Bankruptcy probability changes and the differential informativeness of bond upgrades and downgrades

Prior studies have found that stock returns around announcements of bond upgrades are insignificant, but that stock prices respond negatively to announcements of bond downgrades. This asymmetric stock market reaction suggests either that bond downgrades are timelier than upgrades, or that voluntary disclosures by managers preempt upgrades but not downgrades. This study investigates these conjectures by examining changes in firms’ probabilities of bankruptcy (assessed using bankruptcy prediction models) and voluntary disclosure activity around rating change announcements. The results indicate that the assessed probability of bankruptcy decreases before bond upgrades, but not after. By contrast, the assessed probability of bankruptcy increases both before and after bond downgrades. We also find that controlling for potential wealth-transfer related rating actions, which can impact stock returns differently, does not alter our results. Tests of press releases and earnings forecasts issued by firms suggest that the differential informativeness of upgrades and downgrades is not caused by differences in pre-rating change voluntary disclosures by upgraded and downgraded firms. The results support the hypothesis that downgrades are timelier than upgrades.     

Enlarging the Pie vs. Increasing One's Slice: An Analysis of the Relationship Between Generic and Brand Advertising

Marketing Letters - Generic advertising promotes the general qualities of a product category and, therefore, benefits all firms—regardless of who has contributed to the campaign (e.g....     

Consumer responses to offline and online low price signals: The role of cognitive elaboration

Low price signals (LPS), pricing tools where retailers promise to match or beat competitors' prices, have been increasingly popular in offline and online markets. We compare consumer evaluation of offline and online LPS as a function of how deeply they process the signals. Results of an experiment indicate that regardless of retail media consumers accept an LPS as an indicator of low price when they do not elaborate sufficiently on the signal. However, at high levels of elaboration, consumers challenge the assumptions underlying their acceptance of the signal at lower levels of elaboration whereby they become more skeptical of an online signal than an offline signal resulting in lower efficacy of the former. Implications of these findings for consumer vulnerability to false low price signaling are discussed along with other theoretical and managerial implications. Additionally, directions for future research are provided.     

Investigating the tourism and economic growth linkage: a panel causality analysis for the SAARC countries

Tourism receipts and expenditure are considered to be causally related to economic growth. The present study investigates the causal relationship between tourism receipts and tourism expenditure to economic growth for a panel of the South Asian Association for Regional Cooperation (SAARC) countries over a 20-year period (1995–2014). The present study used panel Granger causality tests and panel fully modified ordinary least squares to test the presence and magnitude of the causality. Results indicated a bidirectional causal linkage between growth and tourism expenditure only, while tourism receipts were found to influence growth. Tourism expenditure was found to have a negative effect on growth.     

Constructing a value-based healthcare system for hypertensive patients through changing payment mode: evidence from a comparative study in rural China

Objective: To construct a value-based healthcare system for rural Chinese hypertensive patients through an increasing outpatient care reimbursement ratio.

Methods: This comparative study sampled two similar counties, Dangyang County and Zhijiang County, in Hubei Province of China, as the intervention group and the control group, respectively. The Social Health Insurance Fund of the intervention group budgeted 600 yuan per capita per year to insured patients with third stage hypertension to cover their outpatient expenditures, while the outpatient expenditures of the control group were not covered by its Social Health Insurance Fund. The inpatient expenditure reimbursement policies in both groups were not adjusted during the study. Value improvement in this study was defined as reduction in medical costs and improvement in health outcomes within the pilot healthcare system. A propensity score matching model combined with a difference-in-differences model was used to estimate the changes in medical costs and health outcomes.

Results: In total, 1,673 pairs of patients were enrolled into statistical analysis after the propensity score matching. The intervention increased per capita annual outpatient expenditure by 81.2 (+31.8%) yuan (p?>?.05), but decreased the per capita annual inpatient expenditure and total medical expenditure by 475.4 (–40.7%) yuan and 394.2 (–27.7%) yuan, respectively (p?p?p?p?p?>?.05).

Conclusion: Increasing the outpatient expenditures, the reimbursement ratio was beneficial to the value of the healthcare system for hypertensive patients. Outpatient care for patients with chronic diseases should be prioritized for rural China and healthcare settings with inadequate health insurance funds.     

Female,married and endorsing: integrating celebrity marital status,role congruence and credibility

In this study, we investigate the effect of marital status and perceived role congruence (RCN) of a female celebrity endorser on consumer attitudes incorporating the role of credibility in the Indian context. The research hypotheses were tested using a series of experimental designs. The main study had a 4 (Celebrity: Unmarried/Just Married/Married but Endorsing/Married and Comeback) × 2 (Product: Role Congruent/Role Incongruent) full factorial design. Non-student samples were used in this study. Major findings implied a significant effect of celebrity marital status, RCN and the interaction term on consumer attitudes. The three source credibility dimensions were found to have differential effects on consumer attitudes when they were included as moderators. This study finds evidence in support of diminishing effectiveness of female celebrities over time/marriage. In this study, we explored a new dimension of congruence (RCN) and found the same to influence consumer attitudes favourably towards the endorsed product.     

Detection of collusion in government procurement auctions

Research on bidder collusion in procurement auctions is reasonably successful in unveiling the mechanisms of collusion among the bidders. But it is relatively weak in forwarding effective practical methods of collusion detection before the winner is declared, because they presuppose the knowledge of collusion in specific auctions. Past studies, however, point out the need for working with bid price-to-reserve price ratios rather than bid prices or winning bid prices, to be free from the problem of heteroscedasticity. They also draw an important inference that the set of collusive data are significantly different from the set of competitive data. On the basis of these basic facts, the current paper outlines a seven-step approach to collusion detection. The approach makes rudimentary statistical analysis of bid price-to-reserve price ratios for all the bidders. The analysis comprises tests of equality of means, medians and variance and tests of skewness, autocorrelation and normality of the ratios. It divides the ratios into two significantly different clusters. The cluster with the higher mean and variance values of the ratios corresponds to collusive bidding with the other cluster corresponding to competitive bidding. The paper proposes the construction of a process control chart to detect occurrence of collusion in an auction immediately after the price bids are opened. The approach is illustrated by applying it to data from procurement auctions for construction projects in a State Department of the Republic of India.