nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2014‒02‒21
ten papers chosen by
Frederic S. Lee
University of Missouri-Kansas City

  1. Some Questions on the Rates of Profit and Rents By Melendez-Plumed, Vicenc
  2. The return of public enterprise By Massimo Florio
  3. Women on French Corporate Board of Directors- How Do They Differ from their Male Counterparts? By Rey Dang; Anne-Françoise Bender; Marie-José Scotto
  4. Firms doing good : how do we know ? measurement of social and environmental results By Klein, Michael; Kaur, Sumeet
  5. Ladislaus von Bortkiewicz - statistician, economist, and a European intellectual By Wolfgang Karl Härdle; Annette B. Vogt; ;
  6. Informal firms and financial inclusion : status and determinants By Farazi, Subika
  7. Political Selection in China: the Complementary Roles of Connections and Performance By Jia, Ruixue; Kudamatsu, Masayuki; Seim, David
  8. La discrimination à l'entrée des établissements scolaires privés : Les résultats d'une expérience contrôlée By Loïc Du Parquet; Thomas Brodaty; Pascale Petit
  9. Transatlantic Trade and Investment Partnership: Sectoral and Macroeconomic Perspectives for Germany, the EU and the US By Irawan, Tony; Welfens, Paul J. J.
  10. Islamic finance: a review of the literature By Jean-Yves MOISSERON; Bruno-Laurent MOSCHETTO; Frédéric TEULON

  1. By: Melendez-Plumed, Vicenc
    Abstract: We deal with three subjects, namely, the presence of more than one rate of profit in an economy due to the existence of rents (absolute and monopoly rents); the subordination of the prices and the rate of profit (in price terms) to the real profit or net product, measured in value terms; and the impact of leveraging on the rate of profit and on a simple calculation of the sum of credit (money) generated in an economy over a given period of time. Production prices are affected by absolute and monopoly rents. An arbitrary rise of an industry rate of profit increases the global rate and system prices while the real product expressed in values is not altered. Labour magnitudes determine the sustainable price system. An increase in the quantity of credit is a natural consequence of economic growth and the rate depends on the proportions of the effective use and the production of commodities. Interests of credits have similarities with differential rent, provided that the production costs increase depressing the rate of profit and generating a “rent” to capitalists who do not need to borrow money.
    Keywords: Labour values; Relative prices;Rates of profit;Credit; Rate of suplus value;Absolute rent; Differential rent; Monopoly rent
    JEL: B51
    Date: 2014–02
  2. By: Massimo Florio (DEAS, Universita' di Milano)
    Abstract: Public enterprises never disappeared in spite of several privatization waves in the last three decades. This paper offers some trends and possible rationales for their resilience. In a sample of the Forbes 2000 top corporations, as reviewed by OECD economists (Kowalski et al. 2013), we show that the around ten per cent of state-owned enterprises perform better in financial terms than their private counterparts. The Great Recession has also shown that governments had to take over failing major private enterprises, including particularly banks. In several countries, particularly in Western Europe, there is municipalization of electricity and water distribution. In the EU/15, there is also evidence that in electricity and gas, government owned incumbents offer fairer prices to households than private competitors. Recent research on mergers and acquisitions confirms that in the last ten years there has been an increase of publicization relative to privatization, including through trans-border deals.
    Keywords: Public enterprise; privatization
    JEL: H44 L32 L33
    Date: 2014–02–02
  3. By: Rey Dang; Anne-Françoise Bender; Marie-José Scotto
    Abstract: Our research aims at exploring individual’s characteristics of women on Boards in the French context. In the first part of our paper, we discuss the different theoretical frameworks which supported the business case of gender diversity on Boards of Directors and expose our hypothesis regarding differences in women and men characteristics. The second part presents our methods, measurements and data. Then, we focus on our empirical study. Our sample consists of the French Index SBF 120 companies. We studied the profile of 1,250 directors collecting information from the firms’ annual reports of year 2010, using various scales defined by previous research on that field in the Anglo–Saxon literature. Our findings confirm that integrating women on boards has an impact on the Human and Social Capital of Boards but not as much as might have been expected. It is worth noting that men and women board members seem to build their human and social capital through the same educational process in France. Nonetheless, our work shows significant differences between men and women regarding professional experience and board member status.
