Stock market regulations and international financial integration: the case of Spain

International financial integration effects on the Spanish stock market are studied, both for the conditional mean and conditional variance. New institutional regulations in Spain are taken into account and their efficiency consequences are addressed. Results suggest an increasing international integration but nontrivial opportunities for financial diversification may still be relevant.     

Improving the statistical power of financial event studies: The inverse variance weighted average-based test

Some claim that the event study methodology literature is “mature”. But the overlooked IVWA-based test is more powerful than conventional tests. Its implementation requires the same inputs as the traditional test. Its functional form yields the power improvement. Using CRSP monthly data for 1944–1971 and 1980–2006, simulations indicate that IVWA-based test correctly rejects the null hypothesis substantially more frequently than the traditional test. Its superiority seems more pronounced over 1980–2006. This casts doubts over previous event studies that failed to reject the null. They may have done so incorrectly due to lack of statistical power. Their reevaluation under IVWA-based test is advisable.     

Keeping Your Financial Planner to Yourself: Racial and Cultural Differences in Financial Planner Referrals

Literature suggests that the use of a financial expert by Black households improves savings and investment behaviors. However, these households lack the financial knowledge and sophistication needed to select an appropriate financial expert. This admitted inability results in Black households relying on the recommendations of friends and family in selecting and hiring a financial expert. However results from this study suggest that Blacks who have successfully chosen a financial expert, i.e., are satisfied, are nearly two times (92 %) less likely than non-Blacks to refer their financial planner to others. Decomposition analyses indicate that over 80 % of satisfied Blacks should be willing to provide a referral yet only 50 % do. The largest significant component of the difference in referral rates is culturally based perception differences of the variables used in determining the net benefit of providing a referral.     

Irrationality and intertemporal choice in early neoclassical thought

Early neoclassical economists presumed an element of irrationality in the context of intertemporal decision making. W.S. Jevons, Irving Fisher, Alfred Marshall, and A.C. Pigou observed a preference for present over future consumption, and each took this as evidence that consumer 'foresight' or 'will power' was defective. The labouring classes were said to discount future consumption to reflect uncertainty, and such discounting is regarded as 'rational.' But each of these economists focused on an additional, and purportedly 'irrational,' reason for discounting: 'impatience.' Consumers are thus said to make persistent miscalculations when it comes to decisions involving time.
Irrationalité et choix intertemporel dans les débuts de la pensée néo-classique. Les premiers économistes néo-classiques présumaient qu'il y avait un brin d'irrationalité dans le processus de décision intertemporel. W.S. Jevons, Irving Fisher, Alfred Marshall et A.C. Pigou ont observé une certaine préférence de la consommation présente par rapport à la consommation future et en ont déduit que le consommateur manquait de 'prévoyance' et de 'volonté.' On suggérait que les classes travailleuses escomptaient leur consommation future à cause de l'incertitude - ce qui était considé comme rationnel. Mais chacun de ces économistes faisait aussi appel à une raison additionnelle pour escompter la consommation future - l'impatience - un motif jugé irrationnel. On en concluait que les consommateurs faisaient des erreurs persistantes de calcul quand ils prenaient des décisions intertemporelles.     

Efficiency of travel agency franchises: a study in Spain

Efficiency in a firm is important because it ensures that the economy’s scarce resources are not being wasted. It produces something else of value—profits or the continued existence of the organisation. This work contributes to the literature on efficiency in franchising. Specifically, it is focused on the sector of travel agencies which operate in the franchising system in Spain. This fact is an original contribution and is very important because until now there have not been any studies about efficiency in this sector of franchising. The results show that the number of brand names which are efficient is around 50%. This means that many chains are not efficient. This result may be, to a great extent, a result of the dynamics of this sector in recent years. A Tobit model is also used in order to characterise the franchisors’ efficiency. Some important findings are showed.     

The practice of sport and its influence on social values and behaviour education

‘Non-health effects’ of sports practice, as life satisfaction or non-cognitive education, are being adopted as aim in academic journals in several fields. This paper tries to contribute to this literature by focusing on the links between youth sports and the formation of values and social skills. To do this, we have made a survey, in which more than 5000 Spanish students were involved. They were asked about their sport activity, leisure preferences and socio-economic and family characteristics. We analyse separately athletes and non-athletes using Heckman’s two-step method. Therefore, we split the sample based on the likelihood of practising sports initially predicted by a probit analysis. Then, we separately estimate the non-cognitive educational outcomes of each group of individuals. The results of the first step show significant differences in gender, socio-economic and academic performance. In the second step, segregating the sample provides a number of highly significant effects: The cases of household income and videogames frequency play, among others. So, we have detected a different effect of increasing family income on the educational results (positive in the athlete and negative in the non-athlete group). In addition, a more substantial negative effect was observed in time devoted to videogames in the sample of athletes. These results can be used to implement educational policy measures, such as the promotion of sport in schools, or implementing awareness campaigns about responsible engagement in leisure time activities.     

Two are Better Than One: The Link Between Management Systems and Business Performance

Little is known about the complementary performance benefits associated with facilities’ combined use of both quality management systems (QMSs) and environmental management systems (EMSs), and how these performance benefits might differ from those associated with facilities’ use of only one of these management systems (or neither). We suggest that complementarities arise because each management system fosters the development of internal capabilities that facilitates the adoption and routine operationalization of the other, while maintaining differentiated goals that enhance strategic value. We examine these relationships using a sample of 2619 manufacturing facilities operating within six OECD countries, while controlling for self‐selection issues. Our findings support the idea of complementarity, in that facilities that adopt both QMS and EMS are more associated with positive business performance than facilities that adopt either a QMS or an EMS on its own, or no management system. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

Competitive advantages of the mobile phone operators in the Asia Pacific region: analysis from the strategic groups approach

This paper studies the existence of strategic groups in the mobile phone industry. The analysis has been conducted in an international context characterised by major differences in regional wireless infrastructures, types of customers, government regulations and economic development, such as the Asia Pacific region. The purpose is to find the competitive advantages of the groups identified and the strategies that have led them to achieve them. The empirical research was carried out using data from a sample of the 28 largest firms of the industry in 2013. The results reveal the existence of three different strategic groups pursuing different strategies. The main determinant variables of the competitive advantages are price and size. The differences in environmental characteristics in this industry might explain the formation of strategic groups.     

Regulating collateral-requirements when markets are incomplete

In this paper we examine the effects of default and collateral on risk sharing. We assume that there is a large set of assets which all promise a risk less payoff but which distinguish themselves by their collateral requirements. In equilibrium agents default, the assets have different payoffs, and there are as many linearly independent assets available for trade as there are states of the world. We derive necessary and sufficient conditions for equilibria to be Pareto-efficient in the presence of uncertainty. We explore some examples for which the collateral equilibrium allocation is identical to the Arrow–Debreu allocation, either when agents have a high preference for the durable good, or when the endowment distribution of the durable good is relatively homogeneous. We examine a series of examples to understand which collateral-levels prevail in equilibrium and under which conditions there is scope for regulating margin-requirements, that is, restricting the sets of tradable assets through government intervention. In these examples equilibrium is always sub-optimal but regulation never leads to a Pareto-improvement. While the competitive equilibria are constrained efficient, there do exist regulations which make large groups of agents in the economy better off. These regulations typically restrict all trades to take place in the low-collateral loans and benefit the poor and the rich agents in the economy through their effects on the equilibrium interest rate and the equilibrium prices of the durable goods.