does economic recession reduce material use empirical evidence based on 157 economies worldwide abstract the research on economic recession has been more focused on the interactions between macroeconomic and financial variables however whether material use has been affected during the recession period has remained under explored in order to fill up this gap this study investigates the relationship between material use and economic recession as well as other socio economic drivers by using the material flow analysis and the system generalized method of moments for 157 economies worldwide during 1980 2011 results show that economic recession poses significant and negative impact on domestic material consumption at 1 level illustrating its role as a determinant factor on material mitigation by dividing the research sample into extractive and non extractive economies as well as high mid and low income groups we again confirmed the significant negative correlations as expected no significant sign is found between recession and physical trade balance besides other drivers such as population gross domestic production gdp per capita and technological variables also exert marked effects at different situations this research work provides an empirical study on how recession and other factors affect material use at various scenarios which have essential implications for understanding material flow dynamics in different economic cycles

rebates matches and consumer behavior an experiment conducted to examine the effects of different discount formats on consumer purchases is reported participants made a series of purchase decisions for chocolate bars given 1 rebates from the listed price 2 matching quantities of chocolates for each bar purchased and 3 simple price reductions contrary to standard theoretical predictions and consistent with results in the context of charitable contributions by eckel and grossman 2003 we find that participants purchase significantly more chocolate bars under a matching sales format than under a comparable rebate format inattention to the net consequences of decisions as well as some rebate aversion explain the preference for matching discounts

will business cycles in the euro area converge a critical survey of empirical research this survey of business cycle synchronization in the european monetary union focuses on two issues have business cycles become more similar and which factors drive business cycle synchronization we conclude that business cycles in the euro area have gone through periods of both convergence and divergence still there is quite some evidence that during the 1990s business cycle synchronization in the euro area has increased higher trade intensity is found to lead to more synchronization but the point estimates vary widely the evidence for other factors affecting business cycle synchronization is very mixed

labor s share the firm s market power and total factor productivity we investigate the relationship between labor s share firm s market power and the elasticity of output with respect to labor input using an approach based on an unobserved components model the approach yields time varying estimates of market power and the elasticity evidence on the market power of firms which we find to be rising since 2000 gives a deeper understanding of movements in labor s share and the labor wedge the generated values of the elasticity yield revised estimates of total factor productivity growth which is informative about the extent of the downward bias inherent in traditional estimates which use labor s share as a proxy for the elasticity jel o47 c32 e25

output dynamics in real business cycles models the time series literature reports two stylized facts about output dynamics in the united states gnp growth is positively autocorrelated and gnp appears to have an important trend reverting component this paper investigates whether current real business cycle rbc models are consistent with these stylized facts many rbc models have weak internal propagation mechanisms and must rely on external sources of dynamics to replicate both facts models that incorporate labor adjustment costs are partially successful they endogenously generate positive autocorrelation in output growth but they need implausibly large transitory shocks to match the trend reverting component in output

asset prices credit and the business cycle abstract this paper uses the multivariate unobserved components model with phase shifts to analyse the interaction of interest rates output asset prices and credit in the us we find close linkages amongst cyclical fluctuations in the variables

marketing mix and brand sales in global markets examining the contingent role of country market characteristics marketing products globally is challenging due to the diverse nature of markets we use market heterogeneity unbranded competition resource and infrastructure availability and sociopolitical governance as country market characteristics that distinguish between developed and emerging countries we investigate their moderating role on the relationship between elements of the marketing mix and brand sales we provide evidence from a hierarchical linear model and a panel data set of brands from 14 emerging and developed markets that account for 62 of the global gdp that country market characteristics moderate the relationship between the complete set of marketing mix elements and brand sales performance asymmetrically while distribution and price have the largest impact in emerging and developed countries respectively product innovation and advertising have significantly larger impacts in emerging markets relative to developed countries these finding highlights the importance of contingency view of marketing strategy in global markets

fiscal policy and business cycle characteristics in a heterogeneous agent macro model abstract this paper explores the macroeconomic implications of changing fiscal policy in a heterogeneous interacting agent hia model the key contributions to the existing hia complex adaptive trivial system cats literature include the addition of a progressive income tax structure an expanded role for redistribution and a stylized reactive government sector in certain specifications deficit financed tax cuts are shown to effectively shorten recessions while deficit financed spending stimulus is able to lengthen recoveries alternative specifications provide ambiguous support for generalizing the effectiveness of these policy treatments robustness checks support the general findings that increased redistribution towards the unemployed results in higher unemployment rates greater inequality and shorter contractions

concordance in global office market cycles stevenson s akimov a hutson e and krystalogianni a concordance in global office market cycles regional studies a large proportion of international real estate investment is concentrated in the office markets of the world s largest cities however many of these global cities are also key financial services centres highlighting the possibility of reduced economic diversification from an investor s perspective this paper assesses the degree of synchronization in cycles across twenty of the world s largest office markets finding evidence of significant concordance across a large number of markets the results highlight the problems associated with commonalities in the underlying economic bases of the markets the concentration of investment also raises the possibility of common flow of funds effects that may further reduce diversification opportunities

