Journal of Applied Business and Economics
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Journal of Applied Business and Economics North American Business Press Atlanta - Seattle – South Florida - Toronto Journal of Applied Business and Economics Editors Dr. Adam Davidson Dr. William Johnson Editor-In-Chief Dr. David Smith NABP EDITORIAL ADVISORY BOARD Dr. Andy Bertsch - MINOT STATE UNIVERSITY Dr. Jacob Bikker - UTRECHT UNIVERSITY, NETHERLANDS Dr. Bill Bommer - CALIFORNIA STATE UNIVERSITY, FRESNO Dr. Michael Bond - UNIVERSITY OF ARIZONA Dr. Charles Butler - COLORADO STATE UNIVERSITY Dr. Jon Carrick - STETSON UNIVERSITY Dr. Mondher Cherif - REIMS, FRANCE Dr. Daniel Condon - DOMINICAN UNIVERSITY, CHICAGO Dr. Bahram Dadgostar - LAKEHEAD UNIVERSITY, CANADA Dr. Deborah Erdos-Knapp - KENT STATE UNIVERSITY Dr. Bruce Forster - UNIVERSITY OF NEBRASKA, KEARNEY Dr. Nancy Furlow - MARYMOUNT UNIVERSITY Dr. Mark Gershon - TEMPLE UNIVERSITY Dr. Philippe Gregoire - UNIVERSITY OF LAVAL, CANADA Dr. Donald Grunewald - IONA COLLEGE Dr. Samanthala Hettihewa - UNIVERSITY OF BALLARAT, AUSTRALIA Dr. Russell Kashian - UNIVERSITY OF WISCONSIN, WHITEWATER Dr. Jeffrey Kennedy - PALM BEACH ATLANTIC UNIVERSITY Dr. Jerry Knutson - AG EDWARDS Dr. Dean Koutramanis - UNIVERSITY OF TAMPA Dr. Malek Lashgari - UNIVERSITY OF HARTFORD Dr. Priscilla Liang - CALIFORNIA STATE UNIVERSITY, CHANNEL ISLANDS Dr. Tony Matias - MATIAS AND ASSOCIATES Dr. Patti Meglich - UNIVERSITY OF NEBRASKA, OMAHA Dr. Robert Metts - UNIVERSITY OF NEVADA, RENO Dr. Adil Mouhammed - UNIVERSITY OF ILLINOIS, SPRINGFIELD Dr. Roy Pearson - COLLEGE OF WILLIAM AND MARY Dr. Veena Prabhu - CALIFORNIA STATE UNIVERSITY, LOS ANGELES Dr. Sergiy Rakhmayil - RYERSON UNIVERSITY, CANADA Dr. Robert Scherer - CLEVELAND STATE UNIVERSITY Dr. Ira Sohn - MONTCLAIR STATE UNIVERSITY Dr. Reginal Sheppard - UNIVERSITY OF NEW BRUNSWICK, CANADA Dr. Carlos Spaht - LOUISIANA STATE UNIVERSITY, SHREVEPORT Dr. Ken Thorpe - EMORY UNIVERSITY Dr. Robert Tian – SHANTOU UNIVERSITY Dr. Calin Valsan - BISHOP'S UNIVERSITY, CANADA Dr. Anne Walsh - LA SALLE UNIVERSITY Dr. Thomas Verney - SHIPPENSBURG STATE UNIVERSITY Dr. Christopher Wright - UNIVERSITY OF ADELAIDE, AUSTRALIA Volume 15(2) ISSN 1499-691X Authors have granted copyright consent to allow that copies of their article may be made for personal or internal use. This does not extend to other kinds of copying, such as copying for general distribution, for advertising or promotional purposes, for creating new collective works, or for resale. Any consent for republication, other than noted, must be granted through the publisher: North American Business Press, Inc. Atlanta - Seattle – South Florida - Toronto ©Journal of Applied Business and Economics 2013 For submission, subscription or copyright information, contact the editor at: [email protected] Subscription Price: US$ 360/yr Our journals are indexed by UMI-Proquest-ABI Inform, EBSCOHost, GoogleScholar, and listed with Cabell's Directory of Periodicals, Ulrich's Listing of Periodicals, Bowkers Publishing Resources, the Library of Congress, the National Library of Canada. Our journals have been used to support the Academically Qualified (AQ) faculty classification by all recognized business school accrediting bodies. This Issue Exploring the Role of Public Policy in Promoting Holistic Ecotourism ................................................. 9 Dawn H. Pearcy, W. Keith Story Eco-tourism is a growing industry that can potentially become a victim of its own success. This paper posits a model that incorporates social marketing, public policy, and industry mandates in an effort to understand how tourism consumer behavior can be made more sustainable. The concept presented builds on work by Weaver (2005) that recommends advocates of sustainable eco-tourist behavior use increased information combined with holistic experiences to help consumers achieve deep understandings of their destinations and the impact their behavior has on the eco-system. The Impact of Social Media on the Fashion Industry ........................................................................... 