Technology's varying impact on the success of strategic business units within the miles and snow typology

The high-tech industry is usually treated as an homogeneous entity, without differentiating between organizations according to the relative importance of technology in their business strategy. This paper investigates the varying impact of technology on the success of strategic business units within the Miles and Snow typology. Although common wisdom might lead to the conclusion that prospectors are more dependent on technological progress than the other strategic types, the results show rather that the influence is greater and more fruitful for the defenders both in the short and the long term.     

Determinants of credit loan securitization in Chinese banking

This paper investigates the factors that drive securitization in China using a panel dataset drawn from the financial statements of 83 commercial banks. Given the unique banking and regulatory environment in China, we consider both conventional motivations for securitization and the role of nontraditional factors, including shadow banking. Across a variety of econometric specifications, there is little evidence that banks securitize for typical reasons, including to fund liquidity, transfer credit risk, or reduce regulatory capital. We do find, however, that as banks approach limits on loan to deposit ratios, subsequent securitization activities rise. In addition, robust evidence is presented to show that high levels of nontraditional banking activities precede a decision to securitize. As there is little evidence to suggest that shadow banking activities are receding, the overall findings indicate that banks may be using securitization to mitigate regulatory risk.     

Is economic growth for the birds?

The environment provides ecosystem services that support human wants. Economic growth is important for raising human living standards. But whether economic growth benefits the environment is unclear. Research into this relationship has focused on a U-shaped association known as the Environmental Kuznets Curve (EKC). As economies grow, environmental quality initially declines but ultimately recovers and improves. However, environmental quality has been narrowly defined in the research, largely neglecting the availability and range of ecosystem services. Because these services derive from biodiversity, we use avian biodiversity as a proxy for environmental quality. Our results replace the U-shaped relationship with a lazy-S relationship. As economies grow, environmental quality initially declines, then improves over intermediate growth, but ultimately declines at higher growth. The EKC hypothesis has been used to forward economic growth as a means for improving environment quality. Our results call into question policies that rely solely on economic growth for reversing environmental decline.     

Effect of air services availability on international visitors to New Zealand

We examine the effects of discrete changes in the availability of direct air services on the number of international visitor arrivals to New Zealand. We consider five different countries of origin and control for GDP and exchange rates. The results are mixed, suggesting that regional hubs and robust third-country carriers provide sufficient airlift for many visitors from countries without direct air services to New Zealand. We outline the resulting implications for international air services policy.     

Public Investment in Europe: Evolution and Determinants in perspective*

We describe the evolution of public investment and public capital stocks in Europe over the past three decades. Against this background, we analyse the macroeconomic determinants of public investment, with a special focus on its long‐term trend. We find that public investment has been determined by national income, the stance of budgetary policies and fiscal sustainability considerations. Neither the cost of financing nor the fiscal rules embodied in EMU have had a systemic impact on public investment. The significant downtrend that characterises the evolution of public investment in non‐cohesion countries is chiefly determined by drawn‐out episodes of fiscal consolidation, unrelated to EMU.     

Long‐term versus temporary certified emission reductions in forest carbon sequestration programs*

Under the Clean Development Mechanism (CDM) of the Kyoto Protocol, forest projects can receive returns for carbon sequestration via two crediting instruments: temporary or long‐term certified emission reductions (tCERs or lCERs). This study shows the effect of lCERs on the private owner’s forest rotation intervals decision and carbon credit generation in afforestation and reforestation projects. A credit verification mechanism with a harvest penalty implemented under the lCERs policy distorts the timber harvesting decision and the corresponding carbon credit supply. Two opposing incentives are created by the lCERs mechanism which leads to either longer or shorter rotations compared to the Faustmann rotation, depending on which incentive prevails. Our numerical results show that both lCERs and tCERs seem to have similar impacts on harvesting incentives, but the resulting carbon supply differs among the instruments owing to the credit verification mechanism. The tCERs carbon supply curve is monotonically increasing in the carbon price, while a lCERs carbon supply is non‐monotonic and may have a backward bending region over a range of carbon prices.     

Efficiency of the California electricity reserves market

We test the efficiency of the California electricity reserves market by examining systematic differences between its day- and hour-ahead prices. We uncover significant day-ahead premia, which we attribute to market design characteristics. On the demand side, the market design established a principal–agent relationship between the markets' buyers (principal) and their supervisory authority (agent). The agent had very limited incentives to shift reserve purchases to the lower priced hour-ahead markets. On the supply side, the market design raised substantial entry barriers by precluding purely speculative trading and by introducing a complicated code of conduct that induced uncertainty about which actions were subject to regulatory scrutiny. We use a high-dimensional vector moving average model to estimate the premia and conduct correct inferences. To obtain exact maximum likelihood estimates of the model, we develop a new EM algorithm that seamlessly incorporates missing data and applies directly to general moving average time series models. Our algorithm uses only analytical expressions: the Kalman filter and a fixed interval smoother in the E step and least squares-type regressions in the M step. Copyright © 2007 John Wiley & Sons, Ltd.     

Subsidizing charitable contributions: a natural field experiment comparing matching and rebate subsidies

We report the results of a field experiment conducted in conjunction with a mailed fundraising campaign of a nonprofit organization. The experiment is designed to compare the response of donors to subsidies in the form of matching amounts or rebated amounts. Matching subsidies are used by many corporations as an employee benefit; the US federal tax system encourages giving using a rebate subsidy by making donations tax deductible. The design includes a control group and two levels of subsidy of each type. Our main result is that matching subsidies result in larger total donations to charities than rebate subsidies, a result that is qualitatively similar to the lab findings. The estimated price elasticities for the matching subsidy are very similar to (and insignificantly different from) the lab experiments, while rebate subsidies lead to lower contributions in the field than in the lab. Since rebates in the field involve substantial lags and additional complications as compared with the “instant rebates” of the lab, this latter difference is not unexpected. The matching results are an important step in validating lab estimates of responsiveness to subsidies of charitable giving.

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