Legal Regime and Financial Reporting Quality

This article uses the Canadian environment, where French civil law (FCL) in the province of Quebec coexists with common law (CL) in the Rest of Canada (denoted as bijural), to test the thesis of the neutrality of the legal system with regard to financial reporting quality (FRQ). This single‐country design allows for a better control over other factors that influence FRQ. The FCL environment appears to encourage firms to publish accounting data of better quality due to the greater liability risk faced by auditors and corporate directors under that regime. These findings, based on 10 years of data and seven attributes of FRQ, are robust to different matching procedures and model specifications. This research contributes to the current debates in Canada as to whether financial market regulation under FCL and CL jurisdictions should be unified under a single CL national securities regulator. At the broader level, the results support claims that a more in‐depth understanding of the implementation of civil law and CL is needed rather than gross generalization about the two systems. These results especially call into question that CL regimes are unambiguously superior to civil law regimes in encouraging high‐quality financial reports.     

A discrete-choice experiment to assess treatment modality preferences of patients with anxiety disorder

Aims: The aim of this study was to elicit the preference of patients with an anxiety disorder regarding treatment modalities. Understanding patients’ preferences could help optimize treatment uptake and adherence to therapeutic interventions.

Materials and methods: A discrete-choice experiment was used to elicit patients’ preferences with regard to four treatment characteristics: waiting time until first treatment, intensity of treatment, face-to-face vs digital treatment, and group size. In 12 choice sets, participants were asked to choose between two treatment alternatives. A random parameters logit model was used to analyse the data.

Results: A total of 126 participants, aged 18?years and older, currently or in the previous year in treatment for an anxiety disorder, completed the survey. Respondents preferred short (over long) waiting times, face-to-face (over digital) treatment, individual (over group) treatment and a treatment intensity of one session per week rather than two sessions per week or one session every two weeks. Waiting time and treatment intensity were substantially less important to patients than level of digitalization and group size. Heterogeneity in preference was significant for each attribute, and sub-group analyses revealed this was partly related to education level and age.

Limitations: The convenience sample over-represented the female and younger population, limiting generalizability. Limited information on background characteristics limited the possibilities to explore preference heterogeneity.

Conclusions: This study demonstrated how different treatment components for anxiety disorders affect patients’ preferences for those treatments. There is significant variation in treatment preferences, even after accounting for age and education. Incorporating patients’ preferences into treatment decisions could potentially lead to improved adherence of treatments for anxiety disorders.     

How Do Exporters React to Changes in Cost Competitiveness?

Various international institutions such as the European Commission, the ECB and the OECD often use unit labour costs as a measure of international competitiveness. The goal of this paper was to examine how well this measure is related to international export performance at the firm level. To this end, we use Belgian firm‐level data for the period 1999 to 2010 to analyse the impact of unit labour costs on exports. We find an estimated elasticity of the intensive margin of exports with respect to unit labour costs between −0.2 and −0.4. This elasticity varies between sectors and between firms, with more labour‐intensive firms having a higher elasticity. The microdata also enable us to analyse the impact of unit labour costs on the extensive margin. Our results show that higher unit labour costs reduce the probability of starting to export for non‐exporters and increase the probability of exporters stopping. While our results show that unit labour costs have an impact on the intensive margin and extensive margin of firm‐level exports, the effect is rather low, suggesting that pass‐through of costs into prices is limited. The latter is consistent with recent trade models emphasising that not only relative costs, but also demand factors such as quality and taste matter for explaining firm‐level exports.     

The effects of foreign direct investment on domestic firms

This paper uses firm‐level panel data to investigate empirically the effects of foreign direct investment on the productivity performance of domestic firms in three emerging economies of Central and Eastern Europe: Bulgaria, Romania and Poland. To this end, a unique firm‐level panel dataset is used with detailed information on foreign ownership at the firm level. Two main questions are addressed in the present paper: (1) do foreign firms perform better than their domestic counterparts? (2) do foreign firms generate spillovers to domestic firms? The estimation technique in this paper takes potential endogeneity of ownership, spillovers and other factors into account by estimating a fixed effects model using instrumental variables in the general methods of moment technique for panel data. Only in Poland, do foreign firms perform better than firms without foreign participation. Moreover, for all three countries studied here, I find no evidence of positive spillovers to domestic firms, on average. In contrast, on average, there are negative spillovers to domestic firms in Bulgaria and Romania, while there are no spillovers to domestic firms in Poland. This suggests a negative competition effect that dominates a positive technology effect. JEL classification: D24, F14, O52, P31.     

A smarter way to buy.

Few companies can pinpoint just how much they're spending on procurement. Here's a matrix that gives companies a systematic way to identify and organize the full costs of their relationships with their suppliers.     

Antidumping protection and markups of domestic firms

This paper tests whether Antidumping (AD) protection affects the market power of import-competing domestic firms. We use panel data of about 4000 EU producers that were involved in AD cases to estimate markups before and after the filing of a case. Our findings indicate that AD protection has positive and significant effects on domestic markups, except in cases where import diversion after protection is strong, like in ‘seamless steel tubes’. Our results control for potential endogeneity of AD filings. A randomly drawn control group of firms not subject to AD policy did not have rising markups during the same period.     

Disorganization in the process of transition Firm-level evidence from Ukraine

Most post-communist economies are characterized by an initial collapse in aggregate output. Blanchard and Kremer (1997) and Roland and Verdier (1997) have recently modelled supply-side distortions – disorganization in the links of production – that can lead to a short-term output contraction after market liberalization and a recovery thereafter. This paper is the first to illustrate and test the effects of disorganization in the transition process by using a unique dataset of 300 Ukrainian firms. Our results show that for firms that existed under central planning, disorganization constrains employment and productivity growth during the transition process to a market economy. We also show that the effects of disorganization are greater the more out-dated the capital stock inheritance from the planning system. In contrast, disorganization plays no role in the determination of employment and productivity growth in newly established private firms.
JEL classification: P0, O0, D0.