Journal of Applied Business and Economics

Market Segmentation Strategies: Analysis, Practice, and Marketing Implications

2024-08-19T04:11:43-04:00

The article’s purpose has been to conduct a thorough and analytical review of the academic literature on market segmentation and consumer behavior to unearth emerging issues and trends. The paper begins a brief background on the concept of segmentation and a presentation of the objectives of the article. This is followed by the research methodology used. Next, the article assessed the relevant theoretical framework that underpins segmentation strategies and models. Then, the paper presents a rigorous analysis and synthesis of the extant empirical literature on market segmentation. This is followed by a discussion of emerging trends and issues in the area of market segmentation derived from the literature review. Lastly, the article outlines implications for marketing managers and provides recommendations for action.

Subprime Crisis Revisited: Effect of Payment Shock on Foreclosure Rates

2024-08-19T04:15:48-04:00

This study investigates how payment shock from interest rate resets affects subprime mortgage foreclosure rates. Using robust econometric techniques (OLS, 2SLS, GMM), it isolates the causal effect of payment shock while accounting for house prices and borrowers’ ability to pay. Our findings show a significant positive link (27%) between payment shock and foreclosure rates. It highlights economic stability’s importance, showing negative correlations between foreclosure rates and ability to pay, as well as foreclosure rates and house prices. Lagged foreclosure rates show a persistent effect. The GMM model provides the most reliable estimates by addressing endogeneity, heteroscedasticity, and serial correlation.

The Impact of Online Testing Mode on Business Assessment Test Performance Before and During COVID

2024-08-19T04:22:21-04:00

We examined the impact of the COVID-19 on a Southern California public university’s the Business Assessment Test (BAT) scores. The analysis analyzed over 4,000 observations from Spring 2017 to Spring 2022. Results demonstrated a significant performance improvement during COVID, with the average BAT score increasing from 51.35 to 55.47. Furthermore, demographic factors like major, ethnicity, enrollment, gender, and English proficiency also influenced BAT scores. Finally, interaction effects, especially for quantitative test questions were significant between COVID and cs major, work, and language. The study provides insights for educators and policymakers regarding the implementation of online assessment format in the future.

Unemployment, Financial Literacy, and Retirement: Evidence From National Data Before and During COVID-19 Pandemic

2024-08-19T04:26:12-04:00

Unemployment rates changed dramatically and peaked at 14.7% in April 2020 in the United States. The labor market force might affect households’ retirement differently before and during the COVID-19 pandemic. By utilizing 2018 and 2021 datasets, the study mainly contributes to the following insights related to retirement decisions. First, the current study finds a positive correlation between state-level unemployment rates and retirement. Second, this study finds that both objective and subjective financial literacy, financial confidence, age, and households without a child or a financially dependent child are positively associated with retirement in both pre-pandemic and during the pandemic. Financial market participation, financial risk, and income drop are negatively associated with retirement in pre-pandemic and during the pandemic. We find different significant results regarding the annual income, savings, and the number of children in a household before and during the pandemic. The findings extend the literature on unemployment and retirement. Financial professionals and the government will apply the empirical findings to the practice.

AI-Driven Financial Modeling Techniques: Transforming Investment Strategies

2024-08-19T04:41:10-04:00

Artificial Intelligence (AI) has revolutionized financial modeling and investment strategies by introducing sophisticated algorithms and advanced data processing capabilities. This article delves into a variety of AI-driven financial modeling techniques, such as machine learning, natural language processing, and deep learning, providing detailed examples of their applications. These techniques are shown to significantly enhance predictive accuracy, risk management, portfolio optimization, and trading strategies. Through case studies and empirical evidence, the article highlights the transformative impact of AI on financial modeling. Additionally, it addresses the challenges in implementing AI-driven models, such as data quality issues, model interpretability, and regulatory concerns, and identifies future research opportunities to further advance the field. The comprehensive analysis provided offers a clear understanding of how AI is reshaping the financial industry, the potential benefits it brings, and the hurdles that must be overcome to fully harness its capabilities.

The Failure of Silicon Valley Bank: A Test of Market Efficiency

2024-09-15T21:47:40-04:00

The unexpected collapse of Silicon Valley Bank (SVB) on March 10, 2023, sent shockwaves through the tech industry. SVB, a long-standing financial institution serving tech startups for nearly four decades, suddenly shifted from solvency to insolvency within 48 hours, marking the second-largest bank failure in U.S. history. This event provides an excellent opportunity to test the Efficient Market Hypothesis (EMH), particularly its semi-strong form, which posits that rapid information absorption prevents significant stock price gains in response to new information. This research uses the standard event study methodology in the finance literature to investigate SVB’s collapse and its impact on the stock prices of 30 banks traded on the New York Stock Exchange. The study aims to discern whether stock returns exhibited reactions prior to, on, or after the public announcement of SVB’s failure, thereby assessing market efficiency. Using historical stock and S&P 500 index data, the study analyzes holding period returns, performs regression analyses for pre-event periods, and calculates average excess returns. Results indicate statistically significant negative impacts on stock prices surrounding and on the event date. Furthermore, consistent with behavioral finance theory, a decline in adjusted stock prices approximately 7 days before the event suggests anticipatory market behavior, in line with semi-strong market efficiency. SVB’s case emphasizes the role of external factors, regulatory changes, and industry concentrations in shaping market responses. This research contributes empirical evidence to the discourse on market efficiency, highlighting the need for a nuanced understanding of market behaviors during crises. Lessons from SVB’s collapse will inform regulatory and risk management strategies, impacting future discussions on market efficiency. Likewise, the study results support the semi-strong form efficient market hypothesis and suggest the possibility of trading on this information up to 7 days prior to the announcement consistent with the behavioral finance literature (Bacon & Howell 2021). This study provides valuable insights into market dynamics during unprecedented events, influencing future discussions on regulation, risk management, and market efficiency.

