Real wage cyclicality in the Eurozone before and during the Great Recession: Evidence from micro data

We study the response of real wages to the business cycle in eight major Eurozone countries before and during the Great Recession. Average real wages are found to be acyclical, but this reflects, in large part, the effect of changes in the composition of the labour force related to unemployment variations over the cycle. Using longitudinal micro data from the ECHP and SILC panels to control for composition effects, we estimate the elasticities of real wage growth to unemployment increases between −0.6 and −1 over the period 1994–2011. Composition effects have been particularly large since 2008, and they explain most of the stagnation or increase in the average wage observed in some countries from 2008 to 2011. In contrast, at a constant labour force composition in terms of education and experience, the figures indicate a significant decrease in average wages during the downturn, particularly in countries most affected by the crisis. Overall, there is no evidence of downward nominal wage rigidity during the Great Recession in most countries in our sample.     

Forecasting the direction of the US stock market with dynamic binary probit models

Several empirical studies have documented that the signs of excess stock returns are, to some extent, predictable. In this paper, we consider the predictive ability of the binary dependent dynamic probit model in predicting the direction of monthly excess stock returns. The recession forecast obtained from the model for a binary recession indicator appears to be the most useful predictive variable, and once it is employed, the sign of the excess return is predictable in-sample. The new dynamic “error correction” probit model proposed in the paper yields better out-of-sample sign forecasts, with the resulting average trading returns being higher than those of either the buy-and-hold strategy or trading rules based on ARMAX models.     

How durable is sustainable enterprise? Ecological sustainability meets the reality of tough economic times

Today's business leaders are pressed to achieve ecological (eco) sustainable enterprise, but must do so with fewer resources. Given a protracted global recession, our concern is that the motivation for eco-sustainability may not be as strong as hoped for, nor as swift or durable as expected. To create a more explicit discourse on eco-sustainability activities during a recession, we set forth a framework to help business leaders examine their strategic perspective based on their organization's identity. We describe how this may influence how leaders broach change within their organizations, taking a surface or deep approach to achieve eco-sustainability. The intent is to highlight the importance of honestly assessing the firm's purpose and to work toward a more relational orientation in the new economy. To establish eco-sustainability during this recessionary period, we believe a middle path is needed, adopting a blended perspective. To this end, we offer three practical steps to begin this effort: reflection on the firm's values, development of relationships, and cultivation of different forms of change.     

外部需求衰退与代工企业自创品牌

在国际需求衰退的背景下,我国的代工企业面临着如何在外部需求衰退的约束下实现产业升级的新问题。外部需求衰退固然给代工企业生产经营带来困难,但这一外生冲击也在开拓市场、突破进入壁垒、获取营销渠道等方面给其自创品牌带来机遇。此外,代工企业品牌策略的成功还取决于企业自身效率、学习能力、资本和技术积累等多种因素。文章用韩国三星电子在亚洲金融危机中实现品牌成长的案例进行了说明,并分析了代工向自创品牌的转化条件。     

Beating the recession blues: Exploring the link between family ownership,strategic marketing behavior and firm performance during recessions

This study explores whether family firms exhibit unique marketing behavior and whether their unique behavior in turn helps them outperform non-family firms during periods of economic contraction. Findings based on a sample of 275 large publicly listed U.S. firms reveal that family firms outperform non-family firms during recessions. This superior performance is partially driven by family firms' proactive marketing behavior and their relatively strong emphasis on corporate social responsibility (CSR). During recessions, while non-family firms tend to decrease their advertising intensities and rates of new product introduction (NPI), family firms are likely to maintain relatively high levels of advertising intensity and rates of NPI. Unlike non-family firms, family firms are also likely to maintain high levels of corporate social performance (CSP) during recessions. These results underscore the benefits of proactive marketing behavior and a continued emphasis on CSR during economic downturns. The authors also add to the scant family-firm literature, demonstrating the family firm to be an effective organizational form.     

Retailing and the period leading up to the Great Recession: a model and a 25-year financial ratio analysis of US retailing

Today, more than ever, retailers need to analyze the key solvency (liquidity) and efficiency financial ratio measures that affect how well their firms perform and to engage in long-term activities that will lead to improved results. Clearly, the recent ‘Great Recession’ has had a significant negative impact on retailers worldwide. Yet, an important question remains largely answered: Was the retail industry a major contributor to the events leading up to the economic crisis or was it an affected bystander shaken by the recession? This paper addresses the question for US retailing, the largest retail economy in the world. Although there has been considerable research on some aspects of the performance of the industry and individual firms, no prior studies exist that comprehensively examine the financial ratio performance of the totality of US retailing over time. Here, the financial performance of US retailers in 54 different sectors is analyzed for the 1982–2007 period using a model and data derived from Dun & Bradstreet's annual Industry Norms & Key Business Ratios. Results show that for many financial measures – such as the current ratio, liabilities to net worth, return on sales (profit margin), return on assets, financial leverage, and return on net worth – US retailing's financial performance has been in a steady decline for decades. The model introduced here is largely validated.     

经济衰退期的广告影响——国外研究述略

在经济衰退期间减少广告支出,将导致在衰退期间及以后的商品销量下降,且不能带来实质性的利润的增加。在经济衰退期间增加广告支出对企业的销量、市场份额、利润及品牌资产都有积极的作用,且其影响远大于经济扩张期和稳定期。增减广告支出的影响时效往往超出衰退期本身。     

Between a rock and a hard place: Recession and telecoms taxation

Excessive taxation in the telecoms services sector is rarely found in developed economies as it hinders high technology investments, confines innovation and eventually impedes economic growth. Recession eventually complicates this process. In this paper the repercussions of multi-layer service taxation on the Greek mobile sector during the last five years are studied. It is found that public revenues, companies and subscribers would significantly benefit from a direct decrease of the special levy imposed on the use of mobile services today. An econometric model that links the consumption propensity of mobile voice service usage with the disposable income of the users and the price of the product is applied. The results of this research indicate that the adoption of high sector specific service taxes with the objective of increasing government revenues creates an economic distortion that lowers service usage, shrinks sector revenues, and, ultimately, jeopardizes the competitiveness of the mobile telecommunications sector.     

Changes in the informational content of term spreads: Is monetary policy becoming less effective?

We examine the predictive power of term spreads as predictors of economic recessions in Europe and the US. Using a battery of methodologies that include endogenous changepoint detection we find that the predictive power of spread-type variables has changed significantly during the 1980s and 1990s: in the most advanced countries the domestic spread has lost its informative content in favor of international – US and German – spreads, whereas in less developed countries this informational content has appeared during the late 1980s. Given the theoretical arguments for the predictive power, these findings suggest that domestic monetary policy may have become less effective in the most developed countries of the sample.     

International Integration,Trade, and the Great Recession

In the wake of the Great Recession, almost all countries suffered a severe and synchronized trade collapse unlike any seen since the Great Depression. To the extent that economic integration fosters trade among countries, this paper examines the role that international integration played in moderating the negative shock caused by the Great Recession on trade. The methodology adopted is a modified gravity model in which we control for the Great Recession, different forms of integration, as well as the interaction between integration and the recession. Measuring integration in three different ways, the findings show that countries that were more integrated fared better in trade – the extent of trade collapse was milder – than less integrated countries. Specifically, Regional Trade Agreement, as a form of trade integration, had a positive and robust effect on trade during the Great Recession. This positive effect is also robust across regions and countries around the world. In a nutshell, countries that are into some form of trade agreements are better-positioned to absorb negative demand-side shocks caused by economic recessions than similar countries without such agreements.