nep-bec New Economics Papers
on Business Economics
Issue of 2006‒07‒15
eleven papers chosen by
Christian Calmes
Universite du Quebec en Outaouais

  1. Do european business cycles look like one ? By Maximo Camacho; Gabriel Perez-Quiros; Lorena Saiz
  2. Technology Licensing to a Rival By Boivin, Caroline; Langinier, Corinne
  3. Forecasting Irregularly Spaced UHF Financial Data: Realized Volatility vs UHF-GARCH Models By Francois-Éric Racicot; Raymond Théoret; Alain Coen
  4. Hidden Talents: Partnerships with Pareto-Improving Private Information By Andrew F. Daughety; Jennifer F. Reinganum
  5. Learning, structural instability and present value calculations By M. Hashem Pesaran
  6. Failure to Delegate and Loss of Control By Tymofiy Mylovanov
  7. Complete Markets, Enforcement Constraints and Intermediation By Arpad Abraham
  8. Observable Reputation Trading By Hendrik Hakenes; Martin Peitz
  9. Explaining company-level influences on individual career choices: towards a transitional career pattern? Evidence from belgium By Soens, N.; De Vos, A.; Buyens, D.
  10. Developing Competences Designed to Create Customer Value By Anna Lund Jepsen; Svend Ole Madsen
  11. Linking job motivating potential to frontline employee attitudes and performance: testing the mediating role of psychological empowerment By Dewettinck, K.; Buyens, D.

