Adjustment costs and time-to-build in factor demand in the U.S. manufacturing industry

In order to explain cyclical behavior of factor demand, the static neoclassical model of the firm has been extended to include either adjustment costs (e.g. Lucas (1967)) or time-to-build considerations as in Kydland and Prescott (1982). This paper presents an intertemporal factor demand model which accounts for adjustment costs and gestation lags. The closed form solution of the model is a highly restricted vector ARMA-process that is estimated using quarterly data for the manufacturing industry in the U.S., 1960–1988. The main conclusion is that both sources of dynamics of factor demand are identifiable and found to be empirically of importance.     

Using life cycle approaches to enhance the value of corporate environmental disclosures

As the focus of environmental policy and management shifts from cleaner production at the process level towards greener products as a whole, stakeholders ask for transparency throughout the entire value chain. This article assesses the comprehensiveness and the value of currently reported quantitative environmental disclosures of 97 listed companies from the automotive, banking, pharmaceutical and electronic hardware sectors. Findings indicate that quantitative environmental disclosures have many limitations, including incompleteness and inconsistency regarding corporate activities and sites, and limited internal data coherence. For many sectors, corporate disclosures only cover a very small share of the total environmental burden of products. A stepwise procedure is proposed to verify and improve the quality and completeness of reporting using life cycle approaches. We present simple data quality tests, and we introduce the concept of the environmental influence matrix, which provides a solid basis for the identification and prioritization of key performance indicators and areas of action. Copyright © 2009 John Wiley & Sons, Ltd and ERP Environment.     

Beyond survival: the implementation of new forms of work organization in the UK and German steel industries

This paper outlines and analyses the major changes in work-force organization that have been introduced by British and German steel producers in the past decade, against a backcloth of retrenchment in the industry, new product development and technological change. Including multiskilling, a reduction in demarcation and team–working, these changes have had a major effect upon the composition of the work–force and the nature of work undertaken at the shopfloor level.

While these changes have had a common broad trajectory, they have been introduced at a different pace and in different forms. The contrasts are provided not only at the international level, but between plants in the same countries. The paper further outlines the response of trade unions to these changes and the implications for industrial relations at the shopfloor level.     

The Effect of Employment while in High School on Educational Attainment: A Conditional Difference‐in‐Differences Approach*

Using American panel data from the National Education Longitudinal Study of 1988, this article investigates the effect of working during grade 12 on attainment. We employ, for the first time in the related literature, a semiparametric propensity score matching approach combined with difference‐in‐differences. We address selection on both observables and unobservables associated with part‐time work decisions, without the need for instrumental variable. Once such factors are controlled for, little to no effects on reading and math scores are found. Overall, our results therefore suggest a negligible academic cost from part‐time working by the end of high school.     

Enhancing the EU’s Energy Supply Security—An Evaluation of the Nabucco Project and an Introduction to Its Open Season Capacity Allocation Process

The Russian dominance of the European Union (EU)’s natural gas supplies has put the independence of the EU at risk. This paper presents an evaluation of the Nabucco gas pipeline project—considered by some to be the most economical link to new natural gas sources—to determine whether it would help the EU to diversify its gas supplies in a cost-effective way, thus improving its energy supply security in future years. Furthermore, an introduction to the Nabucco Open Season Capacity Allocation Process is given. Applying empirical methods and competitive pipeline benchmarking analysis, three hypotheses related to the Nabucco natural experiment are evaluated: while hypothesis (1) focuses on the strength of demand for the Nabucco pipeline transportation capacities, hypotheses (2) and (3) examine fair usage rights and overall cost effectiveness of this project. Empirical results show that, due to the EU’s increasing long-term gas demand and decreasing indigenous production, there is a strong demand for the Nabucco gas pipeline by gas shippers. Furthermore, the empirical survey reveals that Nabucco provides a fair capacity allocation of fifty percent to third party shippers. Finally, competitive benchmarking shows Nabucco is indeed a cost-effective new pipeline and a link to fresh natural gas sources for Europe. Based on these results, it is anticipated that “Nabucco” will not only remain the name of a famous opera, but will also become the term associated with one of the most successful energy projects in Europe.     

United States and German Real Capital Formation and Social Investment in the Sciences and Humanities

Two rules for optimizing economic growth are applied to the United States and Germany. One application is to test both against the Golden Rule of Capital Accumulation, and the other is to measure social investment in the sciences and humanities against Euler’s equation.     

Towards a Measure of Core Inflation using Singular Spectrum Analysis

This paper constructs a number of possible core measures of inflation using singular spectrum analysis (SSA). Annual changes in monthly inflation are decomposed into its trend, oscillatory and noise components in order to develop an understanding of the trend and cyclicality in South African headline inflation. Three cyclical components with differing amplitude and frequency are identified. The trend and cyclical components of inflation are found to be a good approximation of core inflation, the inertial part of inflation. These core measures are compared with other candidate core measures based on the properties of a good core inflation measure. Generally, the SSA measures outperform commonly used measures of core inflation based on both in‐ and out‐of‐sample performance.     

Conservation Incentives for Consumers

This paper investigates profit-maximizing conservation incentives of a utility, where the interest in conservation results from prices regulated below the marginal costs of supply and where consumers differ with respect to their subjective time preference. Conventional least-cost planning implies that a program should focus on inefficient consumers (those who apply high discount rates). However, this scheme provokes strategic reactions of the consumers. Hence, incentive-compatible conservation schemes-one tied to efficiency, the other tied to electricity consumption-are derived that differ starkly from the above finding and from actual programs.     

Testing for profitability and contestability in banking: evidence from Austria

The paper investigates the determinants of banking profitability and banking market conditions in Austria. We conduct a panel econometric analysis which allows for testing the hypotheses which have become the most prominent in the literature on bank profitability: the structure–conduct–performance hypothesis, the efficient‐structure hypothesis and the relative market‐power hypothesis. Further, we test whether Austrian banking markets are, on average, contestable. A newly compiled dataset covering more than 700 Austrian banks ranging over the period from 1995 to 2002 is used to carry out these econometric analyses. The empirical findings support the view that the Austrian banks do exert, on average, some local market power. However, the gains in terms of excess profits are rather minor as a result of low deterrence powers of the incumbent banks.