Tax-subsidized underpricing: The market for Build America Bonds

Build America Bonds (BABs) were issued by municipalities for 20 months as a part of the 2009 fiscal package. Unlike traditional tax-exempt municipals, BABs are taxable to the holder, but the Treasury rebates 35% of the coupon to the issuer. The stated purpose was to provide municipalities access to a more liquid market including foreign, tax-exempt, and tax-deferred investors. We find BABs do not exhibit greater liquidity than traditional municipals. BABs are more underpriced initially, particularly for interdealer trades. BABs also show a substitution from underwriter fees toward more underpricing, suggesting that the underpricing is a strategic response to the tax subsidy.     

Money Demand in an EU Accession Country: A VECM Study of Croatia

The paper estimates the money demand in Croatia using monthly data from 1994 to 2002. A failure of the Fisher equation is found, and adjustment to the standard money‐demand function is made to include the inflation rate as well as the nominal interest rate. In a two‐equation cointegrated system, a stable money demand shows rapid convergence back to equilibrium after shocks. This function performs better than an alternative using the exchange rate instead of the inflation rate as in the ‘pass‐through’ literature on exchange rates. The results provide a basis for inflation rate forecasting and suggest the ability to use inflation targeting goals in transition countries during the EU accession process. Finding a stable money demand also limits the scope for central bank ‘inflation bias’.     

Participative backcasting: A tool for involving stakeholders in local sustainability planning

This paper reports on the use of a backcasting approach with local stakeholders in five European cities where several Images of the Future were formulated for household consumption in sustainable cities. The aim was to find methods for inspiring local stakeholders to participate in discussions about sustainability with a long-term perspective. Previous exercises of similar kinds have mainly involved experts. A method based on workshops and back-office work was developed and is described and analysed here, together with the results obtained. The outcomes in terms of ideas, votes and dimensions are also discussed. The findings suggest that the method worked reasonably well, with the process quality receiving the highest ratings. The quality of outcomes was perceived as less reliable. Adaptations should include more efforts to recruit participants with varied backgrounds and more innovative approaches for liberating subjects’ minds during the time travel stage of the process. The outcomes obtained show that there appears to be a common set of popular ideas for more sustainable everyday city life in the EU, including more local and organic food, a greener environment, better public transport and opportunities for non-motorised transport and reorientation of values.     

Using Relational and Transactional MCSs to Manage the Delivery of Outsourced Public Services: Evidence from Twelve Cases in the USA

The successful management of the purchaser–provider relationship is essential for the effective delivery of public services, and entails the use of both transactional and relational approaches. We herein analyse the degree and complementarity of transactional and relational management control systems in the management of purchaser–provider relationships for the successful delivery of public services using evidence from 12 US case studies. We demonstrate that transactional and relational management control systems are controlled differently in order to improve contracting efficiency. We also show how a combination of these management control systems offers a framework for structured public accountability and service flexibility.     

External validation of the use of vignettes in cross-country health studies

Cross-country comparisons of subjective assessments are rendered difficult if not impossible because of sub-population specific response style. To correct for this, the use of vignettes has become increasingly popular, notably within cross-country health studies. However, the validity of vignettes as a means to re-scale across sample sub-populations critically rests on the assumption of “response consistency” (RC): that vignettes and self-assessments are evaluated on the same scale. In this paper, we seek to test this assumption by applying objective measures of health along with subjective measures and vignettes. Our results indicate that the assumption of RC is not innocuous and that our extended model relaxing this assumption improves the fit and significantly changes the cross-country rankings of health vis-á-vis the standard Chopit model.     

Political business cycles and imprisonment rates in Italy: Report on a work in progress

Sociologists have shown the presence of statistically significant associations between changing economic conditions and rates of imprisonment in a number of countries characterized by common law systems. Furthermore, these associations do not seem to be mediated by changing rates of criminal behavior. This article considers the possibility that the same relationships exist in a civil law society, Italy, for the period 1896–1965. It then goes on to highlight an hypothesis and possible test to explain the nature of these associations, based on the intervening role of public opinion.     

How does employee development affect turnover intention? Exploring alternative relationships

This study explores alternative relationships between perceived investment in employee development (PIED) and turnover intention by including affective commitment, perceived internal employability, and perceived external employability as potential mediators. Data were collected through a structured survey from 337 employees working in two large companies in Italy. The factorial validity and dimensionality of the latent constructs studied were evaluated in a confirmatory factor analysis framework, and the mediation hypotheses were tested in a full structural equation model. Results show that the overall effect of PIED on turnover intention is negative and almost fully mediated by external employability and affective commitment, whereas the path through internal employability is not supported. More specifically, PIED increases commitment, which in turn limits the likelihood of turnover. In addition, although perceived external employability is positively associated with turnover intention, PIED seems to reduce this effect by negatively affecting employee perceptions of their marketability in the labour market. The study supports the assumptions of social exchange theory in explaining turnover behaviour as a consequence of employee development support. Contextually, it questions the existence of the employability paradox because it does not reveal either a retention path via perceived internal employability or a turnover risk via perceived external employability.     

The effect of augmented reality versus traditional advertising: a comparison between neurophysiological and self-reported measures

Despite the growing application of augmented reality in advertising, there is limited understanding about how customers respond to their interaction with the augmented reality advertising and how it differs from a standard paper-based advertising. Augmented reality ads are immersive, interactive, and lifelike, which means they may help companies create an emotional connection with their customers. The authors test if customers would respond in terms of emotional and affective intensity differently to augmented reality versus standard paper-based advertising. The results of two laboratory studies that consider physiological measures of arousal (galvanic skin response), self-reported measure of affect intensity and willingness to pay show that the higher willingness to pay for customers exposed to augmented reality as opposed to standard paper-based ads is driven by the physiological arousal, but not by the self-reported affect intensity and that processing fluency possibly underlies consumer’s enhanced emotional responses toward AR. These results suggest that replacing traditional advertisements with augmented reality advertisements enhances customer physiological responses and willingness to pay, with possible implications on customer segmentation and marketing communication.