Search results

This paper aims to investigate the impact of brand equity (BE) on stock performance (i.e. stock return, volatility and beta), and compare the performance of a high brand equity stocks (HBES) portfolio with that of the overall market during market downturn, market upturn and total disturbance periods of the COVID-19 pandemic in 2020.

Stock performance data and brand valuation estimates are obtained from various sources to assemble a portfolio of HBES and conduct the analyses. Econometric models are estimated to examine the impact of BE on stock performance and compare the HBES portfolio performance versus the overall market.

BE was positively associated with stock return and negatively associated with both types of risk (volatility and beta) during the COVID-19 pandemic. Specifically, during the market downturn period, BE was positively related to stock return and negatively related to stock volatility; during the market upturn period, BE was negatively associated with both types of risk; and during the total disturbance period, BE was positively associated with stock return and negatively associated with both types of risk. Finally, the HBES portfolio outperformed the market (S&P 500 index).

The findings advance the extant research by providing evidence pertaining to brands' role in mitigating the impact of unpredictable market shocks and crises, such as the COVID-19 pandemic, on stock performance. While brands are mostly viewed as drivers of sustained competitive advantage and profitability, their protective role in crisis times is noteworthy.

The research findings potentially help marketing and brand managers to justify marketing spending and craft their strategies to enhance firm performance during crises similar to COVID-19.

The marketing–finance interface can benefit from insights offered by the COVID-19 pandemic, as such crises are becoming prevalent and are capable of damaging various stakeholders' outcomes (firms, investors and customers). The empirical examination is separately conducted on the market downturn, market upturn and total disturbance period attributable to the COVID-19 pandemic.

This paper attempts to examine the transmission of exchange rate changes into the domestic prices together with other important determinants of later, in case of a developing country, namely, India.

In an open economy Philips curve framework, a symmetric model developed by Pesaran et al. (2001) together with a complete asymmetric model developed by Shin et al. (2014) has been applied to assess the transmission of exchange rate changes into the domestic prices (inflation) of India. In addition, non-linear cumulative dynamic multipliers are used to portray the route between disequilibrium position of short run and new long-run equilibrium of the system. The multipliers highlight the asymmetric adjustment paths and/or duration of disequilibrium and therefore add valuable information to the long and short-run asymmetry.

In symmetric framework, exchange rate pass-through is reported to be incomplete and short-run pass through is found to be lower than the long-run pass through. A contractionary monetary policy stance is observed to decrease inflation in the long-run only and in the short-run, a case for price puzzle is observed, although the coefficient is statistically insignificant. Similarly, the impact of output growth is positive in both the short and long-run and both the coefficients are statically significant. Finally, the oil price inflation is also found to escalate the domestic inflationary pressures in both the short and long run, although the pass-through transmission is lower in the short-run than in the long-run. In case of an asymmetric setting, evidence in favour of directional asymmetry is reported whereby long-run impact of currency appreciation is found to be higher than depreciation. Similarly, a contractionary monetary policy action lowers the inflation, the easy one increases it; however, the impact of both the positive and negative changes in interest rate is found to be symmetric. An increase in GR is found to increase the inflation by a relatively appreciable magnitude than is observed when the fall in GR is reported. The possible reason for this asymmetric response of inflation may be explained in terms of asymmetric behaviour of demand conditions during economic upturns and downturns and downward inflexibility of prices. Finally, the transmission of oil price inflation to domestic inflation is also found to be asymmetric. An increase in oil price inflation leads to an increase in domestic inflation by a higher magnitude. whereas a decrease in it lowers inflation only marginally.

From a policy perspective, it is certainly important for the central banks to monitor the exchange rate changes so as to design the appropriate policy actions to resist any inflationary pressures resulting from the external sector. More importantly, a gauge on the factors that lead to destabilizing exchange rate movements or large currency price fluctuations is highly warranted. The results also highlight the relevance of proper domestic demand management and lowering dependence on oil imports to avoid the unnecessary inflation pressures in the economy.

While some studies have explored the possibilities of asymmetric interactions in the case of India, however, these studies have considered only the partial asymmetric model specifications and have not included a well-established theoretical base to include the other potential determinants of inflation as well. In this regard, the authors applied a complete asymmetric model specification developed by Shin et al. (2014) in an open economy Philips curve framework to assess the transmission of exchange rate changes into the domestic prices (inflation) of India. This paper will enrich the existing literature from a viewpoint of a comprehensive analysis of exchange rate pass-through by taking note of potential asymmetries coupled with other important determinants of inflation.

