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The purpose of this paper is to present a new methodology to estimate the migration of grades of top rated restaurant and the default rate over time.

To demonstrate how to develop migration matrices the empirical results are based on the real number of top-rated French restaurants in Gault-Millau in a specific year and how they migrate from one grade to another over the period 1974–2010.

The purpose of the empirical analysis is only to illustrate the methodology. It is shown that migration rates are relatively stable over time.

Results are presented only to illustrate the methodology. Further analysis could provide a sound basis to compare the rating systems from one guide to another.

This research note explores the notion of migration rate by developing an alternative way of measuring how restaurants survive over time.

The purpose of this paper is to investigate the main factors and mechanisms that govern the price of cider, and to apply the analysis to the price of ciders in the Province of Québec, Canada.

The analysis is following the methodology applied to the determinants of the price of wine. A model for the price of cider is estimated with 70 prices representing five regions and five types of products.

The analysis is limited to one geographical factor, i.e. the region of origin and factors related to the producer, i.e. the age and the size of the firm. The results conclude on the importance of geographical factors related to the region of origin. The relationship between the price of ciders and the region of origin is statistically significant at the 1 percent level for two regions and shows a high premium for ciders produced in these two regions. Production factors related to the age and the size of the production unit although showing the expected sign are not statistically significant to conclude on the impact. There is a small premium for producing effervescent cider compared to still or rosé cider but the most statistically significant results at a 1 percent level are for ice ciders and fortified ciders which are two typical products from Québec.

The analysis has important potential implications on the role of certification of origin. Cider regions in Québec, Canada have recently defined quality standards applied to specialties like Ice cider and Fire ciders. The choice of high quality products is reflected in the premium associated to the price of these products.

Contrary to the wine sector, there is a lack of research and literature on the determinants of the price of ciders. This study is the first to propose a pricing model to examine some of the determinants of prices.

The purpose of this paper is to examine the purchase decision of consumers when faced with a perceived risk related to a “corked” wine for different levels of price. It provides an example of a study of consumer behavior in the context of risk aversion and when a risk-reduction strategy is proposed. The empirical analysis examines the perceive risk as is a major determinant of the willingness to buy (WTB) and to pay (WTP) for corked bottles of wine.

The experimental investigation on consumer risk perception of corked bottles of wine is based on a choice-based questionnaire distributed to 310 graduate students in Bordeaux and Dijon in France. The context is the decision to purchase or not a bottle of wine at different price levels. Assuming the monotonicity of the demand function, the choice-based questionnaire is used to determine the maximum WTB and WTP for each participant.

Results demonstrate that when participants are asked simultaneously to reveal their perceived risk and purchase decision, the behavior significantly affects the WTB and WTP. At the same time, demand for risk-reduction devices (screw-caps in this study) also declines strongly with price and perceived risk.

Although the experiment was replicated in a different region and students with a different profile, it cannot be generalized to other countries or region with a different wine culture.

The results have interesting behavior implications in the debate for screw-caps rather than corks. They confirm that screw-caps are associated with low quality, low value wines. Understanding the factors that influence consumers, wine purchase decisions are therefore important to wine producers, restaurant owners and retailers.

This is the first study that analyzes, in the context of risk taking when buying wine, the WTB and WTP for a bottle of wine when participants are required to reveal simultaneously their perceived risk and purchase decision.

Numerous articles contain recommendations as to how emerging countries can attract foreign direct investment on terms that are beneficial to both the investing firm and the host society but very few explore the conditions for firms from emerging countries to invest abroad. The purpose of this paper is twofold: the first is the documentation of the preferred locations of foreign affiliates for the largest financial groups headquartered in emerging countries; and, second, is to identify some of the determinants associated with the location-specific advantages of these host countries.

The analysis of the internationalization process of these groups is based on a list of top financial groups ranked by total assets. In the empirical section, the factors that explain the choice of these locations by multinational firms are categorized as resources seeking, market seeking, efficiency-seeking variables and cultural variables.

There is empirical evidence that institutions prefer to invest in foreign locations that minimize some dimensions of the culture. Other factors like the role of efficiency variables, i.e. trade efficiency, political risk and government effectiveness, in host countries also have a strong impact on the determinants of the internationalization process.

The paper puts forward a framework for analyzing determinants of foreign direct investment of multinational financial groups from emerging economies.

Purpose: This chapter is based on risk management of the insurance sector with reinsurance as its linchpin. Such is the importance of the insurance sector that its risk management must be considered.

Need for the study: Risk management of various sectors is gaining much attention. The insurance sector, known to manage the risk of multiple sectors, also requires its own chance to be controlled with the same or even more intensity. Considering the importance of reinsurance coupled with the dependency of primary insurers on reinsurers and the absence of research on reinsurers, the need to conduct a comprehensive study on the topic is felt.

Methodology: It will be a conceptual chapter based on the rigorous literature on the topic integrated with the researcher’s insights to bring forth the framework of reinsurers for the readers.

Findings: It is found that insurers can themselves become the victims of the financial crisis in case they insure risks that surpass their economic boundaries. Not only this, the failure of insurance companies can have a ripple effect on the country’s economy. Therefore, insurers must possess financial resilience; to remain so, they need to have prudent management of the risk they are undertaking.

Practical implications: The study covers a relatively less researched area of reinsurance and hence has a vast scope of research in the future. The study would be helpful to stakeholders like regulators and primary insurers. It will unveil the paradigm of reinsurance and enlighten the stakeholders on how to use it effectively.

This paper aims to examine the relationship between geographical diversification and the underwriting performance for the world's largest reinsurance groups. It also aims to verify that the form and nature of the relationship between diversification and performance follow an S‐shaped curve with increased diversification of the largest reinsurance groups.

