Does market power discipline CEO power? An agency perspective

We examine how product market competition (PMC) shapes chief executive officer's (CEO) power. Using various measures to capture both PMC and CEO power, our analyses, which include a quasi‐natural experiment, find evidence that CEOs have less power when the product market is more competitive. Furthermore, the impact of PMC on CEO power is more pronounced for firms with entrenched management, lower CEO ownership, lower analyst coverage, and for firms experiencing good ‘luck’ (windfall performance). Our results suggest that market power can act as a substitute for corporate governance in disciplining CEO power, particularly when prone to agency problems.     

A general test for time dependence in parameters

A new test for time‐dependent parameters is proposed. The Trig‐test is based on a trigonometric expansion to approximate the unknown functional form of the variation in the parameters concerned. It is shown to have the correct empirical size and excellent power to detect structural breaks and stochastic parameter variation. The appropriate use of the Trig‐test is demonstrated by testing for structural breaks in the US inflation rate. The test detects a statistically significant increase in the US inflation rate beginning in the early 1970s and lasting through to the early 1980s. Copyright © 2004 John Wiley & Sons, Ltd.     

The Relationship of Persuasion Knowledge,Identification of Commercial Intent and Persuasion Outcomes in Advergames—the Role of Media Context and Presence

Across two studies, the authors investigate the extent to which children’s persuasion knowledge of an advertising tactic (advergame and TV commercial) and their level of engagement with the medium (presence) influence their identification of commercial content and persuasion outcomes. In line with theoretical predictions of the persuasion knowledge model, results showed that those children who had more knowledge about advertisers’ tactics were more likely to identify brands and commercial content in the advergame and less likely to be influenced. However, a high level of presence in the medium moderated the effect of persuasion knowledge on persuasion outcomes.     

Effects of the euro on trade, capital markets and the international monetary system

The implications of the introduction of the euro undoubtedly reach far beyond Europe. How will the rest of the world be affected? What role will the euro play as an international trading, investment and reserve currency? Will it be able to function as a stabilising element in the international monetary system?     

EU Constitutional Governance: Failure as Opportunity!?

The French and Dutch rejection of the proposed EU Constitution in May 2005 threw the European Union into what many observers regard as its deepest crisis to date. This crisis can also be seen as a unique opportunity for political, economic and institutional renewal, however. The following article outlines the problems presently facing Europe and discusses what changes would have to be made in the EU system of governance in order to overcome them.      

The intra‐day price discovery process between the Singapore Exchange and Taiwan Futures Exchange

This paper focuses on the increasing competition between exchanges for listing similar index futures contracts and the impact this has on information dissemination between various markets. Specifically, using both the Hasbrouck and Gonzalo–Granger methodologies for extracting the information content held in each market, a comparison of information efficiencies between the Singapore Exchange and the Taiwan Futures Exchange is examined for Taiwan Index Futures listed in both markets. The results show not only a common stochastic trend between index futures and their underlying indices, but also provide strong evidence to suggest price discovery primarily originates from the Singapore futures market. There are direct implications of this result for both financial exchanges and traders—in particular, that traders realize price determination can arise from both futures markets, and the need for exchanges to maintain a reputation as an information center for these similarly traded financial instruments. © 2002 John Wiley & Sons, Inc. Jrl Fut Mark 22: 219–240, 2002