A COMOMENT CRITERION FOR THE CHOICE OF RISKY INVESTMENT BY FIRMS*

This article uses Taylor series expansions and the assumption of small risks to derive a comoment criterion that firms should maximize so that the resulting equilibrium is Pareto optimal. This is done in two models of production under uncertainty: the state‐of‐nature model in which the firms’ outputs depend on states of nature and financial markets are complete with respect to these states of nature and the probability model in which the firms’ risky outputs are modeled by their joint probabilities and financial markets span the outcome space of the firms. The comoment criterion provides a unifying framework for the two equilibrium models of production under uncertainty, has the merit of being based on information which is readily available to firms, and provides greater insight than the theoretical criterion into the risk characteristics of its profit stream that a firm should focus on when choosing its investment plan.     

AN ILLUSTRATIVE PRODUCTION FUNCTION FOR LABOUR-MANAGED FIRMS*

An illustration of the ambiguities in the behaviour of a labour-managed firm in the long run when both capital and labour are variable is provided by means of an example which can be completely solved. Input demand and output supply functions are derived from a suggested production function. The special case of a homothetic production function is yielded by one of five parameter sets identified.     

OPTIONAL REAL-TIME PRICING OF ELECTRICITY FOR INDUSTRIAL FIRMS

Abstract. This paper proposes a pricing mechanism, optional real-time pricing (RTP), with day-ahead hourly prices, that exploits the potential offered by a competitive wholesale power market. When an electric utility offers the option to its industrial customers, the retail prices are based on an existing Hopkinson tariff and expectations as to the wholesale market's next-day hourly spot prices. The proposed RTP mechanism is Pareto-superior to the tariff in that it assures both the utility and the customer of profits that will be at least as great as under the tariff.     

上市公司产业转型的风险管理

产业转型是我国很大一部分上市公司不得不面对的艰难选择,其中蕴涵着极大的风险,转型成功率极低。产业转型的本质是产业创新,通过产业创新实现产业转型是企业转型成功的基本保证。     

A NEW METHOD FOR THE ESTIMATION OF CAPACITY UTILIZATION: THEORY AND EMPIRICAL EVIDENCE FROM 14 EU COUNTRIES

In this paper, we develop a new and at the same time simple method of obtaining a measure of the rate of capacity utilization (CU) which makes use of the structural vector autoregression (SVAR) system of equation estimating technique with long‐run restrictions. The measure of CU that we derive for each of 14 EU countries replicates to a great extent the European Commission's Directorate General for Economic and Financial Affairs (ECFIN) measure. On closer examination we find that the in‐sample explanatory content with respect to the inflation rate of the SVAR measure exceeds more often than not that of the ECFIN's measure; however, the out‐of‐sample forecasting performance of the two models is approximately equivalent.     

MEASUREMENT BIAS IN PRICE INDEXES FOR CAPITAL GOODS*

The official U.S. price deflators for investment goods continue to be based on defective methodology, despite frequent criticism in recent years. This paper contributes new price information, which is combined with the empirical results from other studies to yield a revised investment deflator for the 1954–1963 period which (a) rises much more slowly than the official index and (b) declines relative to a revised price index for consumption expenditures.     

SOURCES OF PRODUCTIVITY GROWTH IN AUSTRALIAN TEXTILE AND CLOTHING FIRMS*

This paper estimates the sources of productivity growth in Australian textile and clothing firms based on the Business Longitudinal Survey (BLS) from 1995 to 1998. Productivity growth estimates have been obtained for each sub‐category of textile and clothing firms. Sources of growth in multifactor productivity (MFP) are examined with growth in technical efficiency and scale effects based on estimates of stochastic frontier production functions. Separate estimates of output growth have been compared with the productivity growth estimates for each of the product categories. MFP improved in all clothing firms and declined in textile firms over 1997–1998 by four‐digit level of Australia New Zealand Standard Industrial classification Scheme (ANZSIC). MFP declined in most major categories of both textile and clothing firms in 1995–1997. Changes in technical efficiency mostly dominated scale effects in the overall direction of MFPG in both textile and clothing firms. The findings of the study provide evidence for policies for improving the firms’ operative performance in the ongoing liberalised regime.     

SUNK COSTS OF CAPITAL AND THE FORM OF ENTERPRISE: INVESTOR‐OWNED FIRMS AND WORKER‐OWNED FIRMS*

ABSTRACT ** : This paper examines implications of sunk costs of capital for efficient forms of enterprise. It is assumed that firm owners and outside traders are asymmetrically informed of venture risks, and that there are sunk costs associated with investment in physical and human capital. We then make an efficiency comparison between investor‐owned and worker‐owned firms. We find that the firm is efficient when it is owned by the input supplier (the investor or worker) who incurs large sunk costs. This is because such an input supplier can credibly signal to the other input supplier that he in fact has a safe project. An empirical study based on the Japanese manufacturing industry seems to support the theoretical result.     

