Economic diversification of a single-asset tourism city: evidence from Antalya†

It is often argued that the growth of single-asset tourism places is fragile because it is vulnerable to economic fluctuations and is based on specialization and localization economies that lead to an ever stronger lock-in process of path-dependent urban economic development and, in the end, slow growth. In this paper, it is doubted whether a high urban tourism growth implies an ever stronger specialization and an ever stronger lock-in. This paper shows that the growth of tourism stimulates the growth of related and unrelated industries and generates a diversification of the economy, even though some other sectors are crowded out. Antalya (Turkey) is selected as a case-study area not only because its economy is dominated by tourism (it is a good example of a single-asset tourism city), but also because its economy shows a tendency to economic diversification at the sectoral level. This diversification tendency is shown by means of a shift-share analysis and Herfindahl indexes.     

Capital Deployment Roundtable: A Discussion of Corporate Investment and Payout Policy

U.S. companies are now reportedly earning record‐high operating returns on capital while at the same time continuing to set new records both for corporate cash holdings and distributions to investors in the form of dividends and stock repurchases. But are most of these companies really maximizing value? And what role, if any, do these large distributions play in creating value? These are the two main questions that are addressed by a small group that includes two senior corporate executives and two representatives of well‐known activist investors. A number of panelists suggest that many companies, in misguided efforts to maximize returns on capital, have been using hurdle rates that are too high and so sacrificing value‐adding investment opportunities. As evidence for this claim, they cite evidence that, in recent years, the companies that have achieved the highest stock market returns appear to have made conscious decisions to reduce their returns on capital to pursue higher growth. Another increasingly common charge against U.S. companies is their tendency to pay out excessive capital to investors, especially in the form of stock repurchases at prices that turn out to be too high. But this last practice, however widespread, may not be as troubling as it has been made out to be. Although it involves a wealth transfer from existing to selling shareholders, overall investor value is lost only if such buybacks lead to corporate underinvestment. But, as a number of panelists (including the activist investors) point out, such payouts of capital have generally functioned as a demonstration of corporate managers' commitment to investing and operating with the optimal, or value‐maximizing, level of capital—neither too much nor too little.     

The causality between FDI and sector-specific production in Turkey: evidence from threshold cointegration with regime shifts

This article considers bidirectional nonlinear cointegration relation between FDI and industrial output in Turkey. The data cover the monthly period 2005:1–2013:10 for the time series of total industrial production, 36 sub-industrial sectors’ production and FDI. Following nonlinear threshold cointegration and VECMs, the article yields that (i) total industrial production and nine sub-industrial productions have positive long-run impact on FDI with significant error corrections, (ii) six sub-industrial productions have short-term influence on FDI, (iii) FDI has long-run positive impulse on total industrial production and nine sub-industrial productions with some significant error corrections and (iv) FDI affects four sub-industrial productions in the short run as well as in the long run. The results of VECMs from (i) also reveal that the all short-term adjustment parameters are found significant and powerful in 10 typical regimes (Regime-1s) and in 5 extreme regimes (Regime-2s). Finally, the outcome of VECMs from (iii) yields that short-term adjustment parameters are found significant and powerful in two typical regimes and in four extreme regimes. Eventually, considering FDI’s positive impact in the short and long run, this article suggests that policymakers promote specifically the FDI inflows to the sectors of intermediate goods, manufacture of beverages, manufacture of rubber and plastic and manufacture of other nonmetallic mineral products.     

Would Roman Soldiers Fight for the Financial Flows Regime? The Re-issue of Diocletian's Edict in the English NHS

Some 17 centuries after the Roman Emperor Diocletian attempted to set prices across the Roman Empire, a system of national prices (tariffs) is being introduced to the English National Health Service (NHS) to enhance patient choice. Initially, fixed prices will apply to 15 treatments. Costs for these treatments as reported by all NHS providers are examined to ascertain whether the data provide a robust basis for price setting. If prices are calculated such that providers are unable to recover the true costs of efficient service provision, considerable financial disruption could result for no good purpose. The authors explain the lessons that should have been learned from the Roman experiment and the changes that need to be made to avoid repeating the mistakes of the past.     

Environmental governance for sustainable tourism development: Collaborative networks and organisation building in the Antalya tourism region

For more than two decades the attainment of sustainable environmental quality and the protection of environmental assets have been at the forefront of central policy issues in global tourism development. Recently, it has been argued that collaborative and associative forms of governance among tourism companies and other related agents are growing in importance in the drive for sustainable and environmentally sensitive tourism. Despite the increasing number of debates on the role of networking on tourism they are not well supported by empirical studies, and still far from explain how such networks can contribute to the sustainable development of territories. This paper aims to contribute to previous literature by analysing together governance networks and literature on sustainable development, and by providing empirical findings that highlight the importance of governance networks in sustainable tourism development, the importance of different scales of collaborative governance networks and the role of organisation building for environmentally sustainable tourism development in Antalya. The paper offers analytical findings on the networks of environmental governance among different types of tourism organisations based on a company-level survey, which reveals an increase in local collaboration and self-help networking based on local concerns and endogenous dynamics among the different actors in tourism. Unfortunately, the findings show that environmental motivations fall far behind economic considerations in networking practices.     

Hedging the black swan: Conditional heteroskedasticity and tail dependence in S&P500 and VIX

The recent financial crisis has accentuated the fact that extreme outcomes have been overlooked and not dealt with adequately. While extreme value theories have existed for a long time, the multivariate variant is difficult to handle in the financial markets due to the prevalent heteroskedasticity embedded in most financial time series, and the complex extremal dependence that cannot be conveniently captured by a single structure. Moreover, most of the existing approaches are based on a limiting argument in which all variables become large at the same rate. In this paper, we show how the conditional approach of Heffernan and Tawn (2004) can be implemented to model extremal dependence between financial time series. We use a hedging example based on VIX futures to demonstrate the flexibility and superiority of the conditional approach against the conventional OLS regression approach.     

Value Creation by Active Investors (and Its Potential for Addressing Social Problems)

A distinguished Columbia academic discusses the methods and outcomes of “active investing” with the co‐founder of a leading private equity firm and a former senior partner of a well‐known hedge fund. In the case studies used by both panelists to illustrate their investment selection and management processes, the investors provided not only capital, but oversight and expertise that helped bring about significant increases in the productivity and value of their portfolio companies. What's more, in both cases, the changes that contributed to high returns for investors also ended up having major benefits for the companies' non‐investor stakeholders, especially their consumers. In the first of the two cases, Paul Hilal explains the thinking behind Pershing Square's $1.1 billion purchase of 14% of the Canadian Pacific Railway in 2012. With the help of intensive “fundamental” analysis of the company, Hilal recognized that Canadian Pacific was substantially underperforming its rival, the Canadian National Railway, in a number of important ways. And when CP's management and board rejected his plan for changes, Hilal led a proxy battle that ended in a landslide victory for the proposed slate of directors, including Hilal himself. Then, after bringing in a new CEO, the restructured board presided over operating changes that, during Pershing's four‐year ownership, increased the market value of CP from $8 billion to $30 billion. By 2016, when Pershing sold its investment (for $4 billion), Canadian Pacific was “shipping 20% more freight … 40% faster than ever before, with record on‐time performance, 40% fewer locomotives, 35% fewer people, and 14% improved fuel efficiency—all while maintaining an industry‐leading safety record.” In the second case, Russ Carson describes the success of Welsh, Carson, Anderson, and Stowe in turning its purchase in 1998 of a single oncology practice in Denver into a publicly traded company with more than 90 outpatient cancer centers throughout the U.S. When it was sold in 2011, US Oncology was producing $4 billion in revenue while employing 1,000 oncologists, who, as significant equity owners, shared in the success of Welsh Carson. Using modern management techniques to create “enormous efficiencies out of an extraordinarily fragmented system,” Carson and his colleagues created “the single largest—and, by all accounts, most reputable—outpatient provider of cancer services in the country.” One of the keys to this success was “getting the doctors to spend their time seeing patients, not looking for records,” which contributed greatly to Welsh Carson's ability to improve “both the quantity and quality of cancer care in the 90 communities that we were operating in.”     

GIS-Based Hedonic Pricing of Landscape

Hedonic prices of landscape are estimated in the urban fringe of Dijon (France). Viewshed and its content as perceived at ground level are analyzed from satellite images supplemented by a digital elevation model. Landscape attributes are then fed into econometric models (based on 2,667 house sales) that allows for endogeneity, multicollinearity, and spatial correlations. Results show that when in the line of sight, trees and farmland in the immediate vicinity of houses command positive prices and roads negative prices; if out of sight, their prices are markedly lower or insignificant: the view itself matters. The layout of features in fragmented landscapes commands positive hedonic prices. Landscapes and features in sight but more than 100–300~m away all have insignificant prices.