Modelling reverse mortgages

This paper suggests a framework for analyzing reverse mortgages in a fixed interest rate environment as well as a variable interest rate environment. To analyze the risk and potential profit of a reverse mortgage, we propose to calculate the expected present value of profit and the probability of loss as indicators of the viability of the loan. Using Singapore data, we provide some estimates of these quantities for various levels of annuity payment under different circumstances.The author is from the Department of Economics and Statistics, National University of Singapore. He wishes to thank Chan Wai Sum, Thomas Herzog, Lim Kian Guan (the previous chief editor), Tan Kin Lian and Albert Tsui for their invaluable comments on the earlier drafts of the paper. All errors and shortcomings, however, remain his responsibility.     

Turnaround strategy: A study of restaurant firms

This paper uses a case study approach to analyze the turnaround actions of two restaurant firms and compares them to the model of Robbins and Pearce [1992. Strategic Management Journal 9, 287–309]. The objective of this study is to scrutinize why these firms were unsuccessful in turning around and identify gaps between the firms’ actions and the empirical model of turnaround proposed by Robbins and Pearce. Two key turnaround measures, i.e., retrenchment and recovery are explored in detail and discussed in the context of the firms. The need for studying turnaround strategies is warranted as the number of hospitality firms that perish because of unsuccessful turnaround strategies is on the increase. Since turnaround strategies have not been pursued vigorously as a stream of research within the hospitality industry context, this approach would provide a framework for hospitality researchers to initiate similar future research efforts, which in turn would help the industry cope with turnaround.     

On the flexibility of flexible functional forms: An empirical approach

This paper analyzes empirically the ability of the Translog and Generalized Leontief functional forms to approximate Constant Elasticity of Substitution utility functions. Although these flexible forms provide a good local approximation they do not always provide a good approximation over a range of observations. Hence the finding in practice of observations for which the regularity conditions required by economic theory are not satisfied need not imply the absence of an underlying utility-maximizing process, but may simply reflect the inability of the flexible form to approximate the true utility function over the range of the data.     

Analysing the impact of the single European market and European integration upon local economies: A case study of Gloucestershire

Greater economic integration in the European Community (EC) will have far-reaching effects for businesses and individuals throughout the UK. Indeed, prior to the commencement of the Single European Market (SEM) — the only certain element of European economic integration — there was much evidence of organisations and industries restructuring, increased inward investment, and mergers and acquisitions. Such activities are likely to have far-reaching implications for local economies. Increasing numbers of local authorities are undertaking studies to assess the implications of the SEM measures for their own areas, and to suggest ways in which local government and other economic development actors might respond to the challenge of the opportunities and threats of the SEM. However, in assessing the impact of the SEM, it is important not to lose sight of the wider process of economic integration which has followed in its wake. This article details the methodology used in a study to assess the impact of the SEM upon the economy of one particular local area: Gloucestershire. The methodology employed would be capable of replication in other local areas. Some of the key findings from the Gloucestershire study are also outlined. Although there is only limited scope for public sector organisations at the local level in helping businesses to respond to the threats and opportunities of the SEM, suggestions for a general role for the County Council, the Training and Enterprise Council, and other organisations were identifiable, and specific recommendations for training policies, promotional activities, and planning policies were forthcoming.