social ties and international entrepreneurship opportunities and constraints affecting firm internationalization international entrepreneurship involves the identification and exploitation of opportunities for international exchange yet little is known about the entrepreneurial methods used for opportunity recognition while previous work emphasizes effects operating at the level of the business network i propose that the recognition of exchange opportunities is a highly subjective process shaped by entrepreneurs existing ties with others based on interview data collected from 41 managers i develop a comprehensive measure for classifying different methods of opportunity recognition i then use this measure to classify 665 international exchange ventures set up by entrepreneurs in four chinese cities in contrast with past research i find virtually no role for blind luck although the majority of exchange opportunities were discovered rather than sought these discoveries were intentional rather than accidental i also find that entrepreneurs idiosyncratic connections with others both promote and inhibit international exchange tie based opportunities lead to higher quality and more valuable exchanges that are constrained in terms of geographic psychic and linguistic distance from this i conclude that entrepreneurial networks have distinct opportunity horizons that limit the reach of tie based exchanges and potentially lead to sub optimal internationalization trajectories

detrending and turning points this paper examines the sensitivity of turning points classification to different detrending methods and the ability of each method to replicate nber dating we use two different turning point rules and a variety of detrending methods to compute the cyclical component of output we show that while differences are minor with the first rule the results are extremely sensitive to detrending with the second rule many detrending procedures generate false alarms and many miss several commonly classified turning points the output series detrended with the hodrick and prescott filter and with a frequency domain masking of the low frequency components of the series reproduce all nber turning points with at most two quarters lead or lag regardless of the dating rule used

do european business cycles look like one abstract this paper provides a comprehensive framework to analyze business cycle features other than synchronization we use stationary bootstrap and model based clustering methods to analyze similarities and differences among the european cycles we find evidence that the length deep and shape of cycles differ across european countries and that these differences are not decreasing over time finally even though we find some correlation between business cycle synchronization and characteristics there is important information in the characteristics that is not captured by the synchronization measures

measuring business cycles a modern perspective in the first half of this century special attention was given to two features of the business cycle 1 the comovement of many individual economic series and 2 the different behavior of the economy during expansions and contractions both of these attributes were ignored in many subsequent business cycle models which were often linear representations of a single macroeconomic aggregate however recent theoretical and empirical research has revived interest in each attribute separately notably dynamic factor models have been used to obtain a single common factor from a set of macroeconomic variables and nonlinear models have been used to describe the regime switching nature of aggregate output we survey these two strands of research and then provide some suggestive empirical analysis in an effort to unite the two literatures and to assess their usefulness in a statistical characterization of business cycle dynamics

a world trade leading index wtli this paper develops a new monthly world trade leading indicator wtli that relies on a dynamic factor model estimated on set of leading indicators of world trade activity compared to the cpb world trade monitor s benchmark indicator for global trade the wtli captures turning points in global trade with an average lead between 2 and 3 months this new tool can provide policy makers with valuable foresight into the future direction of economic activity by tracking world trade more efficiently

product and promotion adaptation in export ventures an empirical investigation while the desirability of marketing adaptation vs standardization has long been debated within both academic and business circles empirical studies investigating the conditions under which each strategy becomes appropriate have been rare this article provides a formal investigation of the correlates of product and promotion adaptation in export ventures a conceptual framework of product and promotion adaptation in export ventures is proposed to integrate the diverse perspectives on the issue of standardization versus adaptation the conceptual framework is further specified in a testable form and tested via data collected by a series of in depth personal interviews with export marketing managers the results support the contingency perspective recently emerging in the standardization literature and suggest that the degree of the various aspects of product adaptation i e upon and after entry and promotion adaptation i e positioning packaging labeling and promotional approach are significantly influenced by company product industry and export market characteristics however the profile of the correlates varies across the various aspects of product and promotion adaptation

performance effects of added cultural distance in the path of international expansion the case of german multinational enterprises this paper contributes to the debate on the performance impact of added cultural distance in the multinational enterprise s mne s expansion path our research focuses on the ability of mnes to handle complexity associated with added cultural distance in international expansion and on the effect this may have on profitability we hypothesise that firms that make expansion moves involving a high level of added cultural distance per unit of time and those that expand in culturally distant countries in an irregular fashion that is with a higher variability will be less profitable we test these hypothesised relationships using detailed data on 2404 expansion moves undertaken by our panel of 91 german mnes whose expansion paths we tracked during periods ranging between 5 and 20 years

asymmetric phase shifts in u s industrial production cycles abstract we identify cyclical turning points for 74 u s manufacturing industries and uncover new empirical regularities a industries tend to comove between expansion and contraction phases over the business cycle b clusters of industry turning points are highly asymmetric between peaks and troughs troughs are much more concentrated and sharper than peaks c the temporal pattern of phase shifts across industries supports the spillovers through input output linkages and d macroeconomic shocks such as unanticipated changes in monetary policy government spending oil prices and financial conditions are significant drivers of industrial phase shifts

on the severity of economic downturns lessons from cross country evidence abstract we measure the severity of recessions as a function of their amplitude and duration within a quantile regression framework we assess what causes economic downturns to be more or less severe we find that the most severe downturns have striking similarities regarding cumulated domestic credit and large current account deficits

accounting for endogeneity when assessing strategy performance does entry mode choice affect fdi survival firms choose strategies based on their attributes and industry conditions therefore strategy choice is endogenous and self selected empirical models that do not account for this and regress performance measures on strategy choice variables are potentially misspecified and their conclusions incorrect i highlight how self selection on hard to measure or unobservable characteristics can bias strategy performance estimates and recommend an econometric technique that has been developed to account for this effect although this concern applies to a wide range of strategy questions to demonstrate its effect i empirically examine if entry mode choice acquisition versus greenfield influences foreign direct investment survival in specifications that do not account for self selection i find that greenfield entries have survival advantages compared to acquisitions this confirms previous findings however the significance of this effect disappears once i account for self selection of entry mode in the empirical estimates the results confirm that estimates from models that do not account for self selection of strategy choice can lead to incorrect or misleading conclusions

