Leader Survival and Cabinet Change

Political leaders face both internal and external threats to their tenure as leaders. To retain office leaders need mass support, for instance to win elections. However, they also need to deal with potential internal party rivals. Using a game theoretic model, we examine how the incentives created by these competing pressures affect the retention of ministers across different political systems. Since non‐democratic leaders face relatively little threat from the masses, their concern is to reduce internal party risk. Therefore, they remove high performing ministers and retain mediocre and poor performers. As it becomes easier for the masses to replace the party in power, leaders must tradeoff internal and external threats. Retaining competent leaders improves party performance but generates an internal party rival.     

EVALUATING THE CRITICISMS OF FAIR TRADE1

This article critically examines some of the most common arguments used to support the view that Fair Trade should be rejected by consumers and businesses seeking to socialise their economic decisions. Overall the paper finds that the majority of such criticisms lack evidential rigour and sophisticated theory but instead rely on a high degree of rhetorical aptitude. While this does not naturally lead to the position that Fair Trade is necessarily beneficial, the conclusion reflects on a substantial amount of positive evidence to suggest that Fair Trade should not be abandoned by consumers or businesses.     

The impact of disclosure reform on the NZX's financial information environment

This study investigates the impact of changes to the New Zealand Exchange's listing rules and legislative amendments to the Securities Markets Act 1988 enacted in December 2002. The reforms provided statutory backing for a more stringent disclosure regime. We find evidence that non-dual listed firms, not subject to any prior enhanced disclosure regime, released more earnings-related information to the market in the post-reform period and announced their half-year and fiscal year-end results in a more timely manner. Our results also show that analysts' earnings forecast errors did not decline but analysts' forecasts showed less dispersion in the post-reform period. In respect of informational efficiency, we find evidence of a smaller abnormal return around the half-year and fiscal year earnings announcement date in the post-reform period. Our results suggest that the reforms improved the flow of information to investors, consistent with their intent.     

Estimating Input Use and Production Costs From Farm Survey Panel Data

Econometric estimation of enterprise input use and production costs offers a less expensive alternative to special surveys. Estimates of input allocation are of use within programming models, for policy analysis and income forecasting. However, simple ordinary least squares estimation has been plagued by a number of problems and the results have been disappointing. This paper provides some empirical evidence on the extent to which these problems can be overcome, or at least mitigated, through exploitation of panel data sets and appropriate panel data estimation techniques. The results confirm that this approach provides some improvement in estimation results, but some practical and methodological problems remain.     

Firm performance and knowledge spillovers from academic, industrial and foreign linkages: the case of China

Firm performance may be enhanced by linkages with academic institutions, other firms, and foreign markets that confer knowledge spillovers as well as internal R&D that creates firm-specific knowledge. In particular, firm productivity and innovation may be enhanced by positive externalities from knowledge and technology produced by universities and research institutions (URIs) and diffused to the domestic economy. Productive contributions from such linkages might be particularly expected in China, where policy measures have explicitly supported and facilitated connections between URIs and firms to stimulate economic development and competitiveness. In this paper, we measure the performance impact of such knowledge spillovers in Chinese firms by using a variety of specifications, estimators, and robustness checks, including an ??instrumental variable?? specification that controls for endogeneity. We find more patent activity in Chinese firms with URI connections and enhanced firm productivity particularly from linkages with research institutions (RIs). Introduction of new products, processes, and new businesses is also positively associated with linkages with research institutions, as well as with linkages with other firms.     

The endowment effect and intertemporal choice: a laboratory investigation

We present a laboratory investigation of intertemporal choice (i.e., elicited discount rates) allowing for the influence of the endowment effect. Consistent with the previous literature, we hypothesize that the endowment effect in an intertemporal choice setting results in substantially higher discount rates relative to when individuals treat the resources in question as found money. Our results support this hypothesis and our experimental design provides a new protocol for conducting choice experiments wherein the endowment effect is an important determinant of behaviour.     

Price convergence in an online virtual world

This paper tests for the existence of price convergence using a unique data set from the largest online game, World of Warcraft. It provides a controlled setting without the usual obstacles that make testing price convergence difficult. These difficulties include trade barriers, transportation costs, imperfections and restrictions in capital markets, and differences in productivity growth. The data set consists of eight structurally identical copies, or worlds, of a virtual macroeconomy. We use the non-linear convergence test developed by Phillips and Sul (Econometrica 75(6):1771–1855, 2007), and find price convergence in all eight worlds. We further develop our own simple band of inaction test for price convergence, and under reasonable parameters find price convergence in all eight worlds.     

Reputational contagion and optimal regulatory forbearance

Existing studies suggest that systemic crises may arise because banks either hold correlated assets, or are connected by interbank lending. This paper shows that common regulation is also a conduit for interbank contagion. One bank's failure may undermine confidence in the banking regulator's competence, and, hence, in other banks chartered by the same regulator. As a result, depositors withdraw funds from otherwise unconnected banks. The optimal regulatory response to this behavior can be privately to exhibit forbearance to a failing bank. We show that regulatory transparency improves confidence ex ante but impedes regulators' ability to stem panics ex post.     

Small tourism business research change and evolution

The paper critically reflects on key knowledge contributions that coalesce to inform contemporary understanding of the phenomenon of small tourism business. The purpose is to scrutinise change and evolution in perspectives and how these impact on what knowledge is disclosed and what is not. Conventionally accepted wisdom is challenged, indoctrinated presuppositions are questioned, and research methodological advancements are offered. This is achieved through a comprehensive review and critical‐reflective analysis of key academic contributions spanning a period of approximately 35 years. The value is to stimulate criticality relative to what constitutes ‘truth’ within the given context and to inspire fresh research perspectives. Conclusions are drawn regarding future research directions. Furthermore, informed by thorough analysis of the content of the paper, five guiding research principles provide an appropriate conclusion. Copyright © 2010 John Wiley & Sons, Ltd.