17 Iris Mohr The purpose of the paper is to address social media as a marketing strategy to manage market shrinkage in fashion and luxury markets. During the financial crisis of 2008, retailers faced a dilemma relating to both the economic environment and psychographic issues: how to convince consumers of fashion and luxury goods to purchase when even the wealthy cut back, and how to plan for spring when sales are declining at retail stores. To understand further social media, as a marketing strategy for managing marketing shrinkage for an upscale segment, a study was conducted on attendees of Mercedes Benz Fashion Week in New York to examine the relationship between social media and fashion and its relationship to fashion week. The author synthesizes extant knowledge on the subject, and provides recommendations for future research. Short-run Driver Response to a Gasoline Price Spike: Evidence from San Diego, CA...................... 23 Andrew Narwold, Dirk Yandell Drivers’ response to an unexpected gasoline price spike is examined using daily data from San Diego County. Elasticities of demand are calculated for the very short run and are compared to prior short run and long run elasticity estimates. Public transportation use is also examined and a cross-price elasticity for bus travel is estimated. The immediate effects of a gasoline price spike are found to be close to zero, but results are broadly consistent with prior short-run estimates after 10 days. Return and Volume and the 2008 Market Crash ................................................................................... 33 Bakhtiar Moazzami, Bahram Dadgostar This paper examines the dynamic relationship between stock market trading volume and returns for four major stock markets: New York, Tokyo, London and Toronto using daily data covering March 1, 2003 to Nov. 1, 2012 period. We investigate the information content of volume for the stock returns. We find a positive contemporaneous relation between volume and absolute value of return in all markets. In addition, we find support for the proposition that lagged volume has predictive power for future absolute returns. We also investigate whether the 2008 market crash has had a significant impact on the relationship between the trading volume and return on all markets. Business in Costa Rica: Trends and Issues ............................................................................................. 38 Lisa Kahle-Piasecki Costa Rica, a Central American country historically known for its coffee and banana exports, has a growing industry based on technology and ecotourism. While the country has enjoyed a steady increase in tourists largely from the United States, Nicaragua and Canada, U.S. companies have also discovered Costa Rica as a country with emerging opportunities. With United States businesses increasingly opening operations in Costa Rica, there are management concerns to plan for when conducting business in Costa Rica. This paper will explore practical issues for companies or individuals when opening a business or locating a branch operation in Costa Rica. English Law: Window on Britain ............................................................................................................ 45 Jean Didier This paper shares materials, pedagogy and experience from the author’s course for U.S. students studying a semester in the U.K. The course focused on basics of English law and legal history, with an additional effort to utilize the material to teach about English culture and values, and the interrelationship of law and culture. The information is imparted as a starting point for others planning to teach legal studies in the U.K., especially in London. It is also suggests comparative legal studies as a suitable course for intercultural learning at other study abroad venues. The Financial Crisis of 2008: “It’s a Requirement to Leave Your Ethics at the Door.” .................... 57 Thomas W. Harvey This article investigates the behavior within the financial services industry that contributed to the Crash of 2008 and the Great Recession of 2009 – 2010. Based on the theory of Adam Smith, it is not the typical academic paper as it analyzes the work of industry practitioners who wrote about the run-up of real estate and stock prices between 2003 –2009 and the ultimate collapse. It is also an examination of the role of government in the economy and the financial services industry. The intent is to initiate conversations about ethics in the Finance major of America’s colleges and universities. Poor Predictive Power and the Unrealism of International Trade Models: Proposing a More Realistic (Behavioral Economics Based) Model ...................................................... 72 Hamid Hosseini Beginning with David Ricardo, if not Adam Smith, economists have developed numerous models to explain, and predicts, trade among nations. As I will demonstrate, these models have had poor predictive powers. It is possible to argue that neither gravity model, nor different versions of the comparative advantage doctrine, or even the more recent model developed by Paul Krugman, could explain international trade during the great recession that began in August 2007. For example, these models could not explain why between the first quarter of 2008 and the first quarter of 2009 global GDP fell by 4.5% while world exports declined as much as 17%. The scale and speed of that trade collapse poses a challenge to various international