An empirical investigation of the sustainability of the public deficit in Portugal

In this paper, we investigate Portuguese government expenditures and revenues as an example for a long time series. Our hypothesis states that there may be periods when the deficit is sustainable and those when it is not. Usually, after a period of unsustainable deficits, a new regime takes over. These regime shifts call for an approach that takes into account a non-constant structure of the underlying data generating process. Consequently, we use different tests which we set up in a time-varying framework. We apply and compare the results of the Trace test, Breitung’s non-parametric test and the Bohn test. We identify several break points and find that the Trace test performs worst in this case while Breitung’s test and the Bohn test give similar results. Comparing the results with history, we find that the last two tests best reflect what happened historically.     

Herding in the strategic allocations of Spanish pension plan managers

This paper empirically examines herding behavior in the strategic style allocations of Spanish pension plan managers. The study uses both the standard metric used in financial literature to capture institutional herding and a new approach to address some shortcomings of this traditional measure. Concretely, some authors have highlighted that the traditional measure does not take into account that the probability that a manager buys rather than sells a certain stock depends on both the initial holding in the stock and the asset flows. As a consequence, this study proposes a new approach, which can be applied to other financial markets and provides more accurate values of the probability to increase (or decrease) the style exposures bearing in mind the previous exposure of each portfolio. The study confirms the existence of herding behavior by using both methods. Although the strength of this behavior decreases using the new approach, the herding levels detected in this study of style herding of Spanish pension plans are higher than those of previous research analyzing portfolio holdings in other countries. Additionally, herding levels are higher in periods of low volatility while market returns does not seem to influence herding levels.     

Social Media managerial implications for budget accommodation venues: use of Social Media platforms more effectively and efficiently

Quality & Quantity - Social Media has transformed people’s lives and behaviour. Over the past decade it has also transformed the Tourism Industry. Despite this triumph, insufficient...     

When do improved covariance matrix estimators enhance portfolio optimization? An empirical comparative study of nine estimators

The use of improved covariance matrix estimators as an alternative to the sample estimator is considered an important approach for enhancing portfolio optimization. Here we empirically compare the performance of nine improved covariance estimation procedures using daily returns of 90 highly capitalized US stocks for the period 1997–2007. We find that the usefulness of covariance matrix estimators strongly depends on the ratio between the estimation period T and the number of stocks N, on the presence or absence of short selling, and on the performance metric considered. When short selling is allowed, several estimation methods achieve a realized risk that is significantly smaller than that obtained with the sample covariance method. This is particularly true when T/N is close to one. Moreover, many estimators reduce the fraction of negative portfolio weights, while little improvement is achieved in the degree of diversification. On the contrary, when short selling is not allowed and T?>?N, the considered methods are unable to outperform the sample covariance in terms of realized risk, but can give much more diversified portfolios than that obtained with the sample covariance. When T?<?N, the use of the sample covariance matrix and of the pseudo-inverse gives portfolios with very poor performance.     

Family firm’s management composition: the role played by family members’ age in TMT and supervisor levels

Quality & Quantity - Family firms (FFs) are the backbone of entrepreneurial fabric in many countries. Management of such businesses is complex because of their features: the overlap between...     

Type of diversification and firm resources: new empirical evidence from the Spanish tourism industry

This paper analyses the diversification strategies followed by tourism firms from the perspective of the resource‐based view. More specifically, it seeks to verify whether the composition of the firms' resources has a bearing on the decision to undertake one type of diversification or another (related or unrelated). From a mail survey to 80 Spanish tourism firms, we identified 94 entries into new business areas. We applied an ordered logit regression and have statistically confirmed that intangible resources lead to a more related type of diversification. Copyright © 2008 John Wiley & Sons, Ltd.     

Behavior in one-shot traveler’s dilemma games: model and experiments with advice

We report results of one-shot traveler’s dilemma game experiments to test the predictions of a model of introspection. The model describes a noisy out-of-equilibrium process by which players reach a decision of what to do in one-shot games. To test the robustness of the model and to compare it to other models of introspection without noise, we introduce non-binding advice. Advice has the effect of coordinating all players’ beliefs onto a common strategy. Experimentally, advice is implemented by asking subjects who participated in a repeated traveler’s dilemma game to recommend an action to subjects playing one-shot games with identical parameters. In contrast to observations, models based on best-response dynamics would predict lower claims than the advised. We show that our model’s predictions with and without advice are consistent with the data.      

Value co-creation among hotels and disabled customers: An exploratory study

This study examines how service supplier and buyer value co-creation influences buyers' attitudes toward service providers. Service-dominant logic is a prevalent concept in the services industry, providing an important marketing theory in which intangible resources, co-creation of value, and relationships are the keys to determining marketing exchanges. This research describes a model for analyzing value co-creation management in the hotel industry, focusing on the specific market segment of disabled customers. This framework helps foster value co-creation to increase the benefits for participants during each stage of their relationship. The paper also presents the managerial implications of the research findings.     

Conditioning factors for corporate entrepreneurship: an in(ex)ternal approach

In the last years, the business creation and management literature has paid increasing attention to the entrepreneurship that occurs within organizations. Most empirical studies show a positive relationship between corporate entrepreneurship and performance. The objective of this article is to identify which internal and external factors condition corporate entrepreneurship. The study uses two different theoretical perspectives: Resource-Based Theory (for internal factors) and Institutional Economics (for external or environmental factors). Both theories have been widely used in the strategic management and entrepreneurship literature, however, very few studies in the corporate entrepreneurship field are grounded on them together. The research applies negative binomial regression and uses data from the Global Entrepreneurship Monitor (GEM) for the period 2004–2008. Overall the sample has 339.071 observations and it provides information for 9 different European countries (Greece, Spain, Italy, Ireland, the Netherlands, France, the United Kingdom, Denmark and Finland). Results reinforce the importance of internal factors (knowledge, personal networks and being able to identify business opportunities) compared to external (having fear of failure, media impact and the number of procedures to create a company). Contributions of the study are both theoretical and practical. On the one hand, it contributes to the development of the literature in the corporate entrepreneurship field. On the other hand, it provides useful insights for those companies that are interested in entrepreneurship within the organizations.