The opportunity cost of duality

A dual representation of a technology, e.g., a cost function, may not contain all of the technological information, but it will contain all of the information about input vectors that would be chosen by a cost-minimizing firm. At least this much is clear for deterministic technologies. The main question addressed in this paper is whether the same can be said about stochastic technologies and their dual representations. Despite some pessimism expressed in the stochastic frontier literature on this question, we argue that there is no extra cost imposed in the stochastic case. Thus, the conclusion of this paper is: Just dual it!     

Firms,public good provision and institutional uncertainty: Evidence from Russia

Enterprises in post-socialist and transition economies often participate in providing infrastructure and social services to the surrounding community which in the Russian legal setting should be local authorities’ responsibility. We propose that this bundling of social and infrastructure goods provision with firm's core operations is a fully rational choice in an uncertain institutional environment. A unique survey data suggest that this manifests itself through more reliable infrastructure, stronger employee attachment to the firm and, most interestingly, through better relations with the authorities. Relationship with authorities is a two-way game where the firm gains from the arrangement but on the other faces sanctions if it decided to depart from it. Firm's participation in the arrangement is clearly enhanced by inherited fixed capital assets from the Soviet era.     

Wealth and sustainable development: the role of David Pearce

Green net national product was thought to be one way of measuring sustainable income. However, David Pearce understood that a better measure of sustainable development was to look at what a generation is leaving in form of capital assets to later generations. In this article, his arguments and insights are highlighted against recent theoretical advances.     

Parallel Neutrality

This paper develops the notion of parallel-neutral technical change for inputs and outputs. It is shown that parallel-neutral technical change generalizes existing radial notions of neutral technical change. A taxonomy of the structural consequences of parallel-neutral technical change is developed.     

Sustainable dressing: Consumers' value perceptions towards slow fashion

Slow fashion that improves with an increasing awareness of sustainability has changed consumers' value perception and purchasing behaviours. The aim of this study is to determine slow fashion dimensions that influence consumers' value perceptions for slow fashion products and to reveal the effects of the perceived value on consumers' intentions to purchase and willingness to pay higher prices. The sample includes 725 students pursuing higher education in Turkey and Kazakhstan. Exploratory and confirmatory factor analyses were used to specify the factor structure of the variables used in the research, and structural equation modelling was used to test the hypotheses. Data analysis showed that authenticity, locality, and exclusivity aspects in Turkey and equity, functionality, locality, and exclusivity aspects in Kazakhstan contributed to perceived customer value. Perceived customer value in both groups positively affects the intention to purchase and the willingness to pay higher prices. In addition, consumers who intend to purchase slow fashion clothing are willing to pay higher prices than other products. The results suggest that consumers in different countries have different orientations that influence their perceptions of value. From this perspective, this study can provide designers with insights on the importance of making sustainable designs that are appropriate to the target market beyond the trends imposed by the global fashion industry.     

HOW DO RATING AGENCIES’ DECISIONS IMPACT STOCK MARKETS? A META‐ANALYSIS

The purpose of this study is to examine how credit rating agencies’ decisions impact the stock market using a systematic and quantitative review of existing empirical studies. Specifically, we employ a meta‐regression analysis (MRA) to investigate the extent and nature of the effect of rating agencies’ decisions on the stock market. We survey 62 studies published between 1978 and 2015. Our first finding is that the cumulative average abnormal returns calculated from this empirical literature are affected by publication bias. After controlling for publication bias, the main findings of our meta‐analysis indicate that negative rating decisions cause statistically significant negative abnormal returns. This evidence suggests an informational effect. Our results also indicate that positive rating decisions do not have a significant effect. Finally, the MRA results reveal the importance of several factors related to primary study design, as well as to the nature of the data.     

Sustainable Development and Resilience in Ecosystems

Two new important developments in environmental and resource economics is presented—non convex dynamics of ecosystems and wealth as an indicator of sustainable development. Non convex dynamics imply existence of resilience, that is the robustness of systems to withstand exogenous perturbations. Resilience can be regarded as an insurance against flips of the system into different basins of stability. Sustainable development, according to the Bruntland report, is the provision of productive resources to future generations to make it possible for them to live as well as the present generation. Thus, the value of changes in productive assets is therefore an index of whether an economy is on a sustainable path or not. Resilience can be regarded as one such productive asset and the paper discusses how one can define the value of this asset.