Contagion Effects Research Articles

The behavioral contagion effect of tourists’ risk decision-making

This study investigated the contagion effect of other tourists' risk-seeking behavior on tourists' risk decision-making. It further examined the mediation of two contrasting motivational systems (approach-avoidance), and the moderation of destination management deterrence. Four experiments were conducted focusing on the risk decision-making of tourists in the context of undeveloped natural areas and tidal-bore watching settings. Independent samples t-tests, regression, and multivariate analysis of covariance were utilized to examine the proposed conceptual model. The results of Experiment 1 (n = 226) demonstrated that seeing other tourists' risk-seeking behavior had a contagion effect on tourists' risk decisions; specifically, other tourists' risk-seeking behavior increased tourists' risk-seeking intention but decreased their risk-aversion intention. Experiment 2 (n = 528) revealed the mediation effect of approach/avoidance motivation between the relationship of other tourists' risk-seeking and tourists' risk-seeking/avoidance intentions. Experiment 3 (n = 526) confirmed that destination management deterrence counteracted the behavioral contagion effect of tourist risk-seeking and induced more risk avoidance. Experiment 4 (n = 452) provided a holistic test of the conceptual model, demonstrating the robustness and validity of the findings. This study reveals the formation mechanism of tourists’ risk decision-making from a behavioral contagion perspective and offers management insights for tourist safety.

Structural changes in contagion channels: the impact of COVID-19 on the Italian electricity market

AbstractOperating on electricity markets requires accurately identifying, quantifying, and measuring risk coupled with their corresponding return: this appears as a crucial point, particularly during and after the COVID-19 pandemic. The aim of the present paper is twofold. First, we propose a novel econometric approach to identifying relevant market factors that capture several elements of the risk transmission mechanism inherent in energy systems. The proposed model extends Bayesian graphical models with change points to a multiple-layer set-up. Multilayer graphs encompass the two relevant channels of shock transmission: volatility and price contagion effects. The choice of these two layers seems natural because electricity prices and their spiky nature, coupled with inherent volatility, constitute essential influential elements for market players to maximize their profits. The change-point specification allows for detecting relevant changes in the electricity market. Second, we apply the proposed econometric framework to the Italian zonal markets analyzing the effects of returns and volatility contagion in several periods detected by the model. The last time intervals identified by the change-point methodology overlap the COVID-19 pandemic period. The model captures relevant abrupt changes in prices and volatility in the zonal electricity market and provides new evidence of interconnections in the zones of the Italian market related to the risk alone, price process alone, and risk versus price process relationship and their interactions.

Hedonic Approach to Vertical Residential Rentals in the Brazilian Amazon: The Case of Belém, Pará

This study set out to identify and analyze the factors that influence the formation of rental prices for residential apartments in the city of Belém. The approach adopted was based on the hedonic price theory, which considers that the rental price of an apartment reflects the implicit prices of its attributes—structural, locational, and neighborhood quality. The sample used consisted of 259 observations, corresponding to the rental advertisements of the representative apartments in each building. The ordinary least squares (OLS), spatial lag model (SLM), and geographically weighted regression (GWR) techniques were used in the statistical analysis in this study. The results of the OLS model showed statistical significance between the attributes analyzed and the rental price of the apartments. In turn, the SLM indicated that the structural attributes have an impact on the rental prices of neighboring apartments, configuring a contagion effect in the real estate market. The GWR model showed that there was no spatial heterogeneity in the effects of the determinants on apartment rental prices throughout the sample.

Chinese young adults' perception of fertility: Emotional contagion in fertility policy discussions on Sina Weibo

We investigated the reactions and preferences of the Chinese populace, particularly young adults, toward China's three-child policy, a recent strategy aimed at addressing the nation's aging population that allows couples to have up to three children. By monitoring Sina Weibo discussions related to fertility policies, we gauged public sentiment and potential emotional contagion. We collected 711 main posts and 26,515 responses and used the sentiment analysis method to identify the emotional tendencies of each post, thus determining if emotional contagion occurred. Results showed there were 631 posts with negative emotional contagion effects and 554 posts with positive emotional contagion effects. Further textual analysis indicated that the Chinese public maintains a pessimistic outlook on the three-child policy and expresses concern about the detrimental impact of social circumstances and the difficulties women encounter concerning fertility.

