An income distribution model for Mexico

Employing a multiple regression model, the purpose of the study is to statistically analyze the variations in income concentration between the federal entities of Mexico. The model presented accounts for 72 percent of inter-state variations in individual income concentration.     

A model of R&D leadership and team communication: the relationship with project performance

Industrial research and development (R&D) involves the processing and transformation of new knowledge into a commercially valuable outcome. Communication is an effective mechanism to translate, share and integrate new information into commercial products or processes. We developed a five-factor model of team communication comprising: leadership role performance, team boundary spanning, communication safety, team reflexivity and task communication and tested the model using a one-year longitudinal study. Analyses were conducted on team level data from 56 teams, comprising 350 employees. Independent measures of project performance were obtained from surveys of research managers as well as project customers. Three findings emerged. Different factors predicted different stakeholders' ratings of project performance. Communication safety was the strongest predictor of customer ratings of performance. Boundary spanning is most effective when performed by the project leader not the team.     

Indexing a bond's call price: an analysis of make-whole call provisions

We analyze a new form of call provision known as a “make-whole” call, which utilizes a floating call price based on the level of current interest rates. As rates drop (rise), the call price increases (decreases.) Usually, a floor at par sets a minimum call price. This provision effectively eliminates the reinvestment rate risk associated with bonds with fixed-price call provisions. Survey results indicate a majority of Chief Financial Officers (CFOs) believe make-whole call provisions are “costless.” Analysis of 318 recent, make-whole call bonds indicates that this provision is indeed priced. On average, the at-issue yield-to-maturity of a make-whole call bond is 11.2 basis points higher than the yield of a comparable straight bond.     

Differential Effects of Chinese Women's Sexual Self-Schema on Responses to Sex Appeal in Advertising

Despite the increased use of sex appeal in advertising, little is known about the influence of individual personality differences on responses to sexual information. This study examines the effects of the “sexual self-schema” personality trait on Chinese women's responses to advertisements using sex appeal. Regardless of the type of sexual information used, attitudes toward these advertisements mediate the effect of sexual self-schema on the purchase intentions of women with lower sexual self-schema while this mediating effect was not observed in women with higher sexual self-schema. The theoretical and practical implications of sex appeal in advertising for Chinese women are discussed.     

Dynamic mode decomposition for financial trading strategies

We demonstrate the application of an algorithmic trading strategy based upon the recently developed dynamic mode decomposition on portfolios of financial data. The method is capable of characterizing complex dynamical systems, in this case financial market dynamics, in an equation-free manner by decomposing the state of the system into low-rank terms whose temporal coefficients in time are known. By extracting key temporal coherent structures (portfolios) in its sampling window, it provides a regression to a best fit linear dynamical system, allowing for a predictive assessment of the market dynamics and informing an investment strategy. The data-driven analytics capitalizes on stock market patterns, either real or perceived, to inform buy/sell/hold investment decisions. Critical to the method is an associated learning algorithm that optimizes the sampling and prediction windows of the algorithm by discovering trading hot-spots. The underlying mathematical structure of the algorithms is rooted in methods from nonlinear dynamical systems and shows that the decomposition is an effective mathematical tool for data-driven discovery of market patterns.     

The impact of technology-motivated M&A and joint ventures on the value of IT and non-IT firms: a new examination

We extend Lee and Lim (Rev Quant Financ Account 27:111–123, 2006) who provide empirical evidence on the impact of mergers and acquisitions (M&As) and joint ventures on the value of information technology (IT) and non-IT firms. Using technology-motivated transactions, we examine whether there are differences in market response to the announcement of M&As and joint ventures, and we consider the long-term performance of such firms. We find the market provides no (positive) reaction to joint ventures (M&As) at the announcement. We also present new evidence suggesting the market reacts more favorably to the announcement of technology M&As relative to joint ventures for our full sample, IT sample and non-IT sample. However, our examination of these firms’ long-term performance suggests the initial reaction is not fully supported. The findings suggest improved (declining) operating performance for joint venture (M&A) firms, and evidence to conclude joint venture firms achieve superior long-term performance changes for both accrual- and cash-based measures. To explain these inconsistencies, we employ a set of control variables previously documented as determinants of the innovation ownership decision. For joint venture firms, we find that, while the market fails to consider the importance of the firms’ R&D intensity and growth prospects in its initial reaction, these are ultimately key indicators of their future performance. The evidence also suggests the market overreacts to M&A announcements because it over-weights the impact of R&D intensity on the firms’ future performance in its initial response.     

Farm Size Growth and Participation in Agri‐environmental Schemes: A Configural Frequency Analysis of the Swiss Case

This paper examines the relationship between farm growth and participation in agri‐environmental schemes, using the example of meadow extensification schemes in Switzerland. As a result of small farm sizes in Swiss agriculture, theory would suggest that economies of scale are considerable for market production activities, so that for growing farms it would be rational to intensify. Configural frequency analysis is used to identify and describe combinations of farm size development and proportion of meadows placed under agri‐environmental schemes. In the Swiss case, growing farms are likely to reduce their participation, whereas shrinking farms have a growing share of their meadows under extensification schemes.     

