Canadian cities as regional engines of growth: agglomeration and amenities

Abstract.  Canadian regional population growth is less understood than that of the United States. In both countries, certain regions have persistent population growth. Yet, unlike U.S. trends of amenity-driven migration away from historic urban centres, Canadian growth is more urban centric. This study assesses whether agglomeration economies in the few major Canadian metropolitan areas lead to population growth in or near these cities rather than the more-dispersed U.S. patterns. The results suggest that disparities such as the concentration of Canadians along its southern border may explain migration patterns, indicating that key differences in initial conditions may produce different outcomes between the two countries.     

Supporting decision-making process in facilities management services procurement: A methodological approach

The aim of this paper is to make a contribution to the decision-making process related to procurement of facilities management services in the public sector, particularly with reference to local authorities. Adopting a contingency approach, a model for selecting sourcing strategies is presented. Some empirical evidence resulting from the analysis of various managers’ experiences is reported and, based on the results of the testing of the model, theoretical and managerial implications are discussed.     

Analytical American Option Pricing: The Flat‐barrier Lower Bound*

In a Black and Scholes (1973) world, this paper studies the pricing performance of a closed‐form lower bound to American option values based on an exercise strategy corresponding to a flat‐exercise boundary. The lower bound has a simple two‐step implementation akin to Barone‐Adesi and Whaley (1987) formula and shows superior pricing performance in the out‐of‐the‐money region and for long maturities.     

INCENTIVE EFFICIENT PRICE SYSTEMS IN LARGE INSURANCE ECONOMIES WITH ADVERSE SELECTION

We decentralize incentive efficient allocations in large adverse selection economies by introducing a competitive market for mechanisms, that is, for menus of contracts. Facing a budget constraint, informed individuals purchase (lottery) tickets to enter mechanisms, whereas firms sell tickets and supply slots at mechanisms at given prices. Beyond optimization, market clearing, and rational expectations, an equilibrium requires that firms cannot favorably change, or cut, prices. An equilibrium exists and is incentive efficient. An equilibrium can be computed as the solution to a programming problem that selects the incentive efficient outcome preferred by the highest type within an appropriately defined set. For two‐types economies, this is the only equilibrium outcome.     

Tax Competition between Unitary and Federal Countries

We analyse taxation of capital in a two-country model, where one country is unitary while the other one is federal, consisting of two identical regions. Both national and regional governments levy a tax on capital. The countries play a noncooperative game between them, with the government of the federal country acting as a Stackelberg leader with respect to its regional governments. We show under what circumstances, at equilibrium, the federal country sets its tax rate inefficiently low, while the unitary country sets it inefficiently high.We are deeply grateful to three anonymous referees for their comments, and especially to one of them for extremely helpful suggestions. We also wish to thank participants at ESEM 2004 for fruitful discussions     

Conditional correlations in the returns on oil companies stock prices and their determinants

The identification of the forces that drive stock returns and the dynamics of their associated volatilities is a major concern in empirical economics and finance. This analysis is extremely important for determining optimal hedging strategies. This paper investigates the stock prices’ returns and their financial risk factors for several integrated oil companies, namely Bp (BP), Chevron-Texaco (CVX), Eni (ENI), Exxon-Mobil (XOM), Royal Dutch (RD) and Total-Fina Elf (TFE). We measure the actual co-risk in stock returns and their determinants “within” and “between” the different oil companies, using multivariate cointegration techniques in modelling the conditional mean, as well as multivariate GARCH models for the conditional variances. The distinguishing features of this paper are: (i) focus on the determinants of the market value of each company using the cointegrated VAR/VECM methodology; (ii) specification of the conditional variances of VECM residuals with the Constant Conditional Correlation (CCC) multivariate GARCH model of Bollerslev [(1990) Review of Economics and Statistics 72:498–505] and the Dynamic Conditional Correlation (DCC) multivariate GARCH model of Engle [(2002) Journal of Business and Economic Statistics 20:339–350]; (iii) discussion of the performance of optimal hedge ratios calculated with the DCC estimates. The “within” and “between” DCC indicate time-varying interdependence between stock return volatilities and their determinants. Moreover, DCC models are shown to produce more accurate hedging strategies.     

Intergenerational transfers without altruism : Family, market and state

The article examines the possible role of the extended family, the capital market and the State in organising income transfers between generations and over the life-cycle of each generation. The underlying decision model is one of individuals who live three periods and wish to re-distribute consumption from the middle period of life to the first (youth) and the thrrd (old age). Total selfishness on the part of individuals is assumed in order to investigate the extent to which it is possible to explain reproduction and intergenerational transfers by self-interest alone. It is shown that such transfers could be generated, within an extended family framework, by a self-enforcing set of family rules. It is also shown that under certain circumstances, the opening of a capital market or a rise in the market rate of interest could break the extended family network, reduce the old to penury and cause a fall in fertility. The working of social security is examined against this background, and the implications of an externality associated with pension systems are discussed.     

Banks and innovation: Microeconometric evidence on Italian firms

In this paper we investigate the effect of local banking development on firms’ innovative activities, using a rich data set on innovation for a large number of Italian firms over the 1990s. There is evidence that banking development affects the probability of process innovation, particularly for firms in high-tech sectors, in sectors more dependent upon external finance, and for firms that are small. The evidence for product innovation is much weaker and not robust. There is also some evidence that banking development reduces the cash flow sensitivity of fixed investment spending, particularly for small firms, and that it increases the probability they will engage in R&D.     

The effects of European integration and the business cycle on migration flows: a gravity analysis

This paper explores how European integration, economic fluctuations, and the interactions of these factors affect bilateral migration flows. It focuses on how migration flows developed in the wake of the establishment of the European Monetary Union, and whether migration flows became stronger, and more responsive to economic fluctuations, in the euro area. It estimates a gravity equation of bilateral gross migration flows on a global sample and on a sample restricted to the first 12 members of the euro area. It is found that unemployment is a strong and robust determinant of bilateral migration flows both globally and in the euro area. EU accession and the lifting of labour market restrictions on new member states had a large effect on gross migration flows. While mutual euro area membership is not associated with an overall rise in migration, it is associated with increased flows from countries where unemployment is high to those where it is lower. Migration flows among the euro-area 12 have been on an increasing trend since the late 1990s; after falls in 2009 they picked up again in 2010 and 2011. The evidence overall suggests that labour mobility plays an increasing role in the adjustment to asymmetric shocks in the EU and the euro area.