|
on Central and Western Asia |
| By: | Felix Patzelt; Klaus Pawelzik |
| Abstract: | Prices in financial markets exhibit extreme jumps far more often than can be accounted for by external news. Further, magnitudes of price changes are correlated over long times. These so called stylized facts are quantified by scaling laws similar to, for example, turbulent fluids. They are believed to reflect the complex interactions of heterogenous agents which give rise to irrational herding. Therefore, the stylized facts have been argued to provide evidence against the efficient market hypothesis which states that prices rapidly reflect available information and therefore are described by a martingale. Here we show, that in very simple bidding processes efficiency is not opposed to, but causative to scaling properties observed in real markets. Thereby, we link the stylized facts not only to price efficiency, but also to the economic theory of rational bubbles. We then demonstrate effects predicted from our normative model in the dynamics of groups of real human subjects playing a modified minority game. An extended version of the latter can be played online at seesaw.neuro.uni-bremen.de. |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1303.2044&r=cwa |
| By: | Sebastian M. Krause; Stefan Boerries; Stefan Bornholdt |
| Abstract: | The average economic agent is often used to model the dynamics of simple markets, based on the assumption that the dynamics of many agents can be averaged over in time and space. A popular idea that is based on this seemingly intuitive notion is to dampen electric power fluctuations from fluctuating sources (as e.g. wind or solar) via a market mechanism, namely by variable power prices that adapt demand to supply. The standard model of an average economic agent predicts that fluctuations are reduced by such an adaptive pricing mechanism. However, the underlying assumption that the actions of all agents average out on the time axis is not always true in a market of many agents. We numerically study an econophysics agent model of an adaptive power market that does not assume averaging a priori. We find that when agents are exposed to source noise via correlated price fluctuations (as adaptive pricing schemes suggest), the market may amplify those fluctuations. In particular, small price changes may translate to large load fluctuations through catastrophic consumer synchronization. As a result, an adaptive power market may cause the opposite effect than intended: Power fluctuations are not dampened but amplified instead. |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1303.2110&r=cwa |
| By: | Gareth W. Peters; Rodrigo S. Targino; Pavel V. Shevchenko |
| Abstract: | We set the context for capital approximation within the framework of the Basel II / III regulatory capital accords. This is particularly topical as the Basel III accord is shortly due to take effect. In this regard, we provide a summary of the role of capital adequacy in the new accord, highlighting along the way the significant loss events that have been attributed to the Operational Risk class that was introduced in the Basel II and III accords. Then we provide a semi-tutorial discussion on the modelling aspects of capital estimation under a Loss Distributional Approach (LDA). Our emphasis is to focus on the important loss processes with regard to those that contribute most to capital, the so called high consequence, low frequency loss processes. This leads us to provide a tutorial overview of heavy tailed loss process modelling in OpRisk under Basel III, with discussion on the implications of such tail assumptions for the severity model in an LDA structure. This provides practitioners with a clear understanding of the features that they may wish to consider when developing OpRisk severity models in practice. From this discussion on heavy tailed severity models, we then develop an understanding of the impact such models have on the right tail asymptotics of the compound loss process and we provide detailed presentation of what are known as first and second order tail approximations for the resulting heavy tailed loss process. From this we develop a tutorial on three key families of risk measures and their equivalent second order asymptotic approximations: Value-at-Risk (Basel III industry standard); Expected Shortfall (ES) and the Spectral Risk Measure. These then form the capital approximations. |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1303.2910&r=cwa |
| By: | Shilei Wang |
| Abstract: | This work's purpose is to understand the dynamics of limit order books in order-driven markets. We try to illustrate a dynamical trading mechanism attached to the microstructure of limit order markets. We capture the iterative nature of trading processes, which is critical in the dynamics of bid-ask pairs and the switching laws between different traders' types and their orders. In general, after introducing the atomic trading scheme, we study a general iterated trading process in both combinatorial and stochastic ways, and state a few results on the stability of a dynamical trading system. We also study the controlled dynamics of the spread and the mid-price in an iterated trading system, when their movements, generated from the dynamics of bid-ask pairs, are assumed to be restricted within some extremely small ranges. |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1303.3133&r=cwa |
| By: | Jan Kallsen; Johannes Muhle-Karbe |
| Abstract: | We investigate the general structure of optimal investment and consumption with small proportional transaction costs. For a safe asset and a risky asset with general continuous dynamics, traded with random and time-varying but small transaction costs, we derive simple formal asymptotics for the optimal policy and welfare. These reveal the roles of the investors' preferences as well as the market and cost dynamics, and also lead to a fully dynamic model for the implied trading volume. In frictionless models that can be solved in closed form, explicit formulas for the leading-order corrections due to small transaction costs obtain. |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1303.3148&r=cwa |
| By: | Ioannis Anastasiou; Anastasios Xepapadeas; Vassilios Babalos; Marva Stithou (University of Stirling, UK); Osiel Davila (AUEB-RC); Phoebe Koundouri; Antonios Antypas (Department of Banking and Financial Management, University of Piraeus); Nikolaos Kourogenis (Department of Banking and Financial Management, University of Piraeus.); Aris Mousoulides; Marianna Mousoulidou; Nick Ahrensberg; Barbara Zanuttigh; Fabio Zagonari; Manfred A. Lange; Carlos Jimenez; Elena Charalambous; Lars Rosen; Andreas Lindhe; Jenny Norrman; Tommy Norberg; Tore Soderqvist; Aksel Pedersen; Dimitris Troianos; Athanasios Frentzos; Yukiko Krontira; Inigo Losada; Pedro Diaz-Simal; Raul Guanche; Mark de Bel; Wei He; Sedat Kabdasli; Nilay Elginoz; Elif Oguz; Taylan Bagci; Bilge Bas; Matteo Cantu�; Matteo Masotti; Roberto Suffredini; Marian Stuiver |
