Uncovering the US term premium: An alternative route

The estimates of the US term premium crucially depend upon the ex-ante decision on whether the short-term rate is either an I(0) or an I(1) process. In this paper we estimate a fractionally integrated (I(d)) model which simultaneously determines both the order of integration of the short-term rate and the associated term premium. We show that the term premium experienced a sharp increase from essentially zero in mid-2007 to almost 3% in 2009. We also show that unemployment and term premium dynamics exhibit a very significant positive co-movement.     

The Impact of Failure and Success Experience on Drug Development

It is unclear whether the common belief that experience benefits new product development is driven by decision-makers allocating more attention to success experience or more attention to failure experience. This article differentiates between the two aforementioned types of experience in order to explore their separate effects on new product development. We find that only late-stage failure experience improves new product development, that success experience is more beneficial than late-stage failure experience and that, while others’ related failure experience increases the likelihood of failure, others’ related success experience decreases it. We conducted our research in the context of drug development in the biotech industry and obtained our data from Pharma Projects. We employ logistic regression analysis to model the likelihood that a drug development project results in failure.     

The distance to competitive balance: a cardinal measure

Competitive balance is a key variable in the analysis of sports competitions. There are several indexes that measure competitive balance but, either they are not a mathematical metric or they do not have the unit interval as a range. Therefore, these indexes do not indicate the magnitude of the differences, and the measurements cannot be interpreted as percentages. We characterize the space of all admissible configurations of the results of a competition. Then, we construct a new index, based on the concept of distance, whose range is the unit interval, and define it as a function in a metric space. So, it solves issues linked to the limited cardinality of most existing indexes, and we can answer this question: What is the meaning of the differences between the levels of competitive balance? We applied this index to the major European soccer leagues over the last twenty seasons.     

Autocratic tensions,cronyism, and the opacity of business information: party newspapers and circulation figures during the Francoist dictatorship (1939–1975)

Autocracies draw their political power from cronyism and organized repression. The opacity of business information (economic censorship) protects these regimes and their crony firms from any opposition. However, autocracies might also desire to eliminate cronyism (and therefore opacity) because it dampens economic growth. Autocracies survive through repression that engenders tensions, as evident in the Spanish newspaper industry during the Francoist dictatorship. State control over this industry was important because the press disseminated news to the public. From 1939 to 1957, the autocracy institutionalized both cronyism and the opacity of circulation figures to sustain the political powers of Franco and the single party state. Opacity concealed the economic performance of newspapers owned by sole legal party and any distribution of resources in its favor. Franco authorized voluntary disclosure of reliable circulation figures in 1964, after eliminating cronyism in favor of a freer market. Repression guaranteed support for this industry until Franco's death.     

Does Branch Religiosity Influence Bank Risk‐Taking?

Using branch‐level data on public and private US banking institutions, we investigate the importance of branch religiosity in shaping bank risk‐taking behavior. Our results show robust evidence that branch religiosity is negatively related to bank risk‐taking. This effect persists after controlling for several bank‐level and county‐level variables that might correlate with religiosity. Moreover, this result is robust to controlling for headquarter religiosity, suggesting that the effect of branch religiosity is additive and not washed out by headquarter religiosity. Overall, our findings document that headquarter religiosity does not capture the full effect of religiosity on bank behavior, as claimed by previous research, but that the religiosity of the geographic area in which the bank operates significantly influences bank behavior.     

A decade of occupational accidents due to direct or indirect electrical contact in the primary,secondary and tertiary sectors in Spain (2003–2012)

Occupational accidents caused by electrical contact are a major concern worldwide due to their severe consequences. The study conducted is based on an analysis of the evolution of incidence rates and dependence between variables for 14,022 electrical accidents occurring in Spain between 2003 and 2012. The results show that electrical accidents as a whole are 3.6 times more likely to have severe consequences than the rest of the accidents in the country. This proportion is even nine times greater in the case of fatal accidents. They also confirm a significant relationship between the severity of this type of accidents and the economic sector in which they occur. On the other hand, there is a positive trend in the reduction of the incidence rate, especially in relation to direct contact, although unexpectedly the rate of accidents due to indirect contact is on the rise. Thus, preventing electrical occupational accidents requires efforts to guarantee adequate training adapted to the needs of workers in the various economic sectors. Furthermore, those responsible for safety should work to implement mechanisms to monitor and control compliance with efficient protective measures against electrical contact.     

Banking Soundness Indicators and Sovereign Risk in Time of Crisis: The Case of the European Union

This study examines the impact of the soundness of the banking sector on sovereign risk of EU member countries during the financial crisis using a selection of financial soundness indicators (FSIs) and the sovereign ratings of the three main rating agencies. Unlike previous literature that typically focuses on the ability of FSIs to foresee banking crises, we estimate ordered response models to assess the power of these indicators to explain sovereign risk. Our results show that evaluations made by the rating agencies are related to the lagged values of core FSIs such that an improvement in these indicators leads to improvements in upcoming sovereign ratings. Hence, reinforced banking soundness would reduce the sovereign risk. Accordingly, governments, supervisors and central banks should pay close attention to the evolution of certain FSIs related to the banking sector, in addition to other variables that have traditionally been taken into account in analysing sovereign risk.     

Nanomarketing: A New Frontier for Neuromarketing

The emergence of neuromarketing has significantly advanced conventional marketing research, illuminating how unconscious responses and emotions impact consumers’ perceptions and decision‐making processes. Neuromarketing is founded on the assumption that individual sensory and motor systems can be identified in specific networks of brain cells, the observation of which can reveal the unconscious or emotional characteristics of consumer decision making. Yet, neuromarketing technologies present several limitations that can impede the extension and validation of their application: (i) the development of high‐priced and time‐restricted neuroimaging experiments; (ii) the employment of large and immovable devices confined to artificial laboratory environments; (iii) the use of a single neuroimaging technology at a time (usually the functional magnetic resonance imaging); (iv) the use of a single nonneuroimaging device at a time; and (v) the potentially unethical manipulation of research subjects. One way to address these issues involves nanotechnologies, which present a ground‐breaking opportunity for neuromarketing research. These technologies encompass not only the traditional notion of structures, devices, and systems created by limiting shape and size at the nanometer scale, but also the new miniaturized tools based on one or more nanocomponents. The integration of neuromarketing and nanotechnologies could start a new field of research, which is termed here nanomarketing. Nanomarketing makes it possible to: (i) carry out noninvasive and nonintrusive experiments in shopping places; (ii) monitor consumers’ mental processes in real time; (iii) combine different technologies to corroborate results obtained by different neuroscientific tools; (iv) integrate neurophysiological field indicators with laboratory neuroimaging results; and (v) highlight ethical issues raised by the use of these novel, portable, and easy‐to‐use nanodevices. This study thus has a twofold aim: (i) investigating both the limitations and opportunities, for researchers and practitioners, that accompany the miniaturization process and application of nanotechnologies to neuromarketing; and (ii) providing a critical review of the aforementioned limitations, highlighting the theoretical and managerial implications, and summarizing the discussion for future research.     

MEASUREMENT,EVOLUTION, DETERMINANTS,AND CONSEQUENCES OF STATE CAPACITY: A REVIEW OF RECENT RESEARCH

There is increasing realization that state capacity is a fundamental ingredient for effective governance, and is a crucial element of long‐run economic development. This paper offers an overview of the strengths and limitations in current empirical research on the measurement of state capacity. The paper also surveys the fast emerging literature on the determinants and effects of state capacity. We argue that existing measures on governance quality used in cross‐national research can be usefully exploited to capture different aspects of state capacity, and show that post the end of the Cold War, developing economies have experienced improvements in legal, administrative and bureaucratic capacity, but the gap with advanced economies is still wide. Future research should address the short temporal coverage of available measures of state capacity, as well as providing a systematic quantitative assessment of the determinants of capacity and of its effects on development outcomes, such as health and education, which have not received sufficient scrutiny.