HOUSING POLICY FOR UTILIZATION OF EXISTING HOUSING

Existing housing is not fully utilized in Japan. We explore the problems that discourage the utilization of the existing housing. We present policy plans to solve these problems, and to activate the existing housing market. Our plans include using a hedonic price function to determine appropriate methods for valuing existing housing, introduction of latent defects insurance for existing houses for sale, encouraging the use of fixed‐term housing leases and an providing an intermediary service between the elderly and next users of their houses. Our plan will accelerate the utilization of existing housing and ease the process for the elderly of selling or leasing existing vacant housing.     

WELFARE ECONOMICS AND THE MEASUREMENT OF NNP*

Some relationships between NNP and economic welfare are explored in the confines of a simple, static welfare maximization model. Various assumptions concerning both the measurement of NNP and the economic system underlying this model are dropped seriatem and the implications for the correspondence between NNP and economic welfare are examined. The following conclusions emerge. There are several classes of resource reorganization in which NNP and welfare move in the same direction, so that NNP can serve as an ordinal proxy for welfare. These include changes in taxes or competitive imperfections which result in product substitution and movements along the transformation function. With a general qualification, NNP-welfare correspondence is preserved for allocative changes which affect the real costs and prices of goods included in NNP or of non-included goods in inelastic demand; changes in involuntary unemployment; and changes in technological externalities affecting producers. There are other cases where changes in NNP and welfare are not positively correlated. Included here are changes in real costs of non-included goods for which demand is elastic and changes in technological externalities imposed on consumers.     

IS THE COST OF DEBT CAPITAL HIGHER FOR YOUNGER FIRMS?

Not much is known about the returns to aging (maturing) in the market for small business finance. Using a large panel of closely held micro firms, we document that the cost of debt capital is higher for young firms. The main finding of this paper is that this negative qualitative relation is also obtained when cross‐sectional variation in unobservable creditworthiness of small businesses and within‐firm (i.e., inter‐temporal) variation in their observable creditworthiness are held constant. We control for the former by firm‐specific fixed effects and for the latter by a commercial credit score. We also provide an estimate of the quantitative magnitude of the aging effect, on which both economic theory and earlier empirical research are silent. We find that when a small business ages one year, its cost of debt capital decreases by 1–2 basis points. The effect is neither negligible nor alarmingly large.     

INEQUALITY,INCOMPLETE CONTRACTS,AND THE SIZE DISTRIBUTION OF BUSINESS FIRMS*

This article analyzes the effects of intrafirm bargaining on the formation of firms in an economy with imperfect capital markets and contracting constraints. In equilibrium, wealth inequality induces a heterogeneous distribution of firm sizes, allowing for firms both too small and too large in terms of technical efficiency. The findings connect well to empirical facts such as the missing middle of firm‐size distributions in developing countries. The model can encompass a nonmonotonic relationship between aggregate output and inequality. It turns out that an inflow of capital may indeed decrease output in absolute terms.     

STRATEGIC TRADE POLICY WITH INTERNATIONALLY OWNED FIRMS*

The consequences of international firm ownership for strategic trade policy are examined both in a general and in a simple linear model of an international duopoly with two governments using production subsidies as policy instruments. At first sight, the case for strategic trade policy seems to be weakened, because international ownership reduces a government's incentive for rent-shifting. Closer inspection shows, however, that there are ownership structures leading to optimal policies which induce the duopolists to behave more collusively. This tends to resolve the conflict between national and international rationality in a policy game with retaliation and makes strategic trade policy look more attractive.     

THE MEASUREMENT OF CONSTANT PRICE AGGREGATES IN CANADA*

This paper is in part directed towards a partial examination of Canadian concepts and methods used in the deflation of constant price estimates of gross domestic product from both an expenditure and industry-of-origin point of view, and in part toward certain problems arising in the development of a conceptually balancing set of accounts in real terms. It also provides reference material to allow the reader to pursue the detailed methodology and data underlying the Canadian constant price accounts.     

THE IMPORTANCE OF SKILL MEASUREMENT FOR GROWTH ACCOUNTING

In a growth accounting context one usually constructs a quality adjusted index of labor services by aggregating over predefined groups of workers, using the groups' relative wage bills as weights. In this article we suggest a method based on decomposing individual predicted wages into a skill‐related part and a part unrelated to skill, where the former consists of both observed and unobserved components. The predicted wages, associated with individual skill attributes, are sorted and classified into deciles. The median predicted skill‐related wage in each decile is used to construct an alternative skill‐adjusted index of labor services. We find that total factor productivity (TFP) growth decreases significantly when using the latter method. This means that when using the alternative method one explains more of the growth in labor productivity than what a more traditional labor quality adjustment procedure does.     

企业融资规模、银行所有制 歧视与产能利用率

本文在对中国工业行业产能利用率进行测度的基础上,将企业融资规模和银行所有制歧视引入产能过剩的分析框架,进一步完善了产能过剩的形成机理。研究表明：产能利用率与企业融资规模密切相关,银行所有制歧视通过企业融资规模对产能利用率产生间接影响。剔除技术效率影响后,行业整体融资规模与产能利用率显著负相关,并存在明显的混合效应。从所有制来看,国有企业和外资企业融资规模与产能利用率显著负相关;民营企业融资规模发挥着相对积极作用。2008年后企业融资规模的扩大更易引起产能过剩的发生。银行所有制歧视对产能利用率的冲击效应更加强烈。