Competition and the relative productivity of large and small firms

Using a comprehensive dataset on the incidence of price-fixing across British manufacturing industries in the 1950s, I compare collusive and competitive industries and find evidence of a negative relationship between collusion and the labour productivity of larger firms relative to smaller firms. In particular, collusion is associated with a reduction or even a reversal of the productivity gap between larger and smaller firms. This result is robust to controlling for the potential endogeneity of collusion.     

Construction of an economic index to measure the causes of economic insecurity

This paper is an updated study on the causes of economic insecurity in the United States. The authors have constructed an aggregate composite index that measures objectively the major causes of economic insecurity (CEI) in the United States. The CEI index consists of 11 variables that can cause economic insecurity. The time period under investigation is 1960 through 2001. A rising CEI index indicates that the causes of economic insecurity in the United States have increased in relative importance, which results in an increase in economic insecurity. Conversely, a falling CEI index indicates that the causes of economic insecurity have declined in relative importance, which results in a reduction of economic insecurity. However, despite substantial economic growth in the American economy from 1960 through 2001, the CEI index overall showed little improvement. The major conclusion is that the CEI index was 9 percent higher in 2001 than it was in 1960. This result was due largely to the increase in divorce, violent crime, rising out-of-pocket expenditures for health care, inflation, and unemployment. The results for subperiods are dramatically different, and we think more interesting, than the overall results. During the 1960s, there was a small decline in the CEI index. The 1970s showed a dramatic increase in the CEI index, which reflected both high unemployment rates and inflation rates during this period. The 1980s experienced fluctuating levels in the index but little overall change, and the 1990s experienced a sharp decline in the CEI index due largely to a robust economy. The CEI index has increased more recently, which reflects largely the recent 2001 business recession. The correlation coefficient of the CEI index with the University of Michigan's well-known Index of Consumer Sentiment is ?676. This figure shows that as the CEI index rises, consumer sentiment about the American economy becomes pessimistic and negative.     

On the determination of the US aggregate health care expenditure

Per capita real health care expenditure is examined against three major groups of explanatory variables: economic, demographic, and health stock, and it is found that the three groups of variables have an impact on real health care spending. Other subcategories, such as real private, and government health care, pharmaceutical, dental, home nursing, ambulatory, personal medical consumption, and in-patient expenditures have also been examined, and have been found to be affected by the explanatory variables. For several subcomponents there is evidence of supplier inducement. Of the demographic group of variables, the ageing population had an impact only on the per capita real overall, and private health care outlay, and pharmaceutical spending. Also, cointegrating relationships were found and consistent estimators of the elasticities found.     

Revisiting and extending our understanding of Pierre Wack's the gentle art of re-perceiving

Pierre Wack's 1985 Harvard Business Review papers are two of the most frequently referenced in the scenario planning literature. Wack argued that planning had to be based on the more predictive elements of the business environment. If not, plans would be based on uncertainty and a ‘best guess’ basis. Yet there is a lack of subsequent empirical research to investigate Pierre Wack's contribution. The research findings presented in this paper extend our understanding of Wack's contribution. We show how social discourse during scenario building helped to make sense and reveal the significance of historical events. These historical events were seen, but not previously understood; consequently a new understanding of reality emerged. The findings are in contrast to Wack's explanation of re-perceiving and extend our understanding of the basis of re-perceiving with scenarios.     

Crude oil price forecasting based on internet concern using an extreme learning machine

The growing internet concern (IC) over the crude oil market and related events influences market trading, thus creating further instability within the oil market itself. We propose a modeling framework for analyzing the effects of IC on the oil market and for predicting the price volatility of crude oil’s futures market. This novel approach decomposes the original time series into intrinsic modes at different time scales using bivariate empirical mode decomposition (BEMD). The relationship between the oil price volatility and IC at an individual frequency is investigated. By utilizing decomposed intrinsic modes as specified characteristics, we also construct extreme learning machine (ELM) models with variant forecasting schemes. The experimental results illustrate that ELM models that incorporate intrinsic modes and IC outperform the baseline ELM and other benchmarks at distinct horizons. Having the power to improve the accuracy of baseline models, internet searching is a practical way of quantifying investor attention, which can help to predict short-run price fluctuations in the oil market.     

