Quality dualism

We suggest a theory of quality dualism, defined in terms of the gap between the highest quality good produced in the informal sector and the lowest quality produced in the formal sector. We develop a model of vertically differentiated products, in which firms producing in the formal and informal sectors face different factor prices, and have a relative advantage in the manufacture of different qualities. We then use the model to examine the cyclical behavior of the respective sizes of the two sectors. Finally, we point out that factor price changes, which reduce or increase the size of the informal sector, may have the same or opposite effect on the degree of dualism in the economy.     

Real and financial effects of insider trading with correlated signals

Summary. In this paper we study the real and financial effects of insider trading in a Static, Kyle-type model. In our model the insider is also the manager of the firm. Hence the insider chooses both the amount of the real output to be produced and the amount of the stock of the firm to trade. The aim of the paper is to study the relationship between financial decisions and real decisions. In particular, we examine how insider trading on the stock market affects the real output and price and how the real decision making affects the financial variables, such as the extent of insider trading, stock prices, and the stock pricing rule of the market maker. In the model, the market maker observes two correlated signals: the total order flow and the market price of the real good. We study the informativeness of the stock price and the effects on insider's profits. We also construct a compensation scheme that aligns the interests of the insider and the firm. Finally, we generalize the pricing rule set up by a competitive market maker and analyze the comparative statics of the model. Received: October 3, 1999: revised version: December 1, 1999     

New technological path creation: evidence from the British and German wind energy industries

The canonical economic literature on path dependence provides only a limited explanation of why and how new technological pathways are created initially. The motivation of this paper is to address this gap in the literature and argue that evolutionary economics theories of path dependence need to be linked with sociological explanations of how new technological pathways are created in the first instance by knowledgeable inventors and innovators. These arguments are developed by the authors in a hybrid socio-economic theory of new path creation. In this paper these theoretical arguments are illustrated empirically by a comparative analysis of the introduction and diffusion of new wind power technologies in Britain and Germany. The empirical analysis focuses on the key research question of why the introduction of these new technologies started earlier and has diffused sooner in Germany than in Britain.     

EFFICIENCY OF LIABILITY RULES WITH MULTIPLE VICTIMS

Abstract. This paper investigates the structure of liability rules from the efficiency perspective when there are multiple victims. It is shown that, when there is one injurer and multiple victims, there is no liability rule with the property of invariably yielding efficient outcomes. The fact that there is no rule which is efficient for all applications of course does not in any way preclude the possibility of a rule being efficient with respect to some subclass of applications which may be of interest. We consider in this paper the important subclass of applications (     ') which are such that the expected loss of a victim depends only on the care level taken by that victim and the care level taken by the injurer. It is shown that a sufficient condition for a one-injurer multiple-victim liability rule to be efficient with respect to the above subclass of applications      ' is that its structure be such that: (i) whenever the injurer is negligent and a particular victim is non-negligent, the entire loss incurred by that victim must be borne by the injurer; and (ii) whenever a particular victim is negligent and the injurer is non-negligent, the entire loss incurred by that victim must be borne by the victim himself. In fact, for an important subclass of one-injurer multiple-victim liability rules, characterized by the condition that the proportions in which the loss incurred by a particular victim is to be borne by the injurer and that victim must depend only on the non-negligence proportions of the injurer and that victim, the above condition is both necessary and sufficient for efficiency with respect to the restricted subclass of applications      '.     

Contagious diseases and tourism: a systematic review based on bibliometric and content analysis methods

Quality & Quantity - The present study examines the existing knowledge and intellectual structure on contagious diseases and tourism to map the development of the concept through collaborative...     

Information Transmission between Mature and Emerging Equity Markets During Normal and Crisis Periods: An Empirical Examination

In this paper, we examine the price discovery and volatility spillovers between eight mature market economies (MMEs) and eight emerging market economies (EMEs) from January 2003 to July 2014, covering three sub-periods—prior to the 2007–09 global financial crisis (GFC), during the crisis, and post-crisis. The results of price discovery indicate that MMEs lead EMEs in the pre-crisis and post-crisis periods. All MMEs are cointegrated with China in the pre-crisis period but not in the post-crisis period. Dynamic cointegration results reconfirm our findings from Johansen’s co-integration test. The asymmetric dynamic conditional correlation (ADCC-GARCH) coefficients suggest a regional pattern among MMEs and EMEs, except in the case of European MMEs with South Africa. Employing BEKK-GARCH model, we find that volatility spillovers of MMEs with China and of Italy with EMEs weakened in the post-crisis period as compared to the pre-crisis period implying that the GFC damaged the information transmission process, particularly for China and Italy. While China is a large economy with strong trade linkages with the rest of the world, Italy is one of the larger European economies which was in relatively greater distress during the EDC. The findings have implications for policy makers and investors.

     

THE ASSOCIATION BETWEEN EXECUTIVE SUCCESSION AND DISCRETIONARY ACCOUNTING CHANGES: EARNINGS MANAGEMENT OR DIFFERENT PERSPECTIVES?

This paper investigates the association of executive changes with both income increasing and decreasing accounting changes. Two potential explanations for the hypothesis that firms with changes in CEOs are more likely to make accounting changes are examined. The earnings management explanation holds that new management intervenes in the financial reporting process in order to alter perceptions of effectiveness. The different perspectives explanation holds that managements have different tastes, perspectives, or views of the world than the predecessor. Evidence supports the different perspectives explanation.