| Abstract: | In this paper a Methodology for Integrated Socio-Economic Assessment (MISEA) of the viability and sustainability of different designs of Multi-Use Offshore Platforms (MUOPs) is presented. MUOPs are designed for multi-use of ocean space for energy extraction (wind power production and wave energy), aquaculture and transport maritime services. The developed methodology allows identification, valuation and assessment of: the potential range of impacts of a number of feasible designs of MUOP investments, and the likely responses of those impacted by the investment project. This methodology provides decision-makers with a valuable decision tool to assess whether a MUOP project increases the overall social welfare and hence should be undertaken, under alternative specifications regarding its design, the discount rate and the stream of net benefits, if a Cost-Benefit Analysis (CBA) is to be followed or sensitivity analysis of selected criteria in a Multi-Criteria Decision Analysis (MCDA) framework. Such a methodology is also crucial for facilitating of the implementation of the Marine Strategy Framework Directive (MSFD adopted in June 2008) that aims to achieve good environmental status of the EU's marine waters by 2020 and to protect the resource base upon which marine-related economic and social activities depend. According to the MSFD each member state must draw up a program of cost-effective measures, while prior to any new measure an impact assessment which contains a detailed cost-benefit analysis of the proposed measures is required. |
| Keywords: | Multi-Use Offshore Platforms, Integrated Socio-Economic Assessment, Marine Strategy Framework Directive, Program of Measures, Cost-Benefit Analysis |
| JEL: | Q25 Q42 |
| Date: | 2013–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:aue:wpaper:1304&r=cwa |
| By: | Phoebe Koundouri; Riccardo Scarpa; Mavra Stithou |
| Abstract: | The valuation method of Choice Experiments (CEs) is often used for the economic valuation of natural areas with several nonmarket features that are either degraded or under-degradation. This method can be used to obtain estimates of Willingness-to-Pay (WTP) for the sustainability of several features of natural ecosystems. In particular, the CE method is a survey-based nonmarket valuation technique which can be used to estimate the total economic value of an environmental good in the form of a stock or a service flow as well as the value of its component attributes. Particularly, the bundle of improvements that have been valued in the Asopos water catchment and presented in this chapter is a mixture of use and non-use values. These include: (a) environmental conditions described in terms of ecological status in all water bodies of the catchment, (b) impact on the local economy in terms of tourism/recreation, demand for local production and cost of living for households and (c) impact on human health described as availability of water with a quality and quantity sufficient for satisfying different local uses. It should be also noted that the survey has been administered in samples of respondents from both the Asopos catchment area (more rural) and the Athens area (more urban), since there is the belief that residents of the Asopos River Basin (RB) are not the only ones who would benefit from the environmental improvements taking place in Asopos area. From a broader policy perspective the goal is to derive estimates of values to inform a cost-effectiveness analysis for the determination of the optimal program of measures as suggested in the content of Article 11 of Water Framework Directive (WFD). |
| Date: | 2013–03–06 |
| URL: | http://d.repec.org/n?u=RePEc:aue:wpaper:1314&r=cwa |
| By: | Luis M. Abadie; Ibon Galarraga; Dirk Rübbelke |
| Abstract: | In this paper we evaluate two alternative CCS technologies of a coal-fired power plant from an investor’s point of view. The first technology uses CO2 for enhanced oil recovery (EOR) paired with storage in deep saline formations (DSP) and the second one just stores CO2 in DSF. For projects of this type there are many sources of risk, and three sources of uncertainty stand out: the price of electricity, the price of oil and the price of carbon allowances. In this paper we develop a general stochastic model that can be adapted to other projects such as enhanced gas recovery (EGR) or industrial plants that use CO2 for either EOR or EGR with CCS. The model is calibrated with UK data and applied to help understand the conditions that generate the incentives needed for early investments in these technologies. Additionally, we analyse the risks of these investments. |
| Keywords: | carbon capture and storage; enhanced oil recovery; power plants; stochastic model; futures markets; real options. |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:bcc:wpaper:2013-07&r=cwa |
| By: | David Pérez-Castrillo; Marilda Sotomayor |
| Abstract: | We prove a "General Manipulability Theorem" for general one-to-one two-sided matching markets with money. This theorem implies two folk theorems, the Manipulability Theorem and the General Impossibility Theorem, and provides a sort of converse of the Non-Manipulability Theorem (Demange, 1982, Leonard, 1983, Demange and Gale, 1985). |
| Keywords: | matching, competitive equilibrium, optimal competitive equilibrium, manipulability, competitive equilibrium mechanism, competitive equilibrium rule |
| JEL: | C78 D78 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:681&r=cwa |
| By: | Matthias Kräkel |
| Abstract: | The paper analyzes how the choice of organizational structure leads to the best compromise between controlling behavior based on authority rights and minimizing costs for implementing high efforts. Concentrated delegation and hierarchical delegation turn out to be never an optimal compromise. If the CEO is more efficient than the division heads (i.e., the CEO's costs from exerting high effort are smaller than those of the division heads), the owner will prefer full delegation to the divisions to replace high incentive pay for motivating the division heads by incentives based on private benefits of control. In that situation, the importance of cooperative behavior between the firm's divisions determines whether decentralization or cross-authority delegation is the optimal form of full delegation. If, however, the division heads are more efficient than the CEO, then centralization or partial delegation can also be optimal. |
