Consumption and Portfolio Choice over the Life Cycle

This article solves a realistically calibrated life cycle modelof consumption and portfolio choice with non-tradable laborincome and borrowing constraints. Since labor income substitutesfor riskless asset holdings, the optimal share invested in equitiesis roughly decreasing over life. We compute a measure of theimportance of human capital for investment behavior. We findthat ignoring labor income generates large utility costs, whilethe cost of ignoring only its risk is an order of magnitudesmaller, except when we allow for a disastrous labor incomeshock. Moreover, we study the implications of introducing endogenousborrowing constraints in this incomplete-markets setting.     

The Effects of NAFTA/CUSFTA on Agricultural Trade Flows: An Empirical Investigation

This paper examines the effects of the North American Free Trade Agreement (NAFTA) and its predecessor, the Canada‐United States Free Trade Agreement (CUSFTA), on agricultural trade flows at disaggregated product categories. The empirical analysis is implemented through gravity models using different econometric methods. It accounts for the baseline NAFTA/CUSFTA‐unrelated magnitudes of trade between member countries throughout the assessment of the NAFTA/CUSFTA trade effects. The benchmark estimates show considerable differences across agricultural product categories. The net post‐NAFTA/CUSFTA magnitudes of trade between member countries are found to be markedly low in some cases, underlining missed regional trade opportunities. The empirical analysis proceeds to estimate the NAFTA/CUSFTA trade effects by time period and by bilateral trading partnership, revealing important variations. Cet article examine les effets de l'Accord de Libre‐Échange Nord‐Américain (ALÉNA) et de son prédécesseur, l'Accord de Libre‐Échange entre le Canada et les États‐Unis (ALÉCÉU), sur les flux commerciaux agricoles au niveau des catégories ventilées. L'analyse empirique est mise en ?uvre grâce à des modèles de gravité en utilisant une variété de méthodes économétriques. Elle compte pour la ligne de base des magnitudes non‐reliées à l'ALÉNA/ALÉCÉU du commerce entre les pays membres à travers l′évaluation des effets de l'ALÉNA/ALÉCÉU sur le commerce. Les estimations de référence montrent des différences considérables entre les catégories de produits agricoles. Les magnitudes post‐ALÉNA/ALÉCÉU nettes du commerce entre les pays membres se trouvent d′être considérablement faibles dans certains cas. Ces résultats soulignent des opportunités commerciales régionales manquées. L'analyse empirique procède à estimer les effets de l'ALÉNA/ALÉCÉU sur le commerce par période et par partenariat commercial bilatéral, et elle montre des variations importantes.     

Predicting uncertainty: the impact of risk measurement on value of real estate portfolios

This paper presents a theoretical framework for an assessment and valuation of real estate assets and funds, based on modern stochastic discounted cash flow (DCF) models, which accurately captures the nature of related risks. We show that an accurate risk-adjusted valuation is particularly difficult for real estate investments, due to practical limits to diversification and difficulties in approximating total risk with systematic risk. We develop a risk assessment framework that includes idiosyncratic risk but focuses on insolvency risk related to a specific cash flow profile. We also present a methodology of rating this risk, using forecasts and simulations. We conclude that simulation techniques are a valuable tool in property risk assessment. Further, we show that cost of capital and value of assets depend on diversification of specific risks, investors can achieve in their portfolios.     

Managerial ownership and firm performance: Evidence from China's privatizations

We examine the relationship between managerial ownership and firm performance for a sample of Chinese State-owned enterprises (SOEs) privatized over the period 1992-2000. The results indicate that managerial ownership has a positive effect on firm performance. Although return on assets (ROA) and return on sales (ROS) decline post-privatization, firms with high managerial ownership and, specially, high CEO ownership, exhibit a smaller performance decline. The difference is highly significant, with or without controlling for residual state ownership and changes in the firm's operating environment. We also find that the influence on firm performance becomes less significant at higher levels of CEO ownership. In contrast, performance continues to increase with managerial ownership. This finding suggests that, beyond a certain point, the distribution of shares would be more effective if extended to the whole management team instead of being limited to the chief executive.     

Dual VATs and Cross-Border Trade: Two Problems, One Solution?

In recent years, two distinct but related questions have been raised with respect to value-added taxes (VATs). Concern has been expressed over whether it is desirable or even possible for both national and subnational governments in federal countries such as India, Argentina, and Russia to impose VATs. One reason for thinking that such subnational VATs are unlikely to be workable on a destination basis is the problem of cross-border trade. Of course, this same problem also arises within the European Union, where there is no EU VAT. Drawing upon Canadian experience, we argue that not only is it possible to have two-tier or dual VATs on a destination basis in a single country but that the existence of dual VATs may help deal with some of the problems of cross-border trade.     

The Impact of Human Resource Management on Environmental Performance: An Employee-Level Study

This field study investigated the relationship between strategic human resource management, internal environmental concern, organizational citizenship behavior for the environment, and environmental performance. The originality of the present research was to link human resource management and environmental management in the Chinese context. Data consisted of 151 matched questionnaires from top management team members, chief executive officers, and frontline workers. The main results indicate that organizational citizenship behavior for the environment fully mediates the relationship between strategic human resource management and environmental performance, and that internal environmental concern moderates the effect of strategic human resource management on organizational citizenship behavior for the environment.     

How does PLM technology support knowledge transfer and translation in new product development? Transparency and boundary spanners in an international context

Information Technology is often viewed as imposing too much standardization and limiting flexibility in New Product Development (NPD). This paper aims at understanding how the use of Product Lifecycle Management Technology (PLM) contributes to knowledge sharing in an international NPD environment. The research is based on a longitudinal case study of a consumer goods industry group and involved development teams in Europe and local suppliers in China. Knowledge transfer and translation were observed through the reduction of communication glitches among members and increased NPD work with Chinese suppliers. The results of the case study indicate that (1), with an important codification effort, the use of PLM technology resulted in higher data and network transparency and enhanced knowledge transfer; (2) PLM served as a particularly useful tool for knowledge translation especially for boundary spanners in their work relationships. While PLM can be considered the main mechanism for knowledge transfer in this context, the case suggests that knowledge translation requires a boundary spanner intervention and that, with the use of PLM, they reinforce each other. Particularly noteworthy was a positive shift in the boundary spanners' roles from the project leader to the outsourcing engineer. In turn, this unintended consequence reinforced their credibility and the legitimacy of the use of the system with the Chinese suppliers.