Demand for labour inputs and adjustment costs: evidence from Spanish manufacturing firms

This paper studies the structure of the adjustment costs for heterogeneous labour inputs, allowing for asymmetries and interaction effects among them. To do this, I estimate Euler equations for the demands of permanent nonproduction (white collar) and production (blue collar) employees using a sample of Spanish manufacturing firms. These equations are estimated using the subsample of observations for which adjustment is done, controlling for endogenous sample selection. The main results confirm the heterogeneity of adjustment costs for these two labour inputs, and the existence of cross-adjustment effects between them. Weak evidence of asymmetry in permanent nonproduction labour is also found.     

Stock markets,banks and the sources of economic growth in low and high income countries

This paper studies the effects of stock markets and banks on the sources of economic growth, productivity and capital accumulation, using a large cross country panel that includes high- and low-income countries. Results show that, in low-income countries, banks have a sizable positive effect on capital accumulation. We find that stock markets, however, have not contributed to capital accumulation or productivity growth in these countries. Given the emphasis that has been placed in developing equity markets in developing countries, these findings are somewhat surprising. Conversely, in high-income countries, stock markets are found to have sizable positive effects on both productivity and capital growth, while banks only affect capital accumulation.     

Financial intermediation costs in low income countries: The role of regulatory,institutional, and macroeconomic factors

We analyze factors driving persistently higher financial intermediation costs in low-income countries (LICs) relative to emerging market (EM) country comparators. Using the net interest margin as a proxy for financial intermediation costs at the bank level, we find that within LICs a substantial part of the variation in interest margins can be explained by bank-specific factors: margins tend to increase with higher riskiness of credit portfolio, lower bank capitalization (or lower risk aversion), and smaller bank size. Overall, we find that concentrated market structures and lack of competition in LICs banking systems and institutional weaknesses constitute the key impediments preventing financial intermediation costs from declining. Our results provide strong evidence that policies aimed at fostering banking competition and strengthening institutional frameworks can reduce intermediation costs in LICs.     

Labour adjustment costs: Estimation of a dynamic discrete choice model using panel data for Greek manufacturing firms

In this paper we estimate a dynamic structural model of employment at firm level. Our dataset consists of a balanced panel of 2790 Greek manufacturing firms. The empirical evidence of this dataset stresses three important stylized facts: (a) there are periods in which firms decide not to change their labour input, (b) there are periods of large employment changes (lumpy nature of labour adjustment) and (c) the commonality is employment spikes to be followed by smooth and low employment growth periods. Following Cooper and Haltiwanger [Cooper, R.W. and Haltiwanger, J. “On the Nature of Capital Adjustment Costs”, Review of Economic Studies, 2006; 73(3); 611–633], we consider a dynamic discrete choice model of a general specification of adjustment costs including convex, non-convex and “disruption of production” components. We use a method of simulated moments procedure to estimate the structural parameters. Our results indicate considerable fixed costs in the Greek employment adjustment.     

Household production, full consumption and the costs of children

Recent work criticises both the logic and relevance of the theoretical basis of the approach to estimating the costs of raising children adopted in much of the economics literature. This tends to be restricted purely to models in which the household members consume market goods with given household income. The “costs of children” are perceived essentially as market consumption costs. This ignores the fact that an important, possibly preponderant element of child costs takes the form of parental time, which must be diverted from alternative uses such as market work, other household production activities, and leisure, to care for children. The studies also ignore the question of the differential incidence of child costs on adult members of the household. In this paper, we first of all argue that a satisfactory theoretical approach to modelling child costs must simultaneously incorporate an “individualistic” formulation of the household and a formal treatment of household production. We then provide such a model. Using data from a time use survey we estimate specialised versions of the model for families with two children and use the results to derive the intra-family distribution of resources and implied child-rearing costs.     

An empirical investigation of the effects of impact fees on housing and land markets

This paper presents the results from estimating the effects of development impact fees on the prices of new and existing single-family homes and undeveloped residential land using unique data for Dade County, FL. The results show that an additional US$1.00 of fees increases the price of both new and existing housing by about US$1.60 and reduces the price of land by about US$1.00. These findings are shown to be consistent with the new view but not the old view theory of impact fee incidence.     

The importance of consumer multihoming (joint purchases) for market performance: Mergers and entry in media markets

Consumer “multihoming” (watching two TV channels, or buying two news magazines) has surprisingly important effects on market equilibrium and performance in (two‐sided) media markets. We show this by introducing consumer multihoming and advertising finance into the classic circle model of product differentiation. When consumers multihome (attend more than one platform), media platforms can charge only incremental value prices to advertisers. Entry or merger leaves consumer prices unchanged under consumer multihoming, but leaves advertiser prices unchanged under single‐homing: Multihoming flips the side of the market on which platforms compete. In contrast to standard circle results, equilibrium product variety can be insufficient under multihoming.     