| Keywords: | authority, centralization, contracts, decentralization, moral hazard |
| JEL: | D21 D23 D86 L22 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:bon:bonedp:bgse03_2013&r=cwa |
| By: | Andrew Beath (Office of the Chief Economist for East Asia and the Pacific, World Bank); Fotini Christia (Department of Political Science, Massachusetts Institute of Technology); Ruben Enikolopov (Institute for Advanced Study and New Economic School) |
| Abstract: | In societies with widespread gender discrimination, development programs with gender quotas are considered a way to improve women’s economic, political, and social status. Using a randomized field experiment across 500 Afghan villages, we examine the effects of a development program that mandates women’s community participation. We find that even in a highly conservative context like Afghanistan, such initiatives improve female participation in some economic, social, and political activities, including increased mobility and income generation. They, however, produce no change in more entrenched female roles linked to family decision-making or in attitudes towards the general role of women in society. |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:cfr:cefirw:w0191&r=cwa |
| By: | Norma B. Coe; Matthew S. Rutledge |
| Abstract: | Much as in previous recessions, the number of applications to public disability insurance programs increased sharply during the Great Recession. We find that the composition of applicants also changes across business cycles. For example, applicants during economic downturns, and especially during the Great Recession, are younger, better educated, higher income, and more likely to have recent work experience. However, we find only mixed evidence supporting the theory that the increase in applications in downturns is caused by healthier applicants who apply to disability programs only because they are unemployed. We formally decompose how the differences among the applicants across the business cycle – both from peak to trough and from trough to trough – contribute to the increased probability of applying for, and being awarded, benefits. We find that changing demographics and unemployment rates explain less than half of the increase in the application rate and only one quarter of the increase in the awards to applicants (the allowance rate) between the 2004-2006 expansion and the Great Recession. Further, these same factors predict a fall in the award rate (among eligible individuals), in contrast to the increase observed in the data. Together with the fact that there have been no programmatic changes in the disability programs in the 2000s, these results suggest there have been fundamental changes over the last decade in the way that people apply to disability and in the way these applications are evaluated that cannot be explained by observable differences. |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2013-5&r=cwa |
| By: | Youyou BAENDE BOFOTA (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | This paper presents an empirical analysis of the relationship between social capital and children’ educational outcomes in Tanzania, using panel data from the Kagera Health and Development Survey (KHDS). By exploiting the panel structure of the data, we use several econometric techniques - fixed effect, first difference and 2SLS - to address social capital endogeneity issue and omitted variable bias. We find evidence that social capital available in the family affects significantly student attainment and that the magnitudes are large enough to explain a substantial proportion of variation in children schooling in Tanzania in the short term. More importantly, this positive impact lasts over the long term. |
| Keywords: | Social capital, Education, Developing countries, Tanzania |
| Date: | 2013–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2013003&r=cwa |
| By: | Hélène LATZER (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | This paper introduces multi-quality firms within a Schumpeterian framework. Featuring non-homothetic preferences and income disparities in an otherwise standard quality-ladder model, I indeed show that the resulting differences in the willingness to pay for quality among consumers generate both positive investments in R&D by industry leaders and positive market shares for more than one quality, hence allowing for the emergence of multi-product firms within a vertical innovation framework. This positive investment in R&D by incumbents is obtained with complete equal treatment in the R&D field between the incumbent patentholder and the challengers: in our framework, the incentive for a leader to invest in R&D stems from the possibility for an incumbent having innovated twice in a row to efficiently discriminate between rich and poor consumers displaying differences in their willingness to pay for quality. I hence exemplify a so far overlooked demand-driven rationale for innovation by incumbents. I am then also able to analyze the impact of inequality both on long-term growth and on the allocation of R&D activities between challengers and incumbents. I find that redistributive policies generally lead to an increase in the long-run growth rate, and to variations in the share of the overall R&D expenditures being undertaken by incumbents. |
| Keywords: | Growth, Innovation, Income inequality, Multi-Product firms |
| JEL: | O3 O4 F4 |
| Date: | 2013–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2013004&r=cwa |
| By: | Antonello E. Scorcu (Department of Economics, University of Bologna, Italy); Laura Vici (Department of Economics, University of Bologna, Italy)) |
| Abstract: | The role of economic factors, such as family income, the price of illegal reproductions of books, the enforcement rules and the expected penalties are considered the main determinants of the possible infringements of the copyright law. However, the comparison between individual economic gains and losses offers only a partial explanation, as also cultural individual habits and peer effects exert important influences. Using a unique dataset based on a survey conducted at the University of Bologna, Italy, this paper analyses empirically the relevance of socio-economic as well as cultural determinants in the decision process of using illegal copies of university textbooks. From a policy perspective, the analysis suggests that an effective enforcement of the copyright rules should take into account the cultural behavior and students’ learning practices. |
