Technological change and multinational growth in international telecommunications services

Revolutionary technological and institutional changes, introduced since mid-seventies, are drastically altering the quiet functioning of international telecommunications markets, traditionally characterized by a strong multilateral oligopoly. In such multilateral oligopoly firms had little scope and opportunity for any form of international growth. Since the early eighties the scope for international growth of telecommunications carriers is emerging as a critical issue in international telecommunications. The economics of multinational firms and international trade make it possible to assess the role of technology gaps in the modernization process, international telecommunications tariff asymmetries and global outsourcing as the determinants of multinational growth of telecommunications carriers and their international strategies.     

The economics of path-dependence in industrial organization

Path-dependence defines the set of dynamic processes where small events have long-lasting consequences that economic action at each moment can modify yet only to a limited extent. Path-dependence is analytically generated by the overlapping of irreversibility, indivisibility and structural actions of agents. It makes it possible to allow both for the effects of past behaviour of agents on the structure of the environment and the Lamarckian survival of agents by learning and adaptation to the character of the environment; hence it provides a framework to understand and to model the effects of historic time on the behaviour of agents which are able at each point in time to modify their evolution.     

Exploring the Antecedents of Brand Loyalty and Electronic Word of Mouth in Social-Media-Based Brand Communities: Do Gender Differences Matter?

ABSTRACT

Recently, social media have emerged as key marketing communication channels. In this context, consumers are increasingly gathering in online communities which have been identified as social-media-based brand communities (SMBBCs). However, notwithstanding scholars' attention towards SMBBCs, the role of consumers' gender in developing brand loyalty intention (BLI) has been scarcely explored by literature. Moreover, scant attention has been given to the analysis of whether gender is related to different propensities towards brand recommendation—identified as a proactive behavior towards a positive electronic word of-mouth diffusion (E-WOM)—in the social media context. Hence, this research aims to explore the antecedents of BLI and E-WOM by focusing on consumers' gender differences. A structural equation model has been created based on 250 surveys collected among SMBBCs of an American sportswear brand. The results showed that male consumers' BLI is influenced by engagement in SMBBCs. Instead, brand trust was the main antecedent of females' BLI.     

Localised appropriability: pecuniary externalities in knowledge exploitation

Pecuniary externalities are crucial in shaping the strategies for the valorisation of the distinctive competences and the economic success of innovative firms. The analysis of conditions for localised knowledge appropriation and exploitation makes it possible to identify idiosyncratic production factors. The introduction of directed technological change biased towards their intensive usage provides the opportunity for the exploitation of technological knowledge.     

Keynes and India, 1909–1913: a study on foreign investment policy

Abstract

Keynes's work on India before the First World War concentrated on analysis of the gold exchange standard and the stabilization of the rupee external value. Indian monetary arrangements were framed into a plan for foreign investment, implemented by the India Office in London. This policy, which was a typical example of public control over investments, occasioned Keynes's first job as an applied economist. Although neglected by Keynesian scholarship, this learning by doing experience is likely to have played a significant role in the young economist's training and education.     

Forecasting Surrender Rates Using Elliptical Copulas and Financial Variables

A multistage stochastic model to forecast surrender rates for life insurance and pension plans is proposed. Surrender rates are forecasted by means of Monte Carlo simulation after a sequence of GLM, ARMA-GARCH, and copula fitting is executed. The model is illustrated by applying it to age-specific time series of surrender rates derived from pension plans with annuity payments of a Brazilian insurer. In the GLM process, the only macroeconomic variable used as an explanatory variable is the Brazilian real short-term interest rate. The advantage of such a variable is that we can take future market expectation through the current term structure of interest rates. The GLM residuals of each age/gender group are then modeled by ARMA-GARCH processes to generate i.i.d. residuals. The dependence among these residuals is then modeled by multivariate Gaussian and Student's t copulas. To produce a conditional forecast on a stock market index, in our application we used the residuals of an ARMA-GARCH model fitted to the Brazilian stock market index (Ibovespa) returns, which generates one of the marginal distributions used in the dependence modeling through copulas. This strategy is adopted to explain the high and uncommon surrender rates observed during the recent economic crisis. After applying known simulation methods for elliptical copulas, we proceeded backwards to obtain the forecasted distributions of surrender rates by application, in the sequel, of ARMA-GARCH and GLM models. Additionally, our approach produced an algorithm able to simulate multivariate elliptical copulas conditioned on a marginal distribution. Using this algorithm, surrender rates can be simulated conditioned on stock index residuals (in our case, the residuals of the Ibovespa returns), which allows insurers and pension funds to simulate future surrender rates assuming a financial stress scenario with no need to predict the stock market index.     

Option-based risk management of a bond portfolio under regime switching interest rates

In the present paper, we assume an economy with regime switching short rates and show how the Value at Risk of a financial position on zero-coupon bonds, hedged by buying protective put options under budget constraints, can be minimized by selecting optimal (regime-dependent) strike prices.     

Non‐compliance in Executive Compensation Disclosure: the Brazilian Experience

We examine the determinants and consequences of firms’ choice not to comply with a new executive compensation disclosure regulation. We exploit a unique feature of Brazilian markets, where a change in the regulation of executive compensation disclosure could arguably lead to personal security‐related costs for executives. This major reform in executive compensation disclosure in Brazil became effective in December 2009. While some firms complied with the change in regulation, other firms explicitly refused to comply fully with the regulation by using a court injunction. After controlling for firm‐specific characteristics and both social and economic inequality measures, we find that the degree of criminality in the state in which the firm is headquartered (a proxy for security‐related costs) and the level of CEO compensation are important determinants of a firm's decision not to fully disclose executive compensation information. We also show that firms which do not fully comply with the regulation face costs in the form of higher bid‐ask spreads, suggesting investors are leery of the decision not to comply with the regulation. We discuss the potential implications of our results in the context of executive compensation disclosure reform.     

A Fiscal Stimulus and Jobless Recovery

We analyze the effects of a government‐spending expansion in a dynamic stochastic general equilibrium model with Mortensen–Pissarides labor‐market frictions, deep habits in private and public consumption, investment adjustment costs, a constant elasticity of substitution (CES) production function, and adjustments in employment at both intensive and extensive margins. The combination of deep habits and CES technology is crucial. The presence of deep habits magnifies the responses of macroeconomic variables to a fiscal stimulus, while an elasticity of substitution between capital and labor in the range of available estimates allows the model to produce a scenario compatible with the observed jobless recovery.