Which Net Capital Flows Matter?

This article classifies extreme net capital flow episodes into four types and analyzes the macroeconomic impacts of each type. First, we find that all types of episodes increased drastically in the 2000s relative to previous years. Second, we conclude that liability-flow-driven episodes have more significant macroeconomic impacts than do asset-flow-driven episodes. Third, we show that only drastic positive net capital flows that were driven by liability flows were associated with a higher probability of banking crises in the 2000s. The results suggest that the detailed classification of extreme net capital flows provides insight into these movements’ macroeconomic impacts and policy implementations.     

Key institutions in business and management education research

The authors investigate institutional productivity in business and management education (BME) research based on the analysis of 4,464 articles published by 7,210 authors across 17 BME journals over a 10-year period, involving approximately 1,900 schools worldwide. Departing from traditional disciplinary silos, they examine the BME research field as a whole by including all traditional business disciplinary areas and producing two top 100 rankings, one based on raw number of author publications and the other based on weighted scores reflecting journal quality and coauthorship.     

International Trade Finance and Exports: Evidence from Korean Bank-Intermediated Trade Finance Instruments

This paper investigates the effects of trade finance shocks on real exports by using novel data on two bank-intermediated instruments of trade finance in Korea: foreign trade loans extended by commercial banks and documentary bills purchased by them. Using a vector autoregression (VAR) model, the results show that a negative shock to both instruments adversely affects exports, particularly the exports of small and medium-sized enterprises (SMEs). The trade financing condition explains as much as 10–14 % of the variation in exports, which is comparable to the estimates in previous studies. Noteworthy is that the effects of trade finance on SME exports vary upon whether it is pre- or post-shipment financing.     

The effect of social distancing on the reach of an epidemic in social networks

How does social distancing affect the reach of an epidemic in social networks? We present Monte Carlo simulation results of a susceptible–infected–removed with social distancing model. The key feature of the model is that individuals are limited in the number of acquaintances that they can interact with, thereby constraining disease transmission to an infectious subnetwork of the original social network. While increased social distancing typically reduces the spread of an infectious disease, the magnitude varies greatly depending on the topology of the network, indicating the need for policies that are network dependent. Our results also reveal the importance of coordinating policies at the ‘global’ level. In particular, the public health benefits from social distancing to a group (e.g. a country) may be completely undone if that group maintains connections with outside groups that are not following suit.

     

Heterogeneity and netting efficiency under central clearing: A stochastic network analysis

This paper examines the effect of heterogeneity in clearing members’ exposure management practices under central clearing. Our network model specifies the dynamics of prenetted interbank exposures to shape interdependent exposure distributions beyond normality. Employing over-the-counter derivatives market data from the U.S. Office of the Comptroller of the Currency, our simulation results indicate that heterogeneity in bank-to-bank exposure dynamics is systemically desirable, while the entire system benefits more from the central clearing in more homogeneous environments. Policymakers should incentivize individual clearing members to enhance resiliency and stability in counterparty exposure management to maximize netting efficiency under central clearing.     

A bootstrap test for jumps in financial economics

An i.i.d. bootstrap is applied for the ratio test of Barndorff-Nielsen and Shephard (2006) for jumps in jump diffusion processes. Asymptotic validity is established for the bootstrap test both under the null of no jump and under the alternative of jumps. Finite sample simulation shows that the bootstrap test has more stable size than the ratio test of Barndorff-Nielsen and Shephard (2006).     

The 7th Asia-Pacific CHRIE Conference

Despite the increase in use of user-generated electronic content as an information source by tourists, its influence in destination image formation is not yet fully understood. This research aimed to explore the communicated destination image held by tourists to Zanzibar Island (Tanzania) by utilizing communications in Lonely Planet. Content analysis of 214 posts using TextSTAT yielded 13 destination attributes. Comparatively, functional attributes were dominant in potential tourists whereas post-travel image perception was dominated by psychological attributes. Those who have visited tended to have a positive image of the island compared with those who are planning to visit the island. The results necessitate the differential use of the functional- and psychological-based information in communicating with tourists at different information-search stages. Studies to capture communications in another language are recommended as well as the employment of methodologies that might reveal hidden images held by tourists.     

Clarifying the Relationship between Involvement Variables and Advertising Effectiveness among Young People

Previous research has indicated the need for an in-depth investigation of the role of involvement variables in advertising information processing among young people, in view of the unsuitability of existing adult persuasion models for a young population, the inadequate consideration of involvement variables among young people and the unique characteristics of this population. This study examined the effects of advertising involvement and product involvement on advertising effectiveness among young people, using a quantitative study of 252 4–15-year olds. Results show that advertising involvement and product involvement had a positive direct effect on ad effectiveness. In addition, all endogenous variables—subjective product knowledge, peer and parent influence and age—had an indirect effect on ad effectiveness, via advertising involvement and product involvement. Interestingly, subjective product knowledge and peer influence had no direct effect on ad effectiveness, but rather only an indirect effect. This study presents a more accurate depiction of the complexity of the process and shows that advertising involvement and product involvement contribute to a better understanding of the process among young people.