Motives for foreign direct investment in Oman

This paper empirically examines the factors that influence foreign investors to engage in foreign direct investment (FDI) in Oman. One hundred and six foreign equity ventures participated in the study. The analysis of the data reveals that political and economic stability are the two most important motives for investing in Oman. Contrary to expectations, purchasing power of customers, market size, and availability of low‐cost inputs are the least desirable factors, respectively. The statistical analysis indicates that all motives do not equally appeal to all foreign investors from different countries. © 2003 Wiley Periodicals, Inc.     

Long-term care social insurance: How to avoid big losses?

Long-term care (LTC) needs are expected to rapidly increase in the next decades, and at the same time, the main provider of LTC, namely the family, is stalling. This calls for more involvement of the state that today covers <20% of these needs and most often in an inconsistent way. Besides the need to help the dependent poor, there is a mounting concern in the middle class that a number of dependent people are incurring costs that could force them to sell all their assets. In this paper, we study the design of a social insurance program that meets this concern. Following Arrow (Am Econ Rev 53:941–973, 1963), we suggest a policy that is characterized by complete insurance above a deductible amount.     

Investment and dynamic DEA

A dynamic version of data envelopment analysis (DEA) is developed in the present paper. Our model introduces investment in traditional DEA and imposes intertemporal cost minimization. Adding an intertemporal adjustment constraint into the cost minimization problem, we derive the relation between the DEA variables of the variable cost function and those of the primary production frontiers’ coefficients. The augmented DEA model can be solved using standard linear programming. This dynamic framework enables computing the production frontiers, measuring the productive efficiencies and evaluating the potential economies all in the presence of adjustment costs.

Designing a linear pension scheme with forced savings and wage heterogeneity

This paper studies the optimal linear pension scheme when society consists of rational and myopic individuals. Myopic individuals have, ex ante, a strong preference for the present even though, ex post, they would regret not to have saved enough. While rational and myopic persons share the same ex post intertemporal preferences, only the rational agents make their savings and labor supply decisions according to these preferences. Individuals are also distinguished by their productivity. The social objective is “paternalistic”: the utilitarian welfare function depends on ex post utilities. We examine how the presence of myopic individuals affects both the size of the pension system and the degree of redistribution it operates, with and without liquidity constraints. The relationship between proportion of myopic individuals and characteristics of the pension system turns out to be much more complex than one would have conjectured. Neither the impact on the level of pensions nor the effect on their redistributive degree is unambiguous. Nevertheless, we show that under some plausible assumptions adding myopic individuals increases the level of pension benefits and leads to a shift from a flat or even targeted scheme to a partially contributory one. However, we also provide an example where the degree of redistribution is not a monotonic function of the proportion of myopic individuals.      

The Clean Development Mechanism in a world carbon market

This paper discusses the role of the Clean Development Mechanism (CDM) in the market for carbon quotas and countries' commitments to reduce their carbon emission levels. We show that the CDM contributes to an efficient funding of clean technology investments in least developed countries. However, the CDM is not neutral on the global level of carbon emissions as it entices countries to raise their emission caps. The CDM may also make inappropriate the inclusion of any country that takes no emission abatement commitment. It can even make inefficient a country's decision to commit to an emission target. The implications of the presence of non‐additional projects are also analyzed.     

On microfoundations of the city

This paper considers the spatial structure of a city subject to final demand and vertical linkages. Individuals consume differentiated goods (or services) and firms purchase differentiated inputs (or services) in product (or service) markets where firms compete under monopolistic competition. Workers rent their residential lots in an urban land market and contribute to the production of differentiated goods and inputs. We show that firms and workers co-agglomerate and endogenously form a city. We characterize and discuss the spatial distribution of firms and consumers in such cities on one- and two-dimensional spaces. We show that final demand and vertical linkages raise the urban density and reduce the city spread.     

Frequent cross-border acquirers from emerging countries and cultural distance: Does the cultural difference of the initial deal matter?

This paper analyzes the relationship between national cultural differences and the performances of repeated cross-border acquirers from emerging countries, using a sample of 1079 deals conducted by 337 acquirers for the sample period of 1985–June 2008. Empirical results indicate that cross-border acquisitions on average are associated with positive wealth effects; however, for firms starting with deals with high cultural differences, abnormal returns become near zero for subsequent deals. The evidence points to the relevance of the culture factor. Moreover, the results can be consistent with either the hubris behavior (Roll, 1986) or a learning effect (Aktas et al., 2011). Conditional on successful first deals, declining abnormal return pattern is more pronounced, compared to unconditional results. Regression analyses that control for other factors point to the same conclusion that the declining abnormal return pattern is significant only for firms with high initial cultural differences. The results remain qualitatively the same after using an alternative cultural measure and accounting for country median and information asymmetry. In addition, evidence suggests that information asymmetry is greater for initial deals with higher cultural differences. The practical implication of our results is that it is generally better for firms to start international acquisitions in countries with low or medium cultural differences.     

New approaches for overcoming the complexity of future buildings impacted by new energy constraints

In many European countries, building is an economical sector where it is possible to reduce significantly energy dependence and environmental impact. Ambitious objectives are required for 2020 future buildings: extremely low energy consumption, low carbon emission, etc. To reach these new goals, the existing design of buildings has to change.Buildings are complex systems occupied by humans interacting with their environment. Indeed, each building can be considered a unique set of elements in dynamic interaction, structured and goal-oriented. New drastic energy objectives increase the complexity of building systems. Levels of energy and environmental performance, never reached in the past, are required for future buildings.In this context, it appears that professional capabilities and existing practices are no longer adequate. The actors of the building sector have to face up to a growing complexity generated by new constraints. Usual theories and practices are under questionning.The aim of this paper is to provide an original and helpful approach to this new complexity of future buildings. This approach, based on concepts of complexity and transdisciplinarity, consists in a combination of structural, functional and transformation approaches, thus providing a tridimensional cognitive framework to plan future buildings in a dynamic way.