Is there a Role for an Active Fiscal Stabilization Policy?

This paper discusses the need and scope for an active fiscalstabilization policy. It is argued that the effectiveness offiscal policy as a short run stabilizer does not depend on thelong run multipliers of (balanced budget) fiscal policies. Tothe extent that activity can be affected by aggregate demandin the short run, there is a case for a fiscal stabilizationpolicy in terms of temporary variations in taxes or public consumptioncontingent on the state of the economy. The effectiveness offiscal policy is supported by empirical evidence. However, anappropriate policy intervention depends both on the nature ofthe shock and the structure of the economy. There are thus fundamentalinformation problems in pursuing discretionary fiscal policieson top of political economy concerns, and fiscal fine-tuningis not to be recommended. Automatic stabilizers do not to thesame extent suffer from these problems, but their strength isnot by design but the net result of other policy considerations.Hence, there is a need to consider the structure and size ofautomatic stabilizers. (JEL E6)     

Managing portfolio risk in strategic technology management: evidence from a panel data-set of the world's largest R&D performers

In this article, we analyze the impact of firms’ technology bases on their financial performance. By taking a strategic perspective of technology, we argue that it is not sufficient to analyze only the size or novelty/quality of the technology base as technology bases can best be understood as portfolios of individual technologies. In such a framework, risk consideration should be taken into account. More specifically, we argue that increasing technological breadth can serve as a hedge against the inherent uncertainties of developing and commercializing technology, in particular when the technology base is very large or novel. We also propose that technology has higher impacts on financial performance for firms with broader technology portfolios. A similar argument proposes that technological breadth can offset the increased risks of addressing foreign markets. We test our hypotheses using an international panel data-set of large R&D-performing firms. Our results suggest that broad technology portfolios can indeed serve as a hedge against technological and commercialization risks.     

Jump-robust volatility estimation using nearest neighbor truncation

We propose two new jump-robust estimators of integrated variance that allow for an asymptotic limit theory in the presence of jumps. Specifically, our MedRV estimator has better efficiency properties than the tripower variation measure and displays better finite-sample robustness to jumps and small (“zero”) returns. We stress the benefits of local volatility measures using short return blocks, as this greatly alleviates the downward biases stemming from rapid fluctuations in volatility, including diurnal (intraday) U-shape patterns. An empirical investigation of the Dow Jones 30 stocks and extensive simulations corroborate the robustness and efficiency properties of our nearest neighbor truncation estimators.     

Agricultural productivity and economic development: the contribution of clover to structural transformation in Denmark

This paper contributes to the debate on the impact of agricultural productivity on long run economic development. It presents evidence that widespread adoption of clover contributed to local economic development based on a panel of 56 Danish market towns. We adopt a differences-in-differences approach augmented by an instrumental variable and find that the adoption of clover accounts for about 8 percent of the growth in market town population from 1672 to 1901. The analysis suggests that the effect of the adoption of clover on the process of development was mediated by its impact on human capital formation.     

Economic and Systemic Explanations of Ownership Concentration among Europe's Largest Companies

The paper examines causes and effects of ownership concentration among the largest companies in 12 European countries. As a reference point the paper takes a seminal empirical study on US data and examines to what extent the model is applicable in European countries. The findings indicate that both general economic effects and system effects are significant. Ownership concentration is found to decrease with firm size and to increase with earnings volatility. But in support of the system theories advocated nationality is also found to have a significant effect which is partly attributable to institutional differences between nations such as stock market size and the frequency of large banks. Finally ownership concentration is found to have an insignificant effect on accounting profitability (return on equity)     

Consumer values,the theory of planned behaviour and online grocery shopping

Taking a hierarchical value‐attitude‐behaviour approach, this study empirically tests relations of consumer personal values, attitude, social norm, perceived behavioural control (PBC) and willingness to buy groceries online. The study distinguishes three groups of consumers: consumers who have not yet bought anything on the Internet; consumers who have bought something on the Internet – but not groceries; and consumers who have bought something on the Internet – including groceries. Data were collected from an online survey of Swedish consumers (n = 1058) using self‐administered questionnaires. The findings suggest that consumers may link personal values to attitude towards online grocery buying – but also that this relation may be moderated by whether the consumer previously has carried out an online purchase or an online grocery purchase.     

Is Passive Farming A Problem for Agriculture in the EU?

We address a new agricultural policy concern following the decoupling of CAP direct payments in 2005: passive farming, whereby landowners maintain their agricultural area to collect payments without producing commodities. It is claimed that passive farming is hindering agricultural development by ‘blocking’ access to farmland for expanding farmers. We evaluate the links between the EU's Single Payment Scheme (SPS), passive farming, land use and agricultural development. Following identification of the rational landowners’ optimal land‐use choice, we evaluate the effects of the SPS using a spatial, agent‐based model that simulates farmers’ competition for land in a case‐study region of Sweden. We show that passive farming does not constrain land from being used in production; on the contrary more land is used than would be the case without the SPS. We conclude that passive farming is not a problem for agriculture, but provides public goods that would otherwise be under provided: preservation of marginal farmland and future food security. However SPS payments on highly productive land inflate land values (capitalisation) and slow structural change, which hinder agricultural development. Consequently CAP goals could be better served by targeting payments on marginal land and phasing out payments to highly productive land.     

Competition and Corporate Control in Partial Ownership Acquisitions

Competition authorities have a growing interest in assessing the effects of partial ownership arrangements. We show that the effects of such agreements on competition and welfare depend on the intensity of competition in the market and on the firms’ governance structure. When assessing the effects of partial ownership, competition policy has to consider both the financial interest and level of control of the acquiring firm in the target firm.