Usual Positive Effect Research Articles

Impact of socioeconomic development on inflation in South Asia: evidence from panel cointegration analysis

Purpose This study aims to examine the influence of socioeconomic development on inflation in South Asia using the foreign exchange rate and money supply as control variables. Design/methodology/approach The study uses annual panel data for five South Asian economies, namely, Bangladesh, India, Nepal, Pakistan and Sri Lanka over the period 1990–2018, applies cointegrating regression techniques, namely, the panel dynamic ordinary least square (OLS) and fully modified OLS estimators to examine the long-run relations and conducts the Toda-Yamamoto Granger causality test to detect the direction of causality among variables. Findings The cointegrating regression estimations have documented that the socioeconomic development proxied by the human development index (HDI) has no significant impact on inflation. Although economic development represented by gross domestic product (GDP) growth causes inflation, socioeconomic development represented by HDI has no impact on inflation and has demonstrated as a better macroeconomic indicator, and thus creates no inflationary pressure in the economy. The foreign exchange rate has a positive impact on inflation. The broad money supply has the usual positive effect on domestic inflation that endorses the monetarist view about prices. The Toda-Yamamoto Granger causality test has confirmed several unidirectional causalities: inflation causes HDI, money supply causes both inflation and HDI and the foreign exchange rate causes HDI. Practical implications The study has practical implications for policymakers in South Asia, to improve HDI, particularly GDP per capita, education and health-care facilities to realize continuous socioeconomic development, which will take care of inflation. Moreover, these counties may follow a conservative monetary policy to control inflationary pressure in their economies. Originality/value The study is original and claims to be the first to examine the impact of socioeconomic development on inflation. The findings have socioeconomic values regarding controlling inflation in South Asia.

Sector-Level Competition and Export: Evidence from Exporter Dynamics Database

We study the effect of sector-level competition on export by utilizing the Exporter Dynamics Database of the World Bank that provides sector-level competition measure along with destination-specific detailed export data. The results of the analysis show a nonlinear effect of sector-level competition on export. While at less competitive sectors, an increase in competition depresses export, at highly competitive sectors, an increase in competition generates a trade-promoting effect on export. The observed nonlinear effect is robust across sectors and countries. Therefore, productivity of peer firms could generate negative effect on a firm’s export performance contrary to the usual positive effect of a firm’s own productivity.

Trust, happiness, and households’ financial decisions

A recent line of research highlights trust as an important element guiding the decision of households to invest into risky financial assets and insurance products. This paper contributes to this literature by identifying happiness as another key driver of the same decision. Using detailed survey data from a sample of Dutch households, we show that the impact of happiness on households’ financial decisions works in the opposite direction and is more economically important compared to trust. Specifically, happiness leads to a lower probability of investing into risky financial assets and having insurance, while trust has the usual positive effect found in the literature. Furthermore, the negative effect of happiness on the ownership of risky financial assets is about 6% higher compared to the positive equivalent of trust. Similarly, the negative effect of happiness on the ownership of insurance is 3% higher than the positive effect of trust.

Self-employment and job satisfaction: an empirical analysis

Purpose – The purpose of this paper is to test whether the usual positive effect of self-employment on job satisfaction remains once the greater autonomy and flexibility afforded by self-employment have been factored in, as well as the existence of differences in unobserved characteristics across individuals. Design/methodology/approach – It may be thought that the probability of being self-employed and the declared job satisfaction are not independent from each other due to differences in unobserved characteristics – as psychological or personality traits – across individuals. Therefore, self-employment should be treated as an endogenous variable when it is introduced as an explanatory variable in a job satisfaction equation. Given this, the paper proposes the estimation of a treatment effect model in which self-employment and job satisfaction equations are estimated jointly. Findings – The results suggest that the usual positive effect of self-employment on job satisfaction is due to the greater work autonomy afforded by self-employment, and not to the greater willingness of the self-employed to report higher levels of satisfaction. Thus, the paper finds that once flexibility and autonomy are considered, the usual positive effect of self-employment on job satisfaction disappears and becomes negative. Research limitations/implications – It would be useful further empirical analysis using other data, especially panel data, to test the robustness of the results. Originality/value – The paper proposes an alternative way to analyse the relation between self-employment and job satisfaction by taking into account both the greater autonomy and flexibility afforded by self-employment, as well as psychological or personality traits.

Accounting Transparency and the Asset Substitution Problem

ABSTRACT: We develop a model to show that transparent accounting can worsen the asset substitution effect of debt. This negative effect can outweigh the usual positive effect of transparency. We demonstrate this point by comparing pure historical cost accounting to the conservatively skewed accounting regime of lower-of-cost-or-market (LCM). In a market with asymmetric information, the two regimes lead to different degrees of transparency. The more transparent LCM regime produces more efficient results for firms with lower debt levels, while the opaque rule of pure historical cost accounting is preferable for higher debt levels. We explore the implications of this result for the firm's optimal capital structure.

Helpful Only in the Abstract?

This study tested the hypothesis that empathizing with out-group members is beneficial outside of, but not within, intergroup-contact situations. We predicted that in the context of intergroup interaction, the potential for evaluation would lead individuals' perspective-taking efforts to take on an egocentric and counterproductive flavor. As predicted, when empathy was instantiated during an intergroup exchange, it failed to exert its usual positive effect on intergroup attitudes and led higher-prejudice individuals to derogate an out-group member who was an interaction partner; empathy also blocked the prejudice-reducing influence of intergroup contact. Mediation analyses indicated that activation of negative metastereotypes regarding the out-group's view of the in-group accounted for these effects. The findings, which demonstrate ironic effects of empathy in intergroup interaction, indicate that interventions based on studies of individuals' reactions to out-group members in the abstract might have dramatically different consequences when put into practice in real exchanges between members of different groups.

