Can Families Resist Managerial and Financial Revolutions? Swiss Family Firms in the Twentieth Century

The aim of this contribution is to highlight the long-term evolution of family capitalism in Switzerland during the twentieth century. We focus on 22 large companies of the machine, electrotechnical and metallurgy (MEM) sector whose boards of directors and general managers have been identified in five benchmark years across the twentieth century, which allows us to distinguish between family-owned and family-controlled firms. Our results show that family firms prevailed until the 1980s and thus contradict the dominance of 'managerial capitalism'. Although we observe a decline of family capitalism during the last decade of the century, the significant remaining presence of family firms in 2000 allows us to relativise the advent of investor capitalism.

Effect of a national primary care pay for performance scheme on emergency hospital admissions for ambulatory care sensitive conditions: controlled longitudinal study.

OBJECTIVE: To estimate the impact of a national primary care pay for performance scheme, the Quality and Outcomes Framework in England, on emergency hospital admissions for ambulatory care sensitive conditions (ACSCs). DESIGN: Controlled longitudinal study. SETTING: English National Health Service between 1998/99 and 2010/11. PARTICIPANTS: Populations registered with each of 6975 family practices in England. MAIN OUTCOME MEASURES: Year specific differences between trend adjusted emergency hospital admission rates for incentivised ACSCs before and after the introduction of the Quality and Outcomes Framework scheme and two comparators: non-incentivised ACSCs and non-ACSCs. RESULTS: Incentivised ACSC admissions showed a relative reduction of 2.7% (95% confidence interval 1.6% to 3.8%) in the first year of the Quality and Outcomes Framework compared with ACSCs that were not incentivised. This increased to a relative reduction of 8.0% (6.9% to 9.1%) in 2010/11. Compared with conditions that are not regarded as being influenced by the quality of ambulatory care (non-ACSCs), incentivised ACSCs also showed a relative reduction in rates of emergency admissions of 2.8% (2.0% to 3.6%) in the first year increasing to 10.9% (10.1% to 11.7%) by 2010/11. CONCLUSIONS: The introduction of a major national pay for performance scheme for primary care in England was associated with a decrease in emergency admissions for incentivised conditions compared with conditions that were not incentivised. Contemporaneous health service changes seem unlikely to have caused the sharp change in the trajectory of incentivised ACSC admissions immediately after the introduction of the Quality and Outcomes Framework. The decrease seems larger than would be expected from the changes in the process measures that were incentivised, suggesting that the pay for performance scheme may have had impacts on quality of care beyond the directly incentivised activities.

Inactivation des pathogènes des produits sanguins labiles: entre enjeux financiers et conséquences possibles à long terme [Pathogen reduction of blood components: from financial issues to possible long-term consequences].

Pathogen inactivation of blood products represents a global and major paradigm shift in transfusion medicine. In the next near future, it is likely that most blood products will be inactivated by various physicochemical approaches. The concept of blood safety will be challenged as well as transfusion medicine practice, notably for donor selection or biological qualification. In this context, it seems mandatory to develop analytical economic approaches by assessing costs-benefits ratio of blood transfusion as well as to set up cohorts of patients based on hemovigilance networks allowing rigorous scientific analysis of the benefits and the risks of blood transfusion at short- and long-term.

Do Financial Incentives Affect Firms' Demand For Disabled Workers?

A number of OECD countries aim to encourage work integration of disabled persons using quota policies. For instance, Austrian firms must provide at least one job to a disabled worker per 25 nondisabled workers and are subject to a tax if they do not. This "threshold design" provides causal estimates of the noncompliance tax on disabled employment if firms do not manipulate nondisabled employment; a lower and upper bound on the causal effect can be constructed if they do. Results indicate that firms with 25 nondisabled workers employ about 0.04 (or 12%) more disabled workers than without the tax; firms do manipulate employment of nondisabled workers but the lower bound on the employment effect of the quota remains positive; employment effects are stronger in low-wage firms than in high-wage firms; and firms subject to the quota of two disabled workers or more hire 0.08 more disabled workers per additional quota job. Moreover, increasing the noncompliance tax increases excess disabled employment, whereas paying a bonus to overcomplying firms slightly dampens the employment effects of the tax.

