Too few dividends? Groups' tunneling through chair and board compensation

Group affiliation increases boards' compensation in countries as different as Korea, India, Hong Kong and Italy. In this paper, I examine a 6-year sample of controller-dominated, concentrated-ownership firms in Chile in search of a rationale for these results.I show that, for group-affiliated companies, controllers' presence on the board of directors is associated with a strong negative relation between chair and board compensation and controllers' cash-flow rights. Furthermore, I show that controllers of group-affiliated companies prefer to increase chair and board compensation rather than dividends as their cash-flow rights decrease.     

Performance of French intensive care units: A directional distance function approach at the patient level

By using a novel adaptation of the free-disposable hull analysis of productivity, we assess the medical and technical efficiency of patient care in 25 Parisian intensive care units (ICUs) during 2000. The robust free disposable hull (RFDH) as defined by [Cazals et al., 2002. Nonparametric frontier estimation: a robust approach. Journal of Econometrics 106, 1–25] reduces the impact outliers may have on findings by employing Monte-Carlo techniques and repeated sample selection. Among our key findings, there was no overall significant correlation between medical and technical efficiencies for all the ICUs, therefore performing well in one does not guarantee good performance in the other. We also found that over 80% of inefficiency is concentrated in less than 20% of the sampled patients.     

Forecasting with an econometric model: Some recent results using the national institute model

It is widely believed that the large econometric models cannot be used for forecasting without considerable intervention on the part of the forecaster. In this paper we challenge this view by reproducing a number of recent forecasts published by the National Institute but without the ad hoc interventions used at the time. We show that in no case would the forecast, produced by the model used mechanically, have been radically different from that actually published. Further, in an ex-post comparison against actual out-turns, the mechanical model forecast is not obviously dominated by the published version.     

How the Client Effect Moderates Price Competition

Why is unregulated competition supposed to drive price down to ruinous levels in some high fixed-cost-low marginal-cost industries (e.g., railroads) but not in others (e.g., hotels)? We argue that price competition is moderated in high fixed-cost-low marginal-cost industries when the value one consumer realizes from the service is affected by the characterics of other consumers. We develop a simple model of this client effect using the example of the demand for hotels and then generalize the implications of our model to other industries.     

How does a devaluation affect the current account?

This paper explores how an exchange rate devaluation affects the current account in a sticky-price inter-temporal optimizing model. The main issue addressed is how the features of international pricing affect the response of the current account. When prices are all set in the producer's currencies, the effect of a devaluation on the current account depends on the conventional Marshall–Lerner conditions. This is fundamentally an a-temporal condition (depending on the elasticity of substitution between home and foreign goods). However, when prices are all set in consumer's currencies, the response of the current account depends upon the size of the inter-temporal elasticity of substitution of consumption across time periods. This represents an inter-temporal condition. When pricing-to-market is partial, the effect of devaluation on the current account depends on the strength of the a-temporal elasticity relative to the inter-temporal elasticity.