Optimal education and pensions in an endogenous growth model

In OLG economies with life-cycle saving and exogenous growth, competitive equilibria in general fail to achieve optimality because individuals accumulate amounts of physical capital that differ from the one that maximizes welfare along a balanced growth path (the Golden Rule). With human capital, a second potential source of departure from optimality arises, related to education decisions. We propose to recover the Golden Rule of physical and also human capital accumulation. We characterize the optimal policy to decentralize the Golden Rule balanced growth path when there are no constraints for individuals to finance their education investments, and show that it involves education taxes. Also, when the government subsidizes the repayment of education loans, optimal pensions are positive.     

Ownership Structure, Technological Endowment and Competitive Advantage: Do Democracy and Business Fit?

The current study provides a model that aims to explain the origin of the competitive advantage of organizations in terms of the ownership structure. We have also studied the interactions between IT use and ownership structure. To reach these objectives, we have classified the organizations in two groups using the cooperative character criterion. The results show that cooperative firms achieve a superior competitive advantage regardless of the amount of IT that the firms use. The study is focused on the Spanish Pharmaceutical Distribution Industry.     

A statistical analysis of seven multipliers for linear congruential random number generators with modulus 231−1

Twelve statistical tests were performed on the sequences produced by seven linear congruential pseudorandom number generators with modulus 2³¹?1. The seven generators had, respectively, the multipliers 742938285, 950706376, 1226874159, 62089911, 1343714438, 397204094 and 16807. The worst results were obtained from the sequences produced by the multipliers 1226874159, 397204094 and 16807, while the best ones corresponded to the sequences produced by 1343714438 and 742938285.     

Challenges for forest conservation in Gabon, Central Africa

In recent decades, large expanses of tropical rainforest in central and western Africa have been cleared, logged, fragmented, and overhunted. In contrast, extensive forest in Gabon has survived in a relatively intact condition because the country has a sparse population and substantial petroleum and mineral deposits that have reduced economic pressures on forests. Unfortunately, Gabon's petroleum reserves are dwindling. As a direct result, industrial logging is expanding rapidly; nearly half of the country's forest is currently in timber leases, and this could increase to over 75% of the remaining forest during the next decade. Mechanized logging has important ecological impacts on forests, but the most severe effects are indirect, because loggers create labyrinths of roads that greatly increase access to forests for hunters and slash-and-burn farmers. Declines of forest wildlife from overhunting have been severe in much of tropical Africa, and are likely to rise sharply in Gabon as physical accessibility to forests increases.The Gabonese government is eager to consider alternative strategies to augment economic development, including promotion of an ecotourism industry. This commitment is evidenced by the government's recent designation of 13 new national parks that comprise over a tenth of the country's land area. Efforts to develop ecotourism face substantial challenges, however, including the high profitability of exploitative land uses like logging, the illegal encroachment of loggers and hunters into nature reserves, political instability in the surrounding region, and limited infrastructure for tourism. Nevertheless, these and other efforts to promote more-sustainable development should be strongly supported, as Gabonese forests have among the highest levels of species diversity and endemism in tropical Africa and are likely to play a critical future role in biodiversity conservation.     

'Successes' and 'Failures' in the Markets for Technology

Market-mediated contracts for technology trade are bound byseveral transaction costs. This paper argues that as these transactioncosts become less severe, markets for technology can help improvethree market failures: (i) R&D duplications; (ii) externalitiesin potentially public R&D outcomes; and (iii) deviationsfrom marginal cost pricing in the downstream product markets.In addition, with larger markets of potential users, the technologysuppliers will have incentives to produce more ‘general’technologies which span a wider number of firms or industries.Markets for technology also produce new failures. In particular,they induce deviation from marginal cost pricing in the saleof the technology, and they generate externalities associatedwith complementary R&D and other investments made by theindependent buyers and suppliers that operate in them. The paperconcludes by discussing policy implications.     

