The English Football Industry: profit,performance and industrial structure

The English (Association) Football League is a long established industrial cartel selling a highly popular product with only imperfect substitutes. Despite that, the majority of its member clubs lose money and the industry has faced successive financial crises over the last decade. This paper develops an empirical model of the financial performance of English League clubs using a high quality dataset of 48 clubs over the period 1974–89. The underlying model explains how rents are competed away through the maximising behaviour of club owners subject to production constraints. This model is parameterised by a system of equations which describe the behaviour of a maximising owner subject to demand and production constraints. The model is then used to examine the coordination failure which lies at the heart of the English Football League's decline and to assess the prospects for the Premier League.     

The Coevolution of the Real and Financial Sectors in the Growth Process

The role of debt and equity changes over time and with the levelof development. What are these changes, and why should theysystematically occur across different countries and time periods?This article characterizes financial innovation as a dynamicprocess that both influences and is influenced by the developmentof the real sector. It focuses on the emergence and developmentof equity markets, using a model that allows for growth andfor capital accumulation that is financed externally througha combination of debt and equity. As an economy develops, theaggregate ratio of debt to equity will generally fall; yet,debt and equity remain complementary sources for the financingof capital investments. The results suggest how various governmentpolicy actions might affect capital accumulation and equitymarket activity.     

Beyond Self-Regulation: Towards A Critique of Self-Regulation As A Control Strategy For Hazardous Activities*

After highlighting some of the key issues and positions in the debate around appropriate preventive regulation, the paper presents a number of observations directed at the proponents of greater self-regulation. These observations confront directly a number of familiar, but often unchallenged, arguments for self-regulation. More centrally we address claims concerning, the extent to which the chemicals industries have a good and improving ‘safety’ record; and whether the sector consists of companies both motivated and capable in the context of effective crisis and disaster management. Lastly, the paper sets out some ‘new directions’ for the nature and role of regulation in the effective prevention of crises. Thus the paper indicates a number of regulatory developments which are distinct from any shift towards greater self-regulation, but which would result in more effective crisis and disaster prevention in the UK chemicals industries and, indeed, beyond that specific sector.     

On the Role of Weight Restrictions in Data Envelopment Analysis

This paper examines the role that weight restrictions play in Data Envelopment Analysis (DEA). It is argued that the decision to include a factor (input or output) in a DEA model represents an implicit judgement that the factor has a non-trivial weight. It therefore seems perverse to allow DEA to assign a trivial weight to that factor in assessing the efficiency of a unit. There is therefore a strong case for imposing restrictions on factor weights. However, many existing methods of weight restriction are in practice unwieldy. This paper proposes an alternative approach we term contingent weight restriction which is both practical and intellectually consistent with the DEA philosophy. The paper explores the implications of alternative methods of weight restriction using simulated data from a well known production process.     

The right cure for health care

An aging population with nearly unlimited access to high-priced doctors and technology is pushing medical costs skyward. Managed care is the best way to bring them down.     

Ownership structure and golden parachutes: Evidence of credible commitment or incentive alignment?

Using a sample of S & P 500 firms, we find that golden parachutes are associated with concentrated external ownership, less concentrated internal ownership, and non-Delaware incorporation. We find little support that concentrated external owners use golden parachutes as credible commitment devices. The general multivariate results support the incentive alignment hypothesis, and reaffirm the view that golden parachutes are a mechanism used to align managerial and shareholder interests when there is a separation between ownership and control. (JEL G32)     

Does Advertising Overcome Brand Loyalty? Evidence from the Breakfast‐Cereals Market

In differentiated product markets where consumer preferences are characterized by brand loyalty, an important role for advertising may be to overcome brand loyalty by encouraging consumers to switch to less familiar brands. Using a scanner panel dataset of breakfast-cereal purchases, I find evidence consistent with the hypothesis that advertising counteracts the tendencies of brand loyalty toward repeat purchasing. Equivalently, advertising reduces switching costs in this market. Furthermore, counterfactual experiments demonstrate that in markets with brand loyalty, advertising is an attractive and effective option—relative to alternative promotional activities, such as price discounts—of stimulating demand for a brand .