Re-examination of interest rate sensitivity of commercial bank stock returns using a random coefficient model

This article develops and tests a random coefficient two-index model for commercial bank stock returns which controls for the time-varying interest rate sensitivity caused by a bank's changing maturity profile. Using a sample of 51 actively traded commercial banks, the seemingly unrelated regression results provide evidence that commercial bank stock returns are significantly interest rate sensitive. The effect of interest rate changes on bank stock returns is found to be positively related to the maturity mismatch between the bank's assets and liabilities, when the proxy for interest rate changes and the proxy for maturity mismatch are compatible to each other.This article was written while I was a doctoral student at the University of North Carolina at Chapel Hill. It was presented at the 1989 FMA Annual Meeting in Boston.     

The Incompatibility of Decentralized Bargaining and Equal Employment Opportunity in Australia

Profound changes have occurred in the industrial relations system in Australia since the mid-1980s as the system of centralized regulation has been replaced by collective bargaining at the level of the enterprise. This has corresponded with the considerable expansion of women's employment, mainly in part-time and temporary jobs. At the same time, recognition of the disadvantaged position of women in the work-force has resulted in the enactment of laws to promote equal employment opportunity. This article examines the ability of these laws to achieve equal employment opportunity policies alongside bargaining decentralization and a growing non-standard women's work-force.     

Welfare‐increasing third‐degree price discrimination

When demand functions in different markets are derived from distributions of reservation prices that differ only in their means, conditions exist such that third‐degree price discrimination leads to greater total output and greater total welfare. Welfare is higher with discrimination than with a uniform price when demand functions are derived from logistic distributions with different means. Welfare and consumer surplus are higher with discrimination for demands derived from a distribution related to the Pareto. In general, whether discrimination increases total output depends on demand being more convex in markets in which prices fall with discrimination than in those in which prices rise.     

Food Choice in an Interdisciplinary Context

Reform of agricultural policies, notably the continuing elimination of production‐enhancing subsidies, makes it possible for policies to respond to social issues such as the rural environment and health in future. In this paper, we draw on a Rural Economy and Land Use (RELU) research project which is examining the potential for the development of healthy food chains and the implications for human health and the environment. One of the key issues to be addressed is consumers’ willingness to pay for the nutritionally enhanced food products from these new chains, but it is evident that only a partial understanding can be gained from a traditional economics approach. In the paper, we discuss how economists are beginning to incorporate views from other disciplines into their models of consumer choice.     

The Need for a Marketing Reform: The Wines of the Loire Region

ABSTRACT

This article focuses on how the French wine industry and, in particular, the wine-producing Loire region in France is affected by global and domestic factors. An overview of some of the vast regulations prevailing in the French wine industry that prohibit the wine producers to compete efficiently, especially with the wines from the “new world,” is provided. A Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis is used as the tool to study the competitiveness of the French wine industry in general and the Loire region in particular. The French wine industry is too fragmented and subjected to too many controls and, as a result thereof, is not flexible enough to respond to market opportunities. French wines have the unique blend of “historical intangibles” of romance and mystery that have been part and parcel of wine for many centuries. This advantage is no longer a major competitive advantage, and the time has come to make decisions on which of the vast range of regulations are worthwhile to maintain to contribute positively to the best interests of the French wine industry.     

Measuring rural consumers’ willingness to pay for quality labels using experimental auctions: the case of aflatoxin‐free maize in Kenya

Aflatoxins are a common health hazard in tropical countries, especially in rural areas. New methods to reduce aflatoxin levels in food staples, as well as cheaper test methods, are being developed, but consumers’ willingness to pay (WTP) for these improvements is unknown. A survey was conducted with a representative sample of rural consumers (1,344 in total, 63% women) in all major maize‐production zones of Kenya. The survey included an experimental auction with maize products of different qualities. The results showed that many rural consumers were aware of aflatoxins, but few understood their health risks. Respondents were willing to pay a premium for maize tested for aflatoxins and labeled, but asked a high discount for maize that was visibly contaminated with moldy grain. The premium was higher for respondents with education and in regions with aflatoxicosis outbreaks. Knowledge of aflatoxins substantially reduced the overall WTP, but did not increase the WTP for tested maize. Welfare analysis indicates that mandatory testing would result in substantial benefits if the cost of testing can be lowered to below the premium.     