Coal price shock propagation through sectoral financial interconnectedness in China's stock market: Quantile coherency network modelling and shock decomposition analysis

The long and continuing coal-dominated energy structure in China makes it important to investigate the impact of coal price shocks on China's financial markets. This study identifies whether volatilities in coal market may propagate between sectoral equity markets through the heterogeneous connectedness between these markets, and even further contribute to larger scale overall instabilities. We first apply the cross-spectral quantile coherency (QC) to identify the time-frequency interconnectedness among returns of 28 sectors in China's equity market. A spatial autoregressive (SAR) framework based on the QC network is further utilized to identify the indirect effect propagating through the heterogeneous interconnectedness between 28 sectoral equity markets. The empirical results indicate significant risk contagion effects during market turmoil, while strong risk absorbing effects are confirmed for the tranquil case. The significantly varying sectoral interconnectedness along with the corresponding heterogeneous pattern of shock propagation under various market specifications may provide evidence for the spillover effects to be the key mechanism and the sectoral interconnectedness as an important channel for coal price shock propagation, which is essential to the effectiveness of portfolio diversification and financial stabilizing policy.

Customer contagion effects of voluntary environmental regulation: A supplier green innovation perspective

Prior studies primarily focused on internal green innovation and environmental performance concerning voluntary environmental regulations. Little attention has been given to the impact of partner-imposed regulations, such as those by customers, on green innovation in supplier firms. This research explores the influence of customer-driven voluntary environmental regulation on supplier green innovation and its mechanisms. The findings indicate that customer-driven voluntary environmental regulation leads to a positive contagion effect, significantly fostering supplier green innovation. Robustness is maintained through tests, including trend analysis, placebo tests, propensity score matching (PSM), and controls for spillover mechanisms and external influences. Demand feedback and knowledge spillover are identified as mediating mechanisms. Additionally, equity linkage and state ownership in suppliers facilitate customer-driven voluntary environmental regulation, further promoting green innovation. This study advances understanding in the context of supply chain green innovation.

Ripple-Spreading Network of China’s Systemic Financial Risk Contagion: New Evidence from the Regime-Switching Model

Ripple-Spreading Network of China’s Systemic Financial Risk Contagion: New Evidence from the Regime-Switching Model

Contagion Effect Pasar Finansial Antar Negara ASEAN

This study aims to determine whether stock price indices influence each other in the ASEAN region and whether there is a contagion effect between financial markets in the ASEAN region. The data used in this research is time series data from January 3, 2017 to December 30, 2021 from the official websitesinvesting.com and wsj.com. This research is a quantitative research using the GARCH analysis model. The results of the study show that stock price indices influence each other in the ASEAN region and there is a contagion effect between financial markets in the ASEAN region

Effects of COVID-19 contagion in cohabitants and family members on mental health and academic self-efficacy among university students in Sweden: a prospective longitudinal study

ObjectiveThis study used causal inference to estimate the longitudinal effects of contagion in cohabitants and family members on university students’ mental health and academic self-efficacy during the COVID-19 pandemic.DesignA prospective...

Panic Buying Pandemonium: The Bandwagon Effect and Healthcare Implications

The bandwagon effect — also known as the “contagion effect” — is a psychological phenomenon wherein individuals tend to adopt certain behaviors or beliefs because of the influence of others. This article explores the multifaceted dynamics of the bandwagon effect within the healthcare context, shedding light on its impact on panic behaviors, patient choices, medication compliance, and even healthcare policy.

Exploring Bitcoin dynamics against the backdrop of COVID-19: an investigation of major global events

COVID-19 has significantly influenced global financial markets, including Bitcoin. Recent studies have focused on investigating the first wave of the COVID-19 outbreak and accounting for market changes, which were mostly due to the pandemic. This research not only analyzes the contagion effects of COVID-19 but also considers aftermath events beyond the first pandemic wave to examine spillovers of Bitcoin. The study employs Diebold and Yilmaz’s method to explore the static and dynamic spillovers of the selected variables and identifies several major global events, including crypto-specific affairs, macroeconomic policies, and geopolitical conflicts, to explain the new market dynamics of Bitcoin using network analysis. The findings identify a few high-contagion periods related to Bitcoin. The paper also found that Bitcoin is more likely to produce extreme returns and is more connected to other markets. Contagion effects “from” and “to” other markets are asymmetrical in terms of arrival time and market response. Bitcoin is more likely to be affected by other markets in extreme situations and receives spillovers from them sooner than it transmits spillovers to others. In the context of various global events, impacts arising from developed countries are stronger. China still has some impact on cryptocurrency markets, but they are waning. Bitcoin is thus not a safe haven from the shocks of global events, but can sometimes work as a hedge or diversifier. The results offer alternative explanations for Bitcoin’s different market dynamics and enrich our understanding of Bitcoin’s safe haven, hedge, and diversifier properties within a diversified portfolio.

