Do Firms Diversify Because Managers Shirk? A Reinterpretation of the Principal-Agent Model of Diversification

Review of Industrial Organization - In the principal-agent model of firm structure proposed by Aron (1988), diversification is optimal because it reduces managerial risk exposure. Diversification...     

Human rights in industrial relations – the Israeli approach

Basic human rights are supposed to protect people from abuse and harm. They are the means whereby we protect our humanity. One would expect, therefore, that basic human rights would be valid and sacred in any context, including industrial relations. However, the complexity of the employee–employer relationship obscures this issue, and it is not clear whether such rights can be protected or whether they are valid in the context of industrial relations. Since rights are relational, they are preconditioned on the special nature of the relationship between employee and employer. Hence, the specific meaning that these rights have in industrial relations cannot be grounded in the notion of human rights as such, but rather depends on the special relationships between employers and employees. Though much legislation has been passed to regulate the relationship between employees and employers, the issues surrounding this relationship remain one of the most debated topics in business ethics. Our paper focuses specifically on the right to equal pay and the right to privacy. With respect to the right to property, the paper examines whether there is a conflict between general human rights and the fundamental right of employers to their property. The Israeli legislature has responded to this conflict by enacting 'protective laws' that legally outline and mandate certain human rights. Under these laws, employees are prevented and prohibited from waiving the rights granted to them by law, even if employed in private industries. Despite this legislative effort, market forces are at times stronger, and consequently some basic rights are not fully applied or implemented.     

Early Mortality Declines at the Dawn of Modern Growth*

We explore the hypothesis that demographic changes which began in the seventeenth and eighteenth centuries are at the root of the acceleration in growth rates at the dawn of the modern age. During this period, life tables for Geneva and Venice show a decline in adult mortality; French marriage registers reveal an important increase in literacy; historians measure an acceleration of economic growth. We develop an endogenous growth model with a realistic survival law in which rising longevity increases individual incentives to invest in education and fosters growth. We quantitatively estimate that the observed improvements in adult mortality account for 70% of the growth acceleration in the pre‐industrial age.     

'Design-led' Urban Regeneration: a Critical Perspective

This paper develops a critical perspective on 'design-led' urban regeneration, which is a fuzzy term used to describe a diverse raft of economic development strategies. A definition of design is outlined and then utilised in an assessment of a number of local and regional design-led urban regeneration schemes. A more detailed critique of one such project, the North Staffordshire Design Initiative, is then undertaken. We argue that there is a lack of best practice models and empirical research to guide policy makers.     

Distributional dynamics following a technological revolution

In this paper we explore the link between technological change and the dynamics of employment, production, and the distribution of earnings. Technological change not only advances society's collective capability but also changes the relative productivities of its members. The latter effect establishes the likely winners and losers from advances in productive capabilities, provides a mechanism that can generate cyclical fluctuations in output as well as employment, and determines the evolution of the earnings distribution.
Dynamique de la répartition à la suite d'une révolution technologique . Ce mémoire examine le lien entre le changement technologique et la dynamique de l'emploi, de la production et de la répartition des revenus. Le changement technologique n'augmente pas seulement la capacité collective d'une société mais modifie aussi les productivités relatives de ses membres. Ce dernier effet crée des gagnants et des perdants, déclenche un mécanisme qui peut générer des fluctuations cycliques tant dans le niveau de production que dans celui de l'emploi, et détermine l'évolution de la répartition des revenus.     

Production and the Real Rate of Interest: A Sample Path Equilibrium

This paper examines a multiperiod production economy where investors do not observe the realizations of productivity factors or security expected returns. Unlike previous work, which expresses the equilibrium conditions as functions of unobservable (to both real-world investors and empiricists) moments of the distributions of returns, we express the equilibrium real rate as a function of the observable sample paths of realizations of returns. We provide a framework for empirically testing this and other asset pricing models without outside-the-model econometric assumptions needed for producing the unobservable moments of returns. We construct versions of the restrictions for any time interval between observations.     

Market Dependence and Economic Events

Recent studies on stock market pricing have rejected the random walk model for short-term periods and have concentrated on long-term persistent or mean-reverting dependence. The problem with these studies is that their statistical results can be biased by the shorter term dependence. Rather than trying to develop a unified theory that explains both short- and long-term dependence, current studies use different methodologies to correct for the short-term dependence while trying to test for long-term dependence. This paper uses a sequential information theory to focus attention on short-term dependence effects. This theory states that the market process is a nonstationary mean process surrounded by a nonstationary autocovariance error process. A nonstationary mean process implies short-term dependence resulting from changing economic events (new information). Long-term persistent dependence then derives from nonperiodic economic cycles. A new empirical approach, a cross-sectional autocorrelation coefficient is used since it is free from the stationarity problems of previous techniques.     

THE IMPORTANCE OF INDUSTRY STRUCTURE FOR THE DETERMINATION OF FIRM PROFITABILITY: A NEO-AUSTRIAN PERSPECTIVE

This paper is concerned with exploring the degree to which industry structure determines firm performance. Most of the business policy literature follows Porter in arguing that industry structure has an important influence on firm level profit rates. the arguments contained in this paper take a counter position. It is argued that a plausible alternative to the hypothesis that industry structure matters is the hypothesis that (holding demand constant) individual firm differences are the most important determinant of firm profitability.     

Reforming Hungarian agricultural trade policy: A quantitative evaluation

Reforming Hungarian Agricultural Trade Policy: A Quantitative Evaluation. — In this paper, the authors quantitatively assess the consequences for Hungary of: (i) removing its quantitative import restraints in agriculture, (ii) removing the export subsidy program in agriculture, and (iii) adopting an EU-type “CAP” system in Hungary. The consequences are estimated through the use of a small open economy computable general equilibrium model for Hungary, calibrated to the year 1990. The tariff equivalent of the import licenses was estimated through a detailed price comparisons study, the first of its kind for Hungary. Import protection, export subsidies and a potential CAP system would contribute significantly to the Government's fiscal problems.