Environmental strategy and exports in medium,small and micro-enterprises

Growing corporate internationalization and the emergence of environmental concerns are two of the main trends in the business world. This paper analyzes whether strategies for environmental protection can help small and medium enterprises (SMEs) as they internationalize their activities through exports. Personal interviews were conducted with 123 general managers of exporting SMEs from the Spanish food industry. The results show a relationship between advanced environmental strategies and export intensity for the sampled firms. However, the size of firm plays a role in this relationship, as the relationship between advanced environmental strategies and exports is stronger with an increase in the size of the SMEs. Authors discuss implications of these results for practitioners and future research.     

Why Do Companies Go Public? An Empirical Analysis

Using a large database of private firms in Italy, we analyze the determinants of initial public offerings (IPOs) by comparing the ex ante and ex post characteristics of IPOs with those of private firms. The likelihood of an IPO is increasing in the company's size and the industry's market-to-book ratio. Companies appear to go public not to finance future investments and growth, but to rebalance their accounts after high investment and growth. IPOs are also followed by lower cost of credit and increased turnover in control.     

R&D competition, absorptive capacity, and market shares

This paper deals with an oligopolistic industry where firms are engaged in cost-reducting R&D activity to maximize their market shares. The existence and uniqueness of a feedback-Nash-optimal R&D strategy for each firm are discussed. Our simulations highlight that variations in spillovers hardly influence the firms' R&D investment, if their absorptive capacities to exploit extramural knowledge depend on their R&D efforts. Moreover, extramural knowledge cannot completely replace in-house R&D. However, a high level of public R&D favors the firm with the most restrictive R&D expenditure constraint and/or with the lowest initial R&D stock, provided it invests in R&D.     

The Role of Expectations in Explaining the Cross-Section of Stock Returns

We find highly significant results when the cross-section of market-adjusted stock returns is regressed against changes in analyst expectations this year about: (1) this year's earnings, (2) next year's earnings, (3) long-term earnings growth, and (4) noise (measured as the standard deviation of analyst forecasts). Surprisingly, changes in expectations about this year's earnings are not significant in a multiple regression with the other independent variables. Changes in expectations about next year's earnings are highly significant but with an impact that is much smaller than that of changes in expectations about the long-term growth in earnings. Changes in noise are also statistically significant and are negatively related to market-adjusted returns, an indication that the signal to noise ratio, rather than merely the signal, is what drives price adjustments to new information.     

Spot water markets and risk in water supply

Water availability patterns in semiarid regions are typically extremely variable. Even in basins with a highly developed infrastructure, users are subject to unreliable water supplies, incurring substantial economic losses during periods of scarcity. More flexible instruments, such as voluntary exchanges of water among users, can help users to reduce risk exposure. This article looks at the effects of spot water markets on the economic risk caused by water availability variations. Our theoretical and empirical risk analyses are based on the random profits of water users. Profit probability density functions are formally and graphically characterized for both water sellers and buyers under several possible market outcomes. We conclude from this analysis that, where water supply is stochastic, water markets unambiguously reduce both parties' risk exposure. The empirical study is conducted on an irrigation district in the Guadalquivir Valley (Southern Spain), where there is a high probability of periods of extreme water scarcity. Water demand functions for the district representative irrigators and a spatial equilibrium model are used to simulate market exchanges and equilibrium. This programming model is combined with statistical simulation techniques. We show that the profit probability distribution of a representative irrigator is modified if water exchanges are authorized, leading to risk reductions. Results also indicate that if the market were extended to several districts and users that are subject to varying hydrological risk exposure, extremely low‐profit events would be less likely to occur. In sum, we show that exchanging water in annual spot markets can reduce farmers' economic vulnerability caused by water supply variability across irrigation seasons. These results support the water policy reform carried out in Spain in 1999 to allow for voluntary water exchanges among right holders.     

21 years of international M&As and joint ventures by Italian medium-sized listed firms: Value creation or value destruction?

This study provides evidence of the value creation of different equity entry modes in a sample of international investments performed by all Italian medium-sized listed firms in the period 1986-2006. Our research shows a positive and significant market reaction to announcements of internationalization strategies. The results are largely affected by high-equity entry modes carried out in advanced economies. Low-equity entry modes and international operations performed in emerging countries show no significant market reaction. We also find that the relative size of the deal, the firm age, the country risk, and the evolution of information disclosure regulation, matter in explaining the outcomes.     

A Stochastic Model of Wealth Accumulation with Class Division

This paper is aimed at contributing to the literature on income and wealth inequality by proposing a simple stochastic model in which wealth accumulation depends on the ‘social relation’ between two classes: capitalists or workers. As a result, the society may evolve towards an unequal outcome with few rich and many poor individuals. We study the dynamic properties of the model by means of computer simulations. A maximum likelihood estimation procedure is applied to analyse the Pareto or power law tail of wealth distribution. We also provide a scenario analysis to explore the system's behaviour under alternative parameter settings.     

Optimality conditions¶and bubbles in sequential economies¶and bounded relative risk-aversion

We provide specific qualifications in order that Kuhn–Tucker type Euler equations and transversality conditions at infinity hold in stochastic equilibrium models with heterogeneous agents and where assets are traded in sequential markets. It is not assumed that uncertainty is modeled as an event-tree structure or that preferences are necessarily bounded. We also describe an important class of preferences based on bounded relative risk aversion which yields relevant simplifications. Our results are used to establish conditions that rule out asset pricing bubbles. Specific examples of economies with bubbles are also discussed. Received: 28 January 2002 / Accepted: 19 July 2002 We are grateful to the editor and an anonymous referee for their valuable comments. This research was partially supported by MURST (Italy), National Group on “Nonlinear Dynamics and Stochastic Models in Economics and Finance”.     

Political and Economic Inequities and the Shaping of Institutions and Redistribution

This article studies the joint effect of political and economic inequalities on redistributive taxation and institutional quality. The theoretical model suggests that income inequality, coupled with political bias in favor of the rich, decreases redistribution and lowers institutional quality. The effect of the former is to increase productive investment, and the effect of the latter is to decrease it—with resulting ambiguous implications for economic growth. Testing these predictions empirically in a panel of countries, we find that inequality has a negative effect on both institutional quality and redistribution.