The equity premium and the risk free rate: A cross country, cross maturity examination

This paper examines the relationship between the equity premium and the risk free rate at three different maturities using post 1973 data fora panel of 7 OECD countries. We show the existence of subsample instabilities,of some cross country differences and of inconsistencies with the expectations theory of the term structure. We perform simulations using a standard consumptionbased CAPM model and demonstrate that the basic features of Mehra and Prescott's(1985) puzzle remain, regardless of the time period, the investment maturity and the country considered. Modifications of the basic setup are also considered.

Prevalence of overweight and obesity among migrants in Switzerland: association with country of origin.

Migrants tend to present higher overweight and obesity levels, but whether this relationship applies to all nationalities has seldom been studied. The present study aimed to assess the prevalence of overweight and obesity according to nationality in adults. Cross-sectional population-based samples. Five-year nationwide interview surveys (Swiss Health Surveys - SHS) from 1992 to 2007 (n 63 766) and a local examination survey (CoLaus Study in Lausanne 2004-2006, n 6743). Participants were separated into Swiss, French, German, Italian, Portuguese, Spanish nationals, those from the former Republic of Yugoslavia and from other European and other countries. Compared with Swiss nationals, German and French nationals presented a lower prevalence of overweight and obesity, whereas nationals from Italy, Spain, Portugal and the former Republic of Yugoslavia presented higher levels. Adjusting the SHS data for age, gender, education, smoking, leisure-time physical activity and survey year, a lower risk for overweight and obesity was found for German (OR = 0·80, 95 % CI 0·70, 0·92) and French (OR = 0·74, 95 % CI 0·61, 0·89) nationals, whereas higher risks were found for participants from Italy (OR = 1·45, 95 % CI 1·33, 1·58), Spain (OR = 1·36, 95 % CI 1·15, 1·61), Portugal (OR = 1·25, 95 % CI 1·06, 1·47) and the former Republic of Yugoslavia (OR = 1·98, 95 % CI 1·69, 2·32). Similar findings were observed in the CoLaus Study for Italian (OR = 1·63, 95 % CI 1·29, 2·06), Spanish (OR = 1·54, 95 % CI 1·17, 2·04) and Portuguese (OR = 1·49, 95 % CI 1·16, 1·91) participants and for those from the former Republic of Yugoslavia (OR = 5·34, 95 % CI 3·00, 9·50). Overweight and obesity are unevenly distributed among migrants in Switzerland. Migrants from Southern Europe and from the former Republic of Yugoslavia present higher prevalence rates. This suggests that preventive messages should be tailored to these specific populations.

The effects of uncertainty avoidance on brand performance: Marketing creativity, product innovation and the brand duration

This paper investigates the link between brand performance and cultural primes in high-risk,innovation-based sectors. In theory section, we propose that the level of cultural uncertaintyavoidance embedded in a firm determine its marketing creativity by increasing the complexityand the broadness of a brand. It determines also the rate of firm product innovations.Marketing creativity and product innovation influence finally the firm marketingperformance. Empirically, we study trademarked promotion in the Software Security Industry(SSI). Our sample consists of 87 firms that are active in SSI from 11 countries in the period1993-2000. We use the data coming from SSI-related trademarks registered by these firms,ending up with 2,911 SSI-related trademarks and a panel of 18,213 observations. We estimatea two stage model in which first we predict the complexity and the broadness of a trademarkas a measure of marketing creativity and the rate of product innovations. Among severalcontrol variables, our variable of theoretical interest is the Hofstede s uncertainty avoidancecultural index. Then, we estimate the trademark duration with a hazard model using thepredicted complexity and broadness as well as the rate of product innovations, along with thesame control variables. Our evidence confirms that the cultural avoidance affects the durationof the trademarks through the firm marketing creativity and product innovation.

Country portfolios

Capital flows to developing countries are small and are mostly take the form of loans rather than direct foreign investment. We build a simple model of North-South capital flows that highlights the interplay between diminishing returns, production risk and sovereign risk. This model generates a set of country portfolios and a world distribution of capital stocks that resemble those in the data.

