Disclosure of reserve quantum in the extractive industries

We explore why some firms in the extractive industries disclose mineral reserve quantum in their annual reports and others do not. We propose that the firms' reserve disclosure policies are a function of the extent of information asymmetries, as well as information production, litigation and proprietary costs. More specifically, we propose that a firm's decisions to disclose reserves in the annual report are a function of the stage of the firm's operations, use of project financing, and the cost of measuring reserves. Empirical tests are confirmatory.     

Corporates' strategic responses to economic policy uncertainty in China

Using a novel news‐based index of economic policy uncertainty, this paper studies the impact of economic policy uncertainty on corporate strategic positioning and corporate risk in China from 2009 to 2015. The study also investigates the impact of corporate strategic positioning on corporate risk. The results show that corporate strategic positioning and economic policy uncertainty have a significant positive impact on corporate risk. The results also explain that economic policy uncertainty increases the market risk of the firms irrespective of their corporate strategy. However, it increases the business risk of prospector firms and decreases the business risk of defensive firms. The study may help the firms to formulate and improve their strategic positioning while considering economic policy uncertainty. Our results are robust to alternate proxies of economic policy uncertainty and corporate risk.     

An empirical test of a correspondence model of expatriate managers' work adjustment

We develop and empirically test a model of expatriate managers' work adjustment. In this model we relate the fit between work-related abilities and needs of expatriate managers as well as the fit between the job requirements of, and incentives associated with, an international assignment to the level of expatriate managers' work adjustment. We test this model with data gathered by means of an electronic survey among 118 German expatriate managers. The empirical findings largely support our theoretical model. The paper enhances our understanding of expatriate managers' work adjustment and its antecedents and contributes to the theoretical and empirical basis of research into expatriate management.     

The Performance of Trading Firms in the Services Sectors – Comparable Evidence from Four EU Countries

We examine trade complexity and the implications of adding additional dimensions of trade for firm performance among services producers. We use unique firm‐level data to compare these patterns across four EU countries. Overall, services firms are relatively less engaged in trade than manufacturing firms; they mostly trade goods and are more likely to import than to export. Trade in services is quite rare; services are more likely to be traded by firms already trading goods. Trading firms in the services sectors are significantly larger, more productive and pay higher wages than non‐traders. Two‐way traders outperform one‐way traders. Changes in trading status by either adding another dimension of trade (imports, exports) or another type of product (goods, services) are infrequent and are associated with significant preswitching premia. In contrast, learning effects from switching trading status are uncommon. This points to significant fixed cost of being engaged in trade and confirms some previous findings that trading services firms have similar traits as their manufacturing counterparts. Apart from greater trade participation in smaller countries, we do not observe systematic differences in terms of trade or switching premia between the four countries that might be attributable to differences in country characteristics.     

Japan's International Tourism in the Context of its International Economic Relations

Despite the rapid growth of the Japanese economy, Japan still accounts for a relatively small share of international tourism as a recipient. However, Japan's outward tourism has grown to the point where it is the fourth largest tourism generator. This article analyses the role of tourist flows in Japan's external economic relationships and in the structural adjustments in the Japanese economy needed to correct its perceived external imbalance. Together with the massive and increasing outflows of long-term capital from Japan, increasing outward tourism could become an important factor in achieving external balance. Future policies and forecasts are also analysed.     

A Comparative Analysis of the Hedging Effectiveness of Farmgate Milk Prices for New Zealand and United States Dairy Farmers

Journal of Quantitative Economics - This study investigates the effectiveness of hedging and cross-hedging of fluid milk supplied by New Zealand farmers using derivatives offered by the NZX dairy...     

Guaranteed renewable life insurance under demand uncertainty

Guaranteed renewability (GR) is a prominent feature in many health and life insurance markets. We develop a model that includes unpredictable (and unobservable) fluctuations in demand for life insurance as well as changes in risk type (observable) over individuals' lifetimes. The presence of demand type heterogeneity leads to the possibility that optimal GR contracts may have a renewal price that is either above or below the actuarially fair price of the lowest risk type in the population. Individuals whose type turns out to be high risk but low demand renew more of their GR insurance than is efficient due to the attractive renewal price. This results in imperfect insurance against reclassification risk. Although a first‐best efficient contract is not possible in the presence of demand type heterogeneity, the presence of GR contracts nonetheless improves welfare relative to an environment with only spot markets.     

Import price elasticities: reconsidering the evidence

Recent economic geography and trade empirical studies based on monopolistic competition suggest high levels of trade price elasticities (between 3 and 11). However, price elasticity estimations in trade equations using unit values as price proxies usually lead to lower values of around unity. We show that those inconclusive results may be due to some misspecification in these equations as well as measurement errors in prices. When suitable instrumental variables are used, within a panel of industrialized countries, we obtain high price elasticities, the majority ranging from 1 to 13. The highest estimates correspond to industries producing homogeneous goods. JEL classification: C2, C3 and F1.
Les élasticités prix des importations : un nouveau coup d'oeil aux résultats. Plusieurs études empiriques récentes fondées sur des modèles de concurrence monopolistique exhibent des élasticités prix estimées des échanges élevées (entre 3 et 11). Or, la plupart des élasticités prix estimées dans la littérature approchant les prix par des valeur unitaires sont plus faibles, de l'ordre de 1. Nous montrons que ces résultats non concluants pourraient provenir d'une mauvaise spécification des équations d'échanges ou d'erreurs de mesure sur les prix. Quand ceux-ci sont correctement instrumentés, sur un panel de pays industrialisés, nous obtenons des élasticités prix élevées (de 1 à 13). Les plus fortes correspondent aux secteurs produisant des biens homogènes.     

Trading firms in the services sectors: comparable evidence from four EU countries

We establish a set of stylised facts for trade and trading firms in five market services sectors using comparable firm- and activity-level data from four EU countries. Our analysis shows that exports account for much lower shares of overall sales in the services sectors than in manufacturing. This is because fewer firms are engaged in trade in the services sectors and also because within particular sectors firms trade a lower share of their sales on average. Services producers trade mostly goods, but in terms of value, trade in services is much more important to them than to manufacturers. Larger and more productive firms are more likely to be two-way traders and to engage in both goods and services trade. Trade by services firms is somewhat less dominated by firms that both export and import than trade by manufacturing firms. Few firms export many services or to many countries. The value of services exports is increasing in the number of markets served but not necessarily in the number of services traded.     

Measuring the degree of competition in Pakistan’s banking industry: an empirical analysis

Pakistan’s banking industry has gone through significant transformation from being in a heavily state regulated and controlled environment to a more liberalized market structure in recent years. This liberalization of banking industry in Pakistan has raised concerns over the dominant banks’ exercise of market power on account of increase in market concentration due to mergers and acquisitions, high profitability in banking sector and increasing interest rate spread. Present study therefore explicitly tests the market conduct of banks using quarterly panel data of 30 banks from 2004 to 2012 and employing Panzar–Rosse, Bresnahan–Lau, Hall–Roeger and Boone’s approaches to study market power. Our findings suggest that Pakistan’s banking industry is working in a competitive environment and we find little evidence for the exercise of market power by the dominant banks. Our results remain robust across all these approaches to measure market power. These findings indicate that the liberalization and deregulation of Pakistan’s banking industry has been successful in improving the competitive conditions in the market.