The performance of logistics service providers and the logistics costs of shippers: a comparative study of Finland and Switzerland

This article analyses the market dynamics between shippers in the manufacturing sector and logistics service providers (LSPs) in Finland and Switzerland, focusing on factors that are characteristic of the demand and supply sides of logistics markets such as performance indicators, financial ratios and relevant macroeconomic indicators. The development of shippers’ logistics costs over a period of ten years is analysed as a proxy for cost savings. This is mirrored against the development of the LSPs’ financial performance. The share of logistics costs in the turnover of Finnish shippers is consistently higher than that of their Swiss peers, whereas Finnish LSPs perform financially better than their Swiss peers. This implies that Finnish and Swiss logistics markets differ in terms of market power and interdependence between shippers and LSPs. The results indicate that the sub-regional interdependence and market power of LSPs, caused by a lack of competition, explain some of the differences in logistics costs.     

Eco-efficiency changes of the electricity and gas sectors across 28 European countries: A value-based data envelopment analysis productivity approach

This paper assesses the relative eco-efficiency changes in the electricity and gas sector (E&G)' production and consumption chains in 28 European countries. We propose a novel robustness assessment for the productivity index, specifically adjusted to value-based data envelopment analysis. Overall, results indicate that total factor productivity gains have been mainly driven by the catch-up effect across all chains of the E&G sector. When a more demanding perspective concerning negative environmental externalities is adopted, we find that the number of European countries that achieved productivity gains across all chains decreases. Besides, results depict the existence of lower productivity gains for the direct production chain when compared with the direct and indirect supply chains of the E&G sector. Germany, Luxembourg, and Belgium were consistently viewed as innovators across all chains, according to the environmental perspective. Several Eastern Europe countries usually viewed as policy laggards that resisted adopting the ambitious European decarbonization targets, showed total factor productivity gains in the supply chain of the E&G sector under a more environmental demanding perspective. Czechia was the only country with productivity losses across all chains, due to increasing coal-fired electricity generation in the time horizon assessed. The current partial return to coal as a source of electricity, due to the geopolitical tensions between Russia and Europe, brings additional challenges to the enhancement of the eco-efficiency of the European E&G sector.     

The impact of bank competition and concentration on bank risk-taking behavior and stability: Evidence from GCC countries

This paper presents a comprehensive assessment of the impact of competition on bank fragility pre and post financial crisis period in the GCC banking market as measured by bank risk-taking behavior and bank stability during the period 1998–2016. Our results indicate that a higher level of bank competition and the greater degree of concentration adds to financial fragility. The findings further shows that during the 2008 crisis, lower bank competition maintain the stability of GCC banks. We also find that lower level of competition and lower concentration in the banking market increases the risk-taking behavior of the low capitalized, low liquid and small banks which add to fragility in the banking system. Our findings suggest that countries with greater capital stringency, greater supervisory power, greater market discipline, and private monitoring, with explicit deposit insurance schemes, higher shareholder protection, and higher legal efficiency decrease banks’ risk-taking and increase their stability. We also find that greater regulatory restrictions and higher creditor protection decrease banks’ stability and increase risk in concerned countries. We find support for both competition-fragility and competition-stability hypotheses in the GCC banking market. The results also confirm that the use of a single measure of competition is insufficient to assess the role of competition in banking stability.     

The effect of transaction costs, payment terms and power on the level of raw materials inventories

This paper proposes and tests an explanation for the level of raw materials inventories based on transaction cost economics theory and the role of power in a supply chain. According to this explanation, raw materials inventories are larger the higher a company's transaction costs and the lower its storage-related production and management costs. Factors that affect these costs are the company's vulnerability to opportunism, whether the input becomes more or less costly to store and manage as it moves through the supply chain, payment terms and the company's power in relation to its supplier. This explanation for the level of raw materials inventories was tested on a large sample of customer industries matched to their main supplier industries. Consistent with this theory, the empirical results show that companies hold larger raw materials inventories the more money their suppliers spend on research and development and the less important the customers are to their suppliers. These results are important because they indicate companies must consider a wider range of factors than previously thought necessary when establishing inventory policy.     

Measuring the costs of children: parametric and semiparametric estimators1

How much additional income does a family with four children need to attain the same welfare level as a family with two children? And how much does a single person need compared to a childless couple? These questions are important in applied micro-economics and underlie public policy on, for example, social benefits and child allowances. In microeconomics, this is known as the problem of measuring equivalence scales. We estimate these scales using two types of subjective survey information. First, we use answers to survey questions on the income required to attain a given utility level. We compare the results for the usual linear model with semiparametric estimates, in which the functional form of the relationship between required income and family size and actual income is left unspecified. Second, we use answers to the question: how satisfied are you with actual household income? We present parametric and semiparametric estimates for ordered response models explaining this discrete variable. We find that according to the second type of information, costs of children are much larger than according to the first.     

Epidemics,labour markets and unemployment: the impact of SARS on human resource management in the Hong Kong service sector

This article examines the links between epidemics and their economic consequences, specifically in terms of their impacts on labour markets and jobs. To exemplify the above, we examine the effects of SARS (Severe Acute Respiratory Syndrome) on the Hong Kong economy, its labour market and its level of employment and unemployment. The article hypothesizes that the greatest impact would be on human resource management (HRM) in the service industries and on particular sub-sectors, such as the hotel sector. It concludes that the dramatic demand and supply ‘shocks’ significantly affected both the demand for and the supply of labour in the sector, with discernible HRM consequences.     

