The indirect distribution dilemma: assessing the financial impact of participation in Booking.com for hotels

Purpose This study aims to assess if the benefits outweigh the costs of participation in online travel agencies (OTAs) such as Booking.com. Design/methodology/approach A two-step system generalised method of moments estimation of a regression model of firm-level return on assets (ROA) is used on a dummy variable indicating whether a lodging facility participates in Booking.com. The assessment contained various control variables, including size, age, leverage, liquidity and lagged ROA. The moderating effect of firm age and size was studied by including interaction variables between the Booking.com dummy and age and size, respectively. The model was estimated using participation and financial data of 775 Belgian firms over a 20-year period (1999–2018). Findings The findings indicate that participation in Booking.com is associated with higher profitability, with this effect more economically important and pronounced for smaller hotel properties. Research limitations/implications The study provides a broadly applicable empirical model to assess the impact of platform participation on the financial performance of tourism, hospitality or retail businesses. Practical implications The study provides empirical evidence that, from a transaction cost perspective, the benefits of participation in OTAs outweigh the costs, resulting in substantially higher profitability. The evidence can be used to justify the use of OTAs as distribution channels. Originality/value While prior studies have described and conceptually analysed the evolution and role of OTAs in the hotel sector, and speculated on the net effect of OTA participation, to the best of the authors’ knowledge, this is the first study to empirically assess whether OTA participation creates value for hotel owners and investors.

SUBSTITUTION OF ANCHOR CURRENCY: CHALLENGES FOR TRADE BETWEEN IRAN AND ITS MAJOR TRADING PARTNERS

The aim of the paper is to find out whether euro is a convenient substitution for U.S. dollar as an anchor currency for Iranian rial and whether this replacement would affect Iran’s international trade positively. We explore these effects via Optimum Currency Area (OCA) theories using generalized least square from 2000 to 2018. Based on OCA index, euro would be a good substitution for U.S. dollar as an anchor for Iranian rial. In addition, gravity model and Generalized Method of Moments estimation confirm that substitution of U.S. dollar by euro would improve bilateral trade between Iran and its major trade partners especially the European Economic and Monetary Union (EMU). Furthermore, we confirm that a basket containing main currencies (euro, U.S. dollar, yuan, Russian rubble) would be more efficient than a single currency anchor however euro should be prominent in the basket. Such a change of anchor could positively contribute to reduction of transaction costs, diversification of external risk, rise of mutual trade exchanges between Iran and the EMU or the EU and consequent economic growth of trade partners. The paper contributes to the existing literature by comprehensive methodological approach how to identify an appropriate anchor currency.

Revenue diversification and financial sustainability of microfinance institutions

PurposeThis paper aims to investigate whether revenue diversification affects the financial sustainability of microfinance institutions (MFIs).Design/methodology/approachThe study uses a worldwide panel data set of 443 MFIs in 108 countries for the period 2013–2018 and two-step system Generalized Method of Moments estimation model.FindingsThe study finds that revenue diversification has a significant and positive effect on the financial sustainability of MFIs.Practical implicationsThe findings of this study actually offer important managerial and policy lessons on MFIs’ financial sustainability. Microfinance managers and policymakers should consider revenue diversification as a strategy through which MFIs can attain financial sustainability instead of overreliance on donations and government subsidiesOriginality/valueUnlike previous studies that examined revenue diversification in the context of banking firms, this study contributes to literature by examining the impact of revenue diversification of the financial sustainability of MFIs.

Multiple large shareholders and bank stability: the case of MENA banks

PurposeThis study aims to investigate how multiple large shareholders individually and interactively influence Middle East and North Africa (MENA) bank stability.Design/methodology/approachThe empirical framework is based on a generalized dynamic two-step system and utilizes the method of moments estimation to analyze a panel dataset of 532 bank-year observations over the 2004–2017 period.FindingsThe estimation results show that large shareholders are crucial in explaining the differences in bank stability among MENA banks. Specifically, the first- and second-largest shareholders exacerbate bank instability. However, we found that the third-largest shareholder enhances bank stability. Additionally, the coalition between the two largest shareholders increases the moral hazard problem in MENA banks and significantly decreases stability. Meanwhile, the interaction between the three largest shareholders is associated with a control contestability problem, which impels better bank stability. The results support the dispersion effect of multiple large shareholders in MENA countries.Originality/valueThe role of large shareholders in corporate governance is widely recognized. However, very little is known about the role and the real impact that multiple large shareholders may have on the banking sector. To the best of the authors' knowledge, this work is the first to analyze the relationship between multiple large shareholders and bank stability in the MENA region.

How does a democratic government with limited intervention affect environmental quality? Fresh evidence with international panel data

This paper examines the effect of democratic countries which encourage economic freedom on the environment, measured by Carbon Dioxide (〖CO〗_2) emission. For the empirical analysis, an annual panel data sample consisting of 179 countries from 1990 to 2018 is collected. Applying the Ordinary Least Squares and Two-Step Generalized Method of Moments estimation techniques, we find that the environmental quality is enhanced with a higher degree of democracy and economic freedom. The results firmly hold for high and middle-income countries when the sample is decomposed across income levels.

Social globalisation and quality of democracy: An analysis for old and young democracies

The literature on globalisation and democracy has primarily paid attention to economic integration and its effects on democracies. Systematic empirical evidence on the effects of social globalisation on democracy is absent. This article intends to fill this gap. Social globalisation is disaggregated into interpersonal, information and cultural globalisation. I apply the generalised method of moments estimation and analyse democracies encompassing the periods 1970–1991 and 1991–2017. The results indicate that the democratic qualities affected by social globalisation are freedom of expression, equal access and protection, and the quality of elections. The moderating effect of a given country’s democracy stock has been confirmed across different estimations. However, and especially during the post–Cold War period, younger and older democracies benefit equally from the increased spread of information caused by globalisation with regard to equal access. Equally, both categories experience similar challenges with the rise of interpersonal globalisation in terms of the quality of elections.

Foreign Direct Investment and World Pandemic Uncertainty Index: Do Health Pandemics Matter?

This paper explores the impacts of health pandemics on foreign direct investment (FDI) using the new world pandemic uncertainty index (WPUI). We investigate the effects of pandemics, including COVID-19, on FDI based on a sample of 142 economies and sub-samples (incomes and regions) from 1996 to 2019. The two-step system Generalised Method of Moments estimation of linear dynamic panel-data model (DPDGMM) is used in this study. The estimation results are robust with the results of the two-step sequential (two-stage) estimation of linear panel-data models (SELPDM) and the two-step system Generalised Method of Moments estimation (BBGMM). The results show that health pandemics have negative impacts on FDI. Significantly, the uncertainty caused by pandemics creates adverse shocks on FDI net inflows in Asia-Pacific countries and emerging economies.

Generalized Bernoulli process: simulation, estimation, and application

A generalized Bernoulli process (GBP) is a stationary process consisting of binary variables that can capture long-memory property. In this paper, we propose a simulation method for a sample path of GBP and an estimation method for the parameters in GBP. Method of moments estimation and maximum likelihood estimation are compared through empirical results from simulation. Application of GBP in earthquake data during the years of 1800-2020 in the region of conterminous U.S. is provided.