NAFTA and North American stock market linkages: an empirical note

This paper provides tests of the co-movement of the North American stock markets. We find over the post-US stock market crash period, 1987:11 through 1997:03, there is no cointegration present in these markets even when the passage of NAFTA is taken into account. The absence of cointegration allows us to draw several conclusions. First, the stock markets of North America are segmented. Second, the passage of NAFTA has not resulted in a greater integration of these stock markets. Finally, the data do not support the notion of a contagion effect from the 1987 U.S. stock market crash. In conclusion, the potential for long-run international diversification across the markets of North America still exists.     

The Trade-Off Between Supervision and Wages: Evidence of Efficiency Wages from the NLSY

Standard efficiency wage models suggest that workers employed in places with lower probabilities of identifying shirking will earn more, as will workers who have better alternative opportunities. This paper provides new empirical evidence in support of efficiency wage theory using the National Longitudinal Surveys of Youth data. The empirical results support the prediction of the model that workers employed in larger work groups are paid more, a finding consistent with a supervision-wage trade-off. Additional evidence supports the prediction that workers with better alternative opportunities earn more.     

INFORMATION TRANSMISSION IN THE SHANGHAI EQUITY MARKET

We examine market efficiency and the price-volume relation in Class A and Class B shares on the Shanghai exchange relative to the U. S. equity market. Variance ratios and runs tests for market efficiency support the hypothesis that both Class A and Class B markets follow a random walk. In addition, the augmented Dickey-Fuller test supports the null hypothesis that the Shanghai market follows a random-walk process with drift. We also find a significantly positive relation between changes in volume and absolute price returns in both Class A and Class B shares, which is consistent with studies on U.S. equity markets. However, when using signed returns, our results are stronger than most U.S. studies on price-volume relations. We find no significant difference between the price-volume correlations in Class A and Class B shares. However, the price-volume correlations in both Class A and Class B shares are significantly stronger than the price-volume correlation in the U.S. market. This suggests volume may be more important to information transmission in China than in the U. S. markets.     

Mixed Messages: Open‐Market Repurchases Following Stock Acquisitions

Management decisions and market reactions to those decisions do not occur in isolation. Despite this fact, little or no research has examined two events when they occur in a sequence, even when theory suggests that those two events convey opposite signals. We examine firms that do a stock‐based acquisition then announce an open‐market repurchase program. These two actions, according to the signaling theory, signal conflicting valuation errors. This paper is the first to examine a sequence of events that convey seemingly conflicting signals. Among other results, we find that repurchasers who had previously made a stock‐based acquisition have a less positive market reaction than do otherwise comparable repurchasers with no previous acquisition. These results indicate that the market reactions to events are tempered by previous information‐releasing events.     

Editor��s note

Editorial

Editor’s note     

Re-examination of the velocity-money growth variability debate

In this paper the author re-examines the money growth variability debate set forth by Milton Friedman. Six time periods are analyzed in the study. The pre-1979 period is found to be the only period which exhibits any evidence that money growth variability Granger-causes velocity.     

Individual differences and performance amongst R and D personnel: Some implications for management development

The literature on age and intelligence and scientific performance are briefly reviewed as a prelude to a more detailed consideration of recent work on the characteristics of innovative people. Attention is focussed on Kirton's measure of Innovation-Adaptation and a suggestion is made that it measures a mixture of level of creativity and style of innovation, and that future work should concentrate on developing the three sub-scales of originality, efficiency and rule-conformity. Some implications for the selection and development of R and D personnel are outlined.     

Rethinking country effects: robotics,AI and work futures in Norway and the UK

Current debates around robotics and artificial intelligence (AI) are dominated by concerns over the threat to employment, amid widely varying estimates of potential job losses. Countries are expected to fare differently, but there is little comparative research that goes beyond analysing industry and occupational structures. This article rethinks ‘country effects’ by exploring the role of institutions and social actors in shaping technological change in Norway and the UK. Drawing upon interviews with technology experts, employer associations and trade unions, it examines their perspectives on public policy support for the development and diffusion of robotics and AI, along with potential consequences for employment, work and skills. The research indicates significant country differences and the continued relevance of institutions, interests and power in analysing country effects.