Libertarian Theories of the Corporate and Global Capitalism

Libertarian theories of the normative core of the corporation hold in common the view that is the responsibility of publicity held corporations to return profits to shareholders within the bounds of certain moral side-constraints. Side-constraints may be either weak (grounded in the rules of the game) or strong (grounded in rights). This essay considers libertarian arguments regarding the normative core of the corporation in the context of global capitalism and in the light of actual corporate behavior. First, it is argued the weak side-constraints view is conceptually incoherent when applied in a global context. Second, it is argued that proponents of the libertarian strong side-constraints view lack an adequate theory of rights. Third, both the weak side-constraints view and the strong side-constraints view are shown to be unsatisfactory insofar as they fail to adequately address the coercive power of corporations. The main conclusion of this essay is that a viable libertarian theory of the corporation has yet to be articulated.     

Earnouts: A study of financial contracting in acquisition agreements

We empirically examine earnout contracts, which provide for contingent payments in acquisition agreements. Our analysis reveals considerable heterogeneity in the potential size of the earnout, the performance measure on which the contingent payment is based, the period over which performance is measured, the form of payment for the earnout, and the overall sensitivity of earnout payment to target performance. Our tests of the determinants of contract terms yield support for the view that earnouts are structured to minimize the costs of valuation uncertainty and moral hazard in acquisition negotiations.     

Post-earnings-announcement Drift: Some Preliminary Evidence for the UK

This paper tests for the presence of post-earnings-announcement drift on the London Stock Exchange using data for seven half-years for a constant sample of 206 quoted companies. Separate results are presented for interim and final earnings announcements and the results are disaggregated by firm size. Overall, we find evidence of significant drift for the earnings announcements of small firms but not for the announcements of large firms.     

Identification and semiparametric estimation of a finite horizon dynamic discrete choice model with a terminating action

We study identification and estimation of finite-horizon dynamic discrete choice models with a terminal action. We first demonstrate a new set of conditions for the identification of agents’ time preferences. Then we prove conditions under which the per-period utilities are identified for all actions in the agent’s choice-set, without having to normalize the utility for one of the actions. Finally, we develop a computationally tractable semiparametric estimator. The estimator uses a two-step approach that does not use either backward induction or forward simulation. Our methodology can be implemented using standard statistical packages without the need to write specialized computational routines, as it involves linear (or nonlinear) projections only. Monte Carlo studies demonstrate the superior performance of our estimator compared with existing two-step estimation methods. Monte Carlo studies further demonstrate that the ability to identify the per-period utilities for all actions is crucial for counterfactual predictions. As an empirical illustration, we apply the estimator to the optimal default behavior of subprime mortgage borrowers, and the results show that the ability to identify the discount factor, rather than assuming an arbitrary number as typically done in the literature, is also crucial for obtaining correct counterfactual predictions. These findings highlight the empirical relevance of key identification results of the paper.     

Renegotiating Access to Shea Trees in Burkina Faso: Challenging Power Relationships Associated with Demographic Shifts and Globalized Trade

This paper uses an original integrated theoretical framework to reveal the mechanisms behind socio‐economic differentiation in the changing patterns of access to shea in western Burkina Faso, in the context of globalization of the shea nut trade and internal migrations from both the Mossi Plateau and the Sahelian zone. Based on more than 200 interviews, we unravel the complex dynamic mechanisms of changes in access to shea. We show that negotiations result in reduced access to shea for late comers as well as for people with a limited number of shea trees in their fields, since areas where shea is managed as a common‐pool resource are becoming less accessible. However, we also demonstrate that late comers are not powerless in the face of first comers’ claims to shea. Our results should help policy‐makers and project‐based activities concerning shea to focus more on issues related to access to this resource.     

Territorial dynamic,innovative milieus and regional policy

The change in the hierarchy of regions, observed during the past 20 years, is mainly due to development phenomena, which originated within these regions themselves. The concept of innovative milieu enables us to understand better these phenomena, because it is based on the assumption that there are specific territorial dynamics capable of setting up territorial development of innovation. This paper recalls the origin of the concept of innovative milieu, which is relatively new in the field of regional science, and it aims to give an accurate definition of this concept. Furthermore, the paper shows that the concept of innovative milieu allows regional policy to be considered from a new perspective. In fact, if the territory is not given a priori, but built thanks to the dynamics of the milieus, one can consider that regional collectives have the possibility of promoting and initiating real territorial development.     

BIG‐BOX RETAILERS,RETAIL EMPLOYMENT,AND WAGES IN THE US

This paper examines the dynamic interrelationship between the presence of big‐box retailers and retail employment and wages in the United States at county level for 1986–2005 using panel vector autoregressions (Panel VAR). The Panel VAR approach addresses endogenous interactions among the variables in the system. In other words, this approach takes into account the fact that the presence of big‐box retailers can have an impact on retail employment and wages and at the same time, retail employment and wages can influence the presence of big‐box retailers. Results indicate that the presence of big‐box retailers has a positive effect on employment but a negative effect on wages. The effect on wages is relatively greater and is more prolonged than the effect on employment. Both employment and wages have an instant (first year) positive effect on the presence of big‐box retailers, which implies that big‐box stores are located in areas where the economy is growing.