nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2012‒04‒10
thirteen papers chosen by
Frederic S. Lee
University of Missouri-Kansas City

  1. An analysis of different approaches to women empowerment: a case study of Pakistan By Chaudhary, Amatul R.; Chani, Muhammad Irfan; Pervaiz, Zahid
  2. Does a picture paint a thousand words ? evidence from a microcredit marketing experiment By Gine, Xavier; Mansuri, Ghazala; Picon, Mario
  3. The economic system as an end or as a means and the future of socialism: an evolutionary viewpoint By Alberto, Chilosi
  4. The Chimera of a Complete Analysis of Economic Dynamics By K. Vela Velupillai
  5. Mechanization, task assignment, and inequality By Yuki, Kazuhiro
  6. WP 118 - Collective redress and workers’ rights in the EU By Jan Cremers; Martin Bulla
  7. Modeling Dividend Behavior in Pakistan By Haleem, Fazli; Javid, Attiya Yasmin
  8. Competition Policy in Ireland: A Good Recession? By Gorecki, Paul K.
  9. Impact of managerial ownership on financial policies and the firm’s performance: evidence Pakistani manufacturing firms By Din, Shahab-u-; Javid, Attiya Yasmin
  10. Steel, style and status: the economics of the cantilever chair, 1929-1936 By Vogelgsang, Tobias
  11. Diversified boundaries of the firm By Kimura, Koichiro
  12. Cartel in the Indian cement industry: An attempt to identify it By Bejger, Sylwester
  13. Profitability, Saving and Investment of Non-Financial Firms in Turkey By Erdal Ozmen; Saygin Sahinoz; Cihan Yalcin

  1. By: Chaudhary, Amatul R.; Chani, Muhammad Irfan; Pervaiz, Zahid
    Abstract: Women empowerment has attracted the attention of researchers as an active area of research since 1980s. It can be viewed as an ultimate end as well as a mean to achieve other development goals. The present study is an attempt to investigate how consciousness /sensitization of women about their rights, economic empowerment of women and women’s overall development can be helpful in achieving the goal of women’s empowerment. The study uses data for the period of 1996 to 2009 for Pakistan. Empirical results reveal that consciousness of women about their rights, economic empowerment of women and women’s overall development have positive and significant effect on women’s empowerment as measured by Gender Empowerment Measure (GEM) index. Granger Causality Test confirms the existence of bi-directional causality between women’s overall development and women’s empowerment. A unidirectional causality exists between sensitization of women and women’s empowerment.
    Keywords: Women Empowerment; labour force participation; Gender Development; Gender inequality
    JEL: D63 C22 J16 J23
    Date: 2012
  2. By: Gine, Xavier; Mansuri, Ghazala; Picon, Mario
    Abstract: Female entrepreneurship is low in many developing economies partly because of constraints on women's time and mobility, which are often reinforced by social norms. This paper analyzes a marketing experiment designed to encourage women to adopt a new microcredit product. A brochure with the same content but two different covers was randomly distributed among male and female borrowing groups. One cover featured five businesses run by men, while the other showed identical businesses run by women. Men and women responded to psychological cues. Among men who were not business owners, had lower measured ability and whose wives were less educated, the responses to the female brochure were more negative, as did female business owners with low autonomy within the household. Women with relatively high levels of autonomy had a similar negative response to the male brochure, while there was no effect on female business owners with autonomy. Overall, these results suggest that women's response to psychological cues, such as positive role models, may be affected by their level of autonomy at home, and more intensive interventions may be required for more disadvantaged women.
    Keywords: Access to Finance,Debt Markets,Business in Development,Competitiveness and Competition Policy,Banks&Banking Reform
    Date: 2012–04–01
  3. By: Alberto, Chilosi
    Abstract: After the demise of “real” socialism and the decline of “western” socialism, socialism can be salvaged as a social preference system oriented towards equality and social justice, to be implemented without systemic constraints in the organizational and institutional sense. At the same time there is a case for maintaining an institutional framework allowing different forms of economic organization,capitalist and non-capitalist,to compete on equal footing, in an evolutionary perspective, thus allowing the second to develop if proven efficient. Another way for a spontaneous extension of the domain of socialism could derive from the socialization of consumption, if the consumption of public goods continues to make up a growing component of real consumption.
    Keywords: Socialism; Capitalism; Socialization of Consumption
    JEL: P50
    Date: 2012–04–02
  4. By: K. Vela Velupillai
    Abstract: Alberto Quadrio Curzio’s lifelong research efforts have been characterised by depth of vision, breadth of scholarship, a growing awareness of the need for sensitive mediation between theoretical analysis and empirical, policy oriented, concerns and, above all, the need for underpinning every kind of aim with an institutional and historical perspective. This contribution to a Festschrift in his honour aims to take up one small aspect of one of his many faceted theoretical concerns. Alberto Quadrio Curzio’s conviction that there can be no ‘complete’ analysis of economic dynamics - not even a ‘complete’ formalisation of this tortuous notion - is given some content (albeit a very minor one) in this paper.
