Mixed markets in bilateral monopoly

Should we expect to see patterns in the privatization of a public bilateral monopoly? To address this question, the paper analyzes the welfare implications of privatization and examines the interplay of firm location in the vertical stream, differential priorities on private and public profit in welfare and cost asymmetries in a mixed bilateral monopoly. We conclude that merely comparing cost savings from privatization upstream/downstream, is inadequate. If public profit is relatively insignificant in welfare, then only relative cost savings matter. However, if public profit is sufficiently important, then privatization downstream will maximize welfare if it is as (or more) cost effective compared to privatization upstream. We find that downstream privatization can be better than upstream privatization even when the latter is more cost effective than the former.     

Cloud computing capability: its technological root and business impact

Cloud computing can help organizations create business value for long-term viability and sustainability by providing flexibility and versatility. We report a systematic analysis of the central role of cloud computing capability in bridging the information technology (IT) features of cloud computing and its business value. We posit that the IT features of cloud computing lead to measureable increase in business value on both dimensions of performance benefit and collaboration benefit through cloud computing capability. Survey data collected from 174 firms largely support our hypotheses. This study offers fine-grained insights into the mechanisms of how the IT features of cloud computing influence the business value stemming from cloud computing. Firms should focus more on cultivating organizational capabilities to effectively deploy cloud computing in order to harvest the benefits promised by cloud computing.     

Price volatility of south-east fishery's quota species: an empirical analysis

This study investigates the autoregressive conditional heteroscedasticity (ARCH) and generalized-ARCH (GARCH) effects in the price series of Australian South-East Fishery's quota species. It is found that in all cases significant ARCH and/or GARCH effects are present. To search for the origins of these effects a weakly exogenous variable (trading volume) is introduced to the conditional variance equation of the ARCH and GARCH models, provided that such effects are observed in the first stage of investigation. It is found that in 14 cases the estimated coefficients of the trading volume are negative. In all cases, the 'trading volume' variable does not contribute to the removal of the ARCH and/or GARCH effects. Finally, the policy implications of the findings are discussed.     

Examining the relationship between stock return volatility and trading volume: new evidence from an emerging economy

Using daily stock return data for individual stocks from an emerging economy, this article examines the relationship between return volatility and trading volume under the theoretical postulate of the mixture of distributions hypothesis. The results suggest that the contemporaneous trading volume as a proxy for latent information arrival to the market did not contribute to the removal of significant ARCH or Generalized Autoregressive Conditional Heteroscedasticity effects that are found in stocks at the first stage of the investigation. The same holds for the lagged volume except for one case. This, perhaps, suggests that the trading volume (contemporaneous or lagged) is not adequately conveying information to induce traders’ views of the desirability of trade and, therefore, points to the need for searching for other micro and macro variables to be used as potential proxy for information arrival to the stock market of the emerging economy.     

The impact of public ownership in the lending sector

We examine the effects of increased government ownership of suppliers in the lending sector, which induces increased concern with total welfare and reduced concern with profit. Such increased ownership of a lender can have unanticipated effects. For instance, it can increase lender profit. Furthermore, borrower welfare often declines as government ownership increases in a lender with a relatively limited ability to discern the true quality of borrowers’ projects. In addition, there are settings in which increased government ownership of a lender has no impact on either lender profit or borrower welfare.     

On the Performance of Linear Contracts

We examine the ability of linear contracts to replicate the performance of optimal unrestricted contracts in the canonical moral hazard setting with a wealth constrained, risk averse agent. We find that in a broad class of environments, the principal can always secure with a linear contract at least 95% of the profit that she secures with an optimal unrestricted contract, provided the productivity of the agent's effort is not too meager.     

Spatial patterns of rural poverty and their relationship with welfare-influencing factors in Bangladesh

This study determines the spatial variation of rural poverty in Bangladesh and its relation to people’s livelihood assets affecting their ability to procure food. We estimated household income for over 1 million census households using a predictor model based on a nationally representative sample survey data set. We computed and mapped poverty indices for 415 rural subdistricts revealing distinct areas with high poverty incidence that correspond with ecologically depressed areas. However, other livelihood-influencing factors such as education, accessibility and services are significantly correlated with poverty. This indicates the need for continued focus on providing education and access to income-generating opportunities so that the poor can better meet their food needs. Geographically weighted regression analysis indicated spatial differences in the relative importance of various poverty-influencing factors. Multivariate clustering of the local parameter (β) estimates of the determinant factors revealed distinct spatial relationships, which have implications on poverty alleviation interventions specific to the different regions.     

Does Earnings Quality Influence Corporate Social Responsibility Performance? Empirical Evidence of the Causal Link

The study examines the causal links between earnings quality and corporate social responsibility (CSR) performance using a large sample of United States (US) firms from 1992 to 2013. We first find that the association between earnings quality and CSR performance is positive and significant. We then test the flow of causality using Granger's (1969) lead–lag analysis to determine whether changes in earnings quality cause changes in CSR performance or vice versa. Our findings show that changes in earnings quality cause changes in a firm's CSR performance but not vice versa. Further analysis shows that earnings quality reduces the cost of equity capital for firms with higher CSR performance. These findings suggest that one plausible means by which firms with higher earnings quality can maintain better CSR performance is to reduce their cost of equity capital.     

Did the Great Recession Affect Fertility? Examining the Impact of Job Displacements on the Timing of Births in the United States

We examine the impact of job losses during the Great Recession on fertility in the United States. We find that for married/cohabiting couples, job losses of males during the recession decreased the likelihood of birth. In contrast, job losses of married/cohabiting females had no impact, on average, on fertility because of opposing age-specific effects. Although younger women were reducing fertility after job losses to cope with the loss of income, older women, aged 40 and above, were more likely to have a child following their job loss. Moreover, we find that job losses of single/noncohabiting females decreased the likelihood of birth, particularly for women below the age of 25. This negative effect on fertility persisted in the medium-term, up to three years following the job losses. Overall, these results suggest that job losses during the recession may be partly responsible for the recent decline in the U.S. birth rates.