The political economy of seigniorage

While most economists agree that seigniorage is one way governments finance deficits, there is less agreement about the political, institutional and economic reasons for relying on it. This paper investigates the main political and institutional determinants of seigniorage using panel data on about 100 countries, for the period 1960–1999. Estimates show that greater political instability leads to higher seigniorage, especially in developing, less democratic and socially-polarized countries, with high inflation, low access to domestic and external debt financing and with higher turnover of central bank presidents. One important policy implication of this study is the need to develop institutions conducive to greater political stability as a means to reduce the reliance on seigniorage financing of public deficits.     

Do Colored Photographs Affect Willingness to Pay Responses for Endangered Species Conservation?

The NOAA panel suggested that use of photographs should be pre-tested to explore their effects on subjects (Arrow et al. 1993). For this paper, a modification to the test suggested by the NOAA Panel was made. We tested whether use of colored, as opposed to black and white (B & W), photographs influence respondents’ valuation of the environmental commodity in question. The context of the test is a CVM study valuing the benefits from protecting the national bird. This was performed using two drop-off surveys that were identical except for the color of the photographs incorporated in the survey instrument. The dichotomous choice logit equations were statistically different between the two treatments of the questionnaire, indicating the significant effect of colored photographs on the respondents’ WTP. The findings support the NOAA Panel recommendation of careful pre-testing and scrutiny of the photographs integrated in the questionnaire since ‘packaging’ of the environmental good (i.e., endangered species protection) matters in valuing benefits associated with it. Since colored photographs are found to be value-enhancing, to simply use B & W photos as an attempt to reduce cost associated with implementing the contingent valuation (CV) survey, especially when limited research money is involved, would result to lower the estimated value of the environmental good.     

Does context matter more for hypothetical than for actual contributions? Evidence from a natural field experiment

We investigated the importance of the social context for people’s voluntary contributions to a national park in Costa Rica, using a natural field experiment. Some subjects make actual contributions while others state their hypothetical contribution. Both the degree of anonymity and information provided about the contributions of others influence subject contributions in the hypothesized direction. We found a substantial hypothetical bias with regard to the amount contributed. However, the influence of the social contexts is about the same when the subjects make actual monetary contributions as when they state their hypothetical contributions. Our results have important implications for validity testing of stated preference methods: a comparison between hypothetical and actual behavior should be done for a given social context.      

The internal capital markets of business groups: Evidence from intra-group loans

We study business groups? internal capital markets using a unique data set on intra-group lending in Chile (1990–2009). In line with groups? financing advantage, firms that borrow internally have higher investment, leverage, and return on equity (ROE) than other firms. At the margin, controlling shareholders have higher cash-flow rights in borrowing firms than in lending firms. However, there is no robust evidence of minority shareholders losing out from intra-group loans as tunneling predicts. Our evidence is consistent with the idea that strict regulation and disclosure requirements for intra-group loans, which are features of the Chilean market, reduce the risk of expropriation in pyramids.     

The dynamics of international trade integration: 1967–2004

This article explores how trade integration has advanced over the last four decades and what the foreseeable future holds, among other related questions. To this end, we consider certain methods which have scarcely been used in the literature on trade integration. First, we measure trade integration through a set of indicators which control not only for how open economies are, but also for their degrees of connectedness in the World Trade Web. Second, we assess how these indicators have evolved over time, what the likely steady state distribution might be, and whether results could differ depending on a variety of weighting schemes (GDP, population). The results show that, under current trends, future world trade will be much more trade-integrated, especially for the most heavily populated countries. However, there is still a long way to go before reaching the hypothetical scenario of geographically neutral trade.     

Non‐Fulfilment of Debt Limits in Spanish Municipalities

In decentralised European Monetary Union members such as Austria, Belgium, Finland, Germany and Spain, the Stability and Growth Pact can only be implemented if there is close fiscal coordination among government tiers. Thus, limits on subcentral governments' debt are essential in this coordination. This paper analyses which political and socio‐economic factors influence compliance with debt limits. We use a database with information on Spanish municipalities with at least 1,000 inhabitants for 2001–08. Our results indicate that the non‐financial surplus limit is the requirement that is most commonly breached, followed by the net operating balance requisite. Population has a positive and significant impact on failure to comply with debt limits. In addition, we show a positive relationship between income level and global limit compliance. Finally, it can be stated that municipalities appear to manipulate debt with electoral purposes.     

