Nothing to hide: Commitment to,compliance with,and impact of the special data dissemination standard

Understanding why states voluntarily cede power to international institutions, and if those institutions fulfill their stated goals, remain a pressing question in international relations. In order to evaluate the material and normative logics that may drive this type of behavior, this paper considers state commitment to and compliance with the Special Data Dissemination Standard (SDDS) initiative launched by the IMF in 1996. This effort seeks to enhance the availability of comprehensive economic data based on best dissemination practices to facilitate pursuing sound macroeconomic policies. Using panel data on 120 countries during the 1996–2011 period, we find that commitment to the SDDS occurs when costs for states are low, and that compliance with the SDDS initiative is associated with increased data transparency after controlling for self‐section bias. Our results are robust to controlling for endogeneity, alternative sample, and estimation methods.     

Some observations on models of growth and distribution with autonomous demand growth

This paper offers some theoretical and methodological observations on a model of growth and distribution, recently developed by Franklin Serrano and others and called the Sraffian supermultiplier model, in which the growth of autonomous capitalist consumption demand and distribution are exogenously given and capacity utilization is at an exogenously given “normal” level in long‐run equilibrium. First, it provides a simple long‐run equilibrium version and dynamic formulation of the model, and compares it to other models of growth and distribution using a common framework and focusing on the effect of a change in income distribution on growth. Second, it shows that the model can be modified to examine other components of autonomous demand growth, including government spending, exports, consumption by workers, and investment and technical change, and to simultaneous multiple sources of autonomous demand growth. Finally, it comments on some methodological issues concerning the model, and on its implications for the notion of long‐run equilibrium.     

Suboptimal international equity portfolio diversification and stock market development

Review of Quantitative Finance and Accounting - This paper examines whether the widely reported phenomena of home and foreign biases (i.e. suboptimal international equity portfolio diversification)...     

Expensing stock options: a fair-value approach

Now that companies such as General Electric and Citigroup have accepted the premise that employee stock options are an expense, the debate is shifting from whether to report options on income statements to how to report them. The authors present a new accounting mechanism that maintains the rationale underlying stock option expensing while addressing critics' concerns about measurement error and the lack of reconciliation to actual experience. A procedure they call fair-value expensing adjusts and eventually reconciles cost estimates made at grant date with subsequent changes in the value of the options, and it does so in a way that eliminates forecasting and measurement errors over time. The method captures the chief characteristic of stock option compensation--that employees receive part of their compensation in the form of a contingent claim on the value they are helping to produce. The mechanism involves creating entries on both the asset and equity sides of the balance sheet. On the asset side, companies create a prepaid-compensation account equal to the estimated cost of the options granted; on the owners'-equity side, they create a paid-in capital stock-option account for the same amount. The prepaid-compensation account is then expensed through the income statement, and the stock option account is adjusted on the balance sheet to reflect changes in the estimated fair value of the granted options. The amortization of prepaid compensation is added to the change in the option grant's value to provide the total reported expense of the options grant for the year. At the end of the vesting period, the company uses the fair value of the vested option to make a final adjustment on the income statement to reconcile any difference between that fair value and the total of the amounts already reported.     

On necessarily welfare-enhancing free trade areas

The well-known Kemp-Vanek-Ohyama-Wan proposition establishes that if two or more countries form a customs union (CU) by freezing their net external trade vector through a common external tariff and eliminating internal trade barriers, the union as a whole and the rest of the world cannot be worse off than before. Owing to the fact that a Free Trade Area (whose member countries impose country specific external tariff vectors) does not equalize marginal rates of substitution across its member countries (in contrast to a CU), the literature has been unable to provide a parallel demonstration regarding welfare improving Free Trade Areas (FTAs). The present paper eliminates this gap. In extending the result to the case with intermediate inputs, the paper also sheds new light on the rules of origin required to support such necessarily welfare enhancing FTAs. We show here that provided no trade deflection is permitted, all that is required by way of rules of origin is that the goods produced within the union - whether final or intermediate - be allowed to be traded freely. The proportion of domestic value added in final goods does not enter as a criterion in the rules of origin.     

The inside scoop: Acceptance and rejection at the journal of international economics

There is little work on the inner workings of journals. What factors seem to affect the ability to publish in a journal? Could simple rules (which are already used by some journals) like the desk rejection of a significant minority of papers, help to streamline the process? At what cost? How well do journals seem to do in choosing papers? What can we say about the extent of type 1 and type 2 errors? Do editors seem to have uniform standards or are some harsher than others? We use data on submissions to the Journal of International Economics to help answer these questions.     

Customer loyalty to newly opened cafés and restaurants in Malaysia

An extended review of the literature indicates that there is an insufficient number of past studies which test the SERVQUAL model (tangibles, reliability, responsiveness, assurance, empathy) in the food and beverage industry. Therefore, this research attempts to provide new insight into the impact of service quality on customer loyalty in the food and beverage industry. The purpose of the research is to determine the impact of service quality and price fairness on customer loyalty in the food and beverage industry in Penang, Malaysia. This article surveyed the customers of newly opened cafés and restaurants in Penang, Malaysia, by using a structured questionnaire. The research revealed that service quality (tangibles, reliability, assurance, and empathy) and price fairness have a positive relationship with customer loyalty. However, responsiveness had no relationship with customer loyalty. This article includes an additional independent variable, price fairness, to investigate customer loyalty.