Analogies of Cash Flow Concepts

Several different procedures for the implementation of the internal rate of return criterion are presented in the literature on investment projects evaluation. Taking the net present worth criterion as a basis for comparison, a survey of some of the suggested procedures and a critique of their theoretical basis are presented. It is showed that, although leading to a proper evaluaticn, they are internally inconsistent in the sense of incorporating modifications that may not really be necessary. To circumvent this possibility, we are going to suggest a conceptual algorithm that should be implemented if we are concerned with the formal application of the internal rate of return criterion.     

Does Forecast Combination Improve Norges Bank Inflation Forecasts?*

We develop a system that provides model‐based forecasts for inflation in Norway. We recursively evaluate quasi out‐of‐sample forecasts from a large suite of models from 1999 to 2009. The performance of the models are then used to derive quasi real time weights that are used to combine the forecasts. Our results indicate that a combination forecast improves upon the point forecasts from individual models. Furthermore, a combination forecast outperforms Norges Bank's own point forecast for inflation. The beneficial results are obtained using a trimmed weighted average. Some degree of trimming is required for the combination forecasts to outperform the judgmental forecasts from the policymaker.     

Cross-Cultural Ethics and the Child Labor Problem

This paper examines the issue of global child labor. The treatment is grounded in the classical economics of Adam smith and the more recent writings of human capital theorists. Using this framework, the universal problem of child labor in newly industrializing countries is investigated. Child labor is placed in its historical context with a brief review of practices in the United States and Great Britain at the time those countries were industrializing. Then, child labor is examined in its contemporary global context. We argue that, as countries industrialize, they tend to follow predictable patterns of development – including use of and eventual abandonment of child labor. We argue that this convergence under the logic of industrial capitalism supports a universalist approach to human rights (that would condemn child labor) over a more tolerant cultural relativist approach.     

Effects of selected emulsifiers,enzymes and a carbohydrate-based fat substitute on physical and sensory characteristics in a low-fat muffin

Abstract Selected emulsifiers, enzymes and a carbohydrate-based fat substitute were incorporated into a standard muffin recipe, and their effects were compared with a full-fat counterpart. The control muffin had a significantly (P<0·01) more yellow crumb, was less firm (P<0·01) and contained less moisture (P<0·01). Sodium stearoyl-2-lactylate (SSL) and diacetyl tartaric acid methyl esters (DATEM) contributed to a less firm crumb (P<0·01) and helped to maintain moisture (P<0·01) in the fat-reduced muffin. Sensory analysis yielded complementary results to the physical data with respect to crumb firmness and crust colour. However, the full-fat muffin was significantly (P<0·01) moister. The emulsifiers along with the enzymes were found to be responsible for reducing crumb size (P<0·01).     

The dynamics among G7 government bond and equity markets and the implications for international capital market diversification

This paper investigates potential international capital market diversification gains from relationships between global government bond and equity markets. Its primary contributions are (1) including both government debt and equity markets in the investigation of global diversification gains, (2) basing the analysis on real, risk-adjusted returns, and (3) evaluating both variance decompositions and impulse responses, as well as long-term relationships for international U.S. dollar investors. We find the cointegration, variance decomposition, and impulse response function results indicate interdependence and reduction in gains to international diversification.     

Spillovers in R&D activities: An empirical analysis of the Nordic countries

This paper analyzes the impact of public research and development (R&D) on private sector output. It is argued that giving away public R&D will increase the input supply of private R&D and, accordingly, will enlarge business sector output. A model based on panel data for all five Nordic countries is estimated by a maximum likelihood procedure allowing for nonlinear relationships. The hypothesis is also tested within a cointegration methodology framework. Evidence is present concerning national spillovers from public R&D to private R&D in Denmark, Finland, and Iceland. For Norway and Sweden, international spillover effects seem to be more dominant. An earlier version of this paper was presented at the International Atlantic Economic Conference, October 7–10, 1999, Montreal, Canada. The authors are grateful to conference discussants and an anonymous referee for useful comments.     

