Shadow pricing of labour and capital in an economy with unemployed labour

This paper derives the shadow prices of labour and capital to be used in the public sector in a situation of unemployment. The setting considered is that of a three-good, two-period general equilibrium model. Then shadow prices are compared to their corresponding market prices and shown to closely depend on own and cross-elasticities of supply and demand for labour and investment. In the first part, a rigid wage rate is the sole source of distortion; then, a tax on capital income is introduced so that our formula for the social rate of discount can be contrasted with that of Harberger, Sandmo and Drèze.     

National culture,leadership and citizenship: Implications for cross-cultural management

Continued globalization is raising the level of diversity within hospitality organizations as well as the likelihood that leaders will manage those from varying national cultures. Previous research has found that cultural congruence between leaders and stakeholders (i.e., from the same or different national cultures) impacts a variety of variables including perceived leadership style, satisfaction and trust. This study extends this line of research by investigating the relationship between cultural congruence, perceived leadership style, leader–member exchange (LMX) and employee citizenship behaviors. Using a highly diverse sample of 520 members of congruent and incongruent dyads from 66 countries working for 2 large cruise lines and 2 subsidiaries, multivariate analysis of variance (MANOVA) was used to test the relationships. It was determined that cultural similarity impacted employee perceptions of LMX relations and organization citizenship behaviors, but not leadership style. The results of the study provide strategies for cross-cultural management in the hospitality industry.     

The deductibility of provincial business taxes in a federation with vertical fiscal externalities

Should provincial business taxes be deductible under a federal profit tax? We show that the ‘optimal deductible,’ which neutralizes the vertical fiscal externality between the federal and provincial government, is the change in the federal tax base per dollar of tax revenue collected by the provincial government. The optimal payroll tax deductibility rate depends on the extent to which it is shifted to workers and on the difference between the federal tax rates on profits and on labour income. Two apparently contradictory positions – full deductibility of a payroll tax and non‐deductibility – are special cases of our model. La déductibilité des taxes provinciales imposées aux entreprises dans une fédération où il y a des externalités fiscales verticales. Est‐ce que les taxes provinciales imposées aux entreprises devraient être déductibles de l'impôt fédéral sur les profits? Les auteurs montrent que l'optimum de déductibilité qui neutralise les externalités fiscales verticales entre le fédéral et les provinces est le changement dans la base d'imposition fédérale par dollar de revenu fiscal collecté par le gouvernement provincial. Le taux de déductibilité optimal d'un impôt sur les salaires dépend de la portion du fardeau fiscal qui est déportée vers les travailleurs et de la différence entre les taux d'imposition du fédéral sur les profits et sur le revenu du travail. Deux positions apparemment contradictoires – pleine déductibilité d'un impôt sur les salaires et déductibilité nulle – sont des cas spéciaux du modèle général.     

The influence of managers' awareness of climate change,perceived climate risk exposure and risk tolerance on the adoption of corporate responses to climate change

Uncertainties posed by climate change limit companies' ability to understand implications of global warming on business and society at large, hampering the adoption of tangible organizational responses to climate change. Understanding climate action thus requires to investigate influential factors of decision-making under uncertainty, which implies acknowledging managerial interpretations and perceptions about climate issues. Drawing insights from the literature on climate inaction and from corporate sustainability literature, the present study examines awareness of climate change and perceived exposure to climate risks as antecedents of corporate responses to climate change, drawing on a survey of managers of Italian manufacturing companies. In addition, the study tests the moderation of risk tolerance on the relation between perceived climate risk exposure and climate action, suggesting that risk attitudes are a significant factor of decision-making under climate uncertainty. The results support the hypothesis of the model and thus provide several contributions to the literature on business and climate change. Managerial implications and avenues for future research are also discussed.     

Effects of fiscal policy in the Northern and Southern regions of Italy

This paper contributes to a growing body of work within ‘fiscal policy studies,’ investigating the recent role of fiscal policy on the Italian economy. Using annual data collected on a regional basis, this study estimates and compares the (impact and cumulative) fiscal multipliers across the North and the South—the less developed area—of Italy. With recourse to a simultaneous equation model for the two macro-areas of Italy, it estimates the overall impact of the measures of budget consolidation policies during the period 2011–2013. Our analysis reveals that tax increases and, with a greater impact, spending cuts, hit the South harder compared to the North.