An agency model to explain trade credit policy and empirical evidence

This article explains trade credit policy based on the agency theory. According to this theory, we have developed an agency model based on the adverse selection and moral hazard phenomena arising from the relation between sellers and buyers. This model has been estimated by using panel data methodology applied to UK companies. Our findings strongly support the model proposed. We find that smaller firms, those with a smaller proportion of fixed assets, and those that are less profitable extend more trade credit, whereas firms with a high proportion of variable costs and high percentage of bad debts extend less.     

Gross national happiness as an answer to the Easterlin Paradox?

The Easterlin Paradox refers to the fact that happiness data are typically stationary in spite of considerable increases in income. This amounts to a rejection of the hypothesis that current income is the only argument in the utility function. We find that the happiness responses of around 350,000 people living in the OECD between 1975 and 1997 are positively correlated with the level of income, the welfare state and (weakly) with life expectancy; they are negatively correlated with the average number of hours worked, environmental degradation (measured by SOx emissions), crime, openness to trade, inflation and unemployment; all controlling for country and year dummies. These effects separate across groups in a pattern that appears broadly plausible (e.g., the rich suffer environmental degradation more than the poor). Based on actual changes from 1975 to 1997, small contributions to happiness can be attributed to the increase in income in our sample. Interestingly, the actual changes in several of the ‘omitted variables’ such as life expectancy, hours worked, inflation and unemployment also contribute to happiness over this time period since life expectancy has risen and the others have, on average, fallen. Consequently the unexplained trend in happiness is even bigger than would be predicted if income was the only argument in the utility function. In other words, introducing omitted variables worsens the income-without-happiness paradox.     

Market Structure And The Adoption Of Innovations: The Case Of The Spanish Banking Sector ‡

This paper is an empirical study of the determinants of adoption time for the teleprocess terminal by Spanish commercial and savings banks. The explanatory variables include the characteristics of the adopting firms, size, and in the case of the savings banks, the structure of the market and concentration. The results indicate that the speed of adoption is maximized at intermediate levels of size and market concentration, confirming one theoretical prediction of models of diffusion: namely, that adoption time is minimized at intermediate levels of market concentration.     

Credit Risk in Two Institutional Regimes: Spanish Commercial and Savings Banks

Although credit risk is an important factor that financial institutions must cope with, the determinants of bank problem loans have been little studied. Using panel data, we compare the determinants of problem loans of Spanish commercial and savings banks in the period 1985–1997, taking into account both macroeconomic and individual bank level variables. The GDP growth rate, firms, and family indebtedness, rapid past credit or branch expansion, inefficiency, portfolio composition, size, net interest margin, capital ratio, and market power are variables that explain credit risk. However, there are significant differences between commercial and savings banks, which confirm the relevance of the institutional form in the management of credit risk. Our findings raise important bank supervisory policy issues: the use of bank level variables as early warning indicators, the advantages of bank mergers from different regions, and the role of banking competition and ownership in determining credit risk.     

Intrapreneurship model in the software industry

Quality & Quantity - The complexity of business dynamics demands that companies search for alternative ways to ensure their growth and survival. Thus intrapreneurship emerges as an ad-hoc...     

Labour Adjustment Implications of Service Offshoring: Evidence from Canada

About one‐fifth of Canadian employees are in jobs that are vulnerable to service offshoring. Despite this figure, both theory and our empirical evidence (based on a variety of methodologies and datasets) suggest that the offshoring of business services is not likely to lead to large adverse employment effects. We also conclude that existing active labour market adjustment policies (e.g. increased labour market information, job search, mobility and training) developed for other adjustment pressures such as technological change and free‐trade in goods are just as appropriate (perhaps even more so) to deal with the consequences of service offshoring.     

Growth in regions

We use a newly assembled sample of 1,528 regions from 83 countries to compare the speed of per capita income convergence within and across countries. Regional growth is shaped by similar factors as national growth, such as geography and human capital. Regional convergence rate is about 2 % per year, comparable to that between countries. Regional convergence is faster in richer countries, and countries with better capital markets. A calibration of a neoclassical growth model suggests that significant barriers to factor mobility within countries are needed to account for the evidence.     

Correcting for the Missing Rich: An Application to Wealth Survey Data

It is a well‐known criticism that if the distribution of wealth is highly concentrated, survey data are hardly reliable when it comes to analyzing the richest parts of society. This paper addresses this criticism by providing a general rationale of the underlying methodological problem as well as by proposing a specific methodological approach tailored to correcting the arising bias. We illustrate the latter approach by using Austrian data from the Household Finance and Consumption Survey. Specifically, we identify suitable parameter combinations by using a series of maximum‐likelihood estimates and appropriate goodness‐of‐fit tests to avoid arbitrariness with respect to the fitting of the Pareto distribution. Our results suggest that the alleged non‐observation bias is considerable, accounting for about one quarter of total net wealth in the case of Austria. The method developed in this paper can easily be applied to other countries where survey data on wealth are available.     

Politiques publiques et économie sociale en Europe: Le cas de l'Espagne

Cet article examine les différentes politiques économiques susceptibles d'avoir des répercussions sur l'économie sociale en tant que secteur institutionnel.En premier lieu il présente un cadre d'analyse permettant d'appréhender les contenus des politiques et en offre trois typologies.A la lumière de ce cadre dans unpremier temps il fait unbilan global des politiques mises en oeuvre en Europe pour se centrer dans un deuxième temps sur l'Espagne l'un des pays de l'Union où le niveau de développement de ces politiques est le plus avancé .Pour terminer, l'auteur évalue l'efficacité des principales mesures de politique économique mises en oeuvre dans ce pays.
The article considers different economic policies likely to affect the social economy sector as an institutional sector. In a first time it sets up an analytical framework which allows to apprehend the policies contents and offers three typologies. In the light of this framework it first makes a global evaluation of policies implemented in Europe and then focuses on Spain, one of the Union countries with the highest level of development of these policies. Finally, the author evaluates the efficiency of the main measures of economic policy applied in this country.     

Output gap in Brazil: a real-time data analysis

Recent literature for developed economies has shown that output gap estimates go through important revisions over time, impairing their reliability in real time. We organize a real-time data set for Brazil’s GDP and assess the revisions of the output gap estimated by four different methods. Similar to the findings of studies for developed economies, the output gap revisions in Brazil are substantial in all methods, with frequent changes in the output gap sign. In general, both the GDP data revision and the effect of adding new observations to the sample are relevant sources of output gap revisions. However, differently from those studies, we cannot assert that the latter source is preponderant.