Cross-border restaurant price and exchange rate interactions

Purchasing power parity suggests that international price ratios for identical goods should approximate nominal exchange rates for the currencies in which the prices are denominated. Deviations of the price ratios from exchange rates can occur for a number of reasons and mixed evidence has been recorded for how long those deviations last. Empirical evidence for international restaurant prices in El Paso, Texas and Ciudad Juarez, Mexico confirms that menu item price ratios are strongly correlated with the peso/dollar exchange rate. An earlier exploratory study of eight individual products also indicated that half-life deviations in this market are very short. This study utilizes additional data from a larger and more extensive sample to examine if the prior results are confirmed.     

Predicting Stock Returns Using Financial Statement Information

We examine the profitability of the Ou and Penman (1989a) Pr trading strategy and the Holthausen and Larcker (1992) Prob trading strategy over the period 1980–1992 in the UK. This is a test of whether an investor can earn abnormal returns by exploiting fundamental accounting data. We employ alternative abnormal return metrics and research designs to control for risk. Using a UK dataset offers an independent test because the UK differs from the US in its formal and informal financial reporting environment, its structure of share ownership, and the behaviour of its economy over the study period. We find consistent evidence that an investor could have used a summary measure of financial statement information to predict future abnormal returns by indirectly predicting one-year-ahead earnings changes, but only weak and inconsistent evidence that an investor could have used a summary measure of financial statement information to predict one-year-ahead stock returns directly. We offer some thoughts on the reasons for these different results.     

The allocative efficiency and conservation potential of water laws encouraging investments in on-farm irrigation technology

Agricultural water conservation statutes are emerging in the West encouraging private irrigators to improve on‐farm irrigation efficiency as a basinwide conservation measure. We investigate whether private improvements promote the economic efficiency and conservation of water use basinwide under a wide variety of hydroeconomic circumstances. The standard of efficiency is how an irrigation district manager should optimally invest in improving the irrigation efficiencies of individual farms located along a stream while internalizing intrabasin allocative externalities of these investments. The results indicate that the popular Oregon legislative model may be the least effective in conserving water and promoting economically efficient water allocation.     

Classificatory income smoothing: The impact of a change in regime of reporting financial performance

Financial Reporting Standard No. 3 (FRS3) regulated the reporting of financial performance by UK firms from 1993 until the adoption of International Financial Reporting Standards in 2005. FRS3 outlawed extraordinary items, but allowed a clearer distinction between recurring and transitory income by giving firms discretion over the classifications of unusual (i.e. exceptional) items and the option to disclose alternative EPS. Through these provisions FRS3 increased the scope for classificatory choices as a means to highlight persistent profitability. We examine the impact of FRS3 on classificatory smoothing by UK firms and document a significant rise in this practice post-FRS3. We find that this increase is due mainly to deviations of net income from expected earnings inducing a significantly higher level of classificatory smoothing post-FRS3. Additional analysis shows that earnings are substantially more persistent at the pre-exceptional level post-FRS3. Overall, our results suggest greater use of classificatory choices to highlight sustainable profitability after the change in performance reporting regime.     

Political consequences of ethical investing: The case of South Africa

This paper discusses the economic impact and political consequences of ethical investing, with particular attention to the case of South Africa. The origins of ethical investing are examined, along with the institutions and strategies by which ethical investing operates today. Of immediate relevance to managers is a recent judicial decision upholding Baltimore's divestment ordinance. The discussion concludes with an assessment of the likely consequences of ethical investing for U.S. multinationals in Southern Africa. Dr. Paul is an Associate Professor of Management at the Rochester Institute of Technology. She took her Ph.D. from Emory University in 1974. She has published and presented widely on the subject of Business Ethics and Business and Public Policy. Her current research interest in business and South Africa has taken her to South Africa on a Fulbright Fellowship. Dr. Paul has also been named a Radcliffe Peace Fellow for 1987–88. She has just edited Business Environment and Business Ethics: The Social, Moral, and Political Dimensions of Management (1987) for Ballinger Press.Mr. Aquila has been a full time Lecturer at the Rochester Institute of Technology since 1984. He took his M.B.A. degree from New York University in 1980 and is just finishing his Ph.D. at the University of Rochester in American History. Mr. Aquila was awarded the David Parker Memorial Prize in History from the University of Rochester in 1986.     

Perceptions of Power Within a Membership-based Seniors' Community Center

As opportunities for citizenship diminish in everyday life amid increasing consumption and privatization, there is a growing realization of the importance of participation and citizen power, particularly for older adults. Gaventa's (1980) Gaventa, J. (1980). Power and powerlessness: Quiescence and rebellion in an Appalachian Valley. Urbana, IL: University of Illinois Press. [Google Scholar] concepts of visible, invisible, and hidden power and Arnstein's ladder of citizen power (1969) framed this study, which used participatory methods, including creation and facilitation of a members' group at a small seniors' center, to address the question: What are the factors that undermine or cultivate citizen power at a small community center for seniors? The data were organized under three power-related themes: powerlessness, reluctance to claim power, and claiming power. Findings suggest that negative social constructions associated with aging act as instruments of invisible power. Further, community center membership, to be considered meaningful, should be imbued with visible power, so that seniors can be involved in decision making and leadership.     

Understanding Active Loyalty Behavior in Hotel Reward Programs Through Customers’ Switching Costs and Perceived Program Value

Whether loyalty programs have become part of the lexicon of buzzwords or not, the hotel industry continues to adopt loyalty/rewards programs as a major channel to nurture customers’ active loyalty as well as to reap return business. This study examins the structural relationships among perceived program value, switching costs, and active loyalty. The proposed model is supported by an online survey dataset collected from United States (US) tourists. The findings show that perceived program value is less effective in driving active loyalty compared with switching costs. This implies a need for strategic thinking on the part of hoteliers and the industry. Rather than aggressively spending money or copying schemes used by competitors to gear up program value, the value of a defensive tactic of increasing switching costs should be considered.