What Causes Banking Crises? An Empirical Investigation for the World Economy

We add the Bernanke-Gertler-Gilchrist model to a world model consisting of the US, the Euro-zone and the Rest of the World in order to explore the causes of the banking crisis. We test the model against linear-detrended data and reestimate it by indirect inference; the resulting model passes the Wald test only on outputs in the two countries. We then extract the model’s implied residuals on unfiltered data to replicate how the model predicts the crisis. Banking shocks worsen the crisis but ‘traditional’ shocks explain the bulk of the crisis; the non-stationarity of the productivity shocks plays a key role. Crises occur when there is a ‘run’ of bad shocks; based on this sample Great Recessions occur on average once every quarter century. Financial shocks on their own, even when extreme, do not cause crises—provided the government acts swiftly to counteract such a shock as happened in this sample.     

Labour Mobility: An Adjustment Mechanism in Euroland? Empirical Evidence for Western Germany,France and Italy

We evaluate whether labour mobility is likely to act as a sufficient adjustment mechanism in the face of asymmetric shocks in Euroland. As no adequate data on cross-border migration are available, migration elasticities within nation states (Western Germany, France and Italy) are estimated and interpreted as upper bounds for cross-border migration elasticities between European nation states. Labour mobility is highest in Germany, followed by France and Italy. However, the accommodation of a shock to unemployment by migration takes several years. We conclude that labour mobility is unlikely to act as a sufficient adjustment mechanism to asymmetric shocks in Euroland.     

The Relevance of Responsibility to Ethical Business Decisions

This paper addresses researchers’ call for integrating workplace spirituality with organizational literature. This paper points out that self-interest transcendence is a common aspect in the workplace spirituality concept that emerged in the last decade and also in four OB concepts – transformational leadership, organizational citizenship behavior, organizational support, and procedural justice – that emerged in OB about two decades ago. Based on this common aspect of self-interest transcendence and the temporal precedence of these four OB concepts’ emergence, it indicates that these four OB concepts constitute a precursor of workplace spirituality. It places workplace spirituality in the larger context of OB␣and outlines the associated research and practice implications. The author also holds a lien on the position of professor at XLRI School of Business and Human Resources, India.     

Comparing bank concentration across countries

Cross-country comparisons of traditional measures of concentration, such as the Herfindahl index, are of limited use for answering normative questions such as: ‘Is the banking system too concentrated in our country?’ This paper develops a measure of concentration, essentially by normalising the Herfindahl index by a minimum feasible value for that index based on market size for each country. A formal derivation is given, and the measure is related to the mark-up of price over marginal cost for banking services. The empirical implications of the new measure are illustrated by reference to some recent studies.     

Truth Half Told: Finding the Perfect Pitch for Advertising and Marketing in Socialist Yugoslavia, 1950-1991

Beginning in the 1950s, advertising and marketing specialistsin Yugoslavia campaigned aggressively to change public and officialperceptions of their work. By casting commercial promotion interms of categories already established as legitimate in theideology of Yugoslav socialism, the industry gradually naturalizedadvertising and marketing, transforming them from suspect capitalistpractices into apparent necessities of progressive, rationalproduction and distribution. Although the rhetoric used in thiscampaign consistently appealed to socialist values, in practiceYugoslav advertising and marketing were largely based on Westernmodels. Yugoslav commercial promotion was only superficially"socialist advertising"; practitioners' arguments tended toobscure the true qualities of the industry.     

Giving mergers a head start

Mergers with substantial business overlap face a barrier to speedy integration: Antitrust regulations limit the information companies can share before a deal closes. But as Dow Chemical and Union Carbide found, premerger planning by "clean teams" of former employees can help merging companies hit the ground running.     

Business strategy and firm location decisions: testing traditional and modern methods

Business Economics - For nearly a century, economists have relied upon the neoclassical principle of a “profit-maximizing firm.” Two modern challenges to this principle have arisen: the...     

Resident perceptions of social–ecological resilience and the sustainability of community-based tourism development in the Commonwealth of Dominica

Despite major investments in community-based tourism to diversify economies, reduce poverty and improve life quality in the Caribbean, little is known about what conditions lead to resilience and sustainability. Sustainability from a resilience theory perspective is the likelihood an existing system of resource use will persist indefinitely without a decline in social and natural resource bases. Undertaking activities to enhance resilience and sustainability improves a system's ability to persevere, adapt and learn to meet challenges from unanticipated economic, political or natural events. This study investigated six communities in the Commonwealth of Dominica, all part of a seven-year community tourism program, and examined residents' perceptions of the social, institutional, economic and ecological resilience of their community, and therefore the resilience and sustainability of community tourism development. It used a new scale using eight steps suggested by Devellis' scale development methodology. Data indicated moderate to low resilience in all four domains across the communities. This suggests that communities should invest in strengthening social bonds, developing capacity in local institutions, in diversifying the tourism product and controlling infrastructure development. Indicators measuring trust, networks, local control, flexible governance, leakage prevention and controlled infrastructure development emerged as important in assessing social–ecological resilience and sustainability.