Outsourcing with debt financing

This paper investigates the effect of capital structure on a firm’s choice between vertical integration and outsourcing. We model the production decision in a Principal-Agent framework and show that suppliers use debt as a strategic instrument to collect the surplus from outsourcing as their wealth constraint or limited liability ensures them more attractive compensation schemes. Investigating the buyer’s capital structure, we find that outsourcing with risky debt is more likely to occur for high values of the outsourcing surplus.     

Assessing ethical behaviours in the Spanish banking and insurance industries: evidence and challenges

This study aims to improve understanding of the ethical nature of the relations in two labour-intensive industries to facilitate the creation of an ethical culture. For this purpose, the authors first review literature related to the main influences on ethical behaviour, then perform an empirical analysis of those factors using a hierarchical stepwise regression of a database of 525 banking and insurance employees. Contrary to expectations, leadership has a less important effect on ethical behaviour than other organizational factors. The results reveal several implications for improving the management of ethical behaviour in these industries.     

The Internationalization of Spanish- and Portuguese-Speaking Banks

This article investigates which variables affect the location choice of banks from Spanish- and Portuguese-speaking countries in their process of internationalization. The article compares the differences in these variables for public and private banks. The sample consists of 141 banks operating in 58 countries. Results show that internationalization is undertaken by the largest banks, which preferably choose countries with similar language, close to the home country, and with the most opportunity for growth. Additionally, the effects of certain explanatory variables on the probability of expanding to a given country are different for public and private banks.     

Graph efficiency and productivity measures: an application to US agriculture

Hyperbolic measures of efficiency and productivity change with respect to a graph representation of production technology allow researchers to consider output and input dimensions simultaneously in measuring producer performance. Hyperbolic efficiency measures have been proposed, but empirical implementation has not followed, either in efficiency analysis or in productivity analysis. The objectives of this paper are to define hyperbolic performance measures on a graph representation of production technology, to motivate their use by stating some of their advantages over their radial counterparts, and to introduce a direct formulation to calculate them making use of Data Envelopment Analysis techniques. The ideas are illustrated by calculating hyperbolic efficiency and Malmquist productivity indexes for a US agricultural panel data set.     

Business services,the new engine of French regional growth

This article analyses the evolution of employment in the French regions, putting the accent on business service firms. A ‘shift and share’ type of analysis shows that a primary decentralisation in tertiary activities seems to emerge in the 1990s, essentially pertaining to ancillary producer services. An explanatory analysis backs up the general validity of the regional economic base theory: the basic activities, to which business services can quite legitimately be attached, certainly play a leading long-term role on global employment dynamics. Finally it shows that over the past 20 years, the regional offer of services to businesses has been the major discriminating variable between regions, greatly influencing the evolution of basic employment and thus confirming the vital driving force of this sector in regional dynamics.     

Product variety and the demographic transition

Why does the rate of population growth decline in the face of economic growth? We show that growing product variety may induce a permanent reduction in the demand for children and a continuous rise in income and consumption.     

EXPLICIT SOLUTIONS OF CONSUMPTION-INVESTMENT PROBLEMS IN FINANCIAL MARKETS WITH REGIME SWITCHING

We consider a consumption and investment problem where the market presents different regimes. An investor taking decisions continuously in time selects a consumption–investment policy to maximize his expected total discounted utility of consumption. The market coefficients and the investor's utility of consumption are dependent on the regime of the financial market, which is modeled by an observable finite-state continuous-time Markov chain. We obtain explicit optimal consumption and investment policies for specific HARA utility functions. We show that the optimal policy depends on the regime. We also make an economic analysis of the solutions, and show that for every investor the optimal proportion to allocate in the risky asset is greater in a "bull market" than in a "bear market." This behavior is not affected by the investor's risk preferences. On the other hand, the optimal consumption to wealth ratio depends not only on the regime, but also on the investor's risk tolerance: high risk-averse investors will consume relatively more in a "bull market" than in a "bear market," and the opposite is true for low risk-averse investors.     

Cooperative Credit in Spain: An Analysis of Credit Sections of Cooperatives

The long history and deep-rooted tradition of co-operative credit in Spain (credit co-operatives and credit sections of co-operatives) and the lack of detailed studies of the latter suggest the need to reflect on them and highlight their potential. This study examines the ways in which the credit sections can access the financial markets, describes their financial and economic structure and the sources of their income and expenditure and analyses their competitiveness in terms of efficiency.     

Aspects of profitability that influence smallholder cash-crop preferences in northern Mozambique

This study analyses profitability in terms of relationships between various aspects, indicators and cash-crop cultivation preferences. Both financial and pragmatic aspects of profitability were found to be related to cash-crop preferences. Apart from the need to promote a crop with a good farm gate price and to reduce production and marketing costs, promoters need to strengthen the wider system by supporting profitability as well as household consumption requirements. The correlation between indicators of expected profitability improved as more financial and pragmatic aspects were incorporated. Smallholder farmers' rankings of profitability correlated better with cash-crop preferences when the analysis incorporated more aspects of profitability. In addition, the results indicated the institutional support needed to improve the profitability of cash crops. This simple method of identifying smallholder preferences for one cash crop among many is of paramount importance in the design of strategies for improving agricultural market participation.     

A conceptual framework for public-private interplay in the telecommunications sector

Public activity in the telecommunications industry has experienced important transformations in the last decade: “reinvolvement” in infrastructure deployment, “innovative” boosting measures, and decentralisation of some decisions. Conceptually, even more important than the measures themselves is the fact that private agents often participate in their realisation and execution. This paper reviews how justifications for public action that would apply to any economic activity area have modelled the public-private relationship in the telecommunications sector. Subsequently, it focuses on the analysis of the new spaces for public-private collaboration that are currently opening up.