Social economy and employment – the case of Sweden

Recent research has shown growing shares of employment in the social economy (or non-profit sector) both in the European Union and in the United States. In the EU, there seems to be growing hopes that the social economy will be capable of contributing to local progress on the unemployment issue in crisis regions. This paper analyses employment in certain entrepreneurial forms, usually considered belonging to the social economy, in Sweden during the 1990s. The results show considerable regional differences of employment in the social economy, but also that its share of the labor market is very limited. The effect of social-economic organizations on employment, therefore, is probably mainly indirect in as much as they function as platforms for cooperation between firms or else as embryos for enterprises by strengthening local entrepreneurship and helping to nurture a deposit of social capital which has visible effects on private business and jobs. However, these effects need more detailed examinations.     

Quality-corrected price indices: the case of the Dutch new passenger car market, 1990–1999

Market dynamics and technological developments constitute a major challenge to the proper measurement of the price evolution of durable goods. In this study, hedonic methods are used to estimate quality-corrected price indices of new passenger cars in the Netherlands, 1990–1999. Use is made of a huge set of price, quantity and quality information about 11,000 car models, obtained from different sources. During the observation period the nominal price level of all available car models increased about 20% on average, while the shares of car models with airbags, tinted glass and power steering increased from almost nothing to about 90%. Matched model price indices and the official CPI for new passenger cars, which partially account for quality-adjustments, estimate the price increase to be equal to 10.6–14.2% respectively 11.2% for the 1990–1999 period. By contrast, the hedonic Fisher-like price indices based on the preferred annually estimated brand-weighted semi-log hedonic model, lead to price changes varying from +?2.3% to ??3.4% (depending on the choice of weight variable, and the use of fixed or varying reference periods in the index construction) and thereby fall 8.9 to 14.6 percentage points below the official figures, over the period 1990–1999. The pooled adjacent-years model holds an intermediate position with a predicted quality-corrected price decrease of 1.8% over the observation period, which is 13.0 points below the CPI.     

Foreign exchange exposure and impact of policy switch – the case of Malaysian listed firms

This article undertakes an in-depth study of the foreign exchange exposure of Malaysian listed firms. We examine several issues related to firm-specific and overall exposure, including an evaluation of the efficacy of adopting a hard-peg on such exposure. Our sample consists of 158 listed firms and spans the 16 year period, 1990–2005. A multivariate model using four bilateral exchange rates is used to determine firm level exposure while panel data analysis using a random-effects Generalized Least Squares (GLS) model is used to determine system-wide or aggregate sample exposure. We find a total 71% of our sample firms to have significant exchange rate exposure, a rate substantially higher than that reported for most countries, especially developed ones. The US$ is by far the single most important source of exposure with 63% of sample firms exposed to it. The sign of the beta coefficient for three of the four currencies are negative, implying that our sample firms are largely net importers in these currencies. We find exposure to be time variant and dependent on the sector within which a firm operates. Interestingly, the panel data analysis which measures aggregate exposure, shows the US$ to be a significant source of exposure even with the adoption of the hard peg. The change in policy regime to a fixed peg following the crisis appears to have had no impact at either firm-level exposure or overall system-wide exposure.     

Financialization and the rentier income share – evidence from the USA and Germany

During the past two decades, there has been a shift of significance from the real to the financial sector. In the course of (financial) globalization, measures of liberalization and deregulation have contributed to a strengthening of financial capital. The concept of shareholder value orientation has become more powerful, capital income has increased tremendously, while real wages have stagnated. Most industrial countries have experienced a decline in the share of labor income. Based on a review of empirics and literature, this paper seeks to determine who gained from the fall in the labor share of income in the USA and Germany, respectively. If financialization is indeed responsible for the decline, rentiers should be the beneficiaries. In order to identify the relevant effects, the profit share of the two countries under observation is split between the share of retained earnings and the share of net property income (= rentiers’ income) using a modification of the approach chosen by Epstein and Jayadev (2005 Epstein, G. and Jayadev, A. 2005. “The rise of rentier incomes in OECD countries: Financialization, central bank policy and labor solidarity”. In Financialization and the world economy, Edited by: Epstein, G. Cheltenham: Edward Elgar.  [Google Scholar]). The evidence presented shows that the development of the rentier income share indeed corresponds quite well with the stages of development of financialization in the two different countries: in the US, where the important shift towards financialization occurred in the early 1980s, the rentiers’ share of income shows a corresponding leap upwards exactly at that time and remains on a higher level until the end of the observation period. In Germany, the process of financialization started much later – in the beginning of the 1990s – and followed a much more gradual transition, which is perfectly mirrored by the development of income shares: from the 1990s onwards, the rentiers’ income share gradually increased over time.     

