Informed and uninformed trading on the Australian dollar

Using a high-frequency data set of the spot Australian/US dollar, this study examines the distribution of quotes, spreads, and returns across the trading day. By identifying the direction of trade and the subsequent quote returns from contributing banks, the segmented nature of the market into market-makers and informed and uninformed traders is investigated. The results suggest that the economic gain possible from private information is maximised over 2 to 5 quotes and is rapidly eroded by 20 quotes (about 2 min later during busy trading times) as other new information enters the market. Also, the analysis is revealing of discontinuities in trading and the volatility of pricing across the trading day.     

Organizational learning and market orientation: interface and effects on performance

This paper discusses the relationship between market orientation and organizational learning and, in particular, the former's contribution to the generation of double-loop learning. Although prior contributions on this topic have been controversial, the authors, departing from the principles of RBV, consider market orientation a resource capable of generating higher order organizational learning and, in this way, capable of additionally reinforcing firms' sustainable competitive advantage. The empirical study provides evidence on the existing relationship between a firm's learning and market orientation degree and the organization's economic and non-economic results. Findings indicate that learning orientation stimulates the market-oriented behavior and that it also positively affects the establishment of long-term relationships with strategic clients. Contrary to prior research a significant and positive effect on business performance is only contrasted in the case of market orientation.     

Benefits of Downward Earnings Management and Political Connection: Evidence from Government Subsidy and Market Pricing

This paper examines the role of downward earnings management and political connection on the receipt of government subsidies and market pricing of subsidies. Using subsidies data hand-collected from Chinese listed firms over the period 2004–2014, the results show a significantly positive association between downward earnings management and the receipt of government subsidies. The results also reveal that a firm's political connection is conducive to securing subsidies for poor performers, but not for good performers. Market pricing analyses demonstrate that share markets value subsidies positively in general, but the effect is ameliorated in firms conducting downward earnings management. No discernible difference is found between the market pricing of subsidies received by firms with political connections and those without.     

Timing of earnings restatements: CEO equity compensation and market reaction

This study investigates the impact of chief executive officers’ (CEO) compensation on their choices regarding the timing of earnings restatements. The results indicate a negative relationship between options exercised and lags in disclosing the restated earnings, suggesting that managers who exercise options in a given year tend to release information quickly. This effect is more pronounced if the options are exercised after the dark period. We also find that the market penalises longer lags in the restatement disclosure. It seems that the CEO would try to optimise the timing of information release so as to balance the costs and benefits.     

Non-coercive influence: Scale development and validation based on resource and relational paradigms

To overcome competition in an increasingly network dependent market, retailers are required to influence upstream channel partners while sustaining relationships. However, the contemporary supply chain literature has not sufficiently leveraged the resource and relational paradigms to examine influence. Grounded on resource dependency theory and commitment-trust theory paradigms, this study describes conceptualization and operationalization of a 12-item scale for measuring non-coercive influence on upstream channel partners in retail supply chain management (R-SCM) context. The study is based on responses from 547 retail professionals in India obtained over four successive surveys. Psychometric properties were assessed using exploratory factor analysis (EFA) and confirmatory factor analysis (CFA). The proposed scale demonstrates construct validity. Invariance-testing carried out over 4-levels of increasingly demanding equivalence confirmed cross-validation. Nomological validity of the scale was tested by evaluating association with suppliers’ intention to cooperate. The results indicate existence of three dimensions of non-coercive influence: collaborative intent, market intelligence dissemination, and operational support. Retailers can use the scale to assess their personnel's non-coercive influence behavior over suppliers.     

Long-term sustainability of third-party facilitated market linkages: Evidence from the USDA marketing assistance program in the Armenian dairy industry

Public–private partnerships are increasingly seen as an important tool to build agri-food supply chains and develop markets for agri-food products in emerging economies. However, many of these initiatives fail when the public component of the program ends. One exception is the USDA Market Assistance Program (MAP) that facilitated the redevelopment of the Armenian dairy sector after privatization. This paper presents a case study of this initiative and hypothesize that the USDA MAP facilitated farmer investment in private enforcement capital. This investment resulted in sustainable market relationships between farmers and dairy processors even after the USDA MAP expired. We find empirical evidence to support this hypothesis using a panel dataset collected from 172 Armenian dairy farmers in 2004 and 2009.     

Optimal harvesting of a spatial renewable resource

In this paper we investigate the optimal harvesting of a renewable natural resource. While in most standard approaches the resource is located at a single point, we allow the resource to be distributed spatially. Consequently, an agent who exploits the resource has to travel from one location to another. For a fixed planning horizon, we investigate the speed and the path of harvesting chosen by the agent. We show that the agent adjusts this speed so as to visit each location only once, even in the absence of travelling cost. Since the agent does not return to any location for a second harvest, it is optimal to fully deplete the resource upon arrival. A similar type of bang–bang solution results when we drop the assumption of a constant harvesting rate: allowing for a variable harvesting rate, the agent chooses to fully exploit the resource either in the last or in the first travelling period. A society interested in conserving some of the resource thus has to take measures to limit the exploitative behaviour of the agent.     

The stock market effects of a securities transaction tax: Quasi-experimental evidence from Italy

In the aftermath of the financial crisis, in several countries new levies on the financial sector have been proposed and in some cases implemented. We focus in particular on the recent introduction of a securities transaction tax (STT) in Italy. A peculiarity of the Italian STT is that it only concerns stocks of corporations with a market capitalization above € 500 million. We exploit this feature via a differences-in-differences approach – comparing taxed and non-taxed stocks before and after the introduction of the tax – and via a regression discontinuity design – comparing the performance of stocks just above the threshold with those just below. Focusing on the regulated market, we find that the new tax reduced liquidity, but it left transaction volumes and returns substantially unaffected. There is also evidence – although not conclusive – that the tax increased volatility.     

Conflict and the ethnic structure of the marketplace: Evidence from Israel

How and why does ethnic conflict affect the ethnic structure of the marketplace? To answer these questions, this paper merges a unique administrative dataset covering the universe of transactions in the Israeli market for used cars during 1998–2010 with data on the intensity of the Israeli-Palestinian conflict. The analysis shows that violence reduces the number of transactions between Arab sellers and Jewish buyers while increasing the number of transactions between Arab sellers and Arab buyers; violence has no effect on the number of transactions involving Jewish sellers. I relate these findings to the economic literature studying the sources of discrimination.     

Information,market power,and price volatility

We consider demand function competition with a finite number of agents and private information. We show that any degree of market power can arise in the unique equilibrium under an information structure that is arbitrarily close to complete information. Regardless of the number of agents and the correlation of payoff shocks, market power may be arbitrarily close to zero (the competitive outcome) or arbitrarily large (so there is no trade). By contrast, price volatility is always lower than the variance of the aggregate shock across all information structures. Alternative trading mechanisms lead to very distinct bounds as a comparison with Cournot competition establishes.