| Keywords: | Copyright, textbooks, illegal copying |
| JEL: | Z11 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:cue:wpaper:awp-01-2013&r=cwa |
| By: | Jonathan M. Harris |
| Abstract: | In the wake of the global financial crisis, Keynesianism has had something of a revival. In practice, governments have turned to Keynesian policy measures to avert economic collapse. In the theoretical area, mainstream economists have started to give grudging attention to Keynesian perspectives previously dismissed in favor of New Classical theories. This theoretical and practical shift is taking place at the same time that environmental issues, in particular global climate change, are compelling attention to alternative development paths. Significant potential now exists for “Green Keynesianism” -- combining Keynesian fiscal policies with environmental goals. But there are also tensions between the two perspectives of Keynesianism and ecological economics. Traditional Keynesianism is growth-oriented, while ecological economics stresses limits to growth. Expansionary policies needed to deal with recession may be in conflict with goals of reducing resource and energy use and carbon emissions. In addition, long-term deficit and debt problems pose a threat to implementation of expansionary fiscal policies. This paper explores the possibilities for Green Keynesianism in theory and practice, and suggests that these apparent contradictions can be resolved, and that Green Keynesian policies offer a solution to both economic stagnation and global environmental threats. |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:dae:daepap:13-02&r=cwa |
| By: | Figueiredo, Paulo N. (Brazilian School of Public and Business Administration, Getulio Vargas Foundation); Cohen, Marcela (Brazilian School of Public and Business Administration, Getulio Vargas Foundation); Gomes, Saulo (Brazilian School of Public and Business Administration, Getulio Vargas Foundation) |
| Abstract: | Although much has been written about organizational-level learning, there is a dearth of empirical studies that explore the role of changes in the nature of firm-centred learning mechanisms in affecting inter-firm differences and similarities in the accumulation of innovation capabilities, especially among firms from emerging economies, known as latecomers. By examining the relationships between these issues based on fieldwork evidence from 13 natural resource-processing firms in Brazil (1950-2000s), this study found that: (1) firms that combined the use of external and internal learning mechanisms with increased intensity and quality achieved higher innovation capability levels than firms that used these learning mechanisms with limited frequency and unchanged quality over time; (2) the relative importance of both external and internal learning mechanisms changed as firms' capabilities approached world-leading levels; (3) some combinations of external and internal learning mechanisms were associated with the attainment of particular innovation capability levels. Therefore, if latecomer firms expend limited efforts in using and deliberately changing the intensity and, mainly, the quality of both external and internal learning mechanisms over time, they will deepen their innovation capabilities slowly and will remain innovation 'followers' rather than becoming world-leading innovators. Using a novel approach that explores the relationship between latecomer firms' innovation capability-building and the extent of changes in the underlying learning mechanisms, this paper furthers our understanding of the nature and dynamics of learning and its role as a primary source of firms' international innovation performance. It also challenges recent approaches that seem to over emphasize open learning processes and post-Chandlerian forms of learning as the leading sources of firms' innovation capabilities. |
| Keywords: | Innovation capability building, learning mechanisms, latecomer firms, natural resources, multiple case-study, Brazil |
| JEL: | O12 O32 O33 M10 Q20 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2013007&r=cwa |
| By: | Xavier Fontaine; Katsunori Yamada |
| Abstract: | The caste issue dominates a large part of India's social and political life. Caste shapes Indians' identities, and strong tensions exist between castes. This paper evaluates how caste-based comparisons may be exacerbated in such a conflictual context. Using subjective well-being data from an original panel survey, together with a national representative survey on expenditure, we find that both within-caste comparisons and between-rival-caste comparisons reduce well-being. Between-caste comparisons affect well-being three times more than within-caste comparisons. In absolute value, an increase in rival castes' expenditure affects well-being as much as own expenditure. These findings highlight the strength of comparisons between rival castes. Yet this comparison scheme turns out to be asymmetrical: only low castes care about the economic successes of their rivals, and only high-caste Indians compete with their fellows. |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:0867&r=cwa |
| By: | Reza Siregar (Asian Development Bank Institute (ADBI)); Akkharaphol Chabchitrchaidol |
| Abstract: | The Chiang Mai Initiative Multilateralisation (CMIM) and the ASEAN+3 Macroeconomic Research Office (AMRO), established in March 2010 and May 2011, respectively, have made substantial headway. But despite the rapid progress, a series of fundamental questions have been raised, particularly about the size of the CMIM facility. Although CMIM funding was doubled to $240 billion, effective since May 2012, the swap amount has frequently been criticized as insufficient. Another fundamental issue that still needs to be agreed upon is the CMIM’s role and how it fits in among existing regional and global financing facilities. AMRO’s surveillance work is seen as vital to the overall success of the CMIM in regional financial cooperation. As other multilateral institutions involved in surveillance work have experienced, effective surveillance to support regional financial cooperation is a complicated task, strewn with obstacles. The primary task of this paper is to suggest possible areas in which the effectiveness of the CMIM and AMRO may be increased, despite constraints and limitations. |
| Keywords: | CMIM, AMRO, Chiang Mai Initiative Multilateralization, ASEAN+3, regional financial cooperation |
