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on Business Economics |
| By: | Alan J. Auerbach; Kevin A. Hassett |
| Abstract: | The "Jobs and Growth Tax Relief Act of 2003" (JGTRA03) contained a number of significant tax provisions, but the most noteworthy may have been the reduction in dividend tax rates. The political debate over the dividend tax reductions of 2003 took a number of surprising twists and turns. Accordingly, it is likely that the views of market participants concerning the probability of significant dividend tax reduction fluctuated significantly during 2003. In this paper, we use this fact to estimate the effects of dividend tax policy on firm value. We find that firms with higher dividend yields benefited more than other dividend paying firms, a result that, in itself, is consistent with both new and traditional views of dividend taxation. But further evidence points toward the new view and away from the traditional view. We also find that non-dividend-paying firms experienced larger abnormal returns than other firms as the result of the dividend tax cut, and that a similar bonus accrued to firms likely to issue new shares, two results that may appear surprising at first but are consistent with the theory developed in the paper. |
| JEL: | G12 H24 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11449&r=bec |
| By: | Steven J. Davis (University of Chicago, NBER and American Enterprise Institute); R. Jason Faberman (U.S. Bureau of Labor Statistics); John Haltiwanger (University of Maryland, NBER and IZA Bonn) |
| Abstract: | New data sources and products developed by the Bureau of Labor Statistics and the Bureau of the Census highlight the dynamic character of U.S. labor markets. Private-sector job creation and destruction rates average nearly 8% of employment per quarter. Worker flows in the form of hires and separations are more than twice as large. The data also underscore the lumpy nature of micro-level employment adjustments. More than two-thirds of job destruction occurs at establishments that shrink by more than 10% within the quarter, and more than one-fifth occurs at those that go to zero employment. Our study also uncovers highly nonlinear relationships of worker flows to employment growth and job flows at the micro level. These micro relations interact with movements over time in the cross-sectional density of establishment growth rates to produce recurring cyclical patterns in aggregate labor market flows. Cyclical movements in the layoffs-separation ratio, for example, and the propensity of separated workers to become unemployed reflect distinct micro relations for quits and layoffs. A dominant role for the job-finding rate in accounting for unemployment movements in mild downturns and a bigger role for the job-loss rate in severe downturns reflect distinct micro relations for hires and layoffs. |
| Keywords: | hires, separations, job creation, job destruction |
| JEL: | J23 J63 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1639&r=bec |
| By: | Robert S. Pindyck |
| Abstract: | Sunk costs play a central role in antitrust economics, but are often misunderstood and mismeasured. I will try to clarify some of the conceptual and empirical issues related to sunk costs, and explain their implications for antitrust analysis. I will be particularly concerned with the role of uncertainty. When market conditions evolve unpredictably (as they almost always do), firms incur an opportunity cost when they invest in new capital, because they give up the option to wait for the arrival of new information about the likely returns from the investment. This option value is a sunk cost, and is just as relevant for antitrust analysis as the direct cost of a machine or a factory. |
| JEL: | L40 L10 D43 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11430&r=bec |
| By: | Jeremy Greenwood (University of Rochester); Guillaume Vandenbroucke (University of Rochester) |
| Abstract: | For 200 years the average number of hours worked per worker declined, both in the market place and in the home. Technological progress is the engine of such transformation. Three mechanisms are stressed: (i) The rise in real wages and its corresponding wealth effect; (ii) The enhanced value of time off from work, due to the advent of time-using leisure goods; (iii) The reduced need for housework, due to the introduction of time-saving appliances. These mechanisms are incorporated into a model of household production. The notion of Edgeworth-Pareto complementarity/substitutability is key to the analysis. Numerical examples link theory and data. |
| Keywords: | Hours worked, leisure, housework, household production, Edgeworth-Pareto complementarity/substitutability, technological progress |
| JEL: | E24 J22 O11 O33 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:roc:ecavga:10&r=bec |
| By: | Stefania P.S. Rossi (Economics at the Faculty of Economics, University of Cagliari); Markus Schwaiger (Oesterreichische Nationalbank, Financial Markets Analysis and Surveillance Division); Gerhard Winkler (Oesterreichische Nationalbank, Credit Division) |
