The evolution and use of a policy and research tool: assessing the technological capabilities of firms

Firms differ widely in their technological capabilities. Innovation policies are likely to be more or less successful depending upon the level of such abilities of those firms to which a policy is aimed. Without data on the proficiencies, strengths and weaknesses of firms within the target group(s), the construction and application of innovation or industrial policies are likely to miss salient factors in the ability of firms to benefit from the support that is intended. An in-depth knowledge of firms’ capabilities can allow policy-makers to target support according to the specific needs of firms. This paper describes the Technology capability audit tool (or CAT) that was designed to assist policy-makers in differentiating between firms and in understanding their level of ‘innovation readiness’. Examples of the use of the CAT are presented from South Korea, Thailand, Ireland, Brazil and the UK.     

REIT Going Private Decisions

Over the recent decade there was a wave of REITs going private, from an average of about three per year to 40 between 2005 and 2007. Standard corporate finance theory posits that firms go private when there is no longer a positive tradeoff between the expected benefits and the costs of being public, and it provides empirical evidence that going private decisions are motivated by potential gains from leverage, tax benefits, and expected improvements in corporate governance. Given the unique institutional environment for the REIT industry, this paper sheds new light on the going-private decision. Specifically, we examine the determinants of the going-private decision and document announcement wealth changes using a sample of 160 REITs from 1985 to 2009. We find firm performance and agency-related factors significantly impact the probability that a REIT announces to go private. We find that the passage of Sarbanes-Oxley and a proxy for differential performance in the private and public markets have no significant impact on the decision. The announcement day abnormal return is almost 12% and the three-day abnormal return is 15%, magnitudes that are both statistically and economically significant. Variations in the market reaction are associated with lower levels of cash and higher stock price volatility. Overall, we document a new set of going-private factors and wealth impacts for the REIT industry that are unique from those of previous corporate finance literature.     

Labor education as a method of enhancing employee rights and responsibilities

University-based labor education programs conduct classes designed to provide union members with the skills necessary to perform their organizational and civic responsibilities and to provide union members with opportunities for personal growth and development. In conducting these programs, university labor educators enhance the protection of employee rights and the fulfillment of employee responsibilities. This article describes the manner in which labor education enhances collective and individual rights and responsibilities within unions, vis-à-vis employers and within the larger society.     

Modeling Spatial and Temporal House Price Patterns: A Comparison of Four Models

This research reports results from a competition on modeling spatial and temporal components of house prices. A large, well-documented database was prepared and made available to anyone wishing to join the competition. To prevent data snooping, out-of-sample observations were withheld; they were deposited with one individual who did not enter the competition, but had the responsibility of calculating out-of-sample statistics for results submitted by the others. The competition turned into a cooperative effort, resulting in enhancements to previous methods including: a localized version of Dubins kriging model, a kriging version of Clapps local regression model, and a local application of Cases earlier work on dividing a geographic housing market into districts. The results indicate the importance of nearest neighbor transactions for out-of-sample predictions: spatial trend analysis and census tract variables do not perform nearly as well as neighboring residuals.     

Comment on 'Market discipline and monetary policy' by Carl Walsh

This paper shows that the results Walsh (2000, Market disciplineand monetary policy, Oxford Economic Papers, 52, 249–71)obtains are highly sensitive to the assumption that differentwage contracts are based on different information sets eventhough they are negotiated simultaneously. In particular, thepower of future expectations to discipline an opportunisticcentral banker is much weaker when homogeneous information setsare used.     

How GIS Can Put Urban Economic Analysis on the Map

Geographic information systems (GIS) provide powerful tools for storing and manipulating large amounts of information on spatial relationships. However, applications of GIS in urban economics and real estate are infrequent. As a symptom of this, there is often little relation between the extensive literature on residential mortgages and the housing markets literature. The purpose of this paper is to discuss the potential contributions GIS could make to urban economic and real estate economic research and open debate on GIS as applied to these fields. Beginning with theory, we determine how GIS can be useful to researchers and what is needed from future GIS. A GIS is a database management system with a spatial reference. It is capable of providing researchers with excellent control over spatial relationships. For example, one can “geocode” the housing transactions used for hedonic pricing studies. The process of geocoding assigns a latitude and longitude coordinate for each transaction. This enables much more elaborate spatial analysis than with traditional techniques such as using a ruler on a paper map. For instance, GIS allows the hedonic pricing literature to be reworked using spatial autoregressive analysis (SAR). SAR models need to repeatedly calculate large numbers of distances from each observation to every other observation within a given radius. In this context, GIS software is primarily useful for assigning a latitude and longitude location to each observation based on the best of street, ZIP, or ZIP+4. These geocoded observations may then be exported to other software for batch processing of SAR statistics. Future development of GIS software should eliminate the need for multiple software packages. Likewise, road distances with flexible weights (e.g., depending on type of road or on construction delays) awaits further software development.     

Tourist demand characterization. Andean cultural festival Inti Raymi (Ecuador)

The present empirical work was carried out in situ and using a questionnaire it tries to analyze the demand of the “Inti Raymi” cultural festival, the motivations and satisfaction of its visitors. This festival is held once a year at the Archaeological Complex of Ingapirca located in the province of Cañar in Ecuador. It is a symbol of gratitude of the Andean community to the “Taita Inti” (Father Sun) and the “Paccha Mama” (Mother Earth) for the kindness to allow a good production and harvest of traditional products. During the investigation it was found that the main motivations for attending were: enjoy the culture of Ingapirca, attend an Andean Folk Festival, fun and relaxation. In addition, the results show a high satisfaction of the tourists in the Festival.     

Heuristics in Mutual Fund Consumers' Willingness‐to‐Invest: An Experimental Approach

This paper improves the understanding of heuristics in the choice of mutual funds. We analyze the effect of price‐quality relationship and anchors as heuristics on the evaluation of the willingness‐to‐invest. We perform two studies with graduate students who possess a medium–high level of financial literacy in Chile. In the first study, we find that willingness‐to‐invest increases (decreases) when subjects observe (do not observe) in the market a positive relationship between expense ratios (price) and service quality. In the second study, in the presence of an anchor, the reference price obtained by individuals from the market information loses relevance and the anchor effect predominates. Our results confirm that participants, as consumers of financial services, apply heuristics as groundwork for their investment decisions. These heuristics as a decision making process are useful but do not always lead to the choice of the lowest cost alternative with the highest possible service quality.     

How collateral laws shape lending and sectoral activity

We demonstrate the central importance of creditors’ ability to use movable assets as collateral (as distinct from immovable real estate) when borrowing from banks. Using a unique cross-country micro-level loan data set containing loan-to-value ratios for different assets, we find that loan-to-values of loans collateralized with movable assets are lower in countries with weak collateral laws, relative to immovable assets, and that lending is biased toward the use of immovable assets. Using sector-level data, we find that weak movable collateral laws create distortions in the allocation of resources that favor immovable-based production and investment. An analysis of Slovakia's collateral law reform confirms our findings.