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1 – 10 of over 1000Qiheng Han, Junqing Li and Jianbo Zhang
Based on an uncertainty model with an infinite horizon, this chapter analyzes how financial development and monetary policy in two countries can impact international trade and…
Abstract
Based on an uncertainty model with an infinite horizon, this chapter analyzes how financial development and monetary policy in two countries can impact international trade and capital flows and influence individual behavior and welfare. Our study shows that differences in capital market development are the major contributing factors for trade imbalance and investment among countries. We also find that monetary policies are important factors affecting the trade balance, consumption, and investment. Countries with one-sided, pegging exchange rate policies tend to buy more bonds and enjoy larger trade surpluses. This effect is closely related to the level of capital market development: in these two countries, at higher stages of development, the effects of idiosyncratic monetary policy on imbalance are amplified.
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Part I of this chapter applies the principles of the philosophy of science and the derived scientific method to analyze the foundational concepts and core proposition of the…
Abstract
Part I of this chapter applies the principles of the philosophy of science and the derived scientific method to analyze the foundational concepts and core proposition of the Resource-Base View (RBV) as popularized by Barney (1986, 1991, 1997). This analysis identifies seven fundamental conceptual deficiencies and logic problems in Barney's conceptualization of “strategically valuable resources” and in Barney's VRIO framework for identifying strategically valuable resources that can be sources of sustained competitive advantage. Three problems – the Value Conundrum, the Tautology Problem in the Identification of Resources, and the Absence of a Chain of Causality – relate to the RBV's and VRIO's failure to provide an adequate conceptual basis for identifying strategically valuable resources. The Uniqueness Dilemma, the Cognitive Impossibility Dilemma, and an Asymmetry in Assumptions about Resource Factor Markets result in an inability of the VRIO framework to support identification of resources that can be sources of sustained competitive advantage. More fundamentally, the core proposition of the RBV – that resources that are strategically valuable, rare, inimitable, and organizationally embedded are sources of sustainable competitive advantage – is argued to result directly in the Epistemological Impossibility Problem that precludes use of the scientific method in RBV research. This chapter argues that until these conceptual deficiencies and logic problems are recognized and remedied, the RBV – in spite of its current popularity – is and will remain theoretically sterile and incapable of contributing in any systematic way to the development of strategy theory.
Part II of this chapter then suggests how foundational concepts developed within the competence perspective on strategy provide essential remedies for the identified deficiencies and problems in the RBV – and thereby provide a more conceptually adequate basis for representing the nature of firms in the scientific study of their interactions and competitive outcomes.
Li Weian, Li Xiaoyi and Li Jianbiao
The purpose of this paper is to focus on the characteristics, efficiencies and interaction of many alternative market governance modes, by the approach of comparative…
Abstract
Purpose
The purpose of this paper is to focus on the characteristics, efficiencies and interaction of many alternative market governance modes, by the approach of comparative institutional experimentation.
Design/methodology/approach
First, a highly simplified model of market economy is developed, which is embedded in a three‐layer governance structure. Then the model is transplanted into laboratory experimentation, so the characteristics and efficiencies of different governance modes can be identified by observing the subjects' behaviors under them.
Findings
The experimental results show that the market with governance structure based on rule is more efficient than the market with governance only based on long relation and based on preference or belief, and the dynamic improvement of governance based on rule has a destructive effect on the governance based on relation and governance based on preference or belief.
Originality/value
These results have profound implications for the development or enhancement of market institutions in transition or developing countries.
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Emmanuel Carsamer, Anthony Abbam and Yaw N. Queku
Capital, risk and liquidity are the vitality of the banking industry, which can improve the efficiency of banking and promote the efficiency of resource allocation. The purpose of…
Abstract
Purpose
Capital, risk and liquidity are the vitality of the banking industry, which can improve the efficiency of banking and promote the efficiency of resource allocation. The purpose of this study is to examine how Basel III new liquidity ratios affect bank capital and risk adjustments and how banks respond to the new liquidity rules.
Design/methodology/approach
The authors adopted the system generalized method of moments (GMM) to examine how Basel III new liquidity ratios affect bank capital and risk adjustments and how banks respond to the new liquidity rules. Based on the call reports data from banks, GMM was used to test the hypotheses that new liquidity ratios affect bank capital and risk adjustments, as well as how banks respond to the regulation.
Findings
The results indicate banks targeted capital, risk and liquidity and simultaneously coordinate short-term adjustments in capital and risk. New liquidity measures enable banks to coordinate risk and liquidity decisions. Short-term adjustments in new liquidity rules inversely impact bank capital. Short-term adjustments in new liquidity rules inversely impact bank capital and capital adjustments adversely affect changes in the liquidity coverage ratio (LCR).
Research limitations/implications
The primary results revealed that Ghanaian banks simultaneously coordinate and target capital, risk exposure and liquidity level. Also, capital adjustments positively influence risk adjustments and vice versa while bidirectional negative coordination exists between bank capital and risk on one hand and liquidity on the other hand. Short-term adjustments in new liquidity rule inversely impact bank capital and capital adjustments adversely affect changes in the LCR. The findings partially confirm the theoretical predictions of Repullo (2005) regarding the negative links between capital, risk and liquidity but the authors have higher capital induces higher risk.
Practical implications
Banks should balance off their targeted risk and liquidity in order not to sacrifice capital accumulation for liquidity.
Originality/value
This research offers new contributions in the research of bank management of capital and liquidity toward banks during a financial crisis from a theoretical perspective and trust management from an applicative perspective.
