CEO Regulatory Foci,Environmental Dynamism,and Small Firm Performance

This research proposes and tests that regulatory foci of small business chief executive officers (promotion focus and prevention focus) relate to firm performance differentially when levels of environmental uncertainty vary. Results suggest that a promotion focus is positively related to firm performance, whereas a prevention focus is negatively related to firm performance. Further, these relationships are moderated by the degree of environmental dynamism such that in more dynamic environments, the relationship between promotion focus and firm performance is strengthened, whereas the relationship between prevention focus and firm performance is negatively affected. The reverse was found for less dynamic environments. Theoretical and practical implications as well as future research avenues are offered.     

Marriage equality and interstate migration

This study examines the impact of state imposed, marriage equality laws on interstate migration prior to the 26 June 2015 U.S. Supreme Court ruling to legalize same-sex marriage in all states. Results of the estimation of a series of probit models suggest that all head of households are more likely to leave states without marriage equality. This estimated impact is significantly larger for household heads in same-sex relationships. When examining the migration choices separately by both sex and relationship type, this result remains significant for female heads of households in different-sex relationships and male heads of households in same-sex relationships. Simulations, using the results of the probit estimations, the analysis of regional trends, and recent rebellions against the Supreme Court ruling indicate that state level, marriage equality laws may be aggravating the imbalanced distribution of same- and different-sex couple households across the country.     

Modelling the sectoral allocation of labour in open economy models

Indivisible labour is not the only type of non‐convexity affecting labour supply decisions. Another type of non‐convexity arises in economies with sectors whenever individuals can work in only one sector at a time. I introduce this restriction into an open economy model with a tradeable and a non‐tradeable sector, and I use lotteries to convexify the consumption possibilities set. This approach implies that the aggregate elasticity of labour supply becomes infinite. I compare the performance of the model with an analogous model in which the labour supply elasticity is finite. I find that there is a disconnect between the response of wages to monetary shocks and the open economy variables. The labour supply elasticity plays a more important role in the transmission of technology and government expenditure shocks to the real exchange rate and the terms of trade.     

Unemployment insurance and the business cycle*

An equilibrium model is developed to study the interaction of the business cycle, unemployment insurance (UI), and the labor market for young men in Canada. The model combines optimal job offer, layoff, and recall decisions within a numerically solved and restricted Bayesian–Nash equilibrium. We consider the long‐run implications of changes made to unemployment insurance in Canada during the 1990s. The changes lead to equilibrium increases in average rates of unemployment, layoffs, and recalls. Eliminating UI lowers the equilibrium unemployment rate and average observed earnings. UI policy affects the timing of cycles of endogenous outcomes relative to the productivity cycle.     

Marketing Plans or Marketing Planning?

The standard textbook model of marketing planning starts with strategic analysis, leading to marketing objectives and strategy formulation, action programmes, implementation, and control. The empirical study reported here suggests that while many practitioners apparently aspire to use this model, few use it as prescribed. In particular, few firms included specific action programmes for the marketing mix or any forecasts of competitors'strategies. At the individual firm level there was also some mismatch between the contents of the plan and the intended benefits of planning. Whether or not they produced an explicit annual marketing plan, most firms'planning behaviour consisted mainly of extensive budgeting combined with limited strategic analysis. The main thesis is that the standard model of marketing planning aims to achieve too much and may even be counter-productive as well as time-wasting and energy-sapping. A simpler and more action orientated model is proposed.     

The ‘laissez faire’ bias of managed floating

The government of a small open economy trying to manage its exchange rate faces a ‘time consistency’ problem. If markets expect implementation of the optimal linear intervention rule, the government will be tempted to ‘defect’: knowing this, markets will expect less activism; and, in the discretionary equilibrium, this is what they get. How far this credibility problem can shift discretionary policy towards a free float is shown in two popular models of floating rates. One way of offsetting the ‘laissez faire’ bias of discretionary policy is to appoint a relatively ‘conservative’ central banker: but, as the time period of policy action and precommitment shrinks towards zero, the required conservative bias is found to go towards infinity. Other institutional features — such as central bank reputation, contracts and intermediate targets — may be crucial for successful exchange rate management.     

Disease management primer: managing dollars by managing disease

The costliest participants to treat are those with chronic and serious, acute conditions that are often preventable. Developing programs aimed at patients with chronic conditions could be the key to getting control of health care costs. Disease management programs seek to alleviate some of this expense by better managing chronic illnesses and improving the overall health care of employees.     

IS NOISE TRADER RISK PRICED?

We examine the hypothesis that closed‐end fund shareholders garner greater returns than holders of the underlying assets as compensation for bearing “noise trader risk.” We demonstrate that the returns on fund shares are more volatile and exhibit greater mean reversion than the returns on the underlying assets, consistent with the hypothesis that noise traders play a more active role in closed‐end fund shares than do the underlying assets. Inconsistent with the De Long et al. (1990) noise trader model, however, we find that after accounting for fund expenses, fund shareholders do not earn returns greater than holders of the underlying assets. JEL classification: G12