Opaque Web practices among low-cost carriers

The low-cost airlines' adoption of Web technologies to facilitate direct sales has accelerated their market penetration. However, some low-cost carriers are increasingly using Websites to create distance between themselves and their consumers in specific areas of their operations, while simultaneously developing excellence in sales transaction completion via self-service. The ‘opaque’ practices many low-cost carriers employ appear to be intentional design features and are contrary to the ethos of designing a ‘good system’ to facilitate the full spectrum of customer service. As a result, the low-cost sector has come under increased scrutiny for engaging in unfair practices and violating consumer protection law.     

The contagion effect of foreclosed properties

Although previous research shows that prices of homes in neighborhoods with foreclosures are lower than those in neighborhoods without foreclosures, it remains unclear whether the lower prices are the result of a general decline in neighborhood values or whether foreclosures reduce the prices of nearby non-distressed sales through a contagion effect. We provide robust evidence of a contagion discount by simultaneously estimating the local price trend and the incremental price impact of nearby foreclosures. At its peak, the discount is roughly 1% per nearby foreclosed property. The discount diminishes rapidly as the distance to the distressed property increases. The contagion discount grows from the onset of distress through the foreclosure sale and then stabilizes. This pattern is consistent with the contagion effect being the visual externality associated with deferred maintenance and neglect.     

A Conceptual Model of Medical Tourism: Implications for Future Research

An extensive review of the current literature reveals that no integrated theoretical framework for the holistic study of the medical tourism industry exists. This study, therefore, aims to fill this gap by proposing an integrated model for the investigation of this burgeoning tourism field. It is developed with a view to capturing the current situation of medical tourism in a given country or region from the supply and demand perspectives. Both qualitative and quantitative techniques are suggested as systematic tools to test and validate the model. This study not only has implications for future research, but also provides useful information for practitioners in the medical tourism industry.     

The Effects of Succession Choice Surrounding CEO Turnover Announcements: Evidence from Marathon Successions

This study examines marathon successions, which I define as top executive searches that are extended past the formal departure notice of the incumbent chief executive officer (CEO). Marathons should be used when search costs are high and when little time passes from when the incumbent steps down to when they leave the firm. Consistent with these predictions, marathons primarily follow surprise departures and forced turnovers. Marathons are also likely for firms operating in heterogeneous industries that face early tenure incumbent departures. These findings shed light on an increasingly prevalent form of succession and provide insight into the rationale and implications behind the announcement.     

Economic and financial themes in Australian aged care

This contribution reflects the results of work for a review of aged care in Australia. Initial material covers the policy arrangements in place prior to the beginning of the Review in September 2002. The main feature of the contribution is a survey of economic and financial performance of aged care entities not hitherto attempted. Most attention is directed to labour costs in relation to total costs and earnings before interest and taxes. Cross-section analyses are based on institutional differences between providers of services with some operating as “for profit” entities but most are not reflecting their religious, community-based and charitable origins. Locational differences are also examined. The results show a very great disparity in experiences so that notions of the average experience across providers of services cannot be upheld. Differences between the top 10 percent of entities offering services and the bottom quartile are striking. The implications for development of new strategic approaches to policies are clear.     

The Effect of Demand for Shares on the Timing and Underpricing of Seasoned Equity Offers

Despite high levels of asymmetry of information, firms that issue seasoned equity offerings (SEOs) within a year of their initial public offering (IPO) (follow‐on SEOs) are able to offer shares at a lower discount as compared to more mature firms. We provide evidence that this seeming contradiction can be explained by a very high degree of demand for the follow‐on offering. We find that the likelihood of issuing a follow‐on SEO is significantly related to the level of institutional demand and that discounts are lower for follow‐on SEOs in which institutional demand is high. We also consider the joint effect of cash holdings and follow‐on SEOs on discounts since firms that have recently gone public tend to hold high levels of cash. Underpricing is higher for firms with elevated preoffer levels of cash, which is consistent with market timing predictions. However, this relation is mitigated for both follow‐on SEOs and issues that also have high share demand.     

AIDS is your business

If your company operates in a developing country, AIDS is your business. While Africa has received the most attention, AIDS is also spreading swiftly in other parts of the world. Russia and Ukraine had the fastest-growing epidemics last year, and many experts believe China and India will suffer the next tidal wave of infection. Why should executives be concerned about AIDS? Because it is destroying the twin rationales of globalization strategy-cheap labor and fast-growing markets--in countries where people are heavily affected by the epidemic. Fortunately, investments in programs that prevent infection and provide treatment for employees who have HIV/AIDS are profitable for many businesses--that is, they lead to savings that outweigh the programs' costs. Due to the long latency period between HIV infection and the onset of AIDS symptoms, a company is not likely to see any of the costs of HIV/AIDS until five to ten years after an employee is infected. But executives can calculate the present value of epidemic-related costs by using the discount rate to weigh each cost according to its expected timing. That allows companies to think about expenses on HIV/AIDS prevention and treatment programs as investments rather than merely as costs. The authors found that the annual cost of AIDS to six corporations in South Africa and Botswana ranged from 0.4% to 5.9% of the wage bill. All six companies would have earned positive returns on their investments if they had provided employees with free treatment for HIV/AIDS in the form of highly active antiretroviral therapy (HAART), according to the mathematical model the authors used. The annual reduction in the AIDS "tax" would have been as much as 40.4%. The authors' conclusion? Fighting AIDS not only helps those infected; it also makes good business sense.     

The effectiveness of interest-rate futures contracts for hedging Japanese bonds of different credit quality and duration

This study investigates the effectiveness of the Tokyo Stock Exchange (TSE)-traded Japanese 10-year JGB futures contract to hedge portfolios of Japanese bonds of differing maturity and credit quality. The bond portfolios examined are Government, AAA-, and AA-rated Eurobonds with maturities of 2, 3, 5, 7, 10, and 20 years. Consistent with the recent literature, the study employs univariate methods for calculating hedge ratios based on levels, first differences, and percentage change of each series. Out-of-sample forecasting is used to determine the effectiveness of the calculated hedge ratios for each of the bond portfolios and to determine which approach to calculating hedge ratios is the most effective. The results show that this particular futures contract does provide a good hedge, particularly for those bond terms closest to the 10-year term of the contract. There is some evidence, although not strong, that JGBs are better hedged than AAA and AA bonds. Investors should take some caution when using this futures contract to hedge bond portfolios of different maturities and credit ratings.