Fixed Exchange Rates and Banking Crises: When Does the Former Prevent the Latter?

Because monetary policy is constrained in fixed exchange rate regimes, banks should expect fewer money‐financed bailouts and therefore manage their risks more carefully when exchange rates are fixed than when they are flexible. It follows that we should observe fewer banking crises in countries with formal currency pegs. The 1990s however are littered with occurrences of banking crises in countries with fixed exchange rates. This paper asks whether banks in those countries could have adopted excess risk expecting money‐financed bailouts or whether their pegs discouraged such moral hazard‐type risks.     

Celebrity Endorsements in U.S. and Thai Magazines: A Content Analysis Comparative Assessment

SUMMARY

Celebrity endorsements have become a prevalent form of advertising. Hence, the purpose of the study was to determine the relationship between the use of celebrities and the types of products endorsed. Advertisements from one popular magazine in the U.S. and 2 popular magazines in Thailand were used. Results indicated that U.S. advertisements of beauty, dietary and health services, hospitals, and weight loss clinics categories utilized celebrity endorsements more often than other categories. In Thai advertisements, supplementary foods and medicines used celebrity endorsers more often than other categories. Results further support that a significant relationship exits between celebrity endorsers and product types.     

Unilateral Climate Policy and Competitiveness: Economic Implications of Differential Emission Pricing

Unilateral climate policy raises concerns about international competitiveness and emission leakage that result in preferential regulatory treatment of domestic energy‐intensive and trade‐exposed (EITE) industries. Our applied analysis of unilateral EU abatement illustrates the potential pitfalls of climate policy design which narrowly focuses on competitiveness concerns about EITE industries. The sector‐specific gains of differential emission pricing in favour of these branches must be traded off with the additional burden imposed on other industries. From the perspective of the unilaterally abating region preferential EITE emission pricing can induce non‐negligible excess cost as policy concedes (too) low emission prices to EITE industries and thereby foregoes relatively cheap abatement options in these sectors. With respect to global cost‐effectiveness of unilateral climate policy, we find that differential emission pricing in favour of EITE industries can reduce emission leakage and thereby provide global cost savings compared with uniform pricing. However, the scope for cost savings is limited and may change into substantial cost increases if unilateral reduction targets are moderate and EITE industries get close to exemptions.     

Towards a paradigm shift in marketing? An examination of current marketing practices

In recent years, the traditional Transaction approach to marketing has been challenged to the point where a number of authors have suggested that a “paradigm shift” is occurring. The “newparadigm” is commonly referred to as Relationship Marketing, and has been used to reflect a number of different types of relational marketing activity, including Database, Interaction and Network marketing. This paper investigates current marketing practice to clarify the relevance of these alternative approaches using four case studies and a survey of 134 firms. The results do not support the notion of a complete “paradigm shift”. Rather, the findings show that for many firms, transactional marketing is relevant and practised concurrently with various types of relational marketing. It is concluded that while relational marketing issues are currently receiving attention from academics and practitioners alike, the role of transactional marketing should not be ignored or underestimated.     

An analysis of the predictors of software piracy within Latin America

Corruption has become an increasingly salient issue in recent years due to the increasing pressure placed on top management teams of multinational firms to maintain high moral standards in all facets of their operations. The level and scope of corruption in a particular country is worthy of consideration as companies seek potential export markets and global partners. While macro-level academic research related to causes of corruption has burgeoned in the past decade, there is a lack of depth and breadth with respect to corruption research in Latin America. The current study analyzes patterns of software piracy (a notorious type of corruption) for 20 Latin American nations. Results indicate that economic growth, foreign direct investment, Internet usage, and development assistance relate to software piracy rates in Latin America.     

Could the Crisis at Northern Rock have been Predicted?: An Evolutionary Approach

Bankers have, from their beginning, made their money by takingrisks and deciding how much risk they dare take, by expandinggradually, testing the water. Within this framework, the firstrisk is of illiquidity, but they must also ensure solvency.The steps taken by Northern Rock in developing their present‘business plan’ are the same as those taken by mostother banks, responding to the same incentives. It is the rapidityof its expansion that resulted in its downfall. The steps thathave been taken also by other banks can be traced back to thebeginning of banking and are predictable. Northern Rock's difficultieswere predictable – and were predicted.     

Immigration Status and Postsecondary Opportunity: Barriers to Affordability,Access, and Success for Undocumented Students,and Policy Solutions

Immigrant and undocumented students face significant barriers in accessing and obtaining a postsecondary degree. The anti‐immigration agenda of the Trump administration and its impact on higher education made this issue of paramount concern. In this article, we review issues at the intersection of immigration and postsecondary education. First, we define the population of interest, with special attention to the differentiated rights of different groups. We argue for the policy significance of immigration for postsecondary education. Second, we provide an overview of the main identified barriers facing undocumented students in accessing postsecondary education. We then examine policies that have been adopted by states and by institutions of higher education to address some of those barriers. We conclude with policy recommendations to improve affordability, access, and success for undocumented students and argue for the inclusion of immigration status as a variable in research on equity in postsecondary education.     

Bank lending during the financial crisis of 2008

This paper shows that new loans to large borrowers fell by 47% during the peak period of the financial crisis (fourth quarter of 2008) relative to the prior quarter and by 79% relative to the peak of the credit boom (second quarter of 2007). New lending for real investment (such as working capital and capital expenditures) fell by only 14% in the last quarter of 2008, but contracted nearly as much as new lending for restructuring (LBOs, M&As, share repurchases) relative to the peak of the credit boom. After the failure of Lehman Brothers in September 2008, there was a run by short-term bank creditors, making it difficult for banks to roll over their short term debt. We find that there was a simultaneous run by borrowers who drew down their credit lines, leading to a spike in commercial and industrial loans reported on bank balance sheets. We examine whether these two stresses on bank liquidity led them to cut lending. In particular, we show that banks cut their lending less if they had better access to deposit financing and thus, they were not as reliant on short-term debt. We also show that banks that were more vulnerable to credit-line drawdowns because they co-syndicated more of their credit lines with Lehman Brothers reduced their lending to a greater extent.     

The cross-section of equity returns and assets’ fundamental cash-flow risk

The decomposition of consumption beta into a component driven by assets’ cash-flow news and one related to assets’ discount-rate news reveals that macroeconomic risks embodied in cash flows largely account for the cross-sectional dynamics of average stock returns. Empirically, we find that differences in expected excess returns between low book-to-market and high book-to-market portfolios are associated with differences in their cash-flow betas, and thus reflect macroeconomic, especially consumption-related risks. This result holds true for a broad set of consumption-based asset pricing models. In addition, the results indicate that the risk premium on equity markets is primarily driven by the exposure of assets’ cash-flow components to the cyclical variability of durable consumption goods.     

The prevention of workplace bullying as a question of human resource management: Measures adopted and underlying organizational factors

The aim of this study was to analyse measures adopted to counteract workplace bullying from the perspective of human resource management. First, the kind of measures that are adopted to prevent bullying were examined. Second, factors affecting the extent of such measures were explored. The introduction of written anti-bullying policies and the provision of information were found to be the most common measures adopted. The policies strongly emphasized the role of supervisors and the immediate superior. Measures to counteract bullying were positively related to the adoption of ‘sophisticated’ human resource practices, negative publicity concerning bullying and the presence of a young human resource manager. The results, however, also indicated that imitation seemed to provide an important impetus behind anti-bullying efforts.