International evidence on alternative models of the term structure of volatilities

The term structure of instantaneous volatilities (TSV) of forward rates for different monetary areas (euro, U.S. dollar and British pound) is examined using daily data from at‐the‐money cap markets. During the sample period (two and a half years), the TSV experienced severe changes both in level and shape. Two new functional forms of the instantaneous volatility of forward rates are proposed and tested within the LIBOR Market Model framework. Two other alternatives are calibrated and used as benchmarks to test the accuracy of the new models. The two new models provide more flexibility to adequately calibrate the observed cap prices, although this improved accuracy in replicating cap prices produces some instability in parameter estimates. © 2009 Wiley Periodicals, Inc. Jrl Fut Mark 29:653–683, 2009     

The driving forces behind China’s growth1

The main objective of this article is to disentangle the determinants of the Chinese economic growth that occurred from 1965 to 2000. We have explored, first, the time series properties of the growth rates of gross domestic product and labour productivity with an extended battery of unit‐root tests. Then, in a multivariate setting, we use the VAR model methodology to provide evidence that physical and human capital accumulation, R&D expenditure, openness and competitiveness are the main drivers of output, labour productivity and total factor productivity growth in the long run. Additionally, we also show that although China has not yet converged to its long‐run equilibrium, it is in the process of catching up. These results are more consistent with some versions of the endogenous growth models than with Solow‐type models of growth, since they support active strategies of economic policy to stimulate economic growth and catching up with more advanced economies.     

Price formation in channels of distribution with differentiated products: Theory and empirical evidence

This paper presents a theoretical and empirical study of price formation in markets where goods differ in two attributes, perceived quality of each variety, and service provided by the store where the good is sold. Price competition in the vertically differentiated market is modeled as a two-stage game where manufacturers choose the contract that determines wholesale prices, and retailers choose consumer prices. One important novelty of the paper is that it contemplates competition between brands of different quality in the same store, and competition between brands of the same quality sold at different stores. This is in fact the situation observed in the domestic detergent market and the predictions of the model can be used to guide the empirical analysis of the data available for such market in the area of Barcelona, Spain.     

Marketing Research With Telephone Surveys: Is It Time to Change?

ABSTRACT

Telephone surveys have been an important mode for collecting primary data in the marketing field in recent decades. However, the scenario of telephone coverage is changing mainly due to a massive increase in mobile phone-only usage, which can put the quality of telephone survey estimates at risk. The advance of mobile phones as the preferred telecommunication is a global phenomenon occurring in every country, although at varying speeds. This article examines the relationship between telephone coverage and the coverage bias of telephone survey estimates in the current scenario of telephone coverage across European countries. Findings reveal that the capacity for fixed-line telephone-based sampling frames to represent the overall adult population is becoming critical, especially in countries with declining fixed-line-telephone penetration rates.     

Determinants of brand equity in cultural organizations: the case of an art exhibition

The purpose of this research is two-fold. First, to explore the factors that help to create brand equity in cultural organizations from the visitor viewpoint and second, to examine the impact of cultural brand equity on visitor satisfaction as well as on future intentions. A model of the relationships is developed and empirically tested using data collected from visitors attending The Ages of Mankind cultural exhibition in Castilla and León, Spain. In the present study, evidence is found to support the propositions that brand equity is closely linked to the particular image it conveys, to the event's recognition, the quality of the exhibitions and the cultural values it transmits. Brand equity also impacts visitor perception of the most recent exhibition, as well as future intentions to attend or even pay an admission fee.     

Deficit sustainability and inflation in EMU: An analysis from the Fiscal Theory of the Price Level

Price determination theory typically focuses on the role of monetary policy, while the role of fiscal policy is usually neglected. From a different point of view, the Fiscal Theory of the Price Level takes into account monetary and fiscal policy interactions and assumes that fiscal policy may determine the price level, even if monetary authorities pursue an inflation targeting strategy. In this paper we try to test empirically whether the time path of the government budget in EMU countries would have affected price level determination. Our results point to the sustainability of fiscal policy in all the EMU countries but Finland, although no firm conclusions can be drawn about the prevalence of either monetary or fiscal dominance.     

A master production scheduling procedure for stochastic demand and rolling planning horizons

The problem of interest is a one product, uncapacitated master production schedule (MPS) in which decisions are made under rolling planning horizons. Demand is stochastic and time varying, and effectiveness is measured by inventory holding, production setup, and backorder costs.Typically, in both the research literature and the business practice the stochastic nature of the problem is modeled in an ad hoc fashion. The stochastic MPS problem is usually solved by adding safety stock to production quantities obtained from a deterministic lot-sizing algorithm. Here, the stochastic nature of the problem is explicitly considered, as an optimal algorithm for solving the static probabilistic dynamic lot-sizing problem is adapted to rolling planning horizons. The resulting algorithm is found to dominate traditional approaches over a wide variety of experimental factors, reducing total costs by an average of 16% over traditional methods.     

Measuring innovation in tourism from the Schumpeterian and the dynamic-capabilities perspectives

This paper offers a diagnosis of the “state of the issue” regarding the measurement of innovation in the tourism industry at the company level, and some recommendations for overcoming identified problems. The study addresses two central issues: how existing secondary databases of innovative activity define the boundaries of the tourism industry, and the degree to which these databases reflect the particular characteristics of this economic activity. It is concluded that these analyses present serious biases and anomalies hindering the understanding of the situation at the micro level and complicating the issue of international comparability, and the analyses do not capture the internal heterogeneity of innovative behavior of tourism companies from specific, intra-sectoral activities. The problems concern inappropriate indicators and the need for survey methods to complement the development of innovation scoreboards in secondary sources. The study concludes by detailing a set of proposals that should be considered in the context of a scoreboard to provide a comprehensive view of a tourism firm’s technological and organizational innovations, as well as its innovative capabilities, combining Schumpeterian theory and the dynamic-capabilities-based approach, and also making cross-national comparisons feasible.     

Assessing the broadband gap: From the penetration divide to the quality divide

Only some years ago the analysis of broadband diffusion was focused on who had an Internet connection and who did not. Now, the relevant questions are: how good is it? How fast? And, how fast is fast? Thus, the broadband gap can no longer be seen as a penetration divide. It is becoming more and more a quality and capacity divide, and therefore, a divide in the range of services people can access and use. By means of the Broadband Quality Score—an index that combines three key performance parameters for the quality of a connection (upload and download speeds, and latency)—Japan is found to be the only country of the 42 countries studied currently prepared to deliver the quality required for next-generation web applications over the next 3 to 5 years.     

Entry in Foreign Markets under Asymmetric Information and Demand Uncertainty

This paper examines the mode of entry of a multinational firm that has less information about the host market stochastic demand than the local firm. The foreign firm can enter the market either through direct investment or exports. Each entry mode entails different costs and has different informational implications. Entry through foreign direct investment (FDI) is favored by greater variability in demand. Interestingly enough, strategic behavior by the incumbent firm, which deviates from its first period monopoly output, might be aimed at increasing the probability of foreign entry through FDI despite having to compete against an equally informed and efficient entrant; this never happens in a symmetric information environment. Such host firm behavior is aimed at reducing the strategic uncertainty derived from the foreign firm's beliefs. Compared with the symmetric information setting, entry via direct investment may occur in more cases.