Using video to disclose forward-looking information: the effect of nonverbal cues on investors’ judgments

Review of Accounting Studies - We conduct two experiments to examine how investors react to nonverbal cues of certainty as displayed by a CEO communicating forward-looking information via the...     

Do crop purchase programs improve smallholder welfare? The case of Zambia's Food Reserve Agency

Government and parastatal crop purchase programs have regained popularity in sub-Saharan Africa, with many citing improving smallholder farmers’ welfare as a key goal. Yet there is limited empirical evidence on the topic. This paper analyzes the effects of the Zambian Food Reserve Agency's (FRA's) maize purchase activities on smallholder welfare. The FRA buys maize at a pan-territorial price that often exceeds market prices in surplus production areas. Using two household panel survey datasets spanning 15 years and exploiting variation in the scale of FRA activities over time, we employ fixed effects and control function approaches to estimate the effects of a smallholder household's maize sales to the FRA on its welfare, as well as the effects of more intense FRA maize purchase activity in a given district on the welfare of smallholder households in the district. Results suggest positive direct welfare effects on the minority of smallholders that sell to the FRA. We also find that, in the early years of the program, more intense FRA maize purchase activity in a district was associated with reductions in smallholder welfare, particularly among maize autarkic and net buying households. In later years, we find no evidence of such negative effects and some evidence of positive district-level effects on maize net buyers.     

Can socially irresponsible firms benefit from corporate advertising?

Abstract

Can corporate advertising improve firm performance following a brand crisis borne out of corporate social irresponsibility (CSI)? This article investigates socially irresponsible firms and their corporate advertising expenditures, which can be used to counter negative opinions. First, we examine whether firms experiencing a negative brand image due to socially irresponsible behavior alter their corporate advertising expenditures. Next, we assess the resulting impact of corporate advertising spending by CSI firms on overall performance. Using a sample of firms engaging in socially irresponsible behavior between 1995 and 2011, we find that such firms tend to increase their corporate advertising. Such changes in corporate advertising expenditures ultimately impact firm performance. Specifically, an increase in corporate advertising helps to reduce the negative effect of CSI on firm performance.     

The Incidence of Pension Contributions: A Panel Based Analysis of the Impact of Pension Contributions on Labor Cost,Wages and Labor Supply

De Economist - One of the key elements in the planned pension reform in the Netherlands is to abolish the implicit subsidy from younger to older workers inherent in pension schemes with age...     

Returns to individual traders in agricultural futures markets: skill or luck?

Using individual trader data from the Commodity Futures Trading Commission's (CFTC) Large Trader Reporting System (LTRS) for the period January 2000 to September 2009, this article investigates whether noncommercial traders in the corn, live cattle and coffee futures markets persist in making profits. Two out-of-sample measures of skill – a winner and a loser ranking test and a top and a bottom decile test – are used to analyse the ability of traders to consistently perform well at monthly, quarterly and annual time horizons. The findings identify significant persistence in rankings – traders in the top half of the profit distribution in a time period tend to stay in the top half in the next period. Differences in magnitude of profitability between the top and bottom deciles also provide support that persistent skill exists among the top 10% of traders. Detailed examination of annual rankings for those traders who were most continuously in the markets further reveals persistence in profits for a smaller subset of traders, as well as an indication of persistence in the face of losses.     

Robust portfolio choice with uncertainty about jump and diffusion risk

We analyze the portfolio planning problem of an ambiguity averse investor. The stock follows a jump-diffusion process. We find that there are pronounced differences between ambiguity aversion with respect to diffusion risk and jump risk. Ignoring ambiguity with respect to jump risk causes larger losses in an incomplete market, whereas ignoring ambiguity with respect to diffusion risk is more severe in a complete market. For a deterministic jump size we show that the loss from market incompleteness is always increasing in the level of ambiguity aversion with respect to one risk factor and decreasing in the level of ambiguity aversion with respect to the other risk factor.     

Nature-based tourism's impact on environmental knowledge,attitudes, and behavior: a review and analysis of the literature and potential future research

Although nature-based tourism is often promoted as benefiting local destinations through income generation, employment, and direct conservation support, it is also believed to influence tourists’ environmentally friendly attitudes, knowledge, and ultimately their behavior. Yet, few studies have empirically documented these outcomes, and those that do are inconsistent in the variables measured and the time frame analyzed. This paper examines the empirical research on nature-based tourism's ability to foster long-term stewardship behavior among travelers by conducting a systematic review of peer-reviewed tourism research published between 1995 and 2013. This search, focused on literature addressing changes in tourists’ environmentally related knowledge, attitudes, intentions, and actual behaviors, yielded just 30 empirical studies. Outcomes related to new environmental knowledge were commonly reported in these studies, but findings related to environmental attitudes and behaviors were inconsistent. Few studies measured environmental behavior directly, and fewer still include longitudinal assessments of persistent changes in attitudes or behaviors. We suggest potential future areas for research as well as programmatic strategies that may facilitate favorable outcomes from nature-based tourism, particularly those related to tourists’ knowledge, attitudes, and behaviors. Key areas include understanding visitors’ prior experiences and background, designing and delivering more effective interpretive messages, and using social media.     

Markov-modulated diffusion risk models

In this paper we consider Markov-modulated diffusion risk reserve processes. Using diffusion approximation we show the relation to classical Markov-modulated risk reserve processes. In particular we derive a representation for the adjustment coefficient and prove some comparison results. Among others we show that increasing the volatility of the diffusion increases the probability of ruin.     

Ethical claims and labelling: An analysis of consumers' beliefs and choice behaviours

Abstract

Although consumers' growing interest in ethical consumption has been well-documented, their understanding of specific claims, and the link between their stated concerns and behaviour, has not. Using a framework from systematic-heuristic and behaviour modification theory, this study explored consumers' understanding of varied ethical claims and a specific eco-label, and then estimated the effect these stimuli had on their choice behaviours. In-depth interviews revealed a strong interest in environmental and social attributes but considerable scepticism about specific claims. However, a choice modelling experiment found ethical attributes nevertheless influenced respondents' choices. Two distinct clusters whose views and choice behaviours differed markedly existed: one was primarily price-driven and the other more responsive to specific claims. Discrepancies between the qualitative and quantitative studies appear attributable to differences in information processing; many consumers respond strongly to heuristics, even though they believe themselves sceptical of the claims these communicate. The findings raise important policy questions about the scientific basis of many ethical claims, since consumers were strongly influenced by these, despite their views to the contrary.