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In spite of the certain risk imposed by financial stress on the real economy, the relationship between financial stress and economic activity is complicated and underresearched, meaning that important gaps still remain in the authors’ understanding of this critical relationship. Therefore, the current study aims to answer the significant question regarding whether a stressful financial sector has predictive power on the real sector and vice versa. Hence, the study examines the causal interrelationship between financial stress index (FSI) and economic activity in Luxembourg as a sample country.

In this study, accompanying the time domain Granger causality framework of Hacker and Hatemi-J (2012), the authors utilize the spectral causality technique of Breitung and Candelon (2006), which is based on the study of Geweke (1982) and Hosoya (1991). This method enables the researcher to measure the degree of a particular variation in time series. Moreover, it allows considering the nonlinearities and causality cycles. The authors further apply the recent method of Farné and Montanari (2018) that is a bootstrap framework on Granger-causality spectra, which allows for disambiguation in causalities.

The time-domain approach finds evidence of bidirectional causation between the variables. However, the spectral causality results indicate the causal linkages between the series are only valid under the medium-run frequency. This study’s findings emphasize covering the frequency causality to deliver a more comprehensive picture of the interrelationship between the variables.

There are many studies in this area that examine the nexus between financial stress and economic activity. However, the authors believe this paper is the first study in the context of Luxemburg. The authors focus on this country since its financial sector is designated as the most important pillar for the economy. Thus, a careful and reliable examination of the relationship between the financial sector and economic activity is likely to be of considerable interest to policymakers and researchers in this field.

The need for entrepreneurs to engage in guerrilla behavior is heavily emphasized by entrepreneurship educators and practitioners. Yet such behavior often has serious ethical implications. The purpose of this study is to establish an assessment framework that provides ethical guidance to entrepreneurs engaged in guerrilla behaviors. A theoretical foundation for assessing the ethics of guerrilla behavior is established. The entrepreneurial context and how it gives rise to the need for guerrilla actions are examined. The guerilla concept is explored and criteria are outlined for labeling a given action or approach as being guerrilla in nature. Different forms or types of guerrilla approaches are introduced. Five primary ethical dimensions to be considered in evaluating a given guerrilla approach are identified. Examples are provided of how these dimensions can be applied to assess the ethics of three different successful guerrilla campaigns. An integrated matrix is introduced for use in evaluating guerrilla campaigns that consider our ethical dimensions together with leading theoretical perspectives on ethical action. Based on how a given guerrilla approach is scored when using the assessment matrix, conclusions are drawn for its appropriateness. By using a mix of the deontological, utilitarian and virtue-based frameworks, it becomes possible to determine the relative ethics of any given guerrilla action once implemented, and actions can be taken to either modify or abandon the action. Further, the concepts developed in this paper can be useful in ensuring new guerrilla actions are more ethical when they are first conceptualized or designed. Four design elements can be systematically applied to decisions that unfold as the guerrilla action is being formulated: resources and providers, disclosure, stakeholder effects, and inferences/conclusions. A number of suggestions for ongoing research are provided based on the work presented here.

The study aims to examine the export-led growth (ELG) hypothesis for Bangladesh. The direction of causality between export and output largely determines the success of export-oriented trade policies. A unidirectional causality running from export to output growth is required according to the narrow definition, while bidirectional causality is allowed for the broader definition. The study offers the causality inference, both from narrow and broader senses.

The study uses the bootstrap version of Toda and Yamamoto-modified causality tests, a recent development in time series econometrics, robust against the regularity conditions such as stationarity, properties of integration and cointegration and constancy of parameters. It uses monthly secondary data for the period of 1990-2014.

Test results suggest a unidirectional positive causal relationship from exports to output growth, meaning that the policies and strategies supporting exports are promoting output growth and thereby approve the ELG hypothesis for Bangladesh from the narrow sense. However, the absence of bidirectional causality between export and output growth, necessary to support the ELG hypothesis from the broader perspective, discards the conjecture that output growth is reinvigorated through the probable second-round effects of ELG produced from output growth to exports.

