Network of companies: an analysis of market concentration in the Italian stock market

In this paper we propose an adjustment to the Herfindahl–Hirschman concentration index for explicitly considering the role of the topology of financial economic networks on market concentration. The case study of the Italian stock market serves for outlining the relevance of the shareholding network in the measurement of effective concentration. Moreover, we deepen the analysis of the network comparing network centrality measures, that are a well known method for understanding the relative relevance of network nodes. The correlations among them show their relation, and the fact that none of them can completely substitute the information contained in the size of companies. Such analysis constitutes the base for randomized experiments aiming at understanding to which extent the topology of this financial economic network is constraining the market concentration, so we derive and comment the results on the maximum value of HH \(_{i}\) under the scale-free constraint. We also show the fragility of the network under random rewiring, both unconstrained and constrained by the network topology.     

The dynamic specification of the modified pecking order theory: Its relevance to Italy

This paper proposes an empirical model for the modified pecking order theory (MPO) in which both trade-off (TO) and pecking order (PO) models are nested. The MPO model is specified as an error-correction mechanism and applied to a vast panel data-set. Unlike previously estimated financial models, it avoids a number of problems: the mis-specification of dynamics, the approximation of the target leverage using the historical mean, the constrained estimation of the free cash flow components in a unique parameter. The MPO model is particularly good at explaining “hybrid” systems (neither market-based nor bank-based) such as the Italian one, in which companies are a mixture of two types: TO-type firms with a long-term optimal debt ratio towards which they converge; PO-type firms for whom the short-term availability of internal funds for investment may interfere with the process of adjustment towards the target leverage. Finally, the MPO model enables us to separately test the individual relevance of each of the restricted (“pure”) TO and PO models: results confirm their mis-specification and clearly point towards the excellent empirical performance of the MPO model. First version received: May 2000/Final version received: September 2000     

The use of imagery in statistical reasoning by university undergraduate students: a preliminary study

Many students have difficulty in grasping several concepts that are related to the solution of statistical problems. The bibliography reports how the ability of students to solve problems can be affected by the mode of the statistical problem presentation: verbal–numerical and pictorial–graphical. The dual-coding theory predicts that the graphical representation mode should enhance students’ statistical reasoning. Solving these problems requires the building, by the subjects, of a mental model, which in turn relies on visuo-spatial processing. To test this hypothesis we analysed how the ability to solve problems of 473 undergraduate students is affected by the mode of the statistical problem presentation. The study used a quasi-experimental mixed design to explore how the student’s performance is related to visuo-spatial and numerical abilities, statistical expertise, time pressure and problem representation mode (verbal/pictorial). Data analysis, based on the Hierarchical Loglinear Model and then the Logit Model, highlighted that the effect of facilitation, induced by the graphical presentation mode, would seem more likely to occur in inexperienced subjects with high visuo-spatial competence.     

Adjusting for differential misclassification in multilevel models: the relationship between child exposure to smoke and cognitive development

Misclassification is found in many of the variables used in social sciences and, in practice, tends to be ignored in statistical analyses, and this can lead to biased results. This paper shows how to correct for differential misclassification in multilevel models and illustrates the extent to which this changes fixed and random parameter estimates. Reliability studies on self-reported behaviour of pregnant women suggest that there may be differential misclassification related to smoking and, thus, to child exposure to smoke. Models are applied to the Millennium Cohort Study data. The response variable is the child cognitive development assessed by the British Ability Scales at 3 years of age and explanatory variables are child exposure to smoke and family income. The proposed method allows a correction for misclassification when the specificity and sensitivity are known, and the assessment of potential biases occurring in the multilevel model parameter estimates if a validation data sample is not available, which is often the case.     

Underpricing of Initial Public Offerings: The Case of Portugal

This paper analyzes the initial public offering (IPO) underpricing phenomenon in Portugal. We show that the ‘hot issue’ market of 1987, coinciding with a speculative bubble in the stock market, is well explained by investor sentiment theories and that the issuing firms seized a ‘window of opportunity’ provided by excessive demand to offer and list their shares. In IPOs prior to the 1987 crash, underpricing is very high while there is a strong reversion to fundamentals in the long run. In the period 1988–2004, we find lower IPO underpricing and overall no evidence of long-run underperformance of IPO firms. Bookbuilding IPOs are more underpriced than other price setting systems IPOs, and firms with seasoned public offerings show abnormal returns in the long run.

