Dynamic and Comparative Static Analysis of Imperfectly Competitive International Fishery

A dynamic system for change of fish stock is formulated assuming that two asymmetric rival countries harvest fish from a common fishing ground and sell it in an imperfectly competitive market. The existence of a unique stable steady state is examined based on the dynamic system. Comparative static analysis is conducted in relation to changes in national fishing management policies to explore, among other things, rent-shifting from one country to another.     

The impact of advertising content on movie revenues

We analyze the contents of print ads in the motion picture industry (e.g., number of reviews quoted in the ad, the presence of a top reviewer, size of the ad, star, director, etc.). We find that external validation (a recommendation by a top reviewer) is more important to revenues than the informative content of the ad.     

Approximate maximum likelihood estimation for stochastic differential equations with random effects in the drift and the diffusion

Consider N independent stochastic processes \((X_i(t), t\in [0,T])\), \(i=1,\ldots , N\), defined by a stochastic differential equation with random effects where the drift term depends linearly on a random vector \(\Phi _i\) and the diffusion coefficient depends on another linear random effect \(\Psi _i\). For these effects, we consider a joint parametric distribution. We propose and study two approximate likelihoods for estimating the parameters of this joint distribution based on discrete observations of the processes on a fixed time interval. Consistent and \(\sqrt{N}\)-asymptotically Gaussian estimators are obtained when both the number of individuals and the number of observations per individual tend to infinity. The estimation methods are investigated on simulated data and show good performances.     

Unobserved firm heterogeneity and the size-exports nexus: Evidence from German panel data

This paper starts from the stylized fact that firm size and exporting tends to be positively related. Using large sets of establishment panel data for three different industries from official statistics, evidence is presented that the familiar picture of an export/sales ratio that increases (at a decreasing rate) with firm size vanishes if unobserved firm heterogeneity is controlled for in a fixed-effects fractional logit regression model. This finding is well in line with the fact that many small firms are “hidden export champions.” JEL no. F10, D21, L60     

The role of the entrepreneurial team and the board of directors in the internationalization of academic spin-offs

This study addresses the roles of the entrepreneurial team and the board of directors in the internationalization of academic spin-off companies. The study is based on a quantitative analysis of 109 spin-offs from Norwegian academic institutions. The findings suggest that academic spin-offs are more likely to achieve both international strategic alliances and international sales with entrepreneurial teams having industrial experience that is both highly homogeneous (where each member has work experience in the same industry) and highly diverse (where each member has work experience in different industries) and board members that have diverse functional backgrounds. Firms that are less dependent on networking by board members to increase legitimacy and build relationships with potential foreign customers are more likely to achieve international sales.     

PIGS or Lambs? The European Sovereign Debt Crisis and the Role of Rating Agencies

This paper asks whether rating agencies played a passive role or were an active driving force during Europe??s sovereign debt crisis. We address this by estimating relationships between sovereign debt ratings and macroeconomic and structural variables. We then use these equations to decompose actual ratings into systematic and arbitrary components that are not explained by previously observed procedures of rating agencies. Finally, we check whether systematic, as well as arbitrary, parts of credit ratings affect credit spreads. We find that both do affect credit spreads, which opens the possibility that arbitrary rating downgrades trigger processes of self-fulfilling prophecies that may drive even relatively healthy countries towards default.     

Inflation und Schuldenabbau

The European Central Bank (ECB) recently announced its willingness to do whatever is needed to save the euro. This has raised the question whether such a role of the ECB must lead to higher rates of infl ation. Under current recessive macroeconomic conditions in the eurozone, the ECB’s expansionary monetary policy will not lead to higher infl ation. On the contrary, there is a serious danger of defl ation. Higher infl ation would likely occur only if a permanent stabilisation function were assigned to the ECB. Yet historical examples show that mistakes can be made. During the stagnation in Japan, US economists heavily criticised the Bank of Japan’s timid monetary policy response. But in some sense, current Fed policy seems to be a direct copy of that strategy, caused by uncertainty about the proper communication channel. An infl ation tax could help to bring down the mounting public debt in the wake of the fi nancial crisis, but higher wealth taxes have more transparent distributional effects.     

What can price volatility tell us about market efficiency? Conditional heteroscedasticity in historical commodity price series

The development in the working of markets has been an important topic in economic history for decades. The volatility of market prices is often used as an indicator of market efficiency in the broadest sense. Yet, the way in which volatility is estimated often makes it difficult to compare price volatility across regions or over time for two reasons. First, if prices are non-stationary, the variance is inflated. Second, the variance of commodity prices contains information on a number of region- and time-specific factors that are not related to market efficiency. Hence, the popular coefficient of variation and related indicators are not adequate measures of the efficiency of markets and are incomparable across regions. As a solution, we suggest using a conditional heteroscedasticity model to estimate the residual (conditional) variance of commodity prices. This measure reflects how markets react to unexpected events and can therefore be seen as a measure of market efficiency. Using this approach on grain prices from the Early Modern Pisa, Paris, Vienna, and Japan, we find that the residual price volatility had declined (and market efficiency increased) in the European markets in the late sixteenth century while it remained stable in Japan.     

Nonlinear models with panel data

Panel data play an important role in empirical economics. With panel data one can answer questions about microeconomic dynamic behavior that could not be answered with cross sectional data. Panel data techniques are also useful for analyzing cross sectional data with grouping. This paper discusses some issues related to specification and estimation of nonlinear models using panel data.JEL Classification: C230The research behind this paper was supported by the National Science Foundation, the Gregory C. Chow Econometric Research Program at Princeton University, and Danish National Research Foundation (through CAM at the University of Copenhagen). The author thanks Ekaterini Kyriazidou, Hong Li, Marina Sallustro, and the editors for helpful suggestions.