Corporate Cash Holdings and Advertising Spending After the Financial Crises

2024-09-15T21:57:16-04:00

This paper examines the link between a firm’s characteristics and advertising budget allocation. It also shows the firm’s behavior after the Asian financial crisis and the American subprime mortgage crisis. Results show that crises can significantly impact management decisions. They can influence how multinational companies plan for their future. The study also identifies the macroeconomic factors that can influence a firm’s decision to allocate funds.

A Comparison of Employee Engagement: Pre- and Post-COVID-19

2024-09-15T22:02:01-04:00

The COVID-19 pandemic has created major disruptions in the global economy and employee working patterns. Employee engagement is a key factor for organizational management in that it provides an organization with employee commitment to the goals of the organization. The research literature shows mixed results related to the effects of Covid-19 on employee engagement pre-and post-periods. As a result, the literature on employee engagement across different industries is inconclusive. This research study explores the effects of employee engagement pre- and post-COVID-19 and attempts to identify differences across industries. The researcher administered a 15-question survey to organizations on factors related to employee engagement across five industry categories—Health Care, Food Services, Consumer Retail, Manufacturing, and Professional Services.

Food Insecurity Cost Estimates for El Paso, Texas

2024-09-15T22:06:07-04:00

Food insecurity is a fairly pervasive problem throughout the United States that is especially burdensome for low-income regions. While the latter is generally recognized, there have been very few efforts to quantify the dollar costs of food insecurity, especially at the regional level. This study attempts to do so for El Paso County, Texas. This is achieved by first adjusting for inflation cost estimates in a prior national level study. Regional differences with respect to the nation are then utilized to calculate comparable costs for El Paso. Results indicate that the economic damage wrought by food insecurity in El Paso during 2023 exceeded $745 million. That represents nearly 2 percent of total personal income in the county for that year.

Supply Chains and COVID-19 Vaccines: How Fast Can We Reach Herd Immunity?

2024-09-15T22:12:46-04:00

The COVID-19 epidemic continues to disrupt global society, but the advent of available vaccines in the Winter of 2021 meant that a return to some form of pre-pandemic “normal life” could be possible. With the supply disruptions and shortages through 2021 and 2022, the ability to both manufacture and distribute these remains important, especially with the rise of new variants and sub-variants that can evade earlier vaccines.US vaccine delivery strategies show the need to balance between focusing on delivery efficiency and delivery equity. Urban centers can focus on delivering mass numbers of vaccines quickly as these areas are often the epicenters for early stages of a pandemic, but rural areas need to focus on delivery equity over efficiency with sparsely-populated areas. Additional lessons include means to deal with vaccine-hesitant populations. This paper investigates how these changes can be implemented and the effect of current vaccine delivery with lessons for future pandemic preparation.

Higher Education Institutions’ Credit Loss Recognition

2024-09-15T22:53:53-04:00

The current expected credit loss (CECL) accounting guidance represents a forward-looking methodology for determining credit loss provisions by private colleges and universities’ lending activities beginning with fiscal year 2023-2024. The discussion presents information regarding the types and amounts of lending activities private colleges and universities engage in and the rationale of their lending programs. Provisions of the accounting guidance together implementation decisions, processes, and disclosures are part of the review. The study concludes with the accounting guidance’s impact on higher education fiscal decision making, financial reporting, and the ramifications of the guidance to provide useful information to both higher education management and financial statement users.

How to Improve Accessories Sales Forecasting of a Medium-Sized Swiss Enterprise? A Comparison Between Statistical Methods and Machine Learning Algorithms

2024-09-24T23:37:52-04:00

Forecast accuracy is a crucial topic for industrial companies, and its impacts are particularly important for the finance and production departments. The company can incur high costs if forecasts are inaccurate, for example, due to stock-outs or excess inventory.

Therefore, this study aimed to optimize accessories forecasting for a medium-sized Swiss enterprise. To do so, different forecasting techniques were tested, and statistical methods and machine learning (ML) algorithms were compared. The results were adjusted according to key account managers’ (KAM) expertise.

This paper presents a comparison between exponential smoothing, seasonal autoregressive integrated moving average (SARIMA), SARIMAX (SARIMA with exogenous variables) and ML algorithms, such as k-nearest neighbors (k-NN), least absolute shrinkage and selection operator (LASSO) regression, linear regression, and even random forest (RF).

