Small firms finance in France

The data concerning interest rates paid by small and medium sized firms on credit and financial markets as well as the available balance-sheets confirm the idea that firms have difficulties to get financial resources. This paper tries to put in light the financial disparities among firms when a discrimination resting on size characterises the functioning of credit market. The first section presents the main financial characteristics of French SMEs: the low level of equities, the heaviness of short term debts and the over use of payment delays. Section 2 shows how French and European authorities reacted in order to improve the financial situation of SME's and to reduce their liquidity constraint, changing tax policy and promoting the creation of new means of financing.     

Debt crisis,accumulation crisis and economic restructuring in Latin America

The policy debate over the Latin American debt crisis has shifted from the issue of short-term adjustment to that of long-term restructuring. The history of import substituting industrialization (IS) is reviewed in order to establish a context for the current restructuring debates. We argue that the demise of the IS model was primarily due to narrow domestic markets, heavy imports of capital goods and excessive ties with foreign multinationals, not to inefficiencies inherent in market-constraining policies. From this perspective, free market, export-led growth policies are opposed as an appropriate restructuring strategy and policies of redistribution, regional integration and major debt concessions are supported.     

Mitterrand: from Socialism to Realism

The French elected a government of nationalist Bourbons who thought they could plan the economy in a world of international trade. They soon discovered their error but are reluctant to act upon the lessons. Dr Green reveals that the main results have been economic stagnation and a division in the Government between pragmatists and ideologues.     

A Principal Component Logistic Analysis of the Mobility Decision in Transitional Neighborhoods

This study represents an extension of the literature that examines the factors affecting a household's decision to make an intrametropoli-tan move by emphasizing the importance of neighborhood characteristics in addition to the traditional life-cycle variables on the decision to move. Because of the dichotomous nature of the dependent variable and the collinearity among the independent variables, we employ both principal component and logit analysis. The primary data base is drawn from a sample of households moving into and out of two areas in St. Louis.
The results indicate that many of the traditional life-cycle variables are significant, although some behave differently than in the usual case because of the transitional nature of the neighborhoods we examine. The results also suggest that a household's perceptions regarding the quality of the neighborhood are also important determinants of mobility. Finally, when the maximum likelihood logit analysis results are compared with the principal component logit results, we find that the principal component logit technique performs better in almost all instances.     

Corporate taxation and the choice of patent location within multinational firms

Corporate patents are important assets in the modern economy, where knowledge is highly valued. In many multinational enterprises (MNEs), they constitute a major portion of the business's value. The intra-firm transfer pricing process for patent-related royalty payments is moreover often highly intransparent and patents thus represent a major source of profit shifting opportunities between multinational entities. For both reasons, MNEs have an incentive to locate their patents at low-tax affiliates to minimize the corporate tax burden. The purpose of our paper is to empirically test for this relationship by exploiting a unique dataset that links information on patent applications to micro panel data for European MNEs. Our results suggest that the corporate tax rate (differential to other group members) exerts a negative effect on the number of patent applications filed by a multinational affiliate. The effect is quantitatively large and robust to controlling for firm size and unobserved heterogeneity between the entities. The findings moreover prevail if we account for royalty withholding taxes and binding ‘Controlled Foreign Company’ rules.     

Creating Customer Value in Participating Life Insurance

The value of a life insurance contract may differ depending on whether it is looked at from the customer's point of view or that of the insurance company. We assume that the insurer is able to replicate the life insurance contract's cash flows via assets traded on the capital market and can hence apply risk‐neutral valuation techniques. The policyholder, on the other hand, will take risk preferences and diversification opportunities into account when placing a value on that same contract. Customer value is represented by policyholder willingness to pay and depends on the contract parameters, that is, the guaranteed interest rate and the annual and terminal surplus participation rate. The aim of this article is to analyze and compare these two perspectives. In particular, we identify contract parameter combinations that—while keeping the contract value fixed for the insurer—maximize customer value. In addition, we derive explicit expressions for a selection of specific cases. Our results suggest that a customer segmentation in this sense, that is, based on the different ways customers evaluate life insurance contracts and embedded investment guarantees while ensuring fair values, is worthwhile for insurance companies as doing so can result in substantial increases in policyholder willingness to pay.