| JEL: | E61 F15 F33 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:govern:23388&r=cwa |
| By: | Peter A. Petri (Asian Development Bank Institute (ADBI)); Fan Zhai |
| Abstract: | Most projections envision continued rapid growth in the members of the Association of Southeast Asian Nations (ASEAN), the People’s Republic of China (PRC), and India (collectively, ACI) over the next two decades. By 2030, they could quadruple their output, virtually eliminate extreme poverty, and dramatically transform the lives of their more than 3 billion citizens. The impact will be felt across the world. This study—a background paper to an Asian Development Bank report—used a Computable General Equilibrium model to examine the likely effects of the region's growth on trade, resources and the environment, as well as the implications of the many risks the region's growth path faces from its internal and external environment. |
| Keywords: | ASEAN, China, India, computable general equilibrium, economic growth |
| JEL: | F02 F13 F33 F53 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:macroe:23389&r=cwa |
| By: | M. Constanza Demmel (Universitat de València and ERI-CES); Juan A. Máñez (Universitat de València and ERI-CES); María E. Rochina-Barrachina (Universitat de València and ERI-CES); Juan A. Sanchis-Llopis (Universitat de València and ERI-CES) |
| Abstract: | The literature on firm level productivity in developed countries recognizes the important role played by firm innovation activities on the evolution of firm productivity. However, the literature on this topic for developing and emerging economies is scarcer and far from conclusive. The aim of this paper is to study the innovation-productivity link at the firm level for four Latin American countries (Argentina, Mexico, Colombia and Peru) for the manufacturing sector. The paper distinguishes between different innovations types such as process and product innovations. The data used have been drawn from the World Bank panel Enterprise Surveys, which provides data for these countries for the years 2006 and 2010. Our estimation strategy follows two-steps: first, we estimate TFP measures following De Loecker (2010) approach and Wooldridge (2009) estimation procedure (this allows us to compare results both considering an exogenous or endogenous Markov process for the dynamics of productivity); and, second, we use the estimated TFPs as dependent variables in several models with innovation activities as covariates, in order to disentangle the effects of those variables on the TFP. From our results we confirm that the most productive firms self-select into innovation activities under the endogenous Markov, driven by product innovations, only for Argentina and Mexico. Further, we obtain that there are returns to innovation in terms of productivity for all innovation types, under an exogenous or endogenous Markov process but, again, only for Argentina and Mexico. |
| Keywords: | innovation types, Total Factor Productivity (TFP), GMM, endogenous Markov |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1307&r=cwa |
| By: | Michael Hoel (University of Oslo); Aart de Zeeuw (Tilburg University) |
| Abstract: | For sufficiently low abatement costs many countries might undertake significant emission reductions even without any international agreement on emission reductions. We consider a situation where a coalition of countries does not cooperate on emission reductions but cooperates on the development of new, climate friendly technologies that reduce the costs of abatement. The equilibrium size of such a coalition, as well as equilibrium emissions, depends on the distribution across countries of their willingness to pay for emission reductions. Increased willingness to pay for emissions reductions for any group of countries will reduce (or leave unchanged) the equilibrium coalition size. However, the effect of such an increase in aggregate willingness to pay on equilibrium emissions is ambiguous. |
| Keywords: | Technology Agreement, Coalition Stability, Climate, International Agreement |
| JEL: | F42 O32 Q2 C72 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2013.07&r=cwa |
| By: | Jorge Alcalde-Unzu (Public University of Navarre, Department of Economics.); Maria Gomez-Rua (University of Vigo, Department of Statistics and Operations Research.); Elena Molis (Department of Economic Theory and Economic History, University of Granada.) |
| Abstract: | The cleaning up of waste present in transboundary rivers, which re- quires the cooperation of dierent authorities, is a problematic issue, espe- cially when responsibility for the discharge of the waste is not well-dened. Following Ni and Wang [12] we assume that a river is a segment divided into several regions from upstream to downstream. We show that when the transfer rate of the waste is unknown, the clean-up cost vector provides useful information for estimating some limits in regard to the responsi- bility of each region. We propose a cost allocation rule, the Upstream Responsibility rule, which takes into account these limits in distributing costs \fairly" and we provide an axiomatic characterization of this rule via certain properties based on basic ideas concerning the responsibility of regions. |
| Keywords: | Cost allocation; waste river; responsibility; characterization |
| JEL: | C71 D61 |
| Date: | 2013–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:gra:wpaper:13/03&r=cwa |
| By: | Carl S. Bonham (University of Hawaii Department of Economics); Katerina Peter Fuleky (University of Hawaii Department of Economics); Qianxue Zhao (University of Hawaii Economic Research Organizaion) |
| Abstract: | Tourism demand elasticities are central to marketing, forecasting and policy work, but the wide array of occasionally counterintuitive estimates produced by existing empirical studies implies that some of those results may be inaccurate. To improve the precision of estimates, it is natural to turn to the richness of panel data. However, panel estimation using non-stationary data requires careful attention to the likely presence of common shocks shared across the underlying macroeconomic variables and across regions. Several recently developed econometric tools for panel data analysis attempt to deal with such cross-sectional dependence. We apply the estimator of Pesaran (2006) and Kapetinos, Pesaran and Yamagata (2010) to obtain tourism demand elasticities in non-stationary heterogeneous dynamic panels subject to common factors. We study the extent to which tourism arrivals from the US Mainland to Hawaii are driven by fundamentals such as real personal income and the cost of the trip, and we nd that neglecting cross-sectional dependence in the data leads to spurious results. |
