Consumption Externalities,Habit Formation and Equilibrium Efficiency*

We analyze the welfare properties of the competitive equilibrium in a capital accumulation model where individual preferences are subject to both habit formation and consumption spillovers. Using an additive specification for preferences, according to which the argument in the utility function is a linear combination of present and past values of own consumption and consumption spillovers, we analyze the circumstances under which these spillovers are a source of inefficiency. It is shown that consumption externalities have to interact with habits in order to generate an inefficient dynamic equilibrium. Finally, we characterize optimal tax policies aimed at restoring efficient decentralized paths.     

The Discount Rate in Emerging Markets: A Guide

There is considerable controversy about the correct discount (or "hurdle") rate to use when performing valuations of investments in real assets in emerging markets. The topic is particularly relevant because of the growing need to evaluate privatizations, direct private acquisitions, and greenfield investments in new productive facilities throughout the world.
This article argues that the traditional practitioners' approach of building a country risk premium into the discount rate is generally inappropriate, mainly because country risk is not the same for all projects nor is it totally systematic. Moreover, there is no reason for the discount rate to be closely related to the spread on the government bonds of the country concerned. The author also points out that, in determining the appropriate discount rate, what is important is not the segmentation of the market, but the extent to which the investor is locally or globally diversified. The article accordingly reviews a selected group of models for calculating discount rates for both segmented and integrated markets. Adjustments to the valuation procedure are also suggested for cases in which investors are not well diversified or the investment is illiquid.     

Global intermodal tank container management for the chemical industry

The scale of the global chemical industry is enormous: in 2003, the total value of global production exceeded US$1.7 trillion. International logistics is especially crucial to the high-value chemicals industry, since raw materials sources, production facilities, and consumer markets are distributed globally. Fluctuating demand, imbalanced trade flows, and expensive transportation equipment necessitate dynamic asset management. This paper focuses on asset management problems faced by tank container operators, and formulates an operational tank container management problem as a large-scale multi-commodity flow problem on a time-discretized network. By integrating container routing and repositioning decisions in a single model, total operating costs and fleet sizes can be reduced. A computational study verifies this hypothesis.     

Convergence in the Americas: Some Lessons from the DR‐CAFTA Process

The proliferation of trade agreements in the Americas is a major cause for concern as it might fragment or inhibit the emergence of a hemispheric trading system. In addition to establishing a free trade area between the US and six countries in Latin America, the DR‐CAFTA consolidates a set of trade arrangements among those six Latin American countries. The approaches and techniques employed to achieve this consolidation should be studied by policy analysts and negotiators of broader hemispheric‐wide negotiations since the DR‐CAFTA is in fact a microcosm of the spaghetti bowl of trade agreements now existing in the Americas. This paper points out the potential consequences of the proliferation of trade agreements in the Americas and provides an analysis of the convergence techniques and approaches used in the DR‐CAFTA, in particular in the areas of market access and rules of origin.     

The Spanish Tomato Export Sector of the Almeria Region: An Econometric Approach

This article analyzes the current situation of the tomato export sector of Almeria, the principal exporting province of Spain. First, a critical view is presented relating to the internal organization of this sector; the most important problem observed is the marketing system which is atomized, heterogeneous and significantly difficult for raising funds from the individual partners in order to begin innovative projects. Second, to establish whether this area is losing market share, the sector is compared to the other principal tomato suppliers of the European Union (the Netherlands, Morocco, and other areas of Spain). The analysis shows Almeria has defended its market share in the most recent years. Finally, the most influential variables in the commercial process are analyzed by a tomato export model that shows there are substitution effects of the Almerian tomato for products from others origins, mostly the Netherlands.

Measuring Executive Education Service Quality: A Construct Validity Study in Latin America

ABSTRACT

This article reports on the development of a measurement tool to assess service quality in an executive education setting. For this purpose, two studies were performed at a Peruvian business school. In the first study, data were collected from 205 executive students to establish the dimensionality of the measurement instrument. The follow-up study, performed a year later with data gathered from 354 executive students, was devoted to examining the stability of the factor structure in addition to the reliability and construct validity of the scale's scores. Results provide strong support for the validity and reliability of the scores on the five EXEQ subscales. The findings also showed that students not only evaluate executive education service quality through five factors but that they also view overall executive education service quality as a higher-order construct that captures elements of all its constitutive dimensions.

