Price dispersion and the stability of trade*

Research on trade relationships has documented a high rate of relationship breakup and churning. We use data on Norwegian exports to document two stylized facts about the stability of trade relationships. First, the probability of relationship breakup increases in the deviation of the relationship-specific price from a reference price. Second, relationship hazards follow Zipf's law. We propose a search model with limited information and search frictions to explain these facts. Reference prices provide information on outside trade options that inform optimal breakups, leading to the first stylized fact. Strong heterogeneity in breakup frictions across relationships can explain the Zipf's law hazards.     

Ambiguity and risk factors in bank stocks

The determinants of banks' cost of equity are not well understood. We depart from prior work assuming rational expectations and instead explore the impact of Knightian uncertainty or ambiguity on bank stocks. We test a large set of asset pricing models and find that investors' lack of confidence in both the drift and correlation structure driving bank stock returns affects banks' cost of capital. We also investigate the economic relation among ambiguity, market liquidity, and banks' capital shortfall, which reveals the transmission channels through which ambiguity may increase the probability of a systemic crisis. Our findings have implications for macroprudential policy.     

Private family firms,generations and bank debt

This paper focuses on the use of bank debt by private family firms and whether it is higher for the first generations of family businesses than for their descendants and subsequent generations. We use a unique hand-collected data set of 4,041 private Spanish firms for the years 2004 to 2013. We find statistical evidence that family-controlled firms make greater use of bank credit. Moreover, we show that first-generation family firms acquire more bank debt than those of second and subsequent generations. Furthermore, during financial crises, family-controlled firms were subjected to less rationing, with increased bank financing for first generations.     

Entrepreneurial intentions in the context of a collectivist economy: a comparison between Cuba and Spain

Entrepreneurship research has matured and now spans multiple entrepreneurial contexts, including developing countries, emerging and transitional economies. However, collectivist economies have largely been ignored, partly due to difficulties in conducting research and partly due to the widespread assumption that they remain on the outskirts of entrepreneurial activity. In this paper, from the entrepreneurial event model perspective, we analyse entrepreneurial intention and its antecedents in Cuba, probably the best example of a collectivist economy that exists nowadays. Cuba is compared to Spain, a country that shares historical and cultural features but one which has a developed market economy. Findings indicate that desirability and feasibility constitute the main antecedents of entrepreneurial intention in Cuba, as other studies in market economy countries reflect. However, the influence of desirability on entrepreneurial intention is lower in Cuba compared to Spain, where the values of desirability and feasibility are significantly greater. These results seem to indicate that due to Cuba’s level of development, political regime and collectivist culture, entrepreneurship arises mainly out of necessity and the emergence of a strong entrepreneurial culture is stifled. This reflects a similar situation to the result obtained in previous studies in developing countries.

     

Welfare and sectoral productivity shifts in a small open economy with imported agricultural inputs: The case of Sub-Saharan Africa

This paper studies the impact of sectoral productivity growth on welfare in Sub-Saharan Africa. Using the analytical framework of a DSGE model, the main finding is that, for the estimated values of structural parameters, the allocation of scarce resources to the tradable agricultural sector for boosting productivity leads to a greater increase in overall welfare than would be the case if they were allocated to the non-traded goods sector.

     

Board of director attributes: effects on financial performance in SMEs

International Entrepreneurship and Management Journal - This paper analyses the relationship between board of director (BoD) attributes and financial performance in small and medium-sized...     

Factors that determine the degree of fulfilment of expectations for entrepreneurs from the business incubator programmes

International Entrepreneurship and Management Journal - The uncertain economic situation that was experienced because of the global financial crisis in 2008 and the exponential growth in the use of...     

Assurance of corporate social responsibility reports: Does it reduce decoupling practices?

Recent research shows the existence of a selective corporate social responsibility (CSR) disclosure strategy that creates a gap between CSR disclosure and actual performance. These CSR decoupling practices compromise the credibility of CSR reports and have triggered a demand for the adoption of credibility enhancement mechanisms, such as adherence to the global reporting initiative (GRI) reporting guidelines, and the external assurance of CSR reports. The effectiveness of such mechanisms is not clear, however. This paper draws on legitimacy theory and addresses the issue of symbolic versus substantive use of assurance, and compliance with GRI reporting standards, by analysing their effect on CSR decoupling using an international sample of 1,939 companies (15,219 observations from 2002 to 2017). Analysis of a sub-sample of 708 firms (3,730 observations from 2011 to 2017) also shows that the application of GRI guidelines and the specific characteristics of the assurance provider—accountant, experience and specialisation—reduce CSR decoupling practices. The results provide researchers, managers, assurance providers, investors, stakeholders and regulators with additional insight into the value of the external assurance of sustainability reports and have important managerial and policy implications.     

Density forecasting with Bayesian Vector Autoregressive models under macroeconomic data uncertainty

Macroeconomic data are subject to data revisions. Yet, the usual way of generating real-time density forecasts from Bayesian Vector Autoregressive (BVAR) models makes no allowance for data uncertainty from future data revisions. We develop methods of allowing for data uncertainty when forecasting with BVAR models with stochastic volatility. First, the BVAR forecasting model is estimated on real-time vintages. Second, the BVAR model is jointly estimated with a model of data revisions such that forecasts are conditioned on estimates of the ‘true’ values. We find that this second method generally improves upon conventional practice for density forecasting, especially for the United States.