A new interpretation of the “normalizing” or “balancing” factors of gravity-type spatial models

As the title implies, this paper provides a new way of viewing the so-called “normalizing” or “balancing” factors of generalized gravity-type spatial models. This new interpretation—a more precise version of an earlier interpretation offered by Wilson—is made in terms of the notions of origin and destination accessibilities which are shown to implicitly underly the model.The first part of the paper discusses several previous interpretations of balancing factors. The notions of origin and destination accessibilities are presented in the second section. The third section provides new interpretations of balancing factors in terms of these accessibility notions. The fourth section presents some new modeling results which are made possible by this new interpretation of balancing factors. The fifth and final section of the paper discusses a potentially fruitful direction for further research.     

Numeric or weighted distribution? The effect of different channel performance metrics on market share

Abstract

Previous studies have found a convex relation between weighted measures of distribution and market share for consumer products in developed economies, while companies in emerging markets often use a non-weighted (numeric) distribution measure to manage their channel strategy. In contrast to the markets with high retail concentration, the numeric distribution could be best suited to a more fragmented retail market in which the percentage of physical distribution is important. We investigate the effects of expanding numeric versus expanding weighted distribution by studying stores in channels and regions characterized by structural differences in an emerging market. Our data come from retail audits in Brazil and include 91 soft drink manufacturers, 195 brands and 1,110 stock-keeping units. Our study highlights the importance of numeric distribution as a performance measure in this market. Additionally, we show that the effects of numeric and weighted distribution on market share vary by region and channel format.     

A tale of two states: asymmetries in the UK small,value and momentum premiums

This article performs comparative analysis of the asymmetries in size, value and momentum premium and their macroeconomic determinants over the UK economic cycles, using Markov switching approach. We associate Markov switching regime 1 with economic upturn and regime 2 with economic downturn. We find clear evidence of cyclical variations in the three premiums, most notable being that in the size premium, which changes from positive in expansions to negative in recessions. Macroeconomic indicators prompting such cyclicality the most are variables that proxy credit market conditions, namely the interest rates, term structure and credit spread. Overall, macro factors tend to have more significant impact on the three premiums during economic downturns. The results are robust to the choice of information variable used in modelling transition probabilities of the two-stage Markov switching model. We show that exploiting cyclicality in premiums proves particularly profitable for portfolios featuring small cap stocks in recessions at a feasible level of transaction costs.     

Do Portuguese private firms follow pecking order financing?

This paper tests for pecking order behavior in medium-sized private Portuguese firms. In contrast to the usual split between internal funds, debt, and external equity, we separate debt into four components – cheap trade credits (CTC), bank loans (BL), other loans, and expensive credits (EC). We use breakpoint tests to identify when firms switch between funding sources by examining the change in each funding source based on the financing deficit remaining after the previous pecking order funding source has been used. Our tests indicate that Portuguese companies generally move from lower cost to higher cost financing sources, but they do not exhaust each type of debt before moving on to the next funding source in the pecking order. Such behavior is consistent with a loose interpretation of pecking order financing, but not a strict interpretation of the theory. Instead, Portuguese firms may be balancing pecking order financing with a need to maintain some degree of financing flexibility.     

Convention tourism modelling

This paper introduces an approach for identifying the determinants of convention attendance at alternative cities. This approach permits planners to evaluate the relative importance of accessibility and attractiveness variables as determinants of convention attendance for each site. Four major convention sites in the USA are analysed to illustrate the procedure. In this example, accessibility was found to be far more important than attractiveness.     

Cheating,emotions, and rationality: an experiment on tax evasion

The economics-of-crime approach usually ignores the emotional cost and benefit of cheating. In this paper, we investigate the relationships between emotions, deception, and rational decision-making by means of an experiment on tax evasion. Emotions are measured by skin conductance responses and self-reports. We show that the intensity of anticipated and anticipatory emotions before reporting income positively correlates with both the decision to cheat and the proportion of evaded income. The experienced emotional arousal after an audit increases with the monetary sanctions and the arousal is even stronger when the evader’s picture is publicly displayed. We also find that the risk of a public exposure of deception deters evasion whereas the amount of fines encourages evasion. These results suggest that an audit policy that strengthens the emotional dimension of cheating favors compliance.     

