The Impact of Competition on Investment: Evidence From California Hospitals*

I examine the relationship between bargaining leverage and capital investment using data on California’s hospital markets. I find evidence that investment increases with bargaining leverage; a hospital whose bargaining position improves by one standard deviation will increase its investment rate by 16 percentage points. A positive causal relationship between bargaining leverage and investment fits the institutional details of the health care sector, where many firms have non-profit tax status, making it difficult to return monopoly rents to shareholders. Consistent with this explanation, I find that non-profit hospitals with bargaining leverage invest more than for-profit ones, all else equal. I do not find strong evidence that financing constraints matter disproportionately for hospitals operating in more competitive markets, supporting the hypothesis that the incremental investment may not be socially efficient.     

Workfare in Britain and America: A Personal View

But could workfare succeed in Britain? Professor Richard Nathan of Princeton University argues that the differences between Britain and America are such that workfare in Britain will require even larger changes in attitude than was the case in America.     

Global Collective Bargaining on Flag of Convenience Shipping

The most significant case of transnational union bargaining co‐ordination in existence is in the maritime shipping industry. A global union association, the International Transport Workers’ Federation (ITF), and a global employers’ federation, the International Maritime Employers’ Committee (IMEC), now negotiate over pay scales for seafarers on Flag of Convenience (FOC) ships. These negotiations set the pattern for pay and working conditions for a signifi‐cant portion of the global seafaring work‐force. The ITF brought about global wage bargaining by building and enforcing a global inter‐union consensus between developed and developing countries around a uniform wage rate.     

Large shocks,small shocks,and economic fluctuations: Outliers in macroeconomic time series

We analyse fifteen post-World War II US macroeconomic time series using a modified outlier identification procedure based on Tsay (1988a). ‘Large shocks’ appear to be present in all the series we examined. Furthermore, there are three basic outlier patterns: (1) outliers seem to be associated with business cycles, (2) outliers are clustered together—both over time and across series, (3) there appears to be a dichotomy between outlier behaviour of real versus nominal series. Also, after controlling for outliers, much of the evidence of non-linearity in many of the time series is eliminated.     

Improving health care means spending more time with patients and less time with inventory

In most hospitals and medical establishments, about 35 percent of their budgets are spent on supplies and labor to manage the inventories, material, and information flows; typically, these are managed as multiechelon systems. The importance of reducing inventory costs, among others, has become relevant in today's health care management. This research applies just-in-time concepts to health care inventories.     

Meeting the demand: An estimation of potential future greenhouse gas emissions from meat production

Current production processes for meat products have been shown to have a significant impact on the environment, accounting for between 15% and 24% of current greenhouse gas emissions. Meat consumption has been increasing at a fantastic rate and is likely to continue to do so into the future. If this demand is to be met, technology used in production in the form of Confined Animal Feeding Operations (CAFOs) will need to be expanded. This paper estimates future meat consumption and discusses the potential aggregate environmental impact of this production if the use of CAFOs is expanded. I first separate meat into beef, chicken and pig products and estimate the elasticities associated with each product in order to forecast the world demand for meat. Using research on the environmental impact of food production in the US, which uses one of the most efficient CAFO processes in the world, I then calculate the total potential greenhouse emissions of this meat production and discuss the impact of these consumption patterns. I find that, under an expanded CAFO system, meat production in the future will still be a large producer of greenhouse gases, accounting for up to 6.3% of current greenhouse gas emissions in 2030.     

A structural VAR business cycle model for a volatile small open economy

New Zealand is a small economy exposed to a volatile climate, relatively volatile international trade prices, and its exposure to international financial markets has increased markedly since economic reforms in the 1980s. This paper applies identification techniques suggested by Cushman and Zha [Cushman, D.O. and Zha T.A., 1997. Identifying monetary policy in a small open economy under flexible exchange rates, Journal of Monetary Economics, 39, pp. 433–448.], Zha [Zha, T.A., (1999). Block recursion and structural vector autoregression, Journal of Econometrics, 90, pp. 291–316.] and Dungey and Pagan [Dungey, M. and Pagan, A., 2000. A structural VAR model of the Australian economy, The Economic Record, 76, pp. 321–342.] to develop a large four block structural VAR model of the New Zealand business cycle to capture these features. The model reveals that climate and international trade price shocks have been more important sources of business cycles fluctuations than international or domestic financial shocks. Furthermore, the model does not encounter the price and exchange rate puzzles that have bedevilled attempts to identify monetary policy shocks in small open economy SVAR models.     

Reputation and investor activism: A structural approach

We measure the impact of reputation for proxy fighting on investor activism by estimating a dynamic model in which activists engage a sequence of target firms. Our estimation produces an evolving reputation measure for each activist and quantifies its impact on campaign frequency and outcomes. We find that high reputation activists initiate 3.5 times as many campaigns and extract 85% more settlements from targets, and that reputation-building incentives explain 20% of campaign initiations and 19% of proxy fights. Our estimates indicate these reputation effects combine to nearly double the value that activism adds for target shareholders.     

Finding Mr. Schumpeter: technology adoption in the cement industry

We examine the adoption of fuel‐efficient precalciner kilns in the cement industry using the universe of adoption decisions in the United States over 1973–2013. We find that cement plants are more likely to adopt the technology if fuel costs are high, nearby competitors are few, and local demand conditions are favorable. We relate the findings to the Schumpeterian and induced innovation hypotheses regarding the effects of competition and factor prices. Our results suggest firms may be most responsive to factor prices under advantageous competitive and demand conditions.