Environmental policy and stable collusion: The case of a dynamic polluting oligopoly

We show that the imposition of a Markovian tax on emissions, that is, a tax rate which depends on the pollution stock, can induce stable cartelization in an oligopolistic polluting industry. This does not hold for a uniform tax. Thus, accounting for the feedback effect that exists within a dynamic framework, where pollution is allowed to accumulate into a stock over time, changes the result obtained within a static framework. Moreover, the cartel formation can diminish the welfare gain from environmental regulation such that welfare under environmental regulation and collusion of firms lies below that under a laissez-faire policy.     

A Ricardian Analysis of the Distribution of Climate Change Impacts on Agriculture across Agro-Ecological Zones in Africa

This paper examines the distribution of climate change impacts across the sixteen Agro-Ecological Zones (AEZs) of Africa. We combine net revenue from livestock and crops and regress total net revenue on a set of climate, soil, and socio-economic variables with and without country fixed effects. Although African crop net revenue is very sensitive to climate change, combined livestock and crop net revenue is more climate resilient. With the hot and dry CCC climate scenario, average damage estimates reach 27% by 2100, but with the mild and wet PCM scenario, African farmers will benefit. The analysis of AEZs implies that the effects of climate change will be quite different across Africa. For example, currently productive areas such as dry/moist savannah are more vulnerable to climate change while currently less productive agricultural zones such as humid forest or sub-humid AEZs become more productive in the future. S. Niggol Seo is the Consultant to the World Bank.     

Off-balance sheet activities and bank default-risk premia: A comparison of risk measures

This paper examines the market discipline of off-balance sheet activities on the default-risk premia of subordinated bank debt. The standard approach for determining whether market prices of subordinated debt reflect the risk of default is to regress the yield spread against accounting measures of bank risk. This approach may be inadequate because yield spreads are neither linear nor monotonic functions of bank risk. Moreover, the standard approach fails to consider that banks are regulated. This paper compares this approach and one where risk is measured with a contingent claims pricing model. Observed yields on subordinated bank debt over equivalent maturity treasuries are used to compute implied asset variances. OBS banking activities appear to reduce both linear risk-premia and implied asset variances. These results suggest that bank regulators may be overly concerned with the risk exposure of off-balance sheet banking activities.     

The role of health consciousness,food safety concern and ethical identity on attitudes and intentions towards organic food

The paper examines the roles of health consciousness, food safety concern and ethical self‐identity in predicting attitude and purchase intention within the context of organic produce. A conceptual model is derived and tested via structural equation modelling. Findings indicate food safety as the most important predictor of attitude while health consciousness appears to be the least important motive in contrast to findings from some previous research. In addition, ethical self‐identity is found to predict both attitudes and intention to purchase organic produce, emphasizing that respondents' identification with ethical issues affects their attitude and subsequent consumption choices.     

The Cartagena Declaration,the Baker Plan,and U.S. bank security returns: An empirical investigation

This paper examines the impact of the Cartagena Declaration by 11 Latin American countries and the Baker Plan for resolving the LDC debt problem on the security returns of major U.S. banks. An event parameter approach is employed to investigate two hypotheses, the new-information and the rational-pricing hypotheses, using daily stock market data. Sample banks are grouped into three portfolios depending on their LDC exposure. The results indicate that bank stock returns adjust quickly to new information. Also, there is rational investor reaction to observed events that were neither borrower- nor lender-induced. Those banks displaying greater exposure to LDC loans were affected in a direct and proportionately greater manner.     

The Impact of Risk-Based Premiums on FDIC-Insured Institutions

This paper examines the effect of a series of announcements leading to the approval of risk-based deposit insurance premiums on returns to stockholders of commercial banks. Utilizing risk-weighted capital ratios and measures of overall risk, we group banks according to one of the nine-tier insurance categories subsequently defined by the FDIC. During the period in which the new insurance system was considered and approved, we found that stockholders of well-capitalized, healthy banks experienced wealth changes significantly different from those experienced by less than well-capitalized, less than healthy banks. Although many argued the premium range in the initial insurance schedule was insufficient, the results show that this initial risk-basing marked an important change in the relative burdens imposed by FDIC insurance.     

Governance Matters and Entrepreneurial Activities

This study uses Global Entrepreneurship Monitor (GEM) and World Bank Group Entrepreneurship Survey data from 40 countries from 2002 to 2008 to examine the linkage between governance matters and entrepreneurial activities. Based on the conceptual model of GEM and by using fixed‐effects panel analysis, the results show that political stability and absence of violence, rule of law, and control of corruption are highly significant determinants of entrepreneurial activities. © 2012 Wiley Periodicals, Inc.     

Factors affecting the breadth and depth of e-procurement use in small and medium enterprises

Organizations differ in the range of e-procurement functionalities they use (breadth of use) and in how much they rely on e-procurement (depth of use). Nonetheless, factors affecting the breadth and the depth of e-procurement use have never been studied in a single context. Therefore, it is unclear whether the differences between the effects discovered in past studies are due to the difference between the breadth and the depth of use, or to the difference between contexts. We test the effects of factors potentially affecting the breadth and the depth of e-procurement use in a single context, using data from 151 small and medium enterprises (SMEs) in the manufacturing sector in New Zealand. The results indicate that the breadth and the depth of use of e-procurement in business organizations are influenced by different factors. Perceived relative advantage of using e-procurement, plus external pressure from suppliers and competitors to use e-procurement, result in the use of a broader range of e-procurement functionalities – in a greater breadth of e-procurement use. However, the extent of an organization’s reliance on e-procurement in organizational purchasing (i.e., depth of e-procurement use) is driven by compatibility of e-procurement with organizational values, practices, technology infrastructure, and strategy. Arguing that in order to benefit fully from e-procurement, an organization needs to integrate it deeply into its operations, we conclude that managers evaluating new e-procurement technologies should consider their compatibility with organizational norms and practices.