Policy Implications of the Trade and Wages Debate

This paper examines the choice of policies to redistribute income in response to an increase in inequality caused by a rise in the differential wage paid to skilled labor compared with unskilled labor. The main issue is whether the appropriate policy response depends on whether the cause of the increased skill differential is 'trade'—increased competition with low-skilled workers abroad—or technological change. The analysis is conducted within the context of a two-sector Heckscher–Ohlin trade model augmented to allow endogenous determination of the level of skill.     

SPECIAL INTERESTS AND FINANCIAL LIBERALIZATION: THE CASE OF MEXICO

Financial liberalization is often believed to enhance economic growth. Yet in many cases a few powerful incumbents seem to capture most of the gains from the reform. In this paper, I construct a model with endogenous formation of special interest groups that could reap most of the benefits of financial liberalization. In particular, these groups lobby to limit entry by other firms, while taking advantage of improved borrowing opportunities. I then use the model to study the Mexican financial liberalization of 1988. Analysis of firm‐level panel data on manufacturing plants reveals patterns suggested by the model. Specifically, large firms in more concentrated or more corrupt sectors benefit more from liberalization. In addition, domestically owned firms gain more than firms with foreign ownership. I also propose a new way to measure corruption at the industry level based on the Mexican 10% profit sharing rule.     

Pesticide use in Vietnamese vegetable production: a 10-year study

Vietnam has had varying success over the past decade with its pesticides policy. Some of the most toxic pesticides have been banned from the market. But while many countries have successfully decreased agricultural pesticide use per hectare, this has not (yet) happened in Vietnam. Due to insufficient pesticide management capacity of the Vietnamese government, pesticide types and quantities registered and distributed on the market have substantially increased in Vietnam over the last 10 years. A 10-year monitoring programme at farm level showed that pesticide use follows the increasing pesticide availability on the market, and many toxic and illegal pesticides are still being used. In an agricultural country dominated by millions of small-scale farmers and with limited state capacity for control at farm level, reduction of the use of the most toxic pesticides can best be achieved by more effective pesticide market control through stricter and more effective state regulations and implementation, aimed at eliminating illegal, low quality and counterfeit pesticides from the market. But even then, better state and private extension services, and greater state capacity for control and enforcement remain essential in enabling farmers to make better decisions about pesticide use.     

Two are Better Than One: The Link Between Management Systems and Business Performance

Little is known about the complementary performance benefits associated with facilities’ combined use of both quality management systems (QMSs) and environmental management systems (EMSs), and how these performance benefits might differ from those associated with facilities’ use of only one of these management systems (or neither). We suggest that complementarities arise because each management system fosters the development of internal capabilities that facilitates the adoption and routine operationalization of the other, while maintaining differentiated goals that enhance strategic value. We examine these relationships using a sample of 2619 manufacturing facilities operating within six OECD countries, while controlling for self‐selection issues. Our findings support the idea of complementarity, in that facilities that adopt both QMS and EMS are more associated with positive business performance than facilities that adopt either a QMS or an EMS on its own, or no management system. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

Routing design for less-than-truckload motor carriers using Ant Colony Optimization

One of the most important challenges that confronts less-than-truckload carriers serving many-to-many distribution networks consists of determining how to consolidate flows of small shipments. The objective is to determine a route for each origin–destination pair that minimizes the cost while still guaranteeing a certain level of service. This research studies different aspects of the problem and provides a metaheuristic algorithm (based on Ant Colony Optimization techniques) capable of solving real-life problems in a reasonable computational time. The viability of the approach has been tested with a real case in Spain and encouraging results have been obtained.     

Valuation Effects of Greek Stock Dividend Distributions

This study analyses the price reaction to stock dividend distributions by firms listed on the Athens Stock Exchange on both the announcement and the ex‐dividend day. It also analyses earnings per share, dividends per share and trading volume in the pre‐ and post‐announcement periods. The findings show statistically insignificant abnormal returns on both the announcement and the ex‐dividend day. The analysis does not reveal any significant change in earnings per share and dividends per share, but it does reveal a significant decline in the market‐adjusted trading volume in the post dividend period. The findings, based on a different institutional environment, expand the empirical evidence on the value effects of stock dividends.     

Reversible Jump Markov Chain Monte Carlo Method for Parameter Reduction in Claims Reserving

Abstract

We present an application of the reversible jump Markov chain Monte Carlo (RJMCMC) method to the important problem of setting claims reserves in general insurance business for the outstanding loss liabilities. A measure of the uncertainty in these claims reserves estimates is also needed for solvency purposes. The RJMCMC method described in this paper represents an improvement over the manual processes often employed in practice. In particular, our RJMCMC method describes parameter reduction and tail factor estimation in the claims reserving process, and, moreover, it provides the full predictive distribution of the outstanding loss liabilities.     

Regional Economic Impacts of the World-Wide Recession: A Case Study of Hampton Roads, Virginia

Defense spending accounts for more than 45 percent of all economic activity in the Hampton Roads, Virginia metropolitan region (population 1.67 million and gross regional product $81 billion annually). Between 2008 and 2010, this was highly advantageous. Not only did defense spending double during the decade, but also it increased by about five percent annually during the recession. This buffered the region from extensive recession damage. Hence, in November 2010, the regional unemployment rate was only 7.0 percent, while it was 9.8 percent nationally. However, this scenario has begun to reverse itself. The growth in defense spending has come to a halt and almost surely will decline in the years ahead. Difficult times are on the horizon for Hampton Roads.