Doing it the Swiss Way

Doing it the Swiss Way In the mid‐nineties, Switzerland changed from a high‐price support policy to a policy‐concept that was designed to guarantee a multifunctional agriculture. This change was brought about by some plebiscites in which people first voted against simply switching to direct payments not bound to environmental quality and then decided in favour of a direct payment system with a strong emphasis on environmental quality. Farmers now receive most direct payments if they comply with certain minimum environmental standards, and additional payments for additional improvements to ecological quality as defined at the national level. New regulations that enable the support of regional networks which deliver particularly high ecological quality are of particular interest. At the same time, the importance of market support is decreasing rapidly. The experience with this system can be evaluated according to how structural change in agriculture is buffered, how the ecological quality of Swiss landscapes is maintained or enhanced and the effectiveness of the individual programmes. All three yardsticks lead to fairly positive results. This suggests that a rational agricultural policy approach does not necessarily mean liberalisation. A multifunctional concept of agriculture may allow substantial intervention by the state. Faites le à la Suisse Dans le courant des années 90, la politique agricole Suisse est passée ?un soutien fondé sur des prix élevés à un système destinéà assurer ?existence ?une agriculture multifonctionnelle. Ce changement est la conséquence ?une série de votes‐référendum dans lesquels les électeurs ?abord repoussèrent ?idée de paiements directs sans lien avec ?environnement puis, ensuite, adoptèrent un système de paiements directs mettant ?accent sur la qualité de ?environnement. A ?heure actuelle, pour recevoir la plus grande partie de leurs paiements directs, les agriculteurs doivent respecter certains standards environnementaux minimums. Ils ont droit à des paiements supplémentaires s'ils améliorent la qualité ecologique de leur environnement, telle qu'elle est définie au niveau national. Un intérêt spécial s'attache aux nouveaux règlements qui permettent de soutenir des réseaux régionaux susceptibles de conduire à une qualitéécologique particulière. En même temps, le volume des soutiens directs aux marchés est en baisse rapide. Pour évaluer ce système, il faut examiner comment les changements structures en agriculture sont amortis, si la qualité des paysages suisses est maintenue ou améliorée, et si les programmes individuels sont efficaces. Chacun de ces critères conduit à une appréciation positive, ce qui montre qu'une approche rationnelle de la politique agricole n'est pas forcément synonyme de libéralisation. Le caractère multifonctionnel de ?agriculture peut justifier une assez large intervention de ?Etat. Auf schweizerische Art. Mitte der 1990er Jahre veränderte die Schweiz ihre Politik der Hochpreisstützung hin zu einer Politik, die eine multifunktionale Landwirtschaft garantieren sollte. Diese Veränderung wurde durch mehrere Volksentscheide herbeigeführt, im Laufe derer sich das Volk zunächst dagegen entschied, direkte Zahlungen einzuführen, welche nicht an die Qualität der Umwelt gebunden sind; später jedoch entschied sich das Volk für direkte Zahlungen mit starker Berücksichtigung der Umweltqualität. In den meisten Fällen erhalten die Landwirte nun direkte Zahlungen, wenn sie bestimmte Mindeststandards im Hinblick auf die Umwelt erfüllen, und zusätzliche Zahlungen, wenn sie zusätzlich zur auf nationaler Ebene festgelegten ökologischen Qualität beitragen. Neue Bestimmungen, welche die Unterstützung von regionalen Netzwerken ermöglichen, welche eine besonders hohe ökologische Qualität hervorbringen, sind von besonderem Interesse. Zugleich nimmt die Bedeutung von marktstützenden Maβnahmen rapide ab. Die Erfahrungen mit diesem System können danach bewertet werden, wie der Strukturwandel in der Landwirtschaft abgefedert wird, wie die ökologische Qualität der schweizerischen Landschaft aufrecht erhalten oder verbessert wird, sowie anhand der Wirksamkeit der einzelnen Programme. Alle drei Maβstäbe führen zu recht positiven Ergebnissen. Dies legt nahe, dass ein rationaler Ansatz für die Agrarpolitik nicht notwendigerweise eine Liberalisierung bedeutet. Ein multifunktionales Verständnis von Landwirtschaft könnte eine beträchtliche staatliche Intervention zulassen.     

Trade Facilitation and Economic Development: A New Approach to Quantifying the Impact

This article analyzes the relationship between trade facilitationand trade flows in the Asia-Pacific region. Country-specificdata for port efficiency, customs environment, regulatory environment,and e-business usage are used to construct indicators for measuringtrade facilitation. The relationship between these indicatorsand trade flows is estimated using a gravity model that includestariffs and other standard variables. Enhanced port efficiencyhas a large and positive effect on trade flows. Regulatory barriersdeter trade. Improvements in customs and greater e-businessuse significantly expand trade but to a lesser degree than improvementsin ports or regulations. The benefits of specific trade facilitationefforts are estimated by quantifying differential improvementsin these four areas among members of the Asia Pacific EconomicCooperation (APEC). A scenario in which APEC members with below-averageindicators improve capacity halfway to the average for all membersshows that intra-APEC trade could increase by $254 billion,or 21 percent of intra-APEC trade flows. About half the increaseis derived from improved port efficiency.