Financialization of food. Modelling the time-varying relation between agricultural prices and stock market dynamics

This article studies the correlation of agricultural prices with stock market dynamics. We discuss the possible role of financial and macroeconomic factors in driving this time-varying relation, with the aim of understanding what caused positive correlation between agricultural commodities and stocks in recent years. While previous works on commodity-equity correlation have focused on broad commodity indices, we study 16 agricultural prices, in order to assess patterns that are specific to agricultural commodities but also differences across markets. We show that an explanation based on a combination of financialization and financial crisis is consistent with the empirical evidence in most markets, while global demand factors don’t appear to play a significant role. The correlation between agricultural prices and stock market returns tends to increase during periods of financial turmoil. The impact of financial turmoil on the correlation gets stronger as the share of financial investors in agricultural derivatives markets rises. Our findings suggest that the influence of financial shocks on agricultural prices should decrease as global financial tensions settle down but also that, as long as agricultural markets are ‘financialized’, it might rise again when it is less needed, i.e. in the presence of new financial turmoil.     

The stability of money demand in the long-run: Italy 1861–2011

Money demand stability is a crucial issue for monetary policy efficacy, and it is particularly endangered when substantial changes occur in the monetary system. By implementing the ARDL technique, this study intends to estimate the impact of money demand determinants in Italy over a long period (1861–2011) and to investigate the stability of the estimated relations. We show that instability cannot be excluded when a standard money demand function is estimated, irrespectively of the use of M1 or M2. Then, we argue that the reason for possible instability resides in the omission of relevant variables, as we show that a fully stable demand for narrow money (M1) can be obtained from an augmented money demand function involving real exchange rate and its volatility as additional explanatory variables. These results also allow us to argue that narrower monetary aggregates should be employed in order to obtain a stable estimated relation.     

Understanding gross worker flows across U.S. states

The main cross-sectional and time-series properties of state-level gross and net worker flows, wages, and rents are characterized using micro-data from the U.S. Census. A dynamic general equilibrium model of worker migration is introduced to explain the stylized facts. In the model, a location may experience simultaneous inflows and outflows of workers. Recent migrants choose to migrate more often than incumbent workers. Thus, locations that attract high numbers of migrants also tend to experience high outflow rates. This pattern is a robust feature of the data and cannot be explained by models of net flows only.     

The courage to choose! Primogeniture and leadership succession in family firms

Research Summary : Building on a unique data set with information on the nuclear structure of entrepreneurial families, we integrate leadership succession into a socioemotional wealth (SEW) logic to test the antecedents and consequences of primogeniture vis‐à‐vis second‐ or subsequent‐born selection in family firm succession. Our findings suggest that appointing a family firstborn sibling is more likely when there is a high degree of SEW endowment and the family firm has pre‐succession performance below aspiration levels. Next, we find that appointing a second‐ or subsequent‐born sibling has a positive and significant effect on post‐succession firm profitability, particularly when the firm is in its second generation or later. Managerial Summary : What drives succession choices in family firms? What are the performance implications of each succession choice? These are questions of vital relevance for every business owner. Focusing on the pool of potential family heirs at the time of succession, our study adds to the debate on the drivers of succession choices by suggesting that having a family intensive governance structure fosters primogeniture as the main succession logic, even when the family firm is experiencing lower profitability. Our study informs business owners on the implications of different succession policies, suggesting that family firms that have the courage to disregard primogeniture and choose more wisely the family successor are also the ones experiencing higher post‐succession performance.     

Innovation Systems in a Global Economy

There is increasing emphasis being put on the need to be 'internationally competitive'. This imperative is being driven, it is argued, by the globalization of economic and corporate life. This 'globalization' is the subject of a burgeoning academic literature. To achieve and maintain the necessary competitive edge requires companies to be innovative, technologically dynamic, and organizationally efficient - in a dynamic, not just static sense. There is a literature on systems of innovation analyzing such requirements, how they have been met in practice in different contexts up until now, and what the implications are for policy. However, these two literatures - on systems of innovation and globalization - have developed quite independently. The purpose of the current paper is to discuss the implications of each for the other. Far from transcending national systems of innovation, current globalization processes are shown to have a symbiotic relation to such systems.     

Roy Harrod and the Oxford Economists' Research Group's inquiry on prices and interest, 1936-39

In 1936–39, a group of Oxford tutors inquired, by meansof interviews with entrepreneurs, on price policy and investmentdecisions. A chronology of the inquiry is outlined, based onthe surviving documents found in various archives, focusingon the choice of the subject, on the attempts to provide a theoreticalinterpretation of the phenomena that were discovered, and onthe publication of the results. The role of Harrod is highlighted:it is assessed how far his theoretical approach to the cycleinfluenced the inquiry, and to what extent he modified his viewas a consequence of the group's findings. ‘Our group...best represents the collective mind of economistsin Oxford’ (Harrod to the other members of the OERG, 21April 1939, in ABP 45 and 170).     

The effect of household appliances on female labor force participation: Evidence from microdata

We estimate the effect of household appliance ownership on the labor force participation rate of married women using micro-level data from the 1960 and 1970 U.S. Censuses. In order to identify the causal effect of home appliance ownership on married women's labor force participation rates, our empirical strategy exploits both time-series and cross-sectional variation in these two variables. To control for endogeneity, we instrument a married woman's ownership of an appliance by the average ownership rate for that appliance among single women living in the same U.S. state. Single women's labor force participation rates did not increase between 1960 and 1970. We find evidence in support of the hypothesis that the diffusion of household appliances contributed to the increase in married women's labor force participation rates during the 1960's.     

Triangular Relations in Public Service Economics

This paper critically re-examines the restructuring of public services. Four main decision-making phases are identified: the public oversight to be guaranteed to socially sensitive economic activities; the ways of financing them; the economic organisation of the industry; and the production decisions. By focusing on organisation, the paper reinterprets the market structure in public service industries on the basis of the interactions among three main players: users/citizens, the government and the service supplier. It argues that the issue of public versus private ownership has been overemphasised, and that an effective increase in efficiency can be obtained by introducing appropriate incentives for both public and business players. Instead of using a single policy instrument, namely privatisation, public action ought to be informed by an array of organisational solutions.