Official central bank interventions and exchange rate volatility: Evidence from a regime-switching analysis

In this paper, we investigate the effect of central bank interventions on the weekly returns and volatility of the DEM/USD and YEN/USD exchange rate returns. In contrast with previous analyses, we allow for regime-dependent specifications and investigate whether official interventions can explain the observed volatility regime switches. It is found that, depending on the prevailing volatility level, coordinated central bank interventions can lead to either a stabilizing or a destabilizing effect. Our results lead us to challenge the usual view that such interventions always imply increases in volatility.     

Whither IPOs? Toward an Ecosystem Perspective on Corporate Financing: A Commentary

This commentary reviews the Canadian initial public offering (IPO) market and positions it within global capital market trends. Our views and comments reflect discussions with several market participants whom we have met over the years. Essentially, the falling number of IPOs in Canada during the last decade mimics trends in other developed countries such as the United States. In our view, five underlying factors underlie that decline. The picture that emerges is that capital markets are now widely viewed as a global integrated ecosystem where all actors are interconnected and an IPO represents but one way to raise capital.     

New developments in modeling Internet consumer behavior: Introduction to the special issue

This first special issue of the Journal of Business Research on Internet consumer behavior features thirteen articles selected from the papers submitted following a call for submissions issued in January 2008. They cover topics related to new developments in modeling Internet consumer behavior, and the contributions are regrouped into three broad categories: modeling based on the S–O–R paradigm, modeling based on the TAM model and advances in online consumer information processing. It concludes with future research directions.     

Are conservative approaches to new product selling a blessing in disguise?

A new product’s success in the marketplace largely depends on salesforce actions. Many B2B salespeople display conservatism when confronted with new products in their portfolio, such that they maximize their efforts to sell existing products before engaging in efforts to sell the new product. So far, it is unclear whether this conservative selling behavior (CSB) is harmful to new product selling performance, and how this behavior can be managed. Building on perceived risk processing theory, and employing multi-level structural equation modeling on a multi-source dataset, the authors empirically substantiate that salespeople’s CSB makes their effort to sell new products more effective. Remarkably, such effort is then valued less by sales managers. The authors also find that CSB is a result of a risk assessment and evaluation process, in which internal marketing efforts (i.e., providing salespeople with information on the new product) determine the weight of perceived performance risk (i.e., new product radicalness), social risk (i.e., managerial new product orientation), and financial risk (i.e., long-term rewards). Managers looking to control the levels of CSB in their salesforce should carefully align their information support activities with the perceived risk dimensions of the new product selling situation.     

Beyond the water cooler: using socialization to understand use and impact of networking services on collaboration in a business incubator

Scholars and policymakers claim that Business Incubators (BIs) add value by facilitating internal cooperation between tenant firms. Taking a tenant perspective, this research investigates the impact of a tenant's length of BI tenure on the use of formal internal networking services the BI management provides, and then on the tenant's level of intra-BI cooperation. The premise is that BI tenants use and benefit more from formal internal networking services when their socialization through participation in BI informal networking activities is low. When socialization is high they will enjoy a stronger direct effect of tenant tenure on cooperation with other tenants. Findings from data collected from a Dutch BI confirm the premise of our moderated-mediation model. Results also show that both mechanisms complement each other and that each contributes significantly to tenants' sales growth. It lends support to the effectiveness of BI formal internal networking services, but also stresses the importance of socialization through informal networking activities.     

Advances in internet consumer behavior and marketing strategy: Introduction to the special issue

This second special issue of the Journal of Business Research on Internet consumer behavior features twelve articles selected from the papers submitted following a call for submissions issued in January 2008. They cover topics related to advances in internet consumer behavior and marketing strategy, and the contributions are regrouped into four broad categories: influence of trust and role of virtual communities; understanding the role of electronic word-of-mouth; understanding consumer reactions to pricing on the internet; consumer issues in marketing strategy. It concludes with future research directions.     

Downstream offshoring and firm-level employment

When engaging in offshoring, firms import not only intermediates they used to produce in-house but also intermediates they previously sourced from non-affiliated domestic suppliers. This leads to a negative demand shock for the latter. We label this demand shock “downstream offshoring” and develop a novel measure capturing its extent for a firm in a given upstream industry. According to our instrumental variables estimations for a rich sample of Belgian manufacturing firms for the period of 1997 to 2007, downstream offshoring has a robust negative effect on employment.     

Correlated risks,bivariate utility and optimal choices

In this paper, we consider a decision-maker facing a financial risk flanked by a non-financial background risk such as health or environmental risk. A decision has to be made about the amount of an investment (in the financial dimension) resulting in a future benefit either in the same dimension (savings) or in the other dimension (environmental quality or health improvement). In this framework, we study the impact of the correlation between the two risks on optimal choices. In the saving problem, we find conditions ensuring that positive correlation between the two risks implies that the optimal amount of savings increases. These conditions involve specific requirements on the direct and cross derivatives of the two-argument utility function. Similarly, we find a different and specific set of conditions ensuring that the same conclusion on optimal investment for health (environmental) improvement is reached. The two sets of conditions determined support the conclusion that the signs of the derivatives of the two-argument utility function should alternate.