Which business model for e-book pricing?

We characterize and compare equilibrium pricing strategies in a marketing channel in two scenarios. In the first scenario, the manufacturer chooses the wholesale prices of the two versions of a product, i.e., tangible and digital. and the retailer their prices to consumer. In the second scenario, the players use a revenue-sharing contract for only the digital version, while the competing version is managed by a wholesale price contract. The problem is inspired from a pricing controversy in the e-book industry.     

Is the natural resource production a blessing or curse for China's urbanization? Evidence from a space–time panel data model

This paper provides an analytical framework to evaluate under what conditions the natural resource production could promote or hinder urbanization process, focusing on factors mostly relevant for China. Considering both structure breaks and cross-sectional dependence as well as spatial spillovers, the study deploys a comprehensive approach to rigorously prove the validity of the proposed space–time panel data model that includes the second generation panel unit root test and panel cointegration, panel threshold regression and spatial panel Durbin model. The results not only offer strong evidences that the natural resource production non-linearly impacts on urbanization process, but also show that there exists a dynamic response over time and space as well as space–time diffusion impact, in which these percentages are different from each other confirming an asymmetric effect of the natural resource production on urbanization process.     

Does a bank's business model affect its capital and profitability?

We use a data-driven classification of systemically important European banks into business models based on confidential granular supervisory data and investigate whether banks following different models differ with respect to their capitalisation and profitability. Our aim is to locate the banks' business model in a risk-return space. Using an instrumental variables approach, our econometric methodology addresses potential endogeneity issues. Overall, we find that wholesale funded and securities holding banks are positioned on a relatively high risk-return trade-off plane compared with commercial banks. On the other hand, traditional commercial banks earn lower returns with moderate risk.     

Is business saving really none of our business?

This paper revisits the role of business saving in the economy by critically scrutinizing the existing macroeoconomic and corporate finance literatures. We assemble and exploit a broad international, unbalanced panel of 47 countries over 1995–2013 on saving and investment by institutional sector to shed new light on the relevance of business saving for private saving and investment around the world. We show that businesses contribute on average more than 50% of national saving around the world. Using this unique dataset, we find evidence of partial piercing of the corporate veil: a $1 increase in business saving gives rise to a decrease of approximately $0.40 in household saving–thereby raising private saving by as much as $0.60. We also find that a $1 increase in business saving increases private investment by as much as $0.20 in countries where limited financing is a binding constraint on firms’ investment. The evidence suggests that business saving and external financing are complementary sources of financing for investment.     

The evolution of competition in innovation resource: a theoretical study based on Lotka–Volterra model

This research uses the Lotka–Volterra model to analyse the competition of innovation resource between two enterprises and studies the dynamic effects of environmental changes through the change of model parameters. The research finds that there are three possible results of the competition in innovation resource. That comprises ‘crowding out effect’, ‘unstable equilibrium’ and ‘stable equilibrium’. The results of competitive evolution are determined by enterprises’ interaction parameters. However, the natural growth rates, the initial resource possessions of both enterprises and the amount of regional innovation resource have a significant impact on the evolution of competition.     

Is the value added tax a useful macroeconomic stabilization instrument?

The value added tax (VAT) has been proposed as a macroeconomic stabilization instrument. This paper considers some practical implications of a variable VAT. It then develops a dynamic general equilibrium model to assess its usefulness as a stabilization instrument. A variable rate VAT would no longer be less distortionary than other taxes. It would distort between current and future consumption, i.e. savings and investment decisions, and hence raise the economic costs of taxation. Moreover, a variable VAT would be less effective in dampening business cycles than the conventional stabilization tool, an interest rate. This is because of the additional adverse supply effects. A change in the interest rate affects this period's savings and investment decisions, whereas a variable VAT rate would influence savings and investment decisions over time. A variable VAT rate is therefore unlikely to be a useful stabilization instrument.     

Foresight in innovation policy: Shared visions for a science park and business–university links in a city region

Many car manufacturers recognize fuel cell vehicles as future substitutes for conventional cars with internal combustion engines. According to press releases and brochures, different strategic approaches of the automobile companies to fuel cell technology can be identified. These strategies match to a high degree the market entry strategies known from strategic marketing literature. A system dynamics model that reflects the beginning innovation process and the strategic approaches of a pioneer (first to market), an early follower (early to market) and a late follower (late to market) has been built. It examines the future prospects of the car manufacturers’ strategies in three different scenarios, which illuminate possible future developments of external influences like politics or fuel infrastructure.     

