Current account sustainability in Latin America

This paper examines the sustainability of the current account deficit in eighteen Latin American countries through the analysis of the stationarity properties of the current account balance. First, we apply traditional unit root tests and consider the possibility of structural breaks. Second, since the current account may have a nonlinear behaviour, we test for linearity in the data and analyse current account stationarity by means of a recently developed nonlinear unit root test. Results from linear and nonlinear unit root tests show that current account sustainability is supported for the majority of Latin American countries with the exception of Argentina, Brazil, Chile and Paraguay. For the Dominican Republic, Honduras, Mexico, Panama, Peru, Uruguay and Venezuela the current account dynamics are best described by a stationary linear model, and by a stationary linear model with a mean shift in years 2003, 1982 and 1980 in Bolivia, Costa Rica and Nicaragua, respectively. In the case of Colombia, Ecuador, El Salvador and Guatemala, results show that the current account is best described by a mean-reverting nonlinear process.     

Financing constraints,firm dynamics,export decisions,and aggregate productivity

We present a dynamic model in which firms accumulate wealth to avoid bankruptcy and to overcome financing constraints that affect their fixed operational costs and the costs of becoming an exporter. Financing constraints not only affect firms directly when they are binding, but also indirectly, through precautionary saving and the selection of firms via entry and exit of the domestic and export markets. We calibrate the model and test some of its predictions using a rich dataset of Italian manufacturing firms for the period 1995–2003. Financing constraints reduce the aggregate productivity gains induced by trade liberalization by 25 percent by distorting the incentives of the most productive firms to self-select into exporting.     

Environmental Management Systems and Local Community Perceptions: the Case of Petrochemical Complexes Located in Ports

Most oil refineries and factories producing basic chemical products are located in port areas, with the result that industrial complexes potentially have a strong environmental impact on their area of influence. These externalities result in a loss of welfare for citizens residing in neighbouring areas. In a context of sustainable development, companies must integrate concerns about the natural environment in their business strategy. External stakeholders, as residents, find it difficult to visualize the actions firms take to reduce their environmental impact, and the adoption of voluntary certified environmental management systems (EMSs) acts as a signal indicating the adequate environmental behaviour of these companies. These certifications enable companies to achieve the social legitimacy they need for long‐term survival and competitiveness. In the context of a petrochemical industrial complex located in the port of Castellón (Spain), this paper primarily discusses whether such certifications – which act as signals of firms’ desirable environmental conduct – translate into higher trust in firms and lower risk perception by residents. Contrary to what might be expected, despite the widespread use by companies of voluntary and certified EMSs, the research findings confirm a relatively high citizen perception of risk regarding the industrial complex and a low trust in companies. On the other hand, the findings also show a low trust in the public institutions responsible for authorizing and monitoring firms’ activities and for enforcing possible sanctions in non‐compliance cases. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Firm size and productivity from occupational choices

Small Business Economics - We model the distributions of firm sizes and of firms’ total factor productivity (TFP) as outcomes of a market equilibrium from the occupational decisions of...     

Loving Outside the Neighborhood: The Conflicting Effects of External Linkages on Incremental Innovation in Clusters

The present study assesses the explanatory capacity of three levels of factors, namely, internal to the company, and internal and external to the cluster, in predicting firms' incremental innovative performance in cluster contexts. The empirical research conducted here focuses on a sample of 92 companies from the Spanish textile industrial cluster in Valencia. Findings reveal that the significant role played by firms' interorganizational ties as a moderating factor between absorptive capacity and their incremental innovative performance. Additionally, results reflect the differentiated roles developed by intra‐ and extra‐cluster linkages in these interaction processes.     

IS E‐GOVERNMENT LEADING TO MORE ACCOUNTABLE AND TRANSPARENT LOCAL GOVERNMENTS? AN OVERALL VIEW

This paper seeks to assess to what extent e-government enables accountability and transparency in EU local governments. It also provides an overall view about how local governments are implementing ICTs initiatives to bring citizens closer to governments. Although the mere capacity of the Internet for the dissemination of information improves accountability and makes benchmarking easier, our results show that the expected benefits are far from being achieved because e-government projects are still in the early stages. The results also show that, at present, ICTs have not had a dramatic impact on EU local government accountability.     

Objectives,Techniques and valuation of state-owned companies in privatization processes

This article aims to analyse the objectives and the techniques of privatization and the valuation methods applied in the state-owned company privatization processes in order to determine the coherence between the formal privatization objectives stated by governments and the techniques and the valuation methods chosen to carry out the sale of state-owned companies. From the results of an international survey carried out by the International Organization of Supreme Audit Institutions (INTOSAI), we study the privatization practices in three groups of countries: the most developed OECD countries, Eastern European countries and developing countries. While the reasons that have motivated state-owned company privatizations all over the world are quite similar, the techniques of privatization used by these three groups are different with regard to the purpose of the privatization, the ways of carrying it out and the methods of fixing the sale price.     

Antecedents and consequences of external risk perception in franchising: evidence from the hospitality industry

In this article, we contribute to the understanding of the role that external risk perceptions play in decisions regarding the combination of company-owned and franchised units in the hospitality industry, and to knowledge of the impact of specific CEO characteristics on perceptions of environmental uncertainty. We examine the effects of tenure, an entrepreneurial nature and the innovative attitude of the CEO on the perception of external risk, and address the direct and indirect consequences of such perceptions of external risk on the configuration of the network of outlets. Our results show a significant relationship between the characteristics of the CEO and the perception of risk but, contrary to expectations, risk perception is associated with a lower degree of franchised outlets within the ownership mix.