Price and quality components of imports of food products into the UK

This paper analyses the principal factors responsible for the growth in the value of imports of the UK food sector, during the period 1985-90. On the basis of estimates of translog multilateral price indices it assesses the relative contribution of changes in the quality of imported products and factors other than quality to growth in import values of food products. The main conclusion is that growth in quality appears to be the principal reason for the growth in unit values of imports and the trade deficit incurred by the food manufacturing sector.     

Dynamic almost ideal demand systems: an empirical analysis of alcohol expenditure in Ireland

This paper presents a dynamic form of the Almost Ideal Demand System (AIDS). Three versions of the static AIDS model are employed to determine the preferred long-run equilibrium model and represents the short-run dynamics by an error correction mechanism. This estimation procedure is then applied to alcohol expenditure in Ireland. The estimated point elasticities are consistent with previous studies and a priori expectations. Beer and spirits are found to be price inelastic in both the short and long run. While wine is price inelastic in the short run and price elastic in the long run.     

The determinants of tendering periods for PPP procurement in the UK: an empirical analysis

The procurement of infrastructure projects via public–private partnerships (PPPs) is rising globally. PPPs are, however, often characterized by lengthy tendering periods, defined as the difference between contract notice and financial close. Tendering periods are important because they account for a significant proportion of overall project delivery time. Slow tendering deters bidders and thus reduces competition for contracts. We source data on 670 PPP projects in the United Kingdom and use a duration analysis model to empirically examine factors that impact tendering period duration. Our results reveal significant sectoral variation with projects in the health and housing sectors taking significantly longer to reach financial close. We also show that, after controlling for other factors, projects with higher capital values and projects that overlap with the timing of general elections are associated with significantly longer tendering periods. We further examine the impact of the competitive dialogue procurement method and find evidence that tendering periods have increased since 2006; the year competitive dialogue was introduced. We do, however, observe a significant reduction in the time between appointment of preferred bidder and financial close post-2006. This suggests that competitive dialogue is effective in reducing the scope for negotiations by preferred bidders holding quasi-monopoly advantages.     

Ownership structure,board composition and the market for corporate control in the UK: an empirical analysis

This paper analyses the board composition and ownership structures of a sample of companies that have been acquired and those of a matching control sample that have not. We find significant governance differences between acquired firms and the control sample. Firms with the following characteristics were more likely to be acquired: they had the same person acting as CEO and chair, a higher proportion of non-executive directors, larger institutional shareholdings and higher director shareholdings. An analysis of small firms also found evidence of higher CEO shareholdings. We also find that treating all take-overs as a single group leads to a model mis-specification which does not identify the incentive effects of board and CEO shareholdings present in non-hostile acquisitions. These results are consistent with two agency-derived hypotheses, financial incentives and effective monitoring. We also find that targets exhibit lower growth potential but do not have worse accounting performance.     

Evaluating the productive performance of UK universities as cost-constrained revenue maximizers: an empirical analysis

The study presents an empirical analysis of the relative revenue efficiency of UK universities in providing teaching and research. With government policies pressurizing the largely public-funded universities to secure efficiency in both input usage and output revenue, university producers are modelled as cost-constrained revenue maximizers. Taking explicit account of the quality of research output, the methodology uses linear programming techniques to construct nonparametric cost indirect production frontiers and to compute revenue efficiency relative to these frontiers. Revenue efficiency is then decomposed into its (output) allocative and technical components. Further analysis investigates the sources of allocative and technical inefficiencies.     

The effect of military expenditure on growth: an empirical synthesis

Using a sample of 272 meta-observations drawn from 48 primary studies, this paper conducts a meta-analysis of the empirical literature that examines the impact of military expenditure on economic growth. We find that existing studies indicate growth-retarding effects of military expenditure. The results from the meta-regression analysis suggest that the effect size estimate is strongly influenced by study variations. Specifically, we find that underlying theoretical models, econometric specifications, and data type as well as data period are relevant factors that explain the heterogeneity in the military expenditure–growth literature. Results also show that positive effects of military expenditure on growth are more pronounced for developed countries than less developed countries.     

