Calibration to FX triangles of the 4/2 model under the benchmark approach

Decisions in Economics and Finance - We calibrate a novel multifactor stochastic volatility model that includes as special cases the Heston-based model of De Col et al. (J Bank Finance...     

Audit Publicity and Tax Compliance: A Natural Experiment

We use confidential data on value-added tax payments at the sector level, in two large Italian cities, to estimate the effect of audit publicity on the tax compliance of local sellers. By employing a difference-in-differences identification strategy, we find that such publicity has a positive effect on fiscal declarations made shortly thereafter. The results suggest that increasing awareness on future audits via the media can be an important instrument in the hands of tax authorities.     

Incentivizing Vegetable Consumption in School-Aged Children: Evidence from a Field Experiment

We conducted a field experiment to test the effect of nonmonetary incentives in increasing children's vegetable consumption during lunch at school. We measured children's daily vegetable consumption for four consecutive weeks prior to the provision of incentives, for four consecutive weeks during the incentive provision, and for three consecutive weeks right after the provision of incentives. To check the longer-term effect of the incentive provision, we measured children's daily vegetable consumption 11 weeks after the postintervention period. Results suggest that the incentives are effective in increasing vegetable consumption and that this effect persisted several weeks after the provision of the incentives ended. This is an important topic since gaining a better understanding of effects of nonmonetary incentives can help in the design of nutrition and health policies aimed at improving the dietary behavior of children and potentially reducing childhood obesity.     

Trade effects of geographical indication policy: The EU case

Using a new detailed dataset on country-product information on European Union (EU) Geographical Indications (GIs), we study the impact of this food quality policy on trade margins over the 1996–2014 period. We consider the effect of GIs on both intra- and extra-EU trade margins (extensive and intensive), as well as on export (and import) unit values. Our main results show that GIs affect trade flows differently depending on whether GIs are produced by the exporter or importer country. The presence of GIs in the exporter country systematically exerts a positive trade effect on both the extensive and intensive trade margin. When registered only in the importer country, GIs seem to act weakly as a trade-reducing measure, at least at the intensive trade margin. In addition, GIs positively affect export prices, consistent with the idea that GI products are perceived by consumers as higher quality goods. Importantly, extra-EU trade margins react similarly to those on intra-EU trade. These results have clear and interesting implications concerning the EU strategy of promoting the protection of GIs worldwide.     

The decision to invest in a low-wage country: Evidence from Italian textiles and clothing multinationals

In this paper we investigate the firm-specific factors that account for the decision to invest in low-wage countries on the part of Italian firms in the textiles and clothing sector. This analysis is motivated by the fact that our survey data show, between 1990 and 1997, a decline of average employment in parent companies, while that in subsidiaries grew substantially. However, correlation and regression analysis show that employment in parent companies that invested in low-wage countries only seems to be negatively related with employment abroad. Our hypothesis is that investments in cheap labour countries are mainly cost-driven and are undertaken by firms that focus on a low-quality, low-cost strategy. We test this hypothesis through a probit analysis. The evidence suggests that investments to cheap labour countries are more likely to be of a vertical type, being relatively more labour-intensive compared with the parent company. Our hypothesis seems to be confirmed empirically. Investments in low-wage countries are more likely to generate abundant intra-firm trade and to be undertaken by firms with low shares of skilled employment.     

Household's preferences and monetary policy inertia

Interest rates set by central banks puzzlingly move with a certain inertia. We show that household's preferences can be important determinants of the optimal interest rate inertia due to their impact on the efficiency of the monetary policy transmission mechanism.     

Independent invention in Italy during the Liberal Age, 1861–1913

This article examines the phenomenon of independent invention in Italy during the Liberal Age (1861–1913). It makes use of a new dataset comprising all patents granted in Italy in five benchmark years: 1864–5, 1881, 1891, 1902, and 1911. The following exercises are carried out. First, an examination is undertaken of the shares of independent, corporate, and foreign inventions and their evolution over time and across industries. Second, by exploiting the peculiarities of Italian patent legislation, which was characterized by relatively cheap fees and a flexible renewal scheme, the relative quality of independent and corporate patents is assessed. The results indicate that in Italy independent inventors made an important contribution to technological change in terms of number of patents, but the quality of their patents was significantly lower than that of firms and of foreign patentees.     

The representation of voluntourism in search engines: The case of South Africa

This paper responds to the paucity of research on the linkages between voluntourism and digital technology and seeks to understand the online representation of the phenomenon in a developing context. In particular, the researchers investigate the so-called ‘online domain’ of voluntourism in South Africa. The researchers collected a series of web results from search engines and analysed the presence of traditional and social media websites, the most relevant presented topics, and the type of argumentation found. Results identify the context and representation of voluntourism as it transpires virtually. This will contribute to the understanding of the interplay between voluntourism and digital technology, with specific emphasis on web presence. Ultimately, results will shed light on how digitally accessible voluntourism is in South Africa and will set the basis for future investigations.     

How do firms make money selling digital goods online?

We review research on revenue models used by online firms who offer digital goods. Such goods are non-rival, have near zero marginal cost of production and distribution, low marginal cost of consumer search, and low transaction costs. Additionally, firms can easily observe and measure consumer behavior. We start by asking what consumers can offer in exchange for digital goods. We suggest that consumers can offer their money, personal information, or time. Firms, in turn, can generate revenue by selling digital content, brokering consumer information, or showing advertising. We discuss the firm’s trade-off in choosing between the different revenue streams, such as offering paid content or free content while relying on advertising revenues. We then turn to specific challenges firms face when choosing a revenue model based on either content, information, or advertising. Additionally, we discuss nascent revenue models that combine different revenue streams such as crowdfunding (content and information) or blogs (information and advertising). We conclude with a discussion of opportunities for future research including implications for firms’ revenue models from the increasing importance of the mobile Internet.     

Total efficient risk priority number (TERPN): a new method for risk assessment

Safety is one of the most important issues in modern industrial plants and industrial activities. The Safety Engineering role is to ensure acceptable safety levels of production systems, not only to respect local laws and regulations, but also to improve production efficiency and to reduce manufacturing costs. For these reasons, the choice of a proper model for risk assessment is crucial. In this context, the present research aims to propose a new method, called Total Efficient Risk Priority Number (TERPN), able to classify risks and identify corrective actions in order to obtain the highest risk reduction with the lowest cost. The main scope is to suggest a simple, but suitable model for ranking risks in a company, to reach the maximum effectiveness of prevention and protection strategies. The TERPN method is an integration of the popular Failure Mode Effect and Criticality Analysis (FMECA) with other important factors in risk assessment.