Measuring Innovation in European Industry

This paper analyses the results of the 1993 Community Innovation Survey (CIS). Fifty per cent of European firms introduced a product or process innovation during 1990-92. The share of innovating firms varies between industrial sectors and firm size. The percentage of innovating firms is higher for large firms than for smaller ones. In high-tech sectors this share is two thirds and for traditional ones is one third. The largest part of firms' expenditure for innovation is linked to the adoption and diffusion of technologies through machinery and equipment, which absorbs 50% of firms' innovation expenditure. R&D activities represent, on average, 20% of total innovation expenditure while other innovative activities, such as design and trial production, account respectively for 10% and 11%. The mix of innovation inputs, especially R&D and investment, is strongly correlated with firm size, displays little change across countries and varies greatly across industries.     

Great expectations and broken promises: misleading claims,product failure,expectancy disconfirmation and consumer distrust

Previous research in the product failure literature shows that such failures have important implications for evaluations of the target product, and even for evaluations of closely related products. The current studies identify distrust as an additional byproduct of negative expectancy disconfirmation and show that such perceptions are capable of producing even broader carryover effects—pertaining to unrelated products/companies. The effects of distrust are identified through tests of mediation and moderation, and are shown to be distinct from other processes known to relate to product failure. The results also show an asymmetry in the effects of positive and negative disconfirmation, consistent with the predicted negativity bias in judgments of generalized trust versus generalized distrust. Finally, generalized distrust continued to exert a negative influence despite the opportunity to directly examine the second product, and these effects were actually augmented to some extent. The results have implications for the expectancy disconfirmation and product failure literatures, as well as the defensive bias model of distrust.     

Estimating time series and cross section tourism demand models: Mainland United States to Hawaii data

A study of factors affecting the number of visitors to Hawaii during the period 1993–2007 prompted by an observed waning of the U. S. mainland to Hawaii visitor market was conducted. Both time series and cross section analyses revealed that Log Gross State Product, Log Chained Airfare and Log Distance to Orlando, Florida were the most important predictor variables. A mixed model which modeled Log Chained Gross State Product, Log Chained Airfare, two recessions plus the September 11, 2001 effect in addition to other fixed effects and random state effects was used. Cross section (spatial) airfare elasticities on an annual basis were high and growing over time, but those estimated from the time series analysis (temporal) were much lower. Elasticities derived from Gross State Product were moderately high and very stable over time. To counteract the distance effect, stopovers in existing mainland resort cities when en route to Hawaii and other promotions to develop a stronger presence of a Hawaii image were recommended.     

Trademark dilution and the practice of marketing

This article considers the marketing implications of the Federal Trademark Dilution Act (FTDA) of 1995. The FTDA, an amendment to the Lanham Act, will influence the manner in which marketing is practiced well into the twenty-first century. Although the FTDA is specifically concerned with protecting famous trademarks from being diluted—either by having their distinctiveness diminished or positive associations tarnished—by similar trademarks, its influence will not be limited to trademark or branding issues. Implications range from the allocation of advertising resources to the increased use of marketing research. Robert A. Peterson holds the John T. Stuart III Centennial Chair in Business Administration and the Charles E. Hurwitz Fellowship, both at The University of Texas at Austin. His Ph.D. is from the University of Minnesota. Dr. Peterson’s publications have appeared in such journals as theJournal of the Academy of Marketing Science, Journal of Marketing, Journal of Marketing Research, Journal of Consumer Research, andMarketing Science. His research interests range from Internet marketing to research methodology to marketing strategy. He presently serves on the boards of several for-profit and not-for-profit organizations as well as an advisory committee to the Bureau of the Census. Karen H. Smith is an assistant professor at Southwest Texas State University. Her Ph.D. is from The University of Texas at Austin. Dr. Smith’s research interests include consumer information processing, consumer knowledge structures (schemata), dilution of brand equity, and adolescent smoking. Her research has been published in theJournal of Consumer Research, Journal of Marketing Education, andAdvances in Consumer Research. Philip C. Zerrillo is executive MBA director at The University of Texas at Austin. His Ph.D. is from Northwestern University. Dr. Zerrillo’s research interests have focused on broad-based business innovation, strategic development of distribution channel arrangements, the value of brands in the distribution channel, managing brands as assets, and the legal aspects of branding and channel decisions. His most recent research on antitrust regulation appeared in theJournal of Corporation Law, a University of Iowa law review.