Multi-product capacitated facility location problem with general production and building costs

This research introduces the multi-product capacitated facility location problem with general production and building costs (MP-CFLPGC). The MP-CFLPGC extends previous problems found in the literature by including multiple products and general production and building cost functions that allow the modeling of different behaviors like economies of scale and congestion. The MP-CFLPGC is formulated as a mixed integer linear program (MILP). To evaluate the performance of the proposed formulation we analyze the results of a commercial optimizer on a set of 288 randomly generated test instances that resemble the Colombian cement industry supply chain. After one hour the optimizer achieved an optimality gap of 1.0 % or less in 55 % out of the 288 test instances. On average the optimality gap was 3.57 %. Additionally, we propose a randomized mathematical-programming-based heuristic for the test instances where the MILP formulation presents significantly high optimality gaps.     

Tax competition and the political economy of public employment: a model for Austria

In this work, we simulate the effects of the tax autonomy of the Austrian states on the levels of public employment in each state. We show that depending on the strength of the public sector lobby, tax autonomy would require a reduction of employment in the public sector of between 25 and 35% of the current level. We also show that tax autonomy increases welfare levels by 1–1.5%; that is, the positive change in the disposable income of the workers more than offsets the welfare loss resulting from the lower provision of public goods. Finally, we show that the reduction of public employment is superior in terms of welfare to an alternative scenario in which employment levels are held constant but the wage levels in the public sector are adjusted.     

Optimal monetary policy in a New Keynesian model with habits in consumption

In this paper we consider the implications of habits for optimal monetary policy, when those habits either exist at the level of the aggregate basket of consumption goods (‘superficial’ habits) or at the level of individual goods (‘deep’ habits: see Ravn et al., 2006). External habits generate an additional distortion in the economy and create new trade-offs for optimal policy, as the policy maker does not respond as aggressively to technology shocks in order to avoid exacerbating the habits externality. This can dramatically affect both the parameterization of optimal simple rules, as well as their determinacy properties. These effects are particularly strong when habits are of the deep kind.     

Money secrets: How does trade secret legal protection affect firm market value? Evidence from the uniform trade secret act

Research summary : We investigate the impact of trade secret legal protection on firm market value in the context of acquisitions. On one hand, market value may increase because trade secret assets become better protected from rivals. On the other hand, market value may decrease because trade secret protection reduces information about the target and its competitors available to potential buyers, increasing uncertainty about its value. Buyers will discount their offers in expectation of being compensated for riskier deals. Using a sample of private equity investments in the United States, we find that trade secret protection has a positive effect in industries with high mobility of knowledge workers, but a negative effect in industries with (1) high resource–value uncertainty and (2) high poor‐investment risk. Managerial summary : We argue that an increase in trade secret legal protection might not unequivocally benefit firm owners when selling their business. A stronger trade secret protection increases the market value of firms in industries with high workers' mobility, but it decreases the market value of firms in industries with uncertain resource value and/or high risk of poor‐acquisition investments. Based on the contingent effect of trade secret protection, companies may want to adjust their strategic decisions, including where to locate or relocate, based in part on whether they will derive benefits or suffer losses when trade secrets are better protected. Finally, our study should help policymakers understand more fully the economic impact of government policies associated with trade secrets. Copyright © 2016 John Wiley & Sons, Ltd.     

Marketing mix and customer equity of SPA brands:Cross-cultural perspectives

Globalization has substantially transformed the fashion industry. Firms that conduct innovative marketing campaigns for SPA brands, also known as fast fashion, are operating worldwide. Because SPA brands tend to have short trend cycles, corporate profitability is sensitive to consumers' attitudinal changes. The authors of this study establish a theoretical framework by examining research trends related to customer equity at home and abroad by delving into the current state of global SPA brands, defining customer equity, developing customer equity measurements, and conducting empirical analyses. This study uses structural equation models to analyze corporate marketing activity effects on customer lifetime value through brand attitude. Although earlier studies identify customer equity as driving value equity, brand equity, and relationship equity, the authors introduce social network equity as another driver.     

Insider employee stock option trading and stock prices

The question of which factors determine corporate bonds pricing is investigated by analysing the spreads of eurobonds issued by major G-10 companies during the 1991–2001 period. Three main results emerge from the analysis. First, bond ratings appear as the most important determinant of yield spreads, with investors’ reliance on rating agencies judgments increasing over time. Second, the primary market efficiency and the expected secondary market liquidity are not relevant explanatory factors of spreads cross-sectional variability. Finally, rating agencies adopt a different, ‘through the cycle’, evaluation criteria of default risk with respect to the forward looking one adopted by bond investors.     

The economic returns to schooling for Italian men. An evaluation based on instrumental variables

We study the relationship between (log) hourly earnings and schooling for male household heads in Italy, using cross-sectional data from the 1993 and 1995 waves of the Bank of Italy (BI) survey on the income and wealth of Italian households. In line with international evidence, we find that OLS under-estimate the return to schooling. When the endogeneity of schooling is taken into account, the return to an additional year in school increases from 4.8% to 5.6%. This estimate is lower than the estimates tabulated by Card [Card, D., 1994. Earnings, Schooling and Ability Revisited. NBER Working Paper no. 4832.] for the United States. We also find evidence that this return increases with higher levels of educational attainment.     

Identification of technological structures using patent statistics

This paper studies the use of patent statistics in identifying four aspects of technological structure, namely, the potential knowledge pool, cumulativeness, inter-firm homogeneity in technology levels, and the scope of innovations. The firms are sampled from the chemical (CHEM), the computer (COM) and the electrical and electronic (EE) industries worldwide. Using the proxies defined, we find that (i) the contributions of intra-industry spillover are low, at 12%, 10%, and 9% for the three industries respectively; (ii) they can internalize 15%, 19% and 13% of their previous research efforts respectively; and (iii) a positive relationship between knowledge spillover and technology overlap, and between scope of innovation and number of patents being cited in future.     

Exportkreditgarantien und –bürgschaften in der Diskussion

Öffentlich gesicherte Exportgarantien und –bürgschaften bilden die Grundlage der staatlichen Ausfuhrförderung in Deutschland. Wie sind Exportkredite aus ordnungspolitischer Sicht zu bewerten? Welche Risiken werden in der Praxis abgedeckt? Gibt es Anlass, die mittel– und langfristige Exportfinanzierung der Unternehmen zu reformieren?Dr. Karl–Wolfgang Menck, 63, ist wissenschaftlicher Mitarbeiter im Forschungsschwerpunkt Handel und Entwicklung im Hamburgischen Welt–Wirtschafts–Archiv (HWWA) in Hamburg.