市场、政府与会计信息供求博弈

本文以会计信息供求博弈为主线，从经济学的角度分析了会计信息供求双方围绕会计信息这种商品展开的博弈过程。面对市场失灵，政府管制介入到会计信息供求博弈过程中成为必然。而面对政府管制存在的成本问题，文章最后提出了“分散管制”与“适度管制”相结合的观点。     

Multilateral Comparison of Cost Structures in the Input–Output Tables of Japan,the US and West Germany

This paper presents a multilateral comparison of relative levels and structures of costs of production in Japan, the US and West Germany. The analysis is carried out by using harmonized input–output tables, which are converted at US prices by using adjusted sectoral purchasing power parities. A new accounting methodology is derived from recent developments of index number theory, whereas the chosen multilateral comparison procedure gives results that are invariant with respect to the order of the pairs of countries examined.     

COVID-19, ESG investing,and the resilience of more sustainable stocks: Evidence from European firms

Following the COVID-19 outbreak, orientation toward sustainability is a critical factor in ensuring firm survival and growth. Using a large sample of 1,204 firms in Europe during the year 2020, this study investigates how more sustainable firms fare during the pandemic compared with other firms in terms of risk–return trade-off and stock market liquidity. We also highlight the drivers of the resilience of more sustainable firms to the pandemic. Particularly, we document that higher levels of cash holdings and liquid assets in the pre-COVID period help these firms to perform and absorb the COVID-19 externalities better than other firms. Our results are robust to a host of econometric models, including GMM estimations and several measures of stock market performance. These findings contribute to the theoretical and empirical debate on the role of the sustainability as a source of corporate resilience to unexpected shocks.     

Sharing risk within and across countries: the role of labor market institutions

This paper studies the effect of labor market institutions on within- and cross-country risk sharing, using a model of international trade in risky assets modified to include a subset of agents, labor-owners who do not access financial markets, and employment security provisions. Labor market, institutions, by promoting within-country risk-shifting arrangements between agents with or without, access to financial markets, reduce the fluctuations of non-tradable labor incomes and amplify the, fluctuations of capital incomes. Capital flows become more volatile across countries, and if the, configuration of labor markets differs across countries, capital-owners bear the burden of systematic, undiversifiable world aggregate uncertainty.     

Human resources outsourcing in Canadian organizations: An empirical analysis of the role of organizational characteristics,transaction costs and risks

The main objective of this study is to evaluate the influence of three classes of determinants using a sample of 271 Canadian Organizations, namely: (1) strategic and organizational characteristics; (2) transactional variables; and (3) risk factors on human resource outsourcing. Using an ordered probit statistical analysis, the results show that a strategic implication on the part of the human resources department, support from top managers, prior experience with outsourcing and extensive use of benchmarking in human resources management are positively related to the intensity of Human Resource Outsourcing (HRO). We found some support for the transaction-specific variables, most notably for the complexity and the specificity of transactions. Finally, the study reveals that human and business risks appear to be important drivers of a firm's decision to outsource.     

Open standards,vertical disintegration and entrepreneurial opportunities: How vertically-specialized firms entered the U.S. semiconductor industry

This paper shows how the emergence of open standards has created large numbers of entrepreneurial opportunities in the semiconductor industry by enabling vertical specialization. Integrating data on firms and technology evolution, we find a gradual increase in the percentage of firms represented by newly-founded “de novo” entrepreneurial startups, instead of “de alio” ones, as open standards emerged in semiconductor products and processes over the life of the industry. This standardization reduced transaction costs and fostered specialization, thus facilitating the entry of vertically-specialized new ventures. Vise versa, the rise of such new ventures further pushed the adoption of open standards, and the vertical disintegration of the industry. Our theory on how standardization creates opportunities for new ventures and our analysis of the semiconductor industry contribute to the technology entrepreneurship literature, as well as the industry architecture literature that has primarily focused on the impact of standardization on the disintegration of vertically-integrated incumbents.     

The COVID-19 pandemic uncertainty,investor sentiment,and global equity markets: Evidence from the time-frequency co-movements

We use daily data of the Google search engine volume index (GSVI) to capture the pandemic uncertainty and examine its effect on stock market activity (return, volatility, and illiquidity) of major world economies while controlling the effect of the Financial and Economic Attitudes Revealed by Search (FEARS) sentiment index. We use a time–frequency based wavelet approach comprising wavelet coherence and phase difference for our empirical assessment. During the early spread of the COVID-19, our results suggest that pandemic uncertainty, and FEARS sentiment strongly co-move, and increased pandemic uncertainty leads to pessimistic investor sentiment. Furthermore, our partial wavelet analysis results indicate a synchronization relationship between pandemic uncertainty and stock market activities across G7 countries and the world market. Our results are robust to the inclusion of alternative pandemic fear measure in the form of equity market volatility infectious disease tracker. The pandemic uncertainty and associated sentiment implications could be one plausible reason for increased volatility and illiquidity in the market, and hence, policymakers should look upon this issue for the financial market stability perspective.