The effect of production uncertainty on the labor-managed firm

The effects of production uncertainty on the behavior of the labor-managed, cooperative firm are examined and it is shown that they generally differ from the case of certainty and the case of the entrepreneurial, profit-maximizing firm. In particular, it is shown that the risk-averse (risk-seeking) cooperative will have a larger (smaller) ratio of labor to nonlabor input employed in production than the risk-neutral cooperative.     

Consensus,dissension and ideology among economists in various European countries and in the United States

The paper analyzes consensus and dissension among economists on the basis of surveys conducted in Belgium, France, Germany, Switzerland and the United States. The outcome of the analysis is that there exists a considerable amount of consensus, but substantial differences across countries. In Europe, and especially in Belgium and France, the views of ‘left’ and ‘right’ economists differ, these differences are strong, as expected, on propositions which have a clear ideological content. However, it also appears that economists are not always willing to distinguish ‘technical’ and ‘political’ aspects of an economic issue.     

The Effect of Technological Change and Technical Inefficiencies on the Performance of Functional Forms

Technological change is one of the most important determinants of the technological structure of the firm. Unfortunately, this crucial factor is often unobserved and must therefore be approximated. It is also well recognized that firms are not necessarily located on their efficient production frontier, a phenomenon known as technical inefficiency. This paper compares the performance of three flexible functional forms (the Translog, Symmetric McFadden and Symmetric Generalized Barnett) to properly infer theoretical properties and technology measurements when: (i) unobserved technological change is approximated by a time trend in the variable-cost-function specification and, (ii) firms may be technically inefficient. Our results indicate that no functional form dominates and that measuring the shifts of the production (cost) function has a clear and negative effect on the performance of the functional forms. Furthermore, we find that technical inefficiencies have a significant and negative effect on the measurement of, notably, returns to scale and the implicit rental price of capital. However, all forms over-reject theoretical properties and provide adequate technology measurements only on a sample-average basis. In addition, the performance of the functional forms is closely related to the true underlying rate of technological change.     

Do central banks react to the stock market? The case of the Bundesbank

In this paper, we ask whether the Bundesbank, prior to the European Central Bank taking responsibility for monetary policy in 1999, reacted systematically to stock price movements. In contrast to the results for the US, our empirical findings show a generally weak relationship between German stock returns and short-term interest rates at the daily and the monthly frequency. The results are extremely robust to alternative model specifications. The evidence is inconsistent with the hypothesis of a systematic reaction of the Bundesbank to German stock prices. However, we do find that, as in the US, the Bundesbank may have reacted to the stock market crash of 1987 by loosening monetary policy.     

Should the government directly intervene in stock market during a crisis?

Unlike foreign exchange markets where central banks frequently intervene, the governments strive not to intervene in the stock markets since intervention transmit negative signals and carry market-related side effects. The main reasons often cited in support of intervention are to bring price stability and to restore investors’ confidence. During the recent economic turmoil, opportunities for the governments to intervene in the stock markets were mainly exploited in emerging and developing countries. We study the outcome of the Russian government's intervention in its major stock market between September and October 2008. This intervention was intended to reverse the sudden and swift declining trend in traded security prices by altering the market's expectations. By using a combination of event study and a multivariate GARCH model, our findings does not support direct government intervention in the stock market during a crisis.     

Rising to the challenge: A model of contest performance

Contests are a ubiquitous form of promotion widely adopted by financial services advertisers, yet, paradoxically, academic research on them is conspicuous in its absence. This work addresses this gap by developing a model of contest engagement and performance. Using motivation theory, factors that drive participant engagement are modeled, and engagement's effect on experience and marketing success of the contest specified. Measures of contest performance, in-contest engagement and post-contest enduring interest are included. From the model, propositions are developed. Overall, the model provides financial service marketers with a theory-based foundation for designing and operating successful contests.     

Public‐private partnerships in the health industry

This article compares the traditional government method of procurement of goods and services with various public‐private partnership methods and provides an overview of the various advantages and disadvantages of both. Governments face many challenges in meeting the basic needs of their people. The private sector is therefore becoming increasingly involved in the provision of a range of services. In South Africa, examples are the Maputo N4 Tollroad, various water and sanitation concessions, and even the building and running of prisons, all of which have received media coverage. Many of these forms of private sector involvement, and lessons learnt from these projects, could be transferred to the health care sector. The health industry is currently faced with the challenge of providing increased levels of service to a growing population. There has been much debate over the state of the nation's hospitals, all of which require some maintenance and at least a third of which need extensive, if not complete, replacement. This also applies to the equipment used in hospitals. Overseas, governments are looking to the private sector to work in partnership with them to address these concerns in terms of knowledge and expertise in delivering, financing and operating these services. By involving the private sector as a partner, governments can focus their energies on ensuring that adequate health policy frameworks are established and that the necessary health services are provided. The article identifies and highlights several ways in which the private sector and government could work together to solve many of the challenges facing the industry.