THE IMPORTANCE OF SECTORAL AND AGGREGATE SHOCKS IN BUSINESS CYCLES

The theoretical literature on business cycles proposes numerous causes for their occurrence. This paper attempts to measure the relative importance of aggregate, whether real or nominal, and sectoral factors in generating real economic fluctuations, as well as to identify economic variables that are correlated with the various factors. Empirical results indicate that both aggregate and industry-level factors are statistically significant in explaining variations in output with the aggregate factor being the most important. Some evidence is presented that links the aggregate factor with monetary variables.     

Examining the Influence of the Wine Festival Experience on Tourists’ Quality of Life

Hosting events and festivals is the best way of providing the wine tourism experience. Wine festivals offer a wide range of experiences that are different from day-to-day living, offer a lifestyle package and are an indicator of lifestyle tourism experience. Tourists travel to wine festivals for wine and other leisure-related experiences, including opportunities for social and/or cultural experiences, interactivity and personal development. Therefore, wine festivals should provide an experience that can influence the quality of life (QoL) of the attending tourist. QoL is influenced by various life domains, which include social, leisure and recreational, intellectual, culinary, and travel life. By its nature, a wine festival is able to influence life domains, thereby decreasing or increasing the level of satisfaction with QoL, according to the level of satisfactory experience. The purpose of this article is to examine the influence of the wine festival experience on the QoL of attending tourists. The structural relationship between the wine festival experience on tourists’ QoL is shown in a structural equation model (SEM), which is based on the notion that the QoL of attending tourists will be influenced by their level of satisfaction in various life domains. A self-administrated questionnaire was distributed during the Wacky Wine Festival in Robertson South Africa. The data from 329 (N) eligible questionnaires was cleaned, captured and analysed using SPSS. Furthermore, Amos was used to test the structural model providing statistical support. From the study’s findings, managerial recommendations were made with the aim of maximising attending wine tourists’ QoL. The research contributes to the literature related to QoL.     

Managing demographic change and diversity in organizations: how feedback from coworkers moderates the relationship between age and innovative work behavior

In a field study of 211 employees of a midsized German high-tech company, useful feedback from coworkers was examined as a moderator of the relationship between age and supervisor ratings of radical innovative work behavior. When employees perceived higher levels of useful feedback from their coworkers, the relationship between age and radical innovative work behavior followed an inverted U-shape. This inverted U-shaped relationship was decreasingly manifested as the level of perceived useful feedback from coworkers dropped. Given demographic change and the aging of the workforce of many organizations, this finding broadens the still fragmentary knowledge of the conditions under which aging is likely to have more or less positive effects on innovative work behavior. The authors discuss the theoretical and practical implications of these results on both the individual and the team level of analysis.     

Getting Active in the Gulf: Environmental Attitudes and Action Following Two Mississippi Coastal Disasters

The current study examined the impact of the Gulf Oil Spill and Hurricane Katrina, environmental attitudes, and environmental action among residents of the Mississippi Gulf Coast. The authors sought to determine if disaster impact, worry about the environment, or connection to nature was associated with environmental action following the oil spill and in general. We hypothesized that disaster impact and environmental attitudes would be significantly associated with environmental action. Surveys were administered to 1,108 individuals receiving mental health services in connection with the Gulf Oil Spill. Results indicated that disaster impact was correlated with environmental worry, connection to nature, and action. Additionally, environmental worry and connection to nature were significantly associated with action, as were the effects of Hurricane Katrina to a lesser degree. This study supplements the existing literature by examining environmental attitudes, disaster impact, and their association with environmental action following two disasters.     

Pricing of Full‐Service Repair Contracts with Learning,Optimized Maintenance,and Information Asymmetry

This article considers the optimal pricing of full‐service (FS) repair contracts by taking into account learning and maintenance efficiency effects, competition from service , and asymmetric information. We analyze on‐call service (OS) and FS contracts in a market where customers exhibit heterogeneous risk aversion. While the customers minimize their disutility over the equipment lifetime, the service provider maximizes expected profits arising from the portfolio of OS and FS contracts. We show that the optimal FS price depends inter alia on the customer's prior cost experience and on OS repair and maintenance costs. The optimal FS price is shown to increase as fewer OS customers are lost to competition, whereas improved repair learning enabled by FS reduces the optimal price. A numerical study based on data from a manufacturer of forklifts highlights the importance of learning in maintenance operations, which constitutes the key benefit of FS contracts; 81% of the customers select the FS option and are willing to pay an insurance premium of around 1.5% of total OS cost against volatility of repair costs.     

Opt‐Out Options in New Product Co‐development Partnerships

We study three contractual arrangements—co‐development, licensing, and co‐development with opt‐out options—for the joint development of new products between a small and financially constrained innovator firm and a large technology company, as in the case of a biotech innovator and a major pharma company. We formulate our arguments in the context of a two‐stage model, characterized by technical risk and stochastically changing cost and revenue projections. The model captures the main disadvantages of traditional co‐development and licensing arrangements: in co‐development the small firm runs a risk of running out of capital as future costs rise, while licensing for milestone and royalty (M&R) payments, which eliminates the latter risk, introduces inefficiency, as profitable projects might be abandoned. Counter to intuition we show that the biotech's payoff in a licensing contract is not monotonically increasing in the M&R terms. We also show that an option clause in a co‐development contract that gives the small firm the right but not the obligation to opt out of co‐development and into a pre‐agreed licensing arrangement avoids the problems associated with fully committed co‐development or licensing: the probability that the small firm will run out of capital is greatly reduced or completely eliminated and profitable projects are never abandoned.