We Want Them All Covered! Collective Bargaining and Firm Heterogeneity: Theory and Evidence from Germany

This article establishes a link between the degree of productivity dispersion within an industry and collective bargaining coverage of the firms in the industry. In a stylized unionized oligopoly model, we show that differences in productivity levels can affect the design of collective wage contracts a sector‐union offers to heterogeneous firms. Using German linked employer–employee data, we test a range of our theoretical hypotheses and find empirical support for them. The dispersion of sector‐level labour productivity decreases the likelihood of firms being covered by a collective bargaining agreement on the industry level, but increases the likelihood of firms being covered by firm‐level agreements. The results hold for different subsamples and (panel) estimation techniques.     

Price Adjustment Policies in Procurement Contracting: An Analysis of Bidding Behavior

The fluctuations in fuel prices over the past decade led a number of government agencies to introduce price adjustment clauses in procurement contracting. Those clauses were primarily designed to reduce contractors’ uncertainty without considering the impact of such initiatives on bidding and the budget. We analyze a newly constructed, detailed panel of observations on bids for construction contracts and compare bidding behavior across periods and projects, and across items within projects. Estimates from a difference‐in‐differences approach, indicate that bidding becomes more aggressive and less dispersed after the implementation of this policy. The difference is more pronounced when we consider itemized bids than overall project bids. Alternative techniques of regression discontinuity and nonparametric estimation are applied and yield consistent results.     

Market Structure and the Speed of Price Adjustments: Evidence Of Non-Monotonicity

Rational distributed lag and partial adjustment models are used in this paper to analyze the speed of adjustment of consumer deposit rates. Dummy variables conditioned on market concentration are added to the rational distributed lag model to test for speed of adjustment differences across high, medium, and low concentration markets. The estimated model parameters suggest low, as well as high, concentration markets exhibit slower speed of adjustment (or more price rigidity) than the medium group. Thus, the results for the rational distributed lag model estimation provide empirical evidence of a possible non-monotonic relationship between market concentration and price rigidity. This relationship is further examined within the context of a partial adjustment model by estimating the speed of adjustment parameter as a non-linear (quadratic) function of market concentration. The results support the findings derived from the estimation of the rational distributed lag model. These findings have important implications for: (1) future research that attempts to empirically estimate relationships between market structure and price behavior, and (2) antitrust policies that assume reductions in market concentration will always lead to more competitive, presumably less rigid, pricing behavior.     

Mixed Oligopoly and Market Power Mitigation: Evidence from the Colombian Wholesale Electricity Market*

Using information on price bids in wholesale electricity pools and empirical techniques described in the literature on electricity markets, this study identifies the market power mitigation effect of public firms in the Colombian market. The results suggest that while private firms exercise less market power than is predicted by a profit-maximization model, there are marked differences between private and public firms in their exercise of unilateral market power. These findings support the hypothesis of the market power mitigation effect of public firms.     

Multivariate statistics in industrial marketing management: A practitioner tool kit

Much published work over the years has pointed to the differences between business-to-consumer (B2C) and business-to-business (B2B) marketing. An undesirable by-product of this sometimes misdirected distinction is that managers working within B2B environments have generally not considered the use of what are seen as B2C techniques, such as multivariate statistical analysis. This article is structured in three parts. First, the argument for the similarities between B2B and B2C marketing is developed; second, three different multivariate statistical techniques are presented and combined to form a practical tool kit for use by B2B managers on strategic, operational, and tactical levels; and third, the results of an application of the techniques in the life science research chemicals industry is reported, demonstrating that the tool kit substantially enhanced managerial understanding of customer decision processes.     

The Measurement of Firm Information About Product Demand

The role of firm information about product and financial markets is the subject of considerable research. Typically empirical research measures information through price dispersion. However, the dispersion represents an imperfect measure of information. Several studies utilize stochastic frontier estimation techniques to measure worker information about the labor market. This paper determines whether the frontier information measure can be applied to the measurement of firm information about product markets. Several intuitive hypotheses are tested concerning the relationship between firm characteristics and information investments. The results are consistent with expectations and provide support for using stochastic frontier techniques to measure firm information.     

Market Power, Scale Economies and Productivity: Estimates from a Panel of Establishment Data

This paper presents a new econometric framework that permits simultaneous estimation of price-cost margins, scale economies and productivity from a panel of establishment data. The model contains only a few, economically interesting parameters to be estimated, but it is nevertheless consistent with a flexible (translog) underlying technology, quasi-fixed capital and the presence of persistent differences in productivity between establishments. The framework is applied to study market power, scale economies and productivity differences in a number of manufacturing industries in Norway. The results reveal statistically significant, but quite small, margins between price and marginal costs in most manufacturing industries.     

How to use instrumental variables in addressing endogeneity? A step-by-step procedure for non-specialists

Endogeneity issues in empirical research have received increasing academic attention. Tackling endogeneity problems effectively and using the appropriate estimation techniques are important quality benchmarks in the publication process of many academic journals. In this paper, we discuss the use of instrumental variables (IVs) in business and marketing research, with a particular focus on its implementation in STATA. We discuss several pre- and postestimation tests that researchers can use to implement various versions of IVs in STATA, including two-stage least squares regression, limited information maximum likelihood estimation, and generalized method of moments.     