    Keywords: Corporate Governance, Boards of Directors, Diversity, Gender, Board Composition
    Date: 2014–01–06
  4. By: Klein, Michael; Kaur, Sumeet
    Abstract: Social impact investors, philanthropists, or corporations pursuing social responsibility try to demonstrate that they are indeed"doing good."This essay classifies the various types of measures that currently exist to capture social and environmental impact in a simple scheme. It argues that there is a basic"staircase of results measurement."A first level of measures captures some aspect of"organizational readiness."The next level describes some form of"result"that may or may not be attributable to the organization trying to do good. The third level gets at"impact"that can be attributed to an intervention. Beyond this, there are measures that assess the costs and benefits of interventions, allow aggregation of results from different interventions and comparison among them or across time. Finally, the essay discusses how measures are tied to incentives. It argues that the various approaches can produce more or less helpful measures but cannot be expected to yield anything approaching a true"double"or"triple"bottom line. A true"bottom line"involves aggregation and comparability of costs and benefits and provides incentives to perform. The multitude of social and environmental measurement schemes will by necessity remain a patchwork that can be thought of as describing the"product characteristics"of a company's output. Accounting profit remains the only measure that effectively aggregates costs and benefits and provides incentives. Profit itself is not just a necessity for organizational survival. It measures whether organizations meet client needs. It is thus an important measure of social impact in its own right. This may be unsurprising, but it sets expectations straight compared with currently widespread unrealistic hopes for the measurement of social and environmental impact and redirects attention to paying attention to profitability as part of impact measurement.
    Keywords: Environmental Economics&Policies,Economic Theory&Research,Labor Policies,Debt Markets,E-Business
    Date: 2014–02–01
  5. By: Wolfgang Karl Härdle; Annette B. Vogt; ;
    Abstract: Ladislaus von Bortkiewicz (1868 - 1931) was a European statistician. His scientific work covered theoretical economics, stochastics, mathematical statistics and radiology, today we would call him a cross disciplinary scientist. With his clear views on mathematical principles with their applications in these fields he stood in conflict with the mainstream economic schools in Germany at the dawn of the 20th century. He had many prominent students (Gumbel, Leontief, Freudenberg among them) and he carved out the path of modern statistical thinking. He was a true European intellectual with a career path from St. Petersburg via Gottingen to Straßburg and finally the Berliner Universität, now Humboldt-Universität zu Berlin. He is known for the precise calibration of insurance claims applying the - at that time hardly known - Poisson distribution to Prussian horse kick and child suicide data. He proposed a simple solution to the Marxian transformation problem and wrote numerous articles and books on the mathematical treatment of statistical (including radiological physical) data. In this article we sketch his life and work and point out the prominent role that he has in today's statistical thinking.
    Keywords: History of science, Statistics, Horse kicks, Bortkiewicz
    JEL: N01 D02 B14 B16
    Date: 2014–02
  6. By: Farazi, Subika
    Abstract: Many firms in the developing world -- including a majority of micro, small, and medium enterprises -- operate in the informal economy. The informal firms face a variety of constraints, making it harder for them to do business and grow. Lack of access to finance is often cited as the biggest operational constraint these firms face. This paper documents the use of finance and financing patterns of informal firms, highlights differences between use of finance by formal and informal firms, and identifies the most significant characteristics of informal firms that are associated with higher use of financial services. The analysis shows that use of loans and bank accounts for business by informal firms is very low and a vast majority finances their day-to-day operations and investments through sources other than financial institutions (internal funds, moneylenders, family, and friends). A majority of informal firm owners would like their firms to become formal but do not do so as it would require them to pay taxes. Registered firms are 54 percent more likely to have a bank account and 32 percent more likely to have loans. Results also show that firm size, the level of education of the owner, and whether the owner has a job in the formal sector are significantly associated with financial inclusion of informal firms.
    Keywords: Access to Finance,Microfinance,Banks&Banking Reform,Debt Markets,Small Scale Enterprise
    Date: 2014–02–01
  7. By: Jia, Ruixue (University of California San Diego); Kudamatsu, Masayuki (Institute for International Economic Studies); Seim, David (Department of Economics, University of Toronto)
    Abstract: Who becomes a top politician in China? We focus on provincial leaders a pool of candidates for top political office and examine how their chances of promotion depend on their performance in office and connections with top politicians. Our empirical analysis, based on the curriculum vitae of Chinese politicians, shows that connections and performance are complements in the Chinese political selection process. This complementarity is stronger the younger provincial leaders are relative to their connected top leaders. To provide one plausible interpretation of these empirical findings, we propose a simple theory in which the complementarity arises because connections foster loyalty of junior officials to senior ones, thereby allowing incumbent top politicians to select competent provincial leaders without risking being ousted. Auxiliary evidence suggests that the documented promotion pattern does not distort the allocation of talent. Our findings shed some light on why a political system known for patronage can still select competent leaders.