Quand la peur des dépenses incite au gaspillage humain et financier [When the fear of spending incites a human and financial waste!]

Dans les années 80, la crainte de la pléthore médicale imposait des mesures radicales. En 2002, c'est l'angoisse de l'envahisseur européen qui a justifié un moratoire sur l'ouverture de nouveaux cabinets. Aujourd'hui, alors que la Suisse recrute de plus en plus de médecins étrangers pour ses besoins, le Conseiller fédéral Couchepin brandit la menace d'une augmentation des coûts de la santé de 300 millions par an pour justifier une troisième prolongation du moratoire. Ces mesures ont été dictées par la peur d'une explosion des coûts au point de faire perdre de vue la globalité de la situation. Aujourd'hui pourtant, une gestion rationnelle des ressources impose de tout faire pour qu'un maximum de médecins puissent travailler, car la population en a besoin et a déjà beaucoup investi dans leur formation ! Pour y parvenir, la création de postes d'assistanat à temps partiel, l'adaptation urgente des structures d'accueil en garderie et le respect de conditions de travail raisonnables sont des éléments incontournables mais trop souvent négligés par les politiques et les médecins eux-mêmes !

Financial Markets and Real Ecinomy: Four Essays in International Trade

Financial markets play an important role in an economy performing various functions like mobilizing and pooling savings, producing information about investment opportunities, screening and monitoring investments, implementation of corporate governance, diversification and management of risk. These functions influence saving rates, investment decisions, technological innovation and, therefore, have important implications for welfare. In my PhD dissertation I examine the interplay of financial and product markets by looking at different channels through which financial markets may influence an economy.My dissertation consists of four chapters. The first chapter is a co-authored work with Martin Strieborny, a PhD student from the University of Lausanne. The second chapter is a co-authored work with Melise Jaud, a PhD student from the Paris School of Economics. The third chapter is co-authored with both Melise Jaud and Martin Strieborny. The last chapter of my PhD dissertation is a single author paper.Chapter 1 of my PhD thesis analyzes the effect of financial development on growth of contract intensive industries. These industries intensively use intermediate inputs that neither can be sold on organized exchange, nor are reference-priced (Levchenko, 2007; Nunn, 2007). A typical example of a contract intensive industry would be an industry where an upstream supplier has to make investments in order to customize a product for needs of a downstream buyer. After the investment is made and the product is adjusted, the buyer may refuse to meet a commitment and trigger ex post renegotiation. Since the product is customized to the buyer's needs, the supplier cannot sell the product to a different buyer at the original price. This is referred in the literature as the holdup problem. As a consequence, the individually rational suppliers will underinvest into relationship-specific assets, hurting the downstream firms with negative consequences for aggregate growth. The standard way to mitigate the hold up problem is to write a binding contract and to rely on the legal enforcement by the state. However, even the most effective contract enforcement might fail to protect the supplier in tough times when the buyer lacks a reliable source of external financing. This suggests the potential role of financial intermediaries, banks in particular, in mitigating the incomplete contract problem. First, financial products like letters of credit and letters of guarantee can substantially decrease a risk and transaction costs of parties. Second, a bank loan can serve as a signal about a buyer's true financial situation, an upstream firm will be more willing undertake relationship-specific investment knowing that the business partner is creditworthy and will abstain from myopic behavior (Fama, 1985; von Thadden, 1995). Therefore, a well-developed financial (especially banking) system should disproportionately benefit contract intensive industries.The empirical test confirms this hypothesis. Indeed, contract intensive industries seem to grow faster in countries with a well developed financial system. Furthermore, this effect comes from a more developed banking sector rather than from a deeper stock market. These results are reaffirmed examining the effect of US bank deregulation on the growth of contract intensive industries in different states. Beyond an overall pro-growth effect, the bank deregulation seems to disproportionately benefit the industries requiring relationship-specific investments from their suppliers.Chapter 2 of my PhD focuses on the role of the financial sector in promoting exports of developing countries. In particular, it investigates how credit constraints affect the ability of firms operating in agri-food sectors of developing countries to keep exporting to foreign markets.Trade in high-value agri-food products from developing countries has expanded enormously over the last two decades offering opportunities for development. However, trade in agri-food is governed by a growing