Is inequality harmful for innovation and growth? Price versus market size effects

We introduce non-homothetic preferences into an R&D based growth model to study how demand forces shape the impact of inequality on innovation and growth. Inequality affects the incentive to innovate via a price effect and a market size effect. When innovators have a large productivity advantage over traditional producers a higher extent of inequality tends to increase innovators’ prices and mark-ups. When this productivity gap is small, however, a redistribution from the rich to the poor increases market sizes and speeds up growth.     

Is there a ‘business case’ for board gender diversity within French listed SMEs

Many studies have investigated the relationship between women on corporate boards (WOCB) and firm performance in accordance with the ‘business case’ for board gender diversity. However, these have been conducted on large firms. This study re-examines this relationship for a sample of French listed SMEs over the period 2010–2014 using a dynamic panel GMM estimator to mitigate endogeneity issues. We find that the percentage of WOCB is positively and significantly related to firm performance. However, the other proxies for board gender diversity are not statistically different from zero. We argue that the relationship is not straightforward. This finding is interesting as it sheds light on the ‘business case’.     

Is a monetary union feasible for East Asia?

The empirical suitability of the East Asian economies for potential monetary integration is assessed. The structural vector autoregression (VAR) method is employed to identify the underlying shocks using a three-variable VAR model across the East Asian economies. The estimates of the EEC are used as a benchmark to compare the size of the underlying shocks and the speed of adjustment to shocks in both regions to determine the feasibility of forming an optimum currency area (OCA) in East Asia. The empirical results do not display strong support for forming an OCA in the East Asian region. The results do imply, however, that some small subregions are potential candidates for OCAs, since their disturbances are correlated and small and these economies adjust rapidly to shocks.     

Is there an innovation effect on current account? A case for European countries

The aim of this article is to find out whether there is an innovation effect on the current account, and if there is one then to determine its significance. The study is carried out for the current accounts of European countries. Innovation is tested together with some other factors as control variables in order to estimate and compare its role in the determination process of the current account. The results indicate that innovation has quite a significant influence on the current accounts of European countries, and the form of the relationship between innovation and current account is non-linear. Moreover, the impact of innovation is stronger for countries at higher levels of innovation, but the growth rate of its average marginal effect diminishes through its increasing levels.     

Is post-smoking-cessation weight-gain a significant trigger for relapse?

While the Surgeon General's Consumer Guide lists weight-gain as an important relapse trigger, the 2001 Surgeon General's Report on Women and Smoking concludes, paradoxically, that actual weight-gain during cessation does not appear to predict relapse. This dichotomous view reflects longstanding scientific uncertainty about the role of weight-gain in triggering relapse. This scientific uncertainty, which stems from mixed clinical trial results, is problematic for insurance coverage decisions such as state Medicaid programme decisions to cover or exclude smoking-cessation and weight-control pharmaceuticals. Analysts hypothesize that selection bias may explain the inconsistency between the negative clinical results and the persistent view that weight-gain triggers relapse, if weight-concern is both a key determinant of the transition from ‘smoker’ to ‘ex-smoker,’ and a key moderating variable in the relationship between weight-gain and relapse. We therefore use the nationally representative 1997 National Longitudinal Survey of Youth (NLSY97) to test the relapse-trigger hypothesis, and conclude that post-smoking-cessation weight-gain triggers relapse among weight-concerned white women, but it is associated with quitting success among Hispanic women. In addition, our results do not support the hypothesis that the mixed clinical trial results reflect selection bias based on weight-concern.     

Is migration a good substitute for education subsidies?

Assuming a given educational policy, the recent brain drain literature reveals that skilled migration can boost the average level of schooling in developing countries. In this paper, we introduce educational subsidies determined by governments concerned by the number of skilled workers remaining in the country. Our theoretical analysis shows that developing countries can benefit from skilled emigration when educational subsidies entail high fiscal distortions. However when taxes are not too distortionary, it is desirable to impede emigration and subsidize education. We then investigate the empirical relationship between educational subsidies and migration prospects, obtaining a negative relationship for 105 countries. Based on this result, we revisit the country specific effects of skilled migration upon human capital. We show that the endogeneity of public subsidies reduces the number of winners and increases the magnitude of the losses.