| Keywords: | Panel Cointegration, Cross-Sectional Dependence, Tourism Demand, Hawaii |
| JEL: | C23 C51 L83 R41 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:201303&r=cwa |
| By: | René Van Den Brink (Department of Econometrics and Tinbergen Institute - VU University); Agnieszka Rusinowska (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Frank Steffen (University of Liverpool Management School (ULMS) - University of Liverpool Management School) |
| Abstract: | Opinion leaders are actors who have some power over their followers as they are able to influence their followers' choice of action in certain instances. In van den Brink et al. (2011) we proposed a two-action model for societies with opinion leaders. We introduced a power and a satisfaction score and studied some common properties. In this paper we strengthen two of these properties and present two further properties, which allows us to axiomatize both scores for the case that followers require unanimous action inclinations of their opinion leaders to follow them independently from their own action inclinations. |
| Keywords: | Collective choice ; follower ; opinion leader ; power ; satisfaction ; axiomatization |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-00756720&r=cwa |
| By: | Julia Cagé (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole normale supérieure de Paris - ENS Paris - Institut national de la recherche agronomique (INRA), Harvard University - Harvard university (Cambridge, USA)); Dorothée Rouzet (Harvard University - Harvard university (Cambridge, USA), OECD - OECD) |
| Abstract: | Why do "made in"labels matter? We study the effect of firm and country reputation on exports when buyers cannot observe quality prior to purchase. Firm-level demand is determined by expected quality, which depends on both past experience with the good and the country of origin's reputation for quality. Asymmetric information acts as a barrier to entry for high-quality firms but facilitates sales by "fly-by-night"low-quality firms. We derive two types of steady-state equilibria with endogenous reputation. In a high-quality equilibrium, imperfect information does not hinder entry into export markets, but there is a distortion in profits and in the quality composition of exports. In a lowquality equilibrium, we obtain a sorting of firms into exporting that is non-linear in quality. A range of relatively high-quality firms are permanently kept out of the market by the informational friction, so that countries with bad quality reputation can be locked into exporting low-quality, low-cost goods. Export subsidies then have a positive welfare effect on the exporting country, by improving the average quality of its exports and its terms of trade. However, a subsidy has the opposite long-run effects in a country that initially exports relatively high-quality products. The model is consistent with empirical patterns of export prices. Measuring national reputations by analyzing the content of US newspaper articles about foreign countries over 1988-2006, we find that more positive news coverage of foreign countries and companies is associated with higher unit values of their exports to the US, particularly in sectors with a larger scope for vertical differentiation. |
| Keywords: | Product quality ; Product differentiation ; Export promoting ; Industrial policy |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-00797006&r=cwa |
| By: | Rodolphe Dos Santos Ferreira (BETA - Bureau d'économie théorique et appliquée - CNRS : UMR7522 - Université Louis Pasteur - Strasbourg I); Frédéric Dufourt (AMSE - Aix-Marseille School of Economics - Aix-Marseille Univ. - Centre national de la recherche scientifique (CNRS) - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM)) |
| Abstract: | Economies with oligopolistic markets are prone to inefficient sunspot fluctuations triggered by autonomous changes in firms equilibrium conjectures. We show that a well designed taxation-subsidization scheme can eliminate these fluctuations by coordinating firms in each sector on a single efficient equilibrium. At the macroeconomic level, implementing this stabilization policy leads to significant welfare gains, attributable to a quantitatively dominant "efficient stabilization effect". This effect, while important, is typically ignored in the traditional computations of the welfare costs of aggregate fluctuations (e.g., Lucas, 2003). |
| Keywords: | Business cycles; Stabilization policy; Indeterminacy; Sunspot equilibria; Oligopolistic competition. |
| Date: | 2013–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00789233&r=cwa |
| By: | Mohamed El Hedi Arouri (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR6221 - Université d'Orléans); Amine Lahiani (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR6221 - Université d'Orléans); Duc Khuong Nguyen (CERAG - Centre d'études et de recherches appliquées à la gestion - CNRS : UMR5820 - Université Pierre Mendès-France - Grenoble II) |
| Abstract: | In this paper we make use of several multivariate GARCH models (CCC-, DCC-, BEKK-, diagonal BEKK-, and VAR-GARCH) to investigate both return and volatility spillovers between world gold prices and stock market in China over the period from March 22, 2004 through March 31, 2011. We also analyze the optimal weights and hedge ratios for gold-stock portfolio holdings and show how empirical results can be used to build effective diversification and hedging strategy. Our results show evidence of significant return and volatility cross effects between gold prices and stock prices in China. In particular, past gold returns play a crucial role in explaining the dynamics of conditional return and volatility of Chinese stock market and should thus be accounted for when forecasting future stock returns. Our portfolio analysis suggests that adding gold to a portfolio of Chinese stocks improves its risk-adjusted return and that gold risk exposures can be effectively hedged in portfolios of stocks over time. Finally, we show that the VAR-GARCH model performs better than the other multivariate GARCH models. |
| Date: | 2013–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00798038&r=cwa |
| By: | Sami Debbichi (AEDD - Analyse Economique et Développement Durable - Université de Tunis El Manar); Walid Hichri (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon) |