Status Upgrade:The Case of Cape Verde’s Graduation from the Least Developed Country (Ldc) Category

Esta dissertação analisa as principais características e as dificuldades que se levantam ao desenvolvimento de dois grupos de países em situações especiais, especificamente os PMA e os SIDS. Neste contexto, são abordadas questões relacionadas com medidas de apoio por parte da comunidade internacional, visando facilitar o processo de desenvolvimento dos PMA, e analisada a questão (por vezes controversa) da transição da lista de PMA. Neste quadro, é analisado o caso de Cabo Verde – o primeiro SIDS a transitar da lista de PMA –, com a consideração prévia de importantes questões de financiamento do desenvolvimento, de suma importância para a capacidade do país suster o seu desenvolvimento, a partir da entrada em vigor da sua graduação da lista dos PMA, em Janeiro de 2008.

Estimating multi-country VAR models

This paper describes a methodology to estimate the coefficients, to test specification hypothesesand to conduct policy exercises in multi-country VAR models with cross unit interdependencies, unit specific dynamics and time variations in the coefficients. The framework of analysis is Bayesian: a prior flexibly reduces the dimensionality of the model and puts structure on the time variations; MCMC methods are used to obtain posterior distributions; and marginal likelihoods to check the fit of various specifications. Impulse responses and conditional forecasts are obtained with the output of MCMC routine. The transmission of certain shocks across countries is analyzed.

Country asymmetries, endogenous product choice and the speed of trade liberalization

In a world with two countries which differ in size, we study theimpact of (the speed of) trade liberalization on firms' profitsand total welfare of the countries involved. Firms correctlyanticipate the pace of trade liberalization and take it intoaccount when deciding on their product choices, which areendogenously determined at the beginning of the game. Competitionin the marketplace then occurs either on quantities or on prices.As long as the autarkic phase continues, local firms are nationalmonopolists. When trade liberalization occurs, firms compete in aninternational duopoly. We analyze trade effects by using twodifferent models of product differentiation. Across all thespecifications adopted (and independently of the price v. quantitycompetition hypothesis), total welfare always unambiguously riseswith the speed of trade liberalization: Possible losses by firmsare always outweighed by consumers' gains, which come under theform of lower prices, enlarged variety of higher average qualitiesavailable. The effect on profits depends on the type of industryanalyzed. Two results in particular seem to be worth of mention.With vertical product differentiation and fixed costs of qualityimprovements, the expected size of the market faced by the firmsdetermines the incentive to invest in quality. The longer the periodof autarky, the lower the possibility that the firm from the smallcountry would be producing the high quality and be the leader in theinternational market when it opens. On the contrary, when trade opensimmediately, national markets do not play any role and firms fromdifferent countries have the same opportunity to become the leader.Hence, immediate trade liberalization might be in the interest ofproducers in the small country. In general, the lower the size of thesmall country, the more likely its firm will gain from tradeliberalization. Losses from the small country firm can arise when itis relegated to low quality good production and the domestic marketsize is not very small. With horizontal product differentiation (thehomogeneous good case being a limit case of it when costs ofdifferentiation tend to infinity), investments in differentiationbenefit both firms in equal manner. Firms from the small country do notrun the risk of being relegated to a lower competitive position undertrade. As a result, they would never lose from it. Instead, firms fromthe large country may still incur losses from the opening of trade whenthe market expansion effect is low (i.e. when the country is very largerelative to the other).

Measuring asymmetries in brand associations using correspondence analysis

Correspondence analysis is introduced in the brand associationliterature as an alternative tool to measure dominance, for theparticular case of free choice data. The method is also used to analysedifferences, or asymmetries, between brand-attribute associations whereattributes are associated with evoked brands, and brand-attributeassociations where brands are associated with the attributes. Anapplication to a sample of deodorants is used to illustrate the proposedmethodology.