The purpose of this paper is to analyze the network path and internal mechanism of risks’ cross-contagion between shadow banks and design strategies for preventing risk infection between shadow banks.

Using the complex network theory, analyze the mechanism of risks’ cross-contagion between shadow banks from the credit network, business relationship network (BRN) and social network (SN); the cross-contagion mechanism using the structural equation model on the basis of China’s shadow banks is tested; based on the three risk infection paths, the prevention and control strategies for risk infection using the mathematical models of epidemic diseases are designed.

There are three network risk contagion paths between shadow banks. One, the credit network, risks are infected crossly mainly through debt and equity relationships; two, the BRN, risks are infected crossly mainly through business network and macro policy transmission; three, investor SN, risks are infected crossly mainly through individual SN and fractal relationships. The following three strategies for preventing risk’s cross-contagion between shadow banks: one, the in advance preventing strategy is more effective than the ex post control strategy; two, increasing the risk management coefficient; three, reducing the number of risk-infected submarkets.

The research of this study, especially the strategies for preventing the risks’ cross-contagion, could provide theoretical and practical guidance for regulatory authorities in formulating risk supervision measures.

The purpose of this paper is to examine the effects of the organizational slack and acquisition experience on acquisition behavior across varying environmental conditions. Drawing from behavioral theory and the threat-rigidity hypothesis, the paper explores firm acquisition behavior, in terms of type of acquisitions, before and during the recent economic downturn.

Using data on 385 acquisitions in Italy in the period 2007-2010, the paper tests hypotheses on how organizational slack and acquisition experience influence the likelihood of cross-border and diversifying acquisitions relative to domestic, non-diversifying acquisitions prior to and during the economic downturn.

Results suggest that the availability of financial resources and acquisition experience both have an important influence on acquisition behavior. Firms with greater slack and acquisition experience were more likely to make diversifying and/or cross-border acquisitions, compared to domestic non-diversifying acquisitions, particularly during an economic downturn, than firms with lower levels of slack and acquisition experience.

The paper extends behavioral theory and threat-rigidity hypothesis, highlighting their applicability to acquisition behavior across varying economic conditions. Slack resources and acquisition experience appear to be particularly salient during challenging economic times.

Work environments, which are widely acknowledged to exert strong influences on employee attitudes and behavior, have been studied since the initiation of formal work entities. Over this time, scholars have identified myriad impactful internal and external factors. Absent though are investigations examining economic downturns despite their acknowledged pervasiveness and destructive effects on worker performance and well-being. To address this theoretical gap, a multistage model acknowledging the impact of recessions on workplace responses, response effects, and environmental considerations is proposed. Inherent in this discussion is the role of economic decline on reactive change processes, the nature of work, and the structure and design of organizations. These significant changes affect employee attitudes and behaviors in ways that increase the political nature of these work environments. Organizational factors and employee responses to heightened recession-driven politics are discussed. Additionally, theoretically relevant intervening variables capable of influencing work outcomes are described. The chapter is concluded by discussing the implications of this theoretical framework as well as directions for future research.

The purpose of this paper is to examine the financial performance and stress of beginning farmers in the USA with emphasis on the agricultural downturn experienced since 2013.

Using the US Department of Agriculture’s Agricultural Resource Management Survey (ARMS) data, probit models are estimated to study the personal and farm characteristics that affect whether or not the financial ratios fall into critical zones as defined by the Farm Financial Standards Council. The financial ratios involve liquidity, solvency, profitability, efficiency, and repayment capacity.

Beginning farmers are at a greater risk of financial stress on average, with higher likelihood of financial stress in liquidity and efficiency. Further, the recent agricultural downturn has negatively affected liquidity, solvency, and profitability for farmers while repayment capacity does not appear to be affected. During the downturn, beginning farmers are better positioned than the general farming population with respect to liquidity and repayment capacity.

This paper applies current lending practices to a nationally representative sample of farms over a time of changing economic conditions for the agricultural sector.

The paper aims to examine the role of market orientation (MO) and innovation capability in determining business performance during an economic upturn and downturn.