| Abstract: | This paper analyzes cost and profit efficiency level and the managerial behavior of banks in nine Central and Eastern European countries (the Czech Republic, Estonia, Hungary, Latvia, Lithuania Poland, Romania, Slovakia and Slovenia), providing cross-country and time series evidence on the period 1995-2002. A stochastic frontier analysis based on a Fourier flexible form indicates a generally low level of cost efficiency and an even lower level of profit efficiency. However, we also find significant differences among countries and some evidence of an increasing tendency over time in profit efficiency and, to an even stronger extent, in cost efficiency. Cost and profit efficiency scores are negatively correlated both on a country wide as well as on a bank by bank basis. Furthermore, instead of just looking at the determinants of cost and profit efficiency (e.g. asset quality, problem loans and risk), we test several hypotheses of managerial behavior using the Granger causality approach based on the intertemporal relation between bank efficiency, capitalization and problem loans, as proposed by Berger and DeYoung (1997). Even though a static analysis shows a negative correlation between problem loan and efficiency, we find no evidence of bad management hypothesis. Results provide evidence for the bad luck hypothesis suggesting the exogeneity of bad loans triggering inefficiency. |
| Keywords: | Cost and profit efficiency; CEECs; Stochastic frontier analysis; Managerial behavior |
| JEL: | G21 G28 C14 D21 |
| Date: | 2005–03–04 |
| URL: | http://d.repec.org/n?u=RePEc:onb:oenbwp:96&r=bec |
| By: | Pascal St-Amour |
| Abstract: | According to standard theory, wealth should have no intrinsic value. Yet, conventional wisdom, recent theories, and data suggest it might. We verify whether or not households have direct preferences over wealth in selecting assets. The fully structural econometric model focuses on a multivariate Brownian motion in optimal consumption, portfolios and wealth. Using aggregate portfolio data, we find that wealth (i) is directly valued, (ii) reduces marginal utility and (iii) reduces risk aversion, while we reject the HARA, and CRRA restrictions. Consequently, wealth-dependent utility generates a larger IMRS risk, justifying a larger, more predictable risk premium and a lower risk-free rate. |
| Keywords: | portfolio choice; wealth-dependent preferences; preference for status; asset pricing; equity premium; risk-free rate; predictability |
| JEL: | G11 G12 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:05.04&r=bec |
| By: | Pierfederico Asdrubali; Soyoung Kim |
| Abstract: | This paper develops a method to estimate jointly the degree of (possibly incomplete) intertemporal consumption smoothing and the degree of (possibly incomplete) international/interregional risksharing. This approach generalizes and improves upon studies that either examine only intertemporal consumption smoothing, or analyze risksharing by making an extreme assumption on intertemporal consumption smoothing, or by adopting a purely empirical framework. The method is applied to the US states and OECD and EU countries to analyze how the degrees of risksharing and intertemporal consumption smoothing differ within a country and across countries. The empirical results suggest that: 1) regardless of the assumption on the degree of intertemporal consumption smoothing, the degree of risksharing within a country is larger than across countries 2) the degree of intertemporal consumption smoothing within a country is also larger than across countries, contrary to the findings of past channel studies. Finally, this paper also provides some foundations and suggests limitations of the empirical literature on channels of risksharing and intertemporal consumption smoothing. |
| Keywords: | Intertemporal consumption smoothing, risksharing, channels of risksharing, international vs. intranational |
| JEL: | E21 F36 F41 |
| Date: | 2005–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpif:0506010&r=bec |
| By: | Anthony Chin (Department of Economics, National University of Singapore); Hong Junjie (School of International Trade and Economics, University of International Business and Economics, Beijng, China) |
| Abstract: | In recent years the logistic needs have created tremendous pressure on the ‘hard’ transport infrastructure. Logistics and the harness of information technology are the key facilitators of mobility. The Chinese logistics market is still in its infancy and creates tremendous opportunities for investors. It recognized as one of important driving forces both for national economy and business. Beijing, Tianjin, Shanghai, Shenzhen and Guanzhou aspire to be regional or international logistics hubs and have adopted preferential policies in attracting FDIs in logistics. From 1996 to 2001, foreign capital invested in transportation, storage, post and telecommunications increased from USD6.96 billion to USD15.16 billion. This study looks at the location decisions of foreign logistics firms and identifies with the aid of a multinomial logit model factors that are crucial in attracting them to China. This is important as they have an important role to play in filling in the gap left by traditional Chinese firms, which largely concentrate, on warehousing and distribution. The results suggest that location of logistics firms depends on transport infrastructure, market size, labor quality and cost, agglomeration economies, communication cost, economic privatization degree, as well as government incentives. The importance of the above factors varies by source of region. European and North American firms favor higher population densities, lower labor cost, convenient airway transport and large cities while logistics firms from Hong Kong, Macao and Taiwan put more emphasis on communication infrastructure. |
