Capital Flight and Bitcoin Regulation

This paper studies the risk of Bitcoin being used for the purpose of capital flight. We propose a new indicator, the bitcoin‐implied exchange rate discount, to identify empirically capital flight via Bitcoin. Using data from the two largest bitcoin exchanges in the world during our sample period, BTC China and Bitstamp, we find strong evidence of capital flight from the Chinese Renminbi to the US Dollar via Bitcoin before the People's Bank of China, China's central bank, announced its regulatory policy on December 5, 2013, while the evidence displays no trace of capital flight after the announcement. The People's Bank of China's Bitcoin restriction policy successfully halts the illicit capital outflow via Bitcoin, thereby providing valuable policy implications for government regulation on Bitcoin, as well as on other virtual currencies.     

Does Cross-Sector Collaboration Lead to Higher Nonprofit Capacity?

This study examines determinants of retail chains’ corporate social responsibility (CSR) communication on their web pages. The theoretical foundation for the study is signaling theory, which suggests that firms will communicate about their CSR efforts when this is profitable for them and when such communication makes it possible for outsiders to distinguish good from bad performers. Based on this theory, I develop hypotheses about retail chains’ CSR signaling. The hypotheses are tested in a sample of 208 retail chains in the Norwegian market. As hypothesized, I find that foreign chains, chains using private brands, and vertically integrated chains are more likely to signal, but I find no relationship between pricing and signaling. In further analysis using chains’ CSR memberships and certifications as the measure of signals, only the relationship between organizational form and signaling is replicated. In total, the findings give partial support to signaling theory.     

Using Engel curves to estimate bias in the Canadian CPI as a cost of living index

Abstract.  Semiparametric Engel curves are used to infer bias in the Canadian CPI as a Cost of Living Index. The budget share of food has long been used as an indicator of welfare. We compare households with the same levels of CPI deflated total expenditure over the period 1978–2000. Differences in the expenditure share of food are attributed to the CPI failing to capture changes in costs of living. We employ a novel econometric approach using a single index penalized linear spline model. Over the period, we find that the CPI overstated changes in the cost of living between 1.33 and 1.86% for the four household types considered. JEL classification: D1, C1     

Bounded rationality in laboratory bargaining with asymmetric information

Summary. This paper reports an experiment on two-player sequential bargaining with asymmetric information that features some forces present in multi-round monopoly pricing environments. Buyer-seller pairs play a series of bargaining games that last for either one or two rounds of offers. The treatment variable is the probability of continuing into a second round. Equilibrium predictions do a poor job of explaining levels of prices and treatment effects. As an alternative to the conventional equilibrium model, we consider models that allow for bounded rationality of subjects. The quantal response equilibrium model captures some of the important features of the results.Received: 30 April 2003, Revised: 10 December 2003, JEL Classification Numbers: C78, D82, D42, C91. Correspondence to: Timothy N. CasonThis research was funded in part by the National Science Foundation (SBR-9809110). The experiments were run at the Economic Science Laboratory of the University of Arizona and the Krannert Laboratory for Experimental Economic Research at Purdue University, using the z-Tree software developed at the Institute for Empirical Research at the University of Zurich (Fischbacher [8]). David Cooper, Rachel Croson, Charles Noussair, an anonymous referee, and conference participants at the Economic Science Association and the Society for the Advancement of Economic Theory meetings provided helpful comments. Timothy ONeill Dang, Thomas Wilkening and Marikah Mancini provided expert research assistance.     

Examining the Cognitive and Affective Trust-Based Mechanisms Underlying the Relationship Between Ethical Leadership and Organisational Citizenship: A Case of the Head Leading the Heart?

In this paper, we investigate the trust-based mechanisms underlying the relationship between ethical leadership and followers’ organisational citizenship behaviours (OCBs). Based on three-wave survey data obtained from 184 employees and their supervisors, we find that ethical leadership leads to higher levels of both affective and cognitive trust. In addition, we find support for a three-path mediational model, where cognitive trust and affective trust, in turn, mediate the relationship between ethical leadership and follower OCBs. That is to say, we found that ethical leadership leads to the development of cognitive trust, which subsequently influences the development of affective trust. Affective trust, in turn, induces followers to exhibit OCBs as a means of reciprocating the leader’s favourable behaviour. Our findings suggest that both affective and cognitive trust plays an important role in the social exchange processes that underlie the relationship between ethical leadership and the discretionary behaviour of followers.     

ECONOMIC FREEDOM AND INCOME LEVELS ACROSS U.S. STATES: A SPATIAL PANEL DATA ANALYSIS

There is a large literature estimating the effect of economic freedom on economic growth or income levels. Most studies examine the relationship between economic freedom and growth or income levels for countries, while a few examine the relationship for U.S. states. Absent in the state‐level literature is consideration of the presence of spatial spillovers affecting the freedom‐income relationship. Neglecting to account for spatial autocorrelation can bias estimation results and therefore inferences drawn. We find evidence of a spatial pattern in real per‐capita gross state product (GSP) that affects nonspatial estimates of the freedom‐income relationship. Taking into account the direct and indirect effects of economic freedom on real per‐capita GSP, we find a 10% increase in economic freedom is associated with a 5% increase in real per‐capita GSP. (JEL E02, O47, R11)     

Overhauling the new product process

The three cornerstones of successful product development are process, strategy, and resources, according to the benchmarking study reported in this article. Of the three, having a high quality new product process had the strongest impact on business's new product performance. A high quality new product process meant: an emphasis on up-front homework; sharp, early product definition; the voice of the customer evident throughout; tough go/kill decision points; a focus on quality of execution; and a thorough yet flexible process. The research results point strongly to a need to overhaul firms' new product processes—from idea to launch—to incorporate these and other key success drivers, such as the quest for real product superiority, and the need for true cross-functional teams. The goals of an effective new product process—that is, the specifications or key elements of a high quality process—are outlined, a vital starting point to any process reengineering exercise. The article ends with a quick look at a third generation stage-gate or new product process, together with some tips and hints on how to proceed to overhaul your company's new product process.     

Foreign travelers’ satisfaction with traditional Korean restaurants

Despite the tourism growth in Korea, foreign travelers remain dissatisfied with Korean restaurants. Accordingly, this research investigates the factors influencing foreign travelers’ satisfaction with traditional Korean restaurants. Using a modified SERVQUAL scale, three dimensions of service quality (‘intangibles’, ‘tangibles’, and ‘food’) as well as expectation and value for money appear to positively influence foreign travelers’ satisfaction with traditional Korean restaurants. In turn, foreign travelers’ satisfaction has a positive influence on both their intention to revisit and their intention to recommend. The results of this study are useful to help restaurants develop strategies to strengthen foreign travelers’ satisfaction with their experience at traditional Korean restaurants.