Does mandatory disclosure affect subprime lending to minority neighborhoods?

We examine changes in lending behavior in response to the Federal Reserve??s requirement for disclosure of loan pricing information implemented in 2004 for two broad types of lenders, depository and nondepository institutions. We find that although subprime approval rates generally increased after 2004 as the housing market boomed, there was nonetheless a reduction in subprime approval rates to minority neighborhoods following implementation of the pricing disclosure requirement. We also find that the effect of the pricing disclosure requirement on subprime approval rates was stronger for depository institutions than for nondepository institutions. Moreover, depository institutions with good reviews from regulators for effectively serving the financing needs of local communities are less likely to issue higher-priced subprime loans.     

Have Australia's tourism strategies incorporated climate change?

Tourism is widely acknowledged as a key contributor to climate change, but it remains unclear how the tourism industry has been planning for climate change in practice. This paper conducts the most comprehensive critical review of Australia's tourism policy and planning documents to date. The paper explores the complex challenges posed by climate change to tourism and how tourism policy has been adapting over a 15-year period. Drawing on a longitudinal data-set of 477 Australian tourism policy and planning documents at the national, state, regional and local level, this research analyses the strategic discourse on climate change using content analysis and bibliometrics. The findings reveal opportunities, challenges and strategies for the tourism industry to contribute to the sustainable management of climate change. Opportunities include developing more “green” products, while strategies include establishing and/or participating in collaborative climate change schemes and strengthening dialogue surrounding climate change to aid the implementation of sustainable practices. Future research should consider the broader policy-making environment, such as the stakeholders, power and interest dynamics when analysing tourism strategies in relation to climate change.     

A Note on Hybrid Mortgages

We extend previous research on traditional one-year adjustable-rate mortgages (ARMs) by analyzing the performance of 3/27 hybrid instruments. Under this contract innovation, which first appeared in the mid-1990s, note rates are fixed for three years after which they convert to a traditional one-year adjustment schedule with periodic and lifetime caps. We find high rates of prepayment, particularly at time of initial rate adjustment, and relatively high rates of default, as would be consistent with the payment shock that often affects adjustable-rate loans.     

European equity markets volatility spillover: Destabilizing energy risk is the new normal

While energy risk is increasingly recognized as a systemic risk, there is limited comprehensive analysis of the risk propagation in regional contexts. In this study, we examine oil and natural gas price changes and shocks in relation to equity market returns and volatility for 24 European Economic Area (EEA) countries. In addition to traditional panel regressions, we also deploy the Diebold-Yilmaz (2014) spillover index for a closed network analysis. We differentiate in the cross-section across the core EU block, PIIGS countries, EU enlargement countries joining after 2004, and other non-EU countries, to provide insights into the ongoing debates on the European energy market stability. While we find evidence of the manifestation of energy risk throughout the sample period, we find that until 2019 the primary sources of volatility spillover in the EEA economic network arose from economic or political uncertainty. Energy risks, measured by large crude oil and natural gas price shocks also significantly contributed to equity market volatility, with increasing volatility risk arising from natural gas, a green labelled energy source after 2019. Last, we show that CEEC equity markets are more sensitive to oil and natural gas price shocks when domestic currencies depreciate against the Euro.     

Factors Influencing Human Resource Management Solutions at Subsidiaries of Multinational Companies in Central and Eastern Europe

There is a shortage of empirical human resource management (HRM) literature in respect to identifying new patterns of multinational company (MNC) involvement in the Central and Eastern Europe region and the impact of ongoing MNC operations on the patterns of the HRM behavior of these companies. To counter this lack of understanding within the field, our broadly based, international survey asked 279 subsidiaries located in Croatia, Estonia, Hungary, Poland, Romania, Serbia, and Slovakia and was conducted in 2010. It aimed to describe the relationships within the companies involved—between the influencing factors and the HR solutions applied—in a statistically valid way.     

The Relationships between Real Estate Price and Expected Financial Asset Risk and Return: Theory and Empirical Evidence

In pricing real estate with indifference pricing approach, market incompleteness is shown to significantly alter the conventional pricing relationships between real estate and financial asset. Specifically, we focus on the pricing implication of market comovement because comovement tends to be stronger in financial crisis when investors are especially sensitive to price declines. We find that real estate price increases with expected financial asset return but only in weak market comovement (i.e., a normal market environment) when investors enjoy diversification benefit. When market comovement is strong, real estate price strictly declines with expected financial asset return. More importantly, contrary to the conventional positive relationship from real option studies, real estate price generally declines with expected financial asset risk. With realistic market parameters, we show that there is a nonlinear relationship between real estate price and financial risk. When the market comovement is strong, real estate price only increases with financial asset risk when the risk is low but eventually declines with the risk when it becomes high. Our cross-country empirical results also show that the relationship between financial market risk and real estate price is non-monotonic, conditional on the degree of market comovement.     

The good news in short interest

Stocks with relatively high short interest subsequently experience negative abnormal returns, but the effect can be transient and of debatable economic significance. In contrast, relatively heavily traded stocks with low short interest experience both statistically and economically significant positive abnormal returns. These positive returns are often larger (in absolute value) than the negative returns observed for heavily shorted stocks. Thus, the positive information associated with low short interest, which is publicly available, is only slowly incorporated into prices, which raises a broader market efficiency issue. Our results also cast doubt on existing theories of the impact of short sale constraints.     

The effect of housing allocation on social inequality in Hungary

The main characteristics of the present Hungarian housing sector are as follows: there are state-owned apartments with rents centrally fixed at a very low level and privately owned houses and condominiums sold at high prices on the free market. In cities chronic housing shortages prevail. This paper investigates the impact of the dual housing market on social inequalities. After surveying the ethical principles of contemporary Hungarian socialism, we examine the factual distribution of dwellings and the variables explaining it. It is shown that the redistributive effect of state subsidies in housing does not reduce, but, on the contrary, increases inequality.