the effect of myopia and loss aversion on risk taking an experimental test myopic loss aversion is the combination of a greater sensitivity to losses than to gains and a tendency to evaluate outcomes frequently two implications of myopic loss aversion are tested experimentally 1 investors who display myopic loss aversion will be more willing to accept risks if they evaluate their investments less often 2 if all payoffs are increased enough to eliminate losses investors will accept more risk in a task in which investors learn from experience both predictions are supported the investors who got the most frequent feedback and thus the most information took the least risk and earned the least money language en

detrending and business cycle facts a user s guide this note argues that it is hardly the case that the profession is fully aware that the application of di erent filters to the data leads to di erent outcomes and that we have enough evidence to claim that these di erences are unimportant to evaluate the fit models to the data 1998 elsevier science b v all rights reserved jel classification b41 e32

the impact of export strategy on export sales performance export sales are an important route to growth for the small to medium sized firm this article reports the results of an extensive empirical study of the export strategies of a large sample of high technology electronics firms and the performance results of adopting alternate export strategies six strategy scenarios were identified the results show that the types of foreign markets selected segmentation strategies and product strategies all have a pronounced impact on export sales and export growth the best performers a group of firms called the world marketers and representing 13 5 of the sample achieved a dramatic 188 annual growth in exports and exported 52 5 of their output the profiles of firms that elected each strategy scenario were determined also

business cycle convergence in emu a first look at the second moment we analyse the dynamics of the standard deviation of demand and supply shocks as well as of the demand component of gdp across countries in the european monetary union emu this analysis allows us to evaluate the patterns of cyclical comovement in emu and compare them the cyclical performance of the new members of the eu and other oecd countries we make use of sigma convergence methods to identify synchronization patterns in business cycles the eurozone has converged to a stable lower level of dispersion across business cycles during the end of the 80s and the beginning of the 90s the new eu members have also experienced a strong pattern of convergence from 1998 to 2005 when a strong divergence trend appears an enlargement of the emu to 22 members would not significantly decrease its optimality as a currency area there is evidence for some europe specific characteristics as compared to global comovements in business cycles authors abstract

frames of mind in intertemporal choice recent research has demonstrated that choices between gambles are systematically influenced by the way they are expressed kahneman and tversky s prospect theory kahneman d a tversky 1979 prospect theory an analysis of decision under risk econometrica472 363 391 explains many of these framing effects as shifts in the point of reference from which prospects are evaluated this paper demonstrates the applicability of the reference point concept to intertemporal choice three experiments demonstrate that when people choose between immediate and delayed consumption the reference point used to evaluate alternatives can significantly influence choice the first study elicited relative preference for immediate and delayed consumption using three methods each of which differently framed choices between alternatives offering identical end state consumption the conventional discounted utility model predicts that the three methods of elicitation should yield similar estimates of time preference but preferences were found to differ in accordance with a reference point model the second and third studies extend and replicate the results from the first the third using real rather than hypothetical choices

business cycle stylized facts and inventory behaviour new evidence for the euro area abstract the purpose of this paper is for the first time to use business tendency survey data first to identify new facts that are useful for the interpretation of the decline in the volatility of real activity in the euro area and second to test the inventory management hypothesis as an explanation for the great moderation in europe we present stylized facts from the business tendency data on series for inventories current production current orders and expected production for the euro area emphasizing the decline in the volatility of the series further we investigate whether the decline in inventory volatility can be attributed to an endogenous change in the persistence of shocks to the accumulation dynamics of inventories or to an exogenous change in the shocks hitting the inventory optimisation process our results at euro level generally indicate that there is no evidence of a break in the inventory accumulation process on the contrary the impact of exogenous shocks on inventory volatility appears to be steadily declining over time beginning from the mid 1980s

an international housing market in the british isles evidence from business and medium term cycles using a friedman test it has been averred that there is an international market in housing inter alia adams z and fuss r 2010 macroeconomic determinants of international housing markets journal of housing economics

the price elasticity of warm glow giving abstract we examine the charitable giving behavior of warm glow givers in response to the same donation incentive structure but with formally different schemes at this aim we implement a large online survey n 1655 using the amazon mechanical turk platform first we elicit and measure warm glow giving then we employ a between subjects design in which each warm glow donor n 881 is randomly assigned to one of two treatment groups that differ for the subsidy rebate or matching and is asked to make a series of allocation decisions between himself and a charity of his choice the results show that contributions are significantly more responsive to matching 1 15 than to rebate subsidies 0 17 moreover we provide evidence that under rebate price elasticity decreases as the warm glow magnitude increases for weak warm glow givers price elasticity is double that for strong warm glow donors

