Optimum Growth and Carbon Policies with Lags in the Climate System

We study the optimal carbon tax in an economy in which climate change, stemming from polluting non-renewable resource, affects the economy’s growth potential. Our main contribution is to introduce and explore the natural time lag of the climate system between emissions and damages to capital accumulation in an endogenous growth setting. This allows us to investigate how optimal climate policy, and its interplay with climate dynamics, affect long-run growth and the transition of the economy towards it. Without pollution decay, a higher speed of emissions diffusion steepens the growth profile of the economy. With pollution decay, this leads to lower short-run but higher long-run economic growth during transition. Poor understanding of the emissions diffusion process leads to suboptimal carbon taxes, resource extraction and growth.     

EFFECTS OF FEDERAL CONSTITUTIONAL GRANTS IN BRAZILIAN MUNICIPALITIES

The objective of the present study is to verify the flypaper effect of 476 Brazilian municipalities from 2005 to 2012, considering the new variables as instruments of grants. Political alignment, alignment of the party, and coalition of the mayor with the federal president and of the state governor were considered as instruments of grants. A municipal tax autonomy index was considered as a control variable, which represents the percentage of local taxes in the municipal total revenues. The results allow concluding that the flypaper effect exists in Brazilian municipalities and is intensified by the alignment of the representatives in the same way of theoretical literature (Hamilton 1983; Hines & Thaler 1995; Inman 2008) and previous empirical studies in Brazil. Moreover, evidences of higher flypaper effect were found in municipalities with low tax autonomy.     

Labor Reform in Mexico,Analysis of Principal Changes and Method of Recruitment

Actually, the country＇s development aims to achieve higher levels of productivity, so it had to adapt to international standards. This has served to ease the hiring of both operational and managerial controls, giving emphasis on training and allowing the pairing boss-worker to take the productivity like benchmark. The labor reform allows companies to make changes with their workers; such changes must be reflected in lower costs for businesses, by labor input and increased competitiveness, however, two years ago this guideline was implanted and society asks if the results are congruent, because Mexican society is undergoing economics problems issue as well as a deficit in generating jobs. Therefore, analyzing whether modifications made to the federal labor law （FLL） are designed to optimize safety of workers and enterprises in which they work is the subject of this research. The corresponding analysis was performed using the deductive method.     

Modeling Financial Sector Joint Tail Risk in the Euro Area

We develop a novel high‐dimensional non‐Gaussian modeling framework to infer measures of conditional and joint default risk for numerous financial sector firms. The model is based on a dynamic generalized hyperbolic skewed‐t block equicorrelation copula with time‐varying volatility and dependence parameters that naturally accommodates asymmetries and heavy tails, as well as nonlinear and time‐varying default dependence. We apply a conditional law of large numbers in this setting to define joint and conditional risk measures that can be evaluated quickly and reliably. We apply the modeling framework to assess the joint risk from multiple defaults in the euro area during the 2008–2012 financial and sovereign debt crisis. We document unprecedented tail risks between 2011 and 2012, as well as their steep decline following subsequent policy actions. Copyright © 2016 John Wiley & Sons, Ltd.     

Trade and the Effect of Public Investment on Regional Inequalities in Heterogeneously Integrated Areas

Regional integration, it is argued, challenges the distribution of economic activity among regions. However, the government role in shifting the patterns of regional inequalities is still under debate and has received small comprehensive empirical evidence. This paper examines the hypothesis of trade as channelling public investment and, thus, perpetuating regional inequalities. We argue that the interplay of public and private investment plays a key role in stimulating trade and economic activity. To avoid problems of cross‐country heterogeneity and comparability this study examines data for two countries; Mexico and Spain, both followers of trade integration arrangements. Findings indicate that regional inequalities in Mexico are significantly explained by differences in export capacity serving to boost private investment whereas inequalities in Spain are appreciably driven by previous endowments and private capital formation.     

Economic Growth and the Diffusion of Clean Technologies: Explaining Environmental Kuznets Curves

The paper provides a theoretical explanation for the inverted U-shaped relation between pollution and income often found in empirical research (Environmental Kuznets Curve). We model the transition in the pollution pattern as a change in general purpose technologies and investigate how it interferes with economic growth driven by quality improvements. We provide an analytical foundation for the claim that the rise and decline of pollution can be explained by endogenous innovations, policy-induced technology shifts, and intrasectoral changes. Once environmental degradation becomes too severe, regulation is introduced by which society forces the economy to make a transition to cleaner production.     

Sustainable Development and Corporate Performance: A Study Based on the Dow Jones Sustainability Index

While corporate social responsibility (CSR) is becoming a mainstream issue for many organizations, most of the research to date addresses CSR in large businesses rather than in small- and medium-sized enterprises (SMEs), because it is too often considered a prerogative of large businesses only. The role of SMEs in an increasingly dynamic context is now being questioned, including what factors might affect their socially responsible behaviour. The goal of this paper is to make a comparison of SME and large firm CSR strategies. Furthermore, size of the firm is analyzed as a factor that influences specific choices in the CSR field, and studied by means of a sample of 3,680 Italian firms. Based on a multi-stakeholder framework, the analysis provides evidence that large firms are more likely to identify relevant stakeholders and meet their requirements through specific and formal CSR strategies.     

SME Export Performance in Indonesia After the Crisis

Firms in export-oriented sectors with more exporters and more foreign investment, or firms with more access/use of credit, tend to export a higher share of their output, whether they are small or large. The latter points out that the benefits of size-neutral policies that improve the overall business and foreign investment climate and secure access to formal credit for all enterprises produce benefits for the entire economy. Small firms with higher use of machinery and higher use of domestic inputs displayed a higher likelihood to increase the share of their output exported. SMEs show rising productivity with access and use of appropriate production inputs. Decades of protective size-specific policies, such as the reservation scheme for SMEs still in place in Indonesia’s manufacturing may have distorted, more than supported, adoption of appropriate technologies among SMEs. These policies may need to be revisited and refocused on more size-neutral policies such as improved access to collateral or reduced cost of business registration and licensing.     

“Managing” Corporate Community Involvement

In academic research, many attempts have been undertaken to legitimize corporate community involvement by showing a business case for it. However, much less attention has been devoted to building understanding about the actual dynamics and challenges of managing CCI in the business context. As an alternative to existing predominantly static and top-down approaches, this paper introduces a social movement framework for analyzing CCI management. Based on the analysis of qualitative case study data, we argue that the active role of employees pressuring for CCI policies and practices, as well as the organization audience responses to their efforts, are at the core of the challenges involved in managing CCI. These challenges also pose limits to how far CCI can be extended to a “business as usual” activity.     

The non-equivalence of tariffs and quotas under retaliation

This note shows the non-equivalence of tariffs and quotas when foreign retaliation is allowed for. Using a Cournot-Johnson type of retaliation mechanism it is shown that, contrary to the case of tariffs, quota retaliation will lead to the elimination of international trade between the countries involved.