Customers’ Risk Factor Disclosures and Suppliers’ Investment Efficiency

This study examines the effect of downstream firms’ (i.e., customers’) risk factor disclosures contained in annual reports on the investment efficiency of upstream firms (i.e., suppliers). We find that more informative disclosures of customers’ risk factors are associated with less under‐ or overinvestment by suppliers. In addition, this inverse association is stronger when the suppliers are at a bargaining disadvantage, when they operate in the durable goods industries, and when they are more concerned about the volatility of future demand. Overall, our results suggest that risk factor disclosures provided by firms in their annual reports contain useful information that could potentially help their suppliers achieve better investment efficiency. Divulgation d'information sur les facteurs de risque des clients et efficience de l'investissement des fournisseurs     

China's economic development: does exchange rate and FDI nexus matter?

This study aims to investigate the relationship between China's exchange rate, foreign direct investment (FDI) inflows, and economic development. We applied the bound testing approach on aggregate level data from 1981 to 2013. The results showed that the Chinese economy benefitted from a lower exchange rate over this period, and that there was a direct link between FDI inflows and economic development on an aggregate level both in the long and short run. The results of the Granger causality test identified a long‐ and short‐run association among these variables. The GMM estimations with dummies for financial crises and RMB exchange rate policy fluctuations also confirmed the growth enhancing impact of the exchange rate and FDI inflows. To promote sustainable economic development in the future, China should focus on improving the levels of domestic investment and human capital, as well as supervising the level of openness and capital controls.     

Growth Enhancement Support Scheme (GESS) and Farmers’ Fertilizer Use in Rural Nigeria

Fertilizer use in Nigeria is estimated at 13 kg/ha, which is far below the 200 kg/ha recommended by the Food and Agricultural Organization (FAO). The objective of this investigation was to identify the determinant factors of farmers’ participation in Nigeria's Growth Enhancement Support Scheme (GESS). In addition, we determined the impact of the GESS on fertilizer use in rural areas. A total of 1,200 rural farmers were sampled across the six geopolitical zones of Nigeria. Results from the use of a recursive bivariate probit model indicated that GESS significantly impacted on the access and usage of fertilizer among the rural farmers; and that contact with extension agents, ownership of mobile phones, power for charging phone batteries, value output, mobile network coverage, ability to read and write were positive determinants of rural farmers’ participation in the GESS; whereas increased distance to registration and collection centers, and cultural constraints to married women reduced farmers’ tendency to participate in the GESS. The findings suggest that farmers’ participation in the GESS is a critical factor for raising fertilizer use in Nigeria. This implies that food security in sub‐Saharan Africa can be achieved by increasing the participation of rural farmers in the GESS.     

TEST OF THE CONVERGENCE HYPOTHESIS ALLOWING FOR CROSS‐SECTIONAL DEPENDENCE

A large empirical literature has investigated whether per capita output converges around a common trend across national and regional economies. The methods used in this literature assume no cross‐sectional dependence even though it is likely to be present and might be important in practice. Chang has devised a promising method of testing for unit roots in heterogeneous panels with cross‐sectional dependence. We apply her method to test whether convergence takes place across three samples of economies: 15 advanced industrial countries; a broader group of 57 countries; and the 48 contiguous US states. We find evidence of convergence for the 15 advanced industrial economies but no evidence of convergence across either the broad group of countries or the US states.     

Tariff and Quota Equivalence in Vertically Related Markets

This paper re‐examines the issue of tariff and quota equivalence by introducing an upstream market into the Hwang and Mai (1988 ) model, and then allowing the two downstream firms to cross‐haul within each other's market. We assume the upstream monopolist can select either a two‐part or a one‐part tariff pricing strategy. It is found that if the upstream firm adopts a two‐part (one‐part) tariff pricing strategy, then the market price of the final good under a tariff will be higher (lower) than that under an equivalent quota; that is, the quota is set at the import level under the tariff regime. This result stands in stark contrast to the prior findings of both Hwang and Mai (1988 ) and Fung (1989 ). Moreover, if the quota rent is set as being equal to the tariff revenue, the social welfare under a tariff will necessarily be lower than that under an equivalent quota.     

QUALITY AND ECONOMIES OF SCALE IN HIGHER EDUCATION: A SEMIPARAMETRIC SMOOTH COEFFICIENT ESTIMATION

This paper proposes a semiparametric smooth coefficient cost model to study the university cost structure where coefficients are an unknown function of the university's overall quality. A local least square method with a kernel weight function is used to estimate the cost function, and a simple statistic for testing a parametric model of the additive quality versus the semiparametric smooth coefficient model is applied. Empirical results from 56 universities in Taiwan show that, taking quality into account, higher education is subject to diseconomies of scale. In all categories—comprehensive and science/technology and public and private universities—the current university scale in Taiwan is too big to be cost efficient. (JEL I21, H52, 9120)     

Taxes,Tuition Fees,and Education for Pleasure

The fact that education provides both a productive and a consumptive (nonproductive) return has important and, in some cases, dramatic implications for optimal taxes and tuition fees. Using a simple model, we show that when the consumption share in education is endogenous and tuition fees are unconstrained, the optimal tax/fee system involves regressive income taxes and high tuition fees. A progressive labor income tax system may, on the other hand, be a second‐best response to politically constrained, low tuition fees. Finally, the existence of individuals with different abilities will also move the optimal income tax system toward progressivity.     

Do People Always Pay Less Than They Say? Testbed Laboratory Experiments with IV and HG Values

Hypothetical bias is a long‐standing issue in stated preference and contingent valuation studies—people tend to overstate their preferences when they do not experience the real monetary consequences of their decision. This view, however, has been challenged by recent evidence based on the elicitation of induced values (IV) in the lab and homegrown (HG) demand function from different countries. This paper uses an experimental design to assess the extent and relevance of hypothetical bias in demand elicitation exercises for both induced (IV) and homegrown (HG) values. For testbed purpose, we use a classic second‐price auction to elicit preferences. Comparing the demand curve we elicit in both, hypothetical bias unambiguously (i) vanishes in an IV, private good context and (ii) persists in HG values elicitation context. This suggests hypothetical bias in preference elicitation appears to be driven by “preference formation” rather than “preference elicitation.” In addition, companion treatments highlight two sources of the discrepancy observed in the HG setting: the hypothetical context leads bidders to underestimate the constraints imposed by their budget limitations, whereas the real context creates pressure leading them to bid “zero” to opt out from the elicitation mechanism. As a result, there is a need for a demand elicitation procedure that helps subjects take the valuation exercise sincerely, but without putting extra pressure on them.     

An exploratory study of organizational politics in Kuwait

Because politics is a way of life in organizations, organizational politics has been studied by several scholars over the past 40 years. Few studies, though, have examined organizational politics outside of the United States and Europe. This study is a further step toward closing that gap. In particular, we (1) examined the applicability of the Perceptions of Organizational Politics Scale (POPS) instrument in Kuwait, (2) examined the perceived existence of organizational politics in a public organization in Kuwait, and (3) sought to determine if perceptions of organizational politics seemed to be influenced by the same variables in Kuwait as in Western societies. The study found that the perception of organizational politics is relatively strong and that the POPS instrument was applicable in the Kuwaiti culture and could lead to an expanded understanding of organizational politics. The gender of the respondents, their tenure, and their current positions had some influence on perceptions of organizational politics. © 2011 Wiley Periodicals, Inc.     

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.