Bouncing Back from Extreme Weather Events: Some Preliminary Findings on Resilience Barriers Facing Small and Medium‐Sized Enterprises

Extreme weather events (EWEs) pose unprecedented threats to modern societies and represent a much‐debated issue strongly interlinked with current development policies. Small and medium‐sized enterprises (SMEs), which constitute a driving force of economic growth, employment and total value added, remain highly vulnerable to and ill prepared for such environmental perturbations. This study investigates barriers to SMEs’ resilience to EWEs in an attempt to shed light on enabling factors that can define effective organizational responses to non‐linear environmental stimuli. Relying on structural equation modeling and data gathered from 109 SMEs that recently experienced EWE impacts, we link the general concept of SMEs’ resilience barriers to EWEs with a series of elements to determine specific internal and external factors that contribute the most to EWE resilience. In particular, external barriers of institutional conditions and mechanisms of support and guidance as well as internal barriers of resources and managerial perceptions are found to be the most critical ones in determining resilience. The assessment offers essential research evidence for practitioners on SME management and sets forth linkages with current mechanisms for policy interventions towards an appropriate resilience agenda for SMEs. Copyright © 2018 John Wiley & Sons, Ltd and ERP Environment     

Regulating,joint bargaining,and the demise of precedent

Recent decades have seen a fundamental shift in the nature of economic regulation in the United States. Unauthorized by congress, and largely unnoted in legal and academic circles, regulatory agencies such as the Federal Communications Commission have changed the regulatory process by linking otherwise unrelated regulatory issues. Examples include tying merger approval to firm commitments to engage in conceptually unrelated build‐outs and other projects of political importance. This linking of issues has several effects, the most prominent being (a) tying regulatory issues changes the outcomes obtained, plausibly in predictable ways; (b) tying in some circumstances allows regulators to extend their authority to issues for which they have little or no legal authority; and (c) tied regulatory bargaining fails to produce valid legal precedent for firm decision making. We provide an analysis of these conclusions by examining the increasing use of consent decrees, voluntary merger commitments, and merger conditions by the Federal Communications Commission, referencing our discussion with a simple model of joint bargaining applicable to regulatory practice.     

International trade of GMO-related agricultural products

This paper examines the international trade of a variety of genetically modified (GM) food products over a 27-year period (1984–2011) with data from the United Nations using the tools of social network analysis. The results indicate that each of the different crops have a distinctive pattern of trade that has changed over time due to a number of different factors. Also, trade in agricultural commodities became more diversified over time, dominated less by the United States and other nations central in the trade networks and trade in the individual GM crops was stable over time. Countries maintained their trading partners for specific crops, despite the adoption of the genetically modified varieties. The economic implications of these results are discussed for specific countries.     

Recovering Hicksian Consumer Surplus within a Collective Model: Hausman's Method for the Household

The purpose of this paper is to describe the implications of the collective model of household behavior for the methods used to estimate the economic value of non-marketed environmental resources. After demonstrating how the separability restrictions inherent in the collective model allow individual preference and household income allocation choices to be distinguished, the paper demonstrates how the framework can be used to recover Hicksian consumer surplus. An algebraic example is used to illustrate how the framework can be used in valuing environmental resources.     

Neuroeconomics: Why Economics Needs Brains

Neuroeconomics uses knowledge about brain mechanisms to inform economic theory. It opens up the “black box” of the brain, much as organizational economics opened up the theory of the firm. Neuroscientists use many tools—including brain imaging, behavior of patients with brain damage, animal behavior and recording single neuron activity. The key insight for economics is that the brain is composed of multiple systems which interact. Controlled systems (“executive function”) interrupt automatic ones. Brain evidence complicates standard assumptions about basic preference, to include homeostasis and other kinds of state‐dependence, and shows emotional activation in ambiguous choice and strategic interaction.