capabilities as a mediator linking resources and the international performance of entrepreneurial firms in an emerging economy this study investigates an under researched topic the relationships between capabilities resources and international performance among entrepreneurial firms in an emerging economy we combine the resource based view of the firm and the capability building perspective of rent creation to shed light on the crucial role of firm specific capabilities that transform key resources into performance outcomes employing a large sample of chinese entrepreneurial firms our investigation demonstrates that while the resources of institutional capital and managerial ties are important in the internationalization effort their effects on international performance are channeled through each firm s adaptive capability this adaptive capability is the firm s ability to coordinate recombine and allocate resources to meet the different requirements of foreign markets specifically our research is able to demonstrate support for the mediating role of capabilities in the relationship between resources and international performance the implications of these findings for theoretical development and future research are discussed

nonlinear autoregressive leading indicator models of output in g 7 countries this paper studies linear and nonlinear autoregressive leading indicator models of business cycles in g 7 countries our models use the spread between short term and long term interest rates as leading indicators for gdp we examine data admissibility by determining whether these models have the ability to produce time series with classical cycles that resemble the observed classical cycles in the data and then we ask whether this data admissibility lends itself to better predictions of the probability of recession copyright 2007 john wiley sons ltd

interconnections between eurozone and us booms and busts using a bayesian panel markov switching var model summary the proposed panel markov switching var model accommodates changes in low and high data frequencies and incorporates endogenous time varying transition matrices of country specific markov chains allowing for interconnections an efficient multi move sampling algorithm draws time varying markov switching chains using industrial production growth and credit spread data several important data features are obtained three regimes appear with slow growth becoming persistent in the eurozone turning point analysis indicates the usa leading the eurozone cycle amplification effects influence recession probabilities for eurozone countries a credit shock results in temporary negative industrial production growth in germany spain and the usa core and peripheral countries exist in the eurozone copyright 2016 john wiley sons ltd

corporate debt structure and economic recoveries abstract this paper analyzes the business cycle behavior of the corporate debt structure and its interaction with economic recovery the debt structure is measured as the share of bonds in the total credit to non financial corporations for a quarterly panel of countries over the period 1989 2013 we first show that the substitution of loans for bonds in recoveries is a regular property of business cycles secondly we provide evidence that economies with high bond share and important bond loan substitution recover from the recessions faster this identified link between corporate debt structure and business cycles is robust to the inclusion of traditional factors which shape recessions and recovery such as the size and the quality of financial markets the occurrence of bank crisis the dynamics of credit and the distribution of firm size

labor market distortions under sovereign debt default crises risk of sovereign debt default has frequently affected emerging market and developed economies such financial crisis are often accompanied with severe declines of employment that are hard to justify using a standard dynamic stochastic model in this paper i document that a labor wedge deteriorates substantially around swift reversals of current accounts or default episodes i propose and evaluate two different explanations for these movements by linking the wedges to changes in labor taxes and in the cost of working capital with these two features included a dynamic model of equilibrium default is able to replicate the behavior of the labor wedge observed in the data around financial crisis in the model higher interest rates are propagated into larger costs of hiring labor through the presence of working capital as an economy is hit with a stream of bad productivity shocks the incentives to default become stronger thus increasing the cost of debt this reduces firm demand for labor and generates a labor wedge a similar effect is obtained with a counter cyclical tax rate policy the model is used to shed light on the recent events of the euro area debt crisis and in particular of the greek default event

does detrending matter for the determination of the reference cycle and the selection of turning points we examine the sensitivity of turning points classification to detrending and compare the implied cycles to those derived by nber or doc researchers two dating rules are considered turning point dates are broadly insensitive to detrending with one dating rule but not the other and many procedures generate false alarms and miss several common turning points with the latter one amplitude and duration properties are also sensitive detrending and dating rules the hodrick and prescott and a frequency domain filters are best in mimicing nber and doc cycles regardless of the dating rule used

policy theory and the cycle the paper sets out some simple statistical models and shows that they are capable of generating the ob served characteristics of classical cycles in three countries australia the united kingdom and the united states both analytical and simulation work is used for this purpose these models emphasize the fact that to generate a realistic business cycle requires some deterministic trend growth near unit root behaviour in the deterministically detrended data and innovations of a certain magnitude with this information we examine some popular models of the cycle asking how they produce these features and then explore the implications of the analysis for economic policy

the price elasticity of charitable giving new experimental evidence abstract we examine the charitable giving decisions of donors under two subsidy mechanisms rebate and matching and we calculate the price elasticity of giving we implement an online survey using the amazon mechanical turk platform participants are asked to make a series of allocation decisions between themselves and a charity of their choice we vary endowment and subsidy rates in line with the literature the results show that contributions under matching subsidies are significantly higher than contributions under rebate subsidies participants who usually make a donation are more likely to give and are less responsive to price changes moreover the probability of giving increases monotonically along with subsidy rates

dissecting the cycle a methodological investigation following burns and mitchell we define the cycle as a pattern in the level of aggregate economic activity an algorithm to locate turning points is developed as is a new measure of pro cyclicality a link between turning points and the moments of the series is established thereby providing the statistical foundation that burns and mitchell s work lacked using these tools we are able to dissect cycles in terms of the contributions made by trend growth volatility serial correlation and non linear effects we dissect several models and find little evidence that certain non linear effects are important to the nature of business cycles

subsidizing charitable giving with rebates or matching further laboratory evidence we examine two different ways to subsidize charitable giving by a rebate returning a portion of the donation to the giver or by a match adding additional donations to the giver s donation in previous experimental research we have shown that participants give more to charity under the match than under an equivalent rebate the previous within subject experimental design required participants to make a series of decisions under both types of subsidy each decision consisted of an allocation of an endowment between the subject and a charity chosen by the subject from a specified list this article examines whether that result is an artifact of the previous within subjects design subjects may have failed to fully distinguish the two types of subsidy in the current article we report results from a between subjects design where participants are required to make only one type of decision involving rebates or involving matching subsidies our results confirm previous findings

