Unobserved heterogeneity in price-setting behavior: A duration analysis approach

There is strong empirical evidence that the degree of price stickiness differs across commodity items, and that the nonparametric hazard function of price changes is downward-sloping with some spikes. We introduce item-specific heterogeneity into the standard single-sector model of Calvo [Calvo, G., 1983. Staggered prices in a utility-maximizing framework. Journal of Monetary Economics 12 (3), 383–398]. By allowing the hazard rate of price changes to vary across items, we show that the decreasing nonparametric hazard function is well described except for the characteristic peaks at 1, 12, 24, and 36 months. We reject the hypothesis that the degree of price stickiness is the same across the items at 1 percent of significance. In the presence of item-specific heterogeneity, the probability that prices remain unchanged for long periods is higher than the single-sector model predicts.     

Location choices of firms and workers in an urban model with heterogeneities in skills and preferences

This paper investigates the location choices of firms and workers, and the implied commuting behavior, in a city comprising several jurisdictions. Jurisdictions are geographically represented by segments that are connected to each other at the center. Each jurisdiction has its own amenities. Workers are classified into types on the basis of their skills and amenity preferences. Firms employ all types of worker. A business area may be formed in the center or in the suburban segments. A monocentric configuration arises when the commuting cost is small and heterogeneity of workers is large.     

Debt covenants in Japanese loan markets: in comparison with the traditional relationship banking

This study investigates determinants of debt covenants in Japanese loan markets. We focus on a unique monitoring mechanism by Japanese banks and hypothesise that debt covenants substitute for the traditional main bank governance. Consistently, we find that debt covenants are less likely to be used for firms with stronger ties with their main banks. We also document that such use of debt covenants results in borrower’s upward earnings management. Overall, our evidence suggests that, in the Japanese context, debt covenants are used as a substitute for the main bank system yet they alone are an incomplete monitoring mechanism.     

Can Small Class Policy Close the Gap? An Empirical Analysis of Class Size Effects in Japan

Can smaller classes lead to better educational outcomes and greater equality in achievement? We estimate the causal effects of class size on achievement tests by using discontinuous changes in class size under the Japanese public compulsory education system. We employ a value‐added model that uses achievement tests conducted at two different times during the same school year. Our results show that a reduction in class size has significantly positive effects on Japanese language test scores in the sixth grade, especially at schools in wealthy areas. However, we find no evidence that a universal small class policy closes the achievement gap among schools.     

Footloose Capital and Comparative Advantage

We investigate the effect of country size differentials and Ricardian technology differences on firms’ location decisions using a two‐country, two‐good (homogeneous agricultural good and differentiated manufacturing products), two‐factor (labour and footloose capital) simple new economic geography model. We found that manufacturing firms may agglomerate in a country where the manufacturing sector has a comparative disadvantage. In addition, when country size differentials and Ricardian technology differences exist between two countries, the key factor influencing firms’ location decisions changes according to the level of trade liberalization, from being market size‐dependent to becoming technology‐dependent.     

Bubbles,growth and imperfection of credit market in a two-country model

This study extends Hirano and Yanagawa (Rev Econ Stud 84(1):406–443, 2017) to an asymmetric two-country model and examines bubbles effects on each country’s long-run economic growth rate. This study also provides numerical examples with respect to the relationship between each country’s growth rate and their financial frictions in the balanced growth equilibria with bubbles and without bubbles. It shows that foreign bubbles have positive and negative effects on both countries’ growth rates, and which effect dominates depends on the level of financial development in both countries. In this study, the positive effect of bubbles tends to dominate when the total level of financial frictions in both countries is relatively low. When the total effect of bubbles on the growth rate is positive, the burst of foreign bubbles leads to a decrease in the growth rate in both countries. This implies that there is a positive correlation between foreign bubbles and the domestic as well as the foreign country’s growth rate.     

An exploratory study on the returns management process in an online retailer

The returns management process is gaining increasing importance both in academia and among supply chain professionals, not only as a tool in the practice of sustainability, but also for its strategic role in many economic sectors. Several studies show how efficiently returns management can reduce costs and provide a competitive advantage to companies. Likewise, electronic commerce, or e-commerce, has shown significant growth in many countries and, due to its very nature, it presents much higher return rates than traditional trade. However, despite the importance of returns management operation for electronic commerce, few studies explore this theme in the literature. The aim of this paper is to describe the process of returns management of the largest online retailer of the Brazilian market, showing its evolution and analysing its performance, as well as identifying its main shortcomings. We conclude with suggestions for improvements and the implementation of a more efficient system.     

Within-group heterogeneity and civil war

This study offers a bargaining model of conflict in which the government offers a transfer to an opposition group to preclude civil war. Members of the opposition are heterogeneous in income and ideology, and heterogeneity generates disagreement about whether to accept the government’s offer. We assume that the probability that the government’s offer will preclude conflict increases continuously with the number of opposition group members who agree to accept it. When within-group heterogeneity is large, the number of members who are receptive to the government’s offer is less responsive to an increase in the transfer level. In this situation, the government must substantially increase its transfer to attract the support of the opposition. Subsequently, as peace becomes more costly for the government, negotiations are likely to break down.     

Time zones,shift working and international outsourcing

We build a trade model with two identical countries located in different time zones and one sector with intermediate differentiated goods produced in two successive stages. We introduce shift working disutility that raises night wage and firms that “virtually” outsource foreign labor. We found that firms only outsource if outsourcing costs are relatively low and shift disutility is high. When outsourcing occurs, it generates the highest level of welfare among production modes. Intermediate values of shift working disutility generate the lowest level of welfare. Outsourcing and domestic labor are substitutes at the firm level and complements at the economy level.     

The system of towns with spatial public goods

In this paper, we introduce a model of ‘spatial public goods’, whose provision costs depend on the size of the benefit area. It is assumed that there are many developers providing spatial public goods in their towns. Each developer chooses the area size of his/her town and the quality of its spatial public good so as to maximize profit, taking the market price system as given. Each consumer chooses the level of the public good, and hence the town that supplies it, so as to maximize his/her utility. We show that the competitive equilibrium allocation of this economy is efficient.