The economics of credit cards,debit cards and ATMs: A survey and some new evidence

This paper provides a critical survey of the large and diffuse literature on credit cards, debit cards and ATMs. We argue that because there are still many outstanding issues and questions about the pricing, use and substitutability of these payment mechanisms, that there are significant further opportunities for research in these areas. A large number of questions are examined in this survey, including the pricing of credit cards, the impact of networks on the provision and pricing of ATMs, as well as the tradeoffs that consumers make between different types of payment mechanism, including debit cards, credit cards and ATMs. Importantly, this paper is also amongst the first to provide new evidence on this latter question from bank level data (from Spain). We conclude that point of sale (debit card) and ATM transactions are substitutes, and that ATM surcharges impacts point of sale volume significantly.     

Are moving average trading rules profitable? Evidence from the European stock markets

This article examines the profitability of several simple technical trading rules for 16 European stock markets over the 1990 to 2006 period. Our results indicate that increasing moving average rules indeed have predictive power being able to discern recurring price patterns for profitable trading, even after accounting for the effects of data snooping bias. To assess the profitability of different technical trading rules and strategies, we adopt the White's (2000) Reality Check (RC) test that quantifies the data snooping bias and adjusts for its effects. Our empirical results also support the hypothesis that technical trading rules can outperform the buy and hold strategy after accounting for transaction costs.     

Strategic business marketing developments in the New Europe: Retrospect and prospect

The unification of Europe is causing considerable effects on industrial marketing strategy. Roughly ten years ago the Industrial Marketing Management journal published a study on the expected consequences of the European Union (EU) single market. In the current study, we investigate the actual results of the single market formation on industrial marketing in the EU and compare them to the expectations noted by industrial marketers a decade earlier. We find that the effects differ markedly from those anticipated and that they have important implications for business marketing practice in the EU.     

Environmental reporting: Toward enhanced information quality

Managers and stakeholders are increasingly aware of the importance of the environmental impact of a firm's operations when assessing risk and attempting to determine future profitability. Unfortunately, financial accounting systems often fail to fully disclose these environmentally-related costs. The reasons underlying this incomplete disclosure are myriad, ranging from measurement issues to the structure of the firm's chart of accounts. In many ways, the issues facing managers and stakeholders who are attempting to assess environmental costs arising from business operations resemble the issues faced when attempting to determine the costs of producing poor quality products. The negative impact on the environment from business operations can be viewed as a failure in the same way that the negative impact of producing a defective product can be seen as a production control failure. Similarly, costs are incurred to prevent and detect environmental failures, and the cost of failure—particularly if not addressed within the firm—can be huge and unknowable. Drawing on the experiences of firms employing quality measures and reporting, this article presents an environmental cost reporting model to provide greater transparency on environmental impact of business operations to managers and firm stakeholders.     

'Urban Bias', Intersectoral Resource Flows and the Macroeconomic Implications of Agrarian Relations: The Historical Experience of Japan and Taiwan

It is argued that agrarian relations play a critical role in the pattern of intersectoral resource flows and the way in which the agricultural sector shapes the macroeconomy in developing countries. The notion of 'urban bias' used by GKI is defective in its abstracting from the pre-existing agrarian system and from the prevailing institutions and in focussing on one simple set of influences outside the agricultural sector itself, i.e. government policy bias. This is illustrated with reference to the historical experience of two countries regarded as exemplary by GKI: Japan and Taiwan. Their experience shows that high rates of taxation and surplus extraction from agriculture are not incompatible with maintaining profitability and production incentives in agriculture, as long as agrarian relations and other enabling conditions can ensure a fast enough rate of technological progress and productivity growth in the sector. The macroeconomic implications of different agrarian relations are much more complex than the urban bias story told by GKI would suggest.     

Bank Debt and Corporate Governance

In this paper, we investigate the disciplining role of banksand bank debt in the market for corporate control. We find thatrelationship bank lending intensity and bank client networkhave positive effects on the probability of a borrowing firmbecoming a target. This effect is enhanced in cases where thetarget and acquirer have a relationship with the same bank.Moreover, we utilize an experiment to show that the effectsof relationship bank lending intensity on takeover probabilityare not driven by endogeneity. Finally, we also investigatereasons motivating a bank's informational role in the marketfor corporate control.     

Do hedge funds trade on private information? Evidence from syndicated lending and short-selling

This paper investigates an important contemporary issue relating to the involvement of hedge funds in the syndicated loan market. In particular, we investigate the potential conflicts of interest that arise when hedge funds make syndicated loans and take short positions in the equity of borrowing firms. We find evidence consistent with the short-selling of the equity of the hedge fund borrowers prior to public announcements of both loan originations and loan amendments. We also find that hedge funds are more likely to lend to highly leveraged, lower credit quality firms, where access to private information is potentially the most valuable and where trading on such information could lead to enhanced profits. Overall, our results have important implications for the current debate regarding regulating the hedge fund industry.     

A brief history of market efficiency

Every finance professional employs the concept of market efficiency. The theory, evidence and counter-evidence focus on a couple of dozen highly influential articles published during the twentieth century. We summarise the origins of and interlinkages between these contributions to the history of finance.     

A technical approach to equity investing in emerging markets

Technical analysis (TA) is used in evaluating its predictive power for the Morgan Stanley Capital International (MSCI) Emerging Market Index (EMI) that reflects 23 emerging market economies’ equity indices. We conclude strong predictive power of technical analysis for the EMI. Given this predictive power of TA, we then investigate whether investors can exploit this predictive power to beat the profitability of the Buy‐and‐Hold strategy considering both risk and transaction costs. Applying Moving Average, Relative Strength Index, Moving Average Convergence Divergence, and Rate of Change trading rules to the MSCI Emerging Market Index over the period of 11/1/1988 to 5/1/2017 reveals strong empirical evidence that investors could use TA to out‐perform the Buy‐and‐Hold strategy even when considering risk and transaction costs. This research provides evidence against the Efficient Market Hypothesis for EMI.