Next generation entrepreneur: innovation strategy through Web 2.0 technologies in SMEs

This essay studies the diffusion/adoption of Web 2.0 technologies in small and medium sized enterprises (SMEs)’ innovation strategies and particularly in research, development, design and other innovation activities. It looks at the effects of these technologies on the evolution and the dynamics of firm's innovation capabilities and the implications of entrepreneurial turnover on the adoption of said technologies. The study is based on original fieldwork with some 130 SMEs. The author finds that a consistent share of SMEs is actively trying to fill the knowledge gap and integrate Web 2.0 technologies in their innovation strategies. SMEs are managing this integration by progressively adjusting their behaviour in reaction to the opportunities offered by the technology and balancing the dependence of the business from the web. Barriers to the adoption of such technologies are also discussed.     

Equilibrium interest rate and liquidity premium with transaction costs

Summary. In this article we study the effects of transaction costs on asset prices. We assume an overlapping generations economy with two riskless assets. The first asset is liquid while the second asset carries proportional transaction costs. We show that agents buy the liquid asset for short-term investment and the illiquid asset for long-term investment. When transaction costs increase, the price of the liquid asset increases. The price of the illiquid asset decreases if the asset is in small supply, but may increase if the supply is large. These results have implications for the effects of transaction taxes and commission deregulation. Received: December 5, 1997; revised version: March 19, 1998     

Public Procurement and Foreign Direct Investment Across France,Germany, Italy and the UK

Foreign direct investment (FDI) has become an important factor of economic development during the last decades. FDI contributes to the economic growth of the host economy through learning, diffusion of technology, positive externalities and capital inflows. Attracting FDI is currently an objective in its own right for many countries and this paper aims to identify policies affecting the multinational firm’s decision to establish a subsidiary. After accounting for labour productivity and trade openness, cross-section analysis, both industry-wise and country-wise, indicates that public procurement, especially “buy national” policies, and agglomeration economies are statistically significant determinants of FDI. Although our findings pertain to four large European economies, e.g. France, Germany, Italy and the UK, they constitute relevant policy guidelines for developing countries as well.      

Forecasting stock market returns over multiple time horizons

In this paper, we seek to demonstrate the predictability of stock market returns and explain the nature of this return predictability. To this end, we introduce investors with different investment horizons into the news-driven, analytic, agent-based market model developed in Gusev et al. [Algo. Finance, 2015, 4, 5–51]. This heterogeneous framework enables us to capture dynamics at multiple timescales, expanding the model’s applications and improving precision. We study the heterogeneous model theoretically and empirically to highlight essential mechanisms underlying certain market behaviours, such as transitions between bull and bear markets and the self-similar behaviour of price changes. Most importantly, we apply this model to show that the stock market is nearly efficient on intraday timescales, adjusting quickly to incoming news, but becomes inefficient on longer timescales, where news may have a long-lasting nonlinear impact on dynamics, attributable to a feedback mechanism acting over these horizons. Then, using the model, we design algorithmic strategies that utilize news flow, quantified and measured, as the only input to trade on market return forecasts over multiple horizons, from days to months. The backtested results suggest that the return is predictable to the extent that successful trading strategies can be constructed to harness this predictability.     

Expectations and Attitudes Toward Gender-Based Price Discrimination

This study explores consumer expectations and attitudes related to gender-based price discrimination. Although much research has focused on pay inequalities and gender diversity, considerably less attention has been focused on situations in which men and women are charged different prices based on gender. In two studies, expectations and attitudes toward gender-based price discrimination are examined. In Study 1, two scenarios related to prices at hair salon and dry cleaning services were manipulated to measure expectations and attitudes toward gender-based price discrimination. We found that the nature of the service results in expectations of price differences between men and women. We also found men expect gender-based pricing more than women. In Study 2, qualitative research was conducted to reveal the cognitions that men and women experience when exposed to gender-based price discrimination.     

Fostering intra‐BRICS trade and investment: The increasing role of China in the Brazilian and South African economies

In the past two decades, Brazil, South Africa and China have designed closer economic and political ties. Since the early 2000s, China has become a key economic partner for both countries. International trade and foreign direct investment between the three nations have expanded, and closer political ties have also evolved. This article elaborates on the increasing economic interdependence between Brazil, China, and South Africa addressing challenges and opportunities for all three countries involved.     

Examining U.S. Food Retailers’ Decisions to Procure Local and Organic Produce From Farmer Direct-to-Retail Supply Chains

U.S. food retailing is a competitive sector that has undergone rapid changes. The U.S. market for organic products has expanded rapidly over the last decade, while local foods have become a more visible marketing strategy. Studies focusing on the marketing of these products by retailers are sparse and generally qualitative. This article is the first quantitative examination of the connection between the local and organic retailing. A sample selection model is used with data from a 2008 national survey of organic retailers to study supplier interactions and company characteristics that influence a retailer’s decision to procure local organic produce directly from farmers, and the rate at which they procure these products. The results show that the number of years a store has sold organic products and the size of the company, as well as aspects prioritized in choosing suppliers and past problems interacting with local suppliers, affect the outcomes.     

French Firms' Exports During Downturns: Evidence from Past Crises

This paper makes use of detailed French firm‐level data on a quarterly basis to investigate the impact of past crises on exports and the margins of adjustment. We first detect crises periods using quantitative criteria and classify them into banking crises, currency crises, simultaneous banking and currency crises, and other crises. Our results underline the prevalence of the intensive margin of adjustment to large shocks, that is, firms reducing their average sales per product while staying on the market. The extensive margin of trade is, however, dominant in currency crises. On average, a crisis reduces the growth rate of exports over six quarters. Finally, we show that exports overreact to demand variations during crises, and that the extensive margin is more responsive to demand. Other factors, not directly related to demand, mostly affect the intensive margin.     

Monetary policy transparency and pass-through of retail interest rates

This paper examines the degree of pass-through and adjustment speed of retail interest rates in response to changes in benchmark market rates in New Zealand during the period 1994–2004. We consider the effects of policy transparency and financial structure of the monetary transmission mechanism. New Zealand is the first OECD country to adopt a full-fledged inflation targeting regime with specific accountability and transparency provisions. Policy transparency was further enhanced by a shift from quantity (settlement cash) to price (interest rate) operating targets in 1999. Using Phillips–Loretan estimates of cointegrating regressions we find complete long-term pass-through for some but not all retail rates. Our results also show that the introduction of the Official Cash Rate (OCR) increased the pass-through of floating and deposit rates but not fixed mortgage rates. In line with previous studies we find the immediate pass-through of market interest rates to bank retail rates to be incomplete. Although we find no statistical evidence for asymmetric response of retail rates to changes in market rates other than for business lending rates in the pre OCR period, differences in the magnitude of mean adjustment lags indicate that banks appear to pass on decreases to fixed mortgage rates faster. Overall, our results confirm that monetary policy rate has more influence on short-term interest rates and that increased transparency has lowered instrument volatility and enhanced the efficacy of policy.