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Article
Publication date: 2 October 2009

Osama D. Sweidan

The purpose of this paper is to examine the hypothesis that a central bank's asymmetric preferences are able to explain inflation rate in a developing country. In…

Abstract

Purpose

The purpose of this paper is to examine the hypothesis that a central bank's asymmetric preferences are able to explain inflation rate in a developing country. In addition, it seeks to help comprehend movements of inflation rate in Jordan and to understand Central Bank of Jordan preferences regarding inflation rate and output.

Design/methodology/approach

A standard monetary model consists of a central bank's loss function and an economy structure is constructed, which acts as a constraint on the central bank's behavior. Then, a distribute‐lag version of the derived model is estimated using ordinary least squares method.

Findings

The empirical evidence from the Jordanian economy shows that inflation rate relies on the variances of inflation rate and the variances of output. This finding supports the hypothesis that a central bank's asymmetric loss function is able to justify inflation rate movements. Moreover, the Jordanian central banker prefers higher inflation rate and higher level of output.

Originality/value

The paper provides evidence from a developing country regarding the ability of the asymmetric central bank preferences to justify inflation rate movement. In addition, the paper links central banks' losses with the uncertainty level and inflation rate in the economy.

Details

Studies in Economics and Finance, vol. 26 no. 4
Type: Research Article
ISSN: 1086-7376

Keywords

Article
Publication date: 21 October 2022

Shijuan Wang, Linzhong Liu, Jin Wen and Guangwei Wang

It is necessary to implement green supply chains. But green development needs to be gradual and coexist with ordinary products in the market. This paper aims to study the…

Abstract

Purpose

It is necessary to implement green supply chains. But green development needs to be gradual and coexist with ordinary products in the market. This paper aims to study the green and ordinary product pricing and green decision-making under chain-to-chain competition.

Design/methodology/approach

This paper considers consumers' multiple preferences and takes two competitive supply chains with asymmetric channels as the research object. Through the construction of the game models involving different competitive situations, this paper studies the pricing, green decision-making and the supply chains' profits, and discusses the impact of consumer green preference, channel preference, green investment and competition on the decision-making and performance. Finally, this paper further studies the impact of the decision structure on the environmental and economic benefits of supply chains.

Findings

The results show that consumer green preference has an incentive effect on the green supply chain and also provides an opportunity for the regular supply chain to increase revenue. Specifically, consumers' preference for green online channels improves the product greenness, but its impact on the green retailer and regular supply chain depends on the green investment cost. Moreover, competition not only fosters product sustainability, but also improves supply chain performance. This paper also points out that the decentralization of the regular supply chain is conducive to the environmental attributes of the green product, while the environment-friendly structure of the green supply chain is different under different conditions. In addition, the profit of a supply chain under centralized decision is not always higher than that under decentralized decision.

Originality/value

The novelty of this paper is that it investigates the pricing of two heterogeneous alternative products and green decision-making for the green product under the competition between two supply chains with asymmetric channels, in which the green supply chain adopts dual channels and the regular supply chain adopts a single retail channel.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

Keywords

Article
Publication date: 25 January 2008

Martin Hingley, Valeria Sodano and Adam Lindgreen

The purpose of this article is twofold: first, to review the literature in order to assess the opportunities and the possible welfare effects of differentiation strategies…

7045

Abstract

Purpose

The purpose of this article is twofold: first, to review the literature in order to assess the opportunities and the possible welfare effects of differentiation strategies in the food market; and second, to analyse the current structure and organisation of the fresh produce market (fruit, vegetable, and salad) in the light of new product procurement, innovation, and differentiation policies carried out by retailers at the global level.

Design/methodology/approach

The paper used a single dyadic case study across two countries (Italy and the UK): the primary producer is engaged in “partner” supply to a principal category management intermediary for channel leading multiple retailers.

Findings

First, equilibrium in differentiated markets is not stable, and a welfare assessment is difficult. Second, a differentiation strategy in the market for fresh produce might benefit retailers more than in other sectors, which seem to be consistent with the theoretical findings. Third, when retailers engage in product differentiation it is more likely that channel relationships shift from collaborative to competitive types, with the power imbalance becoming the disciplinary means by which vertical coordination is achieved and maintained.

Research limitations/implications

This article was based on a single case study.

Practical implications

For suppliers it could be wise to agree to some inequity as the cost of doing business, especially when smart large retailers carry out successfully competitive strategies with positive spill‐over effects on the upstream firms.

Originality/value

Using the industrial economic literature on the effects of differentiation strategies (horizontal and vertical differentiation) on market structure, firms' performance, and welfare effects, this paper analyses case findings from a study in the fresh produce industry and will be of interest to those within the field.