measuring the chinese business cycle this article documents the business cycle characteristics of the chinese economy by adopting both nonparametric and parametric methodologies the two approaches are applied to relevant macroeconomics indicators gross domestic product gdp and industrial production ip indices aiming to investigate the growth cycle deviation cycle we provide a clear chronology of the chinese growth cycle one significant characteristic of the chinese growth cycle is the relatively direct influence of government policies however recently these policy effects have become less significant when compared to global economic influences our study provides an enhanced understanding of the properties of business cycle dating algorithms and as such contributes to future chinese business cycle research

buying a home with a resale value location location location we develop a dynamic multiregion model where a household s choice of housing location depends on its current wealth and its current type and involves both consumption and investment considerations the relative strength of the consumption motive and the investment motive determines the equilibrium pattern of residential sorting a strong investment consumption motive implies sorting according to household type wealth the model predicts that large house price fluctuations are associated with a low degree of sorting by type this prediction is consistent with evidence from us metropolitan areas when income education and age are used as proxies for household type

an empirical analysis of the integration responsiveness framework in global industries in this study businesses competing in global industries were categorized into three groups according to the integration responsiveness framework for conceptualizing industry pressures confronting business competing internationally using this framework contextual conditions associated with each group were examined competitive attributes distinguishing each group were then identified to clarify alternate business level strategies for competing within a global industry context beyond providing additional insight into the nature of competition in global industries several broad extensions to the integration responsiveness framework are suggested

stock market cycles financial liberalization and volatility in this paper we analyze the cycles of the stock markets in four latin american and two asian countries and we compare their characteristics we divide our sample in two subperiods in order to account for differences induced by the financial liberalization processes of the early 1990s we find that cycles in emerging countries tend to have shorter duration and larger amplitude and volatility than in developed countries however after financial liberalization latin american stock markets have behaved more similarly to stock markets in developed countries whereas asian countries have become more dissimilar concordance of cycles across markets has increased significantly over time especially for latin american countries after liberalization

inventories and the three phases of the business cycle this article demonstrates that recessions typically are followed by high growth recovery phases that push output back to its prerecession level thus postwar fluctuations in real output in the united states have consisted of three sequential phases rather than two contractions high growth recoveries and moderate growth periods following recoveries data from before world war ii also exhibit this pattern for the postwar period the three phase pattern is shown to reflect swings in inventory investment and suggests that output fluctuations have an important transitory component the evidence in this article supports delong and summers s output gaps view and friedman s plucking model view of fluctuations

can a real business cycle model pass the watson test abstract watson 1993 measures of fit for calibrated models journal of political economy 101 6 1011 1041 proposes a procedure for evaluating the fit of a dynamic equilibrium business cycle model under watson s criterion the standard real business cycle rbc model fails dramatically in reconciling the dynamics of the model with the data this inability to account for the dynamics of us aggregate data remains a major challenge to rbc theory this paper demonstrates that reasonable modifications can bring rbc theory into closer conformity with the data the empirical results indicate that when habit formation on leisure choice and employment externality are incorporated into the analysis the striking spectral density differentials documented by watson virtually vanish at business cycle frequencies

adaptation and performance in foreign markets evidence of systematic under adaptation past empirical studies have yielded no consistent relationship between strategy adaptation and firm performance these inconclusive results may be partially due to a bias amongt managers to under adapt their host market strategies this paper presents the results of the second stage of a longitudinal study identifying a potential status quo bias among exporters leading to systematic under adaptation

international configuration and coordination archetypes for medium sized firms in global industries the purpose of this study is to determine the basic configuration and coordination patterns for medium sized firms competing in global industries analyzing 126 businesses competing in nine different global industries five distinct archetypes are identified the results suggest that selective globalization in which the firm defines its global strategy around a narrow subset of the value chain may lead to the most effective outcomes

comovement information production and the business cycle abstract recent theoretical research suggests that information production is a positive externality of aggregate economic activity veldkamp 2005 both the quantity and quality of information increase during periods of economic expansion and decrease during periods of contraction based on this insight we hypothesize and confirm that time varying information production drives the comovement patterns observed in stock returns we examine stock return comovement in 36 countries from 1980 to 2007 and show that consistent with the theory comovement patterns are countercyclical that is when information production is high low comovement is low high we also find that the relation between comovement and the business cycle is stronger in countries that experience large intertemporal swings in information production finally we show that the relation between business cycle and comovement is stronger in poor countries countries with less developed financial markets and countries with weaker accounting and transparency standards these results suggest that financial development and transparency are conducive to a steady flow of financial information over the business cycle

international house price cycles monetary policy and credit abstract we evaluate three alternative predictors of house price corrections anticipated tightenings of monetary policy deviations of house prices from fundamentals and rapid credit growth a new cross country measure of monetary policy expectations based on an international term structure model with time varying risk premiums is constructed house price overvaluation is estimated via an asset pricing model the variables are incorporated into a panel logit regression model that estimates the likelihood of a large house price correction in 18 oecd countries the results show that corrections are predicted by increases in the market s forecast of higher policy rates the estimated degree of house price overvaluation also contains significant information about subsequent price reversals in contrast to the financial crisis literature credit growth is less important all of these variables help forecast recessions

