The relative impact of actual and potential rivalry on firm profitability in the pharmaceutical industry

This paper estimates the effects of actual and potential rivalry on profitability of firms in the U.S. pharmaceutical industry during the 20‐year period 1963–82. The results show that during the 1960s actual rivalry among the sampled firms did not materially affect firm profitability, but that during the 1970s competition among incumbents had an increasingly adverse effect on their profitability. The results also show that potential competition significantly reduced drug firms’ profitability during the entire 20‐year period. Copyright © 1999 John Wiley & Sons, Ltd.     

4D cadastres: First analysis of legal,organizational, and technical impact—With a case study on utility networks

The increasing complexity and flexibility of modern land use requires that cadastres need an improved capacity to manage the third dimension. As the world is per definition not static, there also will be needs in relation to the representation of the temporal (fourth) dimension either integrated with the spatial dimensions or as separate attribute(s). In this paper, registration of utility networks in cadastre are considered in this 3D + time (=4D) context. A number of countries in the world have developed methods to register utility networks complying with their legal, organizational, and technical structure. We researched the different approaches of three specific countries: Turkey, The Netherlands and Queensland, Australia. These are analysed to evaluate a solution that matches legal, organizational, and technical cadastral requirements in the most optimal way.     

Interest Rate Risk Rewards in Stock Returns of Financial Corporations: Evidence from Germany

The interest rate sensitivity of stock returns of financial and non-financial corporations is a well-known phenomenon. However, only little is known about the part of total stock returns that is attributable to the compensation an investor receives for being exposed to interest rate risk when investing in equity securities. We pursue here a benchmark portfolio approach, constructing benchmark portfolios having the same interest rate risk exposure as a particular stock. By studying the time series of returns of these asset-specific benchmarks, we find: i) Regardless of the industry considered, the interest rate risk benchmarks of German corporations have mostly earned a significantly positive reward. ii) Returns of interest rate risk benchmarks of financial institutions exceeded significantly those of non-financial corporations. iii) An investor willing to bear nothing but the average interest rate risk of German financial institutions would have earned a mean return of about or even exceeding 70% of the corresponding total stock returns. iv) Returns of the interest rate risk benchmarks of the German insurance sector were significantly higher than those of German banks, which seems to contradict conventional market wisdom that insurances hedge interest rate risks.     

Consumption tax competition among governments: Evidence from the United States

The paper contributes to a small but growing literature that estimates tax reaction functions of governments competing with other governments. We analyze consumption tax competition between US states, employing a panel of state-level data for 1977–2003. More specifically, we study the impact of a state’s spatial characteristics (i.e., its size, geographic position, and border length) on the strategic interaction with its neighbors. For this purpose, we calculate for each state an average effective consumption tax rate, which covers both sales and excise taxes. In addition, we pay attention to dynamics by including lagged dependent variables in the tax reaction function. We find overwhelming evidence for strategic interaction among state governments, but only partial support for the effect of spatial characteristics on tax setting. Tax competition seems to have lessened in the 1990s compared to the early 1980s.     

On the demographic realism of the Ricardian theory of public finance

Summary The possibility of public debt-neutrality is discussed for countries experiencing demographic changes. The heterogeneity of agents plays a decisive role in destroying Ricardian equivalence of public finance. In addition to the usual explanatory factors of non-neutrality, such as distortionary taxation, public debt is not equivalent to current taxation as a consequence of (1) disconnected dynasties, (2) uncertain lifetimes, (3) diverging birth rates, (4) international migration, (5) population growth uncertainty, (6) diverging rates of time preference, and (7) capital market imperfections. The paper concludes that thepure Ricardian model of public finance serves a purpose as a standard of argument for the more realistic models of public finance.Comments by Gerbert Hebbink, Evert van Imhoff, Herman Vollebergh and members of the Department of Public Finance are gratefully acknowledged.     

Eye-Tracking im Einzelhandel - Ein Leitfaden für die Blickaufzeichnung

Die Frage, welche Artikel wo im Regal platziert werden sollten, l?sst sich nicht allein mit Abverkaufsdaten beantworten. Vielmehr gilt es zu untersuchen, wie sich Kunden vor dem Regal verhalten und wie sie die Warenplatzierungen wahrnehmen. Ein Instrument dafür ist das Eye-Tracking. Die Blickaufzeichnung erlaubt es, das Such- und Orientierungsverhalten am Regal mit den Augen der Kunden zu sehen. Um aussagekr?ftige Ergebnisse aus einer Eye-Tracking-Studie zu erhalten, sind bestimmte Anforderungen zu erfüllen. Ein Leitfaden.     

How Likely are Employers to Rehire Older Workers After Mandatory Retirement? A Vignette Study Among Managers

With a vignette experiment among Dutch managers we examine employers’ considerations in the decision to rehire employees after mandatory retirement. We specifically focus on the effects of the employee’s downward wage flexibility (i.e., the willingness to accept a lower wage) and contract flexibility (i.e., preference for a contract which allows flexible hours or employment). The results show that employers are strongly affected by employees who offer to work for a significantly lower wage, but not by the employees’ preference for a particular labor contract. Employers are overall quite disinclined to rehire employees after mandatory retirement, although large differences exist between employees. Part of these differences can be explained by employers having higher retirement age norms (i.e., the maximum age at which employers consider employees suited for work in their organization).     

The Incidence of EU Per‐Hectare Payments on Farmland Rental Rates: A Spatial Econometric Analysis of German Farm‐Level Data

This article analyses determinants for 2001 farmland rental prices from 3,819 farms in Germany. Based on specification tests we estimate a general spatial model to account for both spatial relationships among rental prices of neighbouring farmers and spatially autocorrelated error terms. A €1 per hectare higher rental price in a farmer’s neighbourhood coincides with a €0.72 higher rental price paid by the farmer. The marginal incidence of EU per‐hectare payments paid for eligible arable crop land on rental rates amounts to €0.38 for each additional €1 of premium payments. Regional livestock density, which is indirectly influenced by different policies, is also a major determinant of rental prices. Results are confirmed by sensitivity analyses. Consequently, German farmland rental rates are heavily influenced by agricultural policy instruments and therefore, these policies exhibit substantial distributional effects.