Productivity growth,Smith effects and Ricardo effects in Euro Area's manufacturing industries

We analyse the determinants of labour productivity across (a sample of) EA member states. We focus on the divergent dynamics before and after the financial crisis, and of core countries relative to peripheral countries. We ground our empirical analysis in Paolo Sylos-Labini's productivity equations. We test different models, including a Panel 2S-LS model and a Panel vector autoregression model. Our preliminary findings confirm and strengthen Sylos-Labini's main insights. Labour productivity in manufacturing industries is strongly and positively correlated with the market size (Smith effect), the relative cost of labour (Ricardo effect), the absolute cost of labour (organization effect) and past investment, whereas it is negatively correlated with current investment. Furthermore, we find evidence that the crisis has affected the size of these effects. Focusing on the core periphery dichotomy, the signs of the effects are the same for both groups of countries, although the Smith, Ricardo and long-run investment effects are usually stronger for core countries compared to peripheral countries. The opposite holds for the organization effect, while investment effects are less clear.     

Students’ perception of CSR and its influence on business performance. A multiple mediation analysis

Firm managers play an important role in the implementation of corporate social responsibility (CSR) actions. Education is emerging as the key factor in developing a sense of moral responsibility amongst the business students who will eventually become company managers and decision makers. The aim of this research is, thus, twofold. First, to analyze the existence of a direct positive correlation between university students’ perception of CSR and its impact on business performance; and second, to examine the extent to which two factors (advantages brought by CSR and responsibilities toward stakeholders) act as mediation variables in the aforementioned correlation. The analysis was performed with a sample of 390 business‐related university students. Amongst the potential contributions made by this study we can highlight the possibility of knowing future managers’ way of thinking and of knowing the aspects where educational centers might improve their CSR teaching.     

The Ethical Dimension of Leadership in the Programmes of Total Quality Management

Total Quality Management (TQM) is an overall management philosophy that includes a set of principles whose application is increasing. In fact, the business world and public institutions, such as hospitals, universities or city councils, are implementing quality programs. However, despite the wide diffusion of TQM, the success rate of this type of initiative is limited and the results, heterogeneous. Academics and professionals are therefore trying to identify the keys that explain the success or failure of this kind of initiative. Different explanations have been given, but most of the literature agrees that managerial commitment, implication and leadership are indispensable elements in a successful implementation of TQM. Nevertheless, a study on the specialised literature shows a terminological confusion between managerial commitment and managerial leadership. Is it the same to have a committed manager in the implementation process as to have a leader of the implementation process? The author of this paper defends the thesis that "commitment" and "leadership" are not synonymous, and states that only managerial leadership is able to promote and sustain profound organisational changes. The paper will show that, to understand the previous distinction, it is necessary to consider the ethical dimension of leadership. While committed managers may lead the process by using exclusively their power (with the necessary resource assignment), those who are leaders need authority. Authority goes further than power by generating a kind of confidence (trust) that is able to influence the members of the organisation and bring about profound changes, more than power alone can do.     

SOME REMARKS ON ARBITRAGE AND PREFERENCES IN SECURITIES MARKET MODELS

We introduce the notion of a market-free-lunch that depends on the preferences of all agents participating in the market. In semimartingale models of securities markets, we characterize no arbitrage (NA) and no-free-lunch-with-vanishing-risk (NFLVR) in terms of the market-free-lunch and show that the difference between NA and NFLVR consists in the selection of the class of monotone, respectively monotone and continuous, utility functions that determines the absence of the market-free-lunch. We also provide a direct proof of the equivalence between the absence of a market-free-lunch, with respect to monotone concave preferences, and the existence of an equivalent (local/sigma) martingale measure.     

The Geography of Equity Listing: Why Do Companies List Abroad?

This paper documents aggregate trends in the foreign listings of companies, and analyzes their distinctive prelisting characteristics and postlisting performance. In 1986–1997, many European companies listed abroad, mainly on U.S. exchanges, while the number of U.S. companies listed in Europe decreased. European companies that cross-list tend to be large and recently privatized firms, and expand their foreign sales after listing abroad. They differ sharply depending on where they cross-list: The U.S. exchanges attract high-tech and export-oriented companies that expand rapidly without significant leveraging. Companies cross-listing within Europe do not grow unusually fast, and increase their leverage after cross-listing.     

Optimal Design of Intergovernmental Grants Under Asymmetric Information

This paper develops a theoretical explanation why it may be optimal for higher-level governments to pay categorical block grants or closed-ended matching grants to local governments. We consider a federation with two types of local governments which differ in the cost of providing public goods. The federal government redistributes between jurisdictions, but cannot observe the type of a jurisdiction. In this asymmetric information setting, it is shown that the second-best optimum can be implemented with the help of categorical block grants and closed-ended matching grants, but not with unconditional block grants or open-ended matching grants. JEL Code: H77, D82     

Introduction to the Milestones series

Decisions in Economics and Finance - This piece in the Milestones series is dedicated to the paper coauthored by David Gale and Lloyd Shapley and published in 1962 under the title “College...     

Feature-weighted categorized play across symmetric games

Experimental Economics - Experimental game theory studies the behavior of agents who face a stream of one-shot games as a form of learning. Most literature focuses on a single recurring identical...