    Date: 2012
  5. By: Yuki, Kazuhiro
    Abstract: Mechanization− the replacement by machines of humans engaged in production tasks− is a continuing process since the Industrial Revolution. As a result, humans have shifted to tasks machines cannot perform efficiently. The general trend until about the 1960s is the shift from manual tasks to analytical (cognitive) tasks, while, since the 1970s, because of the advancement of IT technologies, humans have shifted away from routine analytical tasks (such as simple information processing tasks) as well as routine manual tasks toward non-routine manual tasks in services as well as non-routine analytical tasks. Mechanization also has affected relative demands for workers of different skill levels and thus earnings levels and earnings inequality. The rising inequality has been the norm in economies with light labor market regulations, although the inequality fell in periods when the relative supply of skilled workers grew rapidly. This paper develops a task assignment model and examines how improvements of productivities of machines and an increase in the relative supply of skilled workers affect task assignment (which factors perform which tasks), earnings, earnings inequality, and aggregate output in order to understand the aforementioned long-run trend.
    Keywords: mechanization; task assignment; earnings inequality; technical change
    JEL: J31 O33 J24
    Date: 2012–03–30
  6. By: Jan Cremers (AIAS, Universiteit van Amsterdam); Martin Bulla (Faculty of Law, Department of Labour Law and Social Security Law, Trnava University)
    Abstract: This Working Paper examines the issue of collective redress as a possible way to defend workers’ rights in the EU. Since the implementation of the internal market and the development of the Community acquis trade unions and the workers they represent in Europe are confronted with the question how to defend workers’ rights that can be derived from EU law, especially in a cross-border context. Although in theory it is often claimed that foreign workers have access to justice and can address to local courts like any other worker the practice is rather patchy. In the first exploratory contribution Jan Cremers describes the latest developments in the European Union related to the cross-border enforcement of workers’ rights. The notion of collective redress is introduced with a short explanation of the position of the trade unions. After an exploration of practical experiences the article ends with an overview of challenges and open questions that have led to further desktop research. Martin Bulla investigated whether collective redress can provide a possible way of improvement of judicial enforcement of posted workers’ rights vested in the Posting of Workers Directive (Directive 96/71/EC). The contribution starts with the most significant problems posted workers are facing, followed by an overview of basic types of collective redress procedures as well as differences in approaches to legal regulation in countries. EU initiatives dealing with the issue of collective redress mainly related to consumer law are examined and existing legal instruments are addressed with a view to a possible use for enhancement of posted workers’ rights. Finally an overview of ways of applying redress procedures under the existing legislation is followed by proposals concerning a better functioning of collective redress in respect to posted workers.
    Date: 2012–03
  7. By: Haleem, Fazli; Javid, Attiya Yasmin
    Abstract: This study examines the determinants of dividend policy by Lintner (1956) and Braittan (1966) and their extended versions to examine their relative significance in the Pakistani context. The sample consists of thirty-five firms in the overall manufacturing sector and three sub-sectors: textile, energy and chemicals the period 2007 to 2009. The analysis reveals that Lintner model is better than other models examined in the study and net profit and lag dividends are important determinants of dividend policy in Pakistani manufacturing sector. The depreciation and liquidity has significant impact on the dividend policy when included in the Lintner model while investment demand, interest rate, share price behavior and debt turn out to be insignificant. The results imply that for dividend decisions, past dividends, profits and depreciation matters and Lintner model fits the data well in case of manufacturing sector of Pakistan.
    Keywords: Dividend policy; partial adjustment model; Brittain cash flow model; Britain Explicit Depreciation model
    JEL: A1
    Date: 2011
  8. By: Gorecki, Paul K.
    Abstract: This paper analyses the conduct of competition policy in Ireland between 2000 and 2011. Attention is paid to the policies and actions of those persons and institutions responsible for competition policy: the Minister for Jobs, Enterprise and Innovation; the Competition Authority; the Courts; and, since 2010, the European Union and the International Monetary Fund. Competition policy after some initial setbacks at the beginning of the recession, has enjoyed strong support since 2010.