Determinants of non-life insurance expenditure in developed and developing countries: an empirical investigation

The determinants of non-life insurance expenditure in a panel data set covering 36 developed countries and 31 developing countries for the period 2000–2011 are analysed. Results of our instrumental variable analysis indicate that economic freedom, income, bank development, urbanization, culture and law systems are the key drivers of the non-life insurance expenditure across countries. However, their impacts differ significantly between the groups of developed and developing countries, suggesting that the heterogeneity among countries in terms of the level of development plays an important role. The global financial crisis is also found to influence the direction of those effects, especially in developed countries. The article yields useful policy and economic implications for governments and multinational non-life insurance companies with regard to the development of the non-life insurance sector, an important engine for economic growth and prosperity.     

The impact of imports on price-cost margins: An empirical illustration

This article decomposes the impact of imports on domestic price-cost margins into separate price and cost effects. Using data from 24 food-processing industries, the empirical results show that although the direct impact of imports on prices is always negative, a positive net impact on price-cost margins occurs in industries characterized by low own-price elasticity of demand and diseconomies of scale. Further results show that the disciplining effect of imports is more preponderant the lower the degree of domestic competition. First version received: September 2000/Final version received: March 2002 RID="*" ID="*"  Professor and Associate Professor, respectively, in their respective departments. They can be reached at rigoberto.lopez@uconn.edu or elena.lopez@uah.es. The authors are grateful to two anonymous referees for their fruitful and helpful comments. Financial support provided by the USDA CSREES special grant No. 00-34178-9036 and by the Cátedras del Banco Santander Central Hispano-Universidad de Alcalá. This is Scientific Contribution No. 1794 of the Storrs Agricultural Experiment Station. RID="*" ID="*"  Professor and Associate Professor, respectively, in their respective departments. They can be reached at rigoberto.lopez@uconn.edu or elena.lopez@uah.es. The authors are grateful to two anonymous referees for their fruitful and helpful comments. Financial support provided by the USDA CSREES special grant No. 00-34178-9036 and by the Cátedras del Banco Santander Central Hispano-Universidad de Alcalá. This is Scientific Contribution No. 1794 of the Storrs Agricultural Experiment Station.     

Aggregate health care expenditure in the United States: evidence from cointegration tests

Unlike recent studies that are based on international cross-sectional series, this paper attempts to quantify the role of the determinants of aggregate health care expenditure per capita, using time-series data for the period of 1960–87 for the United States. The paper applies the relatively new procedures of unit root testing, cointegration and error-correction modelling. The evidence supports cointegration. Although, the results indicate that per capita income, age of the population, number of practising physicians, and public financing of health care are important determinants, the age structure of the population and number of practising physicians emerge as the major determinants of aggregate health care expenditure in the United States.     

Coordination and price shocks: an empirical analysis

This paper outlines a new technique, which makes optimal control in a stochastic minimum variance framework computationally feasible. The new approach is then used to evaluate gains to policy coordination in the context of a macroeconometric model for the G-3. More specifically, we consider policy responses to a temporary price shock in a single country and in multi-country cases. The results show that coordination brings about a striking improvement in the overall control of inflation and a reduction in output costs.     

Prostitution services: an exploratory empirical analysis

This study provides an empirical analysis of the market for some male prostitution services in the UK. Flexible working hours, part-time working, and multiple job holding are considered as important labour market characteristics in this service sector. Statistical models helping explain the provision of a deviant and a more mainstream sexual service is reported, utilizing cross-section data drawn from individual prostitute advertisements. The significance of various declared intrinsic endowments of the prostitutes are examined in relation to the offer of these services, including age, ethnicity, physique, and masculine demeanour.     

Does Gender have any Effect on Aggregate Saving? An empirical analysis

This study investigates the effects of gender on aggregate saving. We test the hypothesis that shifts in women's relative income, which can affect their bargaining power within the household, have a discernible impact on household saving and, by extension, gross domestic saving, due to differing saving propensities by gender. The empirical analysis is based on panel data for a set of semi-industrialised economies, covering the period 1975-95. The results indicate that, as some measures of women's relative income and bargaining power increase, gross domestic saving rates rise. The implied gender disparity in saving propensities may be linked to differences in saving motives based on gender roles, and well as divergent experiences of economic vulnerability. These findings suggest the importance of understanding gender differences in planning for savings mobilisation and in the formulation of financial and investment policies.     