Lower investments in infrastructure, technology and education are reasons for the absence of ELG from the broader sense. Therefore, directing returns generated from exports for the development of technology, infrastructure and human capital, with regular and continuous revision of trade-liberalization policies so as to make its exports more competitive in the world market, will help Bangladesh trigger the second-round effect of ELG produced from output growth to exports.

Beyond the conventional approaches, this is the first contemporary time series econometrics causality analysis between export and output growth of Bangladesh, both from narrow and broader senses.

In the finance literature, fitting a cross-sectional regression with (estimated) abnormal returns as the dependent variable and firm-specific variables (e.g. financial ratios) as independent variables has become de rigueur for a publishable event study. In the absence of skewness and/or kurtosis the explanatory variable, the regression design does not exhibit leverage – an issue that has been addressed in the econometrics literature on the finite sample properties of heteroskedastic-consistent (HC) standard errors, but not in the finance literature on event studies. The paper aims to discuss this issue.

In this paper, simulations are designed to evaluate the potential bias in the standard error of the regression coefficient when the regression design includes “points of high leverage” (Chesher and Jewitt, 1987) and heteroskedasticity. The empirical distributions of test statistics are tabulated from ordinary least squares, weighted least squares, and HC standard errors.

None of the test statistics examined in these simulations are uniformly robust with regard to conditional heteroskedasticity when the regression includes “points of high leverage.” In some cases the bias can be quite large: an empirical rejection rate as high as 25 percent for a 5 percent nominal significance level. Further, the bias in OLS HC standard errors may be attenuated but not fully corrected with a “wild bootstrap.”

If the researcher suspects an event-induced increase in return variances, tests for conditional heteroskedasticity should be conducted and the regressor matrix should be evaluated for observations that exhibit a high degree of leverage.

This paper is a modest step toward filling a gap on the finite sample properties of HC standard errors in the event methodology literature.

In all existing theoretical papers on causality it is assumed that the lag length is known a priori. However, in applied research the lag length has to be selected before testing for causality. The purpose of this paper is to suggest that in investigating the effectiveness of various Granger causality testing methodologies, including those using bootstrapping, the lag length choice should be endogenized, by which we mean the data‐driven preselection of lag length should be taken into account.

The size and power of a bootstrap test with endogenized lag‐length choice are investigated by simulation methods. A statistical software component is produced to implement the test, which is available online.

The simulation results show that this test performs well. An application of the test provides empirical support for the hypothesis that the UAE financial market is integrated with the US market.

The empirical results based on this test are expected to be more precise.

This paper considers a bootstrap test for causality with endogenous lag order. This test has superior properties compared to existing causality tests in terms of size, with similar if not better power and it is robust to ARCH effects that usually characterize financial data. Practitioners interested in causal inference based on time series data might find the test valuable.

The purpose of this paper is to investigate whether the Australian equity market is informationally efficient in the semi‐strong form with regard to interest rates and the exchange rate shocks during the period 1994‐2006.

There is evidence that the data are non‐normal and that autoregressive conditional heteroskedasticity (ARCH) effects exist and in such circumstances, standard estimation methods are not reliable. A new method introduced by Hacker and Hatemi‐J which is robust to non‐normality and the presence of ARCH is applied.

The results show the Australian equity market is not informationally efficient with regard to either the interest rate or the exchange rate.

The empirical findings, in contrast to several previous studies, imply that the possibility for arbitrage profits in the equity market might exist.

The purpose of this paper is to examine how major changes in an industry may differentially affect firms based on their organizational structure. The authors examine midstream oil and gas firms, comparing master limited partnerships (MLPs or uncorporates) with more traditional midstream corporate firms when the industry changed from one that was considered mature to a more rapid growth industry.

Non-parametric comparisons of returns, distributions, and operating ratios are presented across the two organizational forms and across two distinct industry activity periods. The risk-adjusted return analysis, including Fama and French factors, incorporates a wild bootstrap to address heteroscedasticity in the data.

