(Interstate) banking and (interstate) trade: Does real integration follow financial integration?


Journal of Financial Economics

avril 2012, vol. 104, n°1, pp.89-117

Départements : Economie et Sciences de la décision, GREGHEC (CNRS), Finance

Mots clés : Trade; Banking deregulation; Finance'growth nexus

We examine whether financial sector integration leads to real sector integration through trade. Our conjecture is that financial sector integration between two regions leads to higher trade flows between them. In our stylized model, this happens because banks with presence in the two regions are better able to assess risks and charge the appropriate premiums for trade-related projects pertinent for the two markets; whereas the same banks charge higher average interest rates for projects that involve trade to other markets from which they are absent. We use the deregulation of the inter-state banking in the U.S. as a natural experiment to test the implication of our theory model with the state-level Commodity Flow Survey data. Our empirical evidence, based on difference-in-difference and GMM2S-IV estimates, indicates that there is a trade channel associated with the finance-growth nexus: the trade share of state-pairs that have opened their banking market to each other's financial institutions increases by 9.2% relative to the trade shares of state-pairs that did not. Looking at actual entry data, we estimate that bank entry within a trading pair increases trade in this pair by 54% relative to those that do not have such a bank link. This is probably the lower bound estimate for international trade barriers stemming from the lack of a unified banking system.

A folk theorem for repeated games played in a network


Games and Economic Behavior

2012, vol. 76, n°2, pp.711-737

A generalized single product and single period problem with nonlinear parameters

K. Luo, L. KERBACHE, M. Menezes, C. VAN DELFT

International Transactions in Operational Research

mai 2012, vol. 19, n°3, pp.421-433

Départements : Informations Systems and Operations Management, GREGHEC (CNRS)

Mots clés : Optimization, Perishable items, Production, Supply chain management

In this paper, we extend the study of the classical single-period newsboy inventory problem by considering Q1 costs that are non-linear functions of the decision variable. We assume that the demand probability density function is known to the decision maker.We prove that, under some much more relaxed conditions, the total expected profit function remains concave and classical optimization methods can thus be used to get the global optimal solution. After that, we provide numerical examples for illustrative purpose

A Global Equilibrium Asset Pricing Model with Home Preference


Management Science

février 2012, vol. 58, n°2, pp.273-292

Départements : Finance

Mots clés : International asset pricing, Home bias, Familiarity, Regret

We develop a global equilibrium asset pricing model assuming that investors suffer from foreign aversion, a preference for home assets based on familiarity. Using a utility formulation inspired by regret theory, we derive closed-form solutions. When the degree of foreign aversion is high in a given country, investors place a high valuation on domestic equity, which results in a lower expected return. Thus, the model generates the simple prediction that a country’s degree of home bias and the expected return of its domestic assets should be inversely related. Our predicted relation between the degree of home bias and a country’s expected return has the opposite sign predicted by models that assume some form of market segmentation. Using IMF portfolio data we find that expected returns are negatively related to home bias

A Heterogeneous Bayesian Regression Model for Cross-sectional Data Involving a Single Observation per Response Unit

D. K. H. Fong, P. EBBES, W. DeSarbo


avril 2012, vol. 77, n°2, pp.293-314

Départements : Marketing, GREGHEC (CNRS)

Mots clés : Bayesian estimation, Cross-sectional analysis, Heterogeneity, Consumer psychology

pas sous affiliation HECAbstract: Multiple regression is frequently used across the various social sciences to analyze cross-sectional data. However, it can often times be challenging to justify the assumption of common regression coefficients across all respondents. This manuscript presents a heterogeneous Bayesian regression model that enables the estimation of individual-level-regression coefficients in cross-sectional data involving a single observation per response unit. A Gibbs sampling algorithm is developed to implement the proposed Bayesian methodology. A Monte Carlo simulation study is constructed to assess the performance of the proposed methodology across a number of experimental factors. We then apply the proposed method to analyze data collected from a consumer psychology study that examines the differential importance of price and quality in determining perceived value evaluations.

