Estimating Contagion on the Internet: Evidence from the Diffusion of Digital/Information Products

Even as the Internet continues to grow as a global platform for communication and commerce, the success of new value offerings on the Internet hinges on acquisition of new customers and retention of existing customers. Central to the flow of customers in and out of trial and repeat behavior in this burgeoning and dynamic environment, characterized by diversity among both producers and consumers of value offerings, is the process of social contagion—active word of mouth that flows among customers or passive observation of others. To estimate contagion on the Internet, the authors develop a trial-repeat purchase diffusion model for successive innovations in value offerings on the Internet. The model extends the state-of-the-art diffusion modeling by incorporating (i) dynamic market potential, (ii) heterogeneity among first-time triers, (iii) heterogeneity in word of mouth due to repeat buyers and non-repeaters (i.e., positive and negative word of mouth), and (iv) dynamic repeat purchase rate. The model also incorporates the influence of product characteristics, specifically source of innovation (i.e., whether the innovation is driven by environmental needs or competitive pressures) and product bundling, and competition. The authors test the model with weekly adoption data for 11 computer software products available on the shareware system, involving over 100 new versions in the period 1991–1994, and in a market whose size grows by a factor of fifty from early 1991 to late 1994. The findings clarify the role of word of mouth effects, competition, and product characteristics in fostering the diffusion process for digital information goods.     

Assessing co-ordinated Asian exchange rate regimes: Proposal for a possible move towards a common currency

This study assesses prospective Asian exchange rate regimes and finds short- and long-run currency dynamics more conducive to the introduction of a common peg based on a basket of the European euro, the United States dollar and the Japanese yen than the alternative of a United States dollar peg exchange rate regime. Exchange rate systems of 3- 4- and 5-Asian currencies are considered and the dynamics in a set of four European currencies prior to the introduction of the Euro provides benchmark evidence. The evidence for an Asian basket peg exchange rate regime is strengthened when, unlike prior studies, estimates of the long-run parameters account for time-varying volatility effects.     

Contextual Richness in Teaching IB: Ethics,Language, and Social Factors

Internationalizing the business curriculum has been the subject of increased discussion and interest At the academic level, the realization of the need and the urging of accrediting bodies has brought forth internationalization efforts which vary from substantial to modest undertakings. This DaDer reDorts on a survey of business curriculum intemation'alization.&;ong ~J.s. business schbk. The results show a continuation of internationalization approaches similar to those reported in earlier studies. Also, approachis with a less immediate and direct impact on the business curriculum are being adopted, including the establishment of faculty exchange programs and international business centers.     

Trading volume and exchange rate volatility: Evidence for the sequential arrival of information hypothesis

The relationship between trading volume and volatility in foreign exchange markets continues to be of much interest, especially given the higher than expected volatility of returns. Allowing for nonlinearities, this paper tests competing hypotheses on the possible relationship between volatility and trading volume using data for three major currency futures contracts denominated in US dollars, namely the British pound, the Canadian dollar and the Japanese yen. We find that trading volumes and return volatility are negatively correlated, implying a lack of support for the mixture of distributions hypothesis (MDH). Using linear and nonlinear Granger causality tests, we document significant lead-lag relations between trading volumes and return volatility consistent with the sequential arrival of information (SAI) hypothesis. These findings are robust and not sample-dependent or due to heterogeneity of beliefs as proxied by open interest. Furthermore, our results are insensitive to the modeling approach used to recover volatility measures. Overall, our findings support the contention that short- to medium-term currency relationships may be dominated by trading dynamics and not by fundamentals.     

Evaluating and Managing Brand Repurchase Across Multiple Geographic Retail Markets

Many companies manage their business on a geographic basis and evaluate marketing metrics and managers correspondingly. Here, using a multi-level dataset from the U.S. retail gasoline industry, we demonstrate inherent differences in the levels of brand repurchase across territories. Furthermore, we show that the effects of factors that may improve repurchase—customer satisfaction and customers’ relational investments—are moderated by market share at the territorial level. Relational investments have relatively more effect on repurchase in territories where a brand's market share is higher, while customer satisfaction has relatively more effect in territories where a brand's market share is lower. These findings imply that one size does not fit all for either evaluating or managing brand performance at a territorial level.     

Equity market integration in the NAFTA region: Evidence from unit root and cointegration tests

This study examines integration of the three participating equity markets before and after the 1993 passage of NAFTA based on daily, weekly, and monthly data. As expected, unit root tests for the overall period 1988-2001 and the two subperiods, 1988-1993 (pre-NAFTA) and 1994-2001 (post-NAFTA), indicate that stock prices are non-stationary but stock returns are generally stationary for all three markets for all three periods. However, daily, weekly, and monthly equity prices in the three NAFTA countries are cointegrated only for the post-NAFTA period. Similarly, US stock prices are more integrated with both Canadian and Mexican stock prices after the passage of NAFTA. This evidence of increased financial integration and co-movement in NAFTA equity markets after the passage of NAFTA has important implications for policymakers and managers.     

Adjustment Costs, Firm Responses, and Micro vs. Macro Labor Supply Elasticities: Evidence from Danish Tax Records

We show that the effects of taxes on labor supply are shaped by interactions between adjustment costs for workers and hours constraints set by firms. We develop a model in which firms post job offers characterized by an hours requirement and workers pay search costs to find jobs. We present evidence supporting three predictions of this model by analyzing bunching at kinks using Danish tax records. First, larger kinks generate larger taxable income elasticities. Second, kinks that apply to a larger group of workers generate larger elasticities. Third, the distribution of job offers is tailored to match workers' aggregate tax preferences in equilibrium. Our results suggest that macro elasticities may be substantially larger than the estimates obtained using standard microeconometric methods.     

Currency risk exposure of Chinese corporations

In spite of the rise of China and its currency, the currency risk of Chinese firms has not been studied adequately. In this paper we document for the first time that the stock returns of Chinese firms are significantly exposed to currency risks with many firms benefiting from the rise of the Yuan. Further, the magnitudes of the currency risk coefficients for Chinese companies (<10%) are smaller than those previously documented for other countries (20-40%). However, our results also indicate that Chinese export firms are exposed to significant risk related to the ASEAN currency index. Yuan appreciation also impacts exporters to India, Australia and Russia in some industries. The results documented in this study should be of much interest to managers, scholars, and policy-makers.