| URL: | http://d.repec.org/n?u=RePEc:sca:scaewp:0509&r=bec |
| By: | Séverine Lemière (MATISSE) |
| Abstract: | This document starts from the statement that all human resources themes can generate risks of inequalities and discrimination between men and women. Of course, these discriminations are indirect but the results is the same about recrutment, careers, wages, balance between family life and work, vocational training... Some firms implement practices for women employment and equality at work, the European Commission valorises "these good practices". The aim of this document (grouping experimentations and first analysis which demand futher development on transferability and adaptability of these practices) is to expose some interesting examples of human resources practices in favour of equality and to discuss these practices and stakes of equality in firms. |
| Keywords: | Equality at work, human resources management, discrimination, women. |
| JEL: | J16 J7 M12 M5 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:mse:wpsorb:r05048&r=bec |
| By: | Sluis, Lidewey E.C. van der (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics) |
| Abstract: | In this article we focus on aspects of organisations that they can use to design workplaces in such a way that individual learning and organisational innovation can blossom. Recent studies in this field reported positive associations between organisational characteristics stimulating learning and innovation and performance of the firm. However, it stays unclear which factors are the most prominent facilitators or inhibitors of learning and innovation. This study provides directions for designing the workplace in order to stimulate on-the-job learning by employees, and by this, to organisational innovation. A range of both individual and organisational factors seems to be the building blocks of routes to workplace learning and innovation. Notwithstanding the way an organisation implement these routes and, also, measures the outcomes, it stays clear that designing for learning and innovation is beneficial for organisations in terms of their sustainable competitive advantage. Based on a literature review, we selected the most important organisational aspects to focus on in order to encourage learning and innovation in organisations. Furthermore, we derived from interviews with Dutch managers in what way and in what extent these aspects can be recognised in their organisations. Finally, various ways in which organisations can design the workplace for learning and innovation are discussed and suggestions for possible new directions are given. |
| Keywords: | workplace; innovation; performance |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:vuarem:2004-12&r=bec |
| By: | Bossink, Bart A.G. (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics) |
| Abstract: | Various drivers of construction innovation are distinguished and classified in four distinctive categories: environmental pressure, technological capability, knowledge exchange, and boundary spanning. Innovation drivers in these categories are active at the transfirm, intrafirm, and interfirm level in the network of organizations in the construction industry. Empirical research in the Dutch construction industry illustrates that the innovation drivers are used by managers of the authorities, clients, architects, consultants, and contractors to stimulate and facilitate innovation processes. It also exemplifies that driving innovation on the transfirm, intrafirm, and interfirm level in the network of organizations is an opportunity for managers of both public and private organizations to develop, improve, and renew: their organizations' positions in the market, the quality of their organizations' projects, and the cooperative structure of the industry as a whole. |
| Keywords: | Construction industry; Netherlands; Innovation |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:vuarem:2004-15&r=bec |
| By: | Michel Normandin; Pascal St-Amour |
| Abstract: | This paper analyzes the important time variation in U.S. aggregate portfolio allocations. To do so, we first use flexible descriptions of preferences and investment opportunities to derive optimal decision rules that nest tactical, myopic, and strategic portfolio allocations. We then compare these rules to the data through formal statistical analysis. Our main results reveal that i) purely tactical and myopic investment behaviors are unambiguously rejected, ii) strategic portfolio allocations are strongly supported, and iii) the Fama-French factors best explain empirical portfolio shares. |
| Keywords: | portfolio; factorial pricing; dynamic hedging |
| JEL: | G11 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:05.03&r=bec |
| By: | Graaff, Thomas de (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics) |
