The Stock Market,Monetary Policy,and Economic Development

In this article, we examine the impact of financial market development on the level of economic development. In particular, we explore this issue in a setting where individuals face idiosyncratic risk. Incomplete information also provides a transaction role for money so that monetary policy can be studied. While an active banking sector promotes risk sharing, we incorporate a market for equity by allowing individuals to trade capital across generations. In this manner, each asset and financial market in our model fulfills a distinct economic function. Consistent with recent empirical work, we find that the impact of access to a stock market may be indeterminate—the economy may respond with significant gains in capital accumulation and risk sharing, or there may be relatively little impact. We also show that the effects of monetary policy vary across the level of financial development. In economies with small stock markets, increasing the amount of liquidity will cause capital accumulation to decline. By comparison, in advanced economies, capital accumulation improves.     

Salespersons' self‐monitoring: Direct,indirect, and moderating effects on salespersons' organizational citizenship behavior

Research into self‐monitoring (SM) confirms that people differ when it comes to how much they observe, regulate, and control themselves in certain social settings and interpersonal relationships. Research also shows that high self‐monitors, as opposed to low self‐monitors, perform better in boundary‐spanning positions that require good communication skills. Therefore, it is a matter of interest to analyze the effects of SM on salespeople's behavior, and on organizational citizenship behavior (OCB) in particular. It has been proven that this behavior affects the performance of organizations and influences supervisors' evaluations of subordinates. Although a number of studies examine the antecedents of OCB, certain relationships have yet to be looked at. This study proposes and tests a model stating that salespersons' OCB is determined by salespersons' SM, with this relationship being mediated by salespersons' person–organization (PO) fit and job satisfaction. This study also analyzes the moderating effect of salespersons' SM on PO fit to job satisfaction relationships, as well as on job satisfaction to OCB relationships. Data collected from 122 supervisor–salesperson dyads in 35 companies across 9 different sectors confirm the proposed model. In fact, the results show that SM, both directly and indirectly, has a positive effect on OCB due to the way in which it influences salespersons' PO fit and job satisfaction. The results also confirm the moderating role of SM in the relationships between job satisfaction and OCB, and between PO fit and job satisfaction. Certain implications of this study, as well as directions for future research, are also addressed. © 2009 Wiley Periodicals, Inc.     

BAYESIAN ANALYSIS OF AGGREGATE LOSS MODELS

This paper describes a Bayesian approach to make inference for aggregate loss models in the insurance framework. A semiparametric model based on Coxian distributions is proposed for the approximation of both the interarrival time between claims and the claim size distributions. A Bayesian density estimation approach for the Coxian distribution is implemented using reversible jump Markov Chain Monte Carlo (MCMC) methods. The family of Coxian distributions is a very flexible mixture model that can capture the special features frequently observed in insurance claims. Furthermore, given the proposed Coxian approximation, it is possible to obtain closed expressions of the Laplace transforms of the total claim count and the total claim amount random variables. These properties allow us to obtain Bayesian estimations of the distributions of the number of claims and the total claim amount in a future time period, their main characteristics and credible intervals. The possibility of applying deductibles and maximum limits is also analyzed. The methodology is illustrated with a real data set provided by the insurance department of an international commercial company.     

Forecasting Heavy‐Tailed Densities with Positive Edgeworth and Gram‐Charlier Expansions*

This article presents a new semi‐nonparametric (SNP) density function, named Positive Edgeworth‐Sargan (PES). We show that this distribution belongs to the family of (positive) Gram‐Charlier (GC) densities and thus it preserves all the good properties of this type of SNP distributions but with a much simpler structure. The in‐ and out‐of‐sample performance of the PES is compared with symmetric and skewed GC distributions and other widely used densities in economics and finance. The results confirm the PES as a good alternative to approximate financial returns distribution, specially when skewness is not severe.     

Spatial modeling of stock market comovements

We model the complex global dependencies in international financial markets using spatial techniques. Our methodology allows us to go beyond conventional correlation analyses and volatility-spillover models confined to studying pairwise relationships, and improves the accuracy of return predictions. We find that stock market comovements are unrelated to geographical proximity, and that financial linkages, as measured by foreign direct investment (FDI) ties, are important in accounting for markets comovements. Our results suggest that the proposed measure of financial distance, coupled with spatial methodology, captures fairly accurately the dependencies in the world financial markets, providing important implications for policymaking and portfolio management.     

The Latino Assumption: A Research Note

The Latino assumption refers to the presumption that individuals residing in the United States and its commonwealths who have descended from Latin American countries and Spain constitute a homogeneous panethnic social identity. Inappropriately studying individuals of Latin American and Spanish descent as a homogeneous group in leisure research may result in threats to internal validity, statistical conclusion, and external validity. This article examines these issues and the historical context of the Latino assumption.     

Employees' overestimation of functional and relational service quality: A gap analysis

This study extends previous research on gap analysis of service quality by including not only functional service quality but also relational benefits. To this end, a field study was carried out in 36 hotels and 35 restaurants. The samples consisted of 213 employees and 657 customers. A questionnaire format was used to measure both functional and relational service quality, as well as customers' loyalty. When comparing employee and customer perceptions, gaps potentially range from ‘overestimation’ (employees' perceptions are greater than customers' perceptions) to ‘underestimation’ (customers' perceptions are greater than employees' perceptions). In general, the results indicated that the employees surveyed overestimated the service quality they offer to customers, although gaps were greater for certain service attributes than for others. In addition, some gaps were more related to customer loyalty than others. The findings also showed that employees' overestimation of relational benefits plays a moderating role, increasing the negative relationship between employees' overestimation of functional service quality and customers' loyalty. The theoretical and managerial implications of the results are discussed further in this paper.     

Can sustained growth be attained through trading exhaustible resources for foreign research?

We analyze the existence and the stability of a sustained balanced growth equilibrium (SBE) in a model of two non-homogeneous trading economies. A technological leader country which sells patents of new intermediate products in exchange for an exhaustible resource extracted by a technological follower trade partner. Considering a growth-essential resource, the ‘knife-edge’ assumption of exactly constant returns to scale (CRS) to manmade inputs can be alleviated, and the scale effects associated with R&D-based growth models overcome. A fully endogenous SBE is proven to exist, although its stability turns out to be a ‘knife-edge’ possibility. The long-run equilibrium is saddle-path stable assuming CRS in manmade inputs. Conversely, considering increasing returns to scale together with a completely specialized two-country trade, the equilibrium could be reached only if the two economies initially guard a particular relation, described by a particular subset of the state space.     

Bank presence in firm equity: A diversification based approach

This study analyses the possible reasons for banks deciding to invest in firm equity, based on the fundamentals of the strategic diversification literature. Those fundamentals suggest that it may be in response to the negative evolution of other aspects of banking business, namely, credit business, fixed interest business and services, as well as the bank's level of efficiency. The results confirm the hypotheses that the decision to hold equity in other firms is related to the evolution of the bank's other businesses. However, the results for savings banks differed from those for banks.