RESUMEN. El propósito de este estudio es informar sobre el desarrollo de una herramienta de medición para evaluar la calidad del servicio, en un entorno educacional para ejecutivos. Para lograrlo, se realizaron dos estudios en una escuela de negocios (business schools) de Perú. En el primer estudio, se recopilaron datos provenientes de 205 estudiantes ejecutivos para establecer la dimensión del instrumento de medición. El estudio de seguimiento, a su vez, se realizó un año más tarde con los datos obtenidos de 354 estudiantes ejecutivos, que se utilizaron para examinar la estabilidad del factor estructura, y la confiabilidad y validación constructiva de la clasificación de escala. Los resultados obtenidos respaldaron fuertemente la validación y confiabilidad de la clasificación en cinco subescalas EXEQ. Los hallazgos también demostraron que los estudiantes no sólo evalúan la calidad de los servicios educacionales brindados a los ejecutivos con base en cinco factores, sino que ellos también analizan la calidad de este servicio educacional desde una perspectiva mucho más amplia, que captura los elementos que constituyen sus propias dimensiones y alcance.

RESUMO. Este estudo relata o desenvolvimento de uma ferramenta de medição para avaliar a qualidade do serviço num cenário de formação de executivos. Com esse objetivo, dois estudos foram realizados numa escola de negócios (business school) peruana. No primeiro estudo, dados foram coletados de 205 estudantes executivos para verificar a dimensionalidade do instrumento de medição. O estudo de follow-up, realizado um ano depois com dados coletados de 354 estudantes executivos, dedicou-se a examinar a estabilidade da estrutura de fator e a confiabilidade e validade de constructo dos escores da escala. Os resultados dão fortes sinais da validade e confiabilidade dos escores nas cinco subescalas EXEC. Constatou-se também que os estudantes não apenas avaliam a qualidade do serviço de formação de executivos mediante cinco fatores, mas também vêem a qualidade do serviço de formação de executivos como um constructo de ordem superior, que capta elementos de todas as suas dimensões constitutivas.     

Incentives,Capital Budgeting,and Organizational Structure

Divisional managers compete for financial resources in what is often referred to as an internal capital market. They also have a common interest in maximizing corporate profits, as this determines the resources available to the firm as a whole. Both goals are powerful motivators but can at times conflict: while the amount of resources available to the firm depends on corporate performance, divisional funding depends upon the division's performance relative to the rest. We propose a model in which organizational form is endogenous, divisions compete for corporate resources, and managers have implicit incentives. We show that organizational design can help companies influence their divisional managers' potentially conflicting goals. Our analysis relates the firm's organizational structure to the source of incentives (external vs. internal), the nature of the incentives (competition vs. cooperation), the level of corporate diversification, the development of the capital market, and to industry and firm characteristics.     

Factors helping the HR function gain greater acceptance for its proposals and innovations: evidence from Spain†

On the basis of the sense-making and sense-giving literature, this study addresses factors helping the HR function gain greater acceptance by employees for its proposals and innovations. Using an original sample of 298 employees from nine firms in Spain, we find that HR department credibility is only one of the factors that influence employees' acceptance. Other essential elements are top management and supervisor support. We also investigate the consequences that differential levels of support from supervisors and top managers can have for the acceptance of HR innovations, and we find that supervisor support carries more weight than that of top managers. Finally, we explore variations in the importance of the HR function credibility as an acceptance enabler under different organizational innovation climates. The results suggest that HR credibility plays an essential role independently of climate.     

Lessons from the global financial crisis – the case of Mainland China and Hong Kong

Abstract

The analysis of the intertwined reactions of Hong Kong and Mainland China to the 2008 Global Financial Crisis is considered in this study through the lenses of their stock markets. The GARCH-based analysis of stock market performance over the period December 2011–December 2014 shows that trade and equity sectors were the sectors most affected by the global recession; volatility was prevalent on the Shanghai stock market, whereas volatility persistence characterised the Hong Kong stock market. The results also show that the two stock markets recovered quite quickly. Tight controls applied by the financial authorities helped ensure some stability during the crisis.