Luis E. Arango and Ingri K. Quevedo
The authors estimate the determinants of the value of purchases of semi-durable goods using permanent and transitory income, and the demographic characteristics of customers. The…
Abstract
Purpose
The authors estimate the determinants of the value of purchases of semi-durable goods using permanent and transitory income, and the demographic characteristics of customers. The purpose is to identify whether individuals face remaining liquidity constraints, and how this friction affects their purchases.
Design/methodology/approach
This study uses anonymized data of 516,525 credit card holders, with more than 7,501,065 records of purchases between 2010 and 2015. The authors decompose the income of individuals into permanent and transitory components to test the prevalence of the life cycle–permanent income hypothesis (LC–PIH). Determinants of the value of purchases for constrained and unconstrained consumers are estimated, considering the period in which individual characteristics are valid, the decisions not to make purchases in some months, and the potential endogeneity of the interest rate and the transitory component of income.
Findings
The authors present evidence of liquidity constraints for individuals who have used a high percentage of the credit limit on their cards. For these restricted customers, the value of purchases is inelastic to the interest rate, whereas the response is sizable for customers who are less restricted. The restricted customers increase the value of purchases when faced with increases in their credit limit. The elasticity of the value of purchases of semi-durable goods to permanent income is less than that for transitory income; regardless of the constraints, this still supports the LC–PIH.
Research limitations/implications
This credit card is targeted at low- and middle-income individuals in Bogotá. Although the results might be considered as indicative of the behavior of those with similar characteristics in Colombia, the authors regard this work as the study of a particular case. A limitation of this work is that the authors do not have alternative sources of credit at an individual level.
Practical implications
The broad credit channel of monetary policy does not apply to the restricted customers. This should be considered not only by the monetary authority, to understand the true extent of this policy, but also by the financial institutions that use this business model. The monetary authority should be cautious not to overreact when intervening in the money market to try to prompt an adequate consumer response.
Social implications
Financial institutions have the policy of modifying the credit limits of their customers' credit cards which affects the well-being of restricted customers. Given that the card is aimed at low and middle income individuals, the credit limits of customers who use a high percentage of their credit limit might be increased.
Originality/value
This is the first paper to study liquidity restrictions with a retail credit card in Colombia and Latin America using information on customers' characteristics. The results are highly relevant for the implementation of monetary policy.
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Putri Dini Azizi, Arnold Japutra, Luis Arango and Joohee Kim
This paper aims to investigate whether consumers’ identification with a brand community makes them more likely to engage in compulsive buying behavior. Specifically, this research…
Abstract
Purpose
This paper aims to investigate whether consumers’ identification with a brand community makes them more likely to engage in compulsive buying behavior. Specifically, this research shows that consumers are more likely to experience obsessive passion for brands they identify with if they are also part of brand communities, which, in turn, makes them more likely to engage in compulsive buying behavior.
Design/methodology/approach
An online survey (n = 533) among members of the Adorable Representative M.C. for Youth (ARMY) Bangtan Boys (BTS) brand community was conducted. A partial least squares approach was employed to test the validity and reliability of the measurement model as well as to assess the structural equation model.
Findings
Results show that brand identification affects harmonious and obsessive passion and that both relationships are moderated by brand community identification. Harmonious passion, in turn, has a positive effect on impulsive buying, whereas obsessive passion has a positive effect on both impulsive and obsessive-compulsive buying. Furthermore, consumer hedonic motivations moderate the relationship between (i) harmonious passion and impulsive buying and (ii) obsessive passion and obsessive-compulsive buying.
Originality/value
To the best of the authors’ knowledge, this work is the first to examine the potential negative impacts brand community identification has on compulsive buying behavior. Besides contributing to research on the negative aspects of brand community identification, by employing a model that distinguishes between two types of passion and compulsive buying, the study provides clarification on relationships suggested by prior studies.