| Abstract: | We present a Cournot model that compares the critical threshold of collusion in Duopoly and Oligopoly Markets where the actors are private, mixed or public. We assume that the incentive critical threshold for collusion depends on the interconnection fees. The different threshold values calculated in each Market structure are then estimated, using the OLS method, with variables related to the Tunisian market structures and prices. The Econometric estimation of the different threshold values is consistent with our theoretical results. Our findings can be used by the decision makers to control collusion, by acting on the level of interconnection fees for each market structure and by implementing the suitable market liberalization policies in this sector. |
| Keywords: | Interconnexion fees; Collusion; Market Structure; Private sector; Public Sector; Tunisian Mobile Market |
| Date: | 2013–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00794286&r=cwa |
| By: | Kent Grote (Department of Economics and Business, Lake Forest College); Victor Matheson (Department of Economics, College of the Holy Cross) |
| Abstract: | Over the past half century, there has been an increasing prevalence of legalized gambling in the US. At the same time there is a general recognition, empirically supported in the economics literature, that spending on lottery and gaming products tends to be regressive in nature. In addition, gambling addiction is a widely acknowledged social problem. This raises the question of whether the increased presence of casinos and state lotteries results in relatively more bankruptcy filings in the states that offer them. This paper adds to the existing literature by comparing the relative impact of the presence of lotteries to that of casinos on both personal and business bankruptcies. States that adopted lotteries and casinos prior to 1995 experienced significantly higher personal bankruptcy rates while the effect of lottery and casino adoption on personal bankruptcies has disappeared since that time. |
| Keywords: | lotto, lottery, public finance, gambling |
| JEL: | K35 H71 L83 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:hcx:wpaper:1302&r=cwa |
| By: | Lerner, Josh (Harvard Business School); Tåg, Joacim (Research Institute of Industrial Economics) |
| Abstract: | We survey the literature on venture capital and institutions and present a case study comparing the development of the venture capital market in the US to Sweden. Our literature survey underscores that the legal environment, financial market development, the tax system, labor market regulations, and public spending on research and development correlates with venture capital activities across countries. Our case study suggests these institutional differences led to the later development of an active venture capital market in Sweden compared to the US. In particular, a later development of financial markets and a heavier tax burden for entrepreneurs have played a key role. |
| Keywords: | Financial market development; Institutions; IPOs; Labor markets; Legal environment; R&D; Taxation; Stock markets; Venture Capital. [Running Title: Spinoffs in Sweden] |
| JEL: | E02 G24 G28 N20 O16 O43 O57 |
| Date: | 2013–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:entfor:2012_017&r=cwa |
| By: | Sanandaji, Tino (Research Institute of Industrial Economics and Harris School of Public Policy Studies, University of Chic); Leeson, Peter (George Mason University) |
| Abstract: | Existing studies of entrepreneurship focus on entrepreneurs whose individual contribution to wealth creation is typically trivial. |
| Keywords: | Billionaires; entrepreneurship; self- employment; institutions |
| JEL: | L26 L53 O17 |
| Date: | 2013–08–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:entfor:2012_018&r=cwa |
| By: | Braunerhjelm, Pontus (Swedish Entrepreneurship Forum); Henrekson, Magnus (Research Institute of Industrial Economics (IFN).) |
| Abstract: | The purpose of this research endeavor—in the form of eight articles—published in this Special Issue of Industrial and Corporate Change is to further our understanding of the extent, character and orientation of entrepreneurial activity in today’s wealthy countries. This is done by means of detailed studies of particular aspects of the rules of the game deemed to be of particular importance for entrepreneurship, innovation-based firm growth and its ensuing impact on the economy. Particular aspects of entrepreneurship and economic dynamism are covered by pairs (or in one case three) coauthors, who are renowned specialists in the area and with deep knowledge of the pertinent institutions in Sweden and the US. These two countries have been argued to be located at either end of the spectrum of the types of capitalism with respect to the degree coordination and government intervention. This introductory essay sets off by giving a short overview of the institutional differences that distinguish these economies, but also stresses that convergence has occurred in the last decades in several respects. Still, as is obvious from the summary of the eight comparative analyses included in this issue, considerable differences remain. These constitute the basis for the concluding policy discussion. |
| Keywords: | Entrepreneurship; Innovation; Institutions; Firm growth; Economic dynamism |
| JEL: | G28 H30 K30 L26 L53 O43 O57 |
| Date: | 2013–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:entfor:2012_019&r=cwa |
| By: | Matsuda, Ayako; Kurosaki, Takashi; Sawada, Yasuyuki |
| Abstract: | As an empirical research on weather index insurance in developing countries, we conducted surveys on rainfall and temperature index insurance products in Madhya Pradesh, India. The rainfall insurance covers drought and excess rain during the monsoon season, while the temperature insurance covers against excess heat during the dry season. This paper documents the details of surveys implemented under this project and describes the key variables collected from them. |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:hit:primdp:34&r=cwa |
| By: | Gaétan de Rassenfosse (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; Intellectual Property Research Institute of Australia, The University of Melbourne); Alfons Palangkaraya (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; Intellectual Property Research Institute of Australia, The University of Melbourne); Elizabeth Webster (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; Intellectual Property Research Institute of Australia, The University of Melbourne) |
