Enforcement of Property Rights and Underdevelopment

The authors formalize the role of legal infrastructure in economic development in a general‐equilibrium model with endogenously determined property rights enforcement. The mutual importance of property rights protection and market production is illustrated by the model's multiplicity of equilibria. In one equilibrium, property rights are enforced, and market activity unhampered. In the other, property rights are not enforced, discouraging economic activity, which leaves the economy without the resources and the incentives to enforce property rights. Even identically endowed economies may therefore find themselves in very different equilibria.     

Games with Partially Enforceable Agreements

This paper analyzes games with imperfectly enforceable agreements. It develops a dynamical model in which players are randomly paired into single shot games at each moment. Initially players decide whether to honor an agreement, and then they choose whether to complain to an enforcement agency. The probability of success of a complaint is endogenous; it depends upon whether the defendant breached and upon the aggregate behavior of all players. In the most interesting equilibria of the dynamical system some individuals honor and some individuals complain while others do not, and the net effect of the existence of an enforcement agency is positive.Journal of Economic LiteratureClassification Number: C72.     

Technology sourcing decisions in exploratory projects

Drawing on research on innovation as knowledge combination and firm’s organizational boundaries the paper contributes to open the black box of a firm’s sourcing strategy, investigating how the new knowledge a project aims to develop affects sourcing decisions. The fine-grained level of investigation adopted, namely the project level, not only enhances the understanding of the antecedents of sourcing decisions in any single project but provides primary explorative evidence on the concept of a company sourcing strategy as a portfolio of decisions across projects. Our test is implemented on a sample of 60 New Product Development projects carried out by a group of leading Italian firms, operating in the machine tool industry. We identify two knowledge dimensions that are the determinants of sourcing decisions at project level: novelty, new functions that satisfy emergent market needs, and breadth, heterogeneity of technological fields that encompass possible solutions to product problems. Our findings show that in firms choosing sourcing configurations on a project-by-project basis, exploratory projects, which search at the frontiers of either novel product features or heterogeneous technological domains, spur firms to exploit the potential advantages of external sources.     

Factor vector autoregressive estimation: a new approach

In this paper a new approach to factor vector autoregressive estimation, based on Stock and Watson (Implications of dynamic factor models for VAR analysis, NBER Working Paper, no. 11467, 2005), is introduced. In addition to sharing all the relevant features of the Stock–Watson approach, in its static formulation, the proposed method has the advantage of allowing for a more clear-cut interpretation of the global factors, as well as for the identification of all idiosyncratic shocks. An application to large-scale macroeconometric modelling is also provided. The authors are grateful to an anonymous referee for constructive comments and to MIUR (PRIN project 2005) for financial support.     

Toward sustainable corporate behavior: The effect of the critical mass of female directors on environmental,social, and governance disclosure

Boards of directors have recently become more attentive to their stakeholders' concerns, providing more transparent information and adopting more sustainable business strategies. This study investigates the influence of a critical mass of women on boards on the environmental, social, and governance (ESG) disclosure score and its three components separately. Using a sample of the FTSE-MIB listed companies in the 2005–2017 period, we show that reaching a critical mass of female board members—going from one or two women to at least three—enhances the level of ESG disclosure. The results also show that the critical mass of female board members has a positive influence on every component of the ESG score, with the highest contribution of women reaching the governance score. These findings provide insights to shareholders and policymakers and suggest that a critical mass of female board members is particularly effective in improving transparency, and it can be seen as a mechanism to transit to stakeholder governance, fostering more sustainable behavior in firms.     

Localized Competition,Heterogeneous Firms and Vertical Relations

This paper investigates the link between firms' geographic configuration and market power in imperfect markets. We consider two related setups. The first illustrates the relevant characteristics of the pricing equilibrium. A main implication is that the equilibrium price vector changes in accordance with the firms' spatial configuration. The second, where firms operate as downstream retailers affiliated to rival upstream wholesalers, shows that upstream market power is strongly affected by an index of geographic concentration which reflects the spatial configuration of retailers. Finally, our analysis provides several insights for market delineation as well as merger evaluation and remedies.     

A study on the attributes involved in the hedonic pricing of Brazilian clothing

The objective of this study is to identify the weighted importance of intrinsic and extrinsic attributes. Intrinsic attributes are defined as the specific features of products. Extrinsic attributes refer to other characteristics that are also important for price composition, such as brand, store layout and services, and purchasing experiences. In a survey with 1,923 collected responses, it was possible to identify and quantify intrinsic and extrinsic influencing factors beyond price strategy in the Brazilian fashion market for blue jeans. The statistical analysis was based on the hedonic price method. The idea of expressing the price based on a series of intrinsic and extrinsic variables avoids the problem of using the regression technique. In this research, multiple linear regression and quantile regression were applied. The results show that extrinsic attributes have greater influence than intrinsic features on explaining the final market prices using log-linear and quantile regression statistical methods.