Monotone strong increases in risk and their comparative statics

We introduce a new concept of the monotone strong increase in risk (MSIR) order that imposes monotonicity restrictions on the ratio of the two cumulative of cumulative distribution functions as a special case of Rothschild–Stiglitz increases in risk that is the subset of the second‐degree stochastic dominance criterion. We show that the MSIR order implies that the conditional expectation of a random variable under one cumulative distribution function is greater than or equal to that under another cumulative distribution function. Restricting the payoff function to be linear in the random variable and limiting our analysis to risk‐averse decision‐makers who are prudent, we obtain appealing comparative statics results for the MSIR shift. This general conclusion can be applied to prevailing economic models having a linear payoff.     

Portfolio Choice for Increases in Risk and Prudence Revisited

This paper proposes the concept of a ``simple increase in risk across r in the K-L-L-S sense' (sIR_K (r)) for the subset of K-L-L-S increases in risk defined by Kroll, Leshno, Levy, and Spector (1995; called K-L-L-S) that extends the Rothschild-Stiglitz definition of risk to a larger set of cumulative distribution functions that could not be classified as more risky before. We show that for a risk-averse decision-maker with nonnegative third derivative of the utility function, the demand for the risky asset decreases for a simple increase in risk across r in the K-L-L-S sense in the standard portfolio decision problem.     

Tourism climatic condition over PDR Korea

ABSTRACT

Climatic condition has a remarkable influence on tourism activity. This paper evaluates the tourism climatic condition over DPR Korea applying Tourism Climate Index (TCI). Results show that (1) climate of present resorts is favorable to tourism from mid-April to early October, with TCI scores for most of them well above 70 (very good) from mid-April to late June; (2) seven key tourism resorts have a very good tourism climatic condition, with Mt Guwol, Sariwon, Nampo and Pyongyang at a higher TCI score; (3) six proposed sites have higher TCIs during warm season, and tourism industry could be planed and developed.     

The determinant of performance of cross-border M＆As in China： A comparative study between overseas Sino and Anglo firms

This study examines the factors that affect the performance of foreign acquiring firms in Chinese M＆As （mergers and acquisitions） market. Comparing between overseas Sino-Group and Anglo-Group, this study found that familiarity and location were the most important factors influencing performance of M＆A transactions in China. It also found that unrelated M＆A deals should be merged with familiarity for gaining positive acquisition performance. The total sample used in this study was 3,442 cases from October 1980 to March 2005. Because this period included all deals of M＆As after the opening of Chinese market in China. The authors＇ finding provided a more universal explanation in the cross-border M＆As in China.     

The role of product type and country‐of‐origin in decisions about choice of endorser ethnicity in advertising

Two experiments examine the effects of endorser ethnicity and product country of origin on consumer responses toward ad and brand, and investigate the moderating role of utilitarian versus hedonic product type. In Experiment 1, for utilitarian products, participants showed more favorable responses when the endorser's ethnicity was incongruent with the product's country of origin compared to when it was congruent, supporting an attribution‐theory explanation. For hedonic products, however, participants preferred ads that featured an endorser whose ethnicity matched their own, irrespective of the product's country of origin. In Experiment 2, building on the attribution explanation, two endorsers of different ethnicities generated more favorable responses than two of the same ethnicity. © 2006 Wiley Periodicals, Inc.     

Creating New Relationships Through Tourism: A Qualitative Analysis of Tourist Motivations of Older Individuals in Japan

The current study is an exploration to examine older Japanese individuals’ motivations for travel. The study employed an open-ended survey and in-depth interviews in order to gain insight into the creation of human relationships through tourism. Our results show that tourism is perceived as offering extraordinary opportunities to meet new people, and to form and develop new relationships by Japanese older individuals, who experience fewer opportunities to interact with other people in their everyday lives compared to individuals in younger generations. In particular, distinct features of tourism settings, such as liminality and touristic communitas, allow older tourists to express themselves more freely by escaping from their existing relationships as well as from many social norms, hierarchies, and prohibitions.     

Predicting FDI inflows: Exploring a nonlinear relationship between peace years,oil wealth,and the rule of law

Despite previous studies investigating the impacts of various factors such as peace years, natural resources, and the rule of law on foreign direct investment (FDI), empirical findings remain inconclusive. Therefore, this study investigates the interplay between these factors in shaping host country conditions that facilitate FDI inflows. Using generalized additive models, we examine the simultaneous effects of peace years, oil wealth, and the rule of law on FDI inflows in a sample of non-OECD countries from 1970 to 2009. Our results reveal that established peace is a critical factor in attracting FDI inflows for both oil-exporting and non-oil-exporting countries. However, the effects of the rule of law vary depending on oil wealth. Oil-exporting countries receive more FDI inflows when they have a weak rather than a strong rule of law, while non-oil-exporting countries tend to receive more foreign investments when they have a moderately strong rule of law. We argue that countries with oil wealth combined with a moderately weak rule of law provide an environment that is conducive to multinational corporations (MNCs) in extractive industries seeking monopoly rents. Conversely, countries without oil wealth should create stable yet efficient environments that protect property rights and promote labor market flexibility to appeal to non-resource-seeking MNCs.     

Changes in the options contract size and arbitrage opportunities

We examine the impacts of changes to the options multiplier on market efficiency by analyzing their effects on arbitrage proxies based on the performance of options spread strategies. Despite the intentions of the reforms, both decisions to raise and reduce the multiplier significantly increase the frequency and probability of arbitrage opportunities. Whereas the increment in the multiplier also deteriorates market efficiency by increasing the duration and average size of the arbitrage opportunities in a day, the decrement does not affect these proxies. Our results overall provide evidence that reforms to the options multiplier do not enhance market efficiency and suggest that retail investors are not homogeneously noisy.     

Expectations and the housing market: A model of house price dynamics

We examine the characteristics of housing markets under adaptive and heterogeneous expectations. Model agents have finite horizons, and their borrowings are constrained by the collateral value of housing stock. Our model shows that expectation-driven housing price dynamics constantly change the direction of movement. The steady-state process of housing prices follows an endogenous oscillation process, and the magnitude of the cycles can be amplified by external shocks. Our quantitative results imply that (i) short-term positive and long-term negative serial correlations in housing price changes are inherent, (ii) house prices and expected house price movements are positively correlated, and (iii) fluctuations in housing prices are not fully explained by fundamentals.     

E-commerce retail and reverse factoring: A newsvendor approach

This study builds a theoretical model to examine how supply chain finance (SCF) services using fintech can ease e-commerce suppliers' capital constraints. Despite the innovation in the logistics industry during the Fourth Industrial Revolution and the increasing online shopping in the post-COVID era, small e-commerce enterprises may fail to grow owing to their budget constraints. Reverse factoring is believed to ease such suppliers' capital constraints. We analyze the effect of reverse factoring using the capital-constrained newsvendor model, and we consider the impacts of additional funding from SCF services. Our results show that SCF services reduce e-commerce suppliers' initial orders and, thus, alleviate their budget constraints. This finding suggests that the discount factor of reverse factoring should be higher to ease small suppliers' budget constraints and allow the e-commerce industry to grow sustainably.