Investment trust IPOs: Issuing behaviour and price performance Evidence from the London Stock Exchange

In this paper, we document an average first day return of 1.91 percent for the population of 105 investment trust IPOs during the period from January 1984 through August 1992 on the London Stock Exchange. This is the first study that finds evidence of significant first day returns for a sample of closed-end fund IPOs. The results also suggest that investment trust IPOs are subject to ‘hot’ issue periods. These tend to occur when there is a marked narrowing in the discounts of seasoned investment trusts. Initial gains are, however, short lived; by the end of their first year, investment trust IPOs substantially underperform a number of relevant benchmarks and, on average, trade at discounts to their underlying net asset values.     

Heterogeneous Firms,Globalisation and the Distance Puzzle

Despite the strong pace of globalisation, the distance effect on trade is persistent or even growing over time (Disdier and Head, 2008). To solve this distance puzzle, we use the recently developed gravity equation estimator from Helpman et al. (2008) (HMR henceforth). Using three different data sets, we find that the distance coefficient increases over time when ordinary least squares (OLS) is used, while the non‐linear estimation of HMR leads to a decline in the distance coefficient over time. The distance puzzle, thus, arises from a growing bias of OLS estimates. The latter is explained by an increase in the importance of the bias from omitting the number of heterogeneous exporting firms relative to the bias from omitting zero trade flows. Furthermore, we show that including zero trade flows cannot solve the distance puzzle when using HMR. The HMR estimates are strongly correlated with the time pattern in freight costs reported by Hummels (2007).     

Making Sense of the Third Way

Books reviewed in this article:
Anthony Giddens, The Third Way
Tony Blair and Gerhard Schroeder, The Way Forward for Europe's Social Democrats – A Proposal     

Earthquake effects on tourism in central Italy

This paper proposes an approach to economic assessment of the impact on tourist flows of the earthquake that hit the Umbria region in Central Italy on September 26, 1997. Local arrivals in Assisi fell drastically the month following the main shock, compared to the same month of the previous year. The event study methodology, frequently applied in finance, is employed to evaluate the statistical relevance of the shock over time and space. A further and straightforward application of the event study analysis assesses the substantial amount of loss between October 1997 and June 1998 due to the drop of tourism business.     

Shopping value,tourist satisfaction and positive word of mouth: the mediating role of souvenir shopping satisfaction

We propose new insights into key satisfaction outcomes for souvenir retailers, such as positive word-of-mouth recommendations, seeking deeper comprehension of overall tourist satisfaction determinants, by analysing the mediating role of tourist souvenir shopping satisfaction. We apply variance-based structural equation modelling by means of partial least squares to a sample of 408 tourists all of whom had purchased souvenirs. The results suggest that tourist shopping satisfaction partially mediates the relation between shopping value and positive word of mouth, while tourist shopping satisfaction completely mediates the relation between shopping value and overall tourist satisfaction. The results and their implications are then discussed to arrive at pertinent conclusions on tourist souvenir shopping satisfaction.     

Stochastic monotonicity in intergenerational mobility tables

The aim of this paper is to test for stochastic monotonicity in intergenerational socio‐economic mobility tables. In other words, we question whether having a parent from a high socio‐economic status is never worse than having one with a lower status. Using existing inferential procedures for testing unconditional stochastic monotonicity, we first test a set of 149 intergenerational mobility tables in 35 different countries and find that monotonicity cannot be rejected in hardly any table. In addition, we propose new testing procedures for testing conditional stochastic monotonicity and investigate whether monotonicity still holds after conditioning on a number of covariates such as education, cognitive and non‐cognitive skills. Based on the NCDS cohort data from the UK, our results provide evidence that monotonicity holds, even conditionally. Moreover, we do not find large differences in our results when comparing social class and wage class mobility. Copyright © 2010 John Wiley & Sons, Ltd.