Trade in the enlarged European Union: a new approach on trade potential

This paper focuses on the trade potential of manufactured exports from countries belonging to the enlarged EU (EU25) to groups of countries of that economic area in 2002. We note that previous results on trade potential, based on the estimation of a gravity model, may be invalid. Thus, we propose a correct approach based on the Poisson Pseudo-Maximum Likelihood estimator and the calculation of confidence intervals with the Delta method. The gravity model includes fixed effects to capture bilateral trade specificities between country groupings. We conclude that CEEC as a group had apparently exhausted the possibilities for export expansion in the EU25, unless dynamic changes were to take place. However, several of the remaining EU25 countries had not yet reached their export potential to the EU25 markets, including to the CEEC as a group.     

Fire use and prevention by traditional households in the Brazilian Amazon

Fire is an important land management tool for smallholders in the Brazilian Amazon. However, when fires are not properly controlled they can give rise to large-scale wildfires that threaten forests, agricultural plantations, and settlement areas. We use data from a survey of 220 households to examine fire prevention and the scale of fire prevention and burning activities among traditional subsistence households in the Tapajós National Forest in Pará, Brazil. We find that in traditional households, economic variables such as the opportunity cost of household time, market conditions, and the hiring wage are important predictors of these decisions, as is household reliance on standing forest resources for non-timber products. Our results confirm that traditional households actively engage in fire prevention, and suggest that fire prevention is motivated by a desire to protect agricultural plantations as well as standing forest reserves. The results suggest that increased income, improved infrastructure, and improved access to markets for labor and agricultural goods will encourage fire prevention among smallholders in communities with education and planning programs.     

Improving Firm Environmental Performance and Reputation: The Role of Employee Green Teams

This paper examines the link between a firm's organization environmental management capability, represented by the development of green teams made up of employees, and its performance. In particular, two categories of firm performance will be analysed: environmental performance and environmental reputation. This link has been investigated in a sample made of the largest publicly traded US companies. Data about green teams have been collected through the content analysis of firm environmental/sustainability/corporate social responsibility reports and/or their websites, whereas data about environmental performance and reputation are those reported in the US 500 Newsweek's 2010 Green Ranking. Regression analysis results show that the creation of employee green teams positively affects both environmental performance and environmental reputation. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

A Fresh Approach to Context Influence,Development and Performance in Environmental Management

Respect for the environment has rapidly gained importance in the context of firms, regardless of their pollution levels. Most of the existing research has related to the most polluting sectors and has been limited to the effect that the adoption of cleaner practices has on performance, primarily in terms of operations, financial performance and competitiveness. This paper expands the research towards a more complete picture of environmental management by examining context, development and performance to understand how other factors can influence the development of cleaner practices. In addition, we focus our research on the service sector. In our analysis, we differentiated between the affiliation and size of the studied companies to better understand their specificities. Based on a sample of 374 restaurants, the results show the importance of the influence of institutions and the limited influence of competitors in encouraging firms to adopt a strategic, clean approach, especially for the smallest firms. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

The Political Ecology of Virtual Water in Southern Spain

What does virtual water conceal? This article synthesizes political ecology with ecological economics to question the understanding of the scientific concept of virtual water as part of an independent objective reality, rather than as a construction supported by pre‐existing ideas. The discourse promoting both the concept of virtual water and the methodologies used to estimate virtual water flows is structured according to some underlying ideas that are framed within market logic and the rationality of international trade. Consequently, it produces a representation of water as a factor of production that does not challenge the hegemonic construction of water scarcity in nature, and proposes a water management system the main purpose of which is to maximize efficiency in the use of the resource. We reveal the ideas underlying the virtual water concept to show how a critical approach to ecological economics can be complemented by political ecology theories. In this article, we use epistemological reflection as a starting point, with the specific objective of contrasting this reflection with the reality of water in the horticultural sector of Almería (southern Spain), in order to bring to light those aspects made invisible through the use of the virtual water indicator in a concrete case study.