A Petri Net Approach to Mediation-aided Composition of Web Services


IEEE Transactions on Automation Science and Engineering

2012, vol. 9, n°2, pp.429-435

Départements : Informations Systems and Operations Management, GREGHEC (CNRS)

Abundant rarity: The key to luxury growth


Business Horizons

septembre 2012, vol. 55, n°5, pp.453-462

Départements : Marketing

Although Western economies have not yet transitioned out of crisis, the luxury sector is growing again, especially at the high end. In emerging countries, the luxury sector''s expansion has reached double digits. However, as luxury products continue to penetrate global markets, the prestige of brands like Louis Vuitton has not declined at all. This seems at odds with the concept of luxury being tied to rarity and exclusivity. Thus, how can we reconcile these facts with theory? In order to capture mounting demands'not only from extraordinary people, but also from ordinary individuals'luxury brands enact virtual rarity tactics, construct themselves as art, and adopt a fashion business model while deemphasizing exceptional quality and country of origin. Rarity of ingredients or craft has been replaced by qualitative rarity. Further, the cult of the designer is a potent tool in building emotional connections with a vast number of clients. Today, brands in the luxury sector are actually selling symbolic and magic power to the masses. There exists a culture gap between Asia and the West; namely, Asian consumers feel safer buying prestigious Western brands with which individuals around them are familiar. The insights offered herein provide clues for entrepreneurs attempting to launch luxury brands. *LUXURIES *FINANCIAL crises *ECONOMIC development *EXPANSION (Business) *INTERNATIONAL markets *BUSINESS planning *BRAND name products WESTERN countries

Accounting and the making of Homo Liberalis

E. Pezet, C. LAMBERT

Foucault Studies

mai 2012, n°13, pp.67-81

Départements : Comptabilité et Contrôle de Gestion

ABSTRACT: This paper investigates the practices whereby the subject, in an organisational context, carries out systematic practices of self-discipline and becomes a calculative self. In particular, we explore the techniques of conduct developed by management accountants in a French carmaker, which adheres to a neoliberal environment. We show how these manage-ment accountants become calculative selves by building the very measurement of their own performance. The organisation thereby emerges as the cauldron in which a Homo liberalis is forged. Homo liberalis is the individual capable of constructing for him/her the political self-discipline establishing his/her relationship with the social world on the basis of measurable performance. The management accountants studied in this article prefigure the Homo liberalis in the self-discipline they develop to act in compliance with the organisation's goals.Keywords: Technologies of the self, performance, accounting, Homo liberalis.

Adapting to the EU Requirements: Recent Evolutions in Romanian Competition and State Aid Law


Competition Policy International - Antitrust Chronicle

octobre 2012, vol. 10, n°2

Mots clés : Romania, State aid, Antitrust, European law, Europeanization

Since 2007, Romania is, alongside Bulgaria, one of the newest members of the European Union. Consequently, the vast majority of its institutional and legislative developments in competition and State aid are connected to the adaptation of the law to EU requirements. Romanian competition law and policy has been replicating rules, definitions, and concepts established by EU legislation or through EU case law. One example concerns the notion of “undertaking,” broadly defined in the same lines as those developed by the EU Court of Justice. Consequently, commitments from the Romanian Football Federation were approved with regards to retransmission rights for matches, and the National Association of Enforcers of Judicial Decisions was fined for discriminatory practices with regards to the entry in the profession, as well as for fixing excessive prices for their services. Furthermore, according to latest amendments, antitrust legislation applies also to local or central administrative authorities.

Advancing strategy and organization research in concert: Towards an integrated model?


Strategic Organization

août 2012, vol. 10, n°3, pp.297-303

Départements : Stratégie et Politique d’Entreprise, GREGHEC (CNRS)

Mots clés : BOUNDED rationality *RATIONAL choice theory *STRATEGIC planning *ORGANIZATIONAL research *ORGANIZATIONAL sociology

The article discusses the impact of combining institutional and strategic research. The two type of research share common assumptions, which is the locally bounded rationality of agents. Despite the development seen in strategy research over the years, it still suffers from two shortcomings which include difficulties working with macro-dynamics. The author concludes that commonalities seen in both research types could find a resolution in other paradigm