Fully modified estimation with nearly integrated regressors

I show that the test procedure derived by Campbell and Yogo [2006. Journal of Financial Economics 81, 27–60] for regressions with nearly integrated variables can be interpreted as the natural t-test resulting from a fully modified estimation with near-unit-root regressors. This clearly establishes the methods of Campbell and Yogo as an extension of previous unit-root results and shows that the optimality of their test is valid under more general assumptions than those given in the original paper.     

The establishment of the danish windmill industry—Was it worthwhile?

The paper examines the welfare effects of the Danish subsidies granted for the electricity production from wind power. This policy has induced a remarkable development of the Danish windmill industry resulting in a dominant position on the world market. The article demonstrates a strong learning-by-doing productivity growth in the Danish windmill industry and it analyzes the costs and benefits of this infant industry case. The costs consist of the efficiency loss from diverting electricity production from using fossil fuels to utilizing wind power. Benefits are the reductions in the environmental damage of using fossil fuels, however, the main benefits are related to the emergence of a new export sector. As the value of the windmill firms at the stock exchange by far exceeds that of the accumulated distorted losses in electricity production, this case demonstrates a successful infant industry strategy. JEL no. D2, L5, L6     

Costly Search and Mutual Fund Flows

This paper studies the flows of funds into and out of equity mutual funds. Consumers base their fund purchase decisions on prior performance information, but do so asymmetrically, investing disproportionately more in funds that performed very well the prior period. Search costs seem to be an important determinant of fund flows. High performance appears to be most salient for funds that exert higher marketing effort, as measured by higher fees. Flows are directly related to the size of the fund's complex as well as the current media attention received by the fund, which lower consumers' search costs.     

Actor-to-actor dissemination of electronic procurement (EP) adoption: an exploration of influencing factors

The merits of electronic procurement (EP) tools have been widely acknowledged. Achieving these benefits remains a challenge, as companies are experiencing difficulties with human adoption during the implementation of such tools. In this article we focus on the intra-organizational spread of EP adoption from one actor to another. Based on exploratory interviews with experts and representatives of large Dutch purchasing organizations, we have identified nine categories of influences on actor-to-actor dissemination: perceived advantage, communication, demonstration, enforcement, training, involvement, risk reduction, reward, and disposition. This study is beneficial to companies engaging in the implementation of EP tools as it provides a portfolio of interventions that can be used to stimulate the spread of adoption. This article addresses a new area in EP research and opens up possibilities for future research in EP implementation.     

On Cournot-Nash equilibrium distributions for games with differential information and discontinuous payoffs

Summary Mas-Colell's model for equilibrium distributions in large anonymous games is extended by the introduction of an abstract, non-topological notion of players' characteristics. The generality of this model allows us to include as a component of a player's characteristic her/his degree of well-informedness (differential information). This makes it possible to address a generalization of a model recently formulated by Khan-Rustichini. We show that one can remove their rather unnatural compactness condition on the space of admissible decision rules, provided that one allows for decision rules which are randomized. Our utility functions need not be continuous; this particular technical aspect solves an open question of Khan concerning Mas-Colell's original model. Our method of proof is based on the noval observation that Cournot-Nash equilibrium distributions are precisely the solutions of a variational inequality for transition probabilities.     

The implementation of customer profitability analysis: A case study

By using customer profitability analysis (CPA), firms can determine the profit contribution of customer segments and/or individual customers. This article presents an approach for the implementation of CPA. The implementation process is illustrated using a case study of a firm producing and selling professional cleaning products. The case study highlights specific issues related to CPA in an industrial setting, and the results provide examples of the possible benefits of implementing a process of regular CPA.     

Beyond the journey: the lasting impact of culinary tourism activities

In general, food tourism research has focused on tourist behaviour prior to or during trips, as well as food tourism development and marketing from a destination perspective. This exploratory study investigates food tourism from a broader context to determine if food tourism activities may impact attitudes and future behaviours. Data from a nine-country survey indicate that food activities likely impact trip satisfaction and influence intention to return and likelihood to recommend a destination. Food experiences are connected with memory, and these food experiences and souvenirs may influence destination image and lead to future purchases. Suggestions are provided for further research.     

The future of European development aid

Development assistance represents one mechanism for the redistribution of global wealth. This article examines key external challenges that the development aid systems in the EU currently confront. Among the most important elements of the changing backdrop against which decisions on preparing EU development cooperation for the future will be made are the increasing differentiation of countries within the developing world and the rise of new global development actors, and the growing prominence of issue linkages between security and development and the environment and development. These challenges raise important questions for the EU concerning the future rationale and organization of development assistance.     

Characteristic-based mean-variance portfolio choice

We study empirical mean-variance optimization when the portfolio weights are restricted to be direct functions of underlying stock characteristics such as value and momentum. The closed-form solution to the portfolio weights estimator shows that the portfolio problem in this case reduces to a mean-variance analysis of assets with returns given by single-characteristic strategies (e.g., momentum or value). In an empirical application to international stock return indexes, we show that the direct approach to estimating portfolio weights clearly beats a naive regression-based approach that models the conditional mean. However, a portfolio based on equal weights of the single-characteristic strategies performs about as well, and sometimes better, than the direct estimation approach, highlighting again the difficulties in beating the equal-weighted case in mean-variance analysis. The empirical results also highlight the potential for ‘stock-picking’ in international indexes using characteristics such as value and momentum with the characteristic-based portfolios obtaining Sharpe ratios approximately three times larger than the world market.