Entrepreneurship and the Division of Ownership in New Ventures

The current study investigates a tripartite incentive contract between an innovator supplying an intellectual asset, a professional assigned to productive tasks, and a consulting firm specializing in matching ideas and professional skills. A rather simple pure tripartite partnership implements the consultant's expected profit maximum and maximizes the project's expected surplus. The liquidity-constrained professional is compensated by receiving a share of one half in the new venture. The consultant's and the innovator's shares reflect the relative value of search. However, the consultant's optimal search effort to find an appropriate production partner is inefficiently low .     

The dark side of making transit irresistible: The example of France

The French experience in developing policies to reduce car use in metropolitan areas is presented in this paper as an illustration of the lack of recognition of the broader set of criteria on which specific policy frameworks should be judged. One of the major challenges, and often failings of policies focussed on reducing car use, is the lack of a structure that ensures that the downside impacts are not relocated to other parts of a system such that potential gains end up being eroded by the potential losses. We draw on experiences throughout France, as well as case studies in Lyon, to highlight the dark side of French transport policy promoting a switch from car to public transit and non-motorised modes, in terms of financial, equity and environmental outcomes.     

A diagnostic m-test for distributional specification of parametric conditional heteroscedasticity models for financial data

This paper proposes a convenient and generally applicable diagnostic m-test for checking the distributional specification of parametric conditional heteroscedasticity models for financial data such as the customary Student t GARCH model. The proposed test is based on the moments of the probability integral transform of the innovations of the assumed model. Monte-Carlo evidence indicates that our test performs well both in terms of size and power. An empirical example illustrates the practical usefulness of the test and some of its possible extensions are outlined.     

Implementation issues on shrinkage estimators for seasonal factors within the X-11 seasonal adjustment method

This commentary on Miller and Williams [Intl. J. Forecast. 20 (2004)S29-49] discusses how shrinkage can be implemented within X12-ARIMA. We discuss how the seasonal factors are estimated in X12-ARIMA, how shrinkage can be translated into a moving average, if this is compatible with the philosophy behind the X12-ARIMA method, and suggest possible improvements.     

Community Targeting for Poverty Reduction in Burkina Faso

This article develops a method for targeting antipoverty programsand public projects to poor communities in rural and urban areas.The method calls for constructing an extensive data set froma large number of sources and then integrating the entire setinto a geographic information system. The data set includesdemographic data from the population census; household-leveldata from a variety of surveys; community-level data on localroad infrastructure, public facilities, water points, and soon; and department-level data on agroclimatic conditions. Aneconometric model that estimates the impact of household-, community-,and department-level variables on household consumption is usedto identify the key explanatory variables that determine thestandard of living in rural and urban areas. This model is thenapplied to predict poverty indicators for 3,871 rural and urbancommunities in Burkina Faso and to map the spatial distributionof poverty in the country. A simulation analysis assesses theeffectiveness of village-level targeting based on these predictions.The results show that such targeting is an improvement overregional targeting in that it reduces leakage and undercoverage.     

The Exogamic Nature of Sino-Foreign Joint Ventures

The paper suggests that Sino-foreign joint ventures areexogamicpartnerships. Three hypotheses were formulated: (1) partners pool differentiated sets of idiosyncratic and non-substitutable resources into their joint ventures; (2) they establish cooperation to gain access to resources provided by their counterparts; (3) the younger the partnership, the less the partners contribute with idiosyncratic resources. A questionnaire investigation was conducted into 67 Sino-foreign joint ventures. The test for H1 clearly demonstrated that each partner pools very different resources into the joint venture. H2 was also clearly supported by the data collected. However, H3 was weakly supported.     

A bayesian approach to time-varying cross-sectional regression models

This paper presents a Bayesian approach to regression models with time-varying parameters, or state vector models. Unlike most previous research in this field the model allows for multiple observations for each time period. Bayesian estimators and their properties are developed for the general case where the regression parameters follow an ARMA(s,q) process over time. This methodology is applied to the estimation of time-varying price elasticity for a consumer product, using biweekly sales data for eleven domestic markets. The parameter estimates and forecasting performance of the model are compared with various alternative approaches.     

Fortress Europe: Jericho or Château d’If?

Traditional analysis of customs union formation suggests that it leads to an increase in members' external tariffs. This paper stresses two aspects of European trade and trade policy—a large volume of intra-industry trade between similar countries and a political motivation for tariffs—and highlights a role for tariff coordination in a model of differentiated products in which tariffs affect domestic costs and thus export prices and the magnitude of monopolistic rents. We show that when workers choose the tariffs and receive but a small portion of tariff revenues, the union's tariff wall falls.     

Ranking of information systems in agency models: an integral condition

Summary. We provide a condition for ranking of information systems in agency problems. The condition has a straightforward economic interpretation in terms of the sensitivity of a cumulative distribution with respect to the agent's effort. The criterion is shown to be equivalent to the mean preserving spread condition on the likelihood ratio distributions. Received: November 10, 1999; revised version: February 17, 2000