Varieties of Multinationals: Adapting Employment Practices in Central Eastern Europe

"Home-country effects" on multinational companies' practices abroad are assessed by comparing twelve German- and U.S.-owned plants within the same sector in the "institutionally permissive" Poland, Hungary, and Slovenia. Differences are detected on functional flexibility, corporate culture and working time, but not on participation. Work organization seems more integral to national productive models than industrial relations. Moreover, considerable intramodel variation reflects product- and labor-market contingencies. The results support the interpretation of national models as internally heterogeneous and dynamic.     

THE ECONOMIC VALUE OF PROTECTING INVENTORIED ROADLESS AREAS: A SPATIAL HEDONIC PRICE STUDY IN NEW MEXICO

The objective of this paper is to examine the off‐site benefits, as capitalized into housing values, of protecting 1.6 million acres of Inventoried Roadless Areas (IRAs) in the state of New Mexico, United States. In light of petitions filed by various U.S. states to maintain the status of IRAs as roadless lands, spatial hedonic price models are estimated and used to calculate the implicit value of IRAs in New Mexico. Findings show that a two‐stage least squares (2‐SLS), robust spatial‐lag model is the most appropriate econometric representation of the hedonic price function, and that IRA lands are a significant and positive determinant of house value. After controlling for the presence of Wilderness Areas (WAs) and other characteristics, results indicate that, on average, there is a 5.6% gain in the property value of a house from being located in, or adjacent to, a Census tract with IRAs. In the aggregate, this gain represents 3.5% of the value of all owner‐occupied units in New Mexico ($1.9 billion in capitalized value, or an annualized value in perpetuity of $95 million, assuming a 5% interest rate). (JEL R22, H40, Q51, C21)     

Time-Invariant Portfolio Insurance Strategies

This paper characterizes the complete class of time-invariant portfolio insurance strategies and derives the corresponding value functions that relate the wealth accumulated under the strategy to the value of the underlying insured portfolio. Time-invariant strategies are shown to correspond to the long-run policies for a broad class of portfolio insurance payoff functions.     

Sex Discrimination and Occupational Segregation in the Australian Labour Market*

This paper explores the implications of the difference between the occupational distribution for males and females in a joint model determining earnings and occupation. The male/female wage differential is evaluated for a number of broad occupational classifications. This is followed by an evaluation of the role and relative importance of inter-occupational and intra-occupational effects as contributors to the overall male/female wage differential The main conclusion following from the econometric results is that intra-occupational effects dominate Thus, policies which attempt to address the gender wage differential by re-allocation of labour across occupations are unlikely to solve the problem.     

Debt Financing under Asymmetric Information

We analyze the optimal design of debt maturity, coupon payments, and dividend payout restrictions under asymmetric information. We show that, if the asymmetry of information is concentrated around long-term cash flows, firms finance with coupon-bearing long-term debt that partially restricts dividend payments. If the asymmetry of information is concentrated around near-term cash flows and there exists considerable refinancing risk, firms finance with coupon-bearing long-term debt that does not restrict dividend payments. Finally, if the asymmetry of information is uniformly distributed across dates, firms finance with short-term debt.     

Design and tests of an efficient search algorithm for accurate linear valuation systems*

Abstract. A valuation system partitions the set of goods to be valued into multiple disjoint subsets and the current value of the goods is estimated via price indexes covering these subsets. Efficient valuation systems yield a relatively small economy-wide average of mean squared errors with respect to the true total current cost of the goods. Several algorithms have been designed to search for efficient valuation systems. These algorithms, however, do not take advantage of the information contained in the characteristic parameters of the goods to be valued. We present the design and test of a search algorithm that is substantially more efficient than those in the literature. The relative efficiency of the algorithm is gained through the use of information contained in the weights, the expected values, and the variance-covariance structure of the price changes of the goods. Résumé. Un système d'évaluation subdivise l'ensemble des biens à être évalués en plusieurs sous-ensembles disjoints et la valeur actuelle des biens est estimée grâce à des indices de prix couvrant ces sous-ensembles. Des systèmes d'évaluation efficaces produisent, pour l'ensemble de l'économie, une moyenne relativement faible des erreurs moyennes au carré, par rapport au coût actuel réel total des biens. Plusieurs algorithmes ont été conçus pour découvrir des systèmes d'évaluation efficaces. Toutefois, ces algorithmes n'intègrent pas l'information que renferment les paramètres caractérisant les biens à évaluer. Nous présentons la conception et le test d'un algorithme de recherche qui s'avère considérablement plus efficace que ceux mentionnés dans les recherches antérieures. L'efficacité relative de cet algorithme est obtenue grâce à l'intégration de l'information contenue dans les pondérations, les valeurs espérées et la structure de variance-covariance des fluctuations de prix des biens.     

Efficient Financing under Asymmetric Information

This paper characterizes the conditions under which the adverse-selection problem, which may prevent a firm from issuing securities to finance an otherwise profitable investment, may be costlessly overcome by an appropriate choice of financing strategy. The conditions are specialized when the information asymmetry may be characterized by either a first-degree-stochastic-dominance or a mean-preserving-spread ordering across possible distributions of firm earnings. Possible financing strategies that resolve the information asymmetry are discussed, and the results are related to recent empirical findings concerning security issues.