Family‐Owned Business Succession: The Influence of Pre‐performance in the Nomination of Family and Nonfamily Members: Evidence from Spanish Firms

Although family‐owned business succession has been widely researched, very few studies investigate the relationship between preperformance and succession. Drawing on the agency and the resource‐based view theories, we investigate how previous firm performance may influence the nomination of a family or a nonfamily member to top senior positions. We argue that positive firm performance will lead to the nomination of a family member, while negative firm performance leads to nonfamily nominations. Using a stepwise logistic regression with a bootstrap procedure on a sample of nonfinancial firm listed in the Spanish Stock Exchange, the results indicate that performance prior to succession does not affect these nominations, while directive experience does.     

Rural credit and agricultural supply in Brazil

The objective of this study is to determine the financing impact of total expenditure on the use of agriculture inputs (fertilizers, labor, and pesticides), and the output of cotton, rice, beans, corn, soybean, and wheat in Brazil. We study the period 1976–2005. The analysis is based on duality applied to the production theory. The output supplies and conditioned input demands are estimated from a translog multi‐output, multi‐input restricted profit function, where the total production credit is used as proxy of the total expenditure. Farmer expectations with respect to crop prices are incorporated to the estimation based on the quasi‐rational expectation model. The output and input responses to the total expenditure are positive and statistically significant except for cotton, wheat, fertilizer, and pesticides. The short‐run output supply response to own prices is inelastic, except for wheat, which presents elastic response to its price. Acreage has a positive impact on the output supply and it is influenced by land productivity. The main conclusion is that farmers face budget restrictions to purchase inputs, and a government credit program might increase the agricultural supply.     

The ‘Troubling Tradeoffs’ Paradox and a Resolution

Ravallion ( 2012a ) argues that the Human Development Index (HDI) embeds questionable tradeoffs between the dimensions used to compute the index. To alleviate these problems he proposes the adoption of one of the indices developed by Chakravarty ( 2003 ). In this paper I identify the following paradox: while the Chakravarty indices clearly exhibit more sensible tradeoffs than the HDI, the HDI produces more sensible rankings than the Chakravarty indices. To solve the paradox I identify the axioms behind each methodology responsible for the unintuitive tradeoffs and rankings and illustrate how to develop an index with these questionable axioms removed. This approach can result in methodologies that exhibit more intuitive tradeoffs by design, as it seeks inputs from the public as to what those tradeoffs ought to be, and produces rankings that are more in line with what the HDI wishes to measure: human development and capabilities, as conceptualized by Sen ( 1985 ).     

Profits and Fractal Properties: Notes on Marx,Countertendencies and Simulation Models

There are new reasons for revisiting Marx’s elaboration on the rate of profit because contemporary debates provide findings from the MEGA Project, long-term data on the rate of profit, and tools for dealing with complexity and non-equilibrium systems. This article proposes that the interplay between the tendency and the countertendencies of the rate of profit to fall can be translated into a simple system of equations, one based on each chapter of Section Three of Capital—as if Marx sought to mathematically formalise his insights. This article reviews previous debates, presents data and runs a simulation model, showing that the rate of profit behaves as fractals.     

The valuation of warrants: Implementing a new approach

The option pricing model developed by Black and Scholes and extended by Merton gives rise to partial differential equations governing the value of an option. When the underlying stock pays no dividends – and in some very restrictive cases when it does – a closed form solution to the differential equation subject to the appropriate boundary conditions, has been obtained. But, in some relevant cases such as the one in which the stock pays discrete dividends, no closed form solution has been found. This paper shows how to solve these equations by numerical methods. In addition, the optimal strategy for exercising American options is derived. A numerical illustration of the procedure is also presented.     

Targeting agricultural research to benefit poor farmers: Relating poverty mapping to maize environments in Mexico

We explore approaches for targeting agricultural research to benefit poor farmers. Using small area estimation methods and spatial analysis, we generated high-resolution poverty maps and combined them with geo-referenced biophysical data relevant to maize-based agriculture in Mexico. We used multivariate classification and cluster analysis to synthesize biophysical data relevant for crop performance with rural poverty data. Results show that the rural poor are concentrated in particular regions and under particular circumstances. Formal maize germplasm improvement trials were largely outside the core areas of rural poverty and there was little evidence for direct spillover of improved germplasm. Agro-climatic classification used for targeting breeding is useful but often ignores some important factors identified as relevant for the poor. Combining this method with poverty mapping improves stratifying and targeting crop breeding efforts to meet the demands of resource-poor farmers. We believe this integrated approach will help increase benefits from agricultural research to poor rural communities.     

Theory of Storage and the Pricing of Commodity Claims

We extend the literature on commodity pricing by incorporating a link between the spread of forward prices and spot price volatility suggested by the theory of storage. Our model has closed form solutions that are generalizations of the two-factor model of Gibson–Schwartz (1990). We estimate the model on daily copper spot and forward prices using the Kalman filter methodology. Our findings confirm the link between the forward spread and volatility, but also show that the Gibson–Schwartz (1990) model prices forward contracts almost as well. In the pricing of option contracts, however, there are significant differences between the models.     

Commercial Office Space: Testing the Implications of Real Options Models with Competitive Interactions

We test the implications of real option pricing models with competitive interactions for commercial real estate development. The competitive nature of a local commercial real estate market relies on a Herfindahl ratio derived from individual developers' shares of total office construction in their market. All else being equal, greater competition among local developers is associated with more building starts. Other variables suggested by the real options pricing model, including the volatility of local lease rates, are also found to be statistically important. In addition, we provide evidence consistent with greater competition attenuating the extent to which increases in volatility delay commercial real estate development.     

Model selection via genetic algorithms illustrated with cross-country growth data

We provide a new simple procedure for selecting econometric models, which is used to select the regressors of the cross-country growth model regression. This procedure is based on a heuristic approach called genetic algorithms which are used to explore the universe of models made available by a General Unrestricted Model. This search process of the correct model is only guided by the Schwarz information criterion, which acts as the loss function of the genetic algorithm in order to rank the models. Our procedure shows good performance relative to other alternative methodologies when they are compared in a simulation environment. This research was supported by the Spanish Ministry of Science and Education through the project SEJ2006-07701.