Liquidity Constraints and Investment in Transition Economies

We use Bulgarian firm-level data to investigate the impact of liquidity constraints on investment performance. Internal funds are an important determinant of investment in most industrialized countries. We test whether internal funds are important for firm investment during the current transition process in Bulgaria. We use a simple accelerator model of investment to test whether liquidity constraints are relevant in the case of Bulgaria. Our estimations are based on data for the period 1993–95, prior to the Bulgarian financial crisis in 1996–97. It turns out that Bulgarian firms are liquidity constrained, and that firms' size and financial structure help to distinguish between firms that are more and less liquidity constrained. In our view, liquidity constraints can be given a different interpretation in the case of transition economies as compared to Western economies. A more in depth analysis of the data reveals that liquidity constraints, and consequently the access to external funds for Bulgarian firm investment, are to be seen against the background of soft-budget constraints and the failure of the financial system to enforce an efficient allocation of funds. In our view, the lack of liquidity constraints may actually be seen as a sign of financial weakness in the case of Bulgaria.     

Learning about fundamentals: The widening of the French ERM bands in 1993

Learning about Fundamentals: The Widening of the French ERM Bands in 1993. — The authors incorporate a Bayesian learning model into a fairly general model of exchange rate determination in discrete time. The model is applied to the period following the widening of the French-German ERM bands in August 1993, in which a systematic underprediction of the franc can be observed until February 1994. A (substantial) part of these forecast errors can be mimicked by a Bayesian learning process. Simulations with our model show that, after the widening of the bands, agents, contrary to their initial expectations, gradually learned that the true process driving monetary conditions in France had not changed notably.     

Practitioners' forum perestroika and soviet biotechnology

This article summarizes the findings of a UK Department of Trade and Industry 'Overseas Science and Technology Expert Mission' on Biotechnology to the USSR, made over the period 15-24 September 1989. The mission visited some of the most important basic research institutes working in biotechnmology in the Moscow region, including the 'Biocity' of Poushchino, and Kiev in the Ukrainian SSR. These institutes ranged from primarily basic research to ones which had strong links with industrial production. We report on the scientific and technical level of some of the most advanced Soviet centres, such as the Shemyakin Institute of Bioorganic Chemistry, the most important and prominent biotechnology institute in the USSR. The peculiar problems which best Soviet research in the field are described in the context of perestroika, the current restruing of Soviet society.     

Exploring effects of source similarity,message valence,and receiver regulatory focus on yelp review persuasiveness and purchase intentions

This study is among the first to investigate the impact of message, source, and receiver characteristics on user attitudes toward Yelp reviews, with the subsequent impact of these attitudinal evaluations on review persuasiveness. Specifically, it examines the roles of review valence (positive/negative) and sidedness (one-sided/two-sided), as well as perceived similarity with the reviewer, on user perceptions of helpfulness, trustworthiness, and credibility of the review. The study also tests moderating effects of perceived source similarity and user regulatory focus on the relationships among message characteristics, attitudinal variables, and purchase intentions. Our results disconfirm the negativity bias reported in previous studies and indicate that positive reviews are perceived as more trustworthy, credible, and helpful than negative or two-sided reviews. Review helpfulness and credibility, in turn, positively impacts its persuasiveness, with regulatory focus playing a complex nuanced role in the persuasiveness – behavioral intentions relationship. Based on the findings, future research avenues and managerial implications are proposed.     

Prices In Motion: Towards A Schumpeterian Price Theory

To Schumpeter, endogenous development is an essential characteristic of capitalism that disrupts the equilibrium of the circular flow of the economy. Price equilibrium in the circular flow is displaced by an analysis of prices in motion. The diversion of productive inputs from their existing employment through competition from entrepreneurs and the process of creative destruction both impact on prices throughout the economy and generate business cycles. While Schumpeter's theory of the business cycle and, implicitly, his price theory, have been heavily criticized, this article suggests a way forward to a revised theory of prices in motion.     

An Examination of Emotional Information Management in Gift Giving and Receipt

Gift giving is prominent in marketplace exchanges and has robust emotional implications for both the giver and recipient. For example, prior to and during the selection of a gift, the giver endures positive and negative emotions, as he/she grapples with selecting the perfect gift, and ponders if the recipient will actually cherish the purchased item. During this dynamic exchange process, emotional recognition, management of emotions, emotional empathy, and anticipated elation are oft experienced by both the giver and recipient. However, research examining such emotions quantitatively in a gifting context is scant and models of these faculties in the gift‐giving milieu are nonexistent. To help fill this research fissure, four studies are developed; they, in general, investigate determinants of feelings linked with the gestation, prestation, and reformulation stages of the gift‐giving event. Specifically, Study 1 (giver's perspective) and Study 2 (receiver's perspective) reveal a mediation void in the models tested. Heeding these results, Study 3 (gift given) and Study 4 (gift received) introduce anticipated elation as a key factor between the aforementioned emotive factors and the emotional responses inherent in the gift‐giving stages, among others. Managerial implications and future research directions are offered.