Sweating the Assets: Asset Leanness and Financial Performance in the Motor Carrier Industry

Originally adopted by the automotive manufacturers, lean management practices have since been applied to many other manufacturing industries. This study reviews the different theoretical perspectives on the leanness‐performance relationship in the context of the motor carriage industry. Drawing on both the lean management in logistics and organizational slack literatures, we develop hypotheses addressing the link between asset leanness and financial performance. These hypotheses are empirically tested using a comprehensive panel data set of 1,172 firm‐quarter observations from the U.S. publicly traded truckload motor carriers. Initially expecting an inverted U‐shaped relationship between asset leanness and performance, findings indicated a U‐shaped relationship, both for carriers' total assets and the subset of trailer assets.     

Do liberal cities limit new housing development? Evidence from California

Traditional explanations for why some communities block new housing construction focus on incumbent home owner incentives to block entry. Local resident political ideology may also influence community permitting decisions. This paper uses city level panel data across California metropolitan areas from 2000 to 2008 to document that liberal cities grant fewer new housing permits than observationally similar cities located within the same metropolitan area. Cities experiencing a growth in their liberal voter share have a lower new housing permit growth rate.     

The role of liquid government bonds in the great transformation of American monetary policy

A fundamental shift in monetary policy occurred around 1980: the Fed went from a “passive” policy to an “active” policy. We study a model in which government bonds provide transactions services. We present two calibrations of our model, using pre- and post-1980 data. We show that estimates of pre- and post-1980 policy rules all lie within our determinacy regions. But, the pre-1980 policy was a very bad monetary policy, even if it avoided sunspot equilibria. Model simulations suggest that household welfare would have increased by 3.3 percent of permanent consumption in this period under an active policy.     

Improving the efficiency of metropolitan area transit by joint analysis of its multiple providers

Public transportation in a metropolitan area often is supplied by multiple types of transit. This paper develops and illustrates a DEA-based procedure for estimating: overall efficiency of an area’s public transportation; technical efficiencies of the individual transit types; effect of each type on overall efficiency; and efficiency of the allocation of resources among types and an algorithm for improving it. The paper concludes that the overall efficiency of an urban area’s public transportation can be validly estimated only if the technical efficiency of each major transport type and the efficiency in allocating resources among them are taken into consideration.     

Leverage and firm value

Three highly cited studies with over 6000 citations collectively report a negative relationship between the market value of the firm and leverage. Such empirical findings clearly contradict the hypothesis of leverage adding value to the firm and an optimal capital structure that maximizes firm value—these findings have yet to be resolved. Employing a sample of 3,768 firms consisting of 39,015 observations, a stochastic frontier analysis was used to assess the relationship of leverage among other capital structure factors with firm value. It was found that in general the use of leverage promotes firm value, consistent with the trade-off theory and that the inverse relationship between leverage and firm value was a temporary occurrence and is likely attributable to firms employing tax loss carrybacks in response to the 1986 Tax Reform Act. The estimates of technical efficiency indicate that many firms can do more to increase their value, the sample as a whole improves efficiency (value) over the sample period. The findings reconcile the reports of leverage decreasing firm value as reported in Baker and Wurgler, Fama and French, and Habib and Ljungqvist. The empirical findings suggest prior observation was a due to a decline in the value of the tax shield generated by leverage after the Tax Reform Act of 1986. Specifically, tax carrybacks extended the pre-Tax Reform Act of 1986 tax shield value to 1991 and after 1991 the tax shield value declined.     

The employment and wage impact of broadband deployment in Canada

Hundreds of millions of dollars are spent by the Canadian federal and provincial governments to subsidize broadband deployment. This paper provides the first empirical assessment of the impact of broadband on employment and wage growth in Canada. Variation in elevation explains the regional difference in broadband coverage and is used as an instrument to estimate the causal effect. We find that the deployment of broadband in 1997–2011 promoted rural employment and wage growth in service industries. Goods industries were not impacted. The findings suggest that broadband helps service industry businesses overcome geographical barriers that have traditionally hampered rural growth.     

Fossil Fuel Subsidy Reform,Rent Management and Political Fragmentation in Developing Countries

Over the last decade, pressure to reduce subsidies for energy (especially fossil fuels) in developing countries has mounted, but reform is politically controversial. The debate on reform is dominated by a liberal narrative that employs an understanding of energy subsidies as political rent, based on public choice theory. Here, it is argued that this approach takes too static and limited a view of rent, and that engagement with theories of the state in the development process suggests a more dynamic view. The degree of centralisation of political power is also argued to be a key factor in the use and reform of subsidy. This application of the framework is then illustrated in the case of Indonesia. Finally, implications for reform strategies are drawn out.