Malmquist Indexes Using a Geometric Distance Function (GDF). Application to a Sample of Portuguese Bank Branches

Traditional approaches to calculate total factor productivity (TFP) change through Malmquist indexes rely on distance functions. In this paper we show that the use of distance functions as a means to calculate TFP change may introduce some bias in the analysis, and therefore we propose a procedure that calculates TFP change through observed values only. Our total TFP change is then decomposed into efficiency change, technological change, and a residual effect. This decomposition makes use of a non-oriented measure in order to avoid problems associated with the traditional use of radial oriented measures, especially when variable returns to scale technologies are to be compared. The proposed approach is applied in this paper to a sample of Portuguese bank branches.     

Mean reversion and long memory in African stock market prices

We examine the behavior of stock market prices in several African countries by means of fractionally integrated techniques. In doing so, we can test for mean reversion in these markets. Our results can be summarized as follows: we cannot find evidence of mean reversion in any single market, and evidence of long memory returns (i.e., orders of integration above 1 in the logged stock prices) is obtained in the cases of Egypt and Nigeria, and, in a lesser extent in Tunisia, Morocco and Kenya. Permitting the existence of a structural change, the break dates take place in the earlier 2000s in the majority of the cases, and evidence of mean reversion seems to have taken place in the periods before the breaks in most of the countries. If we focus on the absolute and squared returns, evidence of long memory is obtained in Nigeria and Egypt. Thus, for these two countries, a long memory model incorporating positive fractional degrees of integration in both the level and the volatility process should be considered.     

Endogenous rationing,price dispersion and collusion in capacity constrained supergames

This paper examines the feasibility of collusion in capacity constrained duopoly supergames. In each period firms simultaneously set a price–quantity pair specifying the price for the period and the maximum quantity the firm is willing to sell at this price. Under price–quantity competition firms are able to ration their output below capacity. For a wide range of capacity pairs, the equilibrium path providing the smaller firm with its highest stationary perfect equilibrium payoff requires that it undercut its rival’s price and ration demand. Furthermore, for some capacities and discount factors supporting security level punishments, price shading and rationing arise everywhere on the set of stationary perfect equilibrium paths yielding (constrained) Pareto optimal payoffs. That is, price shading may not only be consistent with optimal collusion, it may be a requirement of optimal collusion.     

The effects of fragility and financial inequalities on inclusive growth in African countries

Africa has the largest number and proportion of fragile states in the world. Fragile states are characterized by slower economic growth, higher incidences of poverty, and persistent inequality. Thus, there is a circular relationship between fragility, inequality, and slow economic growth. This study examines the relationship between fragility, financial inequalities, and inclusive growth in African countries. We introduce a novel way of examining inclusive growth in African countries by developing a unified measure of inclusive growth that captures the two dimensions of inclusive growth: income growth and income distribution. This enables us to adequately assess not just increased opportunities arising from economic growth, but also see how those new opportunities are distributed across all segments of the population. We captured the fragile status of African countries by using an index of fragility. We measured financial inequalities using new data on financial inclusion. The data analysis suggested negative relationships between fragility and inclusive growth in African countries. In addition, the results suggest positive relationships between financial inclusion and inclusive growth. Thus, inclusive growth can be fostered through policies that reduce financial inequalities. Therefore, a less fragile environment is conducive to inclusive growth both directly and indirectly through financial inclusion.     

Inflation volatility and stock prices: Evidence from ARCH effects

This paper examines the impact of inflation uncertainty on stock prices in developed as well as in emerging capital markets over the period 1980:1–93:12 via an Autoregressive Conditional Heteroskedasticity (ARCH) model for inflation. The results seem to support the presence of a negative association between inflation uncertainty and stock prices.The authors would like to thank, without implicating, Gikas Hardouvelis, Costas Karfakis, and especially the discussant of the conference session held in Williasmsburg, Robert C. Winder, for helpful comments and suggestions.     

SURVEYING THE ECONOMICS OF PLURAL MODES OF ORGANIZATION

Why do firms concomitantly rely on more than one organizational arrangement to procure/distribute a given input/product? In this paper, we systematically review and discuss the extensive path undergone by the literature exploring this issue: the so‐called plural forms. We address two main questions: how to explain the coexistence (and often the prevalence) of plural forms in many types of businesses? Are plural forms stable or a transitory phenomenon? We describe the most prominent motivations identified in the economics and management literature that drive firms to adopt plural forms and show that their vast majority are related to the mitigation of various types of agency/transaction costs. We also demonstrate that most of the available pieces of empirical evidence suggest the stability of plural forms over time. We conclude by demonstrating the path that has been trailed by the most recent developments.     

Spreading and Shifting Costs of Lateral Control Among Peers: A Structural Analysis at the Individual Level

This paper uses three-way and sociometric data to reconstitute individual conceptions of peer-driven intervention for the protection of common resources in a collegial organization, a Northeastern corporate law firm. Variations in partners' individual conceptions are explained in terms of management of costs of lateral control. Costs of control are mainly expressed as costs to members in terms of social capital. Management of such costs includes spreading or concentrating them among partners, shifting them to others or bearing them oneself, and using similarities among others to smooth the control process among peers. Leverage styles are identified. They tend to combine various ways of spreading and shifting such costs, and characterize three levels of seniority. Seniority appears to be a key variable for a theory of unobtrusive protection of common resources among peers.     

Building Core Competencies in Crisis Management Through Organizational Learning: The Case of the French Nuclear Power Producer

Drawing from the resource-based theory of the firm, we develop a conceptual framework to show how organizational learning helps companies build a set of embedded knowledge assets (core competencies). The evolution of the core competencies over time depends on the ability of the firm to maintain a high level of organizational learning. In this article, we take the case of the French nuclear industry to illustrate how the most powerful French electricity producer and supplier, EDF, had succeeded, for 20 years, in building a core competence in nuclear risk and crisis management. Referring to the future deregulation of the European electricity market and the fierce competition of substitute resources of energy, the article shows that nuclear safety is a crucial issue for the survival of EDF and the European nuclear industry. We explore how EDF has learned from Three Mile Island in 1979 and Chernobyl in 1986 to improve and enrich continuously its core competence in risk and crisis management. We distinguished three phases in the learning process of EDF: the technical phase (1977–1982), the human phase (1982–1989), and the cultural phase (1989–1995). Each phase is analyzed as a step toward a greater awareness of the multidimensional nature of risk and crisis management.     

Political versus economic institutions in the growth process

After a decade of research on the relationship between institutions and growth, there is no consensus about the exact way in which these two variables interact. In this paper we re-examine the role that institutions play in the growth process using data for developed and developing economies over the period 1975–2005. Our results indicate that the data is best described by an econometric model with two growth regimes. Political institutions are the key determinant of which regime an economy belongs to, while economic institutions have a direct impact on growth rates within each regime. These findings support the hypothesis that political institutions are one of the deep causes of growth, setting the stage in which economic institutions and standard covariates operate.