Migration,wages and income taxes

We analyze labor migration flows between two countries (regions) with different-sized populations and different levels of productive efficiencies to determine the effects of such flows on income taxation. The residents are heterogeneous because they incur different migration costs, although they are otherwise identical. Each resident compares her post-tax revenue at home with that obtained abroad, including migration costs, and each country’s government maximizes tax receipts. We study the existence of an equilibrium for any configuration of wages and for any difference in the relative sizes of the countries (regions). Then, we compute and characterize the equilibrium, whenever it exists, for any set of parameters, sizes and wage differentials. Finally, we show that equilibrium migration flows affect the level of income taxation in both the origin and destination countries.     

The Credibility of Earnings Forecasts in IPO Prospectuses and Underpricing

This paper provides empirical evidence of the impact of the voluntary disclosure of management earnings forecasts in IPO prospectuses and of the credibility of these forecasts, as perceived by investors at the time of the IPO. We measure forecast credibility ex ante with two approaches: (i) a vector of determinants of credibility that are observable by market participants at the time of the issue and (ii) the predicted value of the forecast error based on some of these determinants. Controlling for the firm's decision on whether or not to issue a forecast, we find that the issue of a forecast reduces underpricing. We find that the quality of the firm's governance and of the auditor and underwriter associated with the issue seems to act as a substitute to the disclosure of an earnings forecast in the prospectus, so that they significantly decrease the level of underpricing only for non‐forecasters. However, despite our various approaches to measure ex ante credibility, we find no association between the pricing of the issue and perceived forecast credibility at the time of the IPO.     

The Growth and Decline of the Modern Sector and the Merchant Class in Imperial China

This paper offers an explanation of why, in Imperial China, the merchant class expanded and the economy modernized up to the 13th century, and why it entered into decline from the 14th century onward. The modernization of China required the accumulation of public capital and the building of good institutions, upon which a vibrant class of merchants and entrepreneurs could gradually emerge. This class contributed to the enrichment of the society and the emperor, but its activities also weakened the dominance of the emperor and the élite, who would then prefer to block the modernization of China and to restrict the size of the merchant class, putting the economy into long‐run stagnation. However, when the emperor faced severe foreign military threats and when he realized that a modern sector improved the defense capabilities of China, he made the opposite choice.     

Strategic intent and performance: The role of resource allocation decisions

The notion that a firm's strategic intent can affect its performance through managerial actions has become prominent in the organization literature. In this research, we propose that strategic aggressive firms will foster decisions that favor holding low levels of slack and low levels of R&D investments, resulting in increased firm ROI, and that a firm's risk preference will moderate the indirect effect of strategic intent on performance. Findings from moderated mediation analyses on data from 130 firms in manufacturing industries support our hypotheses. Specifically, the indirect effect of a firm's strategic intent on a firm's performance is moderated by its risk aversion, such that when risk aversion is high, the indirect effect of strategic intent on performance through slack is strengthened. Similarly, the indirect effect of strategic intent on firm performance through R&D investments is strengthened, when risk aversion is high.     

Alliances Between Corporate and Fair Trade Brands: Examining the Antecedents of Overall Evaluation of the Co-branded Product

This research investigates the potential for a “fair” co-branding operation. A major corporate brand is fictitiously allied with a Fair Trade labelling organization brand. The sample for the study is composed of 540 respondents, representative of the French population. By considering commercial brands and Fair Trade labels as dissimilar in terms of customers’ perceived Fair Trade orientations, this article studies (1) how this lack of similarity impacts perceived congruence between both entities (i.e. perceived relevancy and expectancy of the alliance) and (2) how prior brand attitudes and congruence influence customers’ evaluation of the co-branded product. The results of this research demonstrate that: (1) Consumer prior brand attitudes toward the partner brands influence very little customers’ evaluation. (2) Perceived similarity of the partner brands has a strong influence toward congruence of the co-branding operation. Results also indicate that congruence (measured as relevancy and expectancy) has a strong influence upon customers’ evaluation. (3) An inverted U-shaped relationship exists between perceived similarity and relevancy of the alliance, and between expectancy and customers’ evaluation. The results obtained through the test of a partial least square model, and inverted U-shaped hypothesis, represent a new insight into co-branding theory. The high discursive power of fair co-branding is a key issue: the corporate brand provides the alliance with its leading position, while the Fair Trade brand provides the ethical attribute.     

