Surrender and path-dependent guarantees in variable annuities: integral equation solutions and benchmark methods

Decisions in Economics and Finance - We investigate the evaluation problem of variable annuities by considering guaranteed minimum maturity benefits, with constant or path-dependent guarantees of...     

Credit constraints in Italian industrial districts

Italy is characterized by strong differences both in the productive and in the financial structure. Small and medium firms tend to concentrate in the so called ‘Marshallian industrial district’, whose productive system has been thoroughly studied but whose financial features are partially overlooked. This paper aims at investigating how the location of a firm in an industrial district affects its ability to resort to external finance, mostly bank loans. The econometric analysis on a panel of 1700 firms over the 1989–1995 period shows that firms located inside industrial districts have an advantage in terms of financial relations with the banking system: both the cost of credit and the probability to face financial constraints are lower. Nevertheless, the cyclical pattern of this advantage is not in favour of district firms: following the tightening of monetary policy, increases in interest rates on bank loans are proportionally higher for firms inside the district; furthermore, also the advantage consisting in an easier access to credit market disappears after the 1992–1993 recession.     

Non-Conscious Influences on Consumer Choice

While consumer choice research has dedicated considerable research attention to aspects of choice that are deliberative and conscious, only limited attention has been paid to aspects of choice that occur outside of conscious awareness. We review relevant research that suggests that consumer choice is a mix of conscious and nonconscious influences, and argue that the degree to which nonconscious influences affect choice is much greater than many choice researchers believe. Across a series of research domains, these influences are found to include stimulus that are not consciously perceived by the consumer, nonconscious downstream effects of a consciously perceived stimuli or thought process, and decision processes that occur entirely outside of awareness.     

Fighting Tax Evasion by Discouraging the Use of Cash?

We propose a bargaining model of tax evasion with a seller that offers a price discount to a buyer in exchange for a cash payment without a receipt, which allows tax evasion. We study the effect on evasion and government revenue of two policy instruments: a tax on cash withdrawals (TCW), which imposes a cost on the buyers who pay cash, and a tax rebate conditional on having the receipt. The tax rebate reduces evasion but it is costly if tax evasion is low. The TCW reduces evasion only if it is set at a sufficiently high rate, which must be higher the larger is the mass of cash users. We also show that the implementation of a TCW, which poses several challenges, is easier if the cost of cash hoarding is high.     

Cash holdings and SME performance in Europe: the role of firm-specific and macroeconomic moderators

Small Business Economics - For the first time, this paper examines the way in which cash holdings affect firm operating performance in a wide sample of European small and medium-sized enterprises...     

Shaping Sustainable Value Chains: Network Determinants of Supply Chain Governance Models

Globalization theories posit organizational convergence, suggesting that Codes of Ethics will become commonplace and include greater consideration of global issues. This study explores the degree to which the Codes of Ethics of 157 corporations on the Global 500 and/or Fortune 500 lists include the “third generation” of corporate social responsibility. Unlike first generation ethics, which focus on the legal context of corporate behavior, and second generation ethics, which locate responsibility to groups directly associated with the corporation, third generation ethics transcend both the profit motive and the immediate corporate environment. Third generation ethics are grounded in responsibilities to the larger interconnected environment. The results of the study suggest convergence, insofar as Codes of Ethics are becoming standard communication features of corporations across region and industrial sector but still manifest a primary concern with profits and those behaviors which are mandated by law. Only corporations headquartered in the European Union demonstrate a significant degree of global consciousness and reflexivity. However, there is some evidence that third generation ethics and thinking are becoming part of the corporate landscape. More then three quarters of the corporations made at least some reference to third generation ethics.     

Selective immigration policies, human capital accumulation and migration duration in infinite horizon

An increasing literature fosters selective immigration policies as a tool to increase human capital in both source and destination countries. These policies are supposed to prompt incentives to education, and–if selection is sufficiently severe–to increase the human capital stock in source countries. Nonetheless, when compared to open migration, selective policies make returns to education uncertain, and they may harm incentives to invest in human capital. As a consequence, they may reduce the human capital stock even though selection is “severe”. Moreover, when repeated migration is possible, they backfire on migration duration. We obtain our results in an infinite-horizon model that, unlike the current literature, places no restriction on the number of possible migration spells and allows for the possibility of a forced emigration.     

Recruitment channel use and applicant arrival: An empirical analysis

This paper focuses on the recruitment behaviour of firms at the extensive margin; we empirically explore the relationship between employer search strategies and the number of applicants by means of (reduced form) two-equations simultaneous models. The empirical analysis is carried out on a rich micro data set on Dutch employer recruitment behaviour. Our empirical analysis reveals that the economic conditions prevailing on the labour market influence employer search activity at the extensive margin. In particular, we see that in tight (slack) labour markets characterised by excess demand (supply) of labour, the flow of applicants is smaller (larger). Employers react to the shortage (excess) of applicants by using more (less) often advertisements. This recruitment channel appears to trigger a significantly larger flow of applicants. First version received: December 1997/Final version received: June 2000     

Multi-part tariffs and differentiated commodity taxation

We study commodity taxation in markets where firms, such as Internet Service Providers, energy suppliers, and payment card platforms, adopt multi-part tariffs. We show that ad valorem taxes can correct underprovision and hence increase welfare, provided the government applies differentiated tax rates to the usage and access parts of the tariff. We obtain this result in different settings, including vertically interlinked markets, markets where firms adopt menus of tariffs to screen consumers, and where they compete with multi-part tariffs. Our results suggest that exempting these markets from taxation may be inefficient.