International Monetary Policy: A Global Taylor Rule

John Taylors rule for setting interest rates provides a framework for studying the global monetary policy generated by individual countries pursing their own policy goals. The study reflects the global nature of monetary policy by modeling an aggregate short-term interest rate as a function of measures of worldwide inflation and the GDP gap. Multiple specifications are estimated to correspond to past studies of the U.S. relationships between these variables. The authors find that Taylor rule is a useful tool for characterizing the global monetary environment as his equation provides a good fit to the data in every specification explored by the authors. However, the international response to inflation is slightly less robust despite claims of inflation targeting by the bulk of the larger economies in the sample.     

The practice of corporate social performance in minority- versus nonminority-owned small businesses

This study compares corporate social performance in terms of charitable contributions of minority-owned and nonminority-owned small businesses. In this sample, minority-owned small businesses are younger, have less full-time employees, and lower annual sales. Minority-owned small businesses donate more funds to religious organizations than nonminority-owned small businesses. When annual sales are accounted for, minority-owned businesses contribute more total dollars to all charitable organizations than nonminority-owned firms. Suggestions for future research in this area are delineated.Judith Kenner Thompson is an Assistant Professor of Business and Society at the University of New Mexico. Her work has appeared inResearch in Corporate Social Performance and Policy, Business Forum, and theJournal of Small Business Management.Jacqueline N. Hood is an Assistant Professor of Organizational Behavior at the University of New Mexico. Her current research interests include gender issues in business, small business and entrepreneurship, and corporate social performance.     

End-of-life care in nursing homes: the high cost of staff turnover

Nursing home staff turnover results in high cost--both economic and personal--and has a negative impact on the quality of care provided to residents at the end of life. Reducing staff turnover in nursing homes would benefit both the cost to the U.S. health care system, and, most importantly, the care residents receive in the vulnerable period leading to death. There is rising pressure on nursing homes to improve their palliative and end-of-life care practices and reduce transfers to hospital for situations and conditions that can be safely managed on site. Nursing care staff deserve an investment in the specific training necessary for them to give the highest quality care to dying residents. This training should be multifaceted and include the physiological, psychological, spiritual, interpersonal, and cultural (including ethnic) aspects of dying. Empowerment with these necessary knowledge, skills, and attitudes will not only result in better care for residents but likely also will reduce the burnout and frustration staff experience in caring for residents near death.     

The Economic Significance of User-Generated Feedback

This paper examines the impact of user-generated feedback on price at a price comparison site or shopbot. It employs a modified hedonic price function to explore the use made by current potential consumers of the experience of past actual consumers in evaluating quality attributes that were not observable when the product was initially launched on to the market. Using a database of daily observations on 211 digital cameras traded on NexTag.com, we find that the product’s star rating, reflecting all the available individual assessments of the product, has a significant negative impact on the discount on the manufacturer’s recommended selling price at which the product is offered.     

A unique view of hedge fund derivatives usage: Safeguard or speculation?

We study the common equity and equity option positions of hedge fund investment advisors over the 1999–2006 period. We find that hedge funds' stock positions predict future returns and that option positions predict both volatility and returns on the underlying stock. A quarterly tracking portfolio of stocks based on publicly observable hedge fund option holdings earns abnormal returns of 1.55% through the end of the quarter. Net of fees, hedge funds using options deliver higher benchmark-adjusted portfolio returns and lower risk than nonusers. The results suggest that hedge fund positions reflect significant timing and selectivity skill.     

Development and validation of a firm-level vertical and horizontal internationalization metric

The lack of valid and reliable measures of firm-level vertical and horizontal internationalization is impeding the development and testing of hypothesized relationships between these respective dimensions of internationalization and a range of important MNE characteristics, actions, and effects. Through a series of qualitative and quantitative studies using data collected from senior MNE executives (total N?=?3,146), we develop and validate a scale to measure both vertical and horizontal firm-level internationalization. Subscales for each type of internationalization prove to be unidimensional, reliable, temporally stable, and to have predictive, cross-cultural, cross-sectoral, and discriminant validity.     

The endo–exo problem in high frequency financial price fluctuations and rejecting criticality

The endo–exo problem lies at the heart of statistical identification in many fields of science, and is often plagued by spurious strong-and-long memory due to improper treatment of trends, shocks and shifts in the data. A class of models that has shown to be useful in discerning exogenous and endogenous activity is the Hawkes process. This class of point processes has enjoyed great recent popularity and rapid development within the quantitative finance literature, with particular focus on the study of market microstructure and high frequency price fluctuations. We show that there are important lessons from older fields like time series and econometrics that should also be applied in financial point process modelling. In particular, we emphasize the importance of appropriately treating trends and shocks for the identification of the strength and length of memory in the system. We exploit the powerful Expectation Maximization algorithm and objective statistical criteria (BIC) to select the flexibility of the deterministic background intensity. With these methods, we strongly reject the hypothesis that the considered financial markets are critical at univariate and bivariate microstructural levels.     

Who benefits in a crisis? Evidence from hedge fund stock and option holdings

We use a unique data set of hedge fund long equity and equity option positions to investigate a significant lockup-related premium earned during the tech bubble (1999–2001) and financial crisis (2007–2009). Net fund flows are significantly greater among lockup funds during crisis and noncrisis periods. Managers of hedge funds with locked-up capital trade opportunistically against flow-motivated trades of non-lockup managers, consistent with a hypothesis of rent extraction in providing crisis era liquidity. The success of this opportunistic trading is concentrated during periods of high borrowing costs, in less liquid stock markets, and is enhanced by hedging in the equity option market.