Do Immigrants Affect Firm‐Specific Wages?*

We propose and test a novel effect of immigration on wages. Existing studies have focused on the wage effects that result from changes in the aggregate labour supply in a competitive labour market. We argue that if labour markets are not fully competitive, immigrants might also affect wage formation at the most disaggregate level – the workplace. Using linked employer?employee data, we find that an increased use of low‐skilled immigrant workers has a significantly negative effect on the wages of native workers at the workplace – also when controlling for potential endogeneity of the immigrant share using both fixed effects and instrumental variables.     

Development of the ‘Travelcard’ Concept in Urban Public Transport

Traditionally, urban bus operators have collected fares in cash for each trip. Some limited mechanisation has occurred in ticket issue at stations. Partly for reasons of operating convenience, there has recently been a shift to simpler fares and prepayment, notably through the introduction of ‘Travelcards', that is, tickets or passes permitting unlimited use of the network (or zones thereof) for a defined period. These cover both all-bus systems, and bus/rail networks (such as the West Midlands PTE system). They are now used in all main British conurbations, following introduction of the London Transport bus/rail Travelcard in May 1983. The Travelcard in effect redefines the ‘product’ being sold. Instead of the public transport service being perceived as a series of separate journeys, payment is made periodically for use of the network as a whole. Cost perception is thus put on a similar basis to that for the private car. The marginal money cost for each trip becomes zero. Interchange penalties associated with re-booking are eliminated. Payment may be made by cheque or credit card, rather than cash, further changing the perception of costs. Product quality is also enhanced through speeding up of services (one-person- operated buses), and enabling the user to select the quickest and/or most convenient route in a network by removing the interchange penalty.     

Stock Options and Firm Performance: New Evidence from the French Market

This study investigates the effect of stock option‐based compensation on the short‐term and long‐term performance of French companies. To the best of our knowledge, we provide the first empirical evidence describing the market reaction following initiations and renewals of Employee Stock Option (ESO) plans in France. We find that the French market reacts positively to initiations of ESO plans but does not consider their renewal as relevant information. Our results on the long‐term effect of ESO plans suggest that neither the size nor the value of the grants affect the firm's accounting and market performance. Similarly, corporate performance prior to the grant has no explanatory power of the size or value of the grant. This implies that, over our sample period, the relationship between option‐based compensation and corporate performance in France was inexistent, regardless of the direction considered.     

Uncovered Interest Parity: Cross‐Sectional Evidence

Uncovered interest parity (UIP) is estimated for short‐term horizons from one month to 12 months using a large number of cross‐sectional bilateral exchange rates. In contrast to conventional time‐series UIP, cross‐sectional UIP is examined with a single‐equation estimation and panel regression model estimation. The exchange rates analyzed here include a broad spectrum of countries: developed, developing, low‐inflation, and high‐inflation countries. Based on the empirical evidence, there does not appear to be a well‐publicized UIP puzzle for cross‐sectional UIP, and the slope estimates remain largely between zero and one throughout the sample periods, with a few exceptions. Evidence of UIP is more clear for low inflation countries than for high inflation countries. As interest rate maturity becomes longer from one month to 12 months, the UIP relationship becomes weaker.     

Antecedents and Consequences of User Coproduction in Information System Development Projects

Based on a coproduction concept highlighted by service‐dominant logic, this study attempts to understand the antecedents and consequences of user coproduction in information system development projects. As a key contribution, we posit that user coproduction is influenced by social capital between users and developers; we then postulate that user coproduction determines the project outcomes. Paired data collected from both user representatives and developers by using a survey approach was used to test proposed hypotheses. The results showed that user coproduction has a positively significant influence on project outcomes, and social capital between user representatives and developers is also associated with user coproduction.     

Determinants of Corporate Diversification: Evidence From the Property–Liability Insurance Industry

This article analyzes variations in line‐of‐business diversification status and extent among property–liability insurers. Our results show that the extent of diversification is not driven by risk pooling considerations; insurers operating in more volatile business lines do not diversify more. Diversification can rather be explained by the benefits of internal capital markets and barriers to business growth like market size and concentration. In our analysis, we distinguish between related and unrelated diversification. Using a measure of unrelated line‐of‐business diversification we find the first support for the diversification prediction of the managerial discretion hypothesis that mutual insurers should be less diversified than stock insurers. While mutual insurers tend to exhibit higher levels of total diversification, they engage in significantly less unrelated diversification than do stock insurers.     

Do foreign institutional investors destabilize China’s A-share markets?

This paper investigates the effect of foreign institutional investors on the stability of Chinese stock markets. Previous literature views this investor group as destabilizing feedback traders. We use the abolition of ownership restrictions on A shares as a natural experiment. There is strong evidence that foreign institutions have a stabilizing effect on Chinese stock markets and contribute to market efficiency. This finding is robust across exchanges, sample periods, size quintiles and alternative model specifications. By contrast, domestic investors appear to engage in positive feedback trading. Our results have important implications for market regulation.