cyclical dynamics of industrial production and employment markov chain based estimates and tests abstract the purpose of this paper is to understand differences in cyclical phenomena across a broad range of developed and emerging countries based on the behavior of two key economic times series industrial production and employment the paper characterizes the series in question as a recurring markov chain univariate processes are estimated for each series individually and a composite indicator is constructed by using information on both series based on tests of equality of the estimated markov chains across countries as well as the expected times to switch between different states we find evidence that i the developed and emerging economies are de coupled from each other in terms of their cyclical dynamics and ii the behavior of industrial production and employment growth are de coupled for the emerging economies our results suggest new directions for the analysis of emerging economy cyclical fluctuations

measuring aggregate risk can we robustly identify asset price boom bust cycles abstract we investigate the extent to which it is possible to detect asset price booms and banking crises according to alternative identification strategies and we assess their robustness we find some evidence that house price booms are more likely to turn into costly recession or to trigger a banking crisis than stock price booms resorting both to a non parametric approach and a discrete choice logit model we analyze the ability of a wide set of indicators to robustly explain costly asset price booms according to our results real long term interest rates and real stock prices tend to increase the probability of a costly housing price boom whereas real gdp tends to increase the probability of a costly stock price boom interestingly the credit to gdp gap indicator sometimes put forward in the literature as a key reference for setting countercyclical capital buffers does not seem to be a robust leading indicator of costly booms or banking crises

have business cycles changed over the last two decades an empirical investigation abstract we document the properties of business cycles of 71 countries 23 industrial countries and 48 emerging market economies or emes from 1970q1 to 2012q4 using the harding and pagan dating algorithm first recessions are deeper steeper and costlier among emes especially in east asia and latin america second recoveries are swifter and stronger among emes partly due to stronger rebound effects third recessions became less costly during the globalization period 1985 2007 for industrial countries and emes thus reflecting institutional changes made during the great moderation fourth the dynamic behavior of macroeconomic indicators around peaks in real gdp is more volatile in downturns associated with crisis compared to other downturns fifth peaks in financial cycles credit and asset prices tend to precede peaks in real output cycles finally although both industrial and emerging markets have experienced deep recessions during the recent global financial crisis the emerging markets have recovered faster

does psychic distance moderate the market size entry sequence relationship an analysis of 924 foreign market entries made by a sample of chinese exporters reveals that psychic distance moderates the relationship between foreign market size and entry sequence in doing so this study challenges the extant hypothesis that the establishment of foreign operations conforms to a simple pattern of increasing psychic distance to markets the findings also reveal that psychic distance is asymmetrical in nature and that assessments made by sellers and their buyers are inherently inequivalent

financial intermediaries instability and euro area macroeconomic dynamics abstract fitting a markov switching structural vector autoregression to euro area data we show that after taking into account heteroskedasticity the differences in the behavior of the economy between tranquil and financial distress periods e g great recession and sovereign debt crisis reflect variations in the transmission mechanism when and only when a period of financial distress occurs disruptions in financial intermediation trigger adverse effects for the real economy and turn out to be the primary source of business cycle fluctuations finally we provide strong evidence that ecb interventions in the financial sector had beneficial effects on the real economy during the sovereign debt crisis

time series decomposition and measurement of business cycles trends and growth cycles abstract a study of business cycles does not require trend estimation and elimination but a study of growth cycles does major cyclical slowdowns and speedups deserve to be analyzed but the needed time series decomposition presents difficult problems mainly because trends and cycles influence each other we compare cyclical movements in levels deviations from trend and smoothed growth rates for both the quarterly real gdp and the monthly u s coincident index using the phase average trend pat then we compare alternative trend estimates deterministic and stochastic linear and nonlinear and the corresponding series of deviations from these trends we discuss how the resulting estimates differ for u s growth cycles in the post world war ii period the results of pat show great similarity to the results obtained with the hodrick prescott local linear trend band pass filtering methods

do real business cycle models really exhibit business cycle behavior abstract previous research indicates that real business cycle models are capable of reproducing important features of u s business cycle behavior here i employ classical methods of business cycle analysis to determine how well the cyclical properties of simulated data from a representative real business cycle model match up with postwar u s business cycle characteristics while the simulated model reproduces qualitative features consistent with observed business cycle experience quantitative goodness of fit tests show that for many sectors of the economy the cyclical characteristics of the simulated data deviate significantly from u s business cycle experience

business cycle phases in u s states the u s aggregate business cycle is often characterized as a series of distinct recession and expansion phases we apply a regime switching model to state level coincident indices to characterize state business cycles in this way we find that states differ a great deal in the levels of growth that they experience in the two phases recession growth rates are related to industry mix whereas expansion growth rates are related to education and age composition further states differ significantly in the timing of switches between regimes indicating large differences in the extent to which state business cycle phases are in concord with those of the aggregate economy

an institutional approach to cross national distance cross national distance is a key concept in the field of management previous research has conceptualized and measured cross national differences mostly in terms of dyadic cultural distance and has used the euclidean approach to measuring it in contrast our goal is to disaggregate the construct of distance by proposing a set of multidimensional measures including economic financial political administrative cultural demographic knowledge and global connectedness as well as geographic distance we ground our analysis and choice of empirical dimensions on institutional theories of national business governance and innovation systems in order to overcome the methodological limitations of the euclidean approach we calculate dyadic distances using the mahalanobis method which is scale invariant and takes into consideration the variance covariance matrix we empirically analyze four different foreign expansion choices of us companies to illustrate the importance of disaggregating the distance construct and the usefulness of our distance calculations which we make freely available to managers and scholars