Does market demand volatility facilitate collusion?

This paper develops a real options model of a price-setting cartel under uncertainty to examine whether market demand volatility facilitates collusion or not. We show that there is a critical level of market demand (the optimal defection trigger) above which firms find it desirable to defect from the cartel. We show further that an increase in the underlying market demand uncertainty has two opposing effects on the optimal defection trigger. First, the increased market demand volatility gives rise to the usual positive effect on option value that lifts up the optimal defection trigger. Second, the increased market demand volatility calls for an upward adjustment of the discount rate and thus creates a negative effect on option value that pushes down the optimal defection trigger. We show that the negative effect dominates (is dominated by) the positive effect when the underlying market demand uncertainty is trivial (significant), thereby rendering a U-shaped pattern of the optimal defection trigger against the market demand volatility.

Aprotinin and tranexamic acid for high transfusion risk cardiac surgery

Background. Studies have shown that aprotinin and tranexamic acid can reduce postoperative blood loss after cardiac operation. However, which drug is more efficacious in a higher risk surgical group of patients, has yet to be defined in a randomized study.Methods. With informed consent, 80 patients undergoing elective high transfusion risk cardiac procedures (repeat sternotomy, multiple valve, combined procedures, or aortic arch operation) were randomized in a double-blind fashion, to receive either high dose aprotinin or tranexamic acid. Patient and operative characteristics, chest tube drainage and transfusion requirements were recorded.Results. There was no significant difference between the 2 treatment groups with respect to age, cardiopulmonary bypass time, complications (myocardial infarction, stroke, death), chest tube drainage (6, 12, or 24 hours), blood transfusions up to 24 hours postoperatively, total allogeneic blood transfusions for entire hospital stay, or induction/postoperative hemoglobin levels. However, multiple regression analysis revealed a positive relationship between cardiopulmonary bypass time and 24 hour blood loss in the tranexamic acid group (p = 0.001), unlike the aprotinin group where 24 hour blood loss is independent of cardiopulmonary bypass time (p = 0.423).Conclusions. Overall, there was no significant difference in blood loss, or transfusion requirements, when patients received either aprotinin or tranexamic acid for high transfusion risk cardiac operation. Aprotinin, when given as an infusion in a high-dose regimen, was able to negate the usual positive effect of cardiopulmonary bypass time on chest tube blood loss.

96/04721 Spotlight on State's thermal coal

This paper develops a real options model of a price-setting cartel under uncertainty to examine whether market demand volatility facilitates collusion or not. We show that there is a critical level of market demand (the optimal defection trigger) above which firms find it desirable to defect from the cartel. We show further that an increase in the underlying market demand uncertainty has two opposing effects on the optimal defection trigger. First, the increased market demand volatility gives rise to the usual positive effect on option value that lifts up the optimal defection trigger. Second, the increased market demand volatility calls for an upward adjustment of the discount rate and thus creates a negative effect on option value that pushes down the optimal defection trigger. We show that the negative effect dominates (is dominated by) the positive effect when the underlying market demand uncertainty is trivial (significant), thereby rendering a U-shaped pattern of the optimal defection trigger against the market demand volatility.

96/04720 Russian coal: Free market or free fall?

This paper develops a real options model of a price-setting cartel under uncertainty to examine whether market demand volatility facilitates collusion or not. We show that there is a critical level of market demand (the optimal defection trigger) above which firms find it desirable to defect from the cartel. We show further that an increase in the underlying market demand uncertainty has two opposing effects on the optimal defection trigger. First, the increased market demand volatility gives rise to the usual positive effect on option value that lifts up the optimal defection trigger. Second, the increased market demand volatility calls for an upward adjustment of the discount rate and thus creates a negative effect on option value that pushes down the optimal defection trigger. We show that the negative effect dominates (is dominated by) the positive effect when the underlying market demand uncertainty is trivial (significant), thereby rendering a U-shaped pattern of the optimal defection trigger against the market demand volatility.

96/04727 Pore structure characteristics of coal char and its scale theory

This paper develops a real options model of a price-setting cartel under uncertainty to examine whether market demand volatility facilitates collusion or not. We show that there is a critical level of market demand (the optimal defection trigger) above which firms find it desirable to defect from the cartel. We show further that an increase in the underlying market demand uncertainty has two opposing effects on the optimal defection trigger. First, the increased market demand volatility gives rise to the usual positive effect on option value that lifts up the optimal defection trigger. Second, the increased market demand volatility calls for an upward adjustment of the discount rate and thus creates a negative effect on option value that pushes down the optimal defection trigger. We show that the negative effect dominates (is dominated by) the positive effect when the underlying market demand uncertainty is trivial (significant), thereby rendering a U-shaped pattern of the optimal defection trigger against the market demand volatility.

IS-LM stability and economic policy effectiveness: A note

Accepting the findings of Weber (1970) and Yarrow (1975), Cebula finds that conventional fiscal policy has its usual positive effect on the level of income while monetary policy has a negative impact. This paper shows that if a budget constraint of the specific, simplified form G − T = ΔM is added to the model, the results differ from Cebula's.