Comparing evolutionary dynamics across different national settings: the case of the synthetic dye industry, 1857–1914

Current models of industry evolution suggest that development patterns should be the same across different levels of analysis. In comparing the evolution of the synthetic dye industry at the global level and in the five major producer countries before World War I (Britain, Germany, France, Switzerland and the United States), it is shown that patterns of industry evolution differed significantly across national contexts. Based on a quantitative and qualitative database of all firms and plants in the industry, the paper analyzes how German firms came to dominate the industry and identifies factors such as availabilities of crucial skills, economies of scale and scope, and positive feedback mechanisms between firms and national institutions that likely produced these national differences. The empirical analysis calls for formal models of evolution that incorporate differences in institutional environments.     

Are price controls necessarily bad? The case of rice in Vietnam

Most economists' instinctive reaction to price controls is that they are harmful. Its strong enforcement results in shortages and resource misallocation, while weak enforcement often leads to black markets and high transaction costs. Given these instincts, this paper assesses the pros and cons of rice price controls in Vietnam using a multi-sector multi-household general equilibrium model. These price controls fix producer prices and allow government marketing agencies to sell at higher prices and hence are, in part, a revenue raising device. As such, they may be part of an efficient tax mix, particularly so since agricultural incomes and production go untaxed under the formal tax system. It is argued that such controls can act to dampen costly domestic adjustments in the face of volatile world prices. It is shown that this system can be supported as welfare enhancing under conditions currently prevailing in Vietnam.     

Mandate-based welfare policies and the effect on real wage – The case of Taiwan

This study estimates the relationship between statutory welfare programs and workers’ compensation. Employing monthly macroeconomic data from 1982 to 2016 and wage rates in several private industrial sectors in Taiwan, the relationships between pay variations and policy interventions are explored after controlling for the economic growth rate, labor productivity, and time fixed effects. The seasonal autoregressive integrated moving average (SARIMA) and multivariate adaptive regression splines (MARS) were adopted in the panel analyses. The findings of this study suggest that social welfare policies have negative effects on employees’ wage rates. The magnitudes of the effects are directly linked to the burden borne by the employers. National Health Insurance has the greatest negative effects on workers’ pay in all selected industrial sectors. The statutory welfare benefits explain approximately 23% of the pay deviation from the trend predicted by the models. A non-payroll-based financing method could be considered in the future to alleviate this impact.     

Industrial structure and preferences for a common currency – the case of the EURO referendum in Sweden

Attitudes for a common currency differ from nation to nation, or from region to region. We analyse regionally differing voting results of a referendum held in Sweden in lieu of joining the European Monetary Union. We put a special focus on the role of the industrial mix – being a potential factor influencing heterogeneous transmission – and find a significant, but subordinated, impact on voting behaviour.     

Changing the rules? Institutional innovation and the diffusion of microgeneration

The paper addresses the question of how institutional change relates to the diffusion of microgeneration energy technologies in the UK, posed in a research project comprising interviews with thirty-one respondents connected with the field of microgeneration in the UK. It analyses the nature of institutional rules in the prevailing regime of electricity generation and in microgeneration niches. It examines how such rules might facilitate systems innovation, or contribute to the maintenance of the prevailing system or partial change. The conclusions of the paper inform and deepen understanding of how conformity to or innovation in institutional rules may hamper or potentially contribute to diffusion of environmentally sustainable microgeneration of energy.     

Simulation study of the price differentiation effect in a stochastic deteriorating inventory with heterogeneous consumers – freshness sensitivity

A fixed price policy regardless of expiration date may result in unsold inventory and sales loss. Price reduction over time as the expiration date approaches motivates customers to purchase all items, including the ones that are left with only a short interval until their expiration. We conduct a discrete event simulation that captures the main characteristics of this phenomenon. Results show that a moderate differentiation of price increases profits by 6%, a larger differentiation reduces profits. Profits are the highest for freshness-oriented customers. A fixed price policy is preferred in an environment of large variance and expected near term expirations.     

Can the difference in ageing across cities explain the divergence of human capital across cities in Korea?

This article uses Korean census data to investigate the divergence of human capital levels across cities in Korea and the role of ageing in explaining the divergence. Our analysis shows that the proportion of adults with a college degree has increased more in cities with a higher initial schooling level in Korea. This finding is consistent with what Berry and Glaeser (2005) and others found for the USA. However, if we control for the difference in ageing across cities, the relationship between the initial schooling level and the proportion of adults with a college degree does not hold any longer. It is argued that the difference in ageing across cities can largely account for the divergence of human capital levels across cities in Korea.     

Study on the price co-movement among the Asia Pacific,European and Chinese coal markets – based on the empirical analysis of MS-VEC model

In this article, based on weekly data of the three major coal markets (the Asia Pacific, Europe and China) from March 2008 to November 2014, an empirical research on their mutual influence and price co-movement effect among the three major coal markets is conducted by using the Co-integration Theory, Granger Causality Test and markov switching-Vector Error Correction (MS-VEC) model. The conclusions are as follows. (1) There exists a long-term cointegration relationship and bidirectional causality relationship between coal prices at home and abroad, and the influences of foreign coal markets on the domestic coal markets are stronger than the influences of domestic coal markets on foreign coal markets, and thus the interaction between the two markets leads to asymmetric linkage effects. (2) Compared with the VEC model, the MS-VEC model can reflect the nonlinear feature of price co-movement effects. (3) There exists an inherent adjustment mechanism between domestic and foreign coal markets, i.e. the coal prices will be self-revised continuously until a long-term equilibrium state is achieved when a deviation from the equilibrium state occurs. (4) There exists a co-movement effect which varies with the change of regime among the three coal prices, and the self-maintenance is strong and the status transfer phenomenon is clear in different regimes.     

