This article investigates the underlying stochastic process generating dangerous rare events, such as financial crises, that occur more frequently than those predicted by models with finite variances. The authors discover that asymmetric Lévy probability distribution function characterized by infinite variance can model several multiple credit ratios used in financial accounting to quantify a firm’s financial health as well as changes of individual financial ratios. The authors also demonstrate, how such continuous credit rating approach and its dynamics can be used to evaluate credit risk.
An open question in the control literature concerns the role of interpersonal trust in the design and functioning of formal control systems for collaborative settings. The authors find that subordinate’s trust in the superior depends on the formality of the performance evaluation procedure and that this relationship is mediated by managerial perceptions of justice and feedback. The authors also find that formality matters more for trust formation if outputs are less contractible.
This article investigates the concept of customer-based brand equity for a tourism destination, which has been introduced into the tourism literature only a few years ago. Specifically, it investigates whether differences between renewal and repeat tourists exist in their evaluation of a tourism destination. A theoretically proposed model, encompassing the dimensions of awareness, image, quality, and loyalty, was empirically verified for the European tourism destination Slovenia from the perspective of German tourists. The results imply that the dimensions of image and quality play the most important role in tourists’ evaluation of a destination, regardless of whether they are first-time visitors or repeaters. Results also reveal differences in importance for the dimensions of awareness and loyalty between renewal and repeat tourists. Drawing on the results, the article offers some implications for tourism organizations in developing and implementing destination marketing strategies in foreign markets.
This article confirms the validity of the hypothesis that national interests were the driving force behind the process and outcome of negotiations for the EU's next financial perspective for 2007–13. The hypothesis is tested by comparing hypothetical coalitions based on quantified national interests (partial net budgetary balances) and the actual (documented) coalitions. Based on these results, the article also discusses implications of the ‘net balances problem’ for the 2008/09 EU budget review.
We study market timing and pecking order in a sample of debt and equity issues and share repurchases of Canadian firms from 1998 to 2007. We find that only when firms are not financially constrained is there evidence that firms issue (repurchase) equity when their shares are overvalued (undervalued) and evidence that overvalued issuers earn lower post announcement long-run returns. Similarly, we find that only when firms are not overvalued do they prefer debt to equity financing. These findings highlight an interaction between market timing and pecking order effects.