Mobility and the Role of Education as a Commitment Device

In closed economies, human capital investment faces a hold-up problem of excessive redistributive taxation. Increased international labor mobility, however, changes the constraints which affect optimal education and tax policy. We show that in a non-altruistic, gerontocratic world, investments in human capital which increase the mobility of the young generation can be interpreted as a commitment device overcoming the hold-up problem. This is in line with Kehoe (1989) who derives a similar result with respect to capital mobility.     

A conceptual framework for public-private interplay in the telecommunications sector

Public activity in the telecommunications industry has experienced important transformations in the last decade: “reinvolvement” in infrastructure deployment, “innovative” boosting measures, and decentralisation of some decisions. Conceptually, even more important than the measures themselves is the fact that private agents often participate in their realisation and execution. This paper reviews how justifications for public action that would apply to any economic activity area have modelled the public-private relationship in the telecommunications sector. Subsequently, it focuses on the analysis of the new spaces for public-private collaboration that are currently opening up.     

Unbundling tolls from contracts: a new road PPP model

Considerable evidence from different countries has revealed important shortcomings in most road public–private partnership (PPP) models. In this paper a new PPP model is presented that overcomes some of the problems found in PPP road contracts. The new model is based on separating user tolls from the fees paid to PPP contractors and setting up new institutional arrangements to oversee PPPs.     

Stock Market Reaction to Monetary Policy: An Event Study Analysis of the Brazilian Case

This article examines the relationship between the monetary policy implemented by the Central Bank of Brazil and the stock market. We implement event study analysis and analyze the effect of the anticipated and unanticipated components of monetary policy decisions on the returns of the IBOVESPA index and 53 stocks. We find that monetary policy has a significant effect on the stock market, but is only responsible for a small proportion of market variation. The analysis at the sector level with expected returns identifies that the financial sector is the most affected by this policy, whereas with excess returns only industrial goods are significantly affected. Moreover, individual assets respond in a rather heterogeneous fashion to monetary policy; however, when we look at excess returns, we identify a reduction in the intensity and in the number of companies impacted by monetary policy. Finally, the monetary shock is explained by unanticipated variations in the unemployment rate, in the Industrial Production Index, in the General Market Price Index, and in the Broad Consumer Price Index.     

Regulatory Uncertainty and Share Price Volatility: the English and Welsh Water Industry’s Periodic Price Review

This paper models the London stock markets response to the 1994 Periodic Review of prices in the English and Welsh water industry using both GARCH and stochastic volatility models. The results indicate that a significant reduction in the volatility of share prices for eight of the ten water and sewerage companies followed the announcement of revised industry price-caps. Investor expectations adjusted rapidly, reflecting confidence in the credibility and political sustainability of the settlement.     

Exploring the contribution of innovation intermediaries to the new product development (NPD) process: a typology and an empirical study

In the ‘knowledge economy’ upheld by the European Lisbon strategy, knowledge‐intensive services are considered a key driver for innovation and competitiveness. A category of knowledge‐intensive services that has become of utmost importance in the last few decades is new product development (NPD) services, which interconnect distant knowledge domains with the client firms. In addition to NPD service providers, web‐based innovation intermediaries have started to help innovative firms access dispersed bodies of knowledge. Despite the heterogeneity of their characteristics, however, a clear typology of the strategies used by traditional NPD service providers and web‐based intermediaries to interact with their knowledge sources and with their clients is missing. This typology would be very useful for those firms that are willing to collaborate with innovation intermediaries because it could highlight the typologies of NPD problems different intermediaries are apt to address and the managerial challenges that working with them entails. Developing such a classification framework is the main goal of this paper. The typology proposed in this paper suggests that innovation intermediaries should be distinguished based on the following: (1) the way they access their distributed knowledge sources and (2) the way they deliver value to their clients. By combining these two dimensions, four categories of innovation intermediaries are identified, which are named brokers, mediators, collectors and connectors. A multiple case study analysis involving four innovation intermediaries and 12 of their clients is presented in the paper. The analysis provides exploratory insights into (1) the typologies of NPD problems that each class of intermediaries addresses and (2) the managerial challenges that working with each of them entails. These preliminary findings call for further theoretical and empirical research into the complex interaction among innovation intermediaries, their dispersed sources of knowledge and their clients.     

Pigouvian Taxation in Tourism

The paper studies the characteristics and the effects of a tax imposed by a local government on the land used to create new tourists' accommodations. First, a dynamic policy game between a monopolist in a tourist area and a local government is considered. In each period the former has to decide the size of land undergoing development, whereas the latter has to choose the tax to levy on each newly developed area unit. Linear Perfect Markov strategies are derived for both the non-cooperative and the public monopoly case. In equilibrium, a public monopoly would develop land more rapidly than a private monopoly. Furthermore, the more the monopolist discounts the future, the more the long run use of the natural resource is reduced. Second, the properties of the tax are studied considering an oligopolistic market structure. The tax alone does not lead to the socially optimal level of land use. However, its combined effect with another policy instrument such as a quota, induces the optimal level of resource use.     

Convergence in OECD countries: technical change,efficiency and productivity

The aim of this study is to analyse labour productivity convergence in the OECD countries over the period 1975-90. A nonparametric frontier approach is used to calculate the Malmquist productivity index. By breaking it down, the contribution in the growth of labour productivity of technical progress, of changes in efficiency, and of the accumulation of inputs per worker are quantified. Unlike other studies, the results obtained show that technical change has worked against labour productivity convergence, since it has always been greater in the countries with higher labour productivity.     

Deconstructing Herding: Evidence from Pension Fund Investment Behavior

In this paper, we examine herding across asset classes and industry levels. We also study what incentives managers at various layers of the financial industry face when investing. To do so, we use unique and detailed monthly portfolios between 1996 and 2005 from pension funds in Chile, a pioneer in pension-fund reform. The results show that pension funds herd more in assets that have more risk and for which pension funds have less market information. Furthermore, the results show that herding is more prevalent for funds that narrowly compete with each other, namely, when comparing funds of the same type across pension fund administrators (PFAs). There is much less herding across PFAs as a whole and in individual pension funds within PFAs. These herding patterns are consistent with incentives for managers to be close to industry benchmarks, and might be also driven by market forces and partly by regulation.