Transmission of movements in stock markets

The paper analyses the relationships between three stock markets: New York, Tokyo and Frankfurt. The non-simultaneity of the trading times in these three markets determines the results of cross-correlations and regressions with daily returns. To cope with this and other problems, an empirical model is proposed and estimated. This model allows the separation of the ability to influence and the sensitivity of the different markets, and New York is found to be the most influential market, with Tokyo the most sensitive.     

Examining How Country Image Influences Destination Image in a Behavioral Intentions Model: The Cases of Lloret De Mar (Spain) and Cancun (Mexico)

Understanding the importance of a country’s image in the behavioral intentions of tourists is essential for sun-and-sand destinations. This study examines an integrated model of behavioral intentions regarding two international tourist destinations, namely Cancun (Mexico) and Lloret de Mar (Spain). The results indicate that country image influences destination image; destination image influences value, satisfaction, and behavioral intentions; value influences satisfaction; and satisfaction influences behavioral intentions. These findings confirm that the country and destination images are different constructs, and that destination image is the key to attracting tourists. Additionally, there are some differences in the relationships hypothesized in the model among the destinations.     

International Segmentation Using Biplots: A Diffusion Approach

ABSTRACT

Studies on segmentation based on the diffusion of innovations have primarily focused on new products in developed countries, whereas research in emerging economies focusing on products at a maturity or declining stage has been relatively scarce. In this study, the authors address this problem by analyzing the diffusion trends of 31 durable goods across 70 developed, emerging, or less-developed countries over three decades. They propose a dynamic time-dependent segmentation approach that segments countries based directly on the time-varying diffusion patterns of durable goods. The authors find that biplots provide a rich summary of international diffusion patterns that prevent managers over/under predicting penetration.     

The International Rate of Discontinuance of Some Old Products

ABSTRACT

Proinnovation bias has limited marketing scholars to studying only the dynamics of rapidly spreading innovations. Firms also need to understand how old products are being discontinued. Wealth, substitute products, and time effects on the rate of discontinuance of four durable goods are analyzed in 86 countries. The rate of discontinuance is found to be faster in countries in which discontinuance tends to start later and is slower than the rate of adoption. It tends to be faster in emerging economies. The authors conclude that assuming that the rates of adoption and discontinuance have the same dynamics may lead to wrong strategic decisions.     

Prices and output in the Mexican economy Emperical testing of alternative hypotheses

This paper derives and compares alternative formulations of price and output formation for the Mexican economy over the period 1961–1981. A structuralist type model with working capital is found to dominate its monetarist and keynesian counterparts. A breakdown of the causes of inflation is offered, and some simulations are carried out to highlight some trade-offs among real wages, the real exchange rate, real interest rates and output.     

Financial distress, bankruptcy law and the business cycle

This paper explores the business cycle implications of financial distress and bankruptcy law. We find that due to the presence of financial imperfections the effect of liquidations on the price of capital goods can generate endogenous fluctuations. We show that a law reform that ‘softens’ bankruptcy law may increase the amplitude of the cycle in the long run. In contrast, a policy of bailing out businesses during the bust or actively managing the interest rate across the cycle could stabilize the economy in the long run. A comprehensive welfare analysis of these policies is provided as well.      

Evaluating the introduction of a quasi-market in community care

It is often the case that only routinely collected, highly aggregate administrative data are available for the purposes of evaluating major public policy initiatives. Such data clearly fall short of the information advocated by statisticians and economists for the purposes of policy evaluation. This paper examines the extent to which methodologies developed in the productivity literature can nevertheless extract useful evaluative information from administrative data. A non-parametric Malmquist Index approach is used that seeks to decompose changes in efficiency into technical efficiency changes, scale effects and technological change. The study applies the methods to the system of “community care” introduced in 1993 for people affected by problems associated with ageing, mental illness, learning disability or physical disability. Non-parametric methods are used to estimate productivity changes amongst 39 English county councils over a four-year period from 1992 to 1995. The results suggest a steady annual increase in productivity of about 1.4% per annum over the period under investigation, but it is not possible to determine the extent to which this progress can be attributed to the introduction of community care. The paper nevertheless concludes that the methods deployed can exploit readily available datasets at low cost, and are a valuable form of exploratory data analysis, if interpreted with discretion.     

Concentration Measurement Under Cross-ownership: The Case of the Spanish Electricity Sector

When major investors own shares in several firms in the same industry, the traditional approach to concentration measurement by the Hirschman–Herfindahl Index (HHI) fails to accurately reflect the level of competition in the market. To address this problem we derive a generalized HHI formula (GHHI) based on the investors degree of control over each firm. We test alternative definitions of this control with actual data from the Spanish electricity sector and show that recent decisions in this industry, particularly the failed merger between the largest firms, Endesa and Iberdrola, could have been affected had the GHHI been used by the competition agency.     

Measuring entrepreneurial quality in southern Europe

The main objective of this paper is working out an empirical methodology to measure the quality of the entrepreneur’s booster function, so that policy makers have an appropriate diagnosis of the qualities of entrepreneurs in their area. In this sense, two essential elements are the construction of an explanatory model, and the establishment of an entrepreneurial typology with respect to quality levels. This methodology is then applied to determine the quality level of entrepreneurs in Seville province (southern Spain), using Partial Least Squares estimation technique on a survey of 278 entrepreneurs from various activity sectors and with firms of different sizes.     

Cyclical common factors in cointegrated systems

When working with vectors of time series which fluctuate regularly we may possibly want to consider the presence of common factors characterized by cyclical or seasonal behavior as well as trend. For example, Deaton89 provides a hint of a theoretical model where cointegration at the annual frequency may exist between consumption and income in addition to the usual secular cointegration. It is well known that a non-cyclical system cointegrated at frequency zero has a common trend (CT) representation Stock-Watson: 88. In this paper we show that a time series vector that is cointegrated at one or several frequencies simultaneously (e.g. seasonal data) has a common factors (CF) representation which belongs to a class of common factor models that encompasses many cointegrating situations found in the literature. We study these issues and extend the method proposed by Gonzalo-Granger: 95 to the estimation and testing of common factors which may combine trend as well as cyclical or seasonal characteristics. Two illustrative applications are also provided. JEL Classification: C10, C32, C50 Javier Fernández-Macho: Financial support from research group grant 9/UPV00038.321-13503/2001 of UPV/EHU is gratefully acknowledged by both authors and from research project BEC2003-02028 of Ministerio de Ciencia y Tecnología by the first author. We are also indebted to two anonymous referees for their helpful comments.