Asymmetric competition and collection rates differentials: determinants of prices in international telephone service markets

The paper investigates determinants of pricing in international telephone service markets. The analysis—focused on 24 worldwide national markets—shows the impact of several telecommunications-specific and macroeconomic variables on collection rate differentials and traffic imbalance between countries. An econometric model is aimed at performing quantitative analysis and providing support to future telecommunications policies.     

Sustainability reporting and corporate identity: action research evidence in an Italian retailing cooperative

Cooperatives are facing the challenge to be competitive in the market, without losing their traditional values of mutuality and democracy. To do that, they need to re‐construct open and participative dialogue with their employees and members based on more democratic forms of communication and engagement. From this point of view, the measurement and communication of sustainability aspects may allow a dialogue to be mobilized with shareholders and stakeholders without losing the attention on competitive factors. Based on these premises, the article analyses the experience of a 5‐year action research project (from 2006 to mid‐2011), carried out within Unicoop Tirreno, an Italian consumers' cooperative, and aimed to implement different tools for sustainability accounting and to embrace a more open dialogue with stakeholders, in particular with employees and members. In this process of change, the tools implemented for sustainability accounting played a key role in supporting the cooperative to reinterpret its own values and in stimulating a new and participative management approach. The results indicate a virtuous circle between the management and measurement of cooperative principles and the management and measurement of sustainability issues.     

What Determines Export Diversification in the Development Process? Empirical Assessment

This paper assesses the role played by country‐specific factors as determinants of relative export diversification. Using a panel data set for 60 countries and 20 years (1985–2004), we confirm that even after clearing out differences in income per capita, cross‐country variability in the degree of export diversification is significant. In general, apart from per capita income, features influencing the size of accessible markets (domestic and foreign) are the most relevant and robust determinants of the export diversification process. Diversification opportunities grow if countries are large and not located far from economic core areas and when barriers to trade are restricted.     

Innovation and growth through local and global interaction

This paper investigates the research and development activity of heterogeneous and rationally bounded firms. The latter conduct this activity through in-house research and by collecting information originating in other firms’ spillovers. Thus, research and development activity owes both to independent searching and to interaction diffusing information. We study the conditions under which this idiosyncratic effort yields effects that have either local, system-wise negligible impacts or cumulate to generate significant aggregate ones. In the latter case, global effects feed back upon the incentive to innovate and therefore on the strength of local interaction as well as on autonomous research efforts. It is these dynamic forces that we model. We compare cases in which significant aggregate effects do emerge with cases in which they do not and study their outcome on innovation-directed investment and on long-term growth.     

Multinationals without Advantages

We question the widespread argument that firms embarking on foreign direct investments must possess some specific advantages to offset the penalties of operating across national and cultural boundaries. A simple model shows that firms might invest abroad to capture local advantages through geographical proximity of plant location, rather than to exploit existing ones. Because of spatially bounded spillovers, laggard firms might use foreign investments to acquire location-specific knowledge, whereas leading firms might prefer costly exports to avoid the dissipation of their advantages.
JEL classification: F 23; O 32; L 22     

Do technology externalities justify restrictions on emission permit trading?

International emission trading is an important flexibility mechanism, but its use has been often restricted on the ground that access to international carbon credits can undermine the domestic abatement effort reducing the incentive to innovate and, eventually, lowering the pace of climate policy-induced technological change. This paper examines the economics that is behind these concerns by studying how a cap to the trade of carbon offsets influences innovation, technological change, and welfare. By using a standard game of abatement and R&D, we investigate the main mechanisms that shape these relationships. We also use a numerical integrated assessment model that features environmental and technology externalities to quantify how limits to the volume, the timing, and the regional allocation of carbon offsets affect climate policy costs and the incentive to invest in innovation and low-carbon technologies.Results indicate that, for moderate caps on the amount tradable emissions permits and sufficiently high technology spillovers, global innovation and technical change would increase and that this additional innovative effort could lead to economic efficiency gains. The numerical analysis confirms that when constraints are close to 15% of domestic abatement, efficiency losses are small because they are partly compensated by more technological spillovers and lower energy prices. Under a broad range of parameters, restrictions are costly for the constrained countries, but always beneficial for unconstrained ones.     

Signaling in science-based IPOs: The combined effect of affiliation with prestigious universities,underwriters, and venture capitalists

This paper studies the combined effect of affiliation with prestigious universities, underwriters, and venture capitalists on the valuation of biotech ventures at IPO and their post-IPO performance. We argue that affiliation to a prestigious university provides the affiliated firm with a quality signal in the scientific domain. The pure quality signaling effect of the affiliation is isolated from the substantive benefits it provides by performing a difference-in-difference approach based on the scientific reputation of scientists in firms' upper echelons. The signal is stronger the weaker is the scientific reputation of scientists of the focal IPO-firm and is additive to those provided by prestigious venture capitalists and underwriters. Results for a sample of 254 European biotech ventures that went through an IPO between 1990 and 2009 confirm our predictions.     

Linear predictability vs. bull and bear market models in strategic asset allocation decisions: evidence from UK data

Most papers in the portfolio choice literature have examined linear predictability frameworks based on the idea that simple but flexible Vector Autoregressive (VAR) models can be expanded to produce portfolio allocations that hedge against the bull and bear dynamics typical of financial markets through careful selection of predictor variables that capture business cycles and market sentiment. Yet, a distinct literature exists that shows that non-linear econometric frameworks, such as Markov switching, are also natural tools to compute optimal portfolios arising from the existence of good and bad market states. This paper examines whether and how simple VARs can produce portfolio rules similar to those obtained under a simple Markov switching, by studying the effects of expanding both the order of the VAR and the number/selection of predictor variables included. In a typical stock-bond strategic asset allocation problem for UK data, we compute the out-of-sample certainty equivalent returns for a wide range of VARs and compare these measures of performance with those of non-linear models. We conclude that most VARs cannot produce portfolio rules, hedging demands or (net of transaction costs) out-of-sample performances that approximate those obtained from simple non-linear frameworks.     

Nominal shocks and the current account: A structural VAR analysis of 14 OECD countries

This paper provides some empirical evidence on one of the most controversial theoretical implications of the new open economy literature, which refers to the role of the current account in the international monetary transmission mechanism. In order to throw some light on this issue, two structural VAR models are estimated separately for 14 industrialized countries. The main empirical results highlight the importance of the role of nominal disturbances for current account fluctuations. Additionally, it is found that expansionary nominal shocks generate temporary current account surpluses, whose size is positively correlated with the openness of the individual countries. JEL no. C32, E40, F41, F42