The optimal behaviour of firms facing stochastic costs

This paper aims at assessing the optimal behavior of a firm facing stochastic costs of production. In an imperfectly competitive setting, we evaluate to what extent a firm may decide to locate part of its production in other markets different from which it is actually settled. This decision is taken in a stochastic environment. Portfolio theory is used to derive the optimal solution for the intertemporal profit maximization problem. In such a framework, splitting production between different locations may be optimal when a firm is able to charge different prices in the different local markets.

Human capital in export-based internationalisation. "Managerial determinants and their influence upon the export behaviour of the firm: four case-studies of catalan exporting SMEs"

Export activities are a major source of economic growth and are considered important both at the national level and for individual businesses. Moreover, in the case of SMEs, they gain particular relevance, exporting being the most common foreign market entry mode for these firms. The decision maker’s role in the export activity is crucial, particularly in the case of SMEs. However, the extant literature on internationalization is characterized by a lack of consensus among scholars as to what constitutes the managerial factor in determining exporting. Therefore, this study focuses on the following issue: Which are the decision maker’s characteristics and perceptions that may influence the export behaviour of Catalan SMEs? To address this question a multiple case study method is applied across four Catalan exporting SMEs. The methodology chosen for analysing the empirical data is relying on the proposition testing approach while the investigation is conducted including both within and cross-case analysis. The findings show that high educational level, language skills, high risk tolerance, innovativeness as well as strongly perceived export stimuli as compared to low and easy to overcome export barriers positively influence the export involvement and development of SMEs. The study provides further insights into the research topic by jointly studying managerial characteristics and perceptions. Additionally, the majority of research on exporting topics has been carried out in the USA, so there is a clear need of investigation in the field in other countries, moreover in Spain where the exporting activities have not been as widely studied.

Political autonomy and independence: theory and experimental evidence

We study the process by which subordinated regions of a country can obtain a more favourable political status. In our theoretical model a dominant and a dominated region first interact through a voting process that can lead to different degrees of autonomy. If this process fails then both regions engage in a costly political conflict which can only lead to the maintenance of the initial subordination of the region in question or to its complete independence. In the subgame-perfect equilibrium the voting process always leads to an intermediate arrangement acceptable for both parts. Hence, the costly political struggle never occurs. In contrast, in our experiments we observe a large amount of fighting involving high material losses, even in a case in which the possibilities for an arrangement without conflict are very salient. In our experimental environment intermediate solutions are feasible and stable, but purely emotional elements prevent them from being reached.

Political institutions and the development of telecommunications

It has traditionally been argued that the development of telecommunications infrastructure is dependent on the quality of countries' political institutions. We estimate the effect of political institutions on the diffusion of three telecommunications services and find it to be much smaller in cellular telephony than in the others. By evaluating the importance of institutions for technologies rather than for industries, we reveal important growth opportunities for developing countries and offer policy implications for alleviating differences between countries in international telecommunications development. Keywords: Political constraints, telecommunications, GMM, economic development. JEL codes: O1, O3.

Inter-group conflict and intra-group punishment in an experimental contest game

We study how conflict in a contest game is influenced by rival parties being groups and by group members being able to punish each other. Our main motivation stems from the analysis of socio-political conflict. The relevant theoretical prediction in our setting is that conflict expenditures are independent of group size and independent of whether punishment is available or not. We find, first, that our results contradict the independence of group-size prediction: conflict expenditures of groups are substantially larger than those of individuals, and both are substantially above equilibrium. Towards the end of the experiment material losses in groups are 257% of the predicted level. There is, however, substantial heterogeneity in the investment behaviour of individual group members. Second, allowing group members to punish each other after individual contributions to the contest effort are revealed leads to even larger conflict expenditures. Now material losses are 869% of the equilibrium level and there is much less heterogeneity in individual group members' investments. These results contrast strongly with those from public goods experiments where punishment enhances efficiency and leads to higher material payoffs.

Political elites in federalized countries: the case of Spain (1980-2005)

This paper explores the social profile of the regional elite that has emerged in Spain since the federalization of the State. For the first time, researchers present data about crucial variables like gender, place of birth, age, education, and profession. They make interregional comparisons, and try to explain some unexpected findings like the behavior of political elites in some regions like Catalonia. The authors compare also the social profile of MPs of the two largest parties.

Earnings management and cultural values

Using theory and empirical data from social psychology to measure for cultural differences between countries, we study the effect of individualism as defined by Hofstede (1980) and egalitarianism as defined by Schwartz (1994, 1999, 2004) on earnings management. We find a significant influence of both cultural measures. In line with Licht et al. (2004), who argue that individualistic societies may be less susceptible to corruption, we find that countries scoring high on individualism tend to have lower levels of earnings management. In addition, we find that egalitarianism, defined as a society's cultural orientation with respect to intolerance for abuses of market and political power, is negatively related with earnings management. Our results are robust to different specifications and controls. The main message of this paper is that besides formal institutions, cultural differences are relevant to explain earnings management behaviour. We think that our work adds to the understanding of the importance of cultural values in managerial behaviour across countries contributing to the literature on earnings management and law and institutions.

Political institutions and the development of telecomunications

It has traditionally been argued that the development of telecommunications infrastructure is dependent on the quality of countries’ political institutions. We estimate the effect of political institutions on the diffusion of three telecommunications services and find it to be much smaller in cellular telephony than in the others. By evaluating the importance of institutions for technologies rather than for industries, we reveal important growth opportunities for developing countries and offer policy implications for alleviating differences between countries in international telecommunications development.

Political alliances and organisational change in political parties: a framework for analysis

This article sets out a theoretical framework for the study of organisational change within political alliances. To achieve this objective it uses as a starting point a series of premises, the most notable of which include the definition of organisational change as a discrete, complex and focussed phenomenon of changes in power within the party. In accordance with these premises, it analyses the synthetic model of organisational change proposed by Panebianco (1988). After examining its limitations, a number of amendments are proposed to adapt it to the way political alliances operate. The above has resulted in the design of four new models. In order to test its validity and explanatory power in a preliminary manner, the second part looks at the organisational change of the UDC within the CiU alliance between 1978 and 2001. The discussion and conclusions reached demonstrate the problems of determinism of the Panebianco model and suggest, tentatively, the importance of the power balance within the alliance as a key factor.

The Political Economy of Resource Rent Distribution

I model the link between political regime and level of diversification following a windfall of natural resource revenues. The explanatory variables I make use of are the political support functions embedded within each type of regime and the disparate levels of discretion, openness, transparency, and accountability of government. I show that a democratic government seeks to maximize the long-term consumption path of the representative consumer, in order to maximize its chances of re-election, while an authoritarian government, in the absence of any electoral mechanism of accountability, seeks to buy off and entrench a group of special interests loyal to the government and potent enough to ensure its short-term survival. Essentially the contrast in the approaches towards resource rent distribution comes down to a variation in political weights on aggregate welfare and rentierist special interests endogenized by distinct political support functions.

Water scarcity, social power and the production of an elite suburb: the political ecology of water in Matadepera, Catalonia

This article investigates the history of land and water transformations in Matadepera, a wealthy suburb of metropolitan Barcelona. Analysis is informed by theories of political ecology and methods of environmental history; although very relevant, these have received relatively little attention within ecological economics. Empirical material includes communications from the City Archives of Matadepera (1919-1979), 17 interviews with locals born between 1913 and 1958, and an exhaustive review of grey historical literature. Existing water histories of Barcelona and its outskirts portray a battle against natural water scarcity, hard won by heroic engineers and politicians acting for the good of the community. Our research in Matadepera tells a very different story. We reveal the production of a highly uneven landscape and waterscape through fierce political and power struggles. The evolution of Matadepera from a small rural village to an elite suburb was anything but spontaneous or peaceful. It was a socio-environmental project well intended by landowning elites and heavily fought by others. The struggle for the control of water went hand in hand with the land and political struggles that culminated – and were violently resolved - in the Spanish Civil War. The displacement of the economic and environmental costs of water use from few to many continues to this day and is constitutive of Matadepera’s uneven and unsustainable landscape. By unravelling the relations of power that are inscribed in the urbanization of nature (Swyngedouw, 2004), we question the perceived wisdoms of contemporary water policy debates, particularly the notion of a natural scarcity that merits a technical or economic response. We argue that the water question is fundamentally a political question of environmental justice; it is about negotiating alternative visions of the future and deciding whose visions will be produced.

Still in the Era of Area Studies? Political-Scientific Perspectives on European Competition Policy in the 2000s

This note reviews the political-scientific literature on European competition policy (ECP) in the 2000s. Based on a data set extracted from four well-known journals, and using an upfront methodology and explicit criteria, it analyzes the literature both quantitatively and qualitatively. On the quantitative side, it shows that, although a few sub-policy areas are still neglected, ECP is not the under-researched policy it used to be. On the qualitative side, the literature has greatly improved since the 1990s: Almost all articles now present a clear research question, and most advance specific theoretical claims/hypotheses. Yet, improvements can be made on research design, statistical testing, and, above all, state-of-the-art theorizing (e.g. in the game-theoretical treatment of delegation problems). Indeed, it is paradoxical that ECP specialists do not pay more attention to theoretical questions which are so central to the actual policy area they study.

Perceptions of Europe in political and economic elites: a geographical compared analysis of Germany, Spain and Poland

Elite perceptions about Europe are a very important point in order to understand the current European integration process, as well as the future perspectives for the continent. This study makes a comparison between the perceptions which political and economical elites in some European countries have about the European Union process and its mechanisms. The main goal is to identify the differences in positions of each type of elites, as well as the variations among three key countries. The database built thanks to the INTUNE (Integrated and United? A quest for Citizenship in an ¨ever closer Europe¨) Project Survey on European Elites and Masses, funded by the Sixth Framework Programme of the EU [Contract CIT 3-CT-2005-513421] have being used. The questionnaire was applied between February and May 2007, in a total of 18 European countries. The national teams got a total of almost 2000 valid responses at European level. In the analysis we have showed some general descriptive statistics about the perception of Europe taking as a reference two dimensions of the INTUNE project: identity (attachment to the national level, the meaning of being a truly national, and the threats from Turkey that EU is facing at this moment) and representation (trust in European and national institutions, preferences for a national or an European army). The results are presented distinguishing between political (national MP’s in low chambers) and economical elites (presidents of corporations, general managers…) and, at the same time, among three countries: Germany as an original member of the European Union; Spain, incorporated in 1986; and a new member, Poland, joining the EU in 2004.

Effect of magnesium sulphate and L-tryptophan and genotype on the feed intake, behaviour and meat quality of pigs

Sixty-nine entire male pigs with different halothane genotype (homozygous halothane positive – nn –, n=36; and homozygous halothane negative – NN-, n=33) were fed with a supplementation of magnesium sulphate (Mg) and/or L-tryptophan (Trp) in the diet for 5 days before slaughter. Animals were housed individually and were submitted to stressful ante mortem conditions (mixed in the lorry according to treatments and transported 1 hour on rough roads). Individual feed intake was recorded during the 5-d treatment. At the abattoir, pig behaviour was assessed in the raceway to the stunning system and during the stunning period by exposure to CO2. Muscle pH, colour, water holding capacity, texture and cathepsin activities were determined to assess meat quality. The number of pigs with an individual feed intake lower than 2 kg/d was significantly different among diets (P&0.05; Control: 8.7 %; Mg&Trp: 43.5 %; Trp: 17.4 %) and they were considered to have inadequate supplement intake. During the ante mortem period, 15.2 % of pigs included in the experiment died, and this percentage decreased to 8.7 % in those pigs with a feed intake & 2kg/day, all of them from the stress-sensitive pigs (nn). In general, no differences were observed in the behaviour of pigs along the corridor leading to the stunning system and inside the CO2 stunning system. During the stunning procedure, Trp diet showed shorter periods of muscular excitation than control and Mg&Trp diets. The combination of a stressful ante mortem treatment and Mg&Trp supplementation led to carcasses with high incidence of severe skin lesions. Different meat quality results were found when considering all pigs or considering only those with adequate supplement intake. In this later case, Trp increased pH45 (6.15) vs Control diet (5.96) in the Longissimus thoracis (LT) muscle (P&0.05) and pH at 24h (Trp: 5.59 vs C: 5.47) led to a higher incidence of dark, firm and exudative (DFD) traits in SM muscle (P&0.05). Genotype affected negatively all the meat quality traits. Seventy-five percent of LT and 60.0 % of the SM muscles from nn pigs were classified as pale, soft and exudative (PSE), while none of the NN pigs showed these traits (P&0.0001). No significant differences were found between genotypes on the incidence of DFD meat. Due to the negative effects observed in the Mg&Trp group in feed intake and carcass quality, the utilization of a mixture of magnesium sulphate and tryptophan is not recommended.

The political ecology of Jatropha plantations for biodiesel in Tamil Nadu, India

Jatropha curcas is promoted internationally for its presumed agronomic viability in marginal lands, economic returns for small farmers, and lack of competition with food crops. However, empirical results from a study in southern India revealed that Jatropha cultivation, even on agricultural lands, is neither profitable, nor pro-poor. We use a political ecology framework to analyze both the discourse promoting Jatropha cultivation and its empirical consequences. We deconstruct the shaky premises of the dominant discourse of Jatropha as a “pro-poor” and “pro-wasteland” development crop, a discourse that paints a win-win picture between poverty alleviation, natural resource regeneration, and energy security goals. We then draw from field-work on Jatropha plantations in the state of Tamil Nadu to show how Jatropha cultivation favors resource-rich farmers, while possibly reinforcing existing processes of marginalization of small and marginal farmers.