    Keywords: competition/COMPETITION POLICY/Ireland/Policy/recession/European Union
    Date: 2012–03
  9. By: Din, Shahab-u-; Javid, Attiya Yasmin
    Abstract: This study evaluates the impact of managerial ownership on the firm‟s performance and financial policies in the context of Pakistani market for sixty non-financial firms included in KSE 100 index for the period of 2000 to 2007. The analysis support that the concentration of managerial ownership affects the firms financial policies, mainly the leverage and dividend policies. The empirical analysis find out that leverage policy variable influenced managerial ownership negatively, supporting that the lower leverage level leads to high profitability firms engage in low managers‟ ownership program. The result also determines a negative and significant association among the mangers ownership concentration and dividend policy of the firms. This result is supported by the agency theory prediction suggesting that as a firm has high managerial ownership, the asymmetric information will decrease and directly decrease the effectiveness of the dividend policy. Beside this the firms with higher managerial ownership decrease their perquisites, so the conflict between manager‟s shareholders can be settled. It is also observed that the managers‟ ownership concentration in general has a positive relationship with the performance in the corporate culture of Pakistan, where major firms are the family oriented. When the managerial ownership is divided in three levels, low level (0 -5%), moderate level (5%-25% and high concentrated (above 25%), the performance positively affect only at low and moderate level. The ownership beyond 25% has a negative association with performance and support the entrenchment theory.
    Keywords: Managerial ownership; leverage; dividend; agency theory; entrenchment theory
    JEL: A1
    Date: 2011
  10. By: Vogelgsang, Tobias
    Abstract: The cantilever chair is an iconic consumer product of the twentieth century and stands for a modern, progressive lifestyle. It is expensive, often used to furnish exclusive spaces and thereby the opposite of its original artistic vision from the late 1920s. By way of comparing historical prices and wages, this paper establishes that the cantilever chair was never a cheap mass commodity but almost immediately acquired an upmarket status with corresponding prices. This is accounted for by programmatic demands of the creative environment from which the chair originated, through the chair's legal status as artwork, consumer tastes, strategic marketing choices and ultimately institutions.
    JEL: N0
    Date: 2012–03
  11. By: Kimura, Koichiro
    Abstract: We analyze diversification of boundaries of local firms in developing countries under the economic globalization. The globalization has an aspect of homogenization of the world economy, but also has another aspect of diversification through international economic activities. Focusing on boundary-level of the firm, this article shows that the diversification from a comparison with boundaries of foreign firms in developed countries is brought by a disadvantage of technology deficit and a home advantage as local firms.
    Keywords: Developing countries, China, Manufacturing industries, Industrial management, Globalization, Industrial technology, Telephone, Diversification, Technology gaps, Home advantage, Boundaries of firms
    JEL: D21 M11 O12 O14
    Date: 2012–03
  12. By: Bejger, Sylwester
    Abstract: This article is devoted to the problem of the detection of overt or tacit collusion equilibrium in the context of the choice of the appropriate econometric method, a choice that is determined by the amount of information that the observer possesses. The author addresses this problem in two steps. First, to provide a theoretical background, he uses a collusion marker based on structural disturbances in a price process'; variance. Then, he applies a Markov switching model with switching in variance regimes. The author considers this method adequate and coherent with the problem structure and the research objective, and useful for assessing the functionality of the collusion marker he uses. He uses the model to examine the Indian cement industry in the period 1994-2009 and finds some objective indications of collusion and competition phases. These phases are confirmed by certain historical facts as well as by numerous research articles. --
    Keywords: Explicit and tacit collusion,collusive equilibrium,cartel detection,cement industry,price variance,Markov switching model
    JEL: C22 L13 L61
    Date: 2012
  13. By: Erdal Ozmen; Saygin Sahinoz; Cihan Yalcin
    Abstract: How investment is financed matters a great deal to growth, especially in countries like Turkey, where domestic savings are low and financial systems are not deep enough in supplying the funds needed for growth-generating corporate investment. In these countries there is a close link between selfgenerated corporate savings and investment activity, since access to external funds may be difficult, especially for firms that have little to offer in the way of collateral. When the funds available in the financial system are limited and there is a high external finance premium, corporate savings become even more important to fixed investment. This study analyzes the determinants of corporate savings and whether they enhance investment and ultimately growth. Empirical analysis of data from listed firms shows that in Turkey the savings of nonfinancial firms as a percent of net sales are lower than those of nonfinancial firms in major developing countries. In addition, the financial sector in Turkey is far from adept at attracting savings and mobilizing funds for firms that have to depend on external financing. In fact, the ratio of commercial credits extended to bank dependent firms to GDP is not high even though it has been increasing in recent years. These two factors are the main barriers to investment by nonfinancial firms. In other words, investment activity of financial firms proves to be highly sensitive to cash flows, which suggests that financially constrained firms invest less and thus grew slowly. In many countries corporate savings constitute about half of total savings. Policies that encourage efforts to raise corporate savings can enhance both investment and economic growth. The results of dynamic panel data regressions suggest that both firm-specific and macroeconomic variables explain savings of non-financial firms. For instance, firms’ saving rates seem to increase significantly with profitability, firm size, Tobin’s q, the GDP growth rate, and financial depth. They decline significantly with the ratio of tangible to total assets, the leverage ratio, the ratio of public debt to GDP, and real exchange rate appreciation.
    JEL: G31 E21 D22 L11 C23
    Date: 2012

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