The Effects of Occupational Licensing: Evidence from Business‐Level Data

Occupational licensing currently affects more than 1,000 occupations in the United States. I use confidential US Census Bureau business micro‐data to shed light on the effect of occupational licensing in cosmetology on key market outcomes and study its effect on the providers of occupational training. Occupational licensing regulation does not seem to affect the equilibrium number of practitioners or prices of services to consumers, but is associated with significantly lower practitioner entry and exit rates. I further find states with more stringent licensing requirements to have more instructors and a larger median size of training facilities, suggesting possible barriers to entry for the training schools. Instructors, however, do not earn more in such states.     

Information effects of announced stock index additions: evidence from S&P 400

The study examines the information content of press announcements of S&P 400 additions between 2002 and 2007. Prior research into stock index additions has explained the positive valuation effects of additions to S&P indices mostly in terms of the price pressure hypothesis and downward sloping curve hypothesis. The two hypotheses attribute the positive market reaction purely to index-fund buying rather than information effects of announcements. My empirical investigation further reinforces the credibility of the information hypothesis by showing that the market varies its response to added firms depending on the information released about them at the announcement. The analysis demonstrates that the mode of addition, exchange listing, reason for index change, and firm size can modulate valuation effects of stock index additions. The paper also strengthens the argument that announcements of additions to an S&P index contain new signals about the industries represented by the added firms. Positive and significant wealth effects are exclusively attributable to ??non-member?? rival firms. Overall, the results imply that the market discerns and rewards firms that come from outside the S&P universe (pure additions) and rival firms that are not part of a target index.     

Innovation behaviour of firms in a small open economy: the case of the Czech manufacturing industry

This paper describes the role of R&D and analyse its impact on productivity in the Czech economy in a CDM model. Four CIS waves (2001, 2003, 2006, and 2008) were used in the CDM model. The estimated low innovation input elasticity around 9 % describes the Czechs as poor innovators in the EU. This economy was a developing country until 2006 and we have observed a substantive FDI inflow since 1998. Multinationals have a higher sales share now and are an essential part of the economy. Multinationals engage less in innovation, but innovating MNEs spend more on R&D per employee and appropriate more from their innovated goods. The FDI inflow was a form of innovation wave. Innovation output is an important determinant for boosting productivity among SME’s. Public support had positive effect on innovation intensity; however, no additional effect on innovation output.     

PDE approach to valuation and hedging of credit derivatives

This paper presents a PDE approach in a Markovian setting to hedge defaultable derivatives. The arbitrage price and the hedging strategy for an attainable contingent claim are described in terms of solutions of a pair of coupled PDEs. For some standard examples of defaultable claims, we provide explicit formulae for prices and hedging strategies.     

Anti-monopoly issues in Polish telecommunications

Since 1990 the telecommunication sector in Poland has been undergoing rapid development and modernization. It is heavily dominated by Telekommunikacja Polska SA (TP SA), a state-owned company which is split into 10 regional directorates. Although TP SA enjoys a legal monopoly only over international traffic, it is a de facto monopolist in the Polish market too. Apart from difficulties in funding local telephone operations, many of the difficulties facing private competitors to TP SA focus on interconnection and pricing issues. The Anti-monopoly Office, which seeks to restrict unfair competition and restrictive business practices, has been monitoring the compliance of TP SA with the statutory standards. In its business practices TP SA has been reluctant to meet the required standards, particularly these relating to the setting of tariffs. This has been found to have a restrictive effect on the emergence of competition in the form of local operators.     

Formalising Workflow: A CCS-inspired Characterisation of the YAWL Workflow Patterns

We present work concerning the formal specification of business processes. It is of substantial benefit to be able to pin down the meaning of business processes precisely. This is an end in itself, but we are also concerned to do so in order that we might prove properties about the business processes that are being specified. It is a notable characteristic of most languages for representing business processes that they lack a robust semantics, and a notable characteristic of most commercial Business Process Management products that they have no support for verification of business process models. We define a high-level meta-model, called Liesbet , for representing business processes. The ontological commitments for Liesbet are sourced from the YAWL workflow patterns, which have been defined from studies into the behavioural nature of business processes. A formal characterisation of Liesbet is provided using Milner’s Calculus of Communicating Systems (CCS). In this article, we omit some of the technical details of this characterisation and instead present the essential features by means of an abstract machine language, called LCCS. We also explain how we have facilitated the verification of certain properties of business processes specified in Liesbet , and discuss how Liesbet supports the YAWL workflow patterns. We include a simple three-part example of using Liesbet .     

An Asymptotic Solution for Sealed Bid Common-Value Auctions with Bidders Having Asymmetric Information

We investigate a first-price common-value auction where bidders have asymmetric information about an item of unknown value. We compute the unique Nash equilibrium when the bidders are constrained to translation-invariant bid functions. Further, this profile of bid functions is also an asymptotic Nash equilibrium (without the constraint on the bidders' strategies) as the a priori distribution of the true value becomes increasingly diffuse. All bidders have positive expected profits at equilibrium. In the second-price analogue with two bidders there is a continuum of Nash equilibria in which both bidders have positive expected profits. Journal of Economic Literature Classification Number: C7.     

Size matters: entrepreneurial entry and government

We explore the country-specific institutional characteristics likely to influence an individual’s decision to become an entrepreneur. We focus on the size of the government, on freedom from corruption and on “market freedom” defined as a cluster of variables related to protection of property rights and regulation. We test these relationships by combining country-level institutional indicators for 47 countries with working-age population survey data taken from the Global Entrepreneurship Monitor. Our results indicate that entrepreneurial entry is inversely related to the size of the government, and more weakly to the extent of corruption. A cluster of institutional indicators representing “market freedom” is only significant in some specifications. Freedom from corruption is significantly related to entrepreneurial entry, especially when the richest countries are removed from the sample, but unlike the size of government, the results on corruption are not confirmed by country-level fixed-effects models.