Cross-listing premium in the US and the UK destination

This paper tests the main hypothesis that firms that cross-list have higher valuations, and provides evidence on the valuation effect of cross-listing on a major non-US market, the UK compared to the US market from source countries in the Asia-Pacific region in 2003–2004. We find evidence that there is a cross-listing premium in both markets. However, the evidence on whether the premium is significantly different in the two countries is mixed. Using univariate, OLS and random effects methods, we find some evidence that the premium in the US is higher, but using a treatment effect methodology we find that the difference is not robust.     

Oil price shocks and Japanese macroeconomic developments

Using quarterly data for Japan over the period 1976:I–2008:II within a modelling strategy incorporating information about structural breaks in the variables included to represent the macroeconomic transmission channels, this paper shows that oil price shocks led to a fall in industrial production and higher inflation. However, these effects are only evident in the late 1970s and early 1980s. In more recent episodes of sharp oil price increases, inflationary effects are barely visible, and there is very limited evidence of oil‐induced industrial slowdowns.     

Structural Reform and Transparency in a Monetary Union

We assess how central bank transparency affects the incentives for labour market reform in a monetary union. We introduce transparency as affecting unemployment forecasts that provide information that the central bank has to the private sector and the governments. Under conditions of monetary policy opaqueness and inflation bias, we show that monetary union may induce more reform (as governments mitigate inflation surprises under idiosyncratic shocks), albeit to a lesser extent when inflation bias is only present at the national level. In the absence of inflation bias, central bank transparency, by eliminating inflation surprises in the face of idiosyncratic shocks, induces less reform in a currency union relative to monetary autonomy. Altogether, these results point to the need for a strong political commitment to reform so that member states benefit most from the combination of a credible and transparent single monetary policy with measures aimed at improving competitiveness and enhancing long-term growth.     

Regime Switches, Biased Expectations, and the Brazilian Inflationary Experience

The paper analyzes how an error in inflation expectations helped maintain high interest rates in the wake of the major stabilization plans launched in Brazil over the past 18 years. Newly implemented low-inflation measures lacked credibility and forced agents to expect a higher inflation rate than the one effectively observed, creating a wedge between ex-post and ex-ante real interest rates. The results also indicate that past failures have helped undermined the credibility of new measures.     

Information Technology and Organizational Practices: An Exploratory Sectoral Analysis

ABSTRACT

Rapid price declines are likely to facilitate the increasing diffusion of information technology (IT) in industrial firms. Recent contributions by Bresnahan et al. (2002), however, have emphasized the interdependence between IT adoption and workplace organization. The present paper undertakes an exploratory analysis of the complementarities between IT adoption and the utilization of modern organizational practices. The analysis considers 3-digit sectoral data on the Brazilian manufacturing industry in 1996. A multivariate statistical analysis of canonical correlation analysis enabled the investigation of the overall relationship amongst a group of variables reflecting IT adoption (comprising the number of microcomputers per employee (median value), the percentage of firms providing computer training for employees, the percentage of firms with Internet connection and the percentage of firms with intranet (internal data communication network)), and amongst another group of variables reflecting the adoption of modern organizational practices (comprised of the percentage of firms adopting total quality management, statistical control of processes, internal just-in-time and improvement groups (Kaizen)). The results indicated a significant association between the two groups of variables, while the individual variables, in the majority of the cases, displayed positive and significant correlations within their own group. The evidence appears to support the perception that the adoption of IT is favored in an environment characterized by the utilization of modern organizational practices.

