Market Instability and Revision Error in Risk Premium

This paper provides a theory and evidence that the risk premium puzzle is viewed as a phenomenon pertaining to the unstable foreign exchange market. In an unstable market, revision error uncompensated by an initial risk premium accrues due to consumer expectation revision about the ex ante uncertainty of the exchange rate. The risk premium widely deviates from its initial level, depending on the frequency of the consumer expectation revision and the degree of risk aversion. Subsequent evidence shows the existence of the revision errors for the risk premium during the Asian currency crisis and the recent financial crisis periods.     

The factor content of regional bilateral trade: The role of technology and demand

The Heckscher–Ohlin–Vanek (HOV) model in its strict form has been strongly rejected by the data. Relaxing some assumptions of the standard HOV model is key to find improvements in its performance. We apply the Davis and Weinstein (2001) methodology to analyse the validity of the HOV model using regions rather than countries. Surprisingly, our results using data for 17 Spanish regions are similar to theirs with international data for OECD countries. Accounting for technological differences improves the predictive capacity of the factor proportions model and including trade costs and geography reduces significantly the missing trade problem. However, relaxing the assumption of factor price equalisation does not improve the performance of the HOV model in a regional setting.     

国家主体功能区规划实施的几个关键问题

全国主体功能区规划已获得国务院通过并开始实施。作为一项国家空间战略布局规划,主体功能区规划的实施必将作为“十二五”时期及今后一段时期内经济社会工作的重点。为推动主体功能区规划的顺利实施,各级政府需要对主体功能区规划实施的关键问题形成共识。在主体功能区规划实施中,对主体功能区的认识、主体功能区规划实施的主体、主体功能区的划分、主体功能区的协调与调整、主体功能区的监测与评价、主体功能区政策措施落实、主体功能区的考核、主体功能区实施的组织保障、主体功能区规划实施的技术支撑、主体功能区实施的挑战与机遇等是需要重点关注的问题。     

Robust Event Studies for Derogation from Suspension of Concentrations in Greece during the Period 1995–2008

This paper examines the possible effect of the derogation from suspension of concentrations by the Hellenic Competition Commission (HCC) on the stock performance of the requested companies. For this reason, we examined 16 companies listed in the Athens Stock Exchange (A.S.E) that are involved to 13 requested derogations from suspension during the period 1995–2008 by applying and assessing the results of three different event study methodologies (market model, mean adjusted return model and market adjusted return model). From the empirical findings, we conclude that the argument of the requested companies concerning the subsequent negative effect on their stock performance if the derogation from suspension by the HCC is delayed or not granted does not hold. On the contrary, the average abnormal and cumulative returns of the requested companies are positive and statistical significant. In addition, the results of the three event study methodologies are robust.     

Barcode Empires: Politics,Digital Technology,and Comparative Retail Firm Strategies

Like other service sectors, information technology has dramatically altered the growth and character of the retail trade sector in the affluent economies. Nevertheless, significant variation exists in the typical strategies of retail firms in different countries. This article explores this variation and proposes an explanation for why retailers achieved scale and solved their make, buy, and partner decisions along such different trajectories. It argues that national bases for scale retailing were shaped by a series of political negotiations starting in the 1960s and 1970s. This demonstrates once again that technology implementation is rarely determined by the technology itself, but more often by social and political rules. Future technology platforms, such as web-based or mobile commerce, should be expected to follow similar political logics. As multinational retailing firms spread around the globe, this has important implications for national competition policy.     

Value Capture and Policy Design in a Digital Economy

Pervasive information and communication technology (ICT), intertwined with global dispersion of supply chains, is inducing a sizable structural transformation. All the articles in this special issue highlight that even though technology is the key driver, the reactions of businesses and countries to these transformations will depend on economic, political, and social arrangements within each organization and society. The competitive landscape of the ICT industry itself is likely to remain in flux. Also in other industries, both value creation and value capture are becoming increasingly complex—and remain more favorable for the developed countries than some commonly used measures suggest. According to the prevailing economic thinking, public policies should set market-friendly “rules of the game” and then stay out of the way. In the ICT domain, technical standards, spectrum allocations, and market power associated with various types of lock-ins play crucial roles calling for more active public involvement. In particular, the dynamic aspects of competition and anti-trust policies are important yet complex. While there is limited scope for sectoral or horizontal industrial policies, this special issue provides alternative avenues for considering matrix or systemic policies emphasizing education, openness, and national competitiveness.     

Chinese dietary culture influences consumers' intention to use imported soy‐based dietary supplements: an application of the theory of planned behaviour

The over‐saturated dietary supplement (DS) market in developed countries such as the US spurs the need for foreign market expansion, and the Chinese market provides a great potential for the foreign soy‐based DS industry. This study examined Chinese consumers' intention to use imported (US‐made US‐brand) soy‐based DS based on the Theory of Planned Behavior (TPB). Two alternative models were also examined in which Chinese dietary culture variables, including soyfoods favourability and dining‐out sociability, as well as their interactions with attitudes, were integrated into the TPB model. A cross‐sectional, self‐administered survey was conducted with a sample of 215 subjects (137 females; 78 males) in Shanghai, China. The TPB variables attitude, subjective norm, perceived behaviour control and behavioural intention, as well as the Chinese dietary culture variables: soyfoods favourability and dine‐out sociability were measured. Multiple linear regressions were used to analyze the three models. The statistical results indicated that all three models were statistically significant to predict intention (Model 1: R² = 0.473, P < 0.001; Model 2: R² = 0.505, P < 0.001; Model 3: R² = 0.525, P < 0.001). The results also showed that attitude, perceived behavioural control, and dine‐out sociability were significant (positive) determinants of intention. Soyfoods favourability acted a significant (negative) moderator of the relationship between attitude and intention. Subjective norm had no significant impact on intention. In conclusion, the TPB model was useful to predict Chinese consumers' intention to use imported soy‐based DS, but not all the TPB components weighed significantly in exploring DS consumption in China. The selected Chinese dietary culture variables were much more important predictors than subjective norm. This study makes a significant contribution in the application of the TPB model and in market strategy development for imported dietary supplements in China.     

Minimax price bounds in incomplete markets

This paper develops an approach to tighten the bounds on asset prices in an incomplete market by combining no-arbitrage pricing and preference-based pricing, and the approach is applied to a call option in the absence of dynamic rebalancing. With the no-arbitrage pricing, it is straightforward to obtain the initial bounds, which are too wide to be of practical uses. By accepting that a representative agent exhibits risk aversion from a benchmark pricing kernel, it is possible to narrow the bounds considerably. Using the unbiased minimax deviation implicit in the parameters, one can restrict further the set of reasonable values on assets in incomplete markets.     

Monday returns and asset pricing

The seasonal patterns observed on Monday stock returns are still unexplained by different asset pricing models. We attempt to fill this gap in the finance literature by using the Fama-French (Journal of Financial Economics 33:3–56, 1993) risk factors to explain the Monday seasonal. The results in the study show that Monday returns are explained by risk factors such as the market return, the size of the firms, and the book-to-market ratios of firms.