Perceived credit constraints in the European Union

The promotion and support of small and medium-sized enterprises (SMEs) is an essential component of policies designed to help improve Europe’s economic performance. A crucial issue is whether SMEs face difficulty obtaining bank loans. Using pre-crisis survey data from 2005 and 2006 for nearly 3,500 SMEs (firms with fewer than 250 employees) in the European Union (EU), we investigate the determinants of perceived bank loan accessibility at the firm level and at the country level. Based on hierarchical (multi-level) binomial logit regressions, our findings show that the youngest and smallest SMEs have the worst perception of access to bank loans. The SMEs in nations with concentrated banking sectors are more positive about loan accessibility. In addition, a high fraction of foreign-owned banks is associated with improved perception of loan accessibility in the EU 15 but not in the EU 10.     

Market Performance of Potato Auctions in Bhutan

Abstract

Market performance with respect to a main horticultural export commodity in Bhutan is the subject of this paper. Imperfections in (market) infrastructure and market structure and conduct may prevent an optimal price for farmers. Market performance is assessed by testing the law of one price for this commodity. This is done by testing three series of auction price data on both long-run and short-run price integration. It is concluded that for the period 1996-2000 the auction prices were interrelated both in the long and short run with one of the three auctions as the price-leading market. In contrast, in the period 2001-2005 the market arbitrage process slowed down, indicating the rise of market imperfections. Policy implications are suggested.     

Global models applied to agricultural and trade policies: a review and assessment

The continuing process of global integration bears implications for farmers and related supplying and processing industries in all parts of the world, but also for the rest of the world economy. An assessment of agricultural and trade policy impacts is bound to be complex and is often supported by quantitative modeling analysis. This article provides an assessment of the present state of applied modelling in the area of trade and agricultural policies. We provide in this paper a comparative assessment of alternative modelling approaches, considering a total of 16 partial equilibrium and general equilibrium models. The assessment includes theoretical modelling foundations, datasets employed and institutional aspects, such as model maintenance and dissemination of results. A typology of models is provided by structuring the assessment along a clear set of evaluation criteria.     

Space matters: the importance of amenity in planning metropolitan growth

Most Australian capital cities require many 100,000s of additional dwellings to accommodate demographic change and population pressures in the next two or three decades. Urban growth will come in the form of infill, consolidation and urban expansion. Plans to redevelop environmental amenities such as parks and open green spaces are regularly being put forward to local councils and State governments. Maintaining parks and reserves represents one of the largest costs to local councils. To aid in the evaluation of some of the different propositions, we report the results of a spatial hedonic pricing model with fixed effects for Adelaide, South Australia. The results indicate that the private benefits of a close proximity to golf courses, green space sporting facilities, or the coast, are in the order $0.54, $1.58, and $4.99 per metre closer (when evaluated at the median respectively). The historic Adelaide Parklands add $1.55 to a property’s value for each additional metre closer. We demonstrate how the estimated model could be used to calculate how local private benefits capitalized in property values change with changes in the configuration of a park.     

Within-person variation in affective commitment to teams: Where it comes from and why it matters

Teamwork is crucial to organizational success and commitment to teams is an important predictor of team-related behaviors. However, theorists and researchers have typically assumed that commitment levels are generally stable within-persons, increasing or decreasing as a result of substantial organizational changes. This position is at odds with the evidence of systematic and regular intraindividual fluctuations in personal attributes and workplace behaviors. We draw upon affective events theory to present a model explaining how certain events and dispositions produce vacillations in affective reactions which, in turn, are likely to create within-person variation in affective commitment to teams (WPVC_teams). We further propose that WPVC_teams enhances prediction and explanation of intraindividual fluctuations in work behavior and, interindividually, moderates the relationship between level of commitment and behavior.     

Firm Recruitment Behaviour: Sequential or Non‐sequential Search?

In the extensive job search literature, studies assume either sequential or non‐sequential search. This article introduces a novel method to test the hypothesis that firms search sequentially based on the relationship between the number of rejected job applicants and the number of filled vacancies. We distinguish between ten different search methods. For most search methods, including methods that rely on social networks and temporary help agencies, we find that sequential search cannot be rejected. However, when firms use advertising or public/private employment agencies, sequential search is rejected. Hence, we find that both forms of search are relevant for our understanding of the labour market. Further, the form of search is closely related to the search method used.     

Sustainability: The search for the integral worldview

The sustainability problem is described as a process of recurrent destabilization of societal value orientations or worldviews. These worldviews represent both value orientations with respect to ‘quality of life’ and mental maps about the surrounding world. The many different worldviews which shape society appear to be part of an overall integral worldview which can be deduced from societal enquiries and from the experiences of history and philosophy over many centuries. This integral worldview is defined by the vertical contrast between idealism and materialism and the horizontal contrast between uniformity and diversity. Due to a number of societal and psychological centrifugal forces, worldviews become one-sided and finally end in fundamentalist value orientations which are synonym with overshoot, collapse and crisis. Examples are religious fundamentalism and related wars, communism, nazism, the ecological crisis as well as the recent financial crisis.The solution to these sustainability problems has to be found in the timely recognition and compensation of the destabilizing centrifugal forces. The resulting integral worldview is synonym with ‘human dignity’. The thus defined time independent notion of human dignity defines a new ethical framework and solves the paradox between the needs of present and future generations in Brundtland's original definition of sustainable development.     

An Empirical Model of Optimal Capital Structure1

The authors provide a reasonably user‐friendly and intuitive model for arriving at a company's optimal, or value‐maximizing, leverage ratio that is based on the estimation of company‐specific cost and benefit functions for debt financing. The benefit functions are downward‐sloping, reflecting the drop in the incremental value of debt with increases in the amount used. The cost functions are upward‐sloping, reflecting the increase in costs associated with increases in leverage. The cost functions vary among companies in ways that reflect differences in corporate characteristics such as size, profitability, dividend policy, book‐to‐market ratio, and asset collateral and redeployability. The authors use these cost and benefit functions to produce an estimate of a company's optimal amount of debt. Just as equilibrium in economics textbooks occurs where supply equals demand, optimal capital structure occurs at the point where the marginal benefit of debt equals the marginal cost. The article illustrates optimal debt choices for companies such as Barnes & Noble, Coca‐Cola, Six Flags, and Performance Food Group. The authors also estimate the net benefit of debt usage (in terms of the increase in firm or enterprise value) for companies that are optimally levered, as well as the net cost of being underleveraged for companies with too little debt, and the cost of overleveraging for companies with too much. One critical insight of the model is that the costs associated with overleveraging appear to be significantly higher, at least for some companies, than the costs of being underleveraged.     

Hiding an inconvenient truth: Lies and vagueness

When truth conflicts with efficiency, can verbal communication destroy efficiency? Or are lies or vagueness used to hide inconvenient truths? We consider a sequential 2-player public good game in which the leader has private information about the value of the public good. This value can be low, high, or intermediate, the latter case giving rise to a prisoners? dilemma. Without verbal communication, efficiency is achieved, with contributions for high or intermediate values. When verbal communication is added, the leader has an incentive to hide the precise truth when the value is intermediate. We show experimentally that, when communication must be precise, the leader frequently lies, preserving efficiency by exaggerating. When communication can be vague, the leader turns to vague messages when the value is intermediate. Thus, she implicitly reveals all values. Interestingly, efficiency is preserved, since the follower does not seem to realize that vague messages hide inconvenient truths.