Import-Price Uncertainty, Production Decisions, and Relative Factor Shares

The effects of import-price uncertainty on factor income in Switzerland are estimated. The production-theory approach is used to derive the import demand function from an expected utility maximization problem, treating imports as an input to the technology. The model is also used to test for risk aversion and to assess the impact of uncertainty on the volume of imports and gross output. Evidence is found that, for most years, labor has been relatively more vulnerable to uncertainty than has capital.     

U.S. Imports by origin: A system approach

Zusammenfassung U.S.-Importe nach Ursprungsl?ndern: Ein systematischer Ansatz.- Die amerikanischen Import-Nachfragefunktionen werden für sieben Ursprungsregionen gesch?tzt. Sie alle werden aus demselben Strukturmodell abgeleitet und gemeinsam gesch?tzt unter Beachtung der Restriktionen, die sich aus der Nachfragetheorie ergeben. Dieses Verfahren stellt sicher, da\ das System von Importnachfragefunktionen intern konsistent ist; die statistische Effizienz wird erh?ht. Die Ergebnisse zeigen, da\ die Elastizit?ten der Importe in bezug auf den eigenen Preis je nach Ursprungsregion sehr stark voneinander abweichen und da\ die besten Substitutionsm?glichkeiten zwischen Einfuhren aus Japan und denen aus einigen europ?ischen L?ndern bestehen.

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Resumen Las importaciones de los EEUU según su origen: un análisis sistemático. - Se estiman funciones de demanda de importaciones de los EEUU para siete regiones de origen. Las funciones de importaciones son derivadas de un mismo modelo estructural y estimadas simultáneamente respetando las restricciones sugeridas por la teoría de la demanda. Este procedimiento asegura que el sistema de funciones de demanda de importaciones sea consistente y que se mejore la eficiencia estadística. Los resultados indican que las elasticidadesprecio de la demanda de importaciones varían ampliamente entre las regiones de origen y que las mejores oportunidades para sustituír importaciones se encuentran en las importaciones provenientes del Japón y de algunos países de Europa.

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Résumé Importations des E.U. par origine: une approche systématique. - L’auteur estime des fonctions de la demande importatrice des E.U. pour sept régions d’origine. Toutes les fonctions d’importation sont dérivées du même modèle structurel, et elles sont estimées en commun sous les restrictions suggérées par la théorie de la demande. Cette procédure assure que le système des fonctions de demande importatrice est internement consistant et l’efficience statistique est augmentée. Les résultats indiquent que les propres élasticités de prix des importations varient largement entre des régions d’origine et que les possibilités de substitution sont les plus grandes entre les importations du Japon et les importations de quelques pays européens.

     

On the relationship between concentration of prospect theory/mental accounting investors,cointegration, and momentum

We examine the role of cointegration between stock prices and their estimated fundamental values in return momentum. We find that the positive relationship between capital gains overhang and future stock returns in Grinblatt and Han (2005) is significantly stronger among the “non-cointegrated” group of stocks as compared with the “cointegrated” group of stocks. Further, for the cointegrated stocks, the slower the speed of adjustment to the cointegrating equilibrium, the greater (smaller) is the future return of stocks with unrealized capital gains (losses). These findings are robust to various firm characteristics including firm size, book-to-market ratio, past returns, idiosyncratic volatility, dispersion in analysts’ earnings forecasts, turnover, individual investor ownership, and industry returns.     

Brain drain or brain bank? The impact of skilled emigration on poor-country innovation

The development prospects of a poor country or region depend in part on its capacity for innovation. In turn, the productivity of its innovators, whom are often concentrated around urban centers, depends on their access to technological knowledge. The emigration of highly skilled individuals weakens local knowledge networks (brain drain) but may also help remaining innovators access valuable knowledge accumulated abroad (brain bank). We develop a model in which the size of the optimal innovator Diaspora depends on the competing strengths of co-location and Diaspora effects for accessing knowledge. Then, using patent citation data associated with inventions from India, we estimate the key co-location and Diaspora parameters. The net effect of innovator emigration is to harm domestic knowledge access, on average. However, knowledge access conferred by the Diaspora is particularly valuable in the production of India’s most important inventions as measured by citations received. Thus, our findings imply that the optimal emigration level may depend, at least partly, on the relative value resulting from the most cited compared to average inventions.     

Compliance with International Financial Reporting Standards and auditor choice: New evidence on the importance of the statutory audit

We examine the impact of auditor choice on IFRS compliance under the assumption of strict exogeneity of auditor choice. Our results reveal that compliance is positively related to auditor choice after controlling for firm size, profitability, leverage, degree of international diversification, and whether a firm has a U.S. listing or was audited according to International Standards of Auditing. We also find that auditor choice is positively related to firm compliance when controlling for unmeasured, firm-specific effects. The results of our study reinforce the importance of developing institutional mechanisms (e.g., enforcement, auditing, or corporate governance structures) to encourage compliance with IFRS.     

Capital Flows and Exchange Rate Volatility in India: How Crucial Are Reserves?

This paper tests if the adequacy of reserves helps reduce exchange rate volatility in an environment of financial globalization, market‐determined exchange rate and macroeconomic imbalances. It exploits the difference in the period after 2010 when India did not accumulate reserves but faced higher capital flow pressures, relative to a previous managed‐float period marked by significant absorption of surplus capital flows. Along with other determinants, the sensitivity of rupee volatility is examined. The paper finds that adequate reserve holdings significantly reduce exchange rate volatility irrespective of the exchange rate regime; the effect is more through influence upon market sentiment and confidence than actual intervention. It contributes to existing evidence on the role of reserves in mitigating exchange rate volatility amid capital flow swings and offers insights into the policy environment depicted in the trilemma.     

Marketing’s roles in innovation in business-to-business firms: Status, issues, and research agenda

A project funded by the Institute for the Study of Business Markets to develop an understanding of the current state of business-to-business marketing and a research agenda for the field identified a lack of understanding of how the marketing function can or should best contribute to firms’ innovation efforts as the top priority. A workshop of senior academics and research-oriented practitioners explored this topic further, identifying four specific themes: (1) improving customer needs understanding and customer involvement in developing new products, (2) innovating beyond the lab, (3) disseminating and implementing research findings in firms, and (4) marketing’s overall role in innovation. This article defines these themes, sketches the current status of knowledge about each theme, frames practitioners’ issues with them, and proposes research agendas for each theme to move the field forward. The goal is to encourage rigorously executed academic research that can also help firms innovate more successfully.