Regulation effects on resource allocation of a utility-maximizing firm

The literature on the effects of rate of return regulation on the allocation of resources was mostly devoted to the classical case of a profit-maximizing monopolist. An attempt is made in this paper to extend the analysis to a firm who maximizes a utility function with profits and revenue as arguments. We prove that a meaningful presentation of the regulation effects implies the formulation of two constraints. Whether the firm over-or undercapitalizes depends on whether the constraint is imposed as an upper or a lower limit. The higher the profit motive the higher the capital-labor ratio and the marginal rate of substitution between labor and capital.     

The relationship between revenue,production and demand functions,and the implications for some microeconomic problems

The properties of concave revenue functions (in input terms) are often of considerable importance in the theory of the firm. One reason for this is the similarity between the sufficient conditions for an interior maxima (the requirement that the Hessian matrix be negative semidefinite) and the necessary and sufficient conditions for concavity. However, the concavity assumption imposes severe restrictions on the production and demand functions which apparently have not been acknowledged in the literature. It is the purpose of this note to explore these restrictions and to point out their implications for a proper formulation of some microeconomic problems.     

The exact likelihood function for a space time model

Recently the space time autoregressive moving average models have become popular and this paper derives the exact likelihood function for this model.     

When are preferred shares preferred? Theory and empirical evidence

This paper demonstrates that preferred stock may arise as an optimal security in a tax-induced equilibrium. This result is driven by graduated tax schedules and by uncertainty. In a more general sense, our results can be interpreted as a template for including any security with a different tax treatment in a firm's capital structure. The first part of the paper demonstrates that the Miller equilibrium framework can accommodate more than two securities if different investor classes are taxed differently on each security and the tax schedule for each investor group is upward sloping. We then simplify the tax schedule, but introduce uncertainty, which implies the possibility of bankruptcy and the possible loss of tax shelters. The interaction of tax rates and seniority now affects the contribution of each security to after-tax firm value, as in some states the firm may not be able to pay either interest (or dividends) or even principal to its various claimholders. It is shown why and how these features, i.e. the various tax rates and seniority, determine the financing equilibrium, which is obtained by equating the expected marginal tax benefit of all securities. We demonstrate that non-profitable firms will tend to issue preferred shares whereas profitable firms will not find preferred stock advantageous in our framework. Comparative statics with respect to various tax rates are derived as well. These predictions are tested using a large sample of firms for the last 25 years. The empirical testing broadly confirms the theoretical predictions.     

The perceived impacts of casino gambling on a community

Proposals have been made to legalize a single hotel casino in each of the towns of Adams and Hull, Massachusetts. A telephone survey of a systematic sample of 400 respondents in the Adams and Hull area was conducted in order to assess the perceived impacts of a hotel-casino in each of these locations. The findings show little consensus as to the positive impacts, but much greater agreement over the negative impacts that a hotel casino might have in the respondents' towns. The major factor in predicting respondents' attitudes toward legalization was found to be their perception of the impact a hotel-casino would have on the character of their town. Other major factors were the impact of the hotel-casino on crimes involving drugs and prostitution, the effectiveness of the State government at regulating casino gambling, the respondent's age, the impact of the hotel-casino on the overall standard of living, and the impact of the hotel-casino on jobs for local residents.     

The effect of coffee price shock on school dropout: new evidence from the 2008 global financial crisis

This article examines the effect of coffee price shock on the school dropout status of children in rural Ethiopia. To identify the effect, I exploit the exogenous coffee price shock caused by the 2008 global financial crisis. Using a unique rural data set collected before and shortly after the crisis, I compare the school dropout status of children in coffee-producing and non–coffee-producing villages. The difference-in-difference estimate suggests that the decline in the global price of coffee during the financial crisis increased school dropout rates among children aged 15–18 in coffee-producing villages. The effect is more pronounced among female children in this age group.     

Brand trust and engagement in social commerce

With the surge in social media (SM) users around the world, the scope of social commerce (SC) in brand engagement is a prominent area of discussion. The present study empirically investigates the effect of social commerce construct (SCC), multi-dimensional constructs of social presence theory (SPT) and consumer generated content (CGC) on brand trust and brand engagement in SC platforms. An online survey was conducted among 625 Indian consumers who had made more than one purchase using SC platforms in the previous 6 months. Structural equation modelling technique was employed for testing the hypotheses and conceptual model. The results suggest that each element of SCC, SPT and CGC positively contributes to brand trust and engagement. Further, the study provides insight into brand trust and brand engagement in SM, which prompts brand usage intention of the consumers. The insights can be used by managers to create long-term customer relationship management action plans that emphasize brand trust and engagement.