When Mayors Go Global: International Strategies,Urban Governance and Leadership

An enigma lies at the heart of this article. In December 2006, the mayor of Saint‐Étienne, Michel Thiollière, was elected as the fifth best mayor in the world by the internet site City Mayors. Yet no publicity was made locally around this award. Taking this anecdote as a starting point, this article deals with the motivations that can lead a city mayor to become involved in urban international relationships' policy (city twinning, participation in cities networks, study trips, etc.). On the one hand these activities provide resources for building up political legitimacy and for electoral control, and on the other they provide resources for policy solutions to urban problems in the public realm. Nevertheless, in a context of transformation of the process of legitimization of urban elected officials, the second kind of resources seems to be the most sought after in mayoral involvement in international activities.     

West African Single Currency and Competitiveness

This paper compares different nominal anchors to promote internal and external competitiveness in the case of a fixed exchange rate regime for the future single regional currency of the Economic Community of the West African States (ECOWAS). We use counterfactual analyses and estimate a model of dependent economy for small commodity exporting countries. We consider four foreign anchor currencies: the US dollar, the euro, the yen and the yuan. Our simulations show little support for a dominant peg in the ECOWAS area if they pursue several goals: maximizing the export revenues, minimizing their variability, stabilizing them and minimizing the real exchange rate misalignments from the fundamental value.     

Optimal unemployment insurance: transitional dynamics vs. steady state

In this study, we ask whether the presence of precautionary savings substantially reduces the optimal replacement rate in an European economy type characterized by high unemployment benefits and moral hazard. We build a simple job search model calibrated on French data and, in line with previous studies, find that the optimality criterion based on comparisons of steady states leads to a low optimal ratio. Yet, this result ignores potential transitional costs due to the necessity for agents to increase their savings and reduce their consumption whenever the ratio is cut. We therefore build a dynamic model taking full account of the transition, and show that a reduction in benefits reduces welfare. Even though the long-run optimal replacement rate is lower than the current one, transitional costs dominate long-run gains.     

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.     

Fast and realistic European ARCH option pricing and hedging

The behavior of the implied volatility surface for European options was analysed in detail by Zumbach and Fernandez for prices computed with a new option pricing scheme based on the construction of the risk-neutral measure for realistic processes with a finite time increment. The resulting dynamics of the surface is static in the moneyness direction, and given by a volatility forecast in the time-to-maturity direction. This difference is the basis of a cross-product approximation of the surface. The subsequent speed-up for option pricing is large, allowing the computation of Greeks and the delta replication strategy in simulations with the cost of replication and the replication risk. The corresponding premia are added to the option arbitrage price in order to compute realistic implied volatility surfaces. Finally, the cross-product approximation for realistic prices can be used to analyse European options on the SP500 in depth. The cross-product approximation is used to compute a mean quotient implied volatility, which can be compared with the full theoretical computation. The comparison shows that the cost of hedging and the replication risk premium have contributions to the implied volatility smile that are of similar magnitude to the contribution from the process for the underlying asset.     

Conglomerate Structure and Capital Market Timing

We examine the effects of keiretsu structure on capital market-timing. Keiretsu groups offer a hybrid structure between fully integrated conglomerates and stand-alone firms. We find that past market conditions affect the capital structure of keiretsu firms more than they affect the capital structure of unaffiliated firms. The decision to issue equity is more correlated with market conditions for keiretsu members than it is for unaffiliated firms. The stock returns of keiretsu firms following the issuance of equity decrease with the size of the issuance. These results suggest that keiretsu members time the issuance of equity more so than stand-alone firms.     

Office automation: From barriers to gateways

Office automation is a concept with which the majority of executives and senior managers profess to agree but to which few have made a serious commitment. The authors examine the barriers to office automation which may be responsible for the reluctance of many executives to proceed with automating the office. In addition, they offer suggestions for removing the real and perceived obstacles to office automation.     

Benefiting from a Clean Environment versus Undertaking Efforts to Protect the Environment

We make an important distinction between product attribute claims related to (1) the environment of the production site and (2) environmentally friendly actions. A producer using type #1 claims benefits from a clean environment, while a producer using type #2 claims undertakes efforts to protect the environment. The categorization of those claims may not be clear to consumers. Rather than focus on informational asymmetry between producers and consumers, this article deals with the way producers may support environmental claims on agrifood products using one of the two categories.     

Symposium on Harrison's “Lean and Mean”: A policy perspective

Conclusion It is unfortunate that Bennett Harrison has been trapped into a Manichean view of the world and that, in his attack on small business, he has found no lever other than a reliance on big business. The world is not as simple as he would appear to suggest. It is neither black nor white, but grey; coordination is neither vertical nor horizontal, but transversal.Yet one must welcome Harrison's polemical attack. It may yet serve as a catalyst that will enable the debate to go well beyond the large-firm/small-firms fixation (a somewhat sterile debate) into an exploration of the various forms of transversal coordination and of their relative merits in a rich variety of contexts. If this were to be the case, one might, in the future, see the present controversies surrounding Harrison's book as being something of a landmark, for while the book itself may have somewhat faded away into oblivion, the stimulating discussions generated by the book will have left behind what Gaston Bachelard would have called a surobject — a solid residue, a positive contribution to knowledge that would never have materialized without such a book (Bachelard, 1949).     

Accounting behavior of German firms after an ADR issuance

This paper presents preliminary evidence on whether German corporations that issue American depositary receipts (ADR) experience a change in the level of garbling in earnings as expressed under German Generally Accepted Accounting Principles (GAAP). In a shareholder regime, a manager's objective is to maximize the company's stock price. Past literature suggests that this will lead managers to follow a policy of more disclosure. In stakeholder regimes, managers have an ill-defined objective function and their compensation is not typically sensitive to the price of the stock. This literature suggests that managers in stakeholder regimes will manipulate earnings to satisfy the various constituents of the firm. By issuing an ADR, a company changes its regime: shareholders become relatively more important to the manager. To maximize the stock price, managers should minimize the overall noise in accounting numbers even under local GAAP. The empirical results are generally consistent with this hypothesis, but a small sample size prevents drawing definitive conclusions.