Investing in natural capital as management strategy in fisheries: The case of the Baltic Sea cod fishery

Many of today's fish stocks are officially managed following the precautionary approach. Yet, different political objectives and uncertainties among fishermen about their economic future make its implementation difficult. Over 75% of all commercially valuable stocks are exploited, overused, or collapsed and in a state of recovery [FAO, 2004. The state of the world fisheries and aquaculture. FAO, Rome. Managing fish stocks with an ecosystem-based approach is likely to stop the divestment of natural capital by combining sustainable use strategies with the preservation of marine ecosystems. Using the example of the Baltic Sea cod fishery, we show that a recovery program is economically and ecologically viable and reduces negative externalities. While policy makers must assist fishermen during the early years of the program, fishermen will experience greater landings and profits in subsequent years.     

Sustainability in shipper-logistics service provider relationships: A tentative taxonomy based on agency theory and stimulus-response analysis

The paper contributes to research on sustainability in dyadic buyer–supplier relationships of logistics services. It presents deeper knowledge on why and how suppliers choose to behave sustainably. The research analyzes how shippers stimulate their LSPs and how LSPs respond by conducting sustainability activities. Agency theory and the stimulus–organism–response model are applied as the theoretical foundations for an explorative case study analysis of three large and five small and medium-sized European logistics service providers (LSPs) active in road transport services. Significant differences are found between the sustainability efforts of SMEs and large LSPs and a tentative taxonomy of the sustainability response types of LSPs is derived. The taxonomy contributes to theory-guided research in sustainable supply chain management and procurement. Thereby, mismatches of stimuli and responses are identified and related agency problems in dyadic relationships in terms of sustainability are discussed. From a managerial point of view, the findings may serve as a starting point for purchasers of logistics services to develop adequate sustainability selection criteria and incentives.     

The Basic Analytics of Access to Financial Services

Access to financial services, or rather the lack thereof, is often indiscriminately decried as problem in many developing countries. This paper argues that the “problem of access” should rather be analyzed by identifying different demand and supply constraints. We use the concept of an access possibilities frontier, drawn for a given set of state variables, to distinguish between cases where a financial system settles below the constrained optimum, cases where this constrained optimum is too low, and—in credit services—cases where the observed outcome is excessively high. We distinguish between payment and savings services and fixed intermediation costs, on the one hand, and lending services and different sources of credit risk, on the other hand. We include both supply and demand side frictions that can lead to lower access. The analysis helps identify bankable and banked population, the binding constraint to close the gap between the two, and policies to prudently expand the bankable population. This new conceptual framework can inform the debate on adequate policies to expand access to financial services and can serve as basis for an informed measurement of access.     

Reaching out: Access to and use of banking services across countries

This paper is a first attempt at measuring financial sector outreach and investigating its determinants. First, we present new indicators of banking sector outreach across 99 countries, constructed from aggregate data provided by bank regulators. Second, we show that our indicators closely predict harder-to-collect micro-level statistics of household and firm use of banking services, and are associated with measures of firm financing obstacles in the expected way. Finally, we explore the association between our outreach indicators and standard determinants of financial sector depth. We find many similarities but also some differences in the determinants of outreach and depth.     

Trade creation and trade diversion in the Canada – United States Free Trade Agreement

In this paper the changes in trade patterns introduced by the Canada-United States Free Trade Agreement are examined. Variation in the extent of tariff liberalization under the agreement is used to identify the impact of tariff liberalization on the growth of trade both with member countries and non-member countries. Data at the commodity level are used, and the results indicate that the Canada-United States Free Trade Agreement had substantial trade creation effects, with little evidence of trade diversion. JEL Classification: F13, F14
Création de commerce et diversion de commerce dans l'Accord de libre-échange Canada-U.S. Ce mémoire examine les changements dans les patterns de commerce international engendrés par l'Accord de libre-échange entre la Canada et les Etats-Unis. La variation dans l'intensité de libéralisation tarifaire selon les secteurs dans l'Accord est utilisée pour identifier l'impact de la libéralisation tarifaire sur la croissance du commerce à la fois entre les pays membres et avec les pays non-membres. A l'aide de données par produits, on montre que l'Accord a eu des effets substantiels de création de commerce mais qu'il n'y a pas lieu de croire qu'il y a eu beaucoup de diversion de commerce.     

Fair value and audit fees

This paper investigates the effect of fair value reporting and its attributes on audit fees. We use as our primary sample the European real estate industry around mandatory IFRS adoption (under which reporting of property fair values becomes compulsory), due to its unique operating and reporting characteristics. We document lower audit fees for firms reporting property assets at fair value relative to those employing depreciated cost—a difference that appears driven, in part, by impairment tests that occur only under depreciated cost. We further find that audit fees are decreasing in firms’ exposure to fair value and increasing both in the complexity of the fair value estimation and for recognition (versus only disclosure) of fair values. We corroborate our findings in two alternative settings: contrasting UK and US real estate firms and using UK investment trusts. Overall, the results suggest that fair values can lead to lower monitoring costs; however, any reductions in audit fees will vary with salient characteristics of the fair value reporting, including the difficulty to measure and the treatment within the financial statements.     

Can utility optimization explain the demand for structured investment products?

In this paper, we first show that for classical rational investors with correct beliefs and constant absolute or constant relative risk aversion, the utility gains from structured products over and above a portfolio consisting of the risk-free asset and the market portfolio are typically much smaller than their fees. This result holds irrespectively of whether the investors can continuously trade the risk-free asset and the market portfolio at no costs or whether they can just buy the assets and hold them to maturity of the structured product. However, when considering behavioural utility functions, such as prospect theory, or investors with incorrect beliefs (arising from probability weighting or probability misestimation), the utility gain can be sizable.     

Das Mindestlohngesetz — Hoffnungen und Befürchtungen

The German government plans to introduce a minimum wage from 2015. This must be understood as a response to the decline in collective bargaining coverage and the marked increase in employment in the low-wage sector. The authors discuss how many workers are affected by this new regulation and whether the minimum wage is too high in relation to the average wage of workers (Kaitz index). They assume that the introduction of a minimum wage in Germany can have a number of effects. It is not possible to forecast all the reactions and behaviour of market participants to handle higher wages and goods prices. Some authors warn that these measures are significant labour market interventions that could have adverse employment effects. They recommend allowing more exemptions from the minimum wage law than intended by the government, especially for young employees and student apprentices. Other authors hope that minimum wages would help to strengthen collective bargaining and stabilise wages. Some authors emphasise that there should be a careful evaluation of the economic effects by scientists.