An investment-function-based measure of capacity utilisation.: Potential output and utilised capacity in the Bank of Italy's quarterly model

Measures of potential output and the output gap are increasingly being developed and used to concisely quantify and monitor the risk of price accelerations stemming from rises in aggregate demand that are not met by a corresponding increase in supply. They often play a prominent role in the price determination mechanisms of macroeconometric models. In this paper we build a measure of potential private-sector value added for the Italian economy that is consistent with the capital accumulation process in the Banca d'Italia's Quarterly Model — and more generally with the rest of the supply-side block of that model. More specifically, we exploit the fact that the investment function can be thought of as a relationship transforming desired gross additions to capacity output into capital accumulation by means of a conversion factor (the optimal capital/output ratio). Thus, if one removes the component of investment decisions that stems from changes in the relative price of the production factors, (i.e. in the optimal capital/output ratio), then a measure of the desired gross addition to capacity may be constructed. The results draw a cyclical picture of the degree of capacity utilisation for the period 1970–1997 that is roughly in line with those produced by the Wharton and Hodrick–Prescott filter approaches, as well as with the pictures resulting from the ISAE, IMF, European Commission and OECD measures of the output gap. Our investment-function-based measure appears to be a promising indicator of the pressure exerted on prices by demand accelerations. Its empirical properties are, on the whole, acceptable and plausible.     

Monetary Policy in Austria–Hungary, 1876–1913: An Econometric Analysis of the Determinants of the Central Bank’s Discount Rate and the Liquidity Ratio

This paper presents a model to explain the official discount rate of the Central Bank of Austria–Hungary from 1876 to 1913. The discount rate is assumed to depend on the liquidity ratio of the Bank, defined as the ratio of its stock of metals to banknotes issued, and on changes in foreign discount rates. The paper also presents an equation explaining the liquidity ratio. We use “not equally spaced chronologically ordered data” referring to the 50 discount rate changes enacted. The regressions confirm that the liquidity ratio was the main determinant of the discount rate and that Germany (and not Great Britain) played a significant role in determining the Austro–Hungarian discount rate and the liquidity ratios, supporting the view that the classical gold standard was a decentralized multipolar system rather than a system fully dominated by London as suggested by Keynes. The regressions also suggest that, although Austria–Hungary had an inconvertible paper currency (1879–1892) and fluctuating exchange rates (1876–1895) and formally joined the gold standard only in 1902, it “shadowed” the behaviour of gold standard Central Banks with such consistency that the stability of the estimated regressions was relatively unaffected by the frequent institutional changes.

The social process of internet appropriation: Living in a digitally advanced country benefits less well-educated Europeans

We generalize and extend the sequential model proposed by the resources and appropriation theory to explain the digital divide in the European Union plus the United Kingdom (EU27+UK). We measure the theoretical constructs of the model with data provided by the EU and test the theoretical predictions using a partial least squares structural equation model. We find support for the hypothesized relationships but find that the effects vary depending on the digital development level of countries. While education overall is the primary determinant of the social production of digital inequalities, a country's digital development level is crucial for less well-educated Europeans. These findings have theoretical and practical implications: (1) they call into question the homogeneity of the effect of causal relationships and the assumption that individuals differ only in terms of motivation, access, and digital skills, and (2) they indicate that socially disadvantaged Europeans benefit from living in more digitally developed countries.     

Glocalization of accounting standards: Observations on neo-institutionalism of IPSAS

This paper defines and then observes processes of glocalization surrounding the adoption of International Public Sector Accounting Standards (IPSAS) for public sector financial reporting. Glocalization can be best understood using sociological institutionalism, because this theory focuses on the retention of identity, and processes of legitimacy, during adaptation (diffusion) of standards. The paper discusses the history of standard-setting for the public sector in New Zealand to explain why this theory has value.

IMPACT

This paper defines and describes the utility of the concept of glocalization in analysing the implementation of IPSAS, with a New Zealand focus. The value of the paper is in its combination of a jurisdiction-specific experience with an understanding of the broader issues of ‘global versus local’ and processes of sociological institutionalism. Such studies of IPSAS adoption can offer distinctive perspectives on global processes of isomorphism within neo-institutional theory. This paper explains the advantages of flexible strategies to standard-setters.     

Asymmetric information and deal selection: evidence from the Italian venture capital market

International Entrepreneurship and Management Journal - The aim of this study is to show how information asymmetry affects the venture capital (VC) deal selection process in the Italian capital...     

Tax havens compliance with international standards: A temporal perspective

This paper contributes to the debate centering on the fight against aggressive tax avoidance practices through the release of international standards. We develop a model in which identical tax havens decide upon their compliance date while competing for onshore capital. The timing of these decisions depends on the effects of two opposing forces. One force is linked to the tax sensitivity of international capital and the other to the reaction of nearby potential capital. When the former force dominates, asynchronous compliance arises, which occurs even with identical tax havens and perfect information. However, when the latter force dominates, tax havens comply simultaneously. In any case, the loss of tax base within the onshore region is minimized when compliance is simultaneous and occurs at the earliest possible date. Surprisingly, compliance of just one tax haven is not necessarily better than no compliance at all.     

The relationships between CEO characteristics and strategic risk-taking in family firms

Abstract

We examine the influences of chief executive officer (CEO) personal characteristics on family firms’ strategic risk-taking. Building on upper echelons theory, we investigate the influences of CEO family relationships, the CEO professional education, other career experiences, tenure, and career horizon have on the risk level a company takes. By analyzing a sample of 107 Italian family firms listed on the Milan Stock Exchange, we find that company’s risk-taking significantly and negatively relates to CEO family relationship and professional education, but positively to CEO career horizon. This provides support to the argument that such CEO personal characteristics are key factors in explaining differences in risk-taking among family firms. Further, our analysis of control variables shows that family firms’ risk-taking relates positively to board size and negatively to company size. These results suggest that company and board characteristics also significantly influence the risk levels taken by a company.     

Mining big data in tourism

Quality & Quantity - Knowledge discovery from various sources of information based on different data types for decision and accurate prediction can be rather complex and costly without a...     

Determinants of environmental innovations supporting small- and medium-sized enterprises sustainable development

Enterprises are increasingly required to improve their environmental performances. The adoption of environmental innovations (EIs) is believed a way to achieve this goal. So a flourishing debate about the determinants supporting investment in EIs arose. Researchers have thus far paid attention mainly to established manufacturing firms operating in traditional sectors. Hence, scientific literature recommends deepening the behavior of small- and medium-sized enterprises (SMEs) because of the role they play in the productive systems in many Western countries. With this in mind, this study investigates a probabilistic sample of 222 innovative SMEs using the partial least squares and importance–performance map analysis in order to identify the factors affecting their propensity to invest in EIs. Findings show that the propensity results are affected by the firms' environmental awareness, company staff, and capabilities, among the internal factors, whereas among the external ones, the propensity is affected by norms and regulations. An important role is also played by the hope to improve their economic and environmental performances. Monetary and fiscal incentives reveal not to be significant. Consequently, policies should firstly propose an appropriate mix of regulations and stimuli following two directions: a compliance direction to more stringent regulations and rules to be followed through the imposition of penalties and a cultural direction aiming at improving environmental awareness of SMEs about the desirability of pursuing EIs for both ethical and economic reasons, given the potential benefits associated with such innovations.