An empirical note about estimation and forecasting Latin American Forex returns volatility: the role of long memory and random level shifts components

Portuguese Economic Journal - A set of RLS-type models with ARMA and ARFIMA dynamics is estimated and compared in a forecasting exercise with ARFIMA, GARCH and FIGARCH models. It is an extension of...     

Honesty in Environmental Regulation

This paper analyzes the determination of the optimal environmental regulatory policy under imperfect competition when the firms differ in their polluting technologies and degree of honesty. We show that more honesty does not necessarily imply lower social losses. The effect of honesty in social welfare depends not only on the degree of honesty measured by the proportion of honest firms and their particular cost features but also on the industry structure.     

Altruism and the Economic Values of Environmental and Social Policies

Altruism is a type of non-use value which can have different definitions depending on the type of goods entering the utility function of the altruists and their expectations about the contributions of others. The purpose of this paper is to measure the trade-offs between different types of altruist values originating from social and environmental policies. Environmental policies are concerned with reducing health effects from a power plant while social policies involve both the attainment of public facilities for education and leisure and an increase in the income of the affected population. The empirical application utilizes a choice experiment technique which allows for valuation of multiple goods. Health effects are decomposed into the values of the risk of becoming ill, the duration of the episodes and the limitations imposed by illness. Altruist values are elicited from a population that is not affected by pollution. Results show that altruism is significant for policies directed to reducing health effects and improving the income level of the affected population, whereas there is egoism for a policy aimed at improving public facilities in the polluted suburb. The value of altruism is significantly influenced by the expectations of net benefits to be received by the affected population.     

Environmental Product Differentiation and Environmental Awareness

In this paper, we have considered a duopolistic model of environmental product differentiation with two types of consumers (green and brown) to analyze how environmental awareness affects the environment. “Green” consumers value the physical and environmental attributes of the good they purchase while “brown” consumers only value the physical attributes. We find that more environmental awareness may not be good news for the environment as the firm that produces the good without environmental attributes may increase its sales. The result depends on the degree of product differentiation and the cost to achieve it. Social welfare can also be inversely related to environmental awareness if the negative environmental effect dominates the positive market effect.      

Recursive utility with unbounded aggregators

A new framework is presented for the study of the existence and uniqueness of solutions to the Koopmans’ equation in the unbounded case, that is based on the contraction mapping approach. In the bounded below case with bounded consumption streams, uniqueness of the solution in the whole class of weak-star continuous utility functions is obtained. When the aggregator is unbounded below and/or consumption streams are unbounded, existence of a weak-star continuous solution is shown, and a simple criterium to check the sufficient conditions for existence is provided. Juan Pablo Rincón-Zapatero and Carlos Rodríguez-Palmero gratefully acknowledge financial support by the Ministerio de Educación y Ciencia and FEDER funds under Research Projects MTM2005-06534 and SEJ2005-08709/ECON, respectively, and by Consejería de Educación de la Junta de Castilla y León under Research Projects VA99/04 and VA017B05, respectively. This paper has substantially benefited from the comments of an anonymous referee. Particular and special thanks are due to Robert Becker for his very helpful comments and valuable suggestions.     

Environmental regulatory enforcement with “green” consumers

We consider a standard probabilistic model of random monitoring to analyze the interactions between a firm and a monitoring agency in the presence of “green” consumers when compliance payoffs are contingent on monitoring and monitoring costs are shared by the monitoring agency and the firm. When the amount paid by the firms if monitored is exogenously fixed, we find that full compliance is implemented with a finite fine. If there is an upper bound for the fine and the regulator determines endogenously the fine and the amount paid by the firms if monitored, we find that full compliance is also achieved, although the optimal fine is now set at its maximum level. The optimal amount paid by the firms if monitored is lower than the environmental premium the compliant firm gets.The author thanks two anonymous referees for their useful comments and suggestions     

The Geography of Innovation in China and India

The BRICS countries in general, and China and India in particular, are now widely regarded as the areas of the world likely to challenge the economic leadership of the United States (US) and the European Union (EU). A large part of this challenge will come from rapid technological catch‐up by China and India. Yet, despite a recent rise in interest, there is limited knowledge about how and where innovation takes place in these two leading emerging countries and to what extent the Chinese and Indian territorial systems of innovation differ from those in the EU or the US. In this article we explore the geography of innovation in China and India, concentrating on understanding key territorial‐level innovation trends by country, region and technology field, using the US and the EU as benchmarks. We find significant contrasts between the geography of innovation in China and India and that of the US and the EU. First, the degree of concentration of innovative activities in both countries is extremely high. Levels of agglomeration of innovation in the coastal provinces of China, as well as in Delhi and the South of India, significantly exceed the levels of agglomeration found in the USA and the EU. Secondly, China has witnessed a more rapid increase in the degree of concentration of innovation than India. We posit that the differences in the geography of innovation between, on the one hand, China and India and, on the other hand, between these countries and the developed world are rooted in different institutional settings, different systems of innovation and different national innovation strategies.     

Strategic Capabilities and Performance in Women‐Owned Businesses in Mexico

The dire economic situation in Mexico, with its high rate of unemployment, makes it necessary for many women to find some form of economic activity to provide income for their families. Although such conditions could encourage the creation of new firms, the results of the Global Entrepreneurship Monitor 2006 Report show a gap between the number of women involved in nascent and young entrepreneurship initiatives and the number who owns established firms. This gap may indicate that the firms created need to improve their competitiveness and their ability to survive. The model proposed adopts the resource‐based view of the firm as a theoretical framework from which to study how entrepreneurial orientation, market orientation, and learning orientation, as well as the interactions between them, influence the achievement of competitive advantage and superior performance in businesses owned by women. Our investigation analyzes businesses established and managed by women in Mexico and registered with the Asociación Mexicana de Mujeres Empresarias A.C. (Mexican Association of Business Women) and the Red de Empresarias del Instituto Nacional de Mujeres (Women Entrepreneurs Network of the National Women's Institute). To gather the information needed, the study used a questionnaire as a measuring instrument. The results are based on the 90 complete answers received from the questionnaires distributed. The results show that all of relationships in our model are positive except the hypothesis that learning orientation mediates in the relationship between market orientation and performance. The results suggest that entrepreneurial orientation reinforces the effect of two capabilities, market orientation and learning orientation, on firm performance. They also reaffirm that the three capabilities assessed may lead an organization to differentiate itself from its competitors by improving its performance. In addition to contributing to the literature on female entrepreneurship, the results have important implications for management. Understanding the relationships between capabilities and the performance of women‐owned businesses in Mexico can permit the identification of areas for improvement to promote the growth and survival of this type of firm.