The Role of Technology in Improving Public Sector Performance in Nigeria

Over the years, the public sector in Nigeria has faced various challenges, including bureaucracy, corruption, and inefficiencies in service delivery, which have dampened the efficiency of the public sector, especially in revenue generation. However, the rapid advancement of technology globally, the increasing rise of globalization, and the contagion effect across the globe have led to the adaptation of technology to a great extent in developing economies. Nigeria, as a developing economy, relies on the Western world for most of its technology, which is accompanied by a huge cost of the transfers, and the country is left with the dilemma of whether technology truly promotes public sector efficiency and growth. Against this backdrop, this study seeks to investigate the impact of technology on public sector efficiency in Nigeria. The study employed monthly data ranging from 2010 to 2022 and was extracted from the database of the Central Bank of Nigeria. The independent variables are Information, Communication, and Technology which served as a proxy for Technology, while Foreign Direct Investment, Exchange Rate, and Inflation were also included as the control variables in the model. While public sector efficiency which is proxied by public revenue represent the dependent variable. The result of the unit root showed that the variables are stationary at levels and first difference, hence the use of the ARDL model which established a short-run relationship among the variables. The result, in the long run ARDL showed that technology had a positive and significant impact on public sector efficiency. The study, therefore, recommends that the Government needs to intensify efforts in the process of acquisition and implementation of technology in the public sector to improve revenue generation for the Government and, invariably, output. A large portion of government budgetary allocations should be channeled more toward adequate development of IT infrastructures to increase efficiency. Ultimately, the Monetary and Fiscal Authorities should collaborate in churning out policies that will improve economic parameters such as exchange rate, interest rate, Inflation, output, etc.

The Effect of Group Dynamics on Individual Ethical Decision Making

ABSTRACT Given that many significant decisions in accounting are made by groups of professionals, it is important to understand the impact of group interactions on ethical decision making. We examine how group dynamics can influence an individual’s ethical evaluations and intentions and whether the effect of these group interactions persists in the future. We also explore the ethical orientations used by participants to inform their ethical judgments. Our results indicate that individual initial assessments of ethical scenarios are consistently more ethical than group assessments of the same ethical scenarios. Groups consistently viewed questionable actions as more acceptable than individuals and were more likely to say that they or their peers would perform the action. This less ethical perspective persists in future individual ethical assessments, demonstrating a contagion effect on ethical judgments. Furthermore, our results show that justice and relativism are the moral constructs utilized by most participants to form ethical evaluations. Data Availability: Data are available from the authors.

Revisiting the Contagion Effect in International Stock Markets: An Approach Based on Endogenous Crises

Ce papier vise à identifier la présence d'un effet de contagion en se basant sur un modèle MS VAR, avec des contraintes sur la matrice de variance-covariance et en fixant de manière endogène des intervalles caractérisés par des régimes à faible et forte volatilité. Les résultats montrent que pour les pays développés, un choc positif (négatif) sur un marché a un impact positif (négatif) à court terme sur les autres marchés boursiers. L'effet de contagion d'un pays émergent aux autres pays du continent est relativement plus important que pour les pays développés. En considérant le changement de régime, les résultats montrent que l'impact des chocs américains sur le marché japonais est plus élevé dans le régime à haute volatilité. Ce papier présente des résultats intéressant en matière de gestion de risque et de diversification de portefeuille. Classification JEL : F36 ; C32 ; G15.

Overnight returns following large price movements

Using 5-second data to simulate overnight and intraday trading, we found that a significant price drop in the NASDAQ index has a contagion effect on price downward stocks listed on Taiwan's stock exchange. After the NASDAQ index experienced a 3–4 % drop, traders could profit by trading on stocks falling more than 7 % without hitting floor limits. The positive returns are significantly associated with firms’ characteristics of small size, high prices, high trading volume, and low net profit margin. Upon large price movements, traders could exploit contagion mispricing to make short-term profits.

Does firms' ESG information disclosure have contagion effect? Evidence from China

AbstractThe increasing concern of the society on environmental issues has driven research on environmental, social, and governance (ESG) issues. Among the existing academic studies on the influencing factors of ESG disclosure, few scholars have investigated the contagion effect of ESG disclosure, that is, whether the ESG disclosure behavior of peer firms affect the ESG disclosure of individual firms. Therefore, based on dynamic competition theory and social learning theory, this paper examines the contagion effect of ESG information disclosure from the perspective of peer relationship networks, using a sample of A‐share listed firms in China from 2009 to 2021. The study finds that there is a contagion effect in the level of firms' ESG disclosure, that is, when other firms in the same industry have a higher average ESG disclosure level, individual firm also tend to have a higher ESG disclosure level; and at the same time, this contagion effect is more pronounced among firms with state‐owned nature, a high degree of marketization, financing constraints and environmental uncertainty. By exploring the mechanism of its effect, we find that the contagion effect of ESG disclosure mainly originates from the competitive imitation mechanism and the information acquisition imitation mechanism. This paper theoretically enriches the research on the factors influencing the level of ESG disclosure and the contagion effect of inter‐firm behavior, and practically provides a reference for regulators to effectively supervise and improve firms' level of ESG disclosure.

