The Role of Human Capital in Manufacturing Plant Growth: Evidence from Taiwan

In this study, we set out to investigate the potential relationships between plant growth and size, age and human capital using a unique employer–employee matched data set for the Taiwanese manufacturing industry from 1998 to 2005. The general assumption of a reduction in plant growth with increases in plant size and plant age is confirmed by our manufacturing industry data set, while plant growth increases with the stock of human capital, albeit at a diminishing rate, thereby implying a positive concave relationship between plant growth and human capital. Moreover, we find that for plants with higher levels of human capital, the reduction in plant growth is more moderate with regard to size than with regard to age, indicating that differences in the stock of human capital within plants will tend to lead to differences in the patterns of age and size impacts on such plants' growth. Finally, substantial differences were observed among the influences of the various characteristics on plants with high, moderate and low growth in size.     

On the Value of Environmental Certification in the Commercial Real Estate Market

A significant part of the global carbon externality stems from the real estate sector. Environmental certification is often hailed as an effective means to resolve the information asymmetry that may prevent markets from effectively pricing the energy performance of buildings. This study analyzes the adoption and financial outcomes of environmentally certified commercial real estate over time. We document that nearly 40% of space in the 30 largest U.S. commercial real estate markets holds some kind of environmental certification in 2014, as compared to less than 5% in 2005. Tracking the rental growth of 26,212 office buildings, we measure the performance of environmentally certified real estate over time. We document that certified office buildings, on average, have slightly higher rental, occupancy and pricing levels, but do not outperform non‐certified buildings in rental growth over the 2004–2013 period. Further performance attribution analysis indicates that local climate conditions, local energy prices and the extent of certification lead to significant heterogeneity in market pricing. On aggregate, these findings provide some evidence on the efficiency of the market in the adoption and capitalization of environmental characteristics in the commercial real estate market.     

FURTHER EVIDENCE ON REAL INTEREST RATE EQUALIZATION: PANEL INFORMATION,NON‐LINEARITIES AND STRUCTURAL CHANGES

Previous studies applying traditional unit root tests generally have difficulty providing widespread evidence supporting the real interest rate parity hypothesis (RIPH). This paper aims to analyse the empirical fulfilment of RIPH for 17 OECD countries by employing many recently developed unit root tests. Power of the tests is raised by taking different approaches, such as using cross‐sectional information, accounting for non‐linear adjustment towards the equilibrium and allowing for structural changes. The combined results of the tests using panel information show that broad evidence in favour of RIPH prevails for 13 of the 17 countries. By contrast, univariate tests fail to make widespread rejections of the unit‐root hypothesis. Our evidence reveals a high degree of market integration for developed countries, and the effect of monetary policies as a stabilization tool might be limited at least in the long run.     

BOOTSTRAPPING COVARIATE UNIT ROOT TESTS: AN APPLICATION TO INFLATION RATES

This paper proposes a bootstrap procedure for the covariate point optimal tests (CP_T) of Elliott and Jansson. Although the covariate tests enjoy large power gains over the traditional univariate unit root tests, our simulations show that they still suffer from severe size distortions at finite samples. Through simulations, we demonstrate the superiority of the bootstrap procedure in the sense that it can yield desirable size and power properties for the CP_T tests when the Akaike's information criterion is used. Moreover, we show the empirical relevance of the bootstrap tests by applying them to inflation in the G‐10 countries, and then obtain strong evidence against the unit root hypothesis for most countries at the 5% significance level.     

Optimizing the Life-Cycle Path of Pension Premium Payments and the Pension Ambition in the Netherlands

De Economist - We determine the optimal life-cycle path of pension premiums during the working ages and pension benefits during retirement, assuming that households can choose these freely. We...     

Examination of Health Messages in Food Advertising: A Case of South Korea

As the public interest in health information has increased globally, the use of health benefits in food advertisements is becoming more essential for food marketing strategy. Consumers view a food product as healthy if it carries a health claim, whereas there has been an ongoing debate about the value of health claims as a strategy to help consumers’ healthier food consumption. The present study attempted to examine the food commercials broadcast on Korean network television in terms of claim types and executional elements. Results indicate that television food advertising has made a wide number of implied “soft” health claims (e.g., “good for health”) without substantial information and call into question whether consumers are misled or deceived by the executional elements used for presenting health messages. The findings of the study raise regulatory concerns about the provision of potentially confusing or misleading health messages in food advertising nationally as well as internationally and suggest further research in this area.     

Online Marketing: A Boon or Bane for Business in Singapore?

This paper examines the impact of e-commerce through online marketing among the multi-national corporations in Singapore. A survey was carried out to examine the differences between online and traditional marketing strategies, to explore the possibility of online marketing replacing traditional marketing, and consequently, the future of online marketing in Singapore. The findings reveal that MNCs do adopt different marketing strategies, both online and offline, in aspects of product, price, place, promotion, people, physical evidence and promotion. Results indicate that online marketing is still in its infancy in Singapore. Although most MNCs are not selling online but some plan to do so within twelve months.     

Information acquisition,referral, and organization

Each of two experts may provide a service to a client. Experts' cost comparative advantage depends on an unknown state, but an expert may exert effort to get a private signal about it. In a market, an expert may refer the client to the other for a fee. In equilibrium, only one expert exerts effort and refers, and the equilibrium allocation is inefficient. Referral efficiency can be restored when experts form an organization, in which a referring expert must bear the referred expert's cost. However, the referred expert shirks from work effort because of the lack of cost responsibility.     

Executive Compensation in UK Property Companies

We study the drivers of executive compensation in the listed UK property sector. The UK provides an excellent opportunity to analyze executive compensation due to high transparency in the different components of executive compensation. We show that company size is the most important variable in explaining the level of executive compensation. We find that absolute and relative share performance significantly explains long-term compensation, that management style has a distinct influence on the level of executive compensation, and that using alternative monitoring mechanisms (institutional shareholders, debtholders, and outside directors) leads to higher levels of long-term incentives. We find only weak evidence of pay-performance sensitivity for both cash and long-term compensation. Executive shareholdings provide a much stronger link between pay and performance than does executive compensation.

Mundell Revisited: a Simple Approach to the Costs and Benefits of a Single Currency Area

The paper evaluates the costs and benefits of a single currency area within a unified framework. Conventionally, it is argued that a single currency area carries a welfare loss owing to the sacrifice of exchange rate adjustment in the presence of country‐specific shocks. But in 1973 Mundell argued that a single currency area offers risk‐sharing benefits when capital markets are limited in their ability to facilitate consumption insurance. The authors construct a simple model and compare a system of independent national currencies to a single currency area. The presence of country‐specific shocks may either reduce or enhance the benefits of a single currency area, depending on the importance of exchange rate adjustment relative to risk‐sharing. In a simple quantitative analysis, we find that either regime may dominate, although the utility differences between the two regimes are very small.