Base consumption levels and fixed costs

Conditioning variables on consumer choices are conventionally included in demand functions additively. We identify the underlying utility maximisation problem. There must be base consumption levels efficiently set which vary with the conditioning variables. A special case is quasi-homothetic preferences.     

Italian Corporate Governance, Investment, and Finance

Italian industrial structure and financial markets have several distinct features. Italian firms are relatively small, few trade publicly and no corporate bond market exists. The limited types of external funds available to Italian firms makes them prone to financing constraints. We examine a panel containing over 1100 Italian firms. We find that firm size does not appear correlated with the severity of financing constraints. We also find that small firms are frequently mature. Our results suggest that young firms face financing constraints, while mature firms may develop relationships with lenders that lower the costs of external funds. Small, young firms appear to face the tightest financing constraints. Many firms are affiliatedwith pyramidal business groups. We find that affiliation with pyramidal businessgroups appears to reduce the effect of financing constraints. Our results haveimportant implications for government policy to promote small firm growth in Italy.     

Does a Switch of Budget Regimes Affect Investment and Managerial Discretion of State-Owned Enterprises? Evidence from Italian Firms

We investigate the investment decisions of Italian state-owned enterprises (SOEs) across budget constraint regimes and carry out a natural experiment that exploits a regime switch in 1987. Drawing on the theory of capital market imperfections, we apply an empirical framework for investment analysis to a panel of manufacturing SOEs in competitive industries. We identify parallels between SOEs and widely held, quoted companies afflicted by agency problems, managerial discretion, and overinvestment. We argue that, in the case of SOEs, the soft budget regime increases managerial discretion, facilitates collusion with vote-seeking politicians, and results in wasteful investment. Consistent with our predictions, we find that the regime switch disciplines SOE's investment behavior. Following a hardening of the budget constraint, managers lose discretion to indulge in collusion and overinvestment. J. Comp. Econ., June 2002 30(4), pp. 787–811. London School of Economics and Political Science, Houghton Street, London WC2A 2AE, United Kingdom; and CERIS–CNR, Institute for Economic Research on Firms and Growth, National Research Council, Via Avogadro, 8, 10121 Turin, Italy. © 2002 Association for Comparative Economic Studies. Published by Elsevier Science (USA). All rights reserved.Journal of Economic Literature Classification Numbers: E32, G31, G32, L32, M40.     

A Note on Capital IQ's Credit Line Data

Empirical work in finance is increasingly using Capital IQ's detailed data on capital structure. We compare the Capital IQ credit line data to hand‐collected data for a random sample of firms. Missing values in Capital IQ are prevalent, so the data set underreports the importance of corporate credit lines. When data are reported, Capital IQ often differs from hand‐collected credit line activity. We suggest methods for correcting the errors in the Capital IQ data, note which portions of the data are most reliable, and quantify the effects of Capital IQ's underreporting by examining the tradeoff between cash and lines of credit.     

Social Protection in a Crisis: Argentina's Plan Jefes y Jefas

The article assesses the impact of Argentina’s main socialpolicy response to the severe economic crisis of 2002. The programwas intended to provide direct income support for families withdependents and whose head had become unemployed because of thecrisis. Counterfactual comparisons are based on a matched subsetof applicants not yet receiving program assistance. Panel dataspanning the crisis are also used. The program reduced aggregateunemployment, though it attracted as many people into the workforcefrom inactivity as it did people who otherwise would have beenunemployed. Although there was substantial leakage to formallyineligible families and incomplete coverage of those who wereeligible, the program did partially compensate many losers fromthe crisis and reduced extreme poverty.     

Riding the waves of family firm internationalization: A systematic literature review,integrative framework,and research agenda

Despite the proliferation in research efforts, family firm (FF) internationalization scholarship suffers from fragmentation, theoretical limitations, and empirical indeterminacy, leaving important facets unexplored. This article’s purpose is to unpack how this body of research has evolved over time and interfaces international business (IB) theory. We conduct a systematic literature review of relevant theoretical and empirical studies covering the last 30 years of research and comprising 134 articles. Our study contributes to this corpus of knowledge by identifying and discussing four evolutionary waves of FF internationalization research. We further advance an integrative framework that offers a comprehensive understanding of the state-of-the-art as well as promising avenues for future research at the intersection of IB and FFs.     

Product Market Competition,Executive Compensation,and CEO Family Ties

Review of Industrial Organization - This paper analyzes the interaction between product market competition and family ties on the structure of CEO pay, in a panel of publicly listed family firms....     

Time-consistency of risk measures: how strong is such a property?

Decisions in Economics and Finance - Quite recently, a great interest has been devoted to time-consistency of risk measures in its different formulations (see Delbaen in Memoriam Paul-André...     

Educational qualifications mismatch in Europe. Is it demand or supply driven?

Most papers dealing with individual overeducation risks focus on labour supply characteristics and workers’ behaviour. On the other hand, only few studies consider labour demand characteristics and technological change. In this paper we analyse the influence of both demand and supply factors on educational mismatch in a set of 10 European countries. Our hypothesis, confirmed by results obtained using ordered probit model with sample selection, is that demand factors generally play a major role in reducing educational mismatch in technologically more advanced countries, whereas supply factors are more important in countries that are lagging behind in the international division of labour. At the same time, important cross-country and gender differences have been identified in how the demand/supply factors operate. All this calls for the fine-tuning of policies intended to tackle the problem of educational mismatch.