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David Goyeneche, Stephen Singaraju and Luis Arango
This paper explores the similarities and differences in privacy attitudes, trust and risk beliefs between younger and older adults on social networking sites. The objective of the…
Abstract
Purpose
This paper explores the similarities and differences in privacy attitudes, trust and risk beliefs between younger and older adults on social networking sites. The objective of the article is to ascertain whether any notable differences exist between younger (18–25 years old) and older (55+ years old) adults in how trust and risk are influenced by privacy concerns upon personal information disclosure on social media.
Design/methodology/approach
A Likert scale instrument validated in previous research was employed to gather the responses of 148 younger and 152 older adults. The scale was distributed through Amazon Mechanical Turk. Data were analyzed through partial least squares structural equation modeling.
Findings
No significant differences were found between younger and older adults in how social media privacy concerns related to trust and risk beliefs. Two privacy concern dimensions were found to have a significant influence on perceptions of risk for both populations: collection and control. Predictability and a sense of control are proposed as two conceptual approaches that can explain these findings.
Originality/value
This article is the first one to explore age differences in privacy concerns, trust and risk on social media employing conceptual developments and an instrument specifically tailored to the social media environment. Based on the findings, several strategies are suggested to keep privacy concerns on social media at a minimum, reduce risk perceptions and increase users' trust.
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Marta Luz Arango-Uribe, Carlos Javier Barrera-Causil, Vladimir Pallares, Jessica Maria Rojas, Luís Roberto Mercado Díaz, Rebecca Marrone and Fernando Marmolejo-Ramos
The concept of sustainable development (SD) is a popular response to society’s need to preserve and extend the life span of natural resources. One of the 17 goals of the SD is…
Abstract
Purpose
The concept of sustainable development (SD) is a popular response to society’s need to preserve and extend the life span of natural resources. One of the 17 goals of the SD is “education quality” (Fourth Goal of Sustainable Development [SDG-4]). Education quality is an important goal because education is a powerful force that can influence social policies and social change. The SDG-4 must be measured in different contexts, and the tools to quantify its effects require exploration. So, this study aims to propose a statistical model to measure the impact of higher education online courses on SD and a structural equation model (SEM) to find constructs or factors that help us explain a sustainability benefits rate. These proposed models integrate the three areas of sustainability: social, economic and environmental.
Design/methodology/approach
A beta regression model suggests features that include the academic and economic opportunities offered by the institution, the involvement in research activities and the quality of the online courses. A structural equation modelling (SEM) analysis allowed selecting the key variables and constructs that are strongly linked to the SD.
Findings
One of the key findings showed that the benefit provided by online courses in terms of SD is 62.99% higher than that of offline courses in aspects such as transportation, photocopies, printouts, books, food, clothing, enrolment fees and connectivity.
Research limitations/implications
The SEM model needs large sample sizes to have consistent estimations. Thus, despite the obtained estimations in the proposed SEM model being reliable, the authors consider that a limitation of this study was the required time to collect data corresponding to the estimated sample size.
Originality/value
This study proposes two novel and different ways to estimate the sustainability benefits rate focused on SDG-4, and machine learning tools are implemented to validate and gain robustness in the estimations of the beta model. Additionally, the SEM model allows us to identify new constructs associated with SDG-4.
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Sandra Milena Santamaria-Alvarez, Maria Angélica Sarmiento-González and Luis Carlos Arango-Vieira
The purpose of this paper is to analyze the characteristics of Colombian migrants’ transnational businesses (TBs) and their operations. To this end, the characteristics of the…
Abstract
Purpose
The purpose of this paper is to analyze the characteristics of Colombian migrants’ transnational businesses (TBs) and their operations. To this end, the characteristics of the entrepreneurs, their businesses and the patterns of their international operations are discussed and compared.
Design/methodology/approach
The paper analyses 14 cases developed from data from in-depth interviews with the same number of Colombian entrepreneurs who migrated to the USA. Similarly, the analysis includes secondary data sources.