| Abstract: | This paper offers a review of the scientific evidence regarding the relation between ICT and travel in general and ICT and commuting in particular. It focuses on the issue of teleworking at home and ignores other interesting phenomena as teleworking centers. The conclusions can be summarized as follows. In the short run, ICT and commuting are to be regarded as weak substitutes, although the relation differs across population groups and parts of the day. If total travel is taken into account, then the relation becomes less clear. However, there also seems to be substitution between non-commute travel and teleworking. This indicates particular recommendations for both environmental and traffic policy. The results are further illustrated by an empirical application from the Netherlands. |
| Keywords: | ICT; travel; commuting; teleworking |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:vuarem:2004-16&r=bec |
| By: | Zarco-Jasso, Hugo (IESE Business School) |
| Abstract: | This paper considers the relationships between public and private organizations entering into public-private partnerships (PPPs) within the context of New Public Management (NPM). After offering a brief discussion of similarities and differences between public and private organizations and their relationships, it provides a short overview of how PPPs are organized in practice. Through elaborating on three dimensions of differentiation between public and private organizations -ownership, funding and control- it proposes a matrix model for identifying a suitable "dimensional mix" for PPP contracts. |
| Keywords: | Public-private partnerships; hybrid organizations; contractual choices; qualitative comparative analysis; |
| Date: | 2005–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0584&r=bec |
| By: | Alvarez, Jose L. (Instituto de Empresa); Ricart, Joan E. (IESE Business School) |
| Abstract: | The purpose of this paper is to analyse the role of consultants, professional service firms or knowledge intermediaries in articulating the collective action of shareholders. The regulatory background is the current proposals for the reform of General Meetings of Shareholders in Spain. General Meetings are particularly revealing of shareholder activism, as they are the forum in which shareholders' actions can be most effective. We believe that our arguments are, to a very large extent, equally applicable to other European countries, as these proposals have been put forward in Spain within the context of the wider governance reforms promoted by the Winter Report in Europe and other national and supranational regulatory efforts. |
| Keywords: | shareholders meetings; corporate governance; consultants; |
| Date: | 2005–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0590&r=bec |
| By: | Sanchez, Ron (Copenhagen Business School) |
| Abstract: | This paper investigates several issues regarding the nature, domain, conceptual foundations, and practical challenges of knowledge management and organizational learning. The paper first identifies and contrasts two fundamental philosophical orientations to knowledge management -- the personal knowledge orientation and the organizational knowledge orientation -- and illustrates the distinctive kinds of knowledge management practices that result from the two orientations. It then summarizes three essential organizational processes in knowledge management: (i) maintaining learning loops in all organizational processes, (ii) systematically disseminating knowledge throughout an organization, and (iii) applying knowledge wherever it can be used in an organization. A general model of organizational learning -- the Five Learning Cycles model -- is introduced to represent how individuals, groups, and the overall organization are linked in an organizational learning process. Key challenges in managing each of the Five Learning Cycles are discussed, and examples of appropriate managerial interventions are proposed for each learning cycle. Concluding comments suggest how knowledge management processes reflect a fundamental shift in management thinking and practice from traditional concepts of command and control to more contemporary concepts of facilitation and empowerment. |
| Keywords: | Knowledge management; Organizational learning; Learning cycles |
| Date: | 2005–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhb:lufewp:2005_003&r=bec |
| By: | Velamuri, Rama (IESE Business School); Venkataraman, Sankaran (Darden Graduate School of Business Administration) |
| Abstract: | The normative foundations of the investor centered model of corporate governance, represented in mainstream economics by the nexus-of-contracts view of the firm, have come under attack, mainly by proponents of normative stakeholder theory. We argue that the nexus-of-contracts view is static and limited due to its assumption of price-output certainty. We attempt a synthesis of the nexus-of-contracts and the Knightian views, which provides novel insights into the normative adequacy of the investor-centered firm. Implications for scholarship and management practice follow from our discussion. |
| Keywords: | Theory of the firm; corporate governance; entrepreneurship; business ethics; stakeholder theory; |
| Date: | 2005–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0591&r=bec |
| By: | Elg, Ulf (Department of Business Administration, School of Economics and Management, Lund University) |
