Do stable strategic time periods exist? Towards new methodological and theoretical insights

This paper investigates a fundamental issue in the current research on strategic groups: the existence or non‐existence of the so‐called ‘stable strategic time periods’ (SSTPs). Our study provides new evidence by adding new methodological and theoretical insights. The research setting is the Spanish banking industry over a 15‐year period, 1983–1997. Unlike all prior longitudinal research that found SSTPs, the multi‐method procedure that we used in this study (i.e. equality of variance and covariance matrix and mean vector of strategic variables and a subsequent grouping analysis performed through the MCLUST) has led us to reject the existence of SSTPs in the industry under study. Based on these original findings, we conclude by suggesting a proposition which should be corroborated in future empirical studies on strategic groups. Copyright © 2007 John Wiley & Sons, Ltd.     

Factors driving embodied carbon in international trade: a multiregional input–output gravity model

ABSTRACT

Concerns about the effects and consequences of climate change have notably increased in recent decades. Despite large advances in the understanding of this phenomenon, further research into the determinants of gas emissions is necessary, to shed light on the responsibilities of producers and consumers, and their potential contribution to mitigation strategies. This paper studies the trajectories and determinants of carbon embodied in world trade during a period of 15 years. Our methodology relies on a multiregional input–output model, environmentally extended. Drawing on data from the World Input–Output Database, we estimate embodied emissions in bilateral flows. Then, we assess the determinants of CO₂ emissions embodied in trade, combining input–output modelling with trade gravity panel data analysis. This paper offers a methodological approach that explains and quantifies the underlying factors of carbon trade, integrating the production and consumption perspectives and considering the geographical, structural and institutional context of countries.     

The erosion of personal norms and cognitive dissonance

In this article, we study how personal norms and behaviour interact and evolve when agents try to reduce cognitive dissonance, and how this dynamic relates to Nash equilibrium. We find that in long run, agents play, and norms prescribe, Nash equilibrium in material payoffs (in the absence of norms). Our model captures two main facts: (i) norms erode along the play of the game; (ii) the erosion of norms depends on the set of possible economic choices, so that the policy maker can potentially influence them.     

Causes of world trade growth in agricultural and food products, 1951–2000: a demand function approach

The objective of the present study is to analyse the causes of the growth of international agricultural and food trade in volume terms from 1951 to 2000. The results suggest that income growth has been the principal reason for this expansion, while exchange rate stability and the real price of agricultural products played only a minor role. Multilateral trade liberalization and trade costs, given their long-term stability, are not elements that could have stimulated their growth. Finally, the intensive liberalization of trade which took place in various economic regions, especially in Europe, became a key factor in promoting agricultural trade among the countries participating in regional trade agreements. The study results also indicate that the determinants of trade growth for these goods were different to those for other goods and other periods.     

Governance of Knowledge‐Intensive Firms in the Modern Market Economy

We model contracting for joint production between workers and shareholders when investment in knowledge is non‐verifiable and the resulting specific human capital embedded in the workers is non‐tradable. The model explains how the effective cost of human capital services will vary depending on whether the investment in knowledge is financed by the workers or by the shareholders. We apply the results of the modeling to identify which firms are expected to gain and which to lose from posted trends in higher employability and lower empowerment of workers in modern market economies. Finally, we present conditions on the self‐interest of current shareholders to empower workers as a way to stimulate their investment in firm‐specific human capital.     

Credit Risk in Two Institutional Regimes: Spanish Commercial and Savings Banks

Although credit risk is an important factor that financial institutions must cope with, the determinants of bank problem loans have been little studied. Using panel data, we compare the determinants of problem loans of Spanish commercial and savings banks in the period 1985–1997, taking into account both macroeconomic and individual bank level variables. The GDP growth rate, firms, and family indebtedness, rapid past credit or branch expansion, inefficiency, portfolio composition, size, net interest margin, capital ratio, and market power are variables that explain credit risk. However, there are significant differences between commercial and savings banks, which confirm the relevance of the institutional form in the management of credit risk. Our findings raise important bank supervisory policy issues: the use of bank level variables as early warning indicators, the advantages of bank mergers from different regions, and the role of banking competition and ownership in determining credit risk.     

The virtuous circle of human resource investments: A precrisis and postcrisis analysis

We propose a dynamic model of positive feedback between human resource (HR) investments and companies' economic performance. The model assumes that HR investment increases profitability through labor productivity and, in turn, profitability improves HR investment through organizational slack. Based on data from a sample of 2,497 industrial companies over a 7‐year period (2005–2011), longitudinal analysis corroborates the existence of a two‐way relationship between HR investment and profitability over time. However, the emergence of an economic crisis weakens this feedback, identifying the effect of organizational slack on HR investment as the weakest causal chain link. In a postcrisis period, HR investment is not such a high priority for managers.     

Does oil corrupt? Evidence from a natural experiment in West Africa

This paper explores the oil discovery announcements in Sao Tome and Principe (1997-1999) to assess the role of natural resources in determining corruption. For this purpose, we use a natural experiment framework which contrasts Sao Tome and Principe to Cape Verde, a control West African country sharing the same colonial past and important recent economic and political shocks. Our measurement is based on tailored household surveys we conducted in both island countries. The unique survey instrument was retrospective and used personal histories to elicit memories from the respondents. We analyze changes in perceived corruption across a wide range of public services and allocations. We find clearest increases on vote buying, education (namely in the allocation of scholarships) and customs, ranging from 31 to 40% of the subjective scale. We interpret these findings as symptoms of increased competition for core state resources.     

Threshold cointegration and nonlinear adjustment between goods and services inflation in the United States

In this paper, we model the long-run relationship between goods and services inflation for the United States over the period 1968:1–2003:3. Our empirical methodology makes use of recent developments on threshold cointegration that consider the possibility of a nonlinear relationship between the two inflation series. According to our results, the null hypothesis of linear cointegration would be rejected in favor of a two-regime threshold cointegration model. Consequently, we could expect a cointegrating relationship only when the divergence between services inflation and goods inflation is above the threshold point estimate.     

Total factor productivity and R&D capital in the spanish economy, 1965–1980

A formal model of productivity growth and technical progress is presented. The model takes into account embodied and disembodied technical progress as explanatory variables. The slowdown in productivity growth for the Spanish economy after 1972 is explained for 92% by the decline in the rate of growth of technical progress originated from domestic R&D and technology imports.