On the benefits of party competition

We study the role of parties in a citizen-candidate repeated-elections model in which voters have incomplete information. We first identify a novel “party competition effect” in a setting with two opposing parties. Compared with “at large” selection of candidates, party selection makes office-holders more willing to avoid extreme ideological stands, and this benefits voters of all ideologies. We then allow for additional parties. With strategic voting, citizens benefit most when the only two parties receiving votes are more moderate. With sincere voting, even with three parties, extreme parties can thrive at the expense of a middle party; and whether most citizens prefer two or three parties varies with model parameters.     

Consumer demand for healthy eating considering diversity – an economic approach for German individuals

Rising incidence and costs of diet‐related diseases have led to nutritionists' and economists' interest in factors determining the demand for healthy eating. The present study analyses the demand for healthy eating by the use of a new food‐based indicator, which combines the health value and diversity of a food basket. Although the diversity aspect gains in importance in recommendations for healthy eating it was not considered adequately in healthy eating indicators until now. Within the household production theory the new indicator is used to identify factors influencing the demand for healthy food diversity for 3220 German individuals. The results of regression analyses show that the demand for a healthy diet is influenced by age and mainly by knowledge, attitudinal and behavioural (proxy‐)variables as education level, participation in a health training course and sport activity. On the basis of these findings conclusions are drawn for health and nutrition policy in Germany and Europe.     

Antecedents of Budget Participation: Leadership Style,Information Asymmetry,and Evaluative Use of Budget

This study explores the causes or antecedents of budget participation to understand more fully the role of participation in the workplace. The study focuses on the reasons why superiors encourage the budget participation of their subordinates and draws upon several theoretical perspectives including leadership theory, agency theory and organizational justice. To examine the issues, a survey was administered to managers and supervisors in several companies. Results of path analysis suggest that superiors encourage subordinate participation when the superior's leadership style is considerate. This implies that budget participation may mediate the relation between leadership style and work outcomes. Results also suggest that superiors encourage participation when budget goals are used in the performance evaluation of subordinates, in which case, the study argues, the superiors encourage participation because of concerns about organizational justice. This finding implies that budget participation may mediate the relation between the evaluative use of budget and those work outcomes that prior research has linked to organizational justice. The proposed relation between information asymmetry and budget participation is not supported.     

Cross-national adoption of private food quality standards

Retailer initiated food quality standards are important elements to market food and agricultural products. However, farmers’ certification proceeds at an unequal speed worldwide with some countries representing a large number of certified producers and others representing very few, if any. This study aims at analysing the adoption of two private food standards, BRC Food Technical Standard and GlobalGAP, at an aggregated cross-country level using data of 2007. Negative binomial models are applied to quantify the determinants of standards’ spread at an aggregated level. The results of the econometric analysis reveal some (potential) barriers for farms and firms in developing countries to access this type of organisational innovation. Certificates of both standards seem to be issued more likely in countries with established trade relations with Germany, the Netherlands and the United Kingdom, home countries of the standards. Furthermore, larger countries and countries with better institutional quality host more certified firms. Finally, a country’s level of economic development displays a clear non-monotonic relationship to the number of certified enterprises. Although no evidence for a general exclusion of developing countries can be found, the main implication of this paper is that third-party certification for export purposes seems to reinforce already existing trade relations, potentially hampering new entrants.     

Meta-ethical Reasoning: Applied to Economics and Business Principles

A bstract . Ethics and ethical thinking involve two primary and interdependent elements of analysis: the individual and the society. Economic thought dichotomized these two elements into the individual (competitive capitalism ) or the society (Marxist socialism ), with one element being the cause, and the other the effect. Views of economic reality were developed not on the basis of the interdependence of the individual and the society but their mutual antagonism.
Economic thought is based on the scientific reasoning of the seventeenth and eighteenth centuries. Its abstract definition of reality narrowed the significance of the concrete appearances of things in favor of the rules (science) that define things. Science requires both an objective causal order (independent of human definitions and beliefs) and the development of laws (independent of the human observer or participant) that explain the nature of the objective world. Ethical reasoning requires that economic causality be defined to include both the individual and the society. Ethical reasoning is needed to bring together both the scientific and the metaphysical for human meaning. The science of means must be joined to the human purposes of ends.     

The Long‐run and Short‐run Effects of Foreign Direct Investment on Financial Development in African Countries

This paper contributes to the understanding of the other neglected effects of foreign direct investment (FDI) by analysing how FDI affects financial development in the short run and long run for a panel of 49 African countries over the period 1990–2016. The empirical evidence is based on a pooled mean group approach. With three panels differentiated by income level, the following findings are established: first, while there is a positive and significant long‐run relationship between FDI and financial development in Africa, in the short run the effect of FDI on financial development is negative. Second, the effect of FDI is positive and significant in the long run in the three sub‐samples. However, in the short run, the effect of FDI is negative and significant in lower‐income countries and non‐significant in lower‐middle‐income and upper‐middle‐income countries. Overall we find strong evidence supporting the view that FDI promotes financial development in African countries in the long run.     

Evaluating the risk premium in the U.S.A. natural gas market: evidence from low-price regime

In recent years, the U.S.A. natural gas market has seen enormous changes. The expectations of abundant supply of shale gas and the slow U.S.A. economic recovery have pushed gas prices below US$ 4 MMBtu. Although shale gas is a new promising source of unconventional energy, investors face uncertain investment plans. In this study, we investigate the risk premium by comparing behaviour before and after the change point in agents risk perception. Unlike traditional empirical research on risk premium, we use the parametric, two-factor model of Schwartz and Smith (2000) to evaluate the implied risk premium term structure from futures prices traded on the New York Mercantile Exchange (NYMEX). We compare our findings with other empirical results and find that the change point lies at the beginning of the low-price regime. When we compare periods before and after the change point, we observe that the risk premium changed, not only in sign, but also in magnitude.