Details

British Food Journal, vol. 110 no. 1
Type: Research Article
ISSN: 0007-070X

Keywords

Article
Publication date: 13 April 2012

Sudhanshu Kumar, Naveen Srinivasan and Muthiah Ramachandran

In the past two decades, there has been a remarkable decline in inflation in both developed and developing countries, in sharp contrast to the period immediately preceding…

Abstract

Purpose

In the past two decades, there has been a remarkable decline in inflation in both developed and developing countries, in sharp contrast to the period immediately preceding it. Interestingly, the behaviour of inflation in India broadly exhibits such a pattern. For much of the 1970s and 1980s, India experienced recurrent bouts of high inflation together with sub‐par economic performance. Since the 1990s the inflation record has been far better. The purpose of this paper is to answer an important question about what ultimately brought on this improved economic outcome.

Design/methodology/approach

A time‐varying parameter model for inflation is proposed which nests all the plausible explanations. The time variation in parameters is modelled as driftless random walks, and is estimated using the median unbiased estimator. The median unbiased estimate helps in addressing the pile‐up problem, which arise if variances of the state specification are small. In such cases the maximum likelihood estimates are biased towards zero. Kalman Filter algorithm is used to obtain the time path of the parameters of the reduced form equation.

Findings

The estimated time paths of the reaction function coefficients suggest gradual changes in the rule coefficients. It has been found that while better monetary policy and structural change have played a non‐trivial role, good luck and exchange rate regime have played a major role in the moderation of inflation in the 1990s. This interpretation suggests that to prevent a resurgence of 1970s‐style inflation, the central bank should reinforce as much as possible its commitment to low inflation by institutional, operational, and rhetorical means. Otherwise, sooner or later, luck will dry out and high inflation could return.

Originality/value

A time‐varying parameter model for inflation in India is proposed which nests the various plausible explanations for moderate inflation in the recent decade. Most empirical and theoretical studies on inflation dynamics have concentrated on developed economies. This paper pays attention to the international dimension of the issue. The reduced form model is estimated using time‐varying parameter estimation technique.

Details

Indian Growth and Development Review, vol. 5 no. 1
Type: Research Article
ISSN: 1753-8254

Keywords

Article
Publication date: 24 September 2020

Diego Ferreira, Andreza Aparecida Palma and Marcos Minoru Hasegawa

This paper analyzes the potential presence of time-varying asymmetries in the preference parameters of the Central Bank of Brazil during the inflation targeting regime.

Abstract

Purpose

This paper analyzes the potential presence of time-varying asymmetries in the preference parameters of the Central Bank of Brazil during the inflation targeting regime.

Design/methodology/approach

Given the econometric issues inherent to classical time-varying parameter (TVP) regressions, a Bayesian estimation procedure is implemented in order to provide more robust parameter estimates. A stochastic volatility specification is also included to take into account the potential presence of conditional heteroskedasticity.

Findings

The obtained results show that the reduced form and structural parameters were not constant during the period considered. Moreover, the subsequent analysis of the preference parameters provided evidences of short periods in which asymmetry was an important feature to the conduction of monetary policy in Brazil. Yet, during most of the sample period, the loss function was considered to be symmetrical.

Originality/value

This paper aims to contribute to the rather scarce monetary debate on time-varying central bank preferences. The study of Lopes and Aragón (2014) is, to the best of the authors’ knowledge, the only study for Brazil considering specifically TVPs. The authors applied Kalman filter estimation to data from 2000:M1 to 2011:M12. Despite the similar structure of TVPs, the present paper extends the latter study by controlling for stochastic volatility. Ignoring conditional heteroskedasticity might lead to spurious movements in time-varying variables and inaccurate inference (Hamilton, 2010). Thus, the stochastic volatility specification is included to take this issue into account. The authors follow the theoretical scheme put forward by Surico (2007) and Aragón and Portugal (2010), in which the economy is modeled from a New Keynesian perspective and the central bank loss function is assumed to be asymmetric regarding the responses to inflation and output deviations from their targets. On the empirical side, the authors propose a TVP univariate regression with stochastic volatility for the Brazilian reduced-form reaction function, following closely the Bayesian econometric procedure developed by Nakajima (2011). Given the nonlinear non-Gaussian nature of the TVP regression with stochastic volatility, the choice of a nonlinear Bayesian approach using the Markov chain Monte Carlo (MCMC) method is justified due to the intractability of the associated likelihood function (Primiceri, 2005). Finally, based on the theoretical model specification, the authors intend to recover the central bank preference parameters as to further evaluate the degree of asymmetry and its potential time-variation under the inflation targeting regime.

Details

Journal of Economic Studies, vol. 48 no. 4
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 15 June 2021

Tingting Zhang, Desheng Wei, Zhifeng Liu and Xihao Wu

This paper studies the effects of lottery preference on stock market participation at the macro level.

Abstract

Purpose

This paper studies the effects of lottery preference on stock market participation at the macro level.

