EFFICIENCY GAINS IN BETA-PRICING MODELS1

Recent literature shows that the risk premium is efficiently estimated in the usual two-pass procedure, estimating betas in the unrestricted model, and then regressing returns on estimated betas. This paper shows that this is not so when allowing for factor unobservability. Imposing the financial theory restriction from the outset leads to a strictly positive efficiency gain in the risk premium estimation. In addition, the role of an associated efficiency gain in the beta estimation is studied in the context of a zero-beta model.     

The Impact of Liberalizing Barriers to Foreign Direct Investment in Services: The Case of Russian Accession to the World Trade Organization

In this paper a computable general equilibrium model of the Russian economy is used to assess the impact of accession to the World Trade Organization (WTO), which encompasses improved market access, Russian tariff reduction, and reduction of barriers against multinational service providers. It is assumed that foreign direct investment in business services is necessary for multinationals to compete well with Russian business services providers, but cross‐border service provision is also present. The model incorporates productivity effects in both goods and services markets endogenously, through a Dixit–Stiglitz framework. It is estimated that Russia will gain about 7.2% of the value of Russian consumption in the medium term from WTO accession and up to 24% in the long run. It is also estimated that the largest gains to Russia will derive from liberalization of barriers against multinational service providers. Piecemeal and systematic sensitivity analysis shows that the results are robust.     

Joining forces: collaboration patterns and performance of renewable energy innovators

Small Business Economics - This article explores the pattern and breadth of collaboration activities of innovating firms active in renewable energy (RE), and the impact of collaboration on...     

Strategic behavior and social outcomes in a bottleneck queue: experimental evidence

We theoretically and experimentally study the differential incentive effects of three well known queue disciplines in a strategic environment in which a bottleneck facility opens and impatient players decide when to arrive. For a class of three-player games, we derive equilibrium arrivals under the first-in-first-out (FIFO), last-in-first-out (LIFO), and service-in-random-order (SIRO) queue disciplines and compare these predictions to outcomes from a laboratory experiment. In line with our theoretical predictions, we find that people arrive with greater dispersion when participating under the LIFO discipline, whereas they tend to arrive immediately under FIFO and SIRO. As a consequence, shorter waiting times are obtained under LIFO as compared to FIFO and SIRO. However, while our theoretical predictions admit higher welfare under LIFO, this is not recovered experimentally as the queue disciplines provide similar welfare outcomes.     

The new fitness geography: the globalisation of Japanese gym and fitness culture

Using a minor case study of the local fitness culture scene in Tokyo, Japan, this exploratory and qualitative article aims to discuss and analyse the consequences of globalisation of fitness culture. The article focuses particularly on how fitness culture is negotiated in Japanese society – at a national, local and subjective level, and in relation to attempts to uniformly rationalise and standardise gym and fitness culture. The results indicate that the fitness geography is changing, and through the establishment of a globalised fitness culture, Japanese youth are following in the footsteps of many other countries. However, this does not mean that we are witnessing a homogenisation process, or a completely McDonaldised version of fitness culture in Japan. Instead, this cultural phenomenon is shaped and formed in particular ways, pointing towards certain strong national sentiments concerning body ideals, views on gender and exercise and relaxation. For example, the cuteness ideal has a strong influence on the way young women talk about and perceive body ideals and corporeal performances in Japan.     

Competition and Environmental Policy in the EU: Old Foes,New Friends?

European competition authorities consider environmental and competition policy to be complementary, as each has the objective of improving social welfare. Naturally, one would imagine that environmental considerations have already been accounted for in competition policy practice, but thus far, only in the case of voluntary environmental agreements. This paper analyzes the extent to which the two types of policy are complementary by examining the legal framework of competition policy, voluntary environmental agreements and three competition cases with equal relevance to the environment and then examines the basic theoretical economic observation that less competition implies lower pollution levels relative to more competition. This trade-off between the benefits of reduced emissions on the one side and increased competition on the other implies that disregarding environmental considerations in the implementation of competition policy entails a negative externality, which can be eliminated if environmental considerations are internalized in competition policy. The impact of the externality is found to depend on the emission level, the emission damage, and market size. Further, this implies that if competition authorities were to adopt a broad definition of the relevant market in competition cases, then environmental considerations would play a limited role in competition policy, whereas a narrow definition implies that environmental considerations should have a much more important place than competitive considerations in competition policy.     

Multiple objectives and perceptions of optimal management: The Danish industrial fishery in the North Sea

Fisheries management involves many stakeholders with differentopinions about how the fishery should be optimally managed.This paper presents a multi-objective bio-economic model, whichis able to incorporate the preferences of managers and otherstakeholders. The model is a weighted goal programme coveringthe Danish industrial fishery. Economic, political and biologicalconcerns are considered simultaneously and, by applying thepreference structures of different stakeholders, it shows howthe optimally managed fishery would look from the perspectiveof managers and various interest groups. Managers, in this casethe Danish Ministry of Food, Agriculture and Fisheries, areprovided with a management tool that shows the consequencesof their preferences towards the objectives, and can be comparedwith optimal solutions as perceived by other stakeholders.     

Managing employee innovative behaviour through transformational and transactional leadership styles

ABSTRACT

This paper focuses on the associations between leadership styles and employee innovative behaviour. We studied the implementation of an ambitious innovation strategy in a large Danish municipality and examined how transformational and transactional leadership styles relate to innovative behaviour. We combined data from two sources rating leadership styles of immediate supervisors and employee innovative behaviour. The findings suggest that transformational leadership and one component of transactional leadership, namely verbal rewards, are positively associated with innovative behaviour. The interaction between the two shows that innovative behaviour is most likely when the leader combines transformational leadership with verbal rewards.     

Economic and environmental analysis of buffer zones as an instrument to reduce ammonia loads to nature areas

In this paper, we present a Danish case study of the effectiveness and costs of protecting nitrogen poor nature areas vulnerable to ammonia eutrophication by appointing buffer zones around them. Buffer zones are found to be an important step towards sustainable co-existence of intensive livestock production and nature conservation when local sources are important contributors to eutrophication. Depending on the deposition patterns, buffer zones may be cost-effective compared to re-establishment of eutrophicated locations, but a need for further model analysis is also identified.     

Competition, Market Structure and Job Turnover

Does internationalization mean increased reallocation of employment among plants and thus higher adjustment costs? This paper studies the reallocation of jobs among plants in the Swedish economy 1986–97 using micro data. It turns out that the rate of job turnover is high in industries with high rates of innovation and employment growth, and low in concentrated industries with limited competition. However, we find no evidence for the view that increased openness to international competition would increase job turnover. In fact turnover is lower in export oriented industries where foreign ownership is frequent.