Quantitative Modeling of Financial Contagion: Unraveling Market Dynamics and Bubble Detection Mechanisms

This study explored the complex interplay and potential risk of financial contagion across major financial indices, focusing on the Bucharest Exchange Trading Investment Funds Index (BET-FI), along with global indices like the S&P 500, Nasdaq Composite (IXIC), and Dow Jones Industrial Average (DJIA). Our analysis covered an extensive period from 2012 to 2023, with a particular emphasis on Romania’s financial market. We employed Autoregressive Distributed Lag (ARDL) modeling to examine the interrelations among these indices, treating the BET-FI index as our primary variable. Our research also integrated Exponential Curve Fitting (EXCF) and Generalized Supremum Augmented Dickey–Fuller (GSADF) models to identify and scrutinize potential price bubbles in these indices. We analyzed moments of high volatility and deviations from typical market trends, influenced by diverse factors like government policies, presidential elections, tech sector performance, the COVID-19 pandemic, and geopolitical tensions, specifically the Russia–Ukraine conflict. The ARDL model revealed a stable long-term relationship among the variables, indicating their interconnectedness. Our study also highlights the significance of short-term market shifts leading to long-term equilibrium, as shown in the Error Correction Model (ECM). This suggests the existence of contagion effects, where small, short-term incidents can trigger long-term, domino-like impacts on the financial markets. Furthermore, our variance decomposition examined the evolving contributions of different factors over time, shedding light on their changing interactions and impact. The Cholesky factors demonstrated the interdependence between indices, essential for understanding financial contagion effects. Our research thus uncovered the nuanced dynamics of financial contagion, offering insights into market variations, the effectiveness of our models, and strategies for detecting financial bubbles. This study contributes valuable knowledge to the academic field and offers practical insights for investors in turbulent financial environments.

Uncovering asymmetrical contagion effects: US monetary policy and emerging markets

The impact of U.S. monetary policy (USMP) on domestic interest rates and goods markets in Emerging Market Economies (EMEs) remains a subject of ongoing debate. We investigate the fluctuations in U.S. interest rates across 17 inflation-targeting EMEs with flexible exchange rates from 2000–2020. Our findings reveal asymmetric contagion effects, with U.S. interest rate decrease having a more significant short-term impact than rate hikes. Long-term U.S. rates minimally influence EMEs’ domestic rates. Resilience is observed in EMEs with robust GDP growth and favorable trade balances, while increased capital inflows and stock market surges heighten contagion risks. Focusing on the short-term contagion effect on goods markets through international trade drivers, we find that global capital flows and US dollar fluctuations, combined with a rise in the FED rate, contribute to the deterioration of EMEs’ trade balance. The study underscores the need for EMEs to monitor and respond to U.S. monetary policy changes for financial stability and advocates for enhanced international dialogue among policymakers.

Are my wife's recovery activities related to my subsequent recovery activities at work?

We proposed a model where a male employee's wife's engagement in recovery activities results in the husband's own enactment of recovery activities while in the workplace, via emotional contagion, based on the COR theory and broaden-and-build theory of positive emotions. We expected wives may experience positive emotions after engaging in social interactions, which has a contagion effect on husbands' positive emotions. Further, husbands were expected to leverage their positive emotions to engage in future recovery activities (better lunch nap and meal quality while at work). Lastly, we examined whether power imbalance in the married couple has a moderating effect on emotional contagion processes. To test our model, we used an experience-sampling method in which 110 dyads completed daily diary questionnaires for 8 consecutive days (N = 768, after removing 112 invalid observations). As expected, wives' social interactions are linked to husbands' positive emotions via wives' positive emotions. Further, husbands' positive emotions predict the quality of two workplace recovery activities (lunch naps and meals). Finally, power imbalance moderates the association between wives' (donors) emotions and husbands' (recipients) emotions such that the crossover of emotions is stronger when wives (donors) have relatively more power than when they have less.

The implications of non‐synchronous trading in G‐7 financial markets

AbstractWe investigate the effects of non‐synchronous trading on volatility spillover for the G‐7 equity markets during the Eurozone sovereign debt crisis (ESDC) and the Covid‐19 pandemic crisis. For data synchronisation we utilise ΜΑ(1) adjusted return series to estimate the Baba‐Engle‐Kraft‐Kroner (BEKK) and the dynamic conditional correlation (DCC) models. We also consider the use of realised kernels as explanatory variables in the variance equation. In this set up, the contagion effects during crises periods are more perceptible, as the spikes are easier to interpret. We also check the robustness of our main results by applying, wavelet coherence analysis to G‐7 major equity indices with realised kernels, as well as local Gaussian correlations (LGC). Our findings suggest the empirical significance of the synchronisation effects for the US and the other G‐7 equity markets. We also conclude that realised kernels is an effective tool for mitigating non‐synchronous effects. These results underline the significance of quantifying the synchronisation effects in equity markets as well as international portfolio diversification strategies.