Clustered airline flight scheduling: Evidence from airline deregulation in Korea

This paper explores the impacts of competition level on airline scheduling in the Korean domestic short-haul routes where a hub-and-spoke system is not the optimal air transport network strategy. The empirical findings using the Korean airline panel data for the period 2006–2010 suggest that competition leads to less differentiated departure flight times as expected from spatial competition theory. Unlike the previous study on the U.S airline industry, the degree of this tendency for less differentiation differs across the type of routes: the Jeju island routes (leisure type) and the inland routes (business type), in the deregulated period. Following the May 2008 Deregulation Act we find an increasingly clustered pattern of airline scheduling in the Jeju island routes where there have been competitive pressures associated with new low cost entrants. This recent evidence would imply that airline carriers strategically schedule departure flight times and allocate flights between routes as competition increases in the deregulated period.     

INVESTMENT BEHAVIOUR,CORPORATE CONTROL,AND PRIVATE BENEFITS OF CONTROL: EVIDENCE FROM A SURVEY OF UKRAINIAN FIRMS

We analyse the impact of ownership and corporate control on firms’ investment using the 2001 survey of Yacoub et al. on Ukrainian firms. The model explains investment by output, financial and soft budget constraints, and corporate control (and ownership) categories potentially enjoying private benefits of control. We find that the corporate control model fits better than the ownership model, a negative relationship between state and employee control and firms’ investment, and evidence for the presence of soft budget constraints. A negative relationship between firms’ investment and the relative size of non‐monetary transactions strengthens the conclusion of private benefits of control impacting investment.     

Does computer penetration increase farmers’ income? An empirical study from China

The diffusion and adoption of modern information technology provide new chance for China to close urban-rural income gap. This paper uses China's provincial panel data from 2002 to 2013 to investigate the effect of computer penetration on rural residents' income. A public program aiming to connect every village with broadband Internet and other rural facilities provides plausibly exogenous variation in rural residents' availability and adoption of the broadband Internet, which is used to explore the instrument variable for rural computer penetration. The results show that rural computer penetration tends to increase rural residents' income over time, but the average effect remains limited. The dynamic panel threshold effects model, which allows for both the threshold variable and other covariates to be endogenous, is further used to explore the constraints of the income-increase effect of rural computer penetration. It shows that the effect is at least doubled over the average effect estimated from instrument variables method, once the digital divide causes are removed. Our findings have important implications for the government to increase rural residents' income and reduce urban-rural income gap by encouraging rural computer usage and removing the digital divide.     

Mass media and preferences for redistribution

This paper investigates how mass media potentially act on preferences for redistribution. Our hypothesis is that media contribute to shaping the value system of a person, which affects support for redistribution. A theoretical model is proposed which combines demand- and supply-driven media bias. On the demand side, the model considers two types of individuals: non-partisan, whose values are influenced by the media, and partisan, who have strong opinions not affected by the media. We assume that although partisan individuals prefer unbiased information, they hold beliefs that they like to be confirmed; therefore, they tend to consume media with an ideological position similar to theirs. On the supply side, we focus on interest groups’ pressure on media coverage. Our results suggest that the anti-equality lobby is willing to pay more than the competing lobby. Moreover, we show that media bias is a decreasing function of the advertising revenues and an increasing function of the relative weight of ideology vs pluralism in individuals’ demand for media. Adding a second media outlet reduces the likelihood of media bias but not its extent. Finally, if both lobbies are active, the two outlets’ ideological positions are polarised.     

Mortgage market credit conditions and U.S. Presidential elections

Voters punish incumbent Presidential candidates for contractions in the county-level supply of mortgage credit during market-wide contractions of credit, but do not reward them for expansions in mortgage credit supply in boom times. Our primary focus is the Presidential election of 2008, which followed an unprecedented swing from very generous mortgage underwriting standards to a severe contraction of mortgage credit. Voters responded to the credit crunch by shifting their support away from the Republican Presidential candidate in 2008. That shift was large and particularly pronounced in states that typically vote Republican, and in swing states. Without it McCain would have received half the votes needed in nine crucial swing states to reverse the outcome of the election. We extend our analysis to the Presidential elections from 1996 to 2012 and find that voters only react to contractions, not expansions, of credit, and reactions are similar for Democratic and Republican incumbent parties.     

The provision of long-term credit and firm growth in developing countries

Do small and young firms benefit from an increase in the provision of long-term loans? By combining firm-level data from 62 countries (over the period 2006–2016) with a new database on short-term and long-term credit provided to the private sector, this article shows a higher provision of long-term credit does not stimulate growth of small and young firms. On the contrary, an increase in the availability of short-term credit spurs firm growth. The main explanation of this (counter-intuitive) result is the differential impact of short-term and long-term credit provision on small and young firms’ access to credit. Young and small firms are able to take advantage of an increase of short-term loans, which allow them to switch from informal finance to bank loans. However, a higher level of long-term credit does not alleviate credit constraints faced by opaque firms because these funds are allocated towards transparent borrowers.     

CEO compensation in EU telecom companies: Does the state design the right incentives?

This paper analyzes the structure of CEO pay in European fixed telecommunication companies, focusing on the impact of state ownership. Results show that, under the (partial or total) control of the state, the level of CEO compensation is lower and pay-performance sensitivity is higher than in privately-controlled firms. This finding suggests the state provides an incentive as well as a monitoring effect. However, when the state holds the majority of the shares, the pay level is significantly affected by the CEO power, suggesting that in these firms, CEOs are more likely to be entrenched with boards and succeed in raising their pay.     

Efficiency Determinants and Capacity Issues in Angolan Insurance Companies

This paper describes a variety of approaches used to assess the efficiency of a sample of major insurance companies in Angola between 2003 and 2012. Starting out with the bootstrapping technique, several data envelopment analysis (DEA) estimates were generated, allowing the use of confidence intervals and bias correction in central estimates to test for significant differences in efficiency levels and input‐decreasing/output‐increasing potentials. Previous studies have focused on the measurement and explanation of the factors affecting the performance rather than the prediction. The use of neural networks combined with DEA results as part of an attempt to produce a model for insurance companies’ performance with effective predictive ability is investigated. The findings indicate that older insurance companies with Portuguese origin tend to be more efficient. Results also suggest that opportunities for accommodating future demand appear to be scarce.     

Foreign Acquisitions,Domestic Multinationals,and R&D

Our aim in this paper is to evaluate the causal effect of foreign acquisition on research and development (R&D) intensity in targeted domestic firms. We are able to distinguish domestic multinational enterprises (MNEs) and non‐MNEs, which allows us to investigate the fear that the change in ownership of domestic MNEs to foreign MNEs leads to a reduction in R&D activity in the country. Overall, our results give no support to the fears that foreign acquisition of domestic firms leads to a relocation of R&D activity in Swedish MNEs. Rather, in this paper, we find robust evidence that foreign acquisitions lead to increasing R&D intensity in acquired domestic MNEs and non‐MNEs.