the synchronization of credit cycles abstract this paper proposes a simple econometric procedure to test for the synchronization of credit cycles using a century of data for 14 advanced economies we find that credit cycle synchronization dropped in the early 1920s from initially relatively high levels between the 1920s and the 1970s synchronization was overall low and concentrated within five predominantly regional clusters however synchronization has significantly increased in the post bretton woods era and has become less associated with geographic proximity australia denmark france italy japan norway spain switzerland the uk and the us form a single major credit cycle cluster since the 1970s a smaller cluster is formed by canada the netherlands and sweden while the german credit cycle follows a distinct path using logistic regressions we find that the synchronization of credit and business cycles go hand in hand our findings are especially relevant for the international coordination of macroprudential policy as well as to spur and inform further analysis on credit cycle dynamics

globalization and location choice an analysis of us multinational firms in 1980 and 2000 in this paper we examine foreign location choices of the top 100 us multinational corporations mncs in 1980 and 2000 we first ask whether there has been a change in mnc foreign location choice in this two decade period second we explore the underlying reasons of location change by focusing on country level factors accounting for firm industry and regional level explanations our findings suggest first that the extent of mncs activities around the globe is more extensive than assumed by regionalists arguments and well beyond ohmae s triad but still less widespread than claimed by the globalists the two main traditions within the globalization regionalization debate second we uncover an interesting de location pattern in this period third we develop an integrative framework where both economic and institutional cultural arguments are shown to influence mncs foreign location choice in different ways we conclude with a discussion of our findings and provide suggestions for future research

a new approach to the study of jobless recoveries this article is concerned with the measurement of jobless recoveries and the elements that may explain their emergence we first introduce a measure that maps the various elements that define a jobless recovery into a single number that we label the jobless recovery depth we then construct a database of 389 state level observations and study the cross sectional variations that emerge we find that jobless recoveries in the united states are not a nation wide phenomena but a local event confined within a cluster of states that expands slowly between 1975 and 2015 we find the state level evidence to be consistent with theories that link jobless recoveries to unusually long expansionary periods less dynamic labor markets and the advent of the great moderation the evidence is not consistent with theories that link them to decreases in union power increases in income inequality or increases in health care costs

macroeconomic forecasting using diffusion indexes this article studies forecasting a macroeconomic time series variable using a large number of predictors the predictors are summarized using a small number of indexes constructed by principal component analysis an approximate dynamic factor model serves as the statistical framework for the estimation of the indexes and construction of the forecasts the method is used to construct 6 12 and 24 monthahead forecasts for eight monthly u s macroeconomic time series using 215 predictors in simulated real time from 1970 through 1998 during this sample period these new forecasts outperformed univariate autoregressions small vector autoregressions and leading indicator models

explaining the formation of international new ventures the limits of theories from international business research abstract international new ventures invs represent a growing and important type of start up an inv is defined as a business organization that from inception seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries oviatt and mcdougall 1994 their increasing prevalence and important role in international competition indicates a need for greater understanding of these new ventures oviatt and mcdougall 1994 logitech as described in a case study by alahuhta 1990 is a vivid example of an inv its founders were from two different countries and had a global vision for the company from its inception the venture which produces peripheral devices for personal computers established headquarters in both switzerland and the u s manufacturing and r d were split between the u s and switzerland and then quickly spread to taiwan and ireland the venture s first commercial contract was with a japanese company using 24 case studies of invs we found that their formation process is not explained by existing theories from the field of international business specifically neither monopolistic advantage theory product cycle theory stage theory of internationalization oligopolistic reaction theory nor internalization theory can explain the formation process of invs these theories fail because they assume that firms become international long after they have been formed and they therefore highlight large mature firms they also focus too much on the firm level and largely ignore the individual and small group level of analysis i e the entrepreneur and his or her network of business alliances we propose that an explanation for the formation process of invs must answer three questions 1 who are the founders of invs 2 why do these entrepreneurs choose to compete internationally rather than just in their home countries and 3 what form do their international business activities take who are the founders of invs we argue that founders of invs are individuals who see opportunities from establishing ventures that operate across national borders they are alert to the possibilities of combining resources from different national markets because of the competencies networks knowledge and background that they have developed from their earlier activities following the logic of the resource based view of the firm we argue that the possession of these competencies is not matched by other entrepreneurs only the entrepreneur possessing these competencies is able to combine a particular set of resources across national borders and form a given inv why do these entrepreneurs choose to compete internationally rather than just in their home countries the founders of invs recognize they must create international business competencies from the time of venture formation otherwise the venture may become path dependent on the development of domestic competencies and the entrepreneur will find it difficult to change strategic direction when international expansion eventually becomes necessary as the founder of one inv explained the advantage of starting internationally is that you establish an international spirit from the very beginning mamis 1989 38 what form do their international business activities take founders of invs prefer to use hybrid structures i e strategic alliances and networks for their international activities as a way to overcome the usual poverty of resources at the time of start up this study has important implications for the practice of management in financing decisions relating to invs venture capitalists and other venture financiers should look for entrepreneurs who have a global vision international business competence and an established international network when entrepreneurs start invs they should create hybrid structures to preserve scarce resources finally given the path dependence of competence development founders of new ventures should consider whether establishing a domestic new venture with plans to later internationalize will be as successful a strategy as establishing a new venture that is international from inception

