WHEN‐ISSUED SHARES,SMALL TRADES,AND THE VARIANCE OF RETURNS AROUND STOCK SPLITS

The increases in volatility after stock splits have long puzzled researchers. The usual suspects of discreteness and bid‐ask spread do not provide a complete explanation. We provide new clues to solve this mystery by examining the trading of when‐issued shares that are available before the split. When‐issued trading permits noise traders to compete with a more homogenous set of traders, decreasing the volatility of the stock before the split. Following the split, these noise traders reunite in one market and volatility increases. Thus, the higher volatility after the ex date of a stock split is a function of the introduction of when‐issued trading, the new lower price level after the split date, and the increased activity of small‐volume traders around a stock split.     

Return to Dollar, Generalized Distance Function and the Fisher Productivity Index

Exploring the duality between a return to dollar definition of profit and the generalized distance function we establish the relationship between the Laspeyres, Paasche and Fisher productivity indexes and their alternative Malmquist indexes counterparts. By proceeding this way, we propose a consistent decomposition of these productivity indexes into two mutually exclusive components. A technical component represented by the Malmquist index and an economical component which can be identified with the contribution that allocative criteria make to productivity change. With regard to the Fisher index, we indicate how researchers can further decompose the Malmquist technical component rendering explicit the sources of productivity change. We also show how the proposed model can be implemented by means of Data Envelopment Analysis techniques, and illustrate the empirical process with an example data set.     

The shadow economy in three Mediterranean countries: France,Spain and Greece. A MIMIC approach

This paper offers estimations of the evolution of the shadow economy in three Mediterranean countries, namely France, Spain and Greece. A multiple indicators and multiple causes model based on the latent variable structural theory has been applied. As established by Giles (Working paper on monitoring the health of the tax system, 1995), filtered data to solve the non-stationary problems are used. The model includes the tax burden (both as a whole and disaggregated into direct taxes, indirect taxes and social security contributions), a proxy of regulation burden, theu nemployment rate and self-employment as causes of the shadow economy and the GDP growth rate, the labour force participation ratio and the currency ratio as indicators of the underground economy. The results confirm that unemployment, the fiscal burden and self-employment are the main causes of the shadow economy in these countries, and confirm that an inverse relationship exists between the official GDP growth rate and that of the unofficial economy. This paper has benefited from the comments and suggestions of the anonymous referees. The usual disclaimer applies. The paper was partly written when third author was visiting Real Colegio Complutense at Harvard University. The hospitality of this Institution is gratefully acknowledged.     

Definition of innovation projects in small firms: A Spanish study

Small and medium‐sized enterprises (SMEs) are the main holders of the European economy and innovation projects are essential tools for SMEs to ensure their growth. A high percentage of innovation projects implemented by SMEs lacks planning and initial management, which causes the appearance of important problems for the SMEs survival. The authors have confirmed with a field study of 72 Spanish small firms that a lot of these problems arise from an incomplete project definition, so it is necessary to help SMEs to have a specific methodology that is appropriate to their own characteristics and projects. The statistical analysis shows how the project management knowledge helps to a better project definition, contributing to the project alignment with the company strategy. Also, it reveals other problems related to the project definition as planning, budget, market and financing. Of this analysis, it concludes that the definition phase supports the other phases and is essential in order to achieve project success. This paper presents an ‘integration model of factors’ that helps SMEs in the management of the definition phase of their innovation projects. This model relates the various areas of analysis needed to ensure their integration at the project definition. The relationships between the different model areas have been defined, showing the way to integrate the technical, economic and strategic outlooks of project objectives management in the definition phase of the project. This model has been implemented in 21 new innovation project definitions. The users' valuation has been very positive with a 90.4% of success and all of the model users are interested in implementing the model again in next projects. The main advantages highlighted were user‐friendliness, intuitive model and easy application.     

Competitive collaboration and market contestability: cases in Mexican and UK banking, 1945-75

In this article we explore the emergence and evolution of collaboration agreements among different types of intermediaries in the UK and Mexican financial systems. Collaboration in the UK looks at agreements between non-bank and non-finance providers aiming to modify their competitive capabilities and circumvent barriers to enter deposit markets. Collaboration in Mexican banking considered agreements between commercial banks and small regional banks during the period of 1945 to 1975. Agreements in Mexican banking are benchmarked against collaboration in the UK. As a result, research in this article sheds light on the success of collaboration agreements through changes in competitive strength rather than the longevity of the transaction or the formality and structural visibility of the agreements. Evidence documented here also helps in remedying a shortage of research around financial institutions in less developed countries and the economic and business history of Latin America, while providing an international comparison.     