  1. By: Maximo Camacho (Universidad de Murcia); Gabriel Perez-Quiros (Prime Minister's economic bureau); Lorena Saiz (Bank of Spain)
    Date: 2006–07–04
  2. By: Boivin, Caroline; Langinier, Corinne
    Abstract: Licensing a new technology implies introducing competition into the market. This has a negative effect on the profit of the incumbent if the demand remains unchanged. However, because of the novel content of an innovation, consumers may have different perceptions of the value of a good depending on the market structure. Thus, the introduction of a competitor into the market may enhance demand, and consequently have a positive effect on the profit of the incumbent. In a simple setting, we show that the incumbent may decide to license her technology even in the absence of a royalty when the positive effect outweighs the negative one.
    JEL: L1
    Date: 2005–09–19
  3. By: Francois-Éric Racicot (Département des sciences administratives, Université du Québec (Outaouais) et LRSP); Raymond Théoret (Département de stratégie des affaires, Université du Québec (Montréal)); Alain Coen (Département de stratégie des affaires, Université du Québec (Montréal))
    Abstract: A very promising literature has been recently devoted to the modeling of ultra-high-frequency (UHF) data. Our first aim is to develop an empirical application of Autoregressive Conditional Duration GARCH models and the realized volatility to forecast future volatilities on irregularly spaced data. We also compare the out sample performances of ACD GARCH models with the realized volatility method. We propose a procedure to take into account the time deformation and show how to use these models for computing daily VaR.
    Keywords: Realized volatility, Ultra High Frequency GARCH, time deformation, financial markets, Daily VaR.
    JEL: C22 C53 G14
    Date: 2006–07–06
  4. By: Andrew F. Daughety (Department of Economics and Law School, Vanderbilt University); Jennifer F. Reinganum (Department of Economics and Law School, Vanderbilt University)
    Abstract: Can the presence of private information in a transaction yield a Pareto-improvement over complete information? In this paper we show that the combination of multi-agent simultaneous signaling of private information, and the nature of the strategic interaction, can result in non-cooperative equilibria which are Pareto superior to the complete-information non-cooperative equilibrium. Our application involves two agents who become partners in the production of a product (or the undertaking of a project). The partners’ efforts are complementary and, in addition to its direct contribution to product quality, observable (but non-verifiable) effort serves as a signal for the unobservable component, talent; each partner is privately informed only about her own talent. Because the partners share the payoff from the project, each is tempted to shirk in providing effort. However, the need for each partner to signal the quality of the product to potential buyers serves as a credible commitment to provide greater effort. We find that this non-cooperative, simultaneous signaling need not be wasteful, and can actually be welfare-enhancing in the strongest sense: there is a portion of the parameter space wherein incomplete information is Pareto-improving relative to the complete-information non-cooperative outcome for all possible non-degenerate prior distributions over the private information. Therefore, the combination of simultaneous-move strategic interaction and incomplete information can lead to conditions wherein the “problem” of adverse selection actually mitigates the problem of moral hazard.
    Keywords: Private information, welfare, moral hazard, adverse selection, signaling, partnership
    JEL: D82 L15 L20 K19
    Date: 2006–06
  5. By: M. Hashem Pesaran (University of Cambridge)
    Keywords: present value, stock prices, structural breaks, Bayesian learning
    JEL: C11 G12 G22
    Date: 2006–07–04
  6. By: Tymofiy Mylovanov (Department of Economics, University of Bonn, Adenauerallee 24-42, 53113 Bonn.
    Abstract: This paper provides an explanation for the frequently observed phenomenon of “inefficient micromanagement”. I show that a supervisor may get comprehensively involved into activities of a subordinate although a better option of delegation is available. This inefficiency persists in the absence of conflict of preferences and even as the cost of delegation becomes zero. The paper also demonstrates that imposing constraints on communication with a subordinate can be beneficial for a superior.
    Date: 2004–10
  7. By: Arpad Abraham (University of Rochester)
    Keywords: Complete markets, Enforcement Constraints, Intermediation
    JEL: E44 D52 G12
    Date: 2006–07–04
  8. By: Hendrik Hakenes (MPI for Research on Collective Goods, Kurt-Schumacher-Str. 10, 53113 Bonn, Germany,; Martin Peitz (School of BA, International University in Germany, 76646 Bruchsal, Germany,
    Abstract: Is the reputation of a firm tradable when the change in ownership is observable? We consider a competitive market in which a share of owners must retire in each period. New owners bid for the firms that are for sale. Customers learn the owner’s type, which reflects the quality of the good or service provided, through experience. After observing an ownership change they may want to switch firm. However, in equilibrium, good new owners buy from good old owners and retain high-value customers. Hence reputation is a tradable intangible asset, although ownership change is observable.
    Keywords: Reputation, ownership change, intangible assets, theory of the firm.
    JEL: D40 D82 L14 L15
    Date: 2003–07
  9. By: Soens, N.; De Vos, A.; Buyens, D.
    Abstract: Although current career literature continues to build on the new career concepts that reflect a shift from ‘traditional’ towards ‘transitional’ career patterns, recent research presents a different reality. In Belgium, among other countries, the traditional career pattern remains the dominant picture on the labour market. This study seeks to explain this discrepancy between theory and practice by focussing on the meso-organizational influences on career choices of individuals. Drawing on Schmid’s model of a transitional labour market, this qualitative empirical research explores the factors at company level that individuals point to as obstructing or facilitating career transitions. Results show that the existence of obstructing determinants at company level is one of the reasons why the ‘transitional career’ hasn’t become reality on the Belgian labour market yet. Implications for practitioners and policy makers are discussed.
    Date: 2006–07–04
  10. By: Anna Lund Jepsen (Department of Environmental and Business Economics, University of Southern DenmarkTitle: The Political Economy of Climate Change Policy in the EU: Auction and Grandfathering); Svend Ole Madsen (Department of Environmental and Business Economics, University of Southern Denmark)
    Abstract: This paper focuses on how small, specialized suppliers can gain competitive advantage by acting as a potential for their scale intensive producing customers in achieving competitive advantage. Of special interest is how a shared under-standing of ‘value’ for the customer is obtained, transferred and implemented in the specialized supplier’s production of process equipment. The study draws on theory on networks and specialized suppliers as well as interviews with key in-formants in three specialized supplier companies for the aluminum industry. An important finding is that the constellation of the specialized supplier’s network changes as the project moves from planning to production. With these changes, the role of specialized suppliers in the value creation process also changes. It seems to be an important competence for small, specialized supplier to be able to draw on and manage this network in their value creation process.
    Date: 2006–03
  11. By: Dewettinck, K.; Buyens, D.
    Abstract: In this study, we relate job motivating potential to frontline employee job satisfaction, affective commitment and performance levels and test the mediating role of psychological empowerment. Based on a sample of 1129 employee – supervisor dyads, we found that employee psychological empowerment fully mediates the relationship between job motivating potential and the outcome variables. Our findings confirm the importance of job design approaches to empowering employees. Next to proposing potential avenues for further research, we discuss some suggestions on how to put job redesign strategies into practice.
    Keywords: empowerment, job motivating potential, employee performance, mediation
    Date: 2006–07–07

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