HOUSEWORK: PRICELESS OR VALUELESS?

Two ways of estimating the value of housework are currently used. One is the opportunity cost approach, which sets the value of work done at home equal to the income the person could earn in the labor market. The other is the market cost approach, which uses the cost of hiring someone to do the housework to determine its value. In this study we use data on earnings of female clerical workers with various patterns of labor force participation to obtain estimates of the opportunity cost of hometime for such women. We find that potential market earnings do not provide an acceptable estimate of the value of housework, and suggest that using the wages of general household workers is a better approach.     

Identifying Permanent and Temporary Components in Daily and Monthly Japanese Stock Prices

The purpose of this study is to analyze time series of daily and monthly values for the Tokyo Stock Price Index (TOPIX) and stock price values for 15 companies listed on the Tokyo Stock Exchange, Section 1 (TSE-I), to determine the contribution of permanent and temporary components to Japanese stock prices. The existence of temporary components in the price series would imply that Japanese stock returns are partially predictable. The method of canonical correlation is used to determine components common to each series and the persistence of each component series is evaluated by estimating the amount of dependence in the series. The results suggest that Japanese stock prices contain a small temporary component. The fractionally integrated ARIMA (ARFIMA) model is used to characterize both the component series and an estimate of the temporary component for each original price series. The contribution of the temporary component to the total variation of the price series estimated. We find that, in general, the temporary component accounts for less than 8% of the variation in the daily price series and from 5% to 15% of variation in the monthly price series, indicating that there may be a small amount of predictability in Japanese stock prices.     

Technological Performance and Alliances Over the Industry Life Cycle: Evidence from the ASIC Industry

Technology development in firms is frequently based on a combination of internal and external technological learning. Consequently, firms need to develop both technological capital (a patent portfolio) and alliance capital (a portfolio of technology alliances). This paper examines the relationship between technological capital, alliance capital, and their joint impact on the technological performance of firms, with an application to the application‐specific integrated circuit industry. We find that positive marginal returns to alliance capital are decreasing at higher levels of alliance capital. Technological capital and alliance capital can either augment or reduce each others' influence on innovation performance depending on the stage of the technology life cycle in the industry. A reinforcing relationship related to absorptive capacity requirements and technological uncertainty is present in early stages, while technology leakage and market competition effects render the combination of high levels of technological and alliance capital counterproductive in later stages of the technology life cycle.     

Predictors of Career Success Among Lodging Revenue Managers: Investigating Roles of Proactive Work Behaviors

This study integrated the growing literature of proactive work behavior with career success among lodging revenue managers. Proactive work behavior is a timely, relevant, and important research topic for today’s workplaces in the hospitality industry. The aim of this research was to test a model for linkage among four dimensions of proactive work behavior and career success, among 280 lodging revenue managers, while controlling for work experience, age, and gender. First, the confirmatory factor analyses examined the measurement models of proactive work behavior and career success. Next, hierarchical regression analyses demonstrated that all four dimensions of proactive work behaviors contributed positively to subjective career success, but not objective (extrinsic) career success.     

Developing critical thinking through student consulting projects

The authors present survey results from faculty at 44 universities on the role of student consulting projects in developing business students' critical thinking. They conclude that students can improve critical thinking by engaging in guided primary and secondary research to inform their business assumptions that underpin business planning and financial modeling in consulting projects. Results also suggest that instructors newer to the practice of using student consulting tend to emphasize objective results (e.g., application of disciplinary skills and research methods), whereas experienced users seem to focus on the subjective consulting process (e.g., managing client relationships and evaluating information quality and fit for the project).     

Knowledge,Skills, and Abilities for the Market Economy: An Investigation of Student Perceptions Before and After China's WTO Entry

This exploratory study conducted in the People's Republic of China sought to determine the managerial knowledge, skills, and abilities (KSAs) that are perceived as important for the Chinese market economy. Questionnaire responses were collected from 145 business students in 2001 (before China's WTO entry) and 141 business students in 2006 (after China's WTO entry). The identified set of eight managerial knowledge, skills, and abilities included: business area knowledge and skills, communication skills, creativity/adaptability, ethics, leadership, problem solving, teamwork, and work habits. For each time period examined, the mean score for “importance” of each KSA was significantly higher than the mean score for “presence.” The differences between the importance mean and the presence mean for each KSA was denoted as a “gap.” This study revealed that five of the eight KSAs had a significantly smaller gap in 2006 than in 2001. This suggests that the business education system in China is enabling the development of more effective managers for the Chinese market economy.     

Nasdaq Trading and Trading Costs: 1993–2002

Nasdaq spreads decline from 1993 to 2002, largely independently of tick‐size reductions. Trade size declines, consistent with greater retail investor activity. Using the method of Chordia, Roll, and Subrahmanyam (2001), we find that concurrent market returns strongly affect liquidity and trading activity. Liquidity exhibits distinct day‐of‐the‐week patterns. There is little evidence that macroeconomic announcements or changes in key interest rates affect Nasdaq stocks overall; but in the bear market, we find a relation between some of these variables and effective spreads, which we interpret as consistent with Nasdaq participants' paying greater attention to fundamentals after the market crash.     

The Impact of the Reduction in Tick Increments in Major U.S. Markets on Spreads,Depth, and Volatility

This study presents an analysis of the impact of the introduction of quotes in sixteenths of a dollar on the AMEX, Nasdaq, and NYSE in mid-1997 on select market characteristics such as spreads, effective spreads, quoted depth, and volume. The findings of the study document reductions in the bid-ask spread, effective spread, and a statistically significant increase in the number of quotes. Interestingly, we find that liquidity, as measured by the total depth at the bid and ask, declines significantly on the AMEX and NYSE, but increases on the Nasdaq. Trading volume increases on the NYSE, but remains unchanged for the AMEX and Nasdaq. We also find that the proportion of even-increment quotes is a relevant factor affecting percentage spreads for Nasdaq both before and after and for the NYSE only after the change in quoting increments.     

RISK MANAGEMENT FOR MIDDLE MARKET COMPANIES

This article reinforces the message of the one immediately preceding by showing that small to medium‐sized firms have even stronger (non‐tax) motives for hedging risks than their large corporate counterparts. Although middle market companies have traditionally been viewed as less sophisticated than their larger corporate counterparts in the risk management arena, the authors suggest that such companies have become increasingly receptive to new hedging strategies using derivative products. When used appropriately, such products allow companies to stabilize their periodic operating cash flow by eliminating specific sources of volatility such as fluctuations in interest rates, exchange rates, and commodity prices. Smaller companies recognize that a single swing in a budgeted cost can have a catastrophic effect on an entire budget, whereas a larger company can more easily absorb such a cost. Moreover, because the principal owners of mid‐sized firms often have a substantial part of their net worth tied up in the business, they are likely to have a far stronger interest than typical outside shareholders in using risk management to reduce the volatility of corporate profits and firm value. Perhaps most important to owners whose firms rely on debt financing, the greater cash flow stability resulting from active risk management significantly reduces the possibility of financial distress or bankruptcy. In this article, three representatives of Bank of America's risk management practice discuss three different exposures faced by middle market companies—those arising from changes in interest rates, foreign exchange rates, and commodity prices—and show how these risks can be managed with derivatives. Besides shielding companies from financial trouble, risk management is also likely to improve their access to the money and capital markets. By protecting the firm's access to capital, risk management increases the odds that the firm will not be forced to pass up good investment opportunities because of capital constraints or fear of getting into financial difficulty.