To formalize or not to formalize: Entrepreneurship and pro-market institutions

In this paper, we examine the effects of pro-market institutions on both formal and informal entrepreneurship. While formal entrepreneurship has long been studied in economic literature, informal entrepreneurship has been less frequently discussed. The purpose of this paper, therefore, is not only to examine the impact of pro-market institutions, but also to foster a better understanding of, and introduce a method to measure, informal entrepreneurship. For the purpose of this paper, pro-market institutions are broken into their two main components: economic liberalization and governance levels. The arguments posit that economic liberalization positively impacts both formal and informal entrepreneurship while governance levels have a positive impact on formal entrepreneurship but a negative effect on informal entrepreneurship. Furthermore, governance levels reduce informal entrepreneurship to a greater extent than they increase formal entrepreneurship, resulting in a net reduction in entrepreneurial activity. The analyses of a panel covering 51 countries from 2002–2009 provide robust support for these arguments.     

Modeling to Relate Variables in the Context of Franchises in Brazil

The central objective of the research is to propose a model for the comparative study of the degree of relationship between the variables considered as most relevant in the context of franchises in Brazil. In terms of methodology, the research undertook a qualitative survey of the variables, which in a second phase provided a quantitative framework in order to fulfill the proposed objective, through concepts based on multicriteria methods, performance measurement systems, and linear correlation. Resulting from the practical implementation proposed for the General Food category, it was found that only two constants, denoted “Average Initial Investment” and “Financial Obligations,” are directly related to the base variable defined by “Gross Revenues.”     

Two Models of Intertemporal Price Discrimination

Received December 22, 2000; revised version received August 31, 2001     

Speculative trade, asset prices and investment levels

Summary. In this paper I consider a dynamically complete market model without intrinsic uncertainty. Agents' beliefs are different, but correct in the limit. Some agents are more patient than others. I show that infinitely often share prices are low and the economy stagnates. Also, infinitely often share prices are high and the economy grows. The changes from growth to stagnation and from stagnation to growth are not caused by exogenous shocks. They are caused by speculative trade among agents with different propensities to save and invest. Received: January 8, 2001; revised version: April 11, 2002 RID="*" ID="*" I thank an anonymous referee for helpful comments. I gratefully acknowledge financial support from the National Science Foundation.     

How do employment relationships enhance firm innovation? The role of human and social capital

Aiming to explore the effect of human resource management on innovation, this study examined how employment relationships (ER), human capital and social capital work together in influencing innovation in a sample of Spanish firms. We defined an indirect effects model in which both human and social capital mediate between ERs and innovation. We also expected that social capital would enhance human capital. Tests on a sample of 160 innovative Spanish firms confirmed that ERs are not directly associated with innovation. Nevertheless, there is an indirect effect of the mutual investment employment model on innovation through human and social capital. Finally, we observed a positive effect of social capital on human capital.     

Assessing the Performance of ‘Inflation Targeting Lite’ Countries

This paper deals with what is referred to in the literature as the ‘Inflation Targeting Lite’ (ITL) countries. These are a category of emerging countries, whose main characteristics are that they are least developed and small economies that pursue IT. They use inflation targeting to define their monetary policy framework, but for a number of reasons they are not in a position to put top priority to IT in relation to other objectives. This paper deals with a set of ITL countries for which consistent data could be gathered, and for which a date for setting inflation targeting could be discerned. The object of the paper is to study the impact of IT on actual inflation and inflation expectations. We utilise intervention analysis to time series on inflation for a number of ITL countries, which have actually implemented IT. In doing so our main concern is to assess whether, due to the IT intervention, there has been a significant change in the trend corresponding to these series and the extent to which inflation rates have actually been ‘locked‐in’ at low levels after the implementation of IT. Two major results emerge. The first is that ITL countries have been successful in ‘locking‐in’ inflation rates. The second is that non‐IT countries have also been successful in terms of the ‘lock‐in’ effect. Our overall conclusion, then, is that other factors in addition to IT underpin the apparent success of the control of inflation.     

Maximin growth paths with recursive preferences: A complete characterization

This paper examines the growth paths that maximize the utility of the worst off generation for an economy where preferences are stationary and can be represented by a recursive utility function. The analysis focuses on the case where second period utility is an inferior good. It is shown that in such a case the maximin growth paths are time inconsistent. A possible solution to the time inconsistency problem is examined.     

The stock market and the vacancy rate

This paper analyzes the vacancy rate in competivive markets. It is shown that the competitive vacancy rate is suboptimal and that it can be higher or lower than the optimal rate.