Do food standards affect the quality of EU imports?

This paper investigates the relationship between the diffusion of EU standards and product quality upgrading using highly disaggregated import data to the EU in the food industry. Results show that, on average, the diffusion of EU voluntary standards boosts the rate of quality upgrading. However, the results are heterogeneous when moving from primary to processed foods, and from ISO to non-ISO standards.     

Electricity Prices and Power Derivatives: Evidence from the Nordic Power Exchange

This paper examines the importance of the regular pattern in the behavior of electricity prices, and its implications for the purposes of derivative pricing. We analyze the Nordic Power Exchange's spot, futures, and forward prices. We conclude that the seasonal systematic pattern throughout the year, in particular, is of crucial importance in explaining the shape of the futures/forward curve. Moreover, in the context of the oneand two factor models analyzed in this paper, a simple sinusoidal functionis adequate in order capture the seasonal pattern of the features and forwardcurve directly implied by the seasonal behavior of spot electricity prices.     

Home country employment and foreign direct investment: evidence from the Italian case

The present paper provides further insights on the relationshipbetween home country employment and foreign direct investment(FDI) undertaken by national firms. The unit of analysis iseach ensemble of firms operating in the same industrial sectorand localised in the same geographical region. That allows usto capture both direct and indirect effects of foreign productionon the parent's environment, which arise through the generationof linkages and externalities. Empirical evidence has been providedwith reference to the Italian case in the decade 1985–95.Results suggest that the impact of outward FDI on the labourintensity of domestic production is negative in the case ofvertical investment undertaken—especially by smaller firms—inless developed countries, and positive for horizontal and market-seekinginvestments in advanced countries.     

Market orientation as determinant of entrepreneurship: An empirical investigation on SMEs

Entrepreneurial Orientation (EO) and Market Orientation (MO) are considered key factors in ensuring firm longevity in the new competitive landscape. Despite extensive research during the past decade, most of the studies use samples that exclude small and medium enterprises (SMEs), which represent the majority of economic activity worldwide. Some studies do investigate this relationship in small companies but place little importance on the subtle differences between SMEs and large companies when measuring MO. This study empirically investigates the relationship between MO and EO on a sample of 2500 Swedish SMEs. A new measure of MO that takes into consideration SMEs specific conditions has been developed and used. Findings suggest that MO is the main determinant of EO in SMEs.     

Optimal hedging in an extended binomial market under transaction costs

We develop an approach to optimal hedging of a contingent claim under proportional transaction costs in a discrete time financial market model which extends the binomial market model with transaction costs. Our model relaxes the binomial assumption on the stock price ratios to the case where the stock price ratio distribution has bounded support. Non-self-financing hedging strategies are studied to construct an optimal hedge for an investor who takes a short position in a European contingent claim settled by delivery. We develop the theoretical basis for our optimal hedging approach, extending results obtained in our previous work. Specifically, we derive a no-arbitrage option price interval and establish properties of the non-self-financing strategies and their residuals. Based on the theoretical foundation, we develop a computational algorithm for optimizing an investor relevant criterion over the set of admissible non-self-financing hedging strategies. We demonstrate the applicability of our approach using both simulated data and real market data.     

An ‘oil’igopoly theory of exploration

This paper develops a theory of ‘oil’igopoly exploration of an exhaustible resource. Strategic exploration and production are jointly derived in a three period subgame perfect equilibrium. While the ‘oil’igopoly theory of exploration shares many features with non-strategic models of exploration and production, there is one important difference. The ‘oil’igopoly theory of exploration predicts that firms who exhaust their proved reserves before they can convert their unproved reserves into proved reserves have an incentive to over-explore, relative to the Nash equilibrium level of exploration. A simple empirical prediction is that firms holding smaller proved reserves should be observed doing more exploration. This prediction is consistent with country-level production and reserve data in the post-World War II era.