More or Less Ambition in the Doha Round? Modeling the Development Impact of Recent Proposals

We analyse the impact on developing countries, whose economies depend heavily on agriculture, of a WTO Doha Development Round agreement based on greater or lesser levels of ambition. We present the results of an ambitious versus an unambitious Doha Round outcome, using the MIRAGE model of the global economy, with a special focus on developing countries. Our simulations are based on negotiating proposals from the run-up to the Hong Kong ministerial meeting but not agreed upon in December 2005. We compare those outcomes with the estimated effects of full global trade liberalization. The results for the two Doha scenarios demonstrate the high stakes of this negotiation given the positions of EU, US and the G-20 coalition. A successful round could deliver real gains both globally and for developing countries, but the magnitude of those gains depends on the shape of the agreement. A reform outcome based on the most ambitious components of the negotiating proposals of the US and EU delivers noticeably greater benefits than an unambitious outcome. Developing countries are exposed to very contrasting fortunes. The details matter in the differing proposals, such as the tariff and domestic support reduction formulae, tariff caps, and number of sensitive and special products. Negotiating commitment and diligence are needed in 2006 to avoid a hollow Doha outcome given the technical character of these details.     

Wine Tourism as an Opportunity for Tourism Development: Examples of Good Practice in Slovenia

The authors discuss wine tourism activities in the context of general tourism development in Slovenia. The country’s winegrowing areas have developed traditionally important viticulture, a relatively intensive production of typical grape varieties and in some cases also a distinct entrepreneurial spirit, which consequently reflects in tourism and regional development, based on diverse cultural heritage and natural values. Three Slovene wine regions are divided into nine wine districts with their own identities and more or less distinct terroirs. Despite a several centuries’ long tradition and a rich wine culture, it is evident that in national tourism strategies and development plans, wine tourism still does not occupy the position that it probably deserves, although most of the documents stress its potential for local or regional development. On the other hand, the authors recognize a significant interest among winemakers and tourism professionals for strategic cooperation and systematic approach to develop wine tourism in the selected destinations. The authors therefore focus on some paradoxes and emphasize examples of good practice at the national, regional, and local levels.     

Resource recombinations in the firm: knowledge structures and the potential for schumpeterian innovation

Building on the resource-based view of the firm, this paper explores the notion of ‘resource recombinations’ within the firm. We suggest such recombinations can occur when competencies within the firm (which are interpreted as organized clusters of firm resources) either combine to synthesize novel competencies (synthesis-based recombinations) or experience a reconfiguration or relinking with other competencies (reconfiguration-based recombinations). Central to this paper is an examination of the antecedents necessary for such innovation to occur, and in particular the nature of knowledge in the firm. We argue that several characteristics of knowledge (tacitness, context specificity, dispersion) and its social organization (the way competencies come to be formed and institutionalized) will have important consequences on the likelihoods of resource recombinations. Our paper develops a model of resource recombination likelihoods and propositions. © 1998 John Wiley & Sons, Ltd.     

Modeling Housing Market Fundamentals: Empirical Evidence of Extreme Market Conditions

This article examines the issues encountered in the modeling of market fundamentals during a period of extreme price behavior. The study analyzes the price behavior of the residential property market in Ireland using a number of alternative methodological approaches in the estimation of fundamental market value. Limitations in conventional models such as an inverted demand model are highlighted, in particular, with regard to diagnostic concerns and the static nature of the model. The use of an error correction framework provides more consistent and robust findings. The analysis does appear to indicate that a substantial premium over fundamental values developed in the Irish market during the late 1990s, reaching a peak in 1999 and 2000. However, in recent years, prices have largely been in line with fundamentals.