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on Heterodox Microeconomics |
| By: | Eugenio Caverzasi |
| Abstract: | This paper addresses the critique of the aggregational problem attached to the financial instability hypothesis of Hyman Minsky. The core of this critique is based on the Kaleckian analytical framework and, in very broad terms, states that the expenditure of ï¬rms for investment is at the same time a source of income for the ï¬rms producing capital goods. Hence, even if investments are debt ï¬nanced, as in Minsky's analysis, the overall level of indebtedness of the ï¬rm sector remains unchanged, since the debts of investing ï¬rms are balanced by the income of capital goods–producing ï¬rms. According to the critics, Minsky incurs a fallacy of composition when he does not take this dynamic into account when applying his micro analysis of investment at the macro level. The aim of this paper is to clarify the consequences of debt-ï¬nanced investments over the ï¬nancial structure of an aggregate economy. Starting from the works of MichaÅ‚ Kalecki and Josef Steindl, we developed a stock-flow consistent analysis of a highly simpliï¬ed economy under four different ï¬nancial regimes: (1) debt-ï¬nanced with no distributed profits, (2) debt-ï¬nanced with distributed proï¬ts, (3) internally ï¬nanced with no distributed proï¬ts, and (4) internally ï¬nanced with distributed proï¬ts. The results of our investigation show that debt-ï¬nanced investments do not lead to a worsening of the ï¬nancial position of the ï¬rm sector only if specific assumptions are taken into account. |
| Keywords: | Hyman Minsky; Financial Instability Hypothesis; Stock-flow Consistent; Financial Fragility; Debt Financing |
| JEL: | B5 E12 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_753&r=hme |
| By: | David S. Evans; Richard Schmalensee |
| Abstract: | This Chapter provides a survey of the economics literature on multi-sided platforms with particular focus on competition policy issues, including market definition, mergers, monopolization, and coordinated behavior. It provides a survey of the general industrial organization theory of multi-sided platforms and then considers various issues concerning the application of antitrust analysis to multi-sided platform businesses. It shows that it is not possible to know whether standard economic models, often relied on for antitrust analysis, apply to multi-sided platforms without explicitly considering the existence of multiple customer groups with interdependent demand. It summarizes many theoretical and empirical papers that demonstrate that a number of results for single-sided firms, which are the focus of much of the applied antitrust economics literature, do not apply directly to multi-sided platforms. |
| JEL: | L19 L40 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18783&r=hme |
| By: | Kamila Ruzickova (Department of Economics, Faculty of Business and Economics, Mendel University in Brno); Petr Koráb (Department of Finance, Faculty of Business and Economics, Mendel University in Brno) |
| Abstract: | In the context of current competitive environment the companies in agriculture are forced to find a path towards the improvement of their business competitiveness. One of illuminating examples may be the horizontal cooperation in the form of cooperative entity. Naturally, as the economic performance of the group rises, the economic performance of members should rise, too. However, the crucial point is whether these members create a value for the owners, as this is the primary company objective. In this paper, we provide unique comparison of application of a residual income valuation method to empirically verify the assumptions which lead to grouping agricultural enterprises in cooperative entity. There are two objects of research: firstly, the alliance of winemakers, their individual members cooperating in marketing and sales management with the aim of boosting their economic performance, and secondly, their business rivals, who decided not to enter the alliance and cooperate. Alliance V8 is a newly-established NGO grouping top Moravian winemakers, the only of its kind in the Czech Republic. Contrasting the results of the case study research of both objects of research reveals whether joining the alliance altered the value of their members and also examines the applicability of the valuation method. Classification-JEL: G32, Q13 |
| Keywords: | company value, co-operative entity, horizontal cooperation, residual income. |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:men:wpaper:32_2013&r=hme |
| By: | Simon Janssen (Department of Business Administration (IBW), University of Zurich); Simone N. Tuor Sartore (Department of Business Administration (IBW), University of Zurich); Uschi Backes-Gellner (Department of Business Administration (IBW), University of Zurich) |
| Abstract: | We analyze the relationship between gender-specific social norms and firms’ pay-setting behavior. We combine information about regional voting behavior relative to gender equality laws, as a measure for gender-specific social norms, with a large data set of multi-branch firms and workers. The results show that multi-branch firms pay more discriminatory wages in branches located in regions with a higher social acceptance of gender inequality than in branches located in regions with a lower acceptance. Voter approval rates account for about 50% of the entire variation of within-firm gender pay gaps across regions. By investigating a subsample of performance pay workers for whom we are able to observe their time-based and performance pay component separately, we show that unobserved productivity differences within firms across regions cannot explain the relationship between social norms and within-firm gender pay gaps. As performance pay is more closely related to workers’ productivity than time-based pay, gender-specific productivity differences would manifest in the workers’ performance pay component. However, as the relationship between social norms and within-firm gender pay gaps manifests only for the time-based pay component but not for the performance pay component of the same workers, unobserved gender-specific productivity differences cannot explain our findings. The results support a strong relationship between social norms and the discriminatory pay-setting behavior of firms. |
| JEL: | J31 J33 J71 M5 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:zrh:wpaper:327&r=hme |
| By: | Mario Mariniello |
