The HIV Epidemic,Skill Heterogeneity,and Output

This paper investigates the effect of HIV/AIDS on output using an overlapping generations model with heterogeneous agents calibrated to sub‐Saharan Africa. Output is found to be below a no‐AIDS output in a range between 3% (10%), when only unskilled workers are affected, and 10% (28%), when only skilled workers are affected, whenever the overall infection rate is 7% (20%). When investigating the hypothesis that AIDS affects skilled workers more severely than unskilled at the beginning of the epidemic, with the effect switching as the epidemic becomes more mature, the findings are that the economy can be 8% smaller along the transition path. In all scenarios where the epidemic is temporary, it would take four to five generations or about 90 years for sub‐Saharan Africa to recover.     

Board Effectiveness and Cost of Debt

Does the board of directors influence cost of debt financing? This study of a sample of Spanish listed companies during the period 2004?C2007 provides some evidence about the question. The results suggest that two board attributes ?C director ownership and board activity ?C appear to influence in the risk assessment of debtholders because of their ability to reduce agency cost and information asymmetry. We also find a non-linear relationship between board size and cost of debt, suggesting that from certain levels the benefits of large boards may be outweighed by the cost of poorer communication and increased decision-making time.     

A dynamic perspective on the determinants of accounts payable

Companies can use supplier financing as a source of short-term finance. The main objective of this paper is to extend the literature on the determinants of accounts payable and to test whether the accounts payable follow a model of partial adjustment. To do this, we use a sample of 3,589 small and medium sized firms in the UK. Using a dynamic panel data model and employing GMM method of estimation we control for unobservable heterogeneity and for potential endogeneity problems. The results reveal that firms have a target level of accounts payable. In addition, we find that larger firms, with better access to alternative internal and external financing and with a lower cost, use less credit from suppliers. Moreover, firms with higher growth opportunities use more trade credit for financing sales growth.     

Productivity,energy prices and the great moderation: A new link

We build upon recent research that attributes the moderation of output volatility since the 1980s to the reduced volatility of the Total Factor Productivity (TFP) by investigating the linkage between energy price fluctuations and the stochastic process for TFP. First, we estimate a joint stochastic process for the energy price and TFP and establish that until around 1982, energy prices negatively affected TFP. This spillover has since disappeared. Second, we show that within the framework of a Dynamic Stochastic General Equilibrium (DSGE) model, the disappearance of this energy-productivity spillover accounts for close to 68 percent of the moderation in output volatility.     

Technological choices and unemployment benefits in a matching model with heterogenous workers

This article aims at understanding the interactions between public policies, such as unemployment benefit systems, and firms’ technological choices. For this purpose, we use a matching model in which workers are vertically differentiated and where the nature of jobs is endogenous. We show that an improvement in unemployment benefits leads to an increase in productivity by making agents more selective and jobs more complex. However, the impact on labour market participation is negative.     

The Role of Fair Value Accounting in Promoting Government Accountability

A key factor to improve the financial accountability of governments is the existence of a set of generally accepted financial reporting of standards, such as IPSAS issued by the IFAC, which seek to enhance information transparency. This paper examines the capability of fair value accounting to improve, through financial transparency, government accountability, analysing the possible effect of the implementation of this measurement basis on understandability, comparability and timeliness—three qualitative characteristics linked to the relevance of financial reporting. This paper further considers whether the difficulties involved in achieving FV estimations could affect government financial accountability. The findings indicate that FVA implementation could enhance accountability by improving understandability, comparability and timeliness in governmental financial reporting, although the use of objective measures to estimate the FV of assets is fundamental. In addition, the type of assets and the existence of an active market are crucial to improving the comparability of financial statements under FVA, whereas improving timeliness could be limited by the possibility of estimating FV measures in‐house.     

The determinants of sovereign credit spread changes in the Euro-zone

Using a database of Euro-denominated government bonds covering the period from January 2000 to December 2010, this paper provides an empirical analysis of the determinants of government credit spreads in the Euro-area. The analysis is divided into two sub-periods delimited by the global financial crisis that started in August 2007. We find evidence of a clear shift in the behavior of market participants from a convergence-trade expectation, based on market related factors, before August 2007, to one mainly driven by macroeconomic country-specific variables and an international common risk factor. There is no evidence of a significant role for the liquidity risk before or during the financial crisis period. Overall, our results give support to the Merton-type structural credit risk models and confirm that there are considerable similarities between the factors explaining the dynamics of the credit risk spreads and the factors driving the prices on the government bond markets.     

The impact of daily tour service quality on tourist satisfaction and behavioural intentions in an island context: a study on tours to Isla de la Plata,Ecuador

ABSTRACT

This study assesses the impact of daily tour service quality on tourist satisfaction and behavioural intentions in an island context. Using Partial Least Squares Structural Equation Modeling (PLS-SEM), the analysis of data collected from 195 participating in a daily tour to Isla de la Plata (Ecuador) showed that all the services examined (transportation by boat, food and beverage, tourist guide and visits) had a significant direct impact on tour satisfaction, having the transportation the highest impact. Moreover, the indirect effect of the daily tours services on behavioural intentions mediated by the satisfaction with the tour was also significant.     

Comprehensive Protection,Winners and Losers: A Sectoral Analysis of the Mexican Economy 1970–87

Sectors that have the highest effective protection index should have a greater advantage within an economy than those that have lower index values, and should be the likely winners over a period of years. However, this proposition may not hold, as a result of limitations in the indexes' construction, namely, not considering imperfect structures, the inclusion of non-tradables and intersectoral simultaneity. To overcome these limita-tions, a comprehensive protection (CP) index is proposed. It is based on the Leontief model to calculate market prices and uses a class of equilibrium price models developed on labor value theories. The CP index is then used in a sectoral analysis of the Mexican economy to estimate which sectors are likely to have been winners and which losers. The results of the analysis showed consistency with the instrumentation of the Mexican economic policy. The study concludes that the index formulated here is both theoretically and empirically superior to alternative protection indexes.