经济货币化、信贷配置与经济增长——基于动态面板数据模型的GMM估计

金融与经济增长关系研究的理论文献较多,且随着经济计量技术的发展,学者们逐步从更广范 围和更深层次来实证检验二者的关系。本文基于内生经济增长理论,将金融因素纳入到改进 型Cobb-Douglas生产函数中,并充分考虑到研究的时限性问题,收集了69个国家1991～2013 年间的数据资料,利用动态面板数据模型GMM估计方法,以发达经济体与新兴市场和发展中 国家为横截面单元,以新的视角检验经济货币化、信贷配置与经济增长的动态效应,结果表 明经济货币化、信贷配置与经济增长之间存在动态关系,且对于不同经济体呈现的正负效应 及弹性并非具有一致性。     

ROBUSTNESS OF PRODUCTIVITY ESTIMATES*

Researchers interested in estimating productivity can choose from an array of methodologies, each with its strengths and weaknesses. We compare the robustness of five widely used techniques, two non‐parametric and three parametric: in order, (a) index numbers, (b) data envelopment analysis (DEA), (c) stochastic frontiers, (d) instrumental variables (GMM) and (e) semiparametric estimation. Using simulated samples of firms, we analyze the sensitivity of alternative methods to the way randomness is introduced in the data generating process. Three experiments are considered, introducing randomness via factor price heterogeneity, measurement error and differences in production technology respectively. When measurement error is small, index numbers are excellent for estimating productivity growth and are among the best for estimating productivity levels. DEA excels when technology is heterogeneous and returns to scale are not constant. When measurement or optimization errors are nonnegligible, parametric approaches are preferred. Ranked by the persistence of the productivity differentials between firms (in decreasing order), one should prefer the stochastic frontiers, GMM, or semiparametric estimation methods. The practical relevance of each experiment for applied researchers is discussed explicitly.     

Recovering markups from production data

In this paper, I discuss, what I call, the Production-Approach to recovering markups. In contrast to the most popular approach in empirical IO, which relies on demand estimation, this approach requires standard production data while allowing for various price-setting models and puts no restrictions on underlying consumer demand. Using production data together with standard cost minimization allows a researcher to obtain markups in a flexible way. After presenting a brief and selective overview of the literature I contrast the production approach to that of the more popular demand estimation approach. This discussion makes it clear that both approaches face important trade-offs and at a minimum empirical economist should have both techniques as part of their toolbox. The hope is that the use of both methods will only depend on the data at hand and the relevant institutional knowledge, paired with the actual research question we are trying to answer.     

Disparities in ICT adoption: A multidimensional approach to study the cross-country digital divide

This paper presents a cross-country study on the determinants of information and communication technology (ICT) diffusion using multivariate analysis techniques to capture the relative and multidimensional character of digital divide. Using canonical correlation analysis, the differences detected between groups of countries both in terms of ICT patterns and in terms of the factors explaining each are compared. The results provide the ability to distinguish between different patterns of ICT adoption that can be explained primarily by variables associated with differences in development levels. In countries registering higher levels of ICT adoption, the digitalization pattern is explained by GDP, service sector, education, and governmental effectiveness. In contrast, in developing countries, population age and urban population are positively associated with the ICT adoption, while Internet costs impact negatively. The results might be useful in finding and implementing the most suitable telecommunication and development policies for each case.     

Hedonic Amenity Valuation and Housing Renovations

Hedonic and repeat sales estimators are commonly used to value such important urban amenities as schools, environmental quality and access to transit. Given that property data often omits information on quality differences between same‐aged homes as well as changes in structural attributes over time, researchers must assume that property renovations are uncorrelated with neighborhood amenities. We formally test if this assumption is valid by incorporating detailed data on renovations in Charlotte, North Carolina. We begin by testing how the inclusion of minor and major home improvements influences hedonic and repeat sales indices. Results find limited bias in hedonic indices and that renovated properties are no more likely to be sold than nonrenovated properties. Using the introduction of Charlotte's light rail‐transit system in 2000, we estimate a positive bias of between 1.6% and 19.9% on the capitalized benefits of access to light rail due to omitted information on renovations. Our results show that a number of common data cleaning techniques used to address missing information on structural improvements may worsen this bias.     