The impact of terrorism on expectations,trust and happiness – the case of the November 13 attacks in Paris,France

I use quasi-experimental evidence to measure the impact of the 13 November 2015 attacks in Paris, France, on various channels through which terrorism can affect the economy. The evidence suggests the attacks reduced optimism and increased trust in the national government but did not affect current life satisfaction nor political orientation.     

Building the minimum wage: the distributional impact of Germany’s first sectoral minimum wage on wages and hours across different wage bargaining regimes

The first minimum wage in Germany was introduced in 1997 for blue-collar workers in sub-sectors of the construction industry. In the setting of a natural experiment, blue-collar workers in neighboring 4-digit industries and white-collar workers are used as control groups for differences-in-differences-in-differences estimation based on linked employer–employee data. Estimation results reveal a sizable positive impact on mean wages in East Germany, but no significant effect in West Germany. Size and significance of effects are neither homogeneous across wage regimes (individual vs. collective contracts) nor across the distribution. The patterns suggest a compression in the lower part of the wage distribution and spillover effects to wages where the minimum is not binding, even in West Germany, where the bite of the MW was low. No effects on hours of work or substitution between workers of different qualification levels are found.     

The transition of people’s preferences for the intervention of the government in the economy of re-unified Germany

Covering the first fifteen years immediately after German reunification, this paper analyzes the people??s support to the transition. The focus is on individuals?? preferences for the intervention of the government in the economy and on the opinion about competition per se. Eastern German data are compared with Western German data. Using suitable data that allow for interpersonal comparisons, the paper shows that Eastern Germans have always preferred an intervention of the public hand in the economy deeper than Western Germans; these different positions have hardly converged during the examined period of time. However there are no significant differences with respect to how Germans perceive competition per se: it is considered as a good by the people living in both parts of the country.     

When does the share price equal the present value of future dividends?

Summary This paper discusses an explicit necessary and sufficient condition on the dividend stream of a publicly traded company, under which the price of the company's share is equal to the present value of the future dividends that will accrue to it. When it is not, the share price equals the present value of the future per share dividend plus the limiting per share value of the company at infinity. It uses a well-accepted generalization of the Miller-Modigliani framework, and assumes that the firm is an infinite horizon firm which may engage in repurchasing its own shares. It develops a proper dividend approach that can value such a firm for any dividend stream. The paper concludes by clarifying some remarks in the Miller-Modigliani paper.For helpful discussions and comments, I thank Laurence Booth. Mike Gordon, Robert Jarrow, Raymond Kan, Rajnish Mehra, David Quirin, and Rishin Roy. Support from Social Sciences and Humanities Research Council of Canada is greatly appreciated.     

How is China's coke price related with the world oil price? The role of extreme movements

This paper focuses on the relationship between the world oil price and China's coke price, particularly with respect to extreme movements in the world oil price. Based on a daily sample from 2009 to 2015 and the ARJI-GARCH models and copulas, our empirical results show that China's coke price and the world oil price are characterized by GARCH volatility and jump behaviors. Specifically, negative oil price shocks lead to falls in China's coke returns on the following day while positive oil prices have no significant effects. In addition, current coke returns positively respond to the very recent oil price jump intensity, and a time-varying and volatile lower tail dependence is found between the world oil price and China's coke price. Our results are expected to have implications for coke producers and users and policy makers.     

On the redistributive effects of Germany’s feed-in tariff

This article assesses the redistributive effects of a key element of German climate policy, the promotion of renewables in the electricity generation mix through the provision of a feed-in tariff. The tariff shapes the distribution of households’ disposable incomes by charging a levy that is proportional to household electricity consumption and by transferring financial resources to households who are feeding green electricity into the public grid. Our study builds on representative household survey data, providing information on various socio-demographics, household electricity consumption, and ownership of photovoltaic facilities. The redistributive effects of the feed-in tariff are evaluated by means of inequality indices. All the indices indicate that Germany’s feed-in tariff is regressive.     

Can price discrimination improve the performance of online retail platforms?

Online retail platforms are the core of online retail activities, but due to increased competition among the platforms, traditional sources of revenue such as the membership and transaction fees alone cannot guarantee platform profitability. Thus, platform enterprises are looking for other sources of revenue. In this article, we focus on the role of value-added services fees charged by platforms. Specifically, we show that price discrimination exercised by platform enterprises in value-added services fees can increase the user access scale, platform profit as well as the social welfare.