Capacity precommitment and price competition yield the Cournot outcome

We introduce a simple model of oligopolistic competition where firms first build capacity, and then, after observing the capacity decisions, choose a reservation price at which they are willing to supply their capacities. This model describes many markets more realistically than the model of Kreps and Scheinkman [Kreps, D., Scheinkman, J., 1983. Quantity precommitment and Bertrand competition yield Cournot outcomes. Bell J. Econ. 14, 326–337]. We show that in this new model every pure strategy equilibrium yields the Cournot outcome, and that the Cournot outcome can be sustained by a pure strategy subgame perfect equilibrium.     

On the role and effects of IMF seniority

We analyze the IMF as a lender to countries in financial distress highlighting the fact that it is a senior creditor. An advantage of delegating senior lending in a single institution rather than on competitive markets is that it would be able to reach the socially optimal solution. This would require the IMF not to intervene when the crisis is severe enough. However, a commitment device might be needed to achieve the socially optimal solution. If IMF lending were done for all shocks, the country would be always ex-post better off but lenders would be worse off when the country situation is either good or weak, which is consistent with empirical evidence. Anticipation of senior lending might make the country better off by preventing inefficient liquidation. However it might actually hurt the country ex-ante and too much rescuing in the future could lead to too little lending in the present which is contrary to the moral hazard critique.     

Gobierno corporativo,financiamiento y género: un estudio de las pymes emisoras de títulos en los mercados de valores argentinos

The aim of this work is to study corporate governance (CG) in small and medium enterprises (SMEs) from a gender perspective. In particular, we study the participation of women in ownership, management (board and senior management) and external audit in SMEs participating in the Argentinean Securities Market. The results show that participation of women in ownership and in external audit has a significant relationship with financing decisions. However, we do not find evidence of relations among different levels of GC and gender.     

The structural transformation and aggregate productivity in Portugal

We document the substantial process of structural transformation—the reallocation of labor between agriculture, manufacturing, and services—and aggregate productivity growth undergone by Portugal between 1956 and 1995. We assess the quantitative role of sectoral labor productivity in accounting for these processes. We calibrate a model of the structural transformation to data for the United States and use the model to gain insight into the factors driving the structural transformation and aggregate productivity growth in Portugal. The model implies that Portugal features low and roughly constant relative productivity in agriculture and services (around 22%) and a modest but growing relative productivity in manufacturing (from 44 to 110%). We find that productivity growth in manufacturing accounts for most of the reduction of the aggregate productivity gap with the United States and that a further closing of this gap can only be accomplished via improvements in the relative productivity of services. This paper was written while the authors were affiliated with the Federal Reserve Bank of Richmond. We would like to thank the editor, two anonymous referees, and participants at the Third Conference on Portuguese Economic Development in the European Context organized by the Bank of Portugal for their comments. All errors are our own.     

Technological and non-technological innovation and productivity in services vis-à-vis manufacturing sectors

In this paper, the links between investment in innovation activities, innovation outputs (technological and non-technological innovation) and productivity in services vis-à-vis the manufacturing sector are explored using innovation survey data from Uruguay. The size of firms, their cooperation in R&D activities, the use of public financial support, patent protection and the use of market sources of information are very important drivers of the decision to invest in innovation activities across sectors. The main determinants of technological and non-technological innovations are the level of investment in innovation activities and the size of the firm. The results indicate that both technological and non-technological innovations are positively associated to productivity gains in services, but non-technological innovations have a more important role. The reverse happens for manufacturing, where technological innovations are more relevant for productivity.     

Socioeconomic Index for Income and Poverty Prediction: A Sufficient Dimension Reduction Approach

The present paper introduces a novel method for the construction of Socioeconomic Status (SES) indices that are specific to a target variable of interest. It is based on the Sufficient Dimension Reduction (SDR) paradigm and uses a factorized model-based approach to simultaneously deal with predictor variables of mixed nature (i.e. quantitative, binary, and ordinal), which are usual in microeconomic data. These SES indices also identify relevant predictor variables using a two-step regularized matrix factorization approach. Using data from household surveys for Argentina (Encuesta Permanente de Hogares-EPH), the proposed method is compared with other existing dimension reduction algorithms such as standard Principal Component Analysis (PCA) and its version for mixed variables, regression on the full set of variables and Least Absolute Shrinkage and Selection Operator regression (LASSO).     

A consistent analysis of diversification decisions with non-observable firm effects

The empirical analyses of firm diversification decisions, both for new activities (new products) and markets (for example, new routes for airlines), have usually estimated a binary dependent variable model for each of the decisions the firm makes. To obtain consistent estimators, every relevant effect must be considered in the specification. As this will hardly happen, the presence of nonobserved firm effects (either because such data do not exist or because it is impossible to obtain them) must be econometrically treated, because it causes inconsistency in the estimations. In this paper we propose to use the estimators provided by the maximization of the conditional likelihood function in problems of this kind because they give consistent results even when unobserved firm effects are present. Finally, we apply this technique to an example of diversification among Spanish manufacturers. © 1997 John Wiley & Sons, Ltd.     

Chinese Outward Foreign Direct Investment: A Review of Empirical Research

In the past decade, Chinese outward foreign direct investment (OFDI) has become a major element of global capital flows. As a consequence, recent years have witnessed an increasing growth in the number of papers focusing on Chinese companies “going global.” This paper reviews 112 empirical papers focusing on Chinese OFDI that were published in major scholarly journals between 2002 and 2014. We report on individual and institutional contributions, citations, the theories and methods used and the research topics. We also identify the research gaps and discuss the implications of our literature review for future theory building.     

Type of diversification and firm resources: new empirical evidence from the Spanish tourism industry

This paper analyses the diversification strategies followed by tourism firms from the perspective of the resource‐based view. More specifically, it seeks to verify whether the composition of the firms' resources has a bearing on the decision to undertake one type of diversification or another (related or unrelated). From a mail survey to 80 Spanish tourism firms, we identified 94 entries into new business areas. We applied an ordered logit regression and have statistically confirmed that intangible resources lead to a more related type of diversification. Copyright © 2008 John Wiley & Sons, Ltd.     

Trading Arrangements and Industrial Development

This article outlines a new approach for analyzing the roleof trade in promoting industrial development. It offers an explanationas to why firms are reluctant to move to countries with lowerlabor costs and shows how trade liberalization can change theincentives for firms to locate in developing countries. It modelseconomic development as the spread of concentrations of firmsfrom country to country. Different trading arrangements mayhave a major impact on this development process. By changingthe attractiveness of countries as a base for manufacturingproduction, they can potentially trigger—or postpone—industrialdevelopment. The analysis shows that unilaterally liberalizingimports of manufactures can promote industrialization but thatmembership in a preferential trading arrangement is likely tocreate larger gains. South-South preferential trading arrangementswill be sensitive to the market size of member states, whileNorth-South arrangements seem to offer better prospects forparticipating southern countries, if not for excluded countries.