The labor market effects of payroll taxes in a middle-income country: Evidence from Colombia

We use a panel of manufacturing plants from Colombia to analyze how the risein payroll tax rates over the 1980 s and 1990 s affected the labor market.Our estimates indicate that formal wages fall by between 1.4% and 2.3% as aresult of a 10% rise in payroll taxes. This 'less-than-full-shifting' islikely to be the result of weak linkages between benefits and taxes and thepresence of downward wage rigidities induced by a binding minimum wage inColombia. Because the costs of taxation are only partly shifted fromemployers to employees, employment should also fall. Our results indicatethat a 10% increase in payroll taxes lowered formal employment by between4% and 5%. In addition, we find less shifting and larger disemploymenteffects for production than non-production workers. These results suggestthat policies aimed at boosting the relative demand of low-skill workers byreducing social security taxes on those with low earnings may be effectivein a country like Colombia, especially if tax cuts are targeted to indirectbenefits.

The determinants of the prevalence of single mothers: A cross-country analysis

This paper examines the effect of public assistance, labor market and marriage marketconditions on the prevalence of single mother families across countries and over time. Amultinomial logit derived from a random utility approach is estimated using individualleveldata for 14 countries. I find evidence that increases in the level of public support are significantly and positively associated with a higher incidence of both never marriedand divorced mothers. The results also suggest that single mothers are more prevalentwhen female wages are lower. Higher male earnings and employment opportunities in awoman s marriage market appear to lead to fewer never married mothers, but more divorced mothers. Higher child support or alimony payments are associated with a higher prevalence of divorced mothers.

Ownership structure, customer satisfaction and brand equity

This paper studies the interaction between ownership structure, taken as a proxy for shareholders commitment, and customer satisfaction - the main driver of consumer loyalty - and their impact on a firm s brand equity. The results show that customer satisfaction has a positive direct effect on brand equity but an indirect negative one because of reductions in ownership concentration. This latter effect emerges when managers are mainly customer-oriented. Such result gives out a warning signal that highlights the perverse effect of implementing policies, focused excessively on satisfying customers at the expense of shareholders, on a firm s brand equity. The empirical analysis uses an incomplete panel data comprising 69 firms from 11 nations, for the period 2002-2005.

Country effects in ISSP-1993 environmental data: Comparison of SEM approaches

Structural equation models (SEM) are commonly used to analyze the relationship between variables some of which may be latent, such as individual ``attitude'' to and ``behavior'' concerning specific issues. A number of difficulties arise when we want to compare a large number of groups, each with large sample size, and the manifest variables are distinctly non-normally distributed. Using an specific data set, we evaluate the appropriateness of the following alternative SEM approaches: multiple group versus MIMIC models, continuous versus ordinal variables estimation methods, and normal theory versus non-normal estimation methods. The approaches are applied to the ISSP-1993 Environmental data set, with the purpose of exploring variation in the mean level of variables of ``attitude'' to and ``behavior''concerning environmental issues and their mutual relationship across countries. Issues of both theoretical and practical relevance arise in the course of this application.

Generating global brand equity through corporate social responsibility to key stakeholders

In this paper we argue that corporate social responsibility (CSR) to various stakeholders(customers, shareholders, employees, suppliers, and community) has a positive effect on globalbrand equity (BE). In addition, policies aimed at satisfying community interests help reinforcecredibility to social responsible polices with other stakeholders. We test these theoreticalcontentions using panel data comprised of 57 global brands originating from 10 countries (USA,Japan, South Korea, France, UK, Italy, Germany, Finland, Switzerland and the Netherlands) forthe period 2002 to 2008. Our findings show that CSR to each of the stakeholder groups has apositive impact on global BE. In addition, global brands that follow local social responsibilitypolicies over communities obtain strong positive benefits in terms of the generation of BE, as itenhances the positive effects of CSR to other stakeholders, particularly to customers. Therefore,for managers of global brands it is particularly productive for generating brand value to combineglobal strategies with the satisfaction of the interests of local communities.