Solidarity Day at Unión Fenosa in Spain

The growing interest organizations have in concepts like social involvement and sustainability has helped unite programs and practices of different natures, mostly in the form of large investments in local communities. But what role can employees play in achieving this corporate aim, and how do these policies affect the way employees see their organization? Unión Fenosa has been a pioneer in the Spanish business community in maintaining corporate social responsibility and the commitment of its employees to these values. An analysis of its Solidarity Day policy shows the perspective of its employees, their motivation, and the relations between them and their company.     

An estimation of the pattern of diffusion of mobile phones: The case of Colombia

This paper examines the diffusion pattern of mobile telephony in Colombia. The empirical modelling approach adopted in the paper starts off by choosing between the two functional forms that are most frequently used in the literature, namely the Gompertz and the Logistic models. After applying a formal statistical test to choose the preferred functional form, the evidence suggests that the pattern of diffusion can be best characterised as following a Logistic model. The findings also suggest that despite the fact that in recent years the rate of growth of mobile phone subscribers has started to slow down, there still appears to be room for further expansion as the saturation level is expected to be reached in 2013. The estimated saturation level is consistent with some individuals possessing more than one mobile device.     

A Model of Elitist Qualification

This paper deals with the collective qualification of members of society as belonging to a certain category or group based on a fixed attribute. Our model contains three main features: the existence of individual gradual opinions, the notion of elitism (only the opinions of certain individuals are taken into account to delineate the reference group), and the idea of sequentiality (elites are successively created by using the previous elites’ opinions on a social decision scheme). The main results of the paper characterize when this sequential procedure converges for some intuitive ways of aggregating individual opinions. Finally, we analyze the role of convergence for two extra basic properties (symmetry and contractiveness) that elitist rules should possess.     

Explaining Differences in Milk Quota Values: The Role of Economic Efficiency

This article explores the relationship between milk quota values and economic efficiency in order to analyze government interventions in quota allocations among producers. For this purpose, we estimate quota values using a panel of Spanish dairy farms. Quota values are then decomposed into economic efficiency, price, and scale effects in order to assess the relative influence of these factors. We find that efficiency is important in explaining quota values but is uncorrelated with observable farm characteristics. This casts doubts on the government's ability to allocate quotas to efficient farms.     

Stock Market Mean Reversion and the Optimal Equity Allocation of a Long-Lived Investor

This paper solves numerically the intertemporalconsumption and portfolio choiceproblem of an infinitely-lived investor whofaces a time-varying equity premium.The solutions we obtain are very similarto the approximate analytical solutionsof Campbell and Viceira (1999), except atthe upper extreme of the state spacewhere both the numerical consumption andportfolio rules flatten out.We also consider a constrained version ofthe problem in which the investor facesborrowing and short-sales restrictions.These constraints bind when the equitypremium moves away from its mean in eitherdirection, and are particularly severe forrisk-tolerant investors. The constraints havesubstantial effects on optimalconsumption, but much more modest effects onoptimal portfolio choice in theregion of the state space where they are notbinding.     

Aqui No Se Habla Agencia.* An Examination of the Impact of Adverse Selection and Framing in Decision‐Making: a US/Mexico Comparison

US companies seeking cheaper labor or extraordinary returns have often seen foreign direct investment as a panacea. However, many of these companies founder on the horns of a control dilemma. While raw economic data such as labor rates prove to be true, productivity and decision‐making styles are so different that companies fail to maximize their investment returns. This situation is worsened as companies attempt to impose culturally inappropriate home country controls on their foreign investment. This study examines one of the potential sources of failure, escalation of commitment, which occurs when decision‐makers over‐commit incremental resources to failing investments without reasonable probability of recovery. This behavior has been widely documented in US domestic literature (see Whyte and Hook, 1997 , for a summary). However, there is also some evidence that such behavior is culturally bounded ( Chow et al., 1997; Sharp and Salter, 1997; Greer and Stephens, 2001 ). This study extends previous findings on cross‐cultural differences in decision‐making among managers by comparing the responses of managers in the USA and Mexico to an escalation of commitment exercise. The cross‐cultural validity of two US based theories, agency (adverse selection) and framing (prospect theory), is tested. The results indicate that at base Mexican managers were more risk seeking. However managers from the more individualistic USA were significantly more likely than Mexican managers to escalate in the presence of agency (adverse selection) based incentives. Negative framing among managers was universal in escalating commitment.     

Risk compensation in wages – a replication

We use data from Germany, The Netherlands, Portugal and Spain to test for the effect of earnings variation on individual earnings. We replicate estimates for the USA and find that the variance of earnings in an occupation affects individual wages positively while the skewness of earnings has a negative effect. Both results are in conformity with wage compensation for risk averse workers. First version received: March 2001/Final version received: July 2002 We are grateful to two anonymous referees for valuable comments.     

Income taxes, spending composition and long-run growth

The focus of this paper is threefold. First, it reexamines the impact on long-run growth of changes in flat-rate income taxes when a fraction of total government expenditures is used to provide public services that affect the productivity of privately held inputs. Second, for a given tax policy, this paper studies the impact of government expenditure composition on the rate of economic growth. Third, since demographics follow an overlapping generations structure and fiscal policy affects the economy's productivity, the paper features the role of productivity as a means of redistributing income across generations. The economy is analyzed numerically and policy experiments are carried out.     

The role of human resources strategy in export performance: A longitudinal study

This longitudinal study examines the effect of human resources strategy on the export performance of 388 Florida firms. After controlling for differential firm advantages, managerial perceptions and aspirations, and marketing activities, results show that the way human resources are selected, deployed, compensated and motivated will play a significant role in subsequent export performance.