global factors uncertainty weather conditions and energy prices on the drivers of the duration of commodity price cycle phases abstract we investigate the role of global factors in explaining the length of commodity price cycle phases using a continuous time weibull duration model and data for a panel of 33 countries over the period 1980q1 2015q4 we find evidence of increasing constant positive duration dependence for commodity price booms and busts normal time spells global macroeconomic conditions in particular inflation economic policy uncertainty and monetary policy actions significantly affect the duration of all commodity price cycle phases global environmental conditions also impact the duration of commodity price booms with a rise in average temperature rainfall increasing reducing their length a rise in the number of military conflicts around the globe is associated with shorter booms and busts finally we find that a rise in oil prices is linked with longer booms and shorter busts

can non linear time series models generate us business cycle asymmetric shape abstract fifteen univariate non linear time series models of us output are evaluated by their ability to reproduce the asymmetric shape of the us business cycle two models account for the growth being faster after a trough and slower before a peak

willingness to pay and compensation demanded experimental evidence of an unexpected disparity in measures of value aside from possible income effects measures of the maximum amounts people will pay to avoid a loss and the minimum compensation necessary for them to accept it are generally assumed to be equivalent unexpectedly wide variations between these sums however have been noted in survey responses to hypothetical options this paper reports the results of a series of experiments that confronted people with actual money payments and cash compensations the results indicate that the compensation measure of value seems to exceed significantly the willingness to pay measure which would appear to call into some question various rules of entitlement damage assessments and interpretations of indifference curves

psychic distance and performance of mncs during marketing crises when multinational corporations face foreign marketing crises the psychic distance between the home and host country represents a distinct challenge this paper examines the curvilinear relationship between psychic distance and firm performance during marketing crises and the moderating role of marketing capabilities we test our hypotheses using an event study on a panel dataset of 217 firms based in 19 countries facing crises in 41 host countries the results show that 1 marketing crises are most harmful when the host country is either very close or far away and 2 firms can mitigate this effect with marketing capabilities

do multinationals really prefer to enter culturally distant countries through greenfields rather than through acquisitions the role of parent experience and subsidiary autonomy prior research has argued that multinational enterprises mnes prefer to enter culturally distant countries through greenfields rather than through acquisitions since acquisitions in such countries are costlier to manage this argument contains two hidden assumptions 1 the additional costs of acquisitions in culturally distant countries are the same for all mnes and 2 such acquisitions have no benefits over their greenfield counterparts in this paper we relax these two assumptions by arguing that an mne s preference for greenfields in culturally distant countries depends on its international and host country experience and on the level of autonomy it plans to grant the focal subsidiary analyzing 171 wholly owned greenfield investments and full acquisitions made by dutch mnes in 35 countries we find that these mnes prefer to enter culturally distant countries through greenfields but that this preference is lower when they have little international experience or plan to grant the focal subsidiary considerable autonomy in marketing

an information diffusion based model of oil futures price abstract inspired by the increasing evidence of financialization speculation in commodity pricing this paper constitutes a first attempt to build an information diffusion based asset pricing framework for the oil futures market with gradual information dissemination slowly decaying uncertainty about the asset s future fundamentals generates persistent conditional volatility and a drift in asset return volatility based proxies for information flows are proposed to examine empirically the asset pricing implications the results confirm a significant intertemporal relationship between return on the price of oil futures information diffusion and volatility components an important implication of our study is that the slow diffusion of information generates predictability in price dynamics a forecasting model is then constructed and tested in relation to our theory it is found that the lagged series of the pricing factors possess significant predicting power for returns

real business cycles and the test of the adelmans abstract this paper conducts a modern variant of the test proposed and carried out by adelman and adelman 1959 using the methods developed by burns and mitchell 1946 we see if we can distinguish between the economic series generated by an actual economy and those analogous artificial series generated by a stochastically perturbed economic model in the case of the adelmans the model corresponded to the klein goldberger equations in our case the model corresponds to a simple real business cycle model the results indicate a fairly high degree of coincidence in key economic aggregates between the business cycle characteristics identified in actual data and those found in our simulated economy

booms and slumps in world commodity prices abstract this paper examines the duration and magnitude of cycles in world commodity prices cycles are a dominant feature of commodity prices and dealing with the economic consequences of booms and slumps in prices continues to be one of the most challenging issues facing policymakers in commodity exporting developing countries we find that there is an asymmetry in commodity price cycles as price slumps last longer than price booms how far prices fall in a slump is found to be slightly larger than how far they tend to rebound in a subsequent boom in addition for most commodities the probability of an end to a slump boom in prices is independent of the time already spent in the slump boom

an econometric analysis of some models for constructed binary time series macroeconometric and financial researchers often use binary data constructed in a way that creates serial dependence we show that this dependence can be allowed for if the binary states are treated as markov processes in addition the methods of construction ensure that certain sequences are never observed in the constructed data together these features make it difficult to utilize static and dynamic probit models we develop modeling methods that respect the markov process nature of constructed binary data and explicitly deals with censoring constraints an application is provided that investigates the relation between the business cycle and the yield spread