Financial system and technological catching-up: an empirical analysis

This paper explores the role of the financial system in technological catching-up in the expectation that financing mechanisms affect the production and the exports of new or “new to the market” commodities. We have developed indices of related export variety (REV) and of unrelated export variety (UEV) by using the informational entropy function for a sample of 97 countries using NBER & UN trade data for the period 1992–2005. We used these indices sequentially as dependent variables with the bank credit ratio and stock market capitalization ratio as independent variables. In addition, we include the education system, natural resources and four principal component factors characterizing the cost of doing business, political system, quality of governance and the degree of openness of the countries as control variables in our regressions. Our pooled regression models show that the financial system is an important determinant of both types of export variety for all countries but that, for the most successful developers, the banking system and the stock market play different roles, with the former being relatively more appropriate for REV and the latter for UEV. Such specialization of different forms of the financial system seems to confirm that stock markets are likely to be relatively more appropriate to fund the exploratory type of innovations which are required to increase UEV.     

Food consumption in urban China: an empirical analysis

This paper examines consumption patterns of urban households in China using aggregated household consumption data. A demand system comprising six commodities (rice,pork,vegetables,fish,eggs and fruits) is estimated using a two-stage budgeting procedure which incorporates an almost ideal deamnd system (AIDS) in each stage, Elasticity estimates from the system are plausible and consistent with other relevant studies. Results from this study strengthen the evidence of the emergence of a large Chinese market for non-stable food. The study provides rationale and basis for additional research into Chinese food consumption, especially processed food.     

Privatization and capital formation in developing countries: an empirical analysis

The spur for privatization and its impact on economic performance have been analysed from many perspectives, including microeconomics, macroeconomics, and institutional economics. Previous research has focused on efficiency reasons for privatization at the level of the firm, and the relative performance of state‐owned enterprises and privately owned firms. This article investigates the macroeconomic facet of privatization with particular attention paid to the relation between privatization and capital formation in developing countries. Our study uses recent World Bank data on privatization for 105 countries over the time period 1988–2003. We explore the impact of privatization on capital formation by conducting two‐stage least squares and ordinary least squares estimations within three time frames. Our findings indicate that the effect of privatization on capital formation varies across regions and time frames. In general, privatization is neutral with regard to investment.     

Taxing capital flows: an empirical comparative analysis

Recent studies have analysed the impact of capital account opening on income growth, implicitly assuming that the various forms of foreign savings have similar effects. In fact, theoretical considerations suggest that the individual components of private capital inflows have different effects on growth. This paper analyses the link between income growth and private capital inflows. It presents system GMM estimates with annual observations from 1985 to 1996 for 72 countries. When full-sample results are checked for country and period changes, most of capital inflow series lose their ability to explain income growth. Bank flows stand as the sole source of foreign financing that displays a positive and robust correlation with growth.     

Sudden stops and output: an empirical Markov switching analysis

Sudden stops and their negative effects on GDP have recently received increased attention because quantitative easing has led to substantial capital inflows into emerging economies. We extend the empirical literature on the impact of sudden stops on GDP by proposing an alternative econometric approach which is multivariate, nonlinear and uses a novel way to identify sudden stops. We estimate a Markov switching vector autoregression with a latent variable indicating whether the economy is in a sudden stop regime. We use the maximum fraction of forecast error variance approach for partial structural identification of the vector autoregression model. Beyond confirming findings from the existing empirical literature on sudden stops, our results additionally show that (i) sudden stops are associated with regime switches (i.e., breaks in the behavior of economic variables), which have significantly negative and permanent effects on GDP; (ii) impulse responses to net capital inflow shocks are regime dependent with economies being more vulnerable to shocks during the sudden stop regime; and (iii) there were different main drivers of the output decline in historical sudden stop episodes.     

Financial innovation: theoretical issues and empirical evidence in Italy and in the UK

In the first part of the paper, we try to clearly identify financial innovations and draw a general framework. Despite the relevance of financial innovations, a unique definition is difficult to find. We then provide empirical evidence of such innovations on a sample of Italian and UK listed banks over the period 2005–2007 using financial account data. First, the absence of any mention of a specific organizational unit in charge of research and development (R&D) is highlighted. However, the existence of a research and developmental function involving different organizational units cannot be excluded. Second, innovation seems to be mainly concentrated in the product area, both in Italy and in the UK. This could be accounted for by the difference in the “life cycles” of innovations and by the different operational conditions of banks in both systems. Third, larger banks seem more innovative, both in Italy and in the UK. No clear relation between innovation and cost reduction/revenue increase seems to exist, at least in Italy. In the light of the above considerations, policy implication comes to light on whether the choice of not establishing a specific organizational unit dedicated to R&D could turn out effective in the medium-long term.