The data comprise two national-level surveys conducted in Finland in 2008, representing an economic boom, and in 2010 when the global economic crisis had hit the Finnish market. Partial least square path analysis is used to test the potential mediating effect of innovation capability on the relationship between MO and business performance during economic boom and bust.

The results show that innovation capability fully mediates the performance effects of a MO during an economic upturn, whereas the mediation is only partial during a downturn. Innovation capability also mediates the relationship between a customer orientation and business performance during an upturn, whereas the mediating effect culminates in a competitor orientation during a downturn. Thus, the role of innovation capability as a mediator between the individual market-orientation components varies along the business cycle.

This paper is one of the first studies that empirically examine the impact of the economic cycle on the relationship between strategic marketing concepts, such as MO or innovation capability, and the firm's business performance.

The purpose of this study was to create a more balanced, comprehensive and valid illustration of the relationships between casino gaming volume and employment during economic downturns in urban and rural locations in nondestination gaming states.

This study analyzes gaming volumes and employment prior, during and after the recession of 2007–2009, using a time series with intervention analysis on a monthly coin in, table drop and regression analysis on employment impacts of casinos.

Findings indicate that while there was a slight drop in gaming revenue and employment figures during the economic downturn, nondestination gaming locations such as Indiana proved relatively resilient to an economic downturn.

The Great Recession had no significant impact on gaming volume because gamblers chose to spend their more limited entertainment dollars on less expensive gaming options; in other words, casinos closer to home requiring the expenditure of fewer dollars on travel and/or hotel rooms. The current pandemic and pressures of the macro-environment again threaten the US gaming and casino market with an economic downturn and the results of this study are as timely as ever for hospitality professionals and social scientists to understand the behavior of casinos in recessionary environments.

This paper aims to propose a new country-level construct, national customer orientation, to provide a benchmark for global headquartered managers’ decisions and scholars investigating cross-national research.

A conceptual framework and unique propositions are developed that focus on how one macro-economic driver, e.g. the wealth of a country, and one macro-marketing driver, e.g. customer price sensitivity, affect national customer orientation during and after global economic downturns such as recessions and a pandemic.

An agenda setting section proposes distinct theoretical, empirical and managerial themes for future research aimed at testing the propositions at the country and organization levels over time.

Although the new construct offers substantial benefits for scholars and managers, current measures of national customer orientation are limited to data provided by the World Economic Forum or expensive primary survey-based research that restrict the number of countries, respondents and time periods.

The new national-level customer orientation construct and propositions about its drivers over time promise to provide global managers a country-level customer-based benchmark so that they can better understand, set expectations and manage customer orientation across different countries over time.

Research on market and customer orientation is consistently designated a priority by academics and practitioners. However, most previous studies exclusively focus at the micro organizational-level, with less known on how customer orientation varies at the macro country-level and over time.

This study aims to render a fundamental assessment of the Basel II internal ratings-based (IRB) approach by taking readings of the Australian banking sector since the implementation of Basel II and comparing them with signals from macroeconomic indicators, financial statistics and external credit ratings. The IRB approach to capital adequacy for credit risk, which implements an asymptotic single risk factor (ASRF) model, plays an important role in protecting the Australian banking sector against insolvency.

Realisations of the single systematic risk factor, interpreted as describing the prevailing state of the Australian economy, are recovered from the ASRF model and compared with macroeconomic indicators. Similarly, estimates of distance-to-default, reflecting the capacity of the Australian banking sector to absorb credit losses, are recovered from the ASRF model and compared with financial statistics and external credit ratings. With the implementation of Basel II preceding the time when the effect of the financial crisis of 2007-2009 was most acutely felt, the authors measure the impact of the crisis on the Australian banking sector.

Measurements from the ASRF model find general agreement with signals from macroeconomic indicators, financial statistics and external credit ratings. This leads to a favourable assessment of the ASRF model for the purposes of capital allocation, performance attribution and risk monitoring. The empirical analysis used in this paper reveals that the recent crisis imparted a mild stress on the Australian banking sector.

Given the range of economic conditions, from mild contraction to moderate expansion, experienced in Australia since the implementation of Basel II, the authors cannot attest to the validity of the model specification of the IRB approach for its intended purpose of solvency assessment.

Access to internal bank data collected by the prudential regulator distinguishes this paper from other empirical studies on the IRB approach and financial crisis of 2007-2009. The authors are not the first to attempt to measure the effects of the recent crisis, but they believe that they are the first to do so using regulatory data.