Findings
TBs created by Colombian transnational entrepreneurs (TEs) aim to be successful through the best use of the resources of each market, allowing them to produce with lower costs and better quality in their country of origin while selling in more developed countries, such as the USA (their country of destination). The operations of those businesses are limited by their financial resources, small and fragmented networks, and their organic growth. The personal characteristics of the TE and their business comprise a nexus that helps to overcome business shortcomings.
Originality/value
The paper contributes to entrepreneurship, migration and international business literature by illuminating the nexus between the personal characteristics of the TE and the unique characteristics of their business, including the analysis of their international operations. Likewise, considering the characteristics of the context under study, the paper presents findings that are interesting for countries with similar social and economic difficulties.
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José Gerardo Ignacio Gómez Romero, Francisco Martín Villarreal Solís and Xochitl Escamilla Arango
The confinement resulting from the current COVID-19 pandemic is impacting all human activities. With technology, many of these activities such as business processes are being…
Abstract
The confinement resulting from the current COVID-19 pandemic is impacting all human activities. With technology, many of these activities such as business processes are being transformed. As such it is important to understand how these transformations are taking place and how to address the new challenges with equally innovative strategies.
The purpose of this chapter is to analyse and explain the influence of e-commerce as an independent variable, in consumption habits, and as a dependent variable, in times of COVID-19, for consumers in Durango Mexico. To do so, a quantitative methodology was adopted, in which each of the variables is diagnosed, followed by ANOVA and regression tests to determine the proposed relationship.
The findings show that e-commerce does have an impact on consumer buying habits in the city of Durango, that the ‘surf the internet’ dimension is the one that occurs most frequently and that price is the factor most highly valued by consumers.
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Salvador Antón i Clavé, Francisco López Palomeque, Manuel J. Marchena Gómez, Sevilla Vera Rebollo and J. Fernando Vera Rebollo
The Geography of Tourism in Spain is now at a par in terms of its scientific production with other European countries. Since the middle of the '80s the quality and volume of…
Abstract
The Geography of Tourism in Spain is now at a par in terms of its scientific production with other European countries. Since the middle of the '80s the quality and volume of contributions is analogous to the rest of the European Union, although as a part of University Geography in Spain it has not achieved the level of dedication reached by other subjects considering the importance of tourist activities to the economy, the society and the territory of Spain. It could be said that the Geography of Tourism in Spain is in the international vanguard in dealing with Mediterranean coastal tourism, with the relationships between the residential real estate and tourism sectors and with aspects related to tourism and leisure in rural and protected areas.
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The article clarifies the wage–employment relation in a developing country. Several years ago, many articles in the United States indicated that the relation between increasing…
Abstract
Purpose
The article clarifies the wage–employment relation in a developing country. Several years ago, many articles in the United States indicated that the relation between increasing wages and increasing unemployment is unclear. These articles from the United States are insufficient to be applicable to all countries, especially developing countries such as Colombia where institutions and the wage–employment relation differ from those in the United States.
Design/methodology/approach
A meta-analysis methodology was used as 28 estimates of long-run wage–employment elasticity in Colombia from 1998 to 2016 were analyzed.
Findings
This article provides insights into how real wages affect employment. Despite publication biases, results showed that a 1% increase in wages results in a 0.11% decline in employment in the long run.
Research limitations/implications
Due to the publication bias, it is not considered how variables such as sectors, estimation strategies (panel data, partial adjustment, cointegration and non-linear least squares, among others), formal/informal urban sectors, government services and transportation, and qualified and unskilled workers affect the true elasticity value.
Practical implications
This paper includes implications for public policy because the results are important to minimum wages policy in a developing country.
Originality/value
There are no studies regarding the wage–employment relation in a developing country. The empirical results obtained in this article are useful for regulators, policy makers and researchers to understand whether employment is affected by real wages.