Multivariate Business Cycle Synchronization in Small Samples*

In this paper, we study the degree of business cycle synchronization by means of a small sample version of the Harding and Pagan's [Journal of Econometrics (2006) Vol. 132, pp. 59–79] Generalized Method of Moment test. We show that the asymptotic version of the test gets increasingly distorted in small samples when the number of countries grows large. However, a block bootstrapped version of the test can remedy the size distortion when the time series length divided by the number of countries T/n is sufficiently large. Applying the technique to a number of business cycle proxies of developed economies, we are unable to reject the null hypothesis of a non‐zero common multivariate synchronization index for certain economically meaningful subsets of these countries.     

Testing for short- and long-run causality: A frequency-domain approach

The framework of Geweke (1982. Journal of the American Statistical Association 77, 304–324.) and Hosoya (1991. Probability Theory and Related Fields 88, 429–444.) is adopted to construct a simple test for causality in the frequency domain. This test can also be applied to cointegrated systems. To study the large sample properties of the test, we analyze the power against a sequence of local alternatives. The finite sample properties are investigated by means of Monte Carlo simulations. Our methodology is applied to investigate the predictive content of the yield spread for future output growth. Using quarterly US data we observe reasonable leading indicator properties at frequencies around one year and typical business cycle frequencies.     

Trade Liberalization and Industrial Restructuring: The Role of Cross-Border Mergers and Acquisitions

This paper analyzes industry adjustments to trade liberalization. It introduces cross-border mergers and acquisitions (M&A) as an alternative mode of industrial restructuring to firms' exit. In a two-country Cournot model, we examine the responses of domestic and foreign firms endowed with different technologies for different stages of trade openness. It is found that the less efficient firm loses market shares in its home market at the beginning of trade liberalization. Only for a more advanced level of liberalization, does it take advantage of a larger access to foreign demand. Trade liberalization may therefore harm its profits too strongly, forcing it to leave the market. However, although its incentives decrease with trade liberalization, the high-technology firm may be willing to take it over for low organizational and technological costs of firms' integration. In addition, it may buy it out even if the less efficient firm manages to stay. Then, trade liberalization affects M&A incentives depending on the technological gap. For low and high (medium) gap, there is an inverted U- (W-) shaped relation between trade costs and incentives to merge. Moreover, although technology transfer is assumed to be complete, M&A may lead to a reduction in consumers' welfare. Firms may capture some pro-competitive gains from economic openness. Lastly, an empirical analysis based on a data set of OECD members' multinationals gives some support to these theoretical predictions.     

Climate change mitigation options and directed technical change: A decentralized equilibrium analysis

The paper considers an endogenous growth model with climate change as well as three R&D sectors dedicated to energy, CCS (Carbon Capture and Storage) and backstop efficiency. First, we characterize the set of decentralized equilibria: a particular equilibrium is associated with any vector of policy instruments including a carbon tax and a subsidy to each R&D sector. Second, we show that it is possible to express any equilibrium as the solution of a maximization program. Third, we solve the first-best optimum problem and thereby deriving the optimal instruments. Finally, we illustrate the theoretical model using calibrated functional specifications. In particular, we investigate the effects of various combinations of policy instruments (including the optimal ones) by determining the deviation of each corresponding equilibrium from the “laisser-faire” benchmark. We find notably that introducing an R&D subsidy hardly affects emissions when a carbon tax is already implemented, thus revealing a complementary effect between these two policy instruments.     

Generativity and self‐enhancement values in eco‐friendly behavioral intentions and environmentally responsible consumption behavior

During the past 35 years, academic researchers have been examining the relationship between environmentally responsible consumption behavior and numerous antecedent variables. Because sustainability requires a long‐term perspective, the study included generativity, a construct developed by Erikson ( 1950 ) and self‐enhancement values (Schwartz, 1994 ) as antecedent variables for environmentally responsible consumption behavior. Generativity refers to individuals' beliefs that their current behavior has consequences that extend into future generations, while self‐enhancement refers to values relating to power, wealth, and influence. These variables are related in that generativity requires consideration of others while self‐enhancement generally refers to considering only one's self. This suggests that individuals high on generativity ought to be more aware of and concerned about the environment and should modify their behavior accordingly, and those who are high on self‐enhancement should be less concerned or willing to change behavior. The results of the study, including French and American respondents, indicate that individuals who score high on generativity are more likely to have eco‐friendly intentions and more environmentally responsible consumption behaviors, but generativity interacts with self‐enhancement, resulting in an interpretation that is different from that typically found in environmentally related studies. © 2010 Wiley Periodicals, Inc.     

Vietnam in Mutation: Will it be the Next Tiger or a Future Jaguar?

The article describes Vietnam's economic prospects. Using the World Bank model (1993), the study is based on a documentary research and interviews carried out in Vietnam. The inadequate business environment in Vietnam which is highlighted, implies that Vietnam far from being a tiger should be described as a young jaguar, following in the footsteps of Thailand or Indonesia, all of which are trying to catch up with the four tigers.     

Imperfect competition,technical progress and capital accumulation

This paper constructs a dynamic equilibrium growth model, in which some firms act as monopsonies on the labor market. The framework is an overlapping generations growth model with altruistic agents. Two types of firms exist, competitive and non‐competitive, the latter being endowed with a more productive technology. They behave strategically on the labor market, in taking into account the impact of their demand for labor on the equilibrium wage and on their profit. In this framework, the impact of technical progress on capital accumulation can be positive or negative, depending on its effect on monopsony power.     

Productivity enhancement at home via cross‐border acquisitions: The roles of learning and contemporaneous domestic investments

We examine whether ex post domestic productivity gains accrue to firms making cross‐border acquisitions. We argue that cross‐border acquisitions can enhance the acquirers' productivity at home, and we posit that these domestic productivity gains will be greater when there are learning opportunities in the target's host country and when contemporaneous domestic productivity‐enhancing investments are made by the acquirer in conjunction with the acquisition. These predictions are supported by data drawn from a sample of French acquiring and nonacquiring firms. Our results indicate that cross‐border acquisitions and investing in productivity at home are complementary: each makes the other more beneficial to firm productivity. Copyright © 2014 John Wiley & Sons, Ltd.     

Information optimality and Bayesian modelling

The general approach of treating a statistical problem as one of information processing led to the Bayesian method of moments, reference priors, minimal information likelihoods, and stochastic complexity. These techniques rest on quantities that have physical interpretations from information theory. Current work includes: the role of prediction, the emergence of data dependent priors, the role of information measures in model selection, and the use of conditional mutual information to incorporate partial information.