How SME Uniqueness Affects Capital Structure: Evidence From A 1994–1998 Spanish Data Panel

The principal aim of this paper is to test how firm characteristics affect Small and Medium Enterprise (SME) capital structure. We carry out an empirical analysis of panel data of 6482 non-financial Spanish SMEs during the five years period 1994–1998, modelling the leverage ratio as a function of firm specific attributes hypothesized by capital structure theory. Our results suggest that non-debt tax shields and profitability are both negatively related to SME leverage, while size, growth options and asset structure influence positively SME capital structure; they also confirm a maturity matching behaviour in this firm group.     

Influence of Corporate Social Responsibility on Loyalty and Valuation of Services

The study of corporate social responsibility has been the object of much research in recent decades, although there is a need to continue investigating its benefits as a marketing tool. In the current work we adopt a multi-dimensional perspective of social responsibility, and we carry out market research to determine the perceptions of users of mobile telephone services about economic, legal, ethical and social aspects of their operating companies. With these data we determine the structure and components of the concept of social responsibility. Subsequently, this is related with the overall evaluation of the service and loyalty by means of a model of structural equations, in order to determine the influence of corporate social responsibility on these concepts, and hence its benefits as a commercial tool. Dr. Ma del Mar García de los Salmones is Professor of Marketing at the University of Cantabria (Spain). Her current research interests include corporate social responsibility, brand image and consumer behaviour. She received her Ph.D. in Business Administration in 2002 with her work “Corporate Image as a Key Variable in Firm Choice: Identity and Positioning of Mobile Phone Business”. Dr. ángel Herrero is Professor of Marketing at the University of Cantabria (Spain). His current research interests include consumer behaviour, e-commerce and corporate social responsibility. He received his Ph.D. from the University of Cantabria in 2002 for his work on “The Process of Adoption of a New Sales System: An Application to B2C e-commerce”. Dr. Ignacio Rodríguez del Bosque Rodríguez is Professor of Marketing at the University of Cantabria (Spain). His areas of research include business communication, relationship marketing and distribution channels. His works have previously been published in the several international journals, like Journal of Retailing and Consumer Services, Tourism Management and Industrial Marketing Management.     

Institutions,Governance and Economic Growth in the EU: Is There a Role for the Lisbon Strategy?

While European economic integration and in particular the single European market often appear to be only a smallest common denominator in the EU, they condition the economic policy framework facing Member States and have been instrumental in putting governance patterns into motion. The Lisbon Agenda is a case in point. Motivated by competitiveness concerns, it outlines an economic and social strategy meant to relaunch the EU within the changed setting of world-wide competition and a knowledgebased economy. Its success ultimately hinges on whether the necessary coordination to implement policies with an EU rationale can be achieved so as to realise the efficiency properties of the internal market. *and Research Fellow at IEEI **and National Institute for Public Administration (INA). This paper stems from the authors' joint research and teaching on European Economics at the University of Victoria, Canada, at INA and at the University of Aveiro in 2005 and 2006 and is part of an FCT research project on Economic Growth, Convergence and Institutions (research grant POCI/EGE/55423/2004, partially funded by FEDER).     

The impact of state legitimacy on entrepreneurial activity

The purpose of this research is to analyze the influence of the state legitimacy on of the different countries’ entrepreneurial activity’s development, the opportunities’ perception and the entrepreneurship’s motivations. This paper is set into the research field which analyze how the institutional environment influence entrepreneurship in different countries. Research framework has been built based on the Institutional Theory. To develop the model we use a set of data extracted from the European Social Survey and the Global Entrepreneurship Monitor about 28 European countries and we analyze them through Partial Least Squares-Structural Equation Modeling. Results show that state’s legitimacy influences the level of entrepreneurship in the different countries and the perception of the entrepreneurial opportunities and chances. Besides, the research shows that, in the scenario of the most legitimated countries, entrepreneurial activities is related to the need of self-employment. Based on the Institutional Theory, this research provide relevant contributions in the research field about entrepreneurship and countries’ institutions. From a practical point of view, the research shows ideas on how policymakers can improve entrepreneurial activity managing state legitimacy. Furthermore, the results provide new contributions in the research on the influence of the institutional context on the states entrepreneurial activity, providing an analysis and a comparison of the differences between countries, based on institutional theory.