Design/methodology/approach

The authors use the abnormal search volume intensity for lottery-related keywords from the Baidu search engine to capture retail investors' lottery preference. To measure stock market participation, they use five different macro-level measures from various angles. They perform the time series regression analysis in their empirical study.

Findings

First, the validation tests show that the lottery preference index in this study is reasonable. Further, the authors find that lottery preference increases people's propensity to enter and trade in the stock market. Besides, they find that the effect on trading behavior is asymmetric, that is, high lottery preference has a more significant impact on trading behavior than low lottery preference. However, lottery preference has no significant effect on the stockholding.

Originality/value

This paper contributes to the growing literature that examines the determinants of stock market participation and the role of lottery/gambling preference in the financial market. It also provides direct and novel evidence for Statman's (2002) conclusions about the similarity of lottery players and stock traders.

Details

China Finance Review International, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2044-1398

Keywords

Abstract

Details

Central Bank Policy: Theory and Practice
Type: Book
ISBN: 978-1-78973-751-6

Article
Publication date: 27 September 2011

David C. Broadstock, Alan Collins and Lester C. Hunt

The aim of this paper is to establish the role of asymmetric price decompositions in UK road transportation fuel demand, make explicit the impact of the underlying energy…

1404

Abstract

Purpose

The aim of this paper is to establish the role of asymmetric price decompositions in UK road transportation fuel demand, make explicit the impact of the underlying energy demand trend, and disaggregate the estimation for gasoline and diesel demand as separate commodities.

Design/methodology/approach

Dynamic UK transport oil demand functions are estimated using the Seemingly Unrelated Structural Time Series Model with decomposed prices to allow for asymmetric price responses.

Findings

The importance of starting with a flexible modelling approach that incorporates both an underlying demand trend and asymmetric price response function is highlighted. Furthermore, these features can lead to different insights and policy implications than might arise from a model without them. As an example, a zero elasticity for a price‐cut is found (for both gasoline and diesel), implying that price reductions do not induce demand for road transportation fuel in the UK.

Originality/value

The paper illustrates the importance of joint modelling of gasoline and diesel demand incorporating both asymmetric price responses and stochastic underlying energy demand trends.

Details

Journal of Economic Studies, vol. 38 no. 5
Type: Research Article
ISSN: 0144-3585

Keywords

Book part
Publication date: 17 July 2007

Richard Reeves-Ellington

Organizational studies of time tend to be done by academic researchers rather than practitioners. This chapter builds on academic research to provide a practitioner…

Abstract

Organizational studies of time tend to be done by academic researchers rather than practitioners. This chapter builds on academic research to provide a practitioner perspective by reviewing time situated in theory and constructing two phenotypes: timescapes of business and social time. These timescapes are defined by six dimensions, each with a social and business time parameter. Organizational business and social timescapes have different functions and applications. Timescapes, with their concomitant dimensions and sets of parameters, are used differently by senior managers, middle managers, and entry-level managers. Three multi-level approaches (self, dyadic, and social relationships), composition theory, and compilation theory confirm these three managerial timescape usages. After a review of the theoretical bases of the timescape constructs and a brief discussion of the grounded, anthropological, research methodology used in the study, this chapter applies timescape theory and models to an extended time case study of the Procter & Gamble Company that frames the company's timescape understanding and use from a practitioner's view.

Details

Multi-Level Issues in Organizations and Time
Type: Book
ISBN: 978-0-7623-1434-8

Article
Publication date: 10 May 2021

Carlos Pombo and Maria Camila De La Hoz

This paper examines how the board of directors' attributes in terms of educational and professional backgrounds –that is board capital-, and demographics influence…

Abstract

Purpose

This paper examines how the board of directors' attributes in terms of educational and professional backgrounds –that is board capital-, and demographics influence institutional ownership across listed companies in Latin America.

Design/methodology/approach

Based on unique hand-collected information of directors' educational and professional attributes across 427 firms in Latin America, the authors analyze the effects of directors' educational attainment, professional experience and demographic diversification on institutional investors' holdings.

Findings

Results show that grey investor ownership favors directors with graduate studies and diverse boards regarding gender and nationality. Independent investors value the directors' professional experience like former founders of a firm. Grey investors are more concerned with firm corporate governance mechanisms, consistent with the agency view. In contrast, independent institutional investors focus on business opportunities following the board of directors' resource-based view.

Research limitations/implications

This study shows that board capital becomes a key determinant for institutional ownership in emerging markets.

Originality/value

This study extends previous literature on institutional investor preferences by providing empirical evidence that firm board capital becomes a collective asset that is central for institutional investors' investment choices for an emerging market case.

Details

Managerial Finance, vol. 47 no. 10
Type: Research Article
ISSN: 0307-4358

Keywords

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