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Wagner Junior Ladeira, Fernando de Oliveira Santini and Marcelo Gattermann Perin
The current research empirically aims to explore how displaying incompleteness influences the processing of product information and the number of products placed in the basket…
Abstract
Purpose
The current research empirically aims to explore how displaying incompleteness influences the processing of product information and the number of products placed in the basket. This paper proposes a model of the effects of display incompleteness to analyze the influence of the processing of product information and product scarcity.
Design/methodology/approach
Four studies were conducted to test a model of the effects generated by the display incompleteness.
Findings
The results suggest that incomplete display increases the processing of product information and the number of products chosen. In addition, it supports that processing product information interacts with incomplete display to predict the number of display products placed in the basket. In this context, perceived scarcity cannot increase the effects of incomplete display on processing product information at low levels of perception. On the other hand, consumers will tend to process more information from incomplete displays when perceived scarcity gradually increases.
Research limitations/implications
The empirical findings have some limitations. First, the authors’ experiments do not define whether scarcity was caused due to excessive demand or restricted supply. Second, the studies do not analyze the perceived exclusivity of the product in short supply. Finally, the studies did not indicate the differences between display incompleteness that showed variety and category scarcity.
Practical implications
The findings demonstrate that one of the ways to get customers' attention would be to have an efficient strategy for displaying incompleteness. Many managers believe the lack of products on display is an inventory management problem. However, the studies show that this can help increase product sales.
Originality/value
This research contributes to developing better metrics to understand the processing of product information in display incompleteness. Overall, the studies have demonstrated the value of measuring visual attention as an expression of processing product information to understand better how people visually process display incompleteness and its effects on consumption responses.
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This paper aims to investigate possibility of statistical detection of market completeness for continuous time diffusion stock market models.
Abstract
Purpose
This paper aims to investigate possibility of statistical detection of market completeness for continuous time diffusion stock market models.
Design/methodology/approach
The paper uses theory of forecasting to find criteria of predictability of market parameters such as volatilities and the appreciation rates.
Findings
It is known that the market completeness is not a robust property: small random deviations of the coefficients convert a complete market model into an incomplete one. The paper shows that market incompleteness is also non-robust: for any incomplete market from a wide class of models, there exists a complete market model with arbitrarily close paths of the stock prices and the market parameters.
Originality/value
The paper results lead to a counterintuitive conclusion that the incomplete markets are indistinguishable in the terms of the market statistics.
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Hélyette Geman and Marie‐Pascale Leonardi
The goal of the paper is to analyse the various issues attached to the valuation of weather derivatives. We focus our study on temperature‐related contracts since they are the…
Abstract
The goal of the paper is to analyse the various issues attached to the valuation of weather derivatives. We focus our study on temperature‐related contracts since they are the most widely traded at this point and try to address the following questions: (i) should the quantity underlying the swaps or options contracts be defined as the temperature, degree‐days or cumulative degree‐days? This discussion is conducted both in terms of the robustness of the statistical modelling of the state variable and the mathematical valuation of the option (European versus Asian). (ii) What pricing approaches can tackle the market incompleteness generated by a non‐tradable underlying when furthermore the market price of risk is hard to identify in other traded instruments and unlikely to be zero? We illustrate our study on a database of temperatures registered at Paris Le Bourget and compare the calls and puts prices obtained using the different methods most widely used in weather markets.
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Ruhong Liu, Jing Long and Longjun Liu
How to improve the resilience of service firms in the crisis, such as the COVID-19 epidemic, to maintain a sustainable competitive advantage becomes a growing concern worldwide…
Abstract
Purpose
How to improve the resilience of service firms in the crisis, such as the COVID-19 epidemic, to maintain a sustainable competitive advantage becomes a growing concern worldwide. Digital platform capability (DPC) provides a series of opportunities and advantages for service firms to shape resilience in the crisis. This study aims to clarify the effect and mechanism of DPC on service firms’ resilience, and provides a new mediator (strategic learning [SL]), as well as two boundary conditions (legal inefficiency [LIE] and legal incompleteness [LIC]).
Design/methodology/approach
Questionnaires were used to obtain firm data, and executives answered these key questions. Data from 293 service firms during the COVID-19 period were used for hypothesis testing.
Findings
DPC was positively related to the adaptive capacity (AC) and planning capacity (PC) of service firms. SL mediated the positive effect of DPC on the AC and PC of service firms. The positive effect between DPC and SL was weakened when LIE and LIC were high.
Practical implications
This study suggests that it is a very desirable measure to improve DPC to gain organizational resilience (OR) in the crisis. In addition, a SL process in the crisis is crucial, because service firms need to absorb key strategic information from digital platforms to cope with uncertainty. The services firms need to realize that the benefits of DPC will be weakened in the dysfunctional institutional environment of LIE and LIC.
Originality/value
To the best of the authors’ knowledge, this study is the first to link the DPC with the resilience of service firms, and provides a new explanation mechanism and some boundary conditions for this important relationship. Furthermore, this study takes a step forward, because these efforts respond to the widespread call of the literature on digitalization and OR, and provide new insights for understanding digital resilience.
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N. C. A. da Costa and Francisco A. Doria
Rice’s Theorem is a notorious stumbling block in Computer Science. We review some previous work of us that shows that we can extend Rice’s result to large segments of everyday…
Abstract
Rice’s Theorem is a notorious stumbling block in Computer Science. We review some previous work of us that shows that we can extend Rice’s result to large segments of everyday mathematics, so that similar stumbling blocks appear in many areas of mathematics, as well as applied areas such as mathematical economics; one of its applications (Koppl’s conjecture) is discussed in some detail. Note: this paper has been written in an informal style.
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