Demand bargaining in legislatures

We analyze a pure bargaining problem when decisions require simple majority and self interested players make unilateral demands. In contrast to the case where proposals consist of complete sharing profiles, this content of proposals prevents implicit side-payments inside the committee, and so non-discriminatory outcomes might be expected. We show that in some settings this is the case and the surplus is universally shared.     

Improving the estimation of total factor productivity growth: capital operating time in a latent variable approach

Measuring labor and capital services accurately is essential to obtaining reliable estimates of production functions and total factor productivity (TFP) growth. Using data on the operating time of capital, a series that exists for the French business sector, greatly improves the measurement of effective capital services in production. The ensuing estimation results are consistent with Cobb–Douglas technology under constant returns to scale, with the factor elasticities not statistically different from their income shares. In the same framework, TFP growth is estimated as a latent variable and found to be less volatile than accounting residuals, negatively correlated with employment, and free of cyclicality. It is statistically best estimated as a first-order autoregressive process, with an autoregressive coefficient of 0.95. Total factor productivity growth was estimated to have declined steadily between the mid-1970s and mid-1990s, but the rate of decline has diminished since then.     

Path dependence view of export behaviour: A relationship between static patterns and dynamic configurations

The main objective of this work is to understand the extent to which a relationship exists between static patterns and the dynamic configurations of a firm's export behaviour. The premise of our investigation is that the set of exporting decisions adopted over a period of time can be explained, in part, by the export pattern of the firm at the start of that period. Our empirical work is based on a sample of 754 exporting firms covering a 4-year period (2002–2006). Data were obtained from the Survey of Business Strategies (SBS). Our results support the path dependent focus of internationalisation, find some interdependences among three dimensions of export behaviour (extent, entry mode and scope), in static and dynamic fields, and support the idea that export experience influences some of the changes in foreign behaviour at one point in time, but not all. Our work contributes to the literature as it is one of the first works that (1) simultaneously analyses static and dynamic variables; (2) establishing relationships between both variables; (3) different dimensions of international export behaviour are introduced jointly; and (4) these relationships are contextualised according to the firm's export experience.     

Is the influence of the industrial district on international activities being eroded by globalization?: Evidence from a traditional manufacturing industry

This study provides insight into the impact of industrial districts on the international activities of firms, in the particular context of one traditional manufacturing industry: the Spanish home-textile industry. Using a sample of 128 manufacturing firms, the paper shows how location influences the timing and levels of exports and imports. Moreover, our results demonstrate how these influences have been diluted in recent years as the home-textile industry becomes more involved in the global arena. Our findings challenge some key arguments exploring the advantages of the district in the international activities of firms; in particular, first, in questioning the capacity of the district to prevent international sourcing, and second, its vulnerability to the threats created by the growing integration of the world economy.     

EMULATION,PREVENTION AND SOCIAL INTERACTION IN CONSUMPTION DYNAMICS

In this paper we show that the role of diversity, local interactions and global endogenous change at the level of social standards might be crucial in understanding the evolution of consumption patterns in modern economies. We propose an evolutionary model from which consumption dynamics can be analyzed as global properties emerging from the endogenous transformation of a society inhabited by boundedly rational interactive consumers. This work aspires to take a modest step forward in the direction of an evolutionary theory of demand change.     

Real options with unknown-date events

The real options literature has provided new insights on how to manage irreversible capital investments whose payoffs are uncertain. Two of the most important predictions from such theory are: (i) greater risk delays a firm’s investment timing, and (ii) greater risk increases the option value of waiting. This paper challenges such conclusions in a setting in which the relevant random variable is the arrival time of an unfavorable event. In particular, we model situations in which a firm must choose the time at which to invest in a project whose profit grows at a known rate until a random date is reached and decays thereafter, which may be representative of stochastic product or industry life cycles. This is a novel framework in which a firm can update its beliefs about the profitability of an investment opportunity by simply waiting to invest. Thus, a wait-and-see approach allows the firm to capitalize on favorable market evolutions and avoid adverse ones to some extent. Our framework is simple and does not require using stochastic calculus, which allows for an economic interpretation of optimal investment policies for the cases of one-time and sequential investments.     

Estimation of poverty measures with auxiliary information in sample surveys

The analysis of poverty measures has been receiving increased attention in recent years. This paper contributes to the literature by developing percentile ratio estimators based on the pseudo empirical likelihood method. In practice, variances of poverty measures could be not expressible by simple formulae and consequently other techniques should be used in the variance estimation stage. Assuming percentile ratios, resampling techniques are investigated in this paper. A numerical example based on data from the Spanish Household Panel Survey is taken up to illustrate how suggested procedures can perform better than existing ones. The effect of a model-misspecification on the proposed estimators is also evaluated by using simulated populations.     

The relative income hypothesis

Despite its theoretical dominance, the empirical case in favor of the permanent income hypothesis is weak. Contrary to one of its basic implications, a growing body of evidence suggests that rich households save a higher proportion of their permanent income than poor households. We propose an overlapping-generations economy where households care about relative consumption. As a result, an individual's consumption is driven by the comparison of his lifetime income and the lifetime income of his reference group; a permanent income version of Duesenberry's (1949) relative income hypothesis. Across households the savings rate increases with income while aggregate savings are independent of the income distribution.     

Board independence, firm performance and ownership concentration: Evidence from Chile

What determines the composition of companies' boards in the context of high ownership concentration? Are independent directors important as an internal governance mechanism in companies with high ownership concentration? Do markets favor companies whose controlling shareholders use voting rights to elect professional directors?Using a four-year, 160-company panel data, and controlling for endogeneity, this paper addresses these three related questions, finding that an increase in the proportion of outside directors affects company value. The paper also finds that companies that present more exacerbated agency conflicts tend to incorporate professional directors to the boards, in an effort to improve corporate governance and ameliorate the agency problem.     

International diversification gains and home bias in banking

This paper studies international diversification in banking, exploiting a bank-level dataset that covers the operations of 38 global banks and their subsidiaries overseas during 1995–2004. The paper finds that banks with a larger share of assets allocated to subsidiaries in emerging market countries were able to attain higher risk-adjusted returns. These gains were somewhat reduced by the concentration of bank subsidiaries in specific geographical regions, which is typical of the observed international expansion strategies. The paper also finds a substantial home bias in the international allocation of bank assets relative to the results of a mean–variance portfolio optimization model.