Competition, innovation and growth with limited commitment

We study how barriers to business start-up affect the investment in knowledge capital when contracts are not enforceable. Barriers to business start-up lower the competition for knowledge capital and, in absence of commitment, reduce the incentive to accumulate knowledge. As a result, countries with large barriers experience lower income and growth. Our results are consistent with cross-country evidence showing that the cost of business start-up is negatively correlated with the level and growth of income.

The benefits of limited feedback in organizations

In most firms, managers periodically assess workers' performance. Evidence suggeststhat managers withhold information during these reviews, and some observersargue that this necessarily reduces surplus. This paper assesses the validity of thisargument when workers have career concerns. Disclosure has two effects: it exposesthe worker to uncertainty about future effort levels, but allows him to use current effortto influence his employer's beliefs about future effort. The surplus-maximizingdisclosure policy reveals output realizations in the center of the distribution, butnot in the tails. Thus, it is efficient for firms to reveal some but not all performanceinformation.

Building an honest microfinance organization: Embezzlement and the optimality of rigid repayment schedules and joint liability

We consider the agency problem of a staff member managing microfinancing programs, who can abuse his discretion to embezzle borrowers' repayments. The fact that most borrowers of microfinancing programs are illiterate and live in rural areas where transportation costs are very high make staff's embezzlement particularly relevant as is documented by Mknelly and Kevane (2002). We study the trade-off between the optimal rigid lending contract and the optimal discretionary one and find that a rigid contract is optimal when the audit cost is larger than gains from insurance. Our analysis explains rigid repayment schedules used by the Grameen bank as an optimal response to the bank staff's agency problem. Joint liability reduces borrowers' burden of respecting the rigid repayment schedules by providing them with partial insurance. However, the same insurance can be provided byborrowers themselves under individual liability through a side-contract.

Aggregate consequences of limited contract enforceability

We study a general equilibrium model in which entrepreneurs finance investment with optimal financial contracts. Because of enforceability problems, contracts are constrained efficient. We show that limited enforceability amplifies the impact of technological innovations on aggregate output. More generally, we show that lower enforceability of contracts will be associated with greater aggregate volatility. A key assumption for this result is that defaulting entrepreneurs are not excluded from the market.

Entrepreneurial structure of the mercantile company in pre-industrial Catalonia

The mercantile company was the basic form of enterprise in pre-industrial Catalonia. The aim of this paper is to study the formation and development of the mercantile companies in Barcelona whose end was the wholesale and retail sale of textiles in the botigues de teles (textile retail shops) throughout the eighteenth century. These firms were officially registered before a notary and their deeds reveal how these establishments were administered and managed.The study covers a sample of 121 mercantile companies, and the articles and documentation that were put into effect by 32 notaries who were active in Barcelona in the 18th century have been consulted in their entirety. From an initial selection of documentation, a total of 228 deeds registering companies have been found, 107 of which (47%) relate to the creation of companies whose various activities were centred in taverns, textile manufacturing, braiding.... While the 121 companies, which make up our sample and which account for 53% of the deeds registered with the notaries mentioned above, focused exclusively on the management of textile retail shops located in the commercial heart of the city. Thus one point of interest that the documentation reveals is that the majority of the mercantile companies registered by Barcelona notaries throughout the 18th century were establishments which traded in textiles. The first part of the article focuses on the structural characteristics of these enterprises, the number and socio-professional status of the partners and the extent of each partner s involvement in the administration and management. The second part of the article examines the capital investment made by each partner, their rights and obligations agreed on, the sharing out of profits and possible losses and the duration of the companies. The final aim of the paper is to highlight the evolution of these companies through one specific case.

Recreating the South Sea bubble: Lessons from an experiment in financial history

Major bubble episodes are rare events. In this paper, we examine what factors might cause some asset price bubbles to become very large. We recreate, in a laboratory setting, some of the specific institutional features investors in the South Sea Company faced in 1720. Several factors have been proposed as potentially contributing to one of the greatest periods of asset overvaluation in history: an intricate debt-for-equity swap, deferred payment for these shares, and the possibility of default on the deferred payments. We consider which aspect might have had the most impact in creating the South Sea bubble. The results of the experiment suggest that the company?s attempt to exchange its shares for government debt was the single biggest contributor to the stock price explosion, because of the manner in which the swap affected fundamental value. Issuing new shares with only partial payments required, in conjunction with the debt-equity swap, also had a significant effect on the size of the bubble. Limited contract enforcement, on the other hand, does not appear to have contributed significantly.

A limited area model intercomparison on the "Montserrat-2000" flash-flood event using statistical and deterministic methods

In the scope of the European project Hydroptimet, INTERREG IIIB-MEDOCC programme, limited area model (LAM) intercomparison of intense events that produced many damages to people and territory is performed. As the comparison is limited to single case studies, the work is not meant to provide a measure of the different models' skill, but to identify the key model factors useful to give a good forecast on such a kind of meteorological phenomena. This work focuses on the Spanish flash-flood event, also known as "Montserrat-2000" event. The study is performed using forecast data from seven operational LAMs, placed at partners' disposal via the Hydroptimet ftp site, and observed data from Catalonia rain gauge network. To improve the event analysis, satellite rainfall estimates have been also considered. For statistical evaluation of quantitative precipitation forecasts (QPFs), several non-parametric skill scores based on contingency tables have been used. Furthermore, for each model run it has been possible to identify Catalonia regions affected by misses and false alarms using contingency table elements. Moreover, the standard "eyeball" analysis of forecast and observed precipitation fields has been supported by the use of a state-of-the-art diagnostic method, the contiguous rain area (CRA) analysis. This method allows to quantify the spatial shift forecast error and to identify the error sources that affected each model forecasts. High-resolution modelling and domain size seem to have a key role for providing a skillful forecast. Further work is needed to support this statement, including verification using a wider observational data set.

Morphological changes in convection-diffusion-limited deposition

The effect of hydrodynamic flow upon diffusion-limited deposition on a line is investigated using a Monte Carlo model. The growth process is governed by the convection and diffusion field. The convective diffusion field is simulated by the biased-random walker resulting from a superimposed drift that represents the convective flow. The development of distinct morphologies is found with varying direction and strength of drift. By introducing a horizontal drift parallel to the deposition plate, the diffusion-limited deposit changes into a single needle inclined to the plate. The width of the needle decreases with increasing strength of drift. The angle between the needle and the plate is about 45° at high flow rate. In the presence of an inclined drift to the plate, the convection-diffusion-limited deposit leads to the formation of a characteristic columnar morphology. In the limiting case where the convection dominates, the deposition process is equivalent to ballistic deposition onto an inclined surface.

Morphology and segregation in two-component diffusion-limited aggregation

A diffusion-limited-aggregation (DLA) model with two components (A and B species) is presented to investigate the structure of the composite deposits. The sticking probability PAB (=PBA) between the different species is introduced into the original DLA model. By using computer simulation it is shown that various patterns are produced with varying the sticking probabilities PAB (=PBA) and PAA (= PBB), where PAA (=PBB) is the sticking probability between the same species. Segregated patterns can be analyzed under the condition PAB < PAA, assumed throughout the paper. With decreasing sticking probability PAB, a clustering of the same species occurs. With sufficiently small values of both sticking probabilities PAB and PAA, the deposit becomes dense and the segregated patterns of the composite deposit show a striped structure. The effect of the concentration on the pattern morphology is also shown.

Spontaneous mirror symmetry breaking in the limited enantioselective autocatalysis model: abyssal hydrotermal vents as scenario for the emergence of chirality in prebiotic chemistry

The emergence of chirality in enantioselective autocatalysis for compounds unable to transform according to the Frank-like reaction network is discussed with respect to the controversial limited enantioselectivity (LES) model composed of coupled enantioselective and non-enantioselective autocatalyses. The LES model cannot lead to spontaneous mirror symmetry breaking (SMSB) either in closed systems with a homogeneous temperature distribution or in closed systems with a stationary non-uniform temperature distribution. However, simulations of chemical kinetics in a two-compartment model demonstrate that SMSB may occur if both autocatalytic reactions are spatially separated at different temperatures in different compartments but coupled under the action of a continuous internal flow. In such conditions, the system can evolve, for certain reaction and system parameters, toward a chiral stationary state; that is, the system is able to reach a bifurcation point leading to SMSB. Numerical simulations in which reasonable chemical parameters have been used suggest that an ade- quate scenario for such a SMSB would be that of abyssal hydrothermal vents, by virtue of the typical temper- ature gradients found there and the role of inorganic solids mediating chemical reactions in an enzyme-like role. Key Words: Homochirality Prebiotic chemistry.

Tagging reveals limited exchange of immature loggerhead sea turtles (Caretta caretta) between regions in the western Mediterranean.

Exchange of immature loggerhead sea turtles (Caretta caretta) between the northern and southern regions of the western Mediterranean was investigated using data obtained from several Spanish tagging programmes. Tagged turtles ranged in straight carapace length from 23.0 to 74.0 cm. Thirty-six turtles were recaptured after an average interval of 390.5±462.6 days (SD). As the mean dispersal distance (MDD) of a turtle population that spreads over the western Mediterranean would stabilize after 117 days (CI 95%: 98 to 149), two analyses were conducted that included data from turtles recaptured after 98 and 149 days respectively. In both analyses, turtles were recaptured more often than expected in the same region where they had been tagged. No difference was found in either of the two regions between the average distance between the capture and recapture locations and the expected MDD if the turtles were to remain in the region where they were first captured. Turtles recaptured after 15 and 25 days respectively were excluded from the analysis to ensure data independence. The overall evidence indicates that immature turtles exhibit strong site fidelity to certain areas and that there is a strong barrier to dispersal between the northern and southern parts of the western Mediterranean. Therefore, loggerhead turtles in the western Mediterranean should be split into at least two management units.

Effect of drift on segregation in two-component diffusion-limited aggregation

An effect of drift is investigated on the segregation pattern in diffusion-limited aggregation (DLA) with two components (A and B species). The sticking probability PAB (=PBA) between the different species is introduced into the DLA model with drift, where the sticking probability PAA (=PBB) between the same species equals 1. By using computer simulation it is found that the drift has an important effect on not only the morphology but also the segregation pattern. Under the drift and the small sticking probability, a characteristic pattern appears where elongated clusters of A species and of B species are periodically dispersed. The period decreases with increasing drift. The periodic structure of the deposits is characterized by an autocorrelation function. The shape of the cluster consisting of only A species (or B species) shows a vertically elongated filamentlike structure. Each cluster becomes vertically longer with decreasing sticking probability PAB. The segregation pattern is distinctly different from that with no drift and a small sticking probability PAA. The effect of the concentration on the segregation pattern is also shown.

La actividad productiva de la fábrica de harinas “La Montserrat” (Girona) en el año agrícola de 1903-1904 = The Production Activities at the Company Harinera “La Montserrat” (Girona) over the Agricultural Year 1903-1904

Harinera La Montserrat, S.A, a company involved in the manufacturing and trading of cereals and flour, was founded in Girona in 1898 by José Ensesa y Cía., Sociedad en Comandita. With the objective to determine how the product activity of this business was structured, we have studied in detail the operations that were carried out over the agricultural year 1903-1904. We have focused on three main aspects. Firstly, the purchasing of wheat (origin, transportation, prices); secondly, the production of flour (using internal and external wheat, profits); and thirdly, its distribution (customers, destination). Finally, we have analyzed the profit and loos account for this period in order to find out if this business was profitable