Stock returns and volatility: Another look

Most empirical work examining the intertemporal mean-variance relationship in stock returns has tended to use relatively simple specifications of the mean and especially of the conditional variance. We augment the information set to include economic variables that other researchers have found to be important and use GARCH-M models to explore the relation between volatility and expected stock returns. We find that the additional variables have little impact on the conditional variance and that any intertemporal relationship between volatility and stock returns is weak or unstable. Our results signal the need for theoretical models of the intertemporal volatility-return relationship, and call for further studies of the determinants of the conditional variance of stock returns.     

Too close for comfort? Distinguishing between team intimacy and team cohesion

The authors examine theory and research on team intimacy and team cohesion, and argue that the two have often been confused, merged, and used interchangeably in recent theoretical, empirical, and applied work on team effectiveness. The authors propose distinct definitions to clarify and distinguish between team intimacy and team cohesion, and suggest areas that will aid research and application. Their examination provides a framework for understanding the inconsistent findings in team effectiveness and team building research and thus helps to improve human resource management (HRM) interventions.     

How important is improving food availability for reducing child malnutrition in developing countries?

Do increases in the food supply per person in a country, i.e., national food availability, contribute substantially to reductions in malnutrition among its children? This paper sets out to answer this controversial question using panel data from 63 developing countries over 1970–1996. This paper gives evidence in support of a statistically significant and strong positive impact of national food availability on child nutrition, finding that increased food supplies have resulted in significant reductions in malnutrition since the 1970s despite population increases over the period. However, per‐capita food supplies have a declining marginal impact: their effect is quite strong for countries with very low food availability (e.g., most countries in sub‐Saharan Africa and South Asia), but weak or non‐existent for those with high levels (e.g., most countries in the Near East and North Africa). Further, non‐food factors, such as women's education and status and the quality of health environments, are also important determinants of children's nutritional status. Depending on the state of food availability in any particular geographic area and relative costs, these factors may merit greater priority in policies to reduce malnutrition.     

Bainbridge Festive Foods

Lara Owens and Kathleen Pegram were starting to worry about their newly acquired business, Bainbridge Festive Foods. Bainbridge, a supplier of specialty jams, jellies, and pickles, sold its product through many outlets but relied heavily on a relationship with Cracker Barrel (a restaurant usually accompanied with a country gift store). Many issues face Bainbridge Festive Foods and its new owners. This case offers the opportunity to examine a small agribusiness facing many common issues: reputation (food quality and safety), change in ownership, reliance on one outlet, and a price structure that had not been examined since the firm's inception.     

Continued decline for ethnic minorities in the transition?

Using three Bulgarian cross‐sectional household surveys from 1986, 1993 and 1997, this essay shows that the mean log wage differential between ethnic Bulgarians and Turks increased from 0.1615 in 1986 to 0.2874 in 1993 and again to 0.4075 by 1997. Bulgarian gains over ethnic Turks in the early transition are related to both changes in the relative returns to skill and changes in the composition of demand for goods and services as the country moved toward a market economy. The Turks began the transition with fewer years of education than the Bulgarians, and began to close the education gap over this time. The Bulgarians, however, were more likely to have obtained more general secondary and university degrees than the ethnic Turks – degrees that, in contrast to technical or vocational degrees, are experiencing increased remuneration in the transition. With more of an asset that has become more valuable, the ethnic Bulgarians improved their relative position.     

Advances in Joint Modelling: A Review of Recent Developments with Application to the Survival of End Stage Renal Disease Patients

The use of joint modelling approaches is becoming increasingly popular when an association exists between survival and longitudinal processes. Widely recognized for their gain in efficiency, joint models also offer a reduction in bias compared with naïve methods. With the increasing popularity comes a constantly expanding literature on joint modelling approaches. The aim of this paper is to give an overview of recent literature relating to joint models, in particular those that focus on the time‐to‐event survival process. A discussion is provided on the range of survival submodels that have been implemented in a joint modelling framework. A particular focus is given to the recent advancements in software used to build these models. Illustrated through the use of two different real‐life data examples that focus on the survival of end‐stage renal disease patients, the use of the JM and joineR packages within R are demonstrated. The possible future direction for this field of research is also discussed.     

Harmonization relating to auditor independence: the Eighth Directive,the UK and Germany

The European Union Eighth Directive on the approval of auditors covers auditor independence only to a very limited extent. The provisions in the five articles on this subject are far less detailed than they were in the drafts of the directive, so that almost all specific regulation is left to the Member States. An examination of the development of the articles dealing with independence and integrity shows how the need to compromise, in order to reach an agreement, frustrated the intentions of the harmonizers. This paper traces the development of the independence rules in the Eighth Directive from the avant projet through the drafts to the final directive. It assesses the extent to which pre-Eighth Directive regulation in the UK and Germany may have affected the directive and then examines the implementation of the directive in the two countries. It concludes that national culture and accounting traditions prevented harmonization of independence rules through the Eighth Directive.     

The Dangers of Misclassifying “Employees”: Microsoft Litigation Emphasizes Distinctions Between Employees and Nontraditional Workers

In the past decade, businesses, for reasons such as greater flexibility and lower total costs, have increased their use of nontraditional workers such as independent contractors and temporary agency employees. The Internal Revenue Service's crackdown on misclassifying employees slowed this growth. Additionally, recent lawsuits by nontraditional workers against employers such as Microsoft Corporation have resulted in some client employers being forced to pay more benefits to nontraditional employees because of employment misclassification and coemployment rulings. Such rulings might reduce or even eliminate the use of some types of nontraditional employees. This paper analyzes the vast array of types of workers that have evolved into the nontraditional work force and the difficulty of defining employee with respect to entitlement to employer benefits. Possible recommendations for employers include auditing present use of nontraditional workers, accurately classifying employees, and taking proper actions to minimize problems in the future.     

Implementing Evidence-Based Practice in Health Care

This article summarizes recent research on the effectiveness of efforts to implement evidence-based health care. The authors conclude that the evidence in support of single interventions being effective in bringing about practitioner change is weak at best. The authors give examples and evaluative comments on more complex organizational and systemic interventions that are aimed at changing clinical practice, and discuss some of the barriers to their application.     

The critical discount factor as a measure for cartel stability?

This paper considers the stability of tacit collusion in price setting duopolies with repeated interaction. The minimum discount factor above which tacit collusion can be sustained in a subgame perfect equilibrium is called the critical discount factor δ*. In addition, δ* is often used as an intuitive measure for the stability of a tacit cartel, assuming that a collusive equilibrium is more difficult to sustain when δ* increases. However, according to standard theory the distance δ − δ* between the actual and the critical discount factor does not matter for stability as long as δ > δ*. This paper contributes experimental evidence that supports the intuitive idea that a larger critical discount factor makes collusion a less likely outcome.