Efficient Liability Rules: Complete Characterization

Received May, 18, 2000; revised version received March, 19, 2001     

The impact of product diversification strategy on the corporate performance of large Spanish firms

We analyze the impact of product diversification on performance. This topic has been discussed in the literature, and there is no consensus so far as to the significance or the direction of the impact. Performance is measured using Tobin's q for a sample of 103 large, non-financial Spanish firms (1992–1995). Diversification is measured by means of a categorical variable, as suggested by Varadarajan. The principal results indicate that the firms with intermediate levels of product diversification have the highest performance, while the firms with low and high levels of diversification show significantly lower performance, which performance is not significantly different between them.     

MNE competence‐creating subsidiary mandates

The determinants of R&D intensity differ between subsidiaries in a multinational enterprise (MNE). Previous literature suggests that whether a subsidiary achieves a competence‐creating output mandate depends on the qualities of its location. R&D strategies in competence‐creating subsidiaries are supply‐driven while those in purely competence‐exploiting subsidiaries are demand‐driven. Using data on U.K. subsidiaries of non‐U.K. MNEs, we find that the level of subsidiary R&D depends on MNE group‐level and subsidiary‐level characteristics as well as locational factors. The R&D of mandated subsidiaries rises with acquisition, but for non‐mandated subsidiaries R&D falls upon acquisition. MNEs that grow through acquisition have more inter‐subsidiary R&D diversity. Copyright © 2005 John Wiley & Sons, Ltd.     

Accommodating spatial correlation across choice alternatives in discrete choice models: an application to modeling residential location choice behavior

This paper presents a modeling methodology capable of accounting for spatial correlation across choice alternatives in discrete choice modeling applications. Many location choice (e.g., residential location, workplace location, destination location) modeling contexts involve choice sets where alternatives are spatially correlated with one another due to unobserved factors. In the presence of such spatial correlation, traditional discrete choice modeling methods that are often based on the assumption of independence among choice alternatives are not appropriate. In this paper, a Generalized Spatially Correlated Logit (GSCL) model that allows one to represent the degree of spatial correlation as a function of a multi-dimensional vector of attributes characterizing each pair of location choice alternatives is formulated and presented. The formulation of the GSCL model allows one to accommodate alternative correlation mechanisms rather than pre-imposing restrictive correlation assumptions on the location choice alternatives. The model is applied to the analysis of residential location choice behavior using a sample of households drawn from the 2000 San Francisco Bay Area Travel Survey (BATS) data set. Model estimation results obtained from the GSCL are compared against those obtained using the standard multinomial logit (MNL) model and the spatially correlated logit (SCL) model where only correlations across neighboring (or adjacent) alternatives are accommodated. Model findings suggest that there is significant spatial correlation across alternatives that do not share a common boundary, and that the GSCL offers the ability to more accurately capture spatial location choice behavior.     

Farm earnings, educational attainment, and role of public policy: Some evidence from Mexico

Using real household survey data from Mexico, this study evaluates

• 1. 

  (a) the impact of schooling on farm earnings through the “direct” and “allocative” effects of human capital;

• 2. 

  (b) the household demand for children's schooling;

• 3. 

  (c) using macro-level data, the association between children's school-participation and some policy variables.

The overall rate of return to household heads' schooling is estimated at 25%, and for wives, 19%. The allocative effect of schooling of household heads dominates over the direct effect. Mother's schooling and farm size exercise significantly positive effects on household demand for schooling; while in the macro model, policy variables, government expenditure and pupil-teacher ratio appear strong determinants of children's attainment of primary schooling.     

Modeling Cyclical Asymmetries in GDP: International Evidence

This paper models asymmetric behavior in GDP growth in the USA, Germany, France, and Japan. It develops smooth transition autoregressive models and interprets nonlinear dynamics in terms of cyclical asymmetries. A procedure for defining data-based, qualitative cyclical regimes from the estimated models is proposed, and generalized impulse response functions are computed to assess to what extent the response to a shock changes over different phases of the cycle.     

BARGAINING AMONG FARMERS,GOODWILL, AND THE SUCCESS OF COOPERATIVES

A model of concessional bargaining among farmers explains the success (or lack thereof) of cooperative institutions in rural farm settings in the developing regions. Concessional bargaining in day‐to‐day interactions generates goodwill, which helps smoothen future dealings amongst farmers as well as with outside agents. In particular, we model the existence of goodwill amongst farmers as enhancing their ability to collectively bargain with an outside dealer that buys their farm produce. Results suggest that when dealing with each other, farmers offer higher concessions when the risk of loss or reversal in bargaining power is high; however, the level of concession is also influenced by the degree of reciprocity and parameters that affect bargaining surplus. Findings provide further insights over the success of cooperative institutions in rural farm settings where inter‐farmer goodwill dynamics determines the cooperative's bargaining outcomes. Specifically, when farmers generously reciprocate each other's goodwill gestures, it leads to better outcomes through increasing their cooperative reservation price. In contrast, when the degree of reciprocity is lower, or when the risk of bargaining power switching is higher, farmers extract more surplus from other farmers, and this also lowers the cooperative's bargaining outcomes and makes the cooperative arrangement unviable in the long term.     

Multi-agent modeling of economic innovation dynamics and its implications for analyzing emission impacts

In this elaboration we focus on the role of multi-agent systems as a tool for modeling economic dynamics. Hence, at the beginning the specific features of this tool are considered. Taking the example of explaining the relationship between innovations and economic growth it will be shown after that how the tool of multi-agent modeling can be used for the following purposes: (1) for explaining the occurrence of innovations, (2) for specifying the effects these innovations have on economic growth, (3) for linking emission impacts to this growth and finally (4) for exemplarily assessing political options to reduce these impacts.