Welfare effects of the euro cash changeover

Using merged data from the British Household Panel Survey (BHPS) and the German Socio-Economic Panel (SOEP), this paper applies a parametric difference-in-differences approach to assess the real effects of the introduction of the euro on subjective well-being. A complementary nonparametric approach is also used to analyze the impact of difficulties with the new currency on well-being. The results indicate a loss in well-being associated with the introduction of the new currency, with the predicted probability that a person is contented with his/her household income diminishing by 9.7 percentage points. We calculate a compensating income variation of approximately one-third. That is, an increase in post-government household income of more than 30% is needed to compensate for the clear decline in well-being. The reasons for the negative impact are threefold. First, perceived inflation overestimates the real increase in prices resulting in suboptimal consumption decisions. Second, money illusion causes a false assessment of the budget constraint. Third, individuals have to bear the costs from the conversion and the adjustment to the new currency. Moreover, it is thought that losses are higher for persons who have difficulties with the new currency. However, the impact of difficulties in using and converting the new currency is rather small, and the initial problems were overcome within one year of the introduction of euro cash.     

Access to finance,working capital management and company value: Evidences from Brazilian companies listed on BM&FBOVESPA

In this research, we have analyzed the impact of financial leverage on the relationship between working capital and company value and how financial constraints on access to financing affect this relationship. In addition, we have analyzed the relationship between working capital and company value. Using a sample of Brazilian public companies listed on BM&FBOVESPA from 1995 through 2009, we found evidence for the following conclusions: an extra Real (R$) of investment in working capital is significantly less worth, on average, than an extra Real (R$) of investment in cash; and, on average, increasing the level of working capital at the beginning of a fiscal year reduces company value.     

The interactive effects of goal orientation and leadership style on sales performance

The authors develop and test a model depicting the moderating effects of different types of manager leadership styles on the relationship between salesperson goal orientations (i.e., performance orientation and learning orientation) and performance. The two surveys were set in retail work contexts in Brazil. Results from a multi-level hierarchical analysis demonstrate that (i) transactional leadership strengthens the positive link between learning orientation and sales performance, whereas (ii) transformational leadership weakens the positive association between learning orientation and performance. Our argument for the positive moderating effect of transactional leadership is built upon the path-goal theory and contingent reward mechanism. The justification for the negative effect of transformational leadership involves the follower-dependency logic and overdependence on supervisory cues.     

Coming out of the shadows? Estimating the impact of bureaucracy simplification and tax cut on formality in Brazilian microenterprises

This paper evaluates the impact of a program of bureaucracy simplification and tax reduction on formality among Brazilian microenterprises — the SIMPLES program. We document an increase of 13 percentage points in formal licensing among retail firms created after the program when compared to firms in ineligible sectors. The impact on retailers is robust to a series of tests. We find no impact on construction, transportation, services and manufacturing sectors.     

Testing Household-Specific Explanations for the Inverse Productivity Relationship

The inverse relationship between land productivity and farm size is an old and puzzling empirical regularity. Most explanations for this relationship rely on market imperfections that jointly determine the farm size and the household's shadow price of some productive inputs. We use plot-level data from the ICRISAT/VLS to assess whether these household-specific theories can explain the puzzle. The data exhibit plots of different sizes being simultaneously cropped by the same household. The inverse relationship is shown to hold true with the same magnitude across the plots of each household, thus cross-household heterogeneity does not suffice to explain the puzzle.     

Reweighted loglikelihood method in robust estimation in a mixed unbalanced model

In the paper we introduce a method of computing M-estimators in a mixed unbalanced model. The algorithm is based on weighted loglikelihood. It simultaneously finds the estimator of location and scale. Convergence of the algorithm to a solution of M-equations is proved and a simulation study is given.     

Do Lower Caseloads Improve the Performance of Public Employment Services? New Evidence from German Employment Offices

The caseworker‐to‐clients ratio is an important, but understudied, policy parameter that affects both the quality and cost of public employment services that help job seekers find employment. We exploit a large‐scale pilot by Germany's employment agency, which hired 490 additional caseworkers in 14 of its 779 offices. We find that lowering caseloads caused a decrease in the rate and duration of local unemployment as well as a higher re‐employment rate. Disentangling the mechanisms that contributed to this improvement, we find that offices with lowered caseloads increased monitoring and imposed more sanctions but also intensified search efforts and registered additional vacancies.