Structural gravity equations with intensive and extensive margins

Abstract .  Recent trade models with heterogeneous firms have changed the interpretation of gravity equations. Chaney (2008) shows that the effect of distance on the number of exporters and average exports depends on key parameters characterizing the elements of market structure. We use firm-level export data to estimate the structural parameters of Chaney's model. Controlling for the fixed costs of exporting, our estimated parameters match, for 28 out of 34 industries, the model's theoretical predictions. Our industry parameters allow us to evaluate separately the effect of transport costs and tariffs on trade, without having to resort to detailed data on trade frictions.     

MONETARY AND FISCAL POLICY EFFICIENCY AND COORDINATION IN A MULTI‐SECTOR OPEN‐ECONOMY GENERAL EQUILIBRIUM MODEL

The paper analyzes monetary and fiscal stabilization and coordination in a multi‐sector stochastic new open economy macroeconomics (NOEM) model. It first aims to assess the capacity of fiscal and monetary policy to reduce or eliminate the negative welfare effects of an unanticipated productivity shock affecting some or all of the sectors in each country. Second, it evaluates the possible gains from international monetary cooperation as well as the impact of active fiscal policy on the welfare performance of monetary policy. The setup also allows for international asymmetry concerning the uncertainty over the shocks. The results show that monetary and fiscal policies are efficient tools of stabilization and under several conditions they can replicate the flexible‐price equilibrium. However, their welfare performance is not necessarily increased when both monetary and fiscal policies react to shocks at the national level. The existence of bilateral gains from monetary cooperation depends on the degree of asymmetry concerning the uncertainty over the shocks.     

When does financial integration matter for fiscal policy in a currency union? A welfare-based approach

We use a two-country new open economy macroeconomics model describing a currency union with imperfect financial integration. We assume that household preferences are biased towards the goods produced within the country. We use this setup to show how the degree of financial integration and the home bias affect the welfare efficiency of fiscal policy. This is particularly important for the implications of a fiscal policy launched by a member of the euro zone where the home bias is in a decreasing trend due to higher goods market integration and where there are explicit efforts to enhance financial integration. The results show in particular how the effects of an increasing financial integration on the impact of a fiscal policy can be mitigated or amplified by a decreasing home-product bias. Moreover, under certain conditions, the degree of financial integration has no effect on the welfare efficiency of fiscal policy despite its non-negligible effects on the components of welfare.     

New economic geography meets Comecon

We analyse the internal spatial wage and employment structures of the Czech Republic, Hungary, Poland, Slovakia and Slovenia, using regional data for 1996–2000. A new economic geography model predicts wage gradients and specialization patterns that are smoothly related to the regions’ relative market access. As an alternative, we formulate a ‘Comecon hypothesis’, according to which wages and sectoral location are not systematically related to market access except for discrete concentrations in capital regions. Estimations support both the NEG (new economic geography) prediction and the Comecon hypothesis. However, when we compare internal wage and employment gradients of the five new member states with those of Western European countries, we find that the former are marked by significantly stronger discrete concentrations of wages and service employment in their capital regions, confirming the ongoing relevance of the Comecon hypothesis.     

Interlocking Corporate Directorships as a Social Network

A bstract . Outside directors are now a majority on the boards of the' Fortune 500' corporations creating a network of interconnections through interlocking directorates. Details of this phenomenon and explanations for its significance can be found in an earlier article in this Journal *. This network can be visualized as a system through which common norms, values , and a sense of "weness" can flow. This sense of being part of a corporate establishment would have significant effects on corporate conduct. From what top corporate leaders say and do, the validity and implications of this hypothesis are examined. This class hegemony theory views power as shared within a system of social relationships, in contrast to the management control theory which considers management as in total control.     

Transcendent customer experience and brand community

Transcendent customer experiences (TCEs), which have aspects of flow and/or peak experience, can generate lasting shifts in beliefs and attitudes, including subjective self-transformation. With data from a pre-test/post-test quasi-experimental field experiment we examine the impact of TCEs on customers’ integration in a brand community. Because TCEs are highly desirable and valued for their own sake, customers value marketing activities they perceive as instrumental to them. This study demonstrates that a TCE in the context of a marketer-facilitated consumption activity can strengthen a person’s ties to a brand community, delivering a particularly strong form of brand loyalty. Alternate phone numbers for James H. McAlexander.     

Managing Conflict in Software Development Teams: A Multilevel Analysis

For a new product development (NPD) organization, a little conflict can be a good thing. Healthy disagreements can push project team members or different functional groups in an organization to pursue more in-depth, insightful analysis. This type of creative tension can help to engender an environment that encourages innovation and thus keeps NPD efforts free from the business-as-usual doldrums. However, management must ensure that conflict remains on a healthy level. David H. Gobeli, Harold F. Koenig, and Iris Bechinger note that conflict must be managed not only to increase the satisfaction of project team members, but also to achieve strategic project success. To provide better understanding of the important issues in conflict management, they examine the effects of three conflict factors on software development project success: context, conflict intensity, and conflict management style. Using survey responses from 117 software professionals and managers, they develop a multi-level framework of success versus conflict for team-based, software development projects. Within this framework, they examine context, conflict intensity, and conflict management approaches at the team and organization levels. For the participants in this study, unresolved conflict has a strong, negative effect on overall software product success and customer satisfaction. Project team member satisfaction decreases substantially with higher intensity conflict at the organization level, and even more strongly at the project level. For the respondents to this study, the combined effects of conflict intensity and conflict management style on project success are significant, but they are not as great as the combined effects of such context variables as company goals, group dynamics, and management support. Two conflict management styles—confronting and give and take—have beneficial effects on success at the organization level for the firms in this study. Smoothing, withdrawal, and forcing all have negative effects, although only forcing has a statistically significant negative effect. In general terms, the results suggest that management should guard against frequent use of the dysfunctional management styles—withdrawal, smoothing, and forcing. The results suggest that emphasis on confrontation—that is, true problem solving—is essential at the project level, even if a give-and-take style is better tolerated at the organization level.     

VFR tourism: the importance of university students as hosts

The role of university students in attracting friends and relatives as visitors to their place of study is examined. A questionnaire survey conducted at a UK university is presented in the context of general UK tourism and the visits to friends and relatives (VFR) sector in particular. It is demonstrated that universities represent large, frequently underestimated, generators of VFR tourism and that significant differences exist between the friends and the relatives' components. The paper draws concrete conclusions about the marketing opportunities and argues that the students themselves represent the most effective target for promotion efforts. It also points out possibilities for turning day visits into overnight stays, particularly in the relatives' segment. Copyright © 2007 John Wiley & Sons, Ltd.     

Philip Scranton and Janet F. Davidson, eds. The Business of Tourism: Place, Faith, and History

This volume is a selection of papers presented in 2004 at theHagley Center for the History of Business, Technology and Societyconference. Following the editors, the papers’ focus ison the business dimensions of tourism and not on the culturalones, which today dominate in research. Furthermore, they dealwith three themes, which are not in the foreground of scholarlywork; namely, place, religion, and communism. This may