Education and health in Europe

The productive and allocative theories predict that education has positive impact on health: the more educated adopt healthier life styles and use more efficiently health inputs, and this explains why they live longer. We find partial support for these theories with an econometric analysis on a large sample of Europeans aged above 50 documenting a significant and positive correlation among education years, life styles, health outputs and functionalities. We however find confirmation for an anomaly already observed in the United States, namely the more educated are more likely to contract cancer. Our results are robust when controlling for endogeneity and reverse causality in IV estimates with instrumental variables related to quarter of birth and neighbours’ cultural norms.     

Airport deregulation: Effects on pricing and capacity

We use a model of vertical relations between two congestible airports and an airline oligopoly to examine, both analytically and numerically, how deregulation may affect airports prices and capacities. We find that: (i) unregulated profit-maximizing airports would overcharge for the congestion externality and, compared to the first-best, would induce large allocative inefficiencies and dead-weight losses. They would restrict capacity investments but, overall, would induce fewer delays; (ii) Welfare maximization subject to cost recovery performs quite well, achieving congestion levels similar to a private-unregulated airport but without inducing such large traffic contraction; this puts a question mark on the desirability of deregulation of private airports; (iii) Increased cooperation between airlines and airports provides some improvements, but the resulting airport pricing strategy leads to a downstream airline cartel; (iv) When schedule delay costs effects are strong and airline differentiation is weak, it may be optimal to have a single airline dominating the airports, but this happens only when airports' pricing schemes render the number of airlines irrelevant for competition.     

Fair Trade in Italy: Too Much ‘Movement’ in the Shop?

With the advent of globalization, the track record of multinational corporations (MNCs) has been mixed at best in relation to their Corporate Social Responsibility (CSR) involvement in developing countries. This article attempts to cross-fertilize insights from the business-society and international business political behavior literature streams to identify relevant dimensions and contingencies that can be used to analyze the CSR of MNCs in developing countries and the extent of standardization or localization of their strategies. The article makes use of the new theoretical framework in the context of an interpretive research methodology to examine the CSR orientations of a sample of MNC subsidiaries in Lebanon. The findings reveal patterns of global CSR being diffused to developing countries, but also being diluted along the way in view of specific subsidiary endowments and host market characteristics.     

INFLATION AND STABILIZATION IN YUGOSLAVIA

This paper examines the main causes of the acceleration of inflation in Yugoslavia during the 1980s and Yugoslavia's last attempt at stabilization in 1990. Yugoslav inflation shares common elements with inflation in other highly indebted countries despite appearances otherwise. Like these other countries, Yugoslavia failed to make internal adjustments to match a large transfer to resources abroad, resulting in a large internal redistribution to real resources through inflation. However, in Yugoslavia these internal conditions were not transparent. Instead of an open fiscal deficit, complex interactions took place among enterprises, banks, and the central bank, involving the central bank's absorption and servicing of a large stock of foreign exchange liabilities.
Failure to correct hidden losses in the economy was the main reason that various stabilization attempts failed during the 1980s. The 1990 program was the first to recognize the existence of those hidden losses and the need for a fiscal correction. The program succeeded in eliminating the central bank's own deficit and was initially successful infighting inflation, but pressures to finance enterprises and avoid a liquidity crisis in the financial system resulted in a relaxation of monetary policy and a revival of inflation. Seen from this angle, the Yugoslav program of 1990 resembles other heterodox programs that had initial success in reducing inflation but later faltered because of an insufficient fiscal adjustment.     

The food situation in developing countries : Two decades in review

This article presents an overview of the general changes in the food situation in developing countries over the past two decades, and especially since the 1974 World Food Conference. Following an examination of trends in production, consumption and trade in basic food staples of Third World countries, the article looks at possible strategies for improving their food situation.     

Psychic Distance versus Market Size in International Business: Study of Brazilian Exporters

International Business (IB) theories encompass economic approaches, where firms use objective criteria to select foreign markets, and behavioral approaches, where firms use psychic distance. This study proposes new objective criteria to measure psychic distance and adopts multiple linear regressions with a foreign-trade econometric model adapted to address psychic distance and market size and their relationships with Brazilian exports over 10 years. Psychic distance showed a close relationship to exports from smaller firms, while the market size of the destination country was always significant. This brought original empirical evidence to the validity of IB theories as well as to the exports behavior of firms from emerging economies.     

Relationship and Transaction Lending: New Evidence and Perspectives

In this article, I try to answer three questions: (1) How do relationship lending and transaction lending vary over the cycle? (2) How do economic systems that are more “bank oriented” perform compared to “market-oriented” systems? (3) What are the consequences on relationship banking of the recent structural bank regulation reforms adopted to separate specific investment and commercial banking activities? Building on some recent evidence, the main conclusions are as follows: (1) Relationship banks protect their clients in normal downturns; (2) when recessions coincide with a financial crisis, countries that rely relatively more on bank financing tend to be more severely hit; (3) the effects of structural bank regulation initiatives on relationship banking are uncertain.     

Monopoly regulation under asymmetric information: prices versus quantities

We compare two instruments to regulate a monopoly that has private information about its demand or costs: fixing either the price or quantity. For each instrument, we consider sophisticated (screening) and simple (bunching) mechanisms. We characterize the optimal mechanisms and compare their welfare performance. With unknown demand and increasing marginal costs, the sophisticated price mechanism dominates that of quantity, whereas the sophisticated quantity mechanism may prevail when marginal costs decrease. The simple price mechanism dominates that of quantity when marginal costs decrease, but the opposite may arise if marginal costs increase. With unknown costs, both instruments are equivalent.     

Organizational culture and post-acquisition changes in management control systems: An analysis of a successful Brazilian case

This paper analyzes the effect of organizational culture on the post-acquisition management control system (MCS) of the Brazilian company Extrativa Metalquímica Inc. after its acquisition by the FASA Participações Group. The results herein reported add to discussions of the subject and contribute to reducing the research gap in this area in Brazil. The analysis supports two major conclusions: (1) changes in the acquired company's MCS were derived from the new financial results-oriented culture introduced by the acquirer; and (2) the implementation of this culture implied modifications in production, financial and quality controls.     

Mixed Equilibrium,Collaborative Dominance and Burning Money: An Experimental Study

We experimentally study three aspects of $2\times 2$ one-shot games with collaboratively dominant strategies: if subjects play according to the mixed Nash equilibrium; if the collaborative equilibrium has a focal point property; and if the burning money mechanism stimulates a collaborative behavior. First, our results show that players do not seem to play according to the mixed Nash equilibrium and that the collaborative equilibrium does not seem to have focal point properties. In fact, the subjects seem to prefer less risky strategies when compared to efficient ones. Our results also show that a burning money mechanism only helps players to collaborate when it transforms a collaborative profile of strategies into a collaborative equilibrium. This fact is justified because other burning money mechanisms will only help collaboration if the subjects were playing according to de mixed Nash equilibrium. Furthermore, even when burning money mechanisms improved the collaboration rate, such rate’s increase was smaller than the expected by the mixed Nash equilibrium.