From the islands of knowledge to a shared understanding: interdisciplinarity and technology literacy for innovation in smart electronic product design

In the context of the evolving Internet, a balance between technological advances and meaning change is crucial to develop innovative and breakthrough “connected electronics” that enable the Internet of Things. Designers and technologists are key enablers of this process respectively, ensuring adequate users’ needs and technology development, inside the evolving context of social environment and human relations. Smart electronic product design must be a truly interdisciplinary process, in which technologists are aware of how much their decisions impact the user-product relationship and designers understand the full potential and associated limitations of technology involved. Shared knowledge and communication are essential in this scenario, but, due to their technological limitations, designers are often excluded from high-level decision processes. In this paper, we address the design of constructivist tools and associated strategy to enhance the technological literacy of designers, as a strong foundation for knowledge-based dialogue between these realms. We demonstrate its effectiveness in a long-term multidisciplinary Project-Based Learning application with Design and Electronics students. We present the cases from 2 years’ experimentation (with the first year as control group) that demonstrate improvement in the quality of teamwork; in learning results; improved performance of the students reflected in the quality of the projects developed; and positive teachers’ and students’ evaluations. We conclude that the use of the proposed tool not only provides the designer an active voice in the process of designing smart electronics, but also promotes an effective common language between these two worlds.     

Patterns of occupational segregation by gender in the hospitality industry

This paper investigates the different patterns of occupational gender segregation in the hospitality industry in Andalusia. The methodology is based on the segregation curve and different segregation measures. The results show that cleaning jobs, customer service and jobs with less responsibility in the area of administration are dominated by women, whereas maintenance, jobs with a high level of responsibility in the areas of kitchen, restoration, and administration are dominated by men. Occupational segregation increases as the age of the workers and size of the establishment increase, but decreases with level of education and is less common among workers with training contracts, whereas it is greater among part-time and seasonal workers. Horizontal segregation is more marked than vertical segregation in the hotel industry, but horizontal and vertical segregation is similar in restaurants. Finally, vertical segregation decreases with the size of the establishment, whereas horizontal segregation increases.     

Evaluating Effectiveness in Public Provision of Infrastructure and Equipment: The Case of Spanish Municipalities

Concernabout local government ability to provide public services inan effective way is increasing in Spain as these functions arebeing decentralized from the central to regional governments.The goal of this research is to provide state and local officialswith a decision making tool that allows evaluation of the quantityand quality of the public services--infrastructure and equipment--thatthey are responsible for offering. We characterize performanceamong similar administrative observations, e.g. municipalities,by defining effectiveness improvement strategies--basedon selective funds allocation--that identify and rank thosesectors and variables that present provision deficits and requireprior attention. In order to evaluate provision at the municipalitylevel we define an additive effectiveness measure making useof Data Envelopment Analysis techniques which are enhanced toaccount for the presence of standards. The statistical data arefrom the Spanish Local Infrastructure and Equipment Survey.     

The Ethics of Speculation

Recently there has been an outpouring of consumer frustration over rising food and energy prices. Many politicians railed against “speculators” who allegedly drove up the prices of key necessities. Is speculation unethical? This article reviews the traditional arguments against speculation. Many of the standard criticisms confuse speculation with gambling. In much the same way as ethicists now draw distinctions between usury and normal business interest, we draw a distinction between socially useful speculation and gambling. Gambling involves taking on risk with no plausible expectation of making a profit. Gambling may provide entertainment value to some people, but like other addictive activities causes grave harm to a subset of users. Speculation involves taking on a business risk with a plausible expectation that a profit will result. Speculators provide an important risk bearing service by taking on risks that others do not want. They help markets to function better by helping to incorporate information into prices as well as providing liquidity. Speculators may actually reduce shortages by causing quicker price increases that motivate producers to increase production and consumers to conserve. But even socially useful speculation may have an ethical dark side. Does such speculation cause damage by adding excess volatility to prices? Speculators may contribute to price bubbles. At what point does legitimate speculation become odious “price gouging?” We also draw an ethical distinction between speculation, which seeks to benefit from changing prices, and manipulation, actions taken to push prices away from their economically appropriate levels.     

Demand for environmentally friendly vehicles: A review and new evidence

Although the need for more environmentally friendly vehicles was recognized some decades ago, this new market has not yet established itself. Consumer behavior needs to be studied to ascertain when people will decide to purchase hybrid or electric vehicles rather than conventional ones. An in-depth review of the state-of-the-art has identified existing deficiencies and these are addressed in this paper, proposing a new approach that is applied to the case of Santander in Spain. Emphasis is placed on the role of citizens in researching the local market and their requirements with respect to such vehicles; our model assumes variability in user preferences, an utmost requirement as concluded from the literature review. Results suggest that the highest demand for cleaner vehicles would be achieved in two ways: firstly, by penalizing conventional vehicles in terms of costs/km; secondly, by providing incentives directed at lowering the purchasing price of hybrid and electric vehicles. Finally, as demand becomes more elastic, the preferred strategy should initially focus on hybrid vehicles.