Price cap regulation and the ratchet effect: a generalized index approach

In this study we estimate a variable cost function on a panel of English and Welsh Water and Sewerage companies, observed over two full regulatory periods (1995–2004). The main aim of the paper is to investigate the presence of a ratchet effect in the cost cutting activity associated with the price cap regulatory regime. By applying the Generalized Index of Technical Change approach suggested by Baltagi and Griffin (J Polit Econ 96(1):20–41, (1988)), we provide some empirical evidence consistent with the existence of regulatory cycles. In particular, firms’ cost cutting activity tends to increase in the early phase of the regulatory cycle, while it weakens as the price review approaches. D24, L51, L95.     

The Determinants of Technology Adoption in Italian Manufacturing Industries

The adoption of new technologies in Italian manufacturing industries is analysed using data for 13,334 firms selected from the 1990–92 Community Innovation Survey. The determinants of technology adoption are analysed in an econometric framework (logit model) which is a general test of different theoretical explanations of technological diffusion. We particularly refer to the rank, epidemic and information effects which significantly affect the use of new technology in Italian manufacturing industries. We use a set of explanatory variables which enables us to set up a well specified empirical model and to use odds ratios to determine the effect of their changes on the adoption probability, thus giving a more precise picture of the determinants of technology adoption.     

Cash holdings and SME performance in Europe: the role of firm-specific and macroeconomic moderators

Small Business Economics - For the first time, this paper examines the way in which cash holdings affect firm operating performance in a wide sample of European small and medium-sized enterprises...     

R&D,Innovation and Knowledge Spillovers: A Reappraisal of Bottazzi and Peri (2007) in the Presence of Cross‐Sectional Dependence

Bottazzi and Peri (Economic Journal 2007; 117 : 486–511) show the existence of a cointegrating relationship between the domestic stock of knowledge, domestic R&D and the international knowledge stock for a panel of OECD countries and interpret it as evidence supporting the semi‐endogenous versus the endogenous growth theory. We replicate the baseline specification of their study and we show that main results are robust to the use of a different estimation strategy (Bai et al., Journal of Econometrics 2009; 149 : 82–99) that duly takes into account cross‐sectional correlation: interestingly, in this case we also find a larger role for knowledge spillovers. Copyright © 2014 John Wiley & Sons, Ltd.     

Mean-Variance Hedging for Stochastic Volatility Models

In this paper we discuss the tractability of stochastic volatility models for pricing and hedging options with the mean-variance hedging approach. We characterize the variance-optimal measure as the solution of an equation between Doléans exponentials; explicit examples include both models where volatility solves a diffusion equation and models where it follows a jump process. We further discuss the closedness of the space of strategies.     

The Manager’s Notepad: Working Memory,Exploration, and Performance

This study builds upon March and Simon’s proposition that individual‐level differences must be considered when explaining decision‐making performance. We extend their discussion on the importance of decision‐makers’ attention to explain heterogeneous patterns of exploration and exploitation within the same uncertain environment. We develop a model of decision‐making under uncertainty in which ‘working memory’ – i.e., the ability to hold multiple elements in mind to actively process them – explains the emergence of heterogeneity in exploration‐exploitation choice patterns. We validated the model in a laboratory study and two replications involving 171 individuals. Our findings show that differences in working memory allow us to identify individuals who are more likely to choose exploration over exploitation appropriately, and thus achieve higher performance. We discuss the implications for management theories, and re‐propose the work of March and Simon as a unifying framework that still can be used to generate and test managerially relevant hypotheses.     

Pitfalls in the modeling of labor market flows: a reappraisal

ABSTRACT

We discuss the relevance of the internationally adopted methodology for modelling labour market flows and comparing labour market flexibility. This is based on a two-state labour market model that neglects inactivity and uses aggregate stock data to derive transition rates. Traditionally, the results suggest that continental European labour markets are inflexible and unable to adjust quickly to aggregate demand or supply shocks compared with their Anglo-Saxon counterparts. This evidence has driven us to gain a better understanding of the relevance of such a modelling approach and critically discuss its main methodological hypothesis. We relax its assumptions by including inactivity and by using flow data for the period 2010–2017. We compare the results thus obtained with transition rates derived using a three-state labour market model for France, Italy, Spain and the United Kingdom. These countries represent the institutional settings of continental Europe on the one hand and Anglo-Saxon nations on the other. The implied transition rates are much higher, even in continental Europe, when inactivity is considered, thus suggesting that conclusions derived using an incomplete representation of the labour market are misleading. Inactivity therefore plays a crucial role and its inclusion provides a more exhaustive picture of labour mobility.     

Design of the optimal feeding policy in an assembly system

This paper describes an innovative and integrated approach to component management optimization within a production/assembly system. In a mixed-models assembly process the handling of parts and components for each work station represents a substantial variable that can greatly affect job duration and efficiency. This paper is strictly related to Assembly to Order/Manufacturing to Order (ATO and MTO) systems, where lead time has to be very short and flexibility is at its maximum level. In Assembly to Order (ATO) or Make to Order (MTO) systems, the production is increasingly getting more customized in response to the demand, thanks to the progresses reached in both manufacturing and information technologies. It is becoming increasingly possible to assemble or make products specifically in response to the requests of either end customers or retailers. As a consequence of such customization, the design of the whole system must take into direct account several elements: parts warehouses location, feeding policies and feeding systems. In some cases the collection of parts and components required picking activities, in other the movement of entire units load.In several instances experts have analyzed the problems about material centralization/decentralization, storage policies and assembly feeding problem in different and independent ways, while the problem needs an integrated approach. While many researches regarding components allocation problems in ATO and MTO systems, did not consider feeding policies, material picking, packing activities and vehicles optimization, this paper cover focuses on filling such gap using an integrated framework that considers both aspects of the problem: the centralization/decentralization of components in order to minimize the total storage costs and the right feeding policies.Feeding problems in assembly lines are some of the most important aspects to consider during the analysis and design of an assembly system, to allow the maximization of efficiency and flexibility. To reach such goals, a multi-factorial analysis has been carried out during this experiment and will validate the introduced framework. An industrial application of the introduced framework is illustrated to explain its real significant production implication.