Small and Medium Enterprise Financing in Transition Economies

This paper studies the financing status of small and medium enterprises (SMEs) in transition economies. Factors causing financing obstacles are indentified and further analyzed to determine their influence over financing patterns. Bank regulatory practices relevant to SMEs’ access to bank loans and their influence over loan structures are identified. This study contributes to the existing body of knowledge by exploring the impact of specific bank regulatory practices on credit lending to SMEs in transition economies.     

The Accuracy of Design-based Judgments: A Constructivist Approach

Three studies examine how three factors generic to design, its typicality, clarity, and information content, relate to the accuracy of individual judgments about a brand's quality or personality. Study 1 focuses on interpersonal accuracy and shows that consensus in judgments made by managers and consumers are higher for designs high rather than low in typicality, clarity, and information content. Study 2 focuses on the interpersonal accuracy among consumers and finds again that consensus is higher for high typicality, high clarity, and high information designs. Study 3 focuses on intrapersonal accuracy and shows that – when consumers view designs first from a distance and then close – viewer judgments change less (i.e., are higher in consensual accuracy) for designs low on information content, whereas typicality has no effect. Across the studies, individual design acumen enhanced and category involvement attenuated design effects on accuracy. Further, higher accuracy was associated positively with purchase intention, and corresponded with greater ease and speed of judgment formation.     

A note on foreign bank ownership and monitoring: An international comparison

This paper empirically analyzes the relation between foreign bank ownership and the three pillars of the New Basel Capital Accord (i.e., capital regulatory oversight, supervisory oversight, and market discipline). Using a new database covering 153 countries, we find that countries with greater market discipline have a lower presence of foreign banks operating in their economy. Furthermore, our evidence indicates that capital regulatory oversight and supervisory oversight are not significantly related to foreign bank ownership.     

Credibility and Multiple SEOs: What Happens When Firms Return to the Capital Market?

Using a sample of firms that conducted multiple seasoned equity offerings (SEOs) from 1995 to 2012, we examine whether firms can build credibility for subsequent SEOs by following through on their stated use of the proceeds from earlier SEOs. We find that firms that state their intention to invest these funds in projects and those that make no such statements, but do invest have relatively more positive announcement returns around subsequent SEO announcements. Our results suggest that the markets are aware of the potential agency costs of equity, have a long memory, and update their beliefs as to the likely use of funds raised by firms.     

Global Diversification, Industrial Diversification, and Firm Value

Using a sample of 44,288 firm–years between 1984 and 1997, we document an increase in the extent of global diversification over time. This trend does not reflect a substitution of global for industrial diversification. We also find that global diversification results in average valuation discounts of approximately the same magnitude as those for industrial diversification. Analysis of the changes in excess value associated with changes in diversification reveals that increases in global diversification reduce excess value, while reductions in global diversification increase excess value. These findings support the view that the costs of global diversification outweigh the benefits.     

ECONOMETRICS MEETS SENTIMENT: AN OVERVIEW OF METHODOLOGY AND APPLICATIONS

The advent of massive amounts of textual, audio, and visual data has spurred the development of econometric methodology to transform qualitative sentiment data into quantitative sentiment variables, and to use those variables in an econometric analysis of the relationships between sentiment and other variables. We survey this emerging research field and refer to it as sentometrics, which is a portmanteau of sentiment and econometrics. We provide a synthesis of the relevant methodological approaches, illustrate with empirical results, and discuss useful software.     

Advancing the aesthetic middle principle: Trade-offs in design attractiveness and strength

Key design properties of marketing artifacts that influence consumer response include perceived attractiveness (the valenced evaluative response to the artifact) and perceived strength (the artifact’s ability to capture attention). The aesthetic middle principle contends that the designs most effective in generating purchase intentions are counterintuitively not the most attractive and strongest, but rather designs tempered to be moderately attractive and very strong or very attractive and moderately strong. Such designs are visual representations closer to the aesthetic middle, thereby prompting more favorable consumer responses. This research empirically tests the aesthetic middle principle in two consumer field studies, using both simple (typeface) and complex (wine package) designs. In a subsequent controlled experiment, the strongest aesthetic middle effects emerge for hedonic (rather than utilitarian) products and when less product-related information is available. The effects of the aesthetic middle occur regardless of available cognitive resources or individual differences in design acumen.     

Forecasting risk with Markov-switching GARCH models:A large-scale performance study

We perform a large-scale empirical study in order to compare the forecasting performances of single-regime and Markov-switching $\text{GARCH}$ ($\text{MSGARCH}$) models from a risk management perspective. We find that $\text{MSGARCH}$ models yield more accurate Value-at-Risk, expected shortfall, and left-tail distribution forecasts than their single-regime counterparts for daily, weekly, and ten-day equity log-returns. Also, our results indicate that accounting for parameter uncertainty improves the left-tail predictions, independently of the inclusion of the Markov-switching mechanism.