Public Trading and Private Incentives

This article studies the link between public trading and theactivity of a firm's large shareholder who can affect firm value.Public trading results in the formation of a stock price thatis informative about the large shareholder's activity. Thisincreases the latter's incentives to engage in value-increasingactivities. Indeed, if he has to liquidate part of his stakebefore the effect of his activity is publicly observed, a moreinformative price rewards him for his activity. Implicationsare derived for the decision to go public, capital structure,and security design.     

‘Weltoffenheit schafft Jobs’: Turkish entrepreneurship and multiculturalism in Berlin

This article investigates the connections between multiculturalism, unemployment and self–employment in the case of Berlin’s Turkish economy. It first describes five trends that are currently shaping German–Turks’ business activities: heterogeneity, hybridity, professionalism, internationalization and state interest. The consequences of these five trends are partly contradictory. On the one hand, they challenge the relevance of the ‘Turkish economy’ concept. On the other hand, they give an unprecedented respectability to the ‘Turkish economy’, thus popularizing this concept. The article argues that this contradiction should be interpreted as an outcome of the growing importance of multiculturalism in Germany’s relation to immigrants. Acknowledging the presence of immigrants has led to an emphasis on their high rate of self–employment, viewed as a possible solution to their unemployment and ‘integration’ problems. What emerges is the economic dimension of multiculturalism, i.e. an ideology that sees immigration and ethnic pluralism as economically positive. The article concludes by a critical analysis of this ideology. Cet article étudie les liens entre multiculturalisme, chômage et entreprise individuelle dans le cas de l’économie turque berlinoise. Il décrit d’abord cinq tendances qui configurent actuellement l’activitééconomique des Germano–turcs: hétérogénéité, hybridité, professionnalisme, internationalisation et intérêt de l’État. Les conséquences de ces cinq tendances sont en partie contradictoires. D’un côté, elles remettent en question le concept ‘d’économie turque’ et, de l’autre, elles lui offrent une respectabilité sans précédent, propageant ainsi le concept. Cette contradiction devrait être interprétée comme le résultat de l’importance croissante du multiculturalisme dans la relation de l’Allemagne à l’égard des immigrants. Reconnaître la présence d’immigrés a conduit à souligner le rôle important des entrepreneurs, considérés comme une solution possible à leurs problèmes de chômage et ‘d’intégration’. Est ainsi révélée la dimension économique du multiculturalisme, c’est–à–dire une idéologie qui voit l’immigration et le pluralisme ethnique comme économiquement positifs. La conclusion expose une analyse critique de cette idéologie.     

A note on essential smoothness in the Heston model

This note identifies a gap in the proof of Corollary 2.4 in Forde and Jacquier (Finance Stoch., 2011) which arises because the essential smoothness of the family (X _t /t) _t≥1 can fail for the log-spot process X in the Heston model, and it describes how to circumvent the issue by applying a standard argument from large deviation theory.     

Comovements in the real activity of developed and emerging economies: A test of global versus specific international factors

Although globalization has shaped the world economy in recent decades, emerging economies have experienced impressive growth compared to developed economies, suggesting specific comovements within developed and emerging business cycles. Using observed developed and emerging real economy activity variables, we investigate whether the latter assertion can be supported by observed data. Based on a two-level factor model, we assume these activity variables can be decomposed into global components, emerging or developed common components, and idiosyncratic national shocks. We propose a statistical test for the null hypothesis of a one-level specification, where it is irrelevant to distinguish between emerging and developed latent factors against the two-level alternative. This paper provides a theoretical justification and Monte Carlo simulations that document the testing procedure. An application of the test to various data sets of developed and emerging countries leads to strong statistical evidence of specific comovements within these two groups.     

Coordination Costs and the Geography of Production

In a model à la Venables of 1996 Venables, A. J. (1996) Equilibrium locations of vertically linked industries, International Economic review, 37, 341–359. doi: 10.2307/2527327[Crossref], [Web of Science ®] , [Google Scholar], we distinguish two kinds of intermediate goods: complex goods that entail endogenous coordination costs, and simple goods that do not. Coordination costs depend on geographical distance and the number of intermediate goods used in the production process. In the final stage of integration, there are two possible spatial configurations: (1) a symmetric configuration and (2) a partial core–periphery equilibrium, comprised of a core region that produces the final and complex intermediate goods, and a periphery that produces simple intermediate goods. We discuss some policy implications of this multiple-equilibria outcome.

Les coûts de coordination et la géographie de la production     

On the reliability of unitizing textual continua: Further developments

This paper builds on an agreement coefficient proposed by Krippendorff (Content analysis: an introduction to its methodology, 2013) for measuring the reliability of unitizing and coding continuous phenomena, for example, of texts, videos, or sound recordings. It serves three purposes: It modifies Krippendorff’s definition which turned out to behave not as expected when applied to more than two observers, coders, or annotators. It extends this reliability measure to a family of four coefficients able to assess the reliabilities of diverse properties of unitized continua. It adds a way to obtain the confidence intervals of these coefficients as well as the probability of failing to reach targeted reliability levels. And it describes and provides access to free software that calculates all values of this family of reliability coefficients.     

A dynamic theory of the declining aggregated labor income share: Intangible capital vs. tangible capital

Reports of the literature documenting the declining labor share of income have increased greatly in the past few years, which is opposed to one of the famous “Kaldor's stylized facts” of growth. The declining labor income share has been observed since the 1980s in a number of countries, and especially in the United States. Recent studies have revealed the following five major driving forces of the declining labor share: (i) supercycles and boom-busts, (ii) rising and faster depreciation, (iii) superstar effects and consolidation, (iv) capital substitution and automation, and (v) globalization and labor bargaining power. We set up a two-sector optimal growth model with the R&D intermediate sectors producing intangible capital. By integrating driving factors (ii) through (iv) above into the model, we demonstrate the long-run decline of the aggregated labor income share.     

On the efficient use of the informational content of estimating equations: Implied probabilities and Euclidean empirical likelihood

A number of information-theoretic alternatives to GMM have recently been proposed in the literature. For practical use and general interpretation, the main drawback of these alternatives, particularly in the case of conditional moment restrictions, is that they give up the computational and interpretational simplicity of quadratic optimization. The main contribution of this paper is to analyze the informational content of estimating equations within the unified framework of Chi-square distance. Improved inference by control variables, closed form formulae for implied probabilities and information-theoretic interpretations of continuously updated GMM are discussed in the two cases of unconditional and conditional moment restrictions.