The spatial organization of multinational firms

Abstract Using six years of firm‐level data covering 224 regions of the enlarged European Union, we evaluate the importance to a firm of locating its activities (production, headquarters, R&D, logistics and sales) close together. We find that, after controlling for regional characteristics, being closely located to a previous investment positively affects firm location choice. However, the impact of distance is dependent on the type of investment (production or service). The impact dies out faster for service activities. Finally, we show that a surprisingly positive effect comes from locating a new production plant close to an existing production investment, but in another country.     

The geometry of Black''s single peakedness and related conditions

By using geometry to analyze all three candidate profiles satisfying Black's single peakedness constraint, we characterize all associated election behavior. The same analysis is applied to related profile constraints where some candidate never is top-ranked, or never bottom ranked.     

Privacy intrusiveness and web audiences: Empirical evidence

The development of Internet technologies and personalized advertising has amplified public concern about privacy, but there is little empirical analysis of how firms exploit personal data. This article investigates how website performance, measured by web audience, is affected by intrusions into privacy. We analyze an original dataset of the 197 most visited websites in France. Our study shows that a high level of firm intrusiveness is associated with better economic performance. The results shows that consumers do not respond negatively to overly intrusive data requirements since intrusiveness is associated with higher website traffic, industry self-regulation may not be the most efficient regulation mechanism.     

Shadow of the contract: how contract structure shapes interfirm dispute resolution

This paper investigates how contract structure influences interfirm dispute resolution processes and outcomes by examining a unique dataset consisting of over 150,000 pages of documents relating to 102 business disputes. We find that the level of contract detail affects the type of dispute resolution approach that is adopted when conflict arises, and that different approaches are associated with different costs for resolving the dispute. We also find that the effect of contract choice on dispute resolution approach is moderated by the degree of coordination required in the relationship, and that the effect of dispute approach on costs is moderated by the degree of power asymmetry between the parties. Thus, even after controlling for various attributes of the exchange relationship and the dispute, the choice of contracting structure has important strategic implications. Copyright © 2010 John Wiley & Sons, Ltd.     

An examination of CEO compensation of US banks and thrifts using non-traditional performance measures: 1997–2001

This study compares the compensation of chief executive officers (CEOs) of banks and thrifts in the United States, during the 1997–2001 period. The authors examine the effect of traditional industry measures (such as the value of long-term incentive plans) and non-traditional measures (such as the ploughback ratio), on CEO compensation. The results of Exploratory Factor Analysis indicate that many of these measures are highly correlated and are likely to lead to serious problems of multicollinearity in multiple regression models of compensation. The authors find a crude difference (univariate) in compensation between CEOs from both types of institution. Using a multiple regression model, however, it is found that this discrepancy can be attributed to differences in traditional and non-traditional measures of performance between the two types of institutions. The results add to existing literature of bank CEO compensation by examining non-traditional measures of performance.     

Investment under Demand Uncertainty,Ex-Ante Pricing,and Oligopoly

This paper considers the capacity choice of duopolists who set price ex-ante under demand uncertainty with risk-neutrality. The duopolists compete for market shares on the basis of availability of supply, rather than by price competition. Collusive pricing coexists with Cournot–Nash capacity choice. A formal model is presented, where the market share of each firm may deviate from the certainty share due to rationing. With shares reflecting different costs, capacity utilisation for the lower cost firm is expected to be substantially lower. The implications for the price-cost margin and capacity formation are also explored.     

Monetary union: A welfare based approach

This article attempts to shed light on the consequences of the transition to EMU for individual welfare following specific shocks. To this end, we develop a two country intertemporal general equilibrium model that extends the Obstfeld and Rogoff (Journal of Political Economy 103 (3) (1995) 624) specification to nominal rigidities through price adjustment costs and pricing-to-market behavior.We show that, when facing a positive asymmetric permanent shock to either technology or government expenditures occurring in one country, implementing a monetary union is beneficial to the households living in this economy. Conversely, it is detrimental to foreigners. Further, a sensitivity analysis shows that if the gains/losses to implementing monetary union are qualitatively robust when facing changes in the degree of nominal rigidities and the elasticity of substitution between foreign and domestic goods, they are quite sensitive to the degree of pricing-to-market in the economy.     

American education in the age of mass migrations 1870–1930

This paper derives original series of average years of schooling in the United States 1870–1930, which take into account the impact of mass migrations on the US educational level. We reconstruct the foreign-born US population by age and by country of origin, while combining data on the flow of migrants by country and the age pyramids of migrants by country. Then, we use original data on educational attainment in the nineteenth century presented in Morrisson and Murtin (J Human Cap, in press) in order to estimate the educational level of US immigrants by age and by country. As a result, our series are consistent with the first national estimates of average schooling in 1940. We show that mass migrations have had a significant but modest impact on the US average educational attainment. However, the educational gap between US natives and immigrants was large and increased with the second immigration wave, a phenomenon that most likely fostered the implementation of restrictive immigration rules in the 1920s.     

Optimal Time to Sell in Real Estate Portfolio Management

This paper examines the properties of optimal times to sell a diversified real estate portfolio. The portfolio value is supposed to be the sum of the discounted free cash flows and the discounted terminal value (the discounted selling price). According to Baroni et al. (Journal of Property Investment and Finance 25(6):603–625, 2007b), we assume that the terminal value corresponds to the real estate index. The optimization problem corresponds to the maximization of a quasi-linear utility function. We consider three cases. The first one assumes that the investor knows the probability distribution of the real estate index. However, at the initial time, he has to choose one deterministic optimal time to sell. The second one considers an investor who is perfectly informed about the market dynamics. Whatever the random event that generates the path, he knows the entire path from the beginning. Then, given the realization of the random variable, the path is deterministic for this investor. Therefore, at the initial time, he can determine the optimal time to sell for each path of the index. Finally, the last case is devoted to the analysis of the intertemporal optimization, based on the American option approach. We compute the optimal solution for each of these three cases and compare their properties. The comparison is also made with the buy-and-hold strategy.