Identifying periods of market inefficiency for return predictability

The article examines the efficiency of 31 stock index series spanning 26 countries across the world, using generalized spectral test (GST) and detects departure from the martingale difference hypothesis (MDH). A moving window of 24 months was used and p-values of GST were estimated. In order to explore whether the departure from market efficiency can be used for generating profitable trades, an exponentially weighted-moving-average-based trading rule was applied and was found that average profits per trade were significantly higher when p-value of the GST was less than 0.1. These observations are in consistent with the adapted market hypothesis.     

Determinants of executive beliefs: comparing functional conditioning and social influence

Executive beliefs influence strategic decision making in organizations, and thus they ultimately influence organization performance. The factors that might determine upper‐echelon executive beliefs, however, have received scant empirical attention; certainly, little is known about their relative influence. In contrast to the oft‐asserted influence of functional experiences, our results indicate that beliefs held by upper‐echelon executives are better explained with an alternate theoretical model based on social influence. Our pattern of results indicates support for the argument that beliefs are socially reproduced through interaction among executives. Copyright © 1999 John Wiley & Sons, Ltd.     

When does comparative advertising influence brand attitude? The role of delay and market position

This article presents the results of an experiment that examines the role of delay and sponsor's market position in influencing the effectiveness of comparative ads compared to noncomparative ads. The results show that comparative ads sponsored by an unknown brand are more effective in changing consumers' brand attitudes than noncomparative ads, when brand response occurs at a delay. Implications of these results for the Elaboration Likelihood Model are discussed. © 1998 John Wiley & Sons, Inc.     

Efficiency of the Indian leather firms: some results obtained using the two conventional methods

Indian leather industry has massive potential for generating employment and achieving high export-oriented growth. However, its economic performance has not been assessed much till date. The present paper attempts to fill in this gap by examining technical efficiency (TE) of individual leather producing firms for some years since the mid-1980’s. Analyzing the industry’s firm-level data through the two conventional tools, viz., data envelopment analysis and stochastic frontier analysis, the paper observes a significant positive association between a firm’s size and its TE, but no such clear relation between a firm’s age and TE. It also finds significant variation in TE across firms in different groups of states as well as under different organizational structures and observes some technological heterogeneity across states. Although, non-availability of panel data does not allow one to assess effects of economic reforms on the performance of the Indian leather firms, the average firm-level TE, however, seems to be on an increasing path, except for downswing in the immediate post-reform years.     

Effective Organisational Response by Corporates to India's Liberalisation and Globalisation

The Indian economy began to liberalise and globalise in earnest beginning in 1991. The principal elements of the economy's structural adjustment that have created a far more competitive and turbulent but also opportunity-rich market environment are described. Based on prior Western and Indian research, a model of effective corporate coping with such a market environment has been developed. The model argues that the greater use of policy frameworks representing entrepreneurial, organic, professional, and participatory styles of management, and mechanisms of uncertainty reduction, differentiation, and integration tend to enhance corporate performance in such an environment, while their absence or low usage depresses it. Four sources of information are utilised to assess the model: published information on how Indian corporates have generally coped with economic liberalisation and globalisation, three corporate case studies, data from a recent study of 139 Indian corporates, and another study of 54 Indian corporates. All four sources broadly converge in their support for the model. Several issues relating to the contingency and strategic choice perspectives, and the generalisability, applicability, acceptability, and the diffusion of policy frameworks and redesign mechanisms are discussed.     

Optimality in stochastic OLG models: Theory for tests

We consider general OLG economies under uncertainty, with short maturity assets and with dividend paying assets of infinite maturity and fiat money, and study the optimality properties of equilibria with a sequence of asset markets that are sequentially complete. We provide necessary and sufficient conditions, in terms of asset prices and dividends, for equilibria to be conditionally Pareto optimal. These results provide a theoretical basis for empirical investigation.     

Dividend paying assets,the unit root property,and suboptimality

We consider the stationary equilibria of one good overlapping generations (OLG) economies with a sequence of possibly incomplete asset markets and prove two results. First, we show that if some asset always pays a nonnegative dividend, then its price changes sign across states if and only if the Perron root of every agent’s matrix of intertemporal rates of substitution exceeds one. Second, we provide sufficient conditions in terms of dividends and asset prices such that, keeping asset prices fixed, a conditionally Pareto improving allocation is induced by a stationary reassignment of a single asset. When taken together the results show that when for some agent the Perron root exceeds one, the existence of an asset that pays a strictly positive dividend in every state is sufficient to induce an improvement.     

Liberalising the Movement of Natural Persons: A Lost Decade?

Liberalisation of international trade in services through the Movement of Natural Persons (Mode 4) remains one of the least negotiated issues of trade policy among the 144 members of the World Trade Organisation. Economists believe that there is a basic convergence of economic interest between the developed and the developing world for liberalising Mode 4. Yet the multilateral trading system has not facilitated greater worker mobility between the labour‐surplus and labour‐scarce countries. Is there any economic logic as to why cross‐border movements of workers have not followed the pattern predicted by international trade theory? Or are there strong socio‐political barriers that have come in the way of liberalising Mode 4? These are some of the questions the paper attempts to answer. The paper shows that the economic arguments against the free movement of natural persons are based on the narrow perspective of the welfare of domestic workers while ignoring the benefit it brings to the economy as a whole. Further, non‐economic arguments miss the point that the movement of workers under Mode 4 of GATS is temporary in nature, and so unlikely to have any lasting social and cultural spillovers. The paper gives specific illustrations from the recent past where temporary import of workers from labour‐surplus countries has enabled both developed and developing countries sustain their economic growth. It concludes by arguing that the environment for renegotiating WTO commitments under this important sector of international trade in services is better than ever before, even though the current world economic slowdown may delay actual negotiations for a while.     

Consumer Control and Empowerment: A Primer

This paper introduces consumer empowerment as a promising research area. Going beyond lay wisdom that more control is always better, we outline several hypotheses concerning (a) the factors that influence the perception of empowerment, and (b) the consequences of greater control and the subjective experience of empowerment on consumer satisfaction and confidence.