The Q Theory and the Swedish Housing Market—An Empirical Test

We argue that major changes in economic policy have resulted in a more market driven demand for housing investment in Sweden, due to policy changes at the end of the 1980s and the beginning of the 1990s. Tobin’s transparent Q theory is the investment theory used. For the last period of the sample (1993–2003 quarterly data), our results indicate that there exists a high degree of correlation between the Q ratio and the (logarithm of) two different variables for housing investment. An error correction regression model, controlling for structural breaks, also indicates that a stable long-run relationship could be detected for the logarithm of building starts and the Q ratio between 1993–2003, but not between 1981–1992.      

The institutional memory hypothesis and the procyclicality of bank lending behavior

We test a new hypothesis that may help explain the procyclicality of bank lending. The institutional memory hypothesis is driven by deterioration in the ability of loan officers over the bank's lending cycle that results in an easing of credit standards. We test this hypothesis using data from individual US banks over 1980–2000: over 200,000 bank-level observations on commercial loan growth, over 2,000,000 loan-level observations on interest rate premiums, and over 2000 bank-level observations on credit standards and loan spreads from bank management survey responses. The empirical analysis supports the hypothesis, although there are differences by bank size class.     

Contemporary knowledge and skill requirements in project management

This article provides an overview of some recent developments within the field of project management and presents metrics used to assess current trends within the discipline in order to identify its future direction. Graphical tools are introduced to measure the span and areas of emphasis within project management, such as radar diagrams and the recently introduced International Project Management Association (IPMA) “Eye of Competence.” The research shows that the discipline seems to focus increasingly on interpersonal competences, relationship management, resource management, and strategic alignment. The results are evaluated and discussed, and the article concludes with some ideas about the future development of project management.     

FISCAL INDULGENCE IN CENTRAL EUROPE: LOSS OF THE EXTERNAL ANCHOR?

In recent years, fiscal performance in Central Europe has steadily deteriorated, in contrast to the improvement in the Baltics. This paper explores the determinants of such differences among countries on the path to European Union (EU) accession. Regression estimates suggest that economic and institutional fundamentals do not provide a full explanation. An alternative explanation lies in the political economy of the accession process, and a game‐theoretic model illustrates why a country with a stronger bargaining position might have an incentive to deviate from convergence to the Maastricht criteria. The model generates alternative fiscal policy regimes – allowing for regime shifts – depending on country characteristics and EU policies.     

The impact of direct marketing appeals on charitable marketing effectiveness

Building on behavioral decision research, this article provides guidelines to charitable marketing managers regarding the effect of charitable direct marketing appeals on donor decision judgments. Several charitable direct mail appeals (factors) were empirically tested simultaneously in a factorial experimental design involving 18,144 potential donors to determine how donor decision strategies influenced choice judgments about whether to give and estimation judgments about how much to give. The results indicate that suggested anchors and framing influence response rate (choice) but not size of gift. Reference information (factual/statistical and narrative/experiential) influences size of gift (estimation) but not response rate. Implications for charitable marketing managers are discussed. He received his D.B.A. from Boston University, M.B.A. from Harvard University, and B.A. from Brandeis University. His research interests include managerial pricing, marketing communication strategies, and customer value. His work has been published in theCalifornia Management Review, Sloan Management Review, Pricing Strategy and Practice, Journal of Retailing, Journal of Marketing Communication, Journal of Business and Industrial Marketing, andJournal of Promotion Management, among others. He earned his S.B., S.M., and Ph.D. degrees from the Massachusetts Institute of Technology Sloan School of Management. He is coauthor ofDirect Marketing Management (Prentice Hall) andCases in Business Statistics (Allyn & Bacon). He has published a variety of articles in journals such asManagement Science, Journal of Marketing Research, Journal of Direct Marketing, Harvard Business Review, Sloan Management Review, Journal of Business Forecasting, American Statistician, andJournal of Finance.     

Potential Competitive Effects of Basel II on Banks in SME Credit Markets in the United States

We examine the likely competitive effects of implementation of Basel II capital requirements on banks in the market for credit to SMEs in the U.S. Similar competitive effects from Basel II may occur for other credits and financial instruments in the U.S. and other nations. We address whether reduced risk weights for SME credits extended by large banking organizations that adopt the Advanced Internal Ratings-Based (A-IRB) approach of Basel II might significantly adversely affect the competitive positions of other organizations. The analyses suggest only relatively minor competitive effects on most community banks because the large A-IRB adopters tend to make very different types of SME loans to different types of borrowers than community banks. However, there may be significant adverse effects on the competitive positions of large non-A-IRB banking organizations because the data do not suggest any strong segmentation in SME credit markets among large organizations. JEL classification: G21, G28, G38, L51     

How does capital affect bank performance during financial crises?

This paper empirically examines how capital affects a bank’s performance (survival and market share) and how this effect varies across banking crises, market crises, and normal times that occurred in the US over the past quarter century. We have two main results. First, capital helps small banks to increase their probability of survival and market share at all times (during banking crises, market crises, and normal times). Second, capital enhances the performance of medium and large banks primarily during banking crises. Additional tests explore channels through which capital generates these effects. Numerous robustness checks and additional tests are performed.     

Further Evidence on the Link between Finance and Growth: An International Analysis of Community Banking and Economic Performance

We try to contribute to both the finance-growth literature and the community banking literature by testing the effects of the relative health of community banks on economic growth, and investigating potential transmission mechanisms for these effects using data from 1993 to 2000 on 49 nations. Data from both developed and developing nations suggest that greater market shares and efficiency ranks of small, private, domestically owned banks are associated with better economic performance, and that the marginal benefits of higher shares are greater when these banks are more efficient. Only mixed support is found for hypothesized transmission mechanisms through improved financing for small and medium enterprises or greater overall bank credit flows. Data from developing nations are also consistent with favorable economic effects of foreign-owned banks, but unfavorable effects from state-owned banks.     

Bayesian estimation of manufacturing effects in a fuel economy model

The analysis of fuel economy data results in estimates of the technology utilization by manufacturer and vehicle line. The analysis employs a hierarchical Bayesian regression model with random components representing vehicle lines and manufacturers. The model includes predictor variables which describe vehicle features, such as type of transmission, and vehicle line specific measurements, such as compression ratio. Non-informative priors with novel modifications are used and the Bayes estimates are obtained by use of Gibbs sampling. The results show there is substantial variability among manufacturers in efficiently utilizing technology for fuel economy.