BE/ME and E/P work better than ME/BE or P/E in regressions

Researchers often form ratios of variables to measure firm characteristics, but which ratios create the most powerful tests? For example, if we use ratios of book value of equity (BE) and market value of equity (ME), or earnings (E) and price (P), does it matter which variable appears in the denominator? Any variable in the denominator, when close to zero, creates outliers and is less likely to produce effective tests. Our tests, using data from 1972 to 2008, indicate the choice between reciprocals often produces significantly different outcomes. While ME/BE is a more commonly used control variable than BE/ME or LN(BE/ME), we find the latter two produce better results, even if the data are trimmed to mitigate the outlier problem. Similarly, using E/P generally produces better results than P/E, and while ratios with book value of assets (BA) in the numerator work better than those with it in the denominator, the difference is less pronounced than when BE or E is part of the ratio. While the focus of our empirical findings is on growth measures, the principal applies anytime a ratio has a denominator that is frequently near zero.     

An application of DPSIR framework to identify issues of pollinator loss

This paper is an attempt to apply the Driving forces–Pressures–State–Impact–Responses (DPSIR) framework to identify the issues of pollinator loss. The linkages between the significant pressures on insect pollinators, their underlying socio-economic driving forces and responses, with the focus on Europe, are addressed in the study. A review of literature revealed the shortage of empirical studies that prove direct links between policy responses and specific pressures on the pollinators. Based on written evidence and expert judgement, land use practices and the use of agrochemicals were regarded as the most significant pressures on different functional groups of pollinators. As demonstrated in the study, agricultural and rural development policy has been the key driving force of these pressures. The application of the DPSIR framework proved to be useful in identifying the pathway of human pressures on pollinators. The study also concludes that there is further need for specific empirical research on the effects and effectiveness of the Common Agricultural Policy (CAP) measures (agri-environment measures in particular) to support farming practices that facilitate the protection of the environment and the prevention of pollinator loss.     

FIRM HETEROGENEITY,RULES OF ORIGIN,AND RULES OF CUMULATION*

This article sheds light on the restrictive nature of rules of origin (ROO) and on the role of diagonal cumulation in mitigating the protectionist content of ROO. Empirical evidence suggests that diagonal cumulation has beneficial effects on trade—particularly among spoke countries. We show that these patterns can be reconciled with a theoretical setting where heterogeneous firms buy intermediate inputs from domestic and foreign sources. The model finds that switching from bilateral to diagonal cumulation relaxes the restrictiveness of the ROO and leads the least productive exporters to stop exporting.     

Non-market valuation of forest goods and services: Good practice guidelines

The European COST Action E45 on European Forest Externalities (EUROFOREX) participants developed a set of good practice guidelines for the non-market valuation of forests, elaborating on stated and revealed preference methodologies, as well as benefit transfer and meta-analytical procedures. This article presents a summary of the guidelines.     

Dilemmas of Social Reform (Poverty and Community Action in the United States)

During the last thirty years, one of the most remarkable trends in Western Europe and North America has been the increase in women’s labor force participation rates. However, there has been considerable variation among countries; rates in Southern European countries are markedly lower than in other regions. Standard welfare state regime typology is unable to explain this outcome. This paper tackles the issue by examining the institutional determinants of employment decisions in Spain. Family policies and tax policies greatly influence the labor force participation of women by either promoting or discouraging the employment of mothers. However, these policies do not affect women in the same way. Of particular importance is whether women can claim benefits on the basis of their citizenship, or whether their status as wives or mothers is the link to benefits. By pursuing this line of analysis, the paper explains the low female labor force participation in Spain, providing an important contribution to the welfare state regime literature.