| Abstract: | Standards reduce production costs and increase the value of products to consumers; ultimately they significantly contribute to economic development. Standards however entail risks of anti-competitive abuse. After the adoption of a standard, the elimination of competition between technologies can lead to consumer harm. Fair, reasonable, nondiscriminatory (FRAND) commitments made by patent holders have been used to mitigate that risk. The European Commission recognises the importance of standards, but European Union competition policy is still seeking to identify well-targeted and efficient enforcement rules. |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:bre:polbrf:769&r=hme |
| By: | Rasi Kunapatarawong; Ester Martínez-Ros |
| Abstract: | We study the antecedents that help explaining how firms should deal with CSR in this modern economy where there is a heightened demand for firms to behave in a socially responsible manner, and also why some firms succeed with their CSR initiatives while others fail. We believe (1) different types of demands from various stakeholder groups, (2) managers? attitude, and (3) disaggregation of CSR dimensions to be three important issues playing a role in creating robust CSR. Our results unveil that external and internal institutional pressures alone do not have significant relationships with both types of CSR: firm-benefit CSR and mutually-benefiting CSR. Instead these forces affect CSR attitude of managers, which successively, influences the kinds of CSR they consider and engage in |
| Keywords: | Corporate social responsibility, Corporate social responsibility attitude, Institutional theory |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:cte:wbrepe:wb130301&r=hme |
| By: | Matthew S. Jaremski |
| Abstract: | The passage of the National Banking Acts stabilized the existing financial system and encouraged the entry of 729 banks between 1863 and 1866. The national banks not only attracted more deposits than previous state banks, but also concentrated in the area that would eventually become the Manufacturing Belt. Using a new bank census, the paper shows that these changes to the financial system were a major determinant of the geographic distribution of manufacturing. The sudden entry not only resulted in more manufacturing capital and output at the county-level, but also more steam engines and value added at the establishment-level. |
| JEL: | G21 N21 O43 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18789&r=hme |
| By: | Becker, Sascha (University of Warwick); Hvide, Hans V (University of Bergen) |
| Abstract: | In the large literature on firm performance, economists have given little attention to entrepreneurs. We use deaths of more than 500 entrepreneurs as a source of exogenous variation, and ask whether this variation can explain shifts in firm performance. Using longitudinal data, we find large and sustained effects of entrepreneurs at all levels of the performance distribution. Entrepreneurs strongly affect firm growth patterns of both very young firms and for firms that have begun to mature. We do not find significant differences between small and larger firms, family and non-family firms, nor between firms located in urban and rural areas, but we do find stronger effects for founders with high human capital. Overall, theresults suggest that an often overlooked factor –individual entrepreneurs –plays a large role in affecting firm performance. |
| Keywords: | entrepreneurship, Örm performance, human capital. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cge:warwcg:108&r=hme |
| By: | Osborne, William; Saghaian, Sayed H. |
| Abstract: | Mechanization and technological advancement has been the cornerstone of agricultural prosperity in the United States and has served as a flagship to the rest of the world. Farm machinery and equipment sales for the three largest manufactures in 2011 reached nearly $60 billion and higher sales are projected for the future. Many factors have been attributed to this increase in sales including high commodity prices, low interest rates, and favorable government policies toward agricultural producers. This study will seek to model producer production expenses on farm machinery and equipment and decipher which factors are significant for explaining demand for farm machinery. |
| Keywords: | Farm machinery, depreciation, crop insurance, farm expenditures, Agribusiness, Farm Management, Production Economics, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea13:142547&r=hme |
| By: | Mario Mariniello |
| Abstract: | Standards reduce production costs and increase productsâ?? value to consumers. Standards however entail risks of anti-competitive abuse. After the adoption of a standard, the chosen technology normally lacks credible substitutes. The owner of the patented technology might thus have additional market power relative to locked-in licensees, and might exploit this power to charge higher access rates. In the economic literature this phenomenon is referred to as â??hold-upâ??. To reduce the risk of hold-up, standard-setting organisations often require patent holders to disclose their standard-essential patents before the adoption of the standard and to commit to license on fair, reasonable and non-discriminatory (FRAND) terms. The European Commission normally investigates unfair pricing abuse in a standard-setting context if a patent holder who committed to FRAND ex-ante is suspected not to abide to it ex-post. However, this approach risks ignoring a number of potential abuses which are likely harmful for welfare. That can happen if, for example, ex-post a licensee is able to impose excessively low access rates (â??reverse hold-upâ??) or if a patent holder acquires additional market power thanks to the standard but its essential patents are not encumbered by FRAND commitments, for instance because the patent holder did not directly participate to the standard setting process and was therefore not required by the standard-setting organisations to commit to FRAND ex-ante. A consistent policy by the Commission capable of tackling all sources of harm should be enforced regardless of whether FRAND commitments are given. Antitrust enforcement should hinge on the identification of a distortion in the bargaining process around technology access prices, which is determined by the adoption of the standard and is not attributable to pro-competitive merits of any of the involved players. |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:bre:wpaper:768&r=hme |