A Study of Stock Market Fluctuations and their Relations to Business Conditions

Most research on stock prices is based on the present value model or the more general consumption-based model. When applied to real economic data, both of them are found unable to account for both the stock price level and its volatility. Three essays here attempt to both build a more realistic model, and to check whether there is still room for bubbles in explaining fluctuations in stock prices. In the second chapter, several innovations are simultaneously incorporated into the traditional present value model in order to produce more accurate model-based fundamental prices. These innovations comprise replacing with broad dividends the more narrow traditional dividends that are more commonly used, a nonlinear artificial neural network (ANN) forecasting procedure for these broad dividends instead of the more common linear forecasting models for narrow traditional dividends, and a stochastic discount rate in place of the constant discount rate. Empirical results show that the model described above predicts fundamental prices better, compared with alternative models using linear forecasting process, narrow dividends, or a constant discount factor. Nonetheless, actual prices are still largely detached from fundamental prices. The bubble-like deviations are found to coincide with business cycles. The third chapter examines possible cointegration of stock prices with fundamentals and non-fundamentals. The output gap is introduced to form the non-fundamental part of stock prices. I use a trivariate Vector Autoregression (TVAR) model and a single equation model to run cointegration tests between these three variables. Neither of the cointegration tests shows strong evidence of explosive behavior in the DJIA and S&P 500 data. Then, I applied a sup augmented Dickey-Fuller test to check for the existence of periodically collapsing bubbles in stock prices. Such bubbles are found in S&P data during the late 1990s. Employing econometric tests from the third chapter, I continue in the fourth chapter to examine whether bubbles exist in stock prices of conventional economic sectors on the New York Stock Exchange. The ‘old economy’ as a whole is not found to have bubbles. But, periodically collapsing bubbles are found in Material and Telecommunication Services sectors, and the Real Estate industry group.

Current State of Management/Union Relations in Hospitality Sector

Labor management relations in the hospitality sector is an important aspect of effective management. Increasingly, unions are becoming proactive in organizing hospitality workers. This manifests itself in strikes, boycotts, picketing, sexual harassment complaints, and complaints to OSHA regarding safety and health workplace violations. This research monitors the current scene with respect to labor management relations and analyzes work issues that have been brought up for third-party resolution by NLRB staff or arbitrators. The study reports on 66 NLRB cases and 104 arbitration cases. Issues brought before the NLRB include mostly contract interpretations. In arbitration, there were mostly discipline issues, including work rule violations, disorderly conduct, poor performance and employee theft. Quite often, the proposed job action on the part of the employer was discharge. In NLRB cases, the employee usually prevailed, while in arbitration the employer usually prevailed.

The Foodservice Industry's Social Responsibility Regarding the Obesity Epidemic, Part II: Incorporating Strategic Corporate Social Responsibility into Foodservice Operations

Just as all types of business firms are now expected to go beyond their profit-oriented activities in boosting the well-being of the community, so, too, is corporate social responsibility (CSR) expected from foodservice firms. The significance of the obesity epidemic, combined with the foodservice industry's role in the development of this epidemic, suggests that the industry has an ethical responsibility to implement CSR activities that will help reduce obesity, particularly among children. CSR should be seen as an efficient management strategy through which a firm voluntarily integrates social and environmental concerns into its business operations and its interactions with stakeholders. Although costs are associated with CSR initiatives, benefits accrue to the firm. Decisions regarding alternative CSR activities should be based on a cost-benefit analysis and calculation of the present value of the revenue stream that can be identified as resulting from the specific CSR activities. CSR initiatives should be viewed as long-term investments that will enhance the firms’ value. Key areas for foodservice firms' CSR activities include marketing practices, particularly practices impacting advertising to children and marketing that will enhance the firms’ visibility; portion-size modification; new-product development; and consistent nutrition labeling on menus.