    Keywords: Political turnover; Economic performance; Personnel control; Social networks
    JEL: H11 H70 J63 P30
    Date: 2014–02–07
  8. By: Loïc Du Parquet (TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV), GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - Université du Maine); Thomas Brodaty (CEE - Centre d'études de l'emploi - Ministère de l'Enseignement supérieur et Recherche - Ministère du Travail, de l'Emploi et de la Santé); Pascale Petit (TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV), ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris-Est Créteil Val-de-Marne (UPEC) : EA437 - Université Paris-Est Marne-la-Vallée (UPEMLV))
    Abstract: Chaque année, l'Etat et les collectivités territoriales allouent un budget non négligeable au financement de l'enseignement privé élémentaire et secondaire sous contrat (respectivement 6 663 et 1 483 millions d'euros en 2008). Parmi les contreparties figure pour ces établissements l'obligation de respecter le principe de non-discrimination. " Tous les enfants sans distinction d'origine, d'opinion ou de croyances, y ont accès " prévoit la Loi Debré de 1959. Nous proposons d'examiner sur données expérimentales la réalité des pratiques de ces établissements lorsqu'elles sont confrontées à des demandes d'inscription d'enfants issus ou non de l'immigration. Entre mars et juin 2011, nous avons évalué la discrimination liée à l'origine supposée des parents, à l'entrée de 4 269 établissements privés répartis sur le territoire métropolitain et ultra-marin. Nous avons construit de toutes pièces les identités de deux pères fictifs, l'un portant un prénom et un nom à consonance française, l'autre à consonance maghrébine. A quelques jours d'intervalle, ces deux pères fictifs ont adressé un court message à chacun de ces établissements pour obtenir plus d'informations en vue d'y inscrire leur enfant à la rentrée suivante. Cette démarche de première prise de contact est celle préconisée par l'Education Nationale. Nous avons ensuite comparé les suites données à ces messages par ces établissements. Cette comparaison nous permet de rendre compte de la discrimination à l'entrée de l'enseignement privé, dans la mesure où le protocole expérimental de cette expérience contrôlée, qui s'inspire de la méthode du testing, nous permet d'éliminer parfaitement les deux autres facteurs potentiellement explicatifs de l'inégal accès à ces établissements : l'auto-sélection des parents et l'hétérogénéité des demandes d'inscription. Dans 18% des cas, les établissements privés discriminent le père issu de l'immigration, en donnant à sa demande d'informations une suite moins favorable qu'à celle de l'autre père fictif. Cette discrimination significative apparaît à trois niveaux. Premièrement, la discrimination se manifeste très souvent par l'absence même de réponse de l'établissement au message des parents. Si les deux pères fictifs sont concernés par cette situation dans une très forte proportion, le père issu de l'immigration l'est encore plus fréquemment (écart de 11 points de pourcentage dans les écoles élémentaires et 16 points dans les collèges). Deuxièmement, la discrimination apparaît à travers des refus. Les établissements qui ne répondent qu'à un seul message envoient plus fréquemment une réponse négative au père issu de l'immigration (écart de 6 points de pourcentage dans les écoles élémentaires et 11 points dans les collèges). Troisièmement, la discrimination transparaît au travers des réponses favorables. Les établissements qui répondent aux deux messages et n'adressent pas de réponse négative envoient moins souvent une réponse positive ferme au père issu de l'immigration (écart de 7 points de pourcentage), celui-ci étant plus souvent concerné par la proposition d'un rendez-vous que le père d'origine française (écart de 5 points de pourcentage).
    Keywords: discrimination ; testing; ecoles privees
    Date: 2014–01
  9. By: Irawan, Tony (University of Wuppertal); Welfens, Paul J. J. (University of Wuppertal)
    Abstract: The EU and the US have started negotiations on a Transatlantic Trade and Investment Partnership Agreement (TTIP) which could bring a considerable increase of exports and output as well as changes in the composition of output and employment. Thus export simulation studies in combination with input output analysis and employment analysis is useful. In the analysis presented the focus is mainly on sectoral output and employment effects where the key sectors are the automotive sector, chemical industry, information and communication technology production, pharmaceuticals and machinery and equipment. Backward sector links are analyzed and found to be quite important in the automotive sector, the chemical industry, the machinery and equipment sector in both Germany and the US; in Germany also in ICT production. However, most of the observed sectors have weak forward linkage. Input output analysis is also used to identify employment effects in various sectors: the pure employment effect of a 20% export expansion in Germany amounts to about 800 000 new jobs. Looking only at the US and German perspective turns out to be misleading – the high imports of intermediate inputs of German firms from EU partner countries suggests that a comparison EU-US is analytically required for some key issues and that considering the effects on EU partners is also useful. There is a host of key policy issues, including the issue of extended sustainability reporting.
    Keywords: employment, input output analysis, labor, foreign direct investment, trade, TTIP
    JEL: F15 F16 F21 J21
    Date: 2014–01
  10. By: Jean-Yves MOISSERON; Bruno-Laurent MOSCHETTO; Frédéric TEULON
    Abstract: In recent years, a number of Islamic banks have been created to cater to the growing demand, driven by globalization and the vast wealth of some Muslim states in the Middle East and Southeast Asia, and Islamic finance has moved from a niche position to become a mainstream component of the global banking system. Islamic banking refers to a financial system which is consistent with principles of Islamic law (or 'sharia') and guided by Islamic ethics. A large amount of research has been undertaken into this subject. This paper presents islamic finance’s role in the new world order.
    Date: 2014–02–12

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