

strategic reactions of banks towards a single European banking market; this provides a useful indicator of at least some of the broader bank strategic reactions that might be expected to EMU.     

Utilitarian and hedonic shopping value in the US discount sector

General merchandise discount retailers in the US have evolved to offer higher levels of hedonic shopping value, thereby intensifying levels of intra- and inter-type competition within the industry. Academic research on consumer reactions to these efforts is limited. This study investigates consumers’ perceptions of utilitarian and hedonic shopping value associated with the two leading US general merchandise discounters. Findings suggest differences in perceptions of the level of hedonic benefits offered by the discounters and provide useful insight for the further development of marketing strategies.     

Interrupted anticipation after a service failure: The role of olfactory sensation on expected pleasure, taste enjoyment, consumption, and repatronage intentions

When consumers are highly charged with the anticipation of indulging in a pleasurable eating experience, a service failure that threatens to deny them the opportunity to satisfy their appetitive goals produces an “interrupted anticipation.” This study demonstrated that among those whose eager anticipation was interrupted by an unexpected service failure, food aroma tended to reinforce unpleasant feelings and generally negate the positive emotional boost normally expected from a positive olfactory cue. This resulted in significantly lower levels of expected pleasure, taste enjoyment, quantity of food consumed, and repatronage intentions. In contrast, for those whose anticipation was not interrupted, the food aroma exposure significantly enhanced the positivity of the consumer's service experience. When service failures lead to interrupted anticipation, service recovery efforts may sometimes prove to be ineffective in restoring the positive feelings of customers. Implications for theory development and managerial practice are also discussed.     

Volatility in stock returns for new EU member states: Markov regime switching model

In this paper, we investigate the volatility in stock markets for the new European Union (EU) member states of the Czech Republic, Hungary, Poland, Slovenia and Slovakia by utilising the Markov regime switching model. The model detects that there are two or three volatility states for the emerging stock markets. The result reveals that there is a tendency that the emerging stock markets move from the high volatility regime in the earlier period of transition into the low volatility regime as they move into the EU. Entry to the EU appears to be associated with a reduction of volatility in unstable emerging markets.     

European steel policies in the 1980s: Hindering technological innovation and market structure change?

European Steel Policies in the 1980s: Hindering Technological Innovation and Market Structure Change? — This paper examines the effects of the European Commission’s Manifest Crisis Policy of production quotas on the growth of European minimills during the 1980s. In particular, the study seeks to determine whether the Commission-approved secondary market for the quota rights created sufficient flexibility to ensure that low-cost suppliers increased production during this period of steel industry rationalization. The empirical results indicate that the policies did significantly hinder minimill growth during the quota period but did not prevent later minimill expansion.     

Break-Through Innovations and Continuous Improvement: Two Different Models of Innovative Processes in the Public Sector

How do we understand innovation in the public sector? A look at the public and private sector understanding of innovation helps us begin to see how important new ideas are born, nurtured, tested and disseminated.