Asset Sales and Secured Creditor Control in Restructuring: A Comparison of the UK,US and Canadian Models

The primary insolvency restructuring mechanism in the UK is administration under the Insolvency Act 1986, as amended by the Enterprise Act 2002. In an administration, an insolvency professional known as an administrator, who is accountable to the insolvent company's creditors as a whole, is appointed to oversee the restructuring. The administration process was designed to rehabilitate distressed but viable companies and businesses and to maximize creditors' recoveries. Increasingly, however, insolvent companies are using this process to sell substantially all of their assets through pre‐packaged administrations or ‘pre‐packs’. In a pre‐pack, the insolvent company and its senior creditors negotiate the terms of the sale prior to initiating administration proceedings and appointing an administrator. The administrator then implements the deal, often with little or no input from junior creditors or other stakeholders. Both the US Bankruptcy Code and the Companies' Creditors Arrangement Act in Canada permit insolvent companies to sell substantially all of their assets under the auspices of the restructuring legislation. This article compares pre‐packs with these US and Canadian processes, arguing that they are all functionally equivalent in that they facilitate quick realizations for secured creditors by bypassing traditional restructuring processes. This analysis suggests that pre‐packs may give too much control over the restructuring process to secured creditors, encouraging rent‐seeking and other value‐destructive behaviours that undermine the fundamental goals of insolvency law. Copyright © 2017 INSOL International and John Wiley & Sons, Ltd.     

Variance swaps,non-normality and macroeconomic and financial risks

This paper studies the determinants of the variance risk premium and discusses the hedging possibilities offered by variance swaps. We start by showing that the variance risk premium responds to changes in higher order moments of the distribution of market returns. But the uncertainty that determines the variance risk premium – the fear by investors to deviations from normality in returns – is also strongly related to a variety of macroeconomic and financial risks associated with default, employment growth, consumption growth, stock market and market illiquidity risks. We conclude that the variance risk premium reflects the market willingness to pay for hedging against these financial and macroeconomic sources of risk. An out-of-sample asset allocation exercise shows that the inclusion of the variance swap reduces the modified value-at-risk with respect to a portfolio holding exclusively the equity market portfolio.     

Permanent trading impacts and bond yields

We analyse four years of transaction data for euro-area sovereign bonds traded on the MTS electronic platforms. In order to measure the informational content of trading activity, we estimate the permanent price response to trades. We not only find strong evidence of information asymmetry in sovereign bond markets, but also show the relevance of information asymmetry in explaining the cross-sectional variations of bond yields across a wide range of bond maturities and countries. Our results confirm that trades of more recently issued bonds and longer maturity bonds have a greater permanent effect on prices. We compare the price impact of trades for bonds across different maturity categories and find that trades of French and German bonds have the highest long-term price impact in the short maturity class, whereas trades of German bonds have the highest permanent price impact in the long maturity class. More importantly, we study the cross-section of bond yields and find that after controlling for conventional factors, investors demand higher yields for bonds with larger permanent trading impact. Interestingly, when investors face increased market uncertainty, they require even higher compensation for information asymmetry.     

Environmental Protection in Environmentally Reactive Firms: Lessons from Corporate Argentina

We propose a model of planned corporate environmental behaviour that emphasises the values and attitudes of managers towards the environment, environmental intentions and the context in which these intentions are formed and translated into actual performance. In particular, we focus on the extent to which environmentally reactive (as oppose to pro-active) managers influence the environmental performance of their firms. We identify the factors that mitigate or accentuate the effects of environmental “reactivism”—i.e. a mind-set shared by those who assign to the state the responsibility of protecting the environment. We generate a series of hypotheses and use structural equation modelling to test them in the context of a unique dataset of Argentinean firms. Our system’s approach to corporate environmental behaviour explains approximatively 70 % of the variation in reported environmental performance across firms while highlighting elements of the model that may potentially be influenced by policy. Amongst other things, our empirical results suggest that stakeholder pressures can be an effective tool in the development of pro-environmental attitudes (and environmental intentions in the case of small firms) and in so doing offset some of the negative effects of environmental reactivism on environmental performance. Our paper highlights a number of other important implications for the design and implementation of environmental policies that account for human managerial determinants of corporate behaviour and social factors.