Five proposals for a European model of the countryside

The inability of European institutions to reform the common agricultural policy is a landmark case of political failure. The CAP has led to several policy failures. It helps mainly the well-off farmers in a very wasteful way; it provides excessive incentives for non-competitive primary commodities, specialization and intensification, with adverse impacts on rural natural resources. Economic principles support long-term programmes aimed only at market failures: the respect of environmental norms and the provision of rural public goods in line with society's demands. While not interfering with market mechanisms, the instruments we propose acknowledge the diverse economic potential of European rural areas and the variety of goods and services provided by the rural space. Political feasibility and social concerns may require a transitory period of direct income support for current farmers. We argue, however, against any direct payments for new farmers in order to prevent future dependence on public support.
Large established farmers are those who stand to lose the most from our proposals. However, they and those who represent them have to face the inefficiencies of the current policy and society's demands. Farmers deserve rewards from public funds for the rural public goods they provide, but these rewards should be decoupled and targeted. A profound reform is required if we are to preserve a 'European model of the countryside'.     

Personalmanagement im Controllerbereich — eine Bestandsaufnahme

Ohne Zusammenfassung     

Corporate Governance and the Cost of Borrowing

This paper analyzes the theoretical link between governance (defined loosely as the degree of protection offered to outside shareholders), and the cost of borrowing. We find, consistent with empirical evidence, that improvements in governance reduce the likelihood of default. Also, we find that improvements in governance will monotonically increase or reduce the cost of debt, where the sign of the relationship depends on the firm's restructuring cost in default. Finally, we find that the strength of the governance mechanism can influence the incentives to carry out risk shifting.     

Mediation in professional relationships in France: tactics and outcomes

This study has two goals. First, it attempts to update the various tactics used by mediators in the context of professional relationships in France. Second, the study analyses the outcomes of the different aspects of mediator action. Tying together semi‐structured interviews with mediators and social negotiators involved in mediation and non‐participatory observation, the results show the existence of a range of diversified tactics that a mediator can mobilise based on his or her perception of the existence of dynamics for agreement. In contrast to existing Anglo‐Saxon research, the mediator in the French context feels entitled to become a genuine third party and have an impact on key issues during debates. Highlighting three contingent variables (level of conflictuality, mediator's mediating experience, negotiators' mediating experience) puts the mediator's intrusion into perspective.     

A pure hedonic theory of utility and status: Unhappy but efficient invidious comparisons

We examine status preferences where agents compare their own utility relative to the utilities of others. As long as status utility comparisons are not too intense, they do not affect either the competitive equilibrium or the set of efficient allocations. However, status utility comparison may substantially reduce average utility and dramatically increase utility inequality. Equating utility with happiness operationalizes the theory and provides an explanation of why invidious comparisons can generate so much unhappiness without much inefficiency. Our theory has very different welfare implications from other status theories, even when reduced form representations appear observationally equivalent.     

The effects of economic freedom on FDI inflows: an empirical analysis

There is a regular emphasis on the significant role of inward Foreign Direct Investment (FDI) in promoting economic growth. This favourable relationship has induced many governments to adopt policies intended to increase FDI inflows and, thereby, to create conducive business and economic conditions for Multinational Enterprises (MNEs). This paper examines the effects of Economic Freedom (EF) and its sub-components reflecting the Quality of Institutions (QIs) on FDI inflows, using indices derived from the Fraser Institute and from the Heritage Foundation. The empirical analysis is carried out for a panel dataset using different econometric methodologies and empirical specifications. The results underline positive effects of EF on FDI inflows. They reveal that EF sub-components have varying impacts on FDI inflows, where rule of law, market openness, and less-restrictive regulatory environment stand out as the major FDI-promoting institutional factors. Also, there is an empirical evidence that the effects of EF sub-components on FDI inflows exhibit variations through the economic characteristics of the host countries and across geo-economic regions. The results suggest that governments should pursue EF-improving policies, which should be tailored according to the economic and geo-economic characteristics of the host countries, to increase FDI inflows.     

Supporting weakly Pareto optimal allocations in infinite dimensional nonconvex economies

In this paper, we prove a new version of the Second Welfare Theorem for economies with a finite number of agents and an infinite number of commodities, when the preference correspondences are not convex-valued and/or when the total production set is not convex. For this kind of nonconvex economies, a recent result, obtained by one of the authors, introduces conditions which, when applied to the convex case, give for Banach commodity spaces the well-known result of decentralization by continuous prices of Pareto-optimal allocations under an interiority condition. In this paper, in order to prove a different version of the Second Welfare Theorem, we reinforce the conditions on the commodity space, assumed here to be a Banach lattice, and introduce a nonconvex version of the properness assumptions on preferences and the total production set. Applied to the convex case, our result becomes the usual Second Welfare Theorem when properness assumptions replace the interiority condition. The proof uses a Hahn-Banach Theorem generalization by Borwein and Jofré (in Joper Res Appl Math 48:169–180, 1997) which allows to separate nonconvex sets in general Banach spacesThis work was partially supported by Nucleo Complex Engineering System. The successive versions of the paper were partly prepared during visits of Alejandro Jofré to CERMSEM and of Monique Florenzano and Pascal Gourdel to the Centro de Modelamiento Matematico. The hospitality of both institutions and the support of the french Coopération régionale Cone Sud are gratefully aknowledged. The authors thank Ali Khan for stimulating exchange of ideas and literature, Roko Aliprantis, Jean-Marc Bonnisseau, Alain Chateauneuf, Roger Guesnerie, Filipe Martins Da Rocha, Moncef Meddeb, B. Mordukovich, Lionel Thibault and Rabee Tourky for valuable discussions     

Smooth minimum distance estimation and testing with conditional estimating equations: Uniform in bandwidth theory

To study the influence of a bandwidth parameter in inference with conditional moments, we propose a new class of estimators and establish an asymptotic representation of our estimator as a process indexed by a bandwidth, which can vary within a wide range including bandwidths independent of the sample size. We study its behavior under misspecification. We also propose an efficient version of our estimator. We develop a procedure based on a distance metric statistic for testing restrictions on parameters as well as a bootstrap technique to account for the bandwidth’s influence. Our new methods are simple to implement, apply to non-smooth problems, and perform well in our simulations.