Nontradable goods prices and per-caita income: an application to regional Korean data

A system of demand equations (given oligopolistic interdependence amon firms) is derived and estimated for two four-digit SIC code industries to explain firms' R&D behaviour through time. The two industries chosen are the perfume, cosmetic and toiletries (PCT) industry, and the drug industry. The industries chosen belong to the same two-digit SIC code classification called the Cchemical and Allied Products industry but not in the drug industry. The introduction of the R&D tax credit in 1981, however, reduced the tendency to free-ride in both industries.     

Using clustering ensemble to identify banking business models

The business models of banks are often seen as the result of a variety of simultaneously determined managerial choices, such as those regarding the types of activities, funding sources, level of diversification, and size. Moreover, owing to the fuzziness of data and the possibility that some banks may combine features of different business models, the use of hard clustering methods has often led to poorly identified business models. In this paper we propose a framework to deal with these challenges based on an ensemble of three unsupervised clustering methods to identify banking business models: fuzzy c‐means (which allows us to handle fuzzy clustering), self‐organizing maps (which yield intuitive visual representations of the clusters), and partitioning around medoids (which circumvents the presence of data outliers). We set up our analysis in the context of the European banking sector, which has seen its regulators increasingly focused on examining the business models of supervised entities in the aftermath of the twin financial crises. In our empirical application, we find evidence of four distinct banking business models and further distinguish between banks with a clearly defined business model (core banks) and others (non‐core banks), as well as banks with a stable business model over time (persistent banks) and others (non‐persistent banks). Our proposed framework performs well under several robustness checks related with the sample, clustering methods, and variables used.     

Economic development and inflation: a theoretical and empirical analysis

This paper studies the relation between inflation and economic development. The literature is largely silent regarding both the theoretical and empirical perspectives that undeveloped countries endure higher average inflation than developed economies. We present a simple theoretical model linking the inflation phenomenon to the tradition of development economics. Empirical evidence is garnered to test the hypothesis that economic development engenders a downward bias to inflation rates. Through the feasible-GLS estimator in a panel of 65 countries from 2001 to 2011, we aim at listing a number of variables most commonly used to explain differences in the stage of economic development across countries and identifying the most statistically relevant ones to account for differences in inflationary patterns. While our results show that inflation is inversely correlated with the level of the technological content of the economy (measured by share of high-tech exports), human capital and cyclical unemployment, it is directly related to the degree of inflation persistence and terms of trade growth. However, our findings still present an inverse and low correlation between inflation persistence and economic development, implying that development-sensitive variables allowed into the model can only partially account for the differences in inflation at different levels of economic development.     

Using mean reversion as a measure of persistence

This paper suggests a new scalar measure of persistence together with a companion estimator, which has the advantage of not requiring the specification and estimation of a model for the series under investigation. The statistical properties of the companion estimator are established, which allow tests of hypotheses to be performed, under very general conditions. The use of the new measure is illustrated by re-evaluating persistence of inflation for the United States and the Euro Area. The conclusions for the United States do not differ significantly from what has been found in previous empirical studies. However, for the Euro Area we find evidence of a significant break occurring in 2001/2002, such that persistence becomes virtually nil for the period that follows the launch of the euro and the implementation of a common monetary policy by the European Central Bank.     

The Innovation Process and the Development of a Sustainability Strategy

ABSTRACT

This article analyzes what influences a firm's choice of strategy—why some firms stick to defensive strategies while others rely on offensive ones. With this in mind a survey was conducted on mineral sector companies associated with the Brazilian Mining Institute. The results show that the majority of companies use an offensive strategy and that some companies use more than one strategy at the same time. That is, they possess a corporate strategy and a sustainability strategy.     

The contribution of resources and capabilities to the competitiveness： The case of Port of Sines

The main objective of this paper is to analyse the competitiveness of the main maritime Port sited in Portugal - Port of Sines. This paper is developed under the resource-based view approach. A literature review about the resource-based view is presented with a special highlight on the contribution of organisation owns＇ resources to the competitiveness. With this study we intend to emphasize the applicability of a management theory to a different type of organisation which only recently starts to be preoccupied with its competitiveness. A case study methodology is used in order to collect all information needed about its main resources and capabilities of Port and also its competitiveness. The resources analysed in this paper are： The infrastructures, the accessibilities, the Port operations and also the information systems used on it. Also, a set of performance data is analysed as the main indicators of competitiveness. After that, a conceptual model is presented in order to systematise the main resources and capabilities under which the competitiveness of the Port of Sines is built on.     

Trade liberalization,tariff redundancy and inflation: A methodological exploration applied to Argentina

Zusammenfassung Handelsliberalisierung, Zollredundanz und Inflation: Eine auf Argentinien angewandte methodologische Untersuchung. — Der Hauptzweck dieser Arbeit besteht darin, einen einfachen Rahmen für die Analyse der Auswirkungen verschiedener Ma\nahmen der Importliberalisierung auf die Wettbewerbsf?higkeit des gewerblichen Sektors zu entwickeln. Im Fall von Argentinien wird gezeigt, da\ das Hauptinstrument zur Beseitigung der Zollredundanz die Wechselkurspolitik der Regierung war. Zollsenkungen waren von zweitrangiger Bedeutung. Die Zollredundanz scheint bis Anfang 1979 beseitigt gewesen zu sein, zu einer Zeit, in der die Beh?rden begannen, diskriminierende Zollsenkungen vorzunehmen. Aus der Redundanzanalyse ergeben sich Hinweise auf das Ausmaβ der m?glichen Abschw?chung der Preissteigerungsrate, die bei langfristiger Konvergenz der in- und ausl?ndischen Preise erwartet werden kann. Konvergenzberechnungen, die auf der Kaufkraftparit?ten-these basieren, k?nnen anscheinend nur dann korrekt verwendet werden, wenn die Preise einzelner Produkte auf den in- und ausl?ndischen M?rkten verglichen werden. Die dargestellten Methoden k?nnen zwar verbessert werden, aber die wichtigsten Folgerungen für die Politik dürften sich bereits aus der durchgefìhrten Analyse klar ergeben.

