Micro Foundations for Wage Flexibility: Wage Insurance at the Firm Level*

To what extent do firms insulate their workers' wages from fluctuations in product markets? Which firm and worker attributes are associated with wage flexibility at the micro level? We first rely on Guiso, Pistaferri and Schivardi (2005) to estimate dynamic models of sales and wages, finding that in Portugal, workers' wages respond to permanent shocks on firm performance, as opposed to transitory shocks. We then explore the factors associated with wage flexibility, finding that collective bargaining and minimum wages are associated with higher wage insurance by the firm, while the threat of firm bankruptcy reduces it. Managers receive less protection against permanent shocks than other workers.     

Tax evasion and Ricardian equivalence

This paper studies whether the Ricardian equivalence holds in a context with tax evasion. In such a context, the degree of uncertainty becomes endogenous since agents control the distribution of their future income through their income report. We find that Ricardian equivalence holds when proportional fines are imposed on evaded taxes, but does not hold when the fines are on the amount of unreported income. We also show that it is possible to explain the empirical negative relation between tax rates and declared income when the path of government spending remains unchanged.     

Developing and implementing an environmental performance index for the Portuguese military

At an international level, the implementation of environmental management practices in military facilities is now a growing reality, particularly with the implementation of environmental management programmes and/or systems. The main goal of this research was to assess the Portuguese military sector's environmental performance through an index – the MEPE index – in a simplified and useful manner. A second goal was to measure the units' self‐assessment against the environmental profile of the military sector as evaluated through the index, to determine how far they match. The index was deeloped on the basis of the data obtained in a national questionnaire, which was carried out to evaluate environmental practices adopted by military units. Results show that the Portuguese military's overall environmental performance is poor, reflecting that this is quite a new issue in military organizations. Among the military branches the Air Force reveals the best environmental results. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

Cross-listing and liquidity in emerging market stocks

In this study, we analyze liquidity costs for stocks and ADRs from the four main Latin American markets. The results indicate that international investors are exposed to different trading costs in Latin America, with market location and firm size as important determinants. In the local market, stocks that cross-list internationally do not always present a liquidity cost advantage relative to non-cross-listed stocks. When the ADR and the local stock markets are compared, large firms present lower trading costs in the home market. The opposite occurs for small firms.     

Regulatory disclosure via the internet: does it make financial markets more efficient?

In line with the regulatory framework of the majority of the European capital markets, the Portuguese Securities Market Commission imposes to security issuers the disclosure of any event that could influence share prices in a material way. These events are classified as “Price Sensitive Events”. Through the analysis of market reaction to this kind of event, this study attempts to assess the appropriateness of this disclosure rule. Additionally, since the regulator defines its website as the appropriate manner to disseminate this publishable information through the market, we will also be providing evidence about the efficiency of this system.      

Green auctions: A biodiversity study of mechanism design with externalities

This paper uses a mechanism design approach to study the biodiversity improvement in a territory, where the government is the principal and the landholders are the agents. In particular, I analyze an optimal mechanism that considers multidimensional bid which includes both the biodiversity improvement of the project and its cost. Additionally, this mechanism incorporates the externality (either positive or negative) that a biodiversity project causes in the surrounding agents who decided not to participate. Specifically, I assume that externalities enter in the cost function of the nonparticipating landholders. I show that, in the case of negative externalities, the government will implement a transfer function which is decreasing in the landholder's efficiency level. On the other hand, in the case of a positive externality, paradoxically the government may be interested in the nonparticipation of the most efficient landholders.     

Entrepreneurial opportunities in peripheral versus core regions in Chile

Governmental policies tend to support and boost entrepreneurship in peripheral regions in many countries. This research revives the debate about specific regional policies designed to foster local new business creation, and the entrepreneurial framework conditions needed at the regional level for emerging regions such as Latin America. We applied one of the Global Entrepreneurship Monitor’s methodologies, the National Experts Survey, to a sample of 695 key informants in Chile at eight regions of which six are classified as peripheral. Using non-parametric statistics we compared the differences between peripheral and core regions. The main results indicate that peripherally located entrepreneurship experts perceive their regions as in a worse position than centrally located experts in terms of finance access and physical infrastructure. On the other hand, the results indicate that peripheral entrepreneurship experts detect more market dynamism in their regions and surprisingly perceive general policy and government programs as supporting entrepreneurship although the Chilean government had not promoted many regional policies.     

Environmental Dynamism as a Moderator of Familiness and Performance in Mexican SMEs

This research explores how the environmental dynamism affects the relationship between familiness and a family firm’s performance in an emerging economy. To achieve this goal, we used an instrument to measure three familiness theoretical dimensions (process, human, and organizational resources). To collect data, we interviewed owners of family firms characterized as SMEs in México. Contrary to what is expected, our findings suggest that familiness, as a source of competitive advantage for family firms, may be more suitable in stable environments characterized by certainty of conditions. In other words, the effect of familiness on a family firm’s performance diminishes in highly dynamic environments.