| Abstract: | Patents may assist trade in technology either by protecting buyers against the expropriation of the idea by third parties (the appropriation effect) or by enabling sellers to more frankly disclose the idea during the negotiation phase (the disclosure effect). We test for the presence of both these effects using quasi-experimental matching analysis on a novel dataset of 860 technology transaction negotiations. We identify the appropriation effect by comparing the probability of successful negotiations involving a granted patent with those involving a pending patent. Similarly, we identify the disclosure effect by comparing the probability of successful negotiations involving a pending patent with those involving no patent. We find evidence for the appropriation but not the disclosure effect: technology transaction negotiations involving a granted patent instead of a pending patent are 10 per cent more likely to be successfully completed (compared with an average completion rate of approximately 80 per cent). |
| Keywords: | Markets for technology, R&D, invention, patent, intellectual property, appropriability |
| JEL: | O31 O34 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2013n05&r=cwa |
| By: | Daniel Montolio (University of Barcelona & IEB); Simón Planells (University of Barcelona & IEB) |
| Abstract: | The growth in the number of tourist arrivals in Spain in recent years has had significant economic repercussions; yet, little has been reported about its negative impact. This study goes some way to rectifying this by estimating the impact of tourist activity on crime rates in the Spanish provinces during the period 2000-2008. We use both 2-SLS and GMM techniques in a panel data framework to overcome the various challenges posed by estimating this relationship, namely, controlling for the unobserved characteristics of the provinces, and accounting for both the possible endogeneity of the tourist variable and the inertia of criminal activities. The results show that tourist arrivals have a positive and significant impact on crimes against both property and the person. |
| Keywords: | Crime, tourism, seasonality |
| JEL: | C23 H50 I2 J24 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2013/6/doc2013-4&r=cwa |
| By: | Jean-Marie Dufour; Joachim Wilde (Universitaet Osnabrueck) |
| Abstract: | Weak identification is a well known topic for linear multiple equation models. However, little is known whether this problem also matters for probit models with endogenous covariates. Therefore, the behaviour of the usual z-statistic in case of weak identification is analysed in a simulation study. It shows large size distortions. However, a new puzzle is found: The magnitude of the size distortion depends heavily on the parameter value that is tested. Alternatively the LR-statistic was calculated which is known to be more robust against weak identification in case of linear multiple equation models. The same seems to be true for probit equations. No size distortions are found. However, medium undersizing is observed. |
| Keywords: | probit model, weak identification |
| JEL: | C |
| Date: | 2013–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:iee:wpaper:wp0095&r=cwa |
| By: | Booth, Alison L. (Australian National University); Cardona Sosa, Lina (University of Essex); Nolen, Patrick J. (University of Essex) |
| Abstract: | We examine the effect of single-sex classes on the pass rates, grades, and course choices of students in a coeducational university. We randomly assign students to all-female, all-male, and coed classes and, therefore, get around the selection issues present in other studies on single-sex education. We find that one hour a week of single-sex education benefits females: females are 7% more likely to pass their first year courses and score 10% higher in their required second year classes than their peers attending coeducational classes. We find no effect of single-sex education on the probability that a female will take technical classes and there is no effect of single-sex education for males. Furthermore we are able to examine potential mechanisms driving the single-sex effect for females. We find that the results are consistent with a reduction in stereotype threat for females and are not due to a potential tracking effect. |
| Keywords: | single-sex, education, gender, experiment |
| JEL: | C91 C92 J16 J33 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7207&r=cwa |
| By: | Lin, Carl (Beijing Normal University) |
| Abstract: | Using 1990, 2000 censuses and a 2010 survey, I examine the economic performance of ethnically Chinese immigrants from mainland China, Hong Kong and Taiwan (CHT) in the U.S. labor market. Since 1990, relative wages of CHT migrants have been escalating in contrast to other immigrants. I show these widening gaps are largely explained by individual's endowments, mostly education. Rising U.S.-earned degrees by CHT migrants can account for this relatively successful economic assimilation. Cohort analysis shows that the economic performance of CHT migrants admitted to the U.S. has been improving, even allowing for the effect of aging. |
| Keywords: | Chinese immigration, economic assimilation, Oaxaca decomposition, synthetic cohort analysis |
| JEL: | J31 J61 J24 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7208&r=cwa |
| By: | Cawley, John (Cornell University); von Hinke Kessler Scholder, Stephanie (University of York) |
| Abstract: | We provide new evidence on the extent to which the demand for cigarettes is derived from the demand for weight control (i.e. weight loss or avoidance of weight gain). We utilize nationally representative data that provide the most direct evidence to date on this question: individuals are directly asked whether they smoke to control their weight. We find that, among teenagers who smoke frequently, 46% of girls and 30% of boys are smoking in part to control their weight. This practice is significantly more common among youths who describe themselves as too fat than those who describe themselves as about the right weight. The derived demand for cigarettes has important implications for tax policy. Under reasonable assumptions, the demand for cigarettes is less price elastic among those who smoke for weight control. Thus, taxes on cigarettes will result in less behavior change (but more revenue collection and less deadweight loss) among those for whom the demand for cigarettes is a derived demand. Public health efforts to reduce smoking initiation and encourage cessation may wish to design campaigns to alter the derived nature of cigarette demand, especially among adolescent girls. |
| Keywords: | smoking, cigarettes, obesity, BMI, weight, derived demand, price elasticity |
| JEL: | I1 D01 H2 H3 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7213&r=cwa |