| Abstract: | Previous research demonstrates that a firm’s market orientation is influ-enced by network factors, but few regard market orientation as an inter-firm phe-nomenon, i.e. as a part of cooperative inter-firm activities and relationships. The paper suggests inter-firm market orientation as an approach for studying this. It is based on Kohli and Jaworski’s three original components, but their meaning within an interorganizational relationship is modified and dimensions that enable us to systematically analyse inter-firm market orientation are identified empiri-cally. The results are based on a qualitative study on supplier-retailer relationships in Sweden, Italy and the UK. Four dimensions are found to be especially relevant and propositions are presented concerning how they influence the overall degree of inter-firm MO. |
| Keywords: | Market orientation; inter-firm relationships; cooperation; ydistribu-tion channels; food sector |
| Date: | 2005–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhb:lufewp:2005_006&r=bec |
| By: | Zetterberg, Johnny (IFAU - Institute for Labour Market Policy Evaluation) |
| Abstract: | This paper investigates the impact on earnings of non-cognitive ability, measured in terms of individuals’ 'self-esteem' on earnings. Starting with the pre-market factor approach suggested by Neal & Johnson (1996) a main finding is that measures of relative self-esteem along with cognitive ability are positively correlated with earnings. The analysis also reveals that the returns to cognitive and non-cognitive ability vary over the earnings-distribution: the returns are larger at higher levels of earnings than at low levels. While qualitatively robust, the effects decrease in magnitude when an extended version of the pre-market factor model is used. |
| Keywords: | Incentive-influencing preferences; cognitive ability; non-cognitive ability; relative and absolute self-esteem; earnings distribution |
| JEL: | J31 M54 |
| Date: | 2005–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2005_016&r=bec |
| By: | Dong, Fengxia |
| Abstract: | The paper first presents a 10-year outlook for major Asian dairy markets (China, India, Indonesia, Japan, South Korea, Malaysia, the Philippines, Thailand, and Vietnam) based on a world dairy model. Then, using Heien and Wessells’s technique, dairy product consumption growth is decomposed into contributions generated by income growth, population growth, price change, and urbanization and these contributions are quantified. Using the world dairy model, the paper also analyzes the impacts of alternative assumptions of higher income levels and technology development in Asia on Asian dairy consumptions and world dairy prices. The outlook projects that Asian dairy consumption will continue to grow strongly in the next decade. The consumption decomposition suggests that the growth would be mostly driven by income and population growth and, as a result, would raise world dairy prices. The simulation results show that technology improvement in Asian countries would dampen world dairy prices and meanwhile boost domestic dairy consumption. |
| Date: | 2005–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12379&r=bec |
| By: | Heather Antecol (Claremont McKenna College and IZA Bonn); Deborah Cobb-Clark (Australian National University and IZA Bonn) |
| Abstract: | Our results indicate that two-thirds of active-duty military personnel report experiencing offensive racial behaviors in the previous 12 months, while approximately one in ten report threatening racial incidents or career-related discrimination. Racial harassment significantly increases job dissatisfaction irrespective of the form of harassment considered. Furthermore, threatening racial incidents and career-related discrimination heighten intentions to leave the military, though there is no significant effect of racially offensive behavior on the intended job change of active-duty personnel. Finally, our results point to the importance of accounting for unobserved individual- and job-specific heterogeneity when assessing the consequences of racial harassment. In particular, single-equation models result in estimated effects of racial harassment on job satisfaction and intended job change that are generally understated. |
| Keywords: | job satisfaction, racial harassment, quits, military employment |
| JEL: | J16 J28 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1636&r=bec |
| By: | Wolter Hassink (Utrecht University and IZA Bonn); Pierre Koning (Utrecht University) |
| Abstract: | This paper investigates the effectiveness of a monthly lottery in reducing sick leave among workers in a manufacturing firm. Conditions of participation are not having reported sick in the previous three months and not having won the lottery earlier. It turns out that the lottery results in a decrease in the rate of sick leave of 1.6 percentage point. From the perspective of the firm, the lottery is found to be highly beneficial - that is, the benefits associated with the decrease in the sick leave rate exceed the costs of the lottery. Workers seem to be primarily driven by the first upcoming lottery. After winning the lottery, winners resume their previous (rate of) absence. |
| Keywords: | absenteeism, sick leave, incentives, lottery |
| JEL: | J22 J32 M52 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1644&r=bec |