Emotions,Sanctions, and Cooperation

We use skin conductance responses and self‐reported hedonic valence to study the emotional basis of cooperation and punishment in a social dilemma. We argue that the availability of sanctions sets in motion a “virtuous emotional circle” that accompanies cooperation. Emotional reaction to free riding leads cooperators to apply sanctions. In response, and in addition to the monetary consequences of receiving sanctions, the negative emotions experienced by the free‐riders when punished lead them to increase their subsequent level of cooperation. The outcome is an increased level of cooperation that becomes a new norm. Therefore, emotions sustain both the use of altruistic punishment and cooperation.     

Full disclosure of tender evaluation models: Background and application in Portuguese public procurement

Public procurement rules in the European Union require that public contracting authorities must publish all tender evaluation criteria and its weights in advance. In order to define sound weights, the authors argue that the scoring rules for all evaluation criteria must be defined beforehand. Furthermore, the authors further argue that those scoring rules should also be published, in order to provide much more relevant and meaningful information for tenderers when preparing their tenders. Based on these evidences, the Portuguese Public Contracts Code compels public contracting authorities in Portugal to publish the comprehensive tender evaluation model in advance. This paper presents the Code, outlines the feasibility of establishing such a model in advance, addresses detailed instructions on how to go about in developing and applying it, and submits that existing European provisions on public procurement could yet go further in ensuring effective transparency, competition and best value for money tenders.     

Circular economy and sustainability: The role of organizational behaviour in the transition journey

Implementing circular economy (CE) requires complex and dynamic changes in technical and behavioural aspects. Few studies spend efforts to understand the organizational behavioural side of CE transition. Thus, this study proposes a theoretical framework that addresses the requirements for the transition towards CE from the organizational perspective. We conducted a systematic review aiming to identify the relations between CE and organizational culture. As a result, we developed a theoretical framework composed of five building blocks (mindsets, values, behaviours, capabilities and competences) that guide the transition towards a CE-oriented culture aiming to achieve sustainability in business. We also identified several gaps for future researches. We concluded that the framework could enrich the literature discussion in the field and be used by practitioners for the identification of paths to implement CE from the organizational culture perspective. In addition, the use of this framework could lead to the achievement of the sustainable development.     

Policy implications of technology for detecting P2P and copyright violations

The effectiveness of many proposed policies regarding both online copyright protection and network neutrality depend on the extent to which it is technically possible to detect peer-to-peer file sharing (P2P), the transfer of copyrighted files, or both. There are many detection approaches, some performed primarily by network operators and some by application-layer agents. This paper describes capabilities, limitations, privacy issues, and policy implications of detection technologies and their countermeasures, in part through quantitative analysis of empirical data. Different approaches are better for different purposes. Network operators are well-positioned to estimate how widespread copyright violations are, but application-layer detection from outside entities has important advantages when the purpose is punishment. Detection is also imperfect, so policies should require more transparency regarding how it is done than we see today. It is shown that, although network operators may not detect every transfer, and they typically miss more video than audio, they can identify most individuals who share copyrighted files via P2P after several weeks of monitoring provided that traffic is unencrypted, which is useful for some purposes. However, it is also shown that encryption is already in use, and it effectively prevents network operators from detecting transfers of copyrighted content. Thus, if network operators are held responsible for monitoring illegal file sharing, there is a tension between using detection to identify violators of copyright law for punishment, which may motivate even greater use of encryption, and using detection for other purposes such as creating fair compensation schemes for copyright-holders, warning users that they may be violating copyright law, or allocating network resources. Alternatively, there are forms of detection that are not evaded through encryption, and application-layer agents rather than network operators are primarily responsible for these. These copyright policy issues are intertwined with network neutrality policy in subtle ways. Network neutrality rules do not protect illegal transfers of copyrighted content, but if network operators are responsible for enforcement (as in “graduated response”) then regulators must determine when it is reasonable to terminate or degrade service based on allegations of copyright violation given the limitations of detection technology to prove those allegations. Allegations of copyright violation should be considered invalid unless they are accompanied with information about how detection was performed and an opportunity for rebuttal. Such transparency has been routinely lacking in both laws and industry agreements.