In the industry’s mature market period, partnerships provided a significantly greater payout, return, return on equity (ROE), cash flow, and lower leverage, while exhibiting lower levels of systematic risk than corporations. In the later growth period, midstream corporations and partnerships are no longer significantly different in their returns, ROE or margins. MLPs now have significantly higher leverage levels, while continuing to provide significantly higher dividend payouts.

The paper contributes to the literature with an analysis of the effects of a changing industry environment on two different organizational types across a common industry. The authors find that the optimal organizational structure may be dependent on the environment. The findings during the initial period are consistent with prior research comparing publicly traded partnerships and corporations. During the growth phase, the findings lend support to the seminal literature with respect to corporations potentially best-suited to “growth” industries, while highlighting specific results by organizational form.

The purpose of this paper is to compare and contrast the role of government in the development of SMEs in the Maldives and Mauritius. Using tourism SMEs, it seeks to identify, analyse and compare strategies deployed by SMEs operating in an “enabling” and a “constrained” business environment.

An inductive approach to qualitative research is undertaken using seventeen semi-structured interviews with key stakeholders identified though a stakeholder analysis. Using multiple sources (six government officials, eight SME owner/managers, one private bank owner, one academic and one resort owner), variations and consensus in the data were identified through thematic analysis.

The Maldivian Government is less proactive in supporting its SMEs compared to the Mauritian Government. Its failure to facilitate access to finance and provide business support services has led the Maldivian SMEs to use multiple methods of bootstrapping to sustain existing businesses and/or start new ones. In contrast, despite operating in a more enabling business environment, Mauritian SMEs were found to engage in similar strategies due to lack of trust in government-led initiatives.

Policy-makers in island economies can use the findings to inform decision making in SME development planning.

While this research adds to the sparse literature on government and SME development in island economies, it also highlights the relevance of bootstrapping for SMEs operating in economically constrained environments.

In their role as monitors and advisors, boards are expected to address agency conflicts associated with the separation of ownership from control in large corporations. The ability to effectively perform these functions and enhance corporate outcomes largely depends on their influence in decision-making. This paper aims to examine the effect of corporate governance attributes, in the form of board characteristics, on technical efficiency in the South African life insurance industry.

Using the two-stage data envelopment analysis technique, bootstrapped efficiency scores are estimated for 73 insurers from 2007 to 2014 in Stage 1. The truncated bootstrapping procedure of Simar and Wilson (2007) and the tobit estimation techniques are used to examine the effect of corporate governance characteristics and other insurer level attributes on technical efficiency scores in Stage 2 analysis.

The findings suggest that life insurers operate with high levels of inefficiency within a highly independent governance structure. The results from Stage 2 analysis identifies audit committee size and independence to improve efficiency while board independence is found to be detrimental to efficiency.

The findings provide a useful reference point for insurance regulators in developing economies in the formulation of an effective governance mechanism for the efficient operation of the insurance industry.

As far as the authors are concerned, the analysis contained in this paper presents the first empirical assessment of the corporate governance structure and its effects on corporate outcomes in an African insurance market.

Pursuing objectives despite limited internal resources and leveraging external resources despite non‐ownership are familiar hallmarks of entrepreneurial firms. Although outsourcing is the standard way for businesses to surmount these barriers, entrepreneurial firms often lack the resources to purchase outsourcing arrangements. The purpose of this paper is to shed light on how entrepreneurial firms can better procure and benefit from outsourcing arrangements.

The paper examines six entrepreneurial firms in a Shanghai business incubator as they undertook a variety of outsourcing arrangements. It utilizes an integrative framework based on transaction cost theory, resource dependency theory, and the resource‐based view. It then cross‐hatches those three theory bases with four outsourcing modes (full, partial, spinout, inter‐outsourcing) and case study methodology.

The paper's findings yield three novel propositions for strategic and ex ante entrepreneurial firm outsourcing activities. The propositions pertain to the exchange of non‐traditional resources, vendor‐buyer power differentials, and linkages between internal operations and external resources.

Entrepreneurial firms stand to benefit in particularly vital ways from outsourcing arrangements. Yet, they are often severely constrained with respect to resources. Such strong need combined with limited means is a peculiarly valuable setting but only a paucity of research exists. The original study targets this important setting.