工业集聚与污染排放强度——基于固定效应门限回归模型的再检验

为研究工业集聚对污染排放强度的影响,本文选取2000~2015年全国30个省市（自治区）的面板数据,以工业集聚为门槛变量,利用固定效应门限回归模型,实证分析了不同工业集聚水平对污染排放强度的影响。结果发现：工业集聚对废水排放强度的影响存在显著门槛效应,在达到门槛值前,工业集聚很大程度降低了废水排放强度,在跨过门槛值后,这种作用会减弱。工业集聚与废气排放强度呈显著倒“U”型关系,在工业集聚水平小于门槛值时,工业集聚会加剧废气排放,大于门槛值后,工业集聚会降低废气排放强度。工业集聚会降低废物排放强度,但未出现显著门槛效应。     

Industrial use of public sector research in advanced technologies: a comparison of biotechnology and ceramics

Industrial use of public sector research (PSR) is characterised by considerable diversity: both the nature and extent of linkage varies according to, amongst other factors, firm size, industrial sector and research field. The study reported here aims to understand better some of this diversity by comparing two fields—biotechnology and advanced ceramics. It employs a methodology which focuses on the precise character of scientific and technological inputs (STI) which companies seek and obtain during new product development. The results reveal significant similarities between the technologies: the importance to innovation of a synthesis between formal knowledge and tacit firm-specific skills; and the reliance on PSR for both new knowledge and new research techniques and instruments. Variance in STI flows appears to be related to the particular character of new product development in the relevant industrial sectors; differences in the development and dynamism of the technologies; and in the availability of requisite expertise and knowledge in PSR.     

The Nearest Neighbors Appraisal Technique: An Alternative to the Adjustment Grid Methods

This study presents a new appraisal technique, dubbed the Nearest Neighbors Appraisal Technique, which vastly reduces the subjectivity of the traditional adjustment grid methods while eliminating the need to adjust for subject-comparable differences on a piecemeal basis. Any number of appraisers who apply this technique to the same property at the same point in time will get the exact same estimate of value. The technique avoids piecemeal adjustments by capturing all subject-comparable differences in a single measure. Using single-family sales data, the technique is found to be more accurate than any of the adjustment grid methods and hedonic price regression estimation procedures.     

Dual Kriging: An Exploratory Use in Economic Metamodeling

Sensitivity analysis of capital investments can be effectively carried out by employing a metamodel approach and experimental designs. Although polynomial regression metamodels are popular and straightforward, they do not consider spatial relationships among the data. Dual kriging is an estimation technique that allows the incorporation of spatial correlation into the interpolation or estimation process and has been used primarily in geophysical statistical analysis. This article investigates the dual kriging approach as an alternative technique to polynomial regression and artificial neural networks for metamodel analysis of capital investments. It is observed that dual kriging shows potential in performing sensitivity analysis as its accuracy is as good as, or better than, other techniques, and, while model building and interpretation is more complicated than that of polynomial regression, it is significantly more straightforward than that of neural networks. Furthermore, this is the first known work of using kriging in the field of engineering economics; there may be other useful applications such as in cost estimation.     

行业异质性、适度知识产权保护与出口技术进步

本文将受知识产权保护制度约束的模仿效应参数及模仿成本引入Hausman的技术水平模型,通过建立1994—2009年SITC Rev.3的三位编码产品与中国国民经济中35个工业行业的对应关系,构建了行业出口技术水平测算指标,运用固定效应模型与系统GMM估计方法,实证分析了知识产权保护对行业出口技术进步的影响及在不同行业间的差异性体现。研究结果表明:中国知识产权保护制度的完善对出口技术提升起到了加速器的作用,但并未对出口规模扩张做出显著直接贡献,而是通过影响出口技术间接作用于出口规模;不同行业的知识属性差异使知识产权保护的出口技术进步效应在研发强度大、技术水平高、外资渗透率高的行业中更显著。     

The effect of the Telefonica–BellSouth merger on the Argentine cellular telephone market

The aim of this paper is to evaluate the effects of the merger between Telefonica and BellSouth, which took place in December 2004, in the Argentine cellular telephone market. In this market the merger under analysis is horizontal. The evaluation is carried out by performing a demand estimation, using the PCAIDS model, and a marginal cost estimation, using supply prices and the elasticities inferred from the previously estimated demands. With those results, a merger simulation is run under different hypotheses related to possible marginal cost reductions. The merger is found to be able to lower supply prices for relatively small marginal cost reductions. This is basically due to the fact that the individual firms’ demands are highly elastic, and that the cross elasticity between the brands affected by the merger is relatively small.     

Institutional and Organizational Factors Affecting Effectiveness: Geoeconomic Comparison Between Shanghai and Beijing

This study aims at uncovering the geoeconomics of successful strategic management in subculturally diverse countries. The new theory of geoeconomics is defined as the study of geographic influences on economics and management. Using this theory to integrate the key success factor approach and resource-based view of the firm, the study examines geographical differences between two cities in the North and South of mainland China with respect to key factors leading to organizational effectiveness. It employs structural equation modeling to analyze survey data from 124 enterprises in the two most important cities of China, Beijing and Shanghai. Among the dozen factors integrated from different organizational domains, significant differences were found in the impact of government support (more important in the North) and company size (more important in the South). Other differences related to environmental constraints, ownership, leadership, and decision making corresponded to theoretical predictions but were not significant. As hypothesized, appropriate structure was equally important in both regions. Strategic orientation was not significant anywhere. To achieve high performance in China, practitioners must develop regionally adapted strategies, management techniques and performance control benchmarks, which fully consider and leverage the varying success factors in different subcultures. More generally, the results highlight the importance for researchers of strategy and organization to analyze regional differences that might be hidden at the aggregate data level.