IJV Partner Trustworthy Behaviour: The Role of Host Country Governance and Partner Selection Criteria

This study provides new insight into the interplay between partner‐ and institution‐level bases of trustworthy behaviour in international joint ventures (IJVs). The results of the study, based on survey and archival data collected on 144 IJVs across six Asian countries, revealed that host country governance quality directly and positively influences IJV partner trustworthy behaviour. It was also found that weak host country governance undermined the effectiveness of certain partner selection criteria in serving as a tool for establishing an IJV with a trustworthy partner. Furthermore, through distinguishing between two dimensions of trustworthiness (benevolence and competence), it was demonstrated that partner benevolence is facilitated by relationship‐oriented criteria, whereas partner competence is facilitated by task‐oriented criteria. The implications of these results for the establishment and management of IJVs are discussed.     

采用PRA进行哈尼族地区贫困原因分析

采用参与性农村评估 (PRA)中的问题树和排序等方法 ,对云南省绿春县的哈尼族村寨进行贫困原因分析。结果发现造成该地区贫困的主要原因是 :⑴人口剧增 ,造成耕地不足 ;⑵口粮不够 ,造成对土地的过度开垦 ;⑶经济结构单一 ,土地利用不合理 ,导致森林破坏 ;⑷森林破坏 ,导致水源短缺和水土流失严重 ,进一步减少良田面积 ;⑸水资源管理不合理 ,加剧水源的短缺。针对该地区的实际情况 ,建议发展项目应从环境保护和扶贫相结合的方向发展。     

Option Bounds and the Pricing of the Volatility Smile

This paper presents a new approach forthe estimation of the risk-neutral probability distribution impliedby observed option prices in the presence of a non-horizontalvolatility smile. This approach is based on theoretical considerationsderived from option pricing in incomplete markets. Instead ofa single distribution, a pair of risk-neutral distributions areestimated, that bracket the option prices defined by the volatilitybid/ask midpoint. These distributions define upper and lowerbounds on option prices that are consistent with the observableoption parameters and are the tightest ones possible, in thesense of minimizing the distance between the option upper andlower bounds. The application of the new approach to a sampleof observations on the S&P 500 option market showsthat the bounds produces are quite tight, and also that theirderivation is robust to the presence of violations of arbitragerelations in option quotes, which cause many other methods tofail.     

Digestibility and asymmetric information in the choice between acquisitions and joint ventures: where’s the beef?

<In response to our empirical findings that, contrary to the predictions of the information asymmetry hypothesis, joint ventures are not more, but instead less likely when parents belong to different industries, Balakrishnan and Reurer argue that (1) the information asymmetry and the indigestibility hypotheses are theoretically complementary and (2) our results may be affected by the characteristics of our sample. In fact, the goal of our study was not to deny the theoretical validity of alternative theories of joint ventures, but only to ascertain their relative explanatory power. We therefore agree that both theories are complementary, but show that our findings are not explained by our sample, but instead by the way we test the information asymmetry hypothesis. Copyright © 2000 John Wiley & Sons, Ltd.     

International briefing 8 Training and development in France

Two main features characterise training and development in France: the influence of the school‐based model and a strong institutionalisation of continuing vocational training which is regulated by law and collective bargaining at national and sectoral levels. In the last decade training has been affected by four major changes: the development of alternating training programmes for young people and unemployed persons; a process of decentralisation which gives to regions an essential role of coordination; strengthening of links between training and employment; and an increasing responsibility of firms in the management of training. As a result, training is on an upward trend yet large inequalities in access still exist.