Real Incentive Effects of Soft Information

Both soft, noncontractible, and hard, contractible, information are informative about managerial ability and future firm performance. If a manager's future compensation depends on expectations of ability or future performance, then the manager has implicit incentives to affect the information. We examine the real incentive effects of soft information in a dynamic agency with limited commitment. When long-term contracts are renegotiated, the rewards for future performance inherent in long-term contracts allow the principal partial control over the implicit incentives. This is because the soft information affects the basis for contract renegotiation. With short-term contracts, the principal has no control over the basis for contract negotiation, and thus long-term contracts generally dominate short-term contracts. With long-term contracts, the principal's control over implicit incentives is characterized in terms of effective contracting on an implicit aggregation of the soft information that arises from predicting (forming expectations of) future performance. We provide sufficient conditions for soft information to have no real incentive effects. In general, implicit incentives not controllable by the principal include fixed effects, such as career concerns driven by labor markets external to the agency. When controllable incentives span the fixed effects of career concerns, the latter have no real effects with regard to total managerial incentives—they would optimally be the same with or without career concerns. Our analysis suggests empirical tests for estimating career concerns that should explicitly incorporate noncontractible information.     

Changes in Global Trade Patterns and Women's Employment in Manufacturing, 1995–2011

This study investigates the feminization and defeminization trends in manufacturing employment in thirty countries from 1995 to 2011. Utilizing two separate methods, structural decomposition analysis (SDA) and factor content analysis (FCA), the study identifies the major industries and trade partners behind the structural shifts in trade that have induced changes in employment and thus in the rates of women’s employment. The findings highlight that, as a general trend, defeminization in manufacturing has persisted in the Global North, led by a negative trade impact in low-technology industries. In the Global South, feminization and defeminization trends are not as straightforward. Despite positive changes in women’s share of employment in medium-high- and high-technology industries, negative gender bias effects of trade changes are found particularly in high-technology industries, where occupations are notably gendered.     

Increasing consumer well-being: risk as potential driver of happiness

This article investigates the relation between risk and individual well-being. We propose a theoretical model of happiness that makes a distinction between ex ante evaluations of happiness and ex post assessments. The main assumptions of the model are tested through three studies based on anchoring vignettes. We show that, even if, ex ante, consumers fear high risk and do not associate it to a high level of happiness, their ex post evaluation of well-being is generally higher when identical consequences result from a high-risk situation than from a low-risk situation. Control over risk-taking reinforces the gap between ex ante and ex post measures of happiness. Thus, our article provides empirical evidence about a positive relation between risk and individual well-being, suggesting that risky experiences have the potential to increase consumer well-being.     

Economic and Household Impacts of Projected Policy Changes for the Irish Agri‐food Sector

The policy environment for the Irish agri‐food sector could change rapidly in the coming decade. A potentially positive factor will be the elimination of milk quotas in 2015, although a potentially negative factor will be further trade liberalisation and increased import competition. These changes come on top of the move to decouple direct aids to farmers in 2005 as part of the Mid‐Term Review of the EU's Common Agricultural Policy agreed in 2003. This paper examines these reforms and their impacts on the Irish economy and income distribution using a CGE model particularly rich in detail on the agri‐food sectors, differentiated household groups, and agricultural policy instruments including their links to productive factors and households. The results suggest that the past and projected changes in the policy environment have, in sum, a small positive impact on GDP and household income. However, the gains and losses are unequally distributed across sectors and household groups due to the highly differentiated distribution of support and protection. Although all households generally gain from the sequence of policy reforms in the long run, some experience strong adverse effects from particular reforms and in the medium term.     

A Schumpeterian model of equilibrium unemployment and labor turnover

This paper constructs a general equilibrium model of equilibrium unemployment by combining an endogenous growth model with a variant of equilibrium search theory. The analysis offers two explanations for the causes of widening wage gap between skilled and less-skilled labor, and rising unemployment rate among the less skilled: technological change in the form of an increase in the size of innovations or skilled labor saving technological change in R&D activity. In addition, the model identifies two distinct effects of faster technological progress on the aggregate unemployment rate. First, it increases the rate of labor turnover and therefore increases the aggregate unemployment rate – the creative destruction effect. Second, it creates R&D jobs, which offer workers complete job security, and consequently reduces the aggregate unemployment rate – the resource reallocation effect.     

The impact of capital market imperfections on investment–cash flow sensitivity

We examine the investment–cash flow sensitivity of US manufacturing firms in relation to five factors associated with capital market imperfections – fund flows, institutional ownership, analyst following, bond ratings, and an index of antitakeover amendments. We find a steady decline in the estimated sensitivity over time. Furthermore, we find that investment–cash flow sensitivity decreases with increasing fund flows, institutional ownership, analyst following, antitakeover amendments and with the existence of a bond rating. The overall evidence suggests that investment–cash flow sensitivity decreases with factors that reduce capital market imperfections.     

Business Cycle Synchronization of Turkey with the Eurozone and the United States: What Has Changed Since 2001?

Using wavelet methodology, we make a detailed spectral analysis of the business cycle synchronization of the Turkish economy with the eurozone and the United States. We take into account the dramatic change in the main economic indicators in the Turkish economy after the 2001 financial crisis. We find that the correlation of Turkish cycles with the cycles of the eurozone and the United States increased substantially after 2001. Moreover, the correlation of the Turkish cycles with the U.S. cycles is not lower than that with the euro cycles after 2001. Accordingly, analyzing the effect of international developments should not be confined to the trade channel. We submit that capital flows offer a reasonable explanation for the high correlation with the United States.     

The Vortex of Rights: ‘Right to the City’ at a Crossroads

The right to the city concept has recently attracted a great deal of attention from radical theorists and grassroots activists of urban justice, who have embraced the notion as a means to analyze and challenge neoliberal urbanism. It has, moreover, drawn considerable attention from United Nations (UN) agencies, which have organized meetings and outlined policies to absorb the notion into their own political agendas. This wide‐ranging interest has created a conceptual vortex, pulling together discordant political projects behind the banner of the right to the city. This article analyzes such projects by reframing the right to the city concept to foreground its roots in Marxian labor theory of value. It argues that Lefebvre's formulation of the right to the city — based on the contradiction between use value and exchange value in capitalist urbanism — is invaluable for analyzing and delineating contradictory urban politics that are pulled into the vortex of the right to the city. Following Lefebvre's lead in such an analysis, however, reveals certain limitations of Lefebvre's own account. The article therefore concludes with a theoretical proposition that aims to open up space for further critical debate on the right to the city.     

Extending the Resource‐Based Approach to Livelihoods: An Urban Application to Turkish Gecekondu Households

This article critically examines the existing conceptualizations of and explanations for the socioeconomic behaviour of poor households in order to lay the foundations of a new model designed to extend the existing resource‐based approach to livelihoods. The proposed model groups ‘household responses to poverty’ into four key types: income generation, income allocation, consumption and investment. In explaining household responses and their poverty outcomes, it focuses on the role of different resources beyond income (e.g. social capital), along with the wider structural forces and household characteristics that influence the availability and benefit delivery capacity of these resources. The new model is shown to provide a theoretically more sophisticated framework with greater explanatory power and empirical applicability.