Distortions,endogenous managerial skills and productivity differences

We develop a span-of-control model where managerial skills are endogenous and the outcome of investments over the life cycle of managers. We calibrate this model to U.S. plant-size data to quantify the effects of distortions that are correlated with the size of production units, and how these effects are amplified by managerial investments. We find a quantitatively important role for managerial investments. Distortions that consist of a tax rate of 20% on the top 50% managers reduce steady-state output by about 14.6% in our benchmark model. When skills are exogenous the reduction is about 9.2%.     

Environmental Motivations: The Pathway to Complete Environmental Management

The aim of this research is to ascertain whether a firm’s environmental motivations may help to predict how complete or incomplete its environmental management will be, understanding incomplete management to be that which neglects one or more of the three keys aspects of such management, namely, monitoring, action and results. We specifically posit that while motivations based on the search for legitimation lead to more incomplete styles of environmental management, competitive motivations entail a more complete management. The analyses conducted with a sample of 1,902 plants provide empirical evidence in favour of such reasoning. The contribution this research makes, therefore, is not restricted solely to showing the effect motivations have on the environmental performance of organisations, as it also introduces a new dimension of environmental management—the degree of completeness, which needs to be considered when understanding and evaluating this effect.     

A Spatial Econometric Analysis of Cultural Dimensions,Technology Knowledge and Economic Growth

Using data from 65 countries over the period 1980–2003, this paper investigates the role that cultural dimensions play in the process of technological change, innovation and adoption and consequently on the steady state level of output per worker and its growth, using spatial econometrics techniques to account for spatial dependence between countries. Initial findings indicate that differences across cultural dimensions act as a leveling effect but not as long run growth determinants. In addition, when controlling for physical and human capital accumulation, culture plays a much smaller role in explaining differences in income per capita than initially thought, with little effect on output per worker growth along the transitional dynamics path. Spatial econometric considerations are relevant in explaining differences across rates of growth of per worker output, but not in terms of steady‐state levels of income.     

Fuzzy Negotiation Solutions of n-Person Cooperative Games by Knowledge Engineering in Bargaining

A model for negotiation is developed upon the basis of a previous model called Fuzzy Negotiation Solution by Knowledge Engineering. The new model, called Compensatory Negotiation Solution by Knowledge Engineering and FNSKE are based on the combination of knowledge of experts in negotiation, rather than on classical notions of rationality. The experts in negotiation present four propositions in a non-mathematical way and with a natural language, according to the theory of Knowledge Engineering. In the CNSKE model, knowledge is represented through logic predicates, and the calculations are made using the Compensatory Fuzzy Logic system. CFL is a system whose operators satisfy the axioms of Utility. The CFL operators, especially because of the compensation property, are more adequate than the norm and co-norm’s operators to model human decision-making, according to empirical results. The Good Deal Index in CNSKE is statistically estimated from the GDI in FNSKE. This is a quantitative index, which provides the solution concept. The fuzzy function f(C) represents the likelihood the players of a coalition C to reach an agreement into this coalition. Counterpart Convenience Indexes 1, 2 allow each player to select the best coalition for negotiation. The advantage of CNSKE over FNSKE is that the idempotency of conjunction and disjunction operators give every membership function -obtained from the predicates- the possibility to be interpreted by itself. Hence, the truth-values of the CNSKE membership functions can be semantically interpreted. In addition, CNSKE can be easily applied to solve real negotiation problems.     

Non-parametric analysis of poverty duration using repeated cross section: an application for Peru

Using repeated cross-section annual data for Peru spanning 2002–2011 and non-parametric duration analysis, our estimates support the hypothesis that both stay in and exit from poverty (non-poverty) depends on the duration and sequence of poverty (non-poverty) spells. We find that longer periods in poverty reduce the probability of leaving poverty and, conversely, longer periods spent out of poverty reduce the chance of falling back into poverty. Also, we show that, at least in the last decade (of high economic growth), the probability of staying in poverty was lower than staying in non-poverty and the probability of re-entering in poverty was higher than re-entering in non-poverty, being both differences growing with the number of accumulated spells. Past experiences of poverty and non-poverty seem to be essential to predict the future status of poverty.     

Does Financial Development Promote Innovation in Developing Economies? An Empirical Analysis

Using firm‐level data from 2006 to 2013 for a set of developing countries, we examine the effects of financial development on innovation. Financial development boosts innovation by improving resource allocation and investment in strategic sectors as well as facilitating technology to promote growth. Using binary response models and instrumental variable techniques to correct for endogeneity, we find robust but puzzling results. Contrary to most of the existing literature, financial development has a negative effect on the probability of a firm to innovate in developing countries. This effect is conditional on firm size, and only larger firms benefit from financial development. These results are robust to different measures of financial development and econometric specifications. We argue that this is a result of the design of the financial system in regard to the lack of capital and institutional system. Consequently, developing countries should first generate appropriate institutional conditions if they want financial development to spur growth through innovation.     

Exchange rate movements and monetary policy in Brazil: Econometric and simulation evidence

The literature on monetary economy has aroused growing interest in macroeconomics. Due to computational advancements, models have become increasingly more complex and accurate, allowing for an in-depth analysis of the relationships between real economic variables and nominal variables. Therefore, using a dynamic stochastic general equilibrium (DSGE) model, based on Gali and Monacelli (2005), we propose and estimate a model for the Brazilian economy by employing Bayesian methods so as to assess whether the Central Bank of Brazil takes exchange rate fluctuations into account in the conduct of monetary policy. The most striking result of the present study is that the Central Bank of Brazil does not directly change the interest rate path due to exchange rate movements. A simulation exercise is also used. Our conclusion is that the economy quickly accommodates shocks induced separately on the exchange rate, on the terms of trade, interest rate, and global inflation.     

The finance-investment and saving-funding circuit in the closed and open economies with government

This contribution discusses the Finance-Investment and Saving-Funding (FISF) circuit regarding the closed and open economies with government. Moreover, we discuss the fiscal policy effects on aggregate demand and income in the FISF circuit context. Keynes explained the FISF circuit assuming a closed economy without government. The novelty of the current contribution is to analyze the abovementioned circuit in the closed and open economy context including government. We show that the basic features of the FISF circuit remain unchanged for the closed and open economies when government is considered in the circuit.     

Real Exchange Rate and Economic Growth: New Empirical Evidence

The article empirically analyses the relationship between real exchange rate (RER) and growth rate of output. We first estimate the effect of the index of RER undervaluation on the rate of output growth in two samples of countries from 1978 to 2007. Our contribution is the use of a different dataset that increases the number of countries in the sample, as well as the number of available control variables. In doing so, the article adds to the literature by applying a method that allows for the control of income levels (quantile regressions). So, we present new findings on a non‐linear relationship the RER‐growth nexus. We conclude that maintaining a competitive level of RER has positive effects on growth rate.     

Input,Output, and Environmental Management Productivity: Effects on Firm Performance

Firms invest considerable resources to control any of their operations that may have environmental impacts in an attempt to reduce such impacts but also generate economic value. Various studies of the basic creation or destruction of monetary value through environmental performance offer contradictory evidence. Therefore, the present study proposes a new definition of environmental management as the transformation of inputs (resources assigned) into outputs (valuable results). Both inputs and outputs should be taken into account to explain financial outcomes; further consideration should also include a third aspect, namely, ‘environmental management productivity’, which describes the relationship between the outputs and inputs of environmental management. Empirical analyses of Spanish firms with a certified environmental management system subject to the European Union's CO₂ emissions trading system provide evidence that all three aspects must be considered in combination to achieve a more comprehensive view of the impact of environmental management on financial performance. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment