Testing, hold up and the dynamics of preferences

This paper presents an overlapping generations model with cultural transmission of preferences in an economy in which players face a hold up problem. One of the players, the firm, can use a testing technology which allows him to imperfectly monitor his partner's behaviour. This technology is completely useless with homogeneous preferences. We obtain that in the stable steady state of the economy there is a mixed distribution of preferences where both selfish and other-regarding preferences are present in the population. Moreover, with a good testing technology, the steady state is characterized by the first-best result in the investment decisions. JEL Classification: C78, D23, D63 The authors acknowledge financial support from the Spanish Ministry of Science and Technology project SEC2001-2763. This paper has also benefited from comments of participants in the XXVIII Spanish Symposium of Economic Analysis in Seville (Spain), in the International Workshop on Social and Behavioral Economics in Valencia (Spain), in the 2nd World Congress of the Game Theory Society in Marseille and in the VI Spanish Meeting on Game Theory and Practice in Elche (Spain).     

Adaptation of Agroforestry Systems in South-Eastern Mexico through Integration of Farmer and Bioeconomic Evaluations

Agroforestry systems have been promoted as sustainable land-use systems for regions where shifting agriculture is the traditional predominant land-use. Although environmentally sustainable, agroforestry systems require investment to establish that may affect their economic sustainability. In the southern Yucatan Peninsula 47 agroforestry plots of two timber and 10 fruit tree species were established with 22 farmers in three communities covering two rainfall zones and five soil types. Some fruit trees had wide adaptability to different soil, rainfall and management conditions, e.g. Manilkara zapota; others were restricted to the best soil, rainfall management conditions, e.g. Persea americana. The Meliaceae timber trees responded little to rainfall and soil, but stem borer attack was markedly lower in less intensively managed systems. Level of system maintenance greatly affected costs, but also opportunities for intercropping and obtaining immediate income. All levels of managements had negative net present value (NPV) for the three-year establishment phase, but so does traditional maize production. Farmers preferred to inter-crop their agroforestry systems, but were often limited by site quality. Determining sustainable agroforestry options for farmers requires multiple decisions related to species adaptability to the site, farmer production objectives and farmer capacity to invest in different management strategies. One production technology did not fit all.     

Incentive effects of unemployment insurance savings accounts: Evidence from Chile

The paper, the first one to empirically examine whether individual accounts internalize the cost of unemployment, estimates the determinants of job finding rates of unemployment benefit recipients under the Chilean program. This is a unique, innovative program that combines social insurance, provided via solidarity funding, with self-insurance in the form of unemployment insurance savings accounts (UISAs). The paper shows that beneficiaries who use solidarity funding are less likely to exit unemployment in early months than those relying on UISAs only. Moreover, job finding rates are found to be positively correlated with pre-separation UISA balances among those that use solidarity funding, but are found to be uncorrelated with balances for those relying on UISAs only. While the findings are consistent with the effects expected under the internalization of unemployment costs via UISAs, they do not pinpoint unambiguously the causal link, as alternative mechanisms may be responsible for the observed correlations, particularly selection into the use of UISAs.     

The Value of Territory: Towards a Marxist Geopolitics

The article argues for a Marxist geopolitics that moves beyond both critical geopolitics and the discredited classical geopolitics. It underlines the valorisation of territory by capital across three levels of abstraction: that of social infrastructure, class conflict and ground-rent proper. The recent Russian-Ukrainian gas wars are briefly analysed by way of illustrating the application of this distinctive approach to geopolitics.     

A new look at the UI effect on transitions from unemployment into wage employment in Spain: the limited duration of the UI benefits entitlement

This article is a new look at the study of the unemployment insurance effect on the transition probability from unemployment into wage employment in Spain. It is found that individuals increase their search effort and reduce their reservation wage as the unemployment insurance benefit entitlement exhaustion approaches, and their exit rate equals that of the unemployed who never got benefits from the exhaustion moment. Financial constraints are not important in Spain. Business cycle affects more to long-term unemployed. And, finally, it is found that the probability of being offered a vacancy decreases with time spent in unemployment, having allowed for unobservable heterogeneity.     

High ownership concentration and exporting of emerging market firms: evidence from Peru

Despite the extraordinarily high ownership concentration widely observed in emerging market firms as a result of institutional voids, there is little research on how this high ownership concentration affects the exporting behavior of emerging market firms. From principal–agent and institutional perspectives, we hypothesize that high ownership concentration has a negative relationship with export intensity, because, in emerging markets, highly concentrated ownership bridges the interests of owners (principals) and managers (agents) so that principals must be prudent in exploring risky international markets. Moreover, we hypothesize that export country diversification strengthens the relationship between ownership concentration and export intensity, because broad geographic dispersion increases risk exposure and principal-agent problems. Empirical analysis based on a panel dataset for publicly listed firms in Peru from 2005 to 2014 supports the hypotheses. The study highlights the risk aversion attitude activated by ownership concentration, an attitude that protects emerging market firms from overconfidently exploring international business opportunities. The study extends the conventional literature on the interface between ownership concentration and international business in an emerging market context. We also discuss the generalizability of the findings to other emerging markets, e.g. China.     

Gender discrimination and intergenerational transmission of preferences

This paper provides an explanation for the existence of genderdiscrimination in the labour market focusing on the intergenerationaltransmission of preferences related to the attitude of womentowards jobs and family. Changes in women's preferences overgenerations depend on the socialization efforts of their parentswhich in turn are influenced by both the firm's expected recruitmentpolicy and the expected utility from household care. We obtaintwo types of steady state equilibria: the discriminatory equilibrium,in which women are segregated to low-paid jobs, and the non-discriminatoryequilibrium, in which women are hired in highly-paid jobs. Theconditions of convergence to each equilibrium are analysed.     

Transparency,Value Creation,and Financial Crises

This article reports the findings of the authors' recent study of the impact of the level of corporate transparency on shareholder value creation during periods of financial crisis. Their sample consists of the companies comprising Spain's IBEX 35 stock index during the ten‐year period 2000–2010. The study uses three different measures of earnings management (EM) as inverse indicators of the quality of disclosure and carries out fixed effects regressions that adjust for firm and industry characteristics, two periods of financial crises, and the passage of time. The main findings of the study are that (1) companies with lower disclosure quality have generated less value for their shareholders over long time periods and that (2) the shareholders of companies that were more aggressive in managing their earnings experienced greater wealth destruction during the two financial crises of the last decade. Given the still unfolding impact of the recent global financial crisis, as reflected in the current debt crisis in Western European countries, the authors' study reinforces the importance of the current debate over the benefits and costs of increasing the regulation of financial markets, especially in the areas of transparency and disclosure requirements.     

Effects of Diversity on Group Decision-Making Processes: The Moderating Role of Human Resource Management

Past empirical studies have demonstrated that differences among group members may have both positive and negative effects on decision-making processes. As direct models have failed to explain such intricate consequences, recent work has begun to propose models that are more complex by including mediating and moderating variables. In general, the literature has assumed that the extent to which differences between members benefit group decisions depends on certain conditions in the unit, especially its management. Drawing on a literature review, we find that the human resource management system can be one of these moderators. Using the estimates of a structural model, we discuss how certain choices in the definition of human resource policies can help the organization to improve decision-making processes in diverse groups.