Measurement of English farming technological change, 1523–1900

I have argued that for the period from 1661 to 1850, patent data in England were consistent in that no official changes in methods and standards of issuance occurred. Book data on titles published on farming production methods were similarly consistent from 1523 to the mid-19th century because the market for books developed gradually and the technology of printing was not substantially changed until the mid-19th century.My main point is that data on output of titles of books on farming productive techniques in England are useful measures of technological change. Books did have information on good production methods and could express productive ideas where a patent may not be issued. Further, the literacy rate of farmers was high so that books were likely an important source of ideas on farming production methods. Finally, the fluctuations in the book data were highly related to the fluctuations in the patent data, suggesting that a common set of factors caused those fluctuations. The high correlations between the detrended book and patent data indicate that if we accept patenting as a useful measure of technology we may also accept book title output of a technical nature as a good measure of technical change.I used the data for a simple analysis of the trend growth rate of agricultural technology in England from 1551 to 1850. While there is limited evidence to show that the subperiod 1651–1750 saw a slowing in the trend of development of farming technology, I argue that a division of the entire period into subperiods is too simplistic. A more fruitful approach would be an analysis of the underlying forces that determined the trend of development of the technology of English agriculture.The next step is an analysis of the forces that influenced technological development of English farming. From an economic point of view, market forces play an important role in influencing technology. Because such an analysis deserves careful consideration, I leave that to another paper (see Sullivan and Simon, 1983).     

Assessing introduction factors for a new industrial product

The present research involves determinant component analysis [3]. Specifically, the study assesses which components—price, product or environmental—are most important in the design of new entry strategy. Under conditions of abundance, industrial firms primarily analyzed price and product characteristics when making new product decisions. In choosing one supplier over another the stalwart buying motives have been quality, service and price [4]. However, these decision components were conceptualized in a period of abundance. Under conditions of scarcity, are price and product characteristics still important? Are environmental dimensions perhaps more important under shortage conditions when making new product decisions? Besides describing the key components that may be considered in new product programming, the article also outlines an approach that may be used to find determinant decision components.     

Exclusive Contracts And Market Power: Evidence From Ocean Shipping

There is a substantial theoretical literature on the potential effects of loyalty contracts, but relatively little empirical work. We employ the event study methodology to examine the competitive effects of exclusionary contracts in the ocean shipping industry, where they were the subject of an extended legal and political struggle. We find that some of the most important events in this conflict caused significant changes in shipping firms' stock returns, indicating exclusive contracts increased their profits. We then examine the effect of these events on net exporting industries' stock returns, and provide evidence that these contracts contributed to carriers' market power.     

Policy-Induced Technology Adoption: Evidence from the U.S. Lead Phasedown

Theory suggests that economic instruments, such as pollution taxes or tradable permits, can provide more efficient technology adoption incentives than conventional regulatory standards. We explore this issue for an important industry undergoing dramatic decreases in allowed pollution – the U.S. petroleum industry's phasedown of lead in gasoline. Using a duration model applied to a panel of refineries from 1971–1995, we find that the pattern of technology adoption is consistent with an economic response to market incentives, plant characteristics, and alternative policies. Importantly, evidence suggests that the tradable permit system used during the phasedown provided incentives for more efficient technology adoption decisions.     

Do share prices matter?

This paper examines whether the cross sectional variation in Australian share prices is partially explained by measures of firm size and ownership characteristics in a manner that is consistent with firms behaving in accordance with Merton's (1987) model of capital market equilibrium with incomplete information. Based on a sample of firms whose shares were traded on the ASX during 1995, we show that firms largely owned by less wealthy shareholders tend to have low stock prices, although this relation is not linear. In addition, larger, better–known, firms tend to have higher stock prices. These findings are consistent with prior evidence from US markets, and suggest the existence of a shareholder clientele effect in Australia that is related to the share price of the underlying firm.     

Confirming Management Earnings Forecasts, Earnings Uncertainty, and Stock Returns

In this study we examine the association among confirming management forecasts, stock prices, and analyst expectations. Confirming management forecasts are voluntary disclosures by management that corroborate existing market expectations about future earnings. This study provides evidence that these voluntary disclosures affect stock prices and the dispersion of analyst expectations. Specifically, we find that the market's reaction to confirming forecasts is significantly positive, indicating that benefits accrue to firms that disclose such forecasts. In addition, although we find no significant change in the mean consensus forecasts (a proxy for earnings expectations) around the confirming forecast date, evidence indicates a significant reduction in the mean and median consensus analyst dispersion (a proxy for earnings uncertainty). Finally, we document a positive association between the reduction of dispersion of analysts' forecasts and the magnitude of the stock market response. Overall, the evidence suggests that confirming forecasts reduce uncertainty about future earnings and that investors price this reduction of uncertainty.     

Do Daily Price Limits Act as Magnets? The Case of Treasury Bond Futures

This article examines price behavior in the U.S. Treasury bond futures market in the mornings after large overnight price moves, using data from 1980 to 1987. The article tests whether price behavior is affected by proximity to a price limit, and whether the effect is a magnet effect or a calming effect. In that period, the price tends to reverse direction after the morning open, and the reversal appears to reflect a calming effect of the price being close to the limit. An alternative hypothesis—that morning price behavior reflects the overnight price change rather than proximity to the price limit per se—is also tested, and does not perform as well in explaining price behavior.     

The Relationship Between Market Efficiency and Insider Ownership in Large and Small Firms

The study examines insider ownership in large and small firms in relation to market efficiency. Recent studies have found a positive and significant relation between inside ownership and stock market performance. Such a finding is predicated upon the idea that inside ownership minimizes agency costs caused by the conflict between hired managers and shareholders. It is argued here that semi-strong form market efficiency requires that all public information, including insider ownership, be quickly impounded into the price of a stock. If that is the case, the expected present value of a change in agency cost should be incorporated into the stock price shortly after any significant change in ownership. Hence, if the estimate is unbiased, the longer-term performance of firms should not be effected by such changes. The issue is examined for both large, well-known firms and for smaller, less-known firms. The hypothesis that markets are generally efficient with respect to insider ownership information is rejected.