Challenges and directions in knowledge asset trading

This paper addresses the area that is at the intersection of knowledge management and electronic commerce. This area refers to the exchange and trade of explicit and implicit knowledge at an inter‐organizational level. Electronic knowledge marketplaces are currently emerging to address the opportunities and risks found in the purchase and selling of knowledge in the business‐to‐business (B2B) environment, the need for supporting long‐lasting relationships of knowledge exchange and the requirement for facilitating virtual community contexts where knowledge seekers can find suitable knowledge providers and knowledge providers can advertise and sell their available knowledge. The paper describes the business challenges associated with the design of an Internet‐based knowledge marketplace. INKASS, a European IST project, has stimulated this work and has provided real‐life verification on the arguments raised and on the positions adopted herein. Copyright © 2005 John Wiley & Sons, Ltd.     

Production Structure, Technical Change, and Productivity Growth in Albanian Agriculture

This paper analyzes the production structure, technical change, and total factor productivity of Albanian agriculture during the postwar period. Albanian agriculture faced severe structural problems such as limited economies of scale, labor-using technical change, decreasing partial factor (land and labor) productivities, and slow growth of total factor productivity. Agricultural development in Albania was based mainly on input increases, which accounted for almost 90% of output growth. Consequently, the economic crisis appearing since 1990 is not due only to the adjustment process toward a market economy but has also been affected by the postwar agricultural development strategy.     

Optimal securities under adverse selection and moral hazard

We consider project financing under adverse selection and moral hazard and derive several interesting results. First, we provide an explanation of why good firms issue both debt and underpriced equity (even if the bankruptcy and agency costs of debt are zero). Second, we show that, in the presence of moral hazard, adverse selection may induce the conversion of negative into positive NPV projects leading to an improvement in social welfare. Third, we provide a rationale for the use of warrants. We also show that a debt–warrant combination can implement the optimal contract. Our results have a number of testable implications.     

Non parametric VaR Techniques. Myths and Realities

VaR (value-at-risk) estimates are currently based on two main techniques: the variance-covariance approach or simulation. Statistical and computational problems affect the reliability of these techniques. We illustrate a new technique – filtered historical simulation (FHS) – designed to remedy some of the shortcomings of the simulation approach. We compare the estimates it produces with traditional bootstrapping estimates.
(J.E.L.: G19).     

Indirect Re–employment Wage Discrimination

This paper looks at unemployed individuals and investigates wage differences generated by re–employment selection. It shows that discriminatory re–employment selection can result, indirectly, in discriminatory re–employment pay. A Heckman two–stage selection model is combined with an extension of Gomulka–Stern non–linear decompositions to explain how re–employment selection generates indirect discrimination. The paper uses data from pre–unification Germany in the late 1980s and finds that female human capital suffers more from unemployment and that the market is harsher to males for becoming unemployed. New policies should encourage a regime where the hiring process is more transparent and hiring decisions are monitored on a regular basis.     

The impact of the euro on Europe's financial markets

This paper presents an overview of the impact of the introduction of the euro on Europe's financial structure over the first four years since the start of EMU. It analyzes changes in money markets, bond markets, equity markets and foreign exchange markets. Euro's role in originating or catalyzing trends has been uneven across the spectrum of financial markets. From the supply side, banks and investors in fixed income markets have become more focused on the characteristics of individual borrowers rather than the nationality of the issuer and have built up expertise to evaluate credit risk. European equity markets have also been affected by the enhanced ability of investors to build strategies with a pan‐European perspective as prices increasingly reflected risk factors specific to industrial sectors rather than individual countries. On the borrower side, EMU has increased the attractiveness of market‐based financing methods by allowing debt issuers to tap institutional portfolios across the euro area. Lower barriers to cross‐border financial transactions have also increased the contestability of the market for financial services, be it at the wholesale or the retail level. The introduction of the euro has also highlighted the shortcomings of existing institutional structures and areas where excessive focus on narrowly defined interests may stand in the way of realizing the full potential benefits from the new environment. Diverging legal and institutional infrastructures and market practices can impede further financial market development and deepening. Hence, the euro has put a premium on cooperation between national authorities and institution as a means of achieving a more harmonized financial environment. The impact of EMU on depth in foreign exchange markets has been less clear‐cut, as volatility, spreads, trading volumes and liquidity appear not to have changed in a substantial way. Overall, it seems that the new currency has made some progress towards the goal of becoming a currency of international stature that would rival that of the US dollar. However, a number of the necessary next steps towards achieving this goal are also among the trickiest to implement.     

Insurance and protection of irreplaceable commodities: The case of one's own life

This paper deals with the effect of life insurance upon the individual's ‘value of life’. In a single period framework we analyse the factors which determine whether life insurance and safety will be treated as substitutes or complements.