To compare these different methods, two measures of statistical dispersion are computed: mean absolute error (MAE) and root mean squared error (RMSE). The results are standardized to enable a better comparison. For our dataset, SARIMAX (with the KAMs’ expertise as an exogenous variable) gives better results than all the ML algorithms tested.

The Impact of CEO and CFO Gender on Family Firm Performance

2024-09-25T00:24:18-04:00

This study examines the impact of CEO and CFO gender on firm performance, with a focus on family firms. Family firms focus on strategic decision-making with a tendency to pass the firm to the next generations which includes the appointment of top executives. Since family firms are more likely to appoint a family member as CEO or CFO, common gender-based discriminatory practices play a lesser role in these decisions. Our results indicate that non-family firms with female CEOs or CFOs outperform those with male CEOs or CFOs. However, in contrast to non-family firms, the performance of family firms does not vary based on the gender of the CEO or CFO. This underscores the various discriminatory practices women face throughout the entirety of their careers, as female executives must demonstrate superior abilities to “shatter the glass ceiling” and attain top executive positions. Our study highlights the importance of addressing gender-based discriminatory practices at various stages of women's careers, rather than focusing solely on their tenure as top executives.

Exploring the Role of the Dutch East India Company in Making Taiwan a Center for the Sugar Trade From 1624 to 1662

2024-09-25T00:32:34-04:00

This article intends to explore the actual role of the Dutch East India Company during the Dutch colonial period from 1624 to 1662, when Taiwan became a sugar supply center and its trade status was upgraded from a trading relay station to a trading center for sugar trade with Eurasian markets. This article tests the established model and hypothesis through five dimensions. Except for the fourth dimension, the others all obtain support for the hypothesis. The research results found that whether it is from the improvement of Taiwan’s sugar supply and sugar trade status, or the booming period of the Dutch East India Company’s sugar trade and the two-stage rise in European sugar prices, in addition to marking changes in Taiwan’s industrial transformation and trade status, all of this highlights that the Dutch East India Company indeed played a pivotal role in Taiwan during this process.

Sustainable Investments: Return and Risk

2024-09-25T00:44:59-04:00

Empirical evidence shows that investors and institutions are interested in socially responsible and sustainable investments due to either their values for making a positive impact on the society or because of the perceived rewards and less downside risk of such investments. In addition, a country’s rule of law, culture, values and norms help promote socially desirable and sustainable investments. Furthermore, money flow appears to be larger for firms with high environmental, social and governance scores. Studies generally show a lower cost of capital for socially responsive firms and perhaps a better corporate value. This is due, in part, to lower risk premium demanded by investors. A survey shows that potential investors rank the environment the highest, 79 percent, followed by products with a rank of 48 percent, among other socially desired goals.

An Overview on Russia Oil and Gas Market

2024-09-25T00:55:03-04:00

The article makes a detailed examination of the Russian oil and gas market. It outlines the legislative framework regulating the sector and identifies the regulatory authorities overseeing market operations. It introduces in Russia’s oil and gas transport and distribution system and analyzes the current market conditions. A SWOT analysis is included to illustrate the strengths, weaknesses, opportunities, and threats confronting the Russian oil and gas industry.

The article also discusses the strategic significance of Russia’s geographic location, the necessity for infrastructure upgrades, and the challenges associated with the global shift towards renewable energy. The analysis of current market dynamics is supported by production statistics and an evaluation of the industry’s future prospects, such as the potential for integrating renewable energy sources and advancing LNG technology.

Supply Chain Shocks and Retail Resilience: The Dynamics of Global Value Chains and Inventories

2024-09-25T01:05:19-04:00

We examine the role and relationship of global value chains and inventories by delving into the dynamic effects of upstream manufacturing shocks on downstream retailer performance. Motivated by the pivotal role inventories play in firm demand management, our research employs a novel two-step methodology involving a reduced-form semiparametric smooth coefficient model, and a structural vector autoregressive model. The findings, based on monthly data spanning from January 1999 to December 2021, reveal a profound, and enduring impact of manufacturing supply chain shocks on the retail sector. Following a unit supply chain shock, downstream retailers experience a substantial and lasting increase in inventory accumulation, accompanied by a short-term decline, and subsequent stabilization in sales. Moreover, post-shock, retailers experience a permanent decrease in output, underscoring the far-reaching, and persistent consequences of disruptions in upstream supply chain agents on downstream retail operations.

Cannabis Business and Tourism Impact at a Southern California Destination

2024-09-25T01:12:41-04:00

Cannabis has been legalized for both medical and recreational purposes in many states. Some tourists are drawn by the availability of legal cannabis that in turn, deliver economic benefits to the destination. Where it is legal, cannabis and related businesses attract new marijuana-motivated travelers as well as returning vacationers. Previous studies have shown that the legal cannabis industry can have a positive economic impact at a destination, including increased tax revenues and creating jobs. Additionally, hospitality and related businesses may see revenues increase from new and returning travelers who use it for various reasons, including trying it for the first time. This study focused on the cannabis business in a tourist destination.