Analysis in the paper is based on the concept of Geographical Spread Index defined and calculated by UNCTAD. Data on largest reinsurance groups in the world are published annually by Standard & Poor's for only a limited number of reinsurance groups. To overcome the small sample problem, a re‐sampling procedure from the original sample, similar to a bootstrap sample, is used to validate the results.

The results show that, overall, international geographical diversification has a positive effect on a reinsurance firm's underwriting performance but that this relationship is not linear. It rather follows an S‐shaped curve. Although data limitation does not allow more sophisticated investigations, the results reported in this paper are nevertheless significant. It seems that at an early stage of expansion in proximate markets there are efficiency gains for the firm. With increased internationalization there may be a diminution in performance because of higher transaction costs or learning costs for new markets. Further expansion in foreign markets brings back efficiency and higher performance.

Only cross‐section data for a small sample of companies are available and therefore it is not possible to analyze the dynamics of geographical diversification. A firm may deliberately expand for long‐term strategy reasons such as market share even though this is detrimental to medium‐run performance. Also, the analysis cannot provide any answer to the existence or not of a maximum level of international diversification beyond which performance would decline.

In the literature on firm diversification in the financial services sector, product diversification and performance has received significant attention with mixed results but except for a few papers, the internationalization aspect has not been examined. The reinsurance sector is important since reinsurance activities are, by nature, more geographically diversified than other financial activities. Furthermore, the largest European reinsurance groups dominate this worldwide market and many reinsurance companies have, in the past decade, increased their foreign direct investment and acquired other companies in part because of the belief that only very large players will have the cost advantages necessary to remain competitive in global markets.

This article aims to examine the existence of an underwriting cycle in property‐liability insurance for France, Germany and Switzerland (primary markets) and for the European reinsurance industry. It is also aimed to test how the two markets are related with each other in each country and how they influence each other.

Loss ratio data for France, Germany and Switzerland are used for the recent period 1982‐2001 in connection with the price of reinsurance in Europe as well as the money market rate. To test for the existence of cycles and calculate their length auto‐regressive processes of second order are applied.

There are cross‐country differences for the primary markets of the three countries. The reinsurance price index is highly cyclical with a calculated cycle length of almost nine years. It is shown that the reinsurance price index has a strong influence on the primary market loss ratios of the three countries studied.

With the exception of two studies examining the impact of reinsurance on insurance prices and profits, there has been no research as yet to determine the role of reinsurance on the cyclical behavior of underwriting results. This gap is filled here by an empirical study on three European countries.

The purpose of this paper is to examine where large financial firms are expanding their operations, including financial firms from emerging economies. This paper has two objectives. The first is the documentation of the relative importance of the largest financial groups in emerging countries. The second objective is to describe the regional nature of financial firms.

The analysis of the internationalization process of these groups is based on a list of top 50 financial groups ranked by total assets in 2010.

The paper shows that the majority of the largest financial institutions from emerging countries are expanding their business in the home region where they are headquartered. This result provides support to the debate on the home‐region preference.

The paper provides an example on preferences for the home‐region orientation but does not provide an analysis of the determinants of FDI in the financial sector.

The paper examines where large financial firms are expanding their operations, including financial firms from emerging economies.

Financial literacy is crucial in explaining a broader set of investment behaviors. This paper investigates what financial literacy, wine knowledge, risk propensity and wine purchase behavior have in common.

The analysis is on a questionnaire distributed online to an equal number of young adults from a traditional wine-producing and consuming country (France) and a country less linked to wine by tradition (the UK).

The analysis shows how financial literacy, financial education and financial risk attitudes impact the attitudes toward wine purchase decisions. Results indicate that participants prefer to drink wine for pleasure rather than for potential financial gain. Significant relationships exist between financial literacy, wine consumption frequency and willingness to store and pay for wine.

These results allow for a better understanding of wine purchasing behavior in light of willingness to pay, invest and store.

• (1)

  Financial literacy has a positive role in influencing wine storage and investments.

• (2)

  Culture shapes the impact of financial literacy, habits and risk on wine investments.

• (3)

  Gender and age have a role in influencing wine investments.

Financial literacy has a positive role in influencing wine storage and investments.

Culture shapes the impact of financial literacy, habits and risk on wine investments.

Gender and age have a role in influencing wine investments.

In a highly competitive market, the price of wine is a variable controlled by suppliers to suggest a level of quality. An index of relative firm position in the market based on relative prices is calculated for a sample of wine producers. The purpose of the paper is to analyze some of the factors related to the characteristics of a firm and quality that may explain the price strategy of wine producers in a new and small wine region, i.e. Québec province in Canada.

Data on types of wines and prices are collected from a sample of 40 small wine producers in Québec, Canada for the selected years 2008, 2010 and 2015.

The authors demonstrate that a high price strategy is significantly related to the reputation of the vineyard rather than the age of the domain, the size or the number of wines produced.

The analysis has been carried out based on a data set of only 40 firms for which the price-position index could be calculated. Unfortunately, only limited information is available on producers and production volumes.

This analysis is of particular relevance for small or new wine-producing regions, which lack an established reputation. Because wine quality and taste differ by geographic origin and variety, new wine-producing regions may have opportunities to define a wine’s image (or a winery image) and the producer must inform the market on quality of the wine by reflecting it on the final selling price.

Prior works on the analysis of the price-quality relationship give rise to various and sometimes contradictory results. This analysis is of particular relevance to explain the price strategy of small wine producers in a strongly competitive market where the price remains an obvious commercial argument to signal the quality of a wine.