Military casualties and exchange rates during the First World War: did the Eastern Front matter?

Although the First World War was ultimately decided in the west, historians have emphasized the importance of the often ‘forgotten’ Eastern Front in understanding its complex evolution. This article examines the perception of contemporary foreign exchange traders concerning the relative importance of the Eastern Front over time. Using a newly compiled dataset on prisoners of war and on soldiers killed and wounded, we show that traders were concerned with casualties on both fronts, recognizing the significance of the two‐front war in the early war years. From the autumn of 1916 onwards, traders seemed to believe the key to winning the war lay in the west only.     

Reforming the Taxation of Multijurisdictional Enterprises in Europe

In 2001, the European Commission proposed replacing the currentsystem of taxation of multinational companies by the taxationof a consolidated base, computed at the level of all the Europeanentities of a multinational enterprise, and then distributedfor taxation purposes among the various jurisdictions in whichthese entities operate, according to pre-established criteria.In this article, we propose a discussion, especially focusingon two related issues, the choice of the formula and the compositionof the consolidating area—either the entire European Union(EU) or some Member States within an Enhanced Cooperation Agreement—,as well as on their impact on the size and distribution of taxrevenue and economic activity, and on the intensity of tax competition.Our tentative policy conclusion is that the reform deservessupport provided that (i) the formula puts emphasis on criteriathat the firm may not too easily manipulate, (ii) the activitiesof the multijurisdictional enterprise are enough mobile, (iii)the consolidation is made compulsory within the consolidatingarea and (iv) the consolidating area protects its capacity toactually levy tax by adopting a crediting system vis-à-visthe rest of the world. (JEL code: H32, H73, H87)     

Stochastic non-smooth envelopment of data for multi-dimensional output

The proposed method of Stochastic Non-smooth Envelopment of Data (StoNED) for measuring efficiency has to date mainly found application in the analysis of production systems which have exactly one output. Therefore, the objective of this paper is to examine the applicability of StoNED when a ray production function models a production technology with multi-dimensional input and output. In addition to a general analysis of properties required by a ray production function for StoNED to be applicable, we conduct a Monte Carlo simulation in order to evaluate the quality of the frontier and efficiencies estimated by StoNED. The results are compared with those derived via Stochastic Frontier Analysis (SFA) and Data Envelopment Analysis (DEA). We show that StoNED provides competitive estimates in regard to other methods and especially in regard to the real functional form and efficiency.     

Soil and Moisture Management in Mali: A Case Study Analysis for West Africa

In order for farmers to accept improved soil and water management practices, new technologies must be appropriate to the specific site conditions found in the farm setting and be consistent with farmers' objectives and available resources. A whole-farm modeling analysis of this problem is described. Preliminary estimates of the benefits of increased soil moisture conservation for representative low-resource farmers in Mali are presented. If farmers could improve rainfall infiltration from currently low rates of about 40% up to 60%, and use small amounts of chemical fertilizers, disposable income could increase two to four times depending on rainfall. Income could be increased another 50% if the infiltration rate was raised to 80%. Food grain production could increase 60 to 90% with improved moisture conservation and fertilizer use.     

The Link between Institutional and Economic Integration: Insights for Latin America from the European Experience

The European experience illustrates that institutional integration interacts with economic integration at the regional level. In this paper we ask how economic and institutional integration are linked and whether there is a causal link between the two. We present an original indicator of institutional integration and study how it developed vis-à-vis diverse measures of economic integration. In particular, we ask what insights can be drawn from the European process of regional integration, which started in the 1950s, for regional integration in Latin America today. We find that Latin America is currently less economically integrated not only than the European Union today, but for certain economic variables even than the European Union in the 1960s. A VAR analysis illustrates that the link between institutional and economic integration has worked both ways throughout the European experience. There is also evidence that stronger institutional integration has indeed led to deeper economic integration.     

Attachment orientations in business‐to‐business relationships

Attachment theory has produced an impressive body of evidence for explaining individual differences in personal relationship behavior. The current study examines whether attachment theory can be fruitfully extended to business‐to‐business relationships. Hypotheses about the impact of personal attachment orientations on key relationship constructs are developed and empirically tested in two business‐to‐business relationships. Customers who are securely attached in their personal relationships with their romantic partners experience higher levels of satisfaction, trust, and repurchase intent in their business‐to‐business relationships. In addition, an attachment scale that is specifically tailored for a business‐to‐business context is developed. Two dimensions of business attachment are empirically derived: secure business attachment measures the ability and willingness to rely on the business partner, and close business attachment measures the desire to develop personal bonds with a business partner or its employees. The two business attachment dimensions can be used to segment customers with respect to their intrinsic retainability and their preference for personal bonding with their business partners. © 2009 Wiley Periodicals, Inc.     

Social roles, human capital, and the intrahousehold division of labor: evidence from Pakistan

Using detailed data from rural Pakistan, this paper investigateswhether human capital, learning-by-doing, gender, and familystatus affect the division of labor within households. Resultssuggest the presence of returns to individual specializationin all farm, non-farm, and home based activities. The intrahouseholddivision of labor is influenced by comparative advantage basedon human capital and by long-lasting returns to learning-by-doing,but we also find evidence of a separate effect of gender andfamily status. Households seem to operate as hierarchies withsexually segregated spheres of activity. The head of householdand his or her spouse provide most of the labor within theirrespective spheres of influence; other members work less. Whenpresent in the household, daughters-in-law work systematicallyharder than daughters of comparable age, height, and education.Other findings of interest are that there are increasing returnsto scale in most household chores, that larger households workmore off farm, and that better educated individuals enjoy moreleisure.     

Book reviews

Ohne Zusammenfassung     

Asset Prices and History: The Case of Austria

Historical events are reflected in asset prices. Looking at Austrian government bond prices traded on the Swiss stock exchange during WWII provides therefore a useful way of interpreting the importance the thousands of people directly and indirectly engaged in stock markets attributed to various war events. An econometric analysis of the relationship between government bond values and events in Austrian history reveals that some generally considered crucial events connected with WWII are clearly reflected in Austrian government bond prices. This holds, in particular for the beginning and the end of the war. The annexation of Austria by Germany in 1938 which seemingly looked as being overwhelmingly and passionately welcomed by the Austrian population negatively affected the evaluation of Austrian government bonds, i.e. it was considered to be to the disadvantage of Austria by the people who put their own personal fortune at risk.