Household financial vulnerability: An empirical analysis

Using survey data, we investigate household financial distress. Specifically, we propose an indicator of financial vulnerability to jointly analyse different features of household financial distress, analysing its socio-demographic and economic determinants. A total number of 3102 Italian households make up the sample.The empirical analysis highlights that for the median level of the financial vulnerability index households already exhibit some important symptoms of financial vulnerability, such as problems in getting to the end of the month or an inability to face unexpected expenses. As regards the determinants of the financial vulnerability index, three findings need to be pointed out. First, the level of debt servicing is positively related to financial vulnerability and the effect is stronger for households holding unsecured debt, i.e. consumer credit. Second, financial vulnerability also increases for impulsive individuals, who may adopt impatient, short-sighted behaviour patterns which make it difficult for them to be fully aware of the consequences of their financial and spending decisions. Third, a higher level of education helps to reduce financial fragility.     

The spinning jenny and the guillotine: technology diffusion at the time of revolutions

Scale economies and demand, combined with the relative prices of input factors, can provide an economic explanation to the location and timing of the Industrial Revolution. Its labor-saving innovations were profitable only above a minimum output threshold, which allowed to cover the upfront cost of capital. In turn, the possibility to exceed such threshold depended on consumer demand, which was affected by the level and by the distribution of real income. The case of the spinning jenny and the cotton industry in England and France serves as a valuable case study to show how scale and demand considerations might have mattered even at the eve of the Industrial Revolution, thus implying also a potentially important role for income distribution.     

Implementing Change in a Hospital Management Accounting System

A central aspect of the efforts to improve public healthcare systems often is a provider’s management accounting system (MAS). The article focuses on a change effort for a hospital’s MAS. The effort involved implementing low-cost information technology designed to improve efficiency and effectiveness in operating rooms. The article aims to identify and discuss the factors that led to the hospital’s success in achieving improved outcomes at lower costs via the improvement of its MAS. The analysis uses a theoretical framework that can assist managers to identify methods that can help to foster the factors needed for effective change implementation.     

A simple model of income,aggregate demand and the process of credit creation by private banks

This paper presents a small macroeconomic model describing the main mechanisms of the process of creation by the private banking system. The model is composed of a core unit—where the dynamics of income, credit and aggregate demand are determined—and a set of sectoral accounts that ensure its stock-flow consistency. In order to grasp the role of credit and banks on the functioning of the economic system we make an explicit distinction between planned and realized variables, thanks to which, while maintaining the ex-post accounting consistency, we are able to introduce an ex-ante wedge between current aggregate income and planned expenditure. Private banks are the only economic agents capable of filling this gap through the creation of new credit. Through the use of numerical simulation we discuss the link between credit creation and the expansion of economic activity, also contributing to a recent academic debate on the relation between income, debt and aggregate demand.     

Time-to-market in vertically differentiated industries

This paper analyzes the optimal time to introduce a new product in a vertical differentiated market when the delay between innovation and market opening can be shortened through investments whose costs increase, the shorter the desired delay. The timing process is affected by the trade-off between being first and getting monopoly profits, and postponing entry for reducing time-to-market costs. We study the balance of these forces and how this balance is influenced by market structure. In our model, it is possible a priori to observe at the optimal solution both a quality-upgrading equilibrium (first entering the market with the low quality good and then marketing the high quality variant) and quality-downgrading equilibrium (first entering the market with the high quality good and then marketing the low quality variant) while in the existing published literature a quality-upgrading equilibrium is always observed.     

Price Commitments in Standard Setting under Asymmetric Information*

Standards may create market power for the holders of standard essential patents (SEPs). To address these concerns, the literature advocates price commitments, whereby SEP holders commit to the maximum royalty they would charge were their technology included in the standard. We consider a setting in which a technology implementer holds private information about profitability. In this setting, price commitments increase efficiency not only by curbing SEP holders' market power, but also by alleviating distortions in the design of the royalty scheme. We derive conditions under which price commitments can be implemented using a simple royalty cap as used in practice.     

The financial and green effects of cultural values on mission drifts in European social enterprises

The sustainable social enterprises (SEs) literature shows that SEs have to simultaneously pursue economic, social, and environmental aims. However, tensions between these objectives can make this a challenging task and lead towards mission drift. This work investigates if the cultural dimension can forecast the mission drift. We empirically analyze this relationship in three stages. In the first stage, we identify a homogeneous dataset of 287 sustainable SEs from seven EU countries from 2011 to 2020. Then, in the second stage, we apply the data envelopment analysis (DEA) methodology to calculate the efficiency of the SEs. An efficient SE has to simultaneously achieve social, environmental, and economic aims. We calculate a proxy of the mission drift and generate a dichotomous category variable that assigns value 1 to the SE not affected by mission drift, 0 otherwise. In the last stage, we implement the 2SLS logistic regression between the variable that identifies the SEs affected by mission drift and three cultural dimensions: avoidance of uncertainty, masculinity, and short-term orientation.     

Financial sector bargaining power,aggregate growth and systemic risk

Recent decades have seen a substantial increase in the size and influence of the financial industry in advanced economies. Mainstream theory states that the financial sector can increase the efficiency and stability of the real economy by reducing informational asymmetries and transaction costs. Nevertheless, the rise of the financial industry has been accompanied by lower aggregate growth, increased inequality and declining financial stability. With this in mind, the main aim of the present article is to provide a different perspective on the rise of finance in developed countries, by focusing on the impact of financial markets on aggregate growth and economic (in)stability. Specifically, we analyse the role of the bargaining power of financial intermediaries in promoting (or reducing) the entrance of new enterprises in the market and find that the financial sector is essential for the good functioning of the real economy, but that an overdeveloped financial industry can reduce the incentive for new firms to start production, resulting in a negative impact on aggregate growth and economic stability.