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Résumé La libéralisation du commerce, l’excédent tarifaire, et l’inflation: une exploration méthodologique appliquée à l’Argentine. — Le but principal de cet article est présenter un cadre simple pour analyser l’impacte des plusieurs mesures de libéralisation d’importation sur la capacité de concurrence potentielle du secteur industriel. Pour l’Argentine, les auteurs démontrent que l’instrument clef pour éliminer l’excédent tarifaire était la politique de taux de change des autorités. Les réductions des tarifs externes étaient moins importantes. Il semble clair que les autorités avaient éliminé l’excédent tarifaire au début de 1979, au moment où ils commen?aient à réduire les tarifs d’une manière discriminatoire. L’analyse de l’excédent indique la mesure possible de la décélération de prix qui peut être attendue sous la condition d’une convergence de prix à long terme. Actuellement il para?t que les calculs de convergence qui basent sur la thèse de PPA peuvent être appliqués correctement seulement si les prix des biens individuels sur les marchés internationaux et locaux sont comparés. En effet la méthodologie présentée ici peut être perfectionnée, mais cette analyse devrait déjà avoir montré les principales implications politiques.

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Resumen Liberalization del comercio, redundancia tarifaria e inflación: una exploration metodológica aplicada a la Argentina. — El propósito principal de este artículo es presentar un marco simple para analizar el impacto de varias medidas de liberalización de importaciones sobre la competitividad potencial del sector industrial. En el caso de Argentina se demuestra que el instrumenta clave al eliminar la redundancia tarifaria fue la política cambiaria de las autoridades. Las reducciones en las tarifas extemas fueron de importancia secundaria. Parece claro que la redundancia tarifaria había sido eliminada ya a principios de 1979, en una época en que las autoridades comenzaron a aplicar reducciones tarifarias discriminatorias. El análisis de redundancia indica el posible monte de desaceleracion de precios que puede esperarse bajo una convergencia de precios de largo plazo. En verdad pareciera que los cálculos de convergencia basados en la tesis PPP pueden ser utilizados correctamente solo cuando se comparan precios de productos individuates en los mercados international y doméstico. La metodología presentada aquí puede ser refinada de varias maneras, pero las principales implicaciones de política deberian quedar claras de acuerdo al análisis precedente.

     

Corporate social responsibility,country-level predispositions,and the consequences of choosing a level of disclosure

We study the different levels of corporate social responsibility (CSR) disclosures of the largest European firms. We find that firms are more predisposed to disclose more CSR information in countries with better investor protection, higher levels of democracy, more effective government services, higher quality regulations, more press freedom, and a lower commitment to environmental policies. Our analysis of the association of different levels of CSR disclosure with share prices indicates that a high level of CSR disclosure is associated with higher share prices, whereas a low level of CSR disclosure in sensitive industries is associated with lower share prices (compared to no disclosure). These results are also present when we analyse changes in CSR disclosure and are robust to the inclusion of an accounting quality measure in our model. The overall effect of the association of higher levels of CSR disclosure with higher share prices is stronger in countries with more democracy, more government effectiveness, better regulatory quality, and more press freedom. Therefore, market participants find CSR disclosures more informative in countries where investors are in a better position to voice their concerns and where there is better regulation and more effective government implementation of regulations.     

Is transfer pricing strictness deterring profit shifting within multinationals? Empirical evidence from Europe

This paper examines the extent to which the introduction and tightening of transfer pricing frameworks deter income shifting strategies by European multinational companies. To do so, we have built an index that measures the transfer pricing framework strictness by host country and year. Then, tax rate differentials are used to capture profit-shifting incentives and are interacted with the strictness index to assess whether the host country's transfer pricing framework impacts profit-shifting behaviour. The index is shown to increase significantly over the sample period, indicating that the scrutiny of related party transactions by European governments has increased over the period 2001–2009. Using a sample of European foreign subsidiaries, the results suggest that the stricter the transfer pricing framework the lower the tax rate difference sensitivity of reported earnings. This indicates that tightening the transfer pricing framework is capable of dissuading multinational companies from shifting profits from higher- to lower-tax countries.     

Disclosure strategies among S&P 500 firms: Evidence on the disclosure of non-GAAP financial measures and financial statements in earnings press releases

This paper examines the prominence of non-GAAP financial measures in press releases, testing whether managers emphasize these adjusted performance measures relative to GAAP numbers in four different settings where their disclosure helps managers reach strategic earnings benchmarks on a pro forma basis when they would otherwise fall short using GAAP numbers. Moreover, this research investigates the information content of disclosures reconciling non-GAAP to GAAP earnings (and other financial statements). The data is hand collected from quarterly earnings press releases of a sample of S&P 500 firms during the 2001–2003 period. In this particular sample, the disclosure of non-GAAP financial measures is frequent. The results suggest that managers strategically give more prominence to non-GAAP measures than to GAAP figures when the GAAP earnings number falls short of a benchmark but the non-GAAP earnings number does not. This disclosure strategy may influence the perception of the firm's financial results. Furthermore, the results suggest that both the reconciliation and the non-GAAP income statement contain information useful for users.