RESUMEN. Es bien probable que las vertiginosa bajas sufridas por los precios, faciliten la creciente divulgación de la tecnología de la información (TI) en las empresas industriales. Sin embargo, recientes contribuciones de Bresnahan et al. (2002), han recalcado la interdependencia existente entre la adopción de la TI y la organización del entorno de trabajo. El análisis considera datos sectoriales de 3 dígitos sobre la industria fabril brasileña en 1996. La estadística analítica multivariada del análisis de la correlación canónica permitió investigar la relación general entre el grupo de variables que reflejan la adopción de la TI (considerando el número de microcomputadoras por empleado [valor medio], el porcentaje de firmas suministrando entrenamiento en computación a sus empleados, el porcentaje de empresas con conexión a la Internet y el porcentaje de empresas con intranet (red interna de comunicación de datos)), y entre otro grupo de variables que reflejan la adopción de prácticas organizacionales modernas (abarcando el porcentaje de empresas que adoptan la gestión de calidad total, el control estadístico de los procesos, Just-in-time interno y grupos de mejoría (Kaizen)). Los resultados indican la existencia de una asociación significativa entre ambos grupos de variables mientras que, en la mayoría de los casos, las variables individuales mostraron tener importantes correlaciones positivas dentro de su propio grupo. Las pruebas parecen respaldar la percepción de que, la adopción de la TI, favorece la existencia de un entorno que se caracteriza por el uso de prácticas organizacionales modernas.

RESUMO. Rápidos declínios nos preços tendem a facilitar a difus$aUo crescente da tecnologia da informação (TI) nas empresas industriais. Contribuições recentes de Bresnahan et al. (2002), porém, enfatizaram a interdependência entre a adoção da TI e a organização do local de trabalho. Este artigo realiza uma análise exploratória das complement-aridades entre a adoção da TI e a utilização de práticas organizacionais modernas. A análise considera dados setoriais de 3 dígitos sobre o setor industrial brasileiro em 1996. Uma análise estatística multivariáveis de correlações can$oCnicas permitiu a investigação da relação geral entre um grupo de variáveis refletindo a adoção da TI (incluindo o número de microcomputadores por funcionário (valor mediano), a porcentagem de empresas fornecendo treinamento em informática aos funcionários, a porcentagem de empresas conectadas à Internet e a porcentagem de empresas com intranet (rede de comunicação de dados interna)) e outro grupo de variáveis refletindo a adoção de práticas organizacionais modernas (constituídas da porcentagem de empresas que adotam a gestão da qualidade total, o controle estatístico de processos, just-in-time interno e grupos de melhoria (Kaizen)). Os resultados indicaram uma associação significativa entre os dois grupos de variáveis, enquanto as variáveis individuais, na maioria dos casos, exibiram correlações positivas e significativas dentro de seus próprios grupos. Os dados parecem respaldar a percepção de que a adoção da TI é favorecida num ambiente caracterizado pela utilização de práticas organizacionais modernas.     

Testing for a flexible non-linear link between short-term Eurorates and spreads

This paper investigates the relationship between short-term interest rates and spreads in the Euromarket. Specifically, five Eurocurrency deposit rates are analyzed: the Belgian and French francs, the German mark, the Danish crown, and the British pound. A multivariate test for unit roots is performed and strongly rejects the null hypothesis of integration in the 1-month and 12-months rates of these Eurocurrencies, indicating that the spread cannot be seen as a cointegration vector. Notwithstanding, a codependence analysis shows that the spread can still be interpreted as a long-run relationship between the short- and long-term Eurorates. A flexible non-linear error correction model is then proposed for the short-term rate to take both the short- and long-run adjustments into account. The model fits the data quite well, and seems to provide a slightly better forecast accuracy than the random walk benchmark.     

A note on uncertainty, liquidity, and stock prices

This paper presents theory and some empirical evidence on the relationship between the demands for money and stocks and bonds in the presence of changes in the volatility of money growth. Theoretically, it is shown that with variable velocity, an increase in the conditional variance of money growth triggers an increase in the demand for money relative to stocks and bonds with a consequent reduction in stock and bond prices. Empirically, the model only performs well in the dimension of stocks and bond prices moving in the same direction.     

Smoke in the (Tariff) Water

As the economic crisis deepened and widened, fears of a return to the protectionist spiral of the 1930s become more common. However, an important difference between the 1930s and today is the existence of the World Trade Organization and the legal limits it imposes on the protectionist responses members can pursue. The first objective of this paper is to assess the extent to which applied tariffs can be legally raised without violating bound tariff obligations and compare it with what is economically feasible. The second objective is the examination of whether individual countries have taken advantage of these legal tariff hikes as protectionist responses during economic crises, after the creation of the WTO. Results suggest that the policy space left when looking at what is economically possible is indeed quite large. However, in the recent past little of the available policy space has been used by countries suffering from an economic crisis.