Trade Restrictiveness in the Presence of 'New' Goods

The Trade Restrictiveness Index (TRI) by Anderson and Neary (1994) is an index number aggregating trade distortions in the context of a small open economy. A liberalization process which allows trade in goods not traded in previous periods, implies different sets of goods in the two successive periods over which the TRI is defined; this may introduce a bias, inherent in index numbers. This paper attempts a refinement of the standard TRI to allow for the presence of newly traded goods in the definition of the index. In addition, an implementable expression of the refined TRI is provided.     

The Value of Investor Protection: Firm Evidence from Cross-Border Mergers

International law prescribes that in a cross-border acquisitionof 100% of the target shares, the target firm becomes a nationalof the country of the acquiror, and consequently subject toits corporate governance system. Therefore, cross-border mergersprovide a natural experiment to analyze the effects of changesin corporate governance on firm value. We construct measuresof the change in investor protection in a sample of 506 acquisitionsfrom 39 countries. We find that the better the shareholder protectionand accounting standards in the acquiror's country, the higherthe merger premium in cross-border mergers relative to matchingdomestic acquisitions.     

The Impact of Employees' and Managers' Training on the Performance of Small‐ and Medium‐Sized Enterprises: Evidence from a Randomized Natural Experiment in the UK Service Sector

We investigate the relationship between employees' and managers' training and firm performance using a policy intervention that randomly assigned training support to small‐ and medium‐sized enterprises in the UK accommodation and food service sector. Because the number of firms self‐selected into training exceeded available places, training was randomly assigned to some firms, resulting in a randomized natural experimental design that allowed us to identify the average effect of training on treated firms. Our empirical results suggest that employees' training had a stronger positive impact on firms' labour productivity and profitability than that of managers'.     

A life history approach to perceptions of global climate change risk: young adults’ experiences about impacts,causes, and solutions

Although the general acceptance of human-influenced global climate change within the technical sphere of science is important to consider, public perceptions of global climate change risks, impacts, causes, and solutions are as important to policy actions as scientific findings. Yet, studies analyzing climate change risk perceptions suffer from a number of limitations or use only a handful of approaches. Using a limited life history approach, this article answers calls for additional qualitative approaches in risk perception research. This article (1) introduces risk perception researchers to the limited life history method; (2) discovers that young adults articulate climate change solutions at the individual level, often as consumers, and blend their responses to climate change risks and advocacy for solutions with a general, environmentally friendly orientation, a ‘green posture;’ and (3) contends the key sources informing young adults’ perceptions about climate change risk have changed significantly from previous studies.     

Federal tax competition and the efficiency consequences for local taxation of revenue equalization

Recent work has shown that a system of equalization grants can neutralize the efficiency loss caused by tax competition among lower-level governments. These models, however, ignore the vertical tax externalities that occur when the federal and lower-level governments levy taxes on the same base. This paper incorporates equalization grants into a standard capital tax competition model in which there are horizontal tax externalities between jurisdictions and vertical tax externalities between the levels of government. It is shown that, even in the presence of vertical tax externalities, an efficient level of lower-level government taxation can be achieved with a modifying version of a standard equalization grant formula.     

The dynamics of crop sectors in regional development: The case of tobacco

The importance of specific crop sectors can be better cast in a broader framework to account for intersectoral effects. Input-output analysis can provide this framework to assess the importance of the controversial crop, tobacco. In this respect, employment, income, and output multipliers were estimated to demonstrate the dynamics of the sector at the regional and national levels. Furthermore, the impact of totally eliminating tobacco cultivation was computed. Results clearly demonstrate the significance of the tobacco sector and its interrelation with the rest of the economic sectors.This study was partially financed by the Portuguese Association of Tobacco Producers.     

R&D contribution in TFP growth of Greek industry: A limited information likelihood approach

We provide a novel panel model to decompose total factor productivity (TFP) growth in the Greek industry at the firm level while we tackle the contribution of R&D. We, therefore, opt for parametric methodology that provides statistical inference and would validate the results. Our modeling departs from prior strong assumptions such as error terms across firms being independent. In fact, we provide a novel limited information maximum likelihood (LIML) estimation method that adequately deals with the issue of endogeneity and model misspecification. We demonstrate that our model detects variability in terms of TFP growth components across industries and firms. Our results show that R&D would enhance TFP of Greek firms, albeit the crisis has had a detrimental impact. Financial ratios such as liquidity and solvency ratios also affect TFP as we demonstrate that both would enhance TFP. The solvency ratio is important as it provides an estimate of whether the firm can cope with debt. We also note variability across small versus medium and large firms and report that small firms are more productive and spend more of their revenues on R&D. In terms of policy, our evidence warrants higher R&D spending to enhance TFP growth, though R&D funding is a concern.     

STOCK MARKET CONSEQUENCES OF POLITICAL VIBRANCY

We define areas with strong geographic ties to powerful politicians as politically vibrant and show that they are characterized by greater value-relevant information generation and symptomatic of equity market segmentation. Political vibrancy entails greater levels of local bias and local comovement and has two important return predictability implications. First, it enhances local institutions’ informational advantages; their trades’ ability to forecast local stock returns exceeds that of nonlocal institutions. Second, in support of the view that information diffuses slowly into prices, stock returns of firms from politically vibrant areas predict returns of similar firms in other areas.     

International stock markets interactions and conditional correlations

This paper investigates the transmission of price and volatility spillovers across the US and European stock markets in bivariate combinations. The framework used encompasses the most popular multivariate GARCH models, with News Impact Surfaces employed for interpretation. By using synchronous data the dynamic conditional correlation model (Engle, R., 2002. Dynamic conditional correlation: a simple class of multivariate GARCH models. Journal of Business and Economic Statistics 20, 339–350) is found to best capture the relationships for over half of the bivariate combinations of markets. Other findings include volatility spillovers from the US to European markets, and a reverse spillover. In addition, the magnitude of the correlation between markets is higher not only for negative shocks in both markets, but also when a combination of shocks of opposite signs occurs.