Economic Significance of the Predictable Movements in Futures Returns

This paper tests whether the variation in expected futures returns reflects rational pricing in an efficient market or weak-form market inefficiency. The issue is investigated by looking at the abnormal performance of a trading rule based on available information. Once one allows for time-varying risk and time-varying risk premia, the investment strategy can be used consistently to generate abnormal returns in seven out of 26 markets. With relatively few exceptions therefore, the predictable movements in futures returns reflect weak-form market efficiency. The paper also shows that wrongly assuming constant expected returns may lead to incorrect inferences regarding market efficiency.
(J.E.L.: G14, G12).     

Industrial Clusters and Corporate Social Responsibility in Developing Countries: What We Know,What We do not Know,and What We Need to Know

This article provides a review of what we know, what we do not know, and what we need to know about the relationship between industrial clusters and corporate social responsibility (CSR) in developing countries. In addition to the drivers of and barriers to the adoption of CSR initiatives, this study highlights key lessons learned from empirical studies of CSR initiatives that aimed to improve environmental management and work conditions and reduce poverty in local industrial districts. Academic work in this area remains embryonic, lacking in empirical evidence about the effects of CSR interventions on the profitability on local enterprises, workers, and the environment. Nor do theoretical frameworks offer clear explanations of the institutionalization and effects of CSR in local industrial districts in the developing world. Other key limitations in this research stream include an excessive focus on export-oriented industrial clusters, the risk that CSR becomes a form of economic and cultural imperialism, and the potential for joint-action CSR initiatives in clusters of small and medium-sized enterprises to offer a new form of greenwashing. From this review, the authors develop a theoretical model to explain why CSR has not become institutionalized in many developing country clusters, which in turn suggests that the vast majority of industrial clusters in developing countries are likely to engage in socially irresponsible behavior.     

Natural resources and non-cooperative trade policy

When looking at the conditions of trade in natural resources the world appears upside down: tariff protection in natural resources sectors is generally lower than for overall merchandise trade, while export restrictions are twice as likely as in other sectors. On the other hand, tariff escalation is significant in natural resources sectors, where materials in their raw state face, on average, lower duties than in their processed form. In this paper, we discuss how export taxes and tariff escalation may be the result of an uncooperative trade policy. Specifically, tariff escalation and export taxes can be “beggar-thy-neighbor” policies because governments may be tempted to use them to alter the relative price of exports to their advantage (terms-of-trade effect) or to expand the domestic processing industry at the expenses of foreign production (production relocation effect). In equilibrium, these policies offset each other in a Prisoners’ Dilemma situation, where trade is inefficiently low.     

Longevity Risk Management in Singapore's National Pension System

Although annuities are a theoretically appealing way to manage longevity risk, in the real world relatively few consumers purchase them at retirement. To counteract the possibility of retirees outliving their assets, Singapore's Central Provident Fund, a national defined contribution pension scheme, has recently mandated annuitization of workers’ retirement assets. More significantly, the government has entered the insurance market as a public‐sector provider for such annuities. This article evaluates the money's worth of life annuities and discusses the impact of the government mandate and its role as an annuity provider on the insurance market.     

Price adjustment strategy under conditions of high inflation: An empirical examination

Price adjustment strategy is a central problem to businesses operating under conditions of high inflation. Three different approaches to the problem are presented and some of their implications tested empirically by means of a unique data set. The empirical observations do not support any of the three traditional approaches.     

Economic aspects of diffusion models

This paper presents possible effects of economic and marketing variables on the diffusion process of new products. The variables examined are price, advertising, and consumer's income. It is shown that under certain conditions the diffusion process depends on the income elasticity of the new product introduced.     

A Test of the Advertising Life-cycle Theory

New evidence is presented that lends support to Steiner's advertising life-cycle theory.     

Competition in consumption as viewed by Jewish law

Competition is the most basic force traditionally regarded by Western economists as governing both society's resources allocation and income distribution. No wonder, then, that many legal systems have been concerned with various aspects of competitive activity, and formulated laws and rulings to keep market behavior within limits of ethical conduct. Jewish law has not been an exception. The focus of this paper is on competition in consumption. Its underlying assumption is that lawmakers' decisions approximate optimality in resource allocation. The validity of the ‘optimality’ assumption is assessed in light of the special moral features unique to Jewish law. Yehoshua Lieberman is Senior Lecturer in Business and Economics at the Department of Economics and Business Administration of Bar-Ilan University, Israel. Previously he was Visiting Associate Professor at the Department of Marketing of the University of Washington at Seattle. His most important publications areElements of Talmudic Monetary Thought andThe Coase Theorem in Jewish Law.