array of standards. Sanitary and Phytosanitary standards (SPS) and technical regulations impose additional sunk, fixed and operating costs along the firms' export life. Such costs may be detrimental to firms' survival, "pricing out" producers that cannot comply. The existence of these costs suggests a potential role of credit constraints in shaping the duration of trade relationships on foreign markets. A well-developed financial system provides the funds to exporters necessary to adjust production processes in order to meet quality and quantity requirements in foreign markets and to maintain long-standing trade relationships. The products with higher needs for financing should benefit the most from a well functioning financial system. This differential effect calls for a difference-in-difference approach initially proposed by Rajan and Zingales (1998). As a proxy for demand for financing of agri-food products, the sanitary risk index developed by Jaud et al. (2009) is used. The empirical literature on standards and norms show high costs of compliance, both variable and fixed, for high-value food products (Garcia-Martinez and Poole, 2004; Maskus et al., 2005). The sanitary risk index reflects the propensity of products to fail health and safety controls on the European Union (EU) market. Given the high costs of compliance, the sanitary risk index captures the demand for external financing to comply with such regulations.The prediction is empirically tested examining the export survival of different agri-food products from firms operating in Ghana, Mali, Malawi, Senegal and Tanzania. The results suggest that agri-food products that require more financing to keep up with food safety regulation of the destination market, indeed sustain longer in foreign market, when they are exported from countries with better developed financial markets.Chapter 3 analyzes the link between financial markets and efficiency of resource allocation in an economy. Producing and exporting products inconsistent with a country's factor endowments constitutes a serious misallocation of funds, which undermines competitiveness of the economy and inhibits its long term growth. In this chapter, inefficient exporting patterns are analyzed through the lens of the agency theories from the corporate finance literature. Managers may pursue projects with negative net present values because their perquisites or even their job might depend on them. Exporting activities are particularly prone to this problem. Business related to foreign markets involves both high levels of additional spending and strong incentives for managers to overinvest. Rational managers might have incentives to push for exports that use country's scarce factors which is suboptimal from a social point of view. Export subsidies might further skew the incentives towards inefficient exporting. Management can divert the export subsidies into investments promoting inefficient exporting.Corporate finance literature stresses the disciplining role of outside debt in counteracting the internal pressures to divert such "free cash flow" into unprofitable investments. Managers can lose both their reputation and the control of "their" firm if the unpaid external debt triggers a bankruptcy procedure. The threat of possible failure to satisfy debt service payments pushes the managers toward an efficient use of available resources (Jensen, 1986; Stulz, 1990; Hart and Moore, 1995). The main sources of debt financing in the most countries are banks. The disciplining role of banks might be especially important in the countries suffering from insufficient judicial quality. Banks, in pursuing their rights, rely on comparatively simple legal interventions that can be implemented even by mediocre courts. In addition to their disciplining role, banks can promote efficient exporting patterns in a more direct way by relaxing credit constraints of producers, through screening, identifying and investing in the most profitable investment projects. Therefore, a well-developed domestic financial system, and particular banking system, would help to push a country's exports towards products congruent with its comparative advantage.This prediction is tested looking at the survival of different product categories exported to US market. Products are identified according to the Euclidian distance between their revealed factor intensity and the country's factor endowments. The results suggest that products suffering from a comparative disadvantage (labour-intensive products from capital-abundant countries) survive less on the competitive US market. This pattern is stronger if the exporting country has a well-developed banking system. Thus, a strong banking sector promotes exports consistent with a country comparative advantage.Chapter 4 of my PhD thesis further examines the role of financial markets in fostering efficient resource allocation in an economy. In particular, the allocative efficiency hypothesis is investigated in the context of equity market liberalization.Many empirical studies document a positive and significant effect of financial liberalization on growth (Levchenko et al. 2009; Quinn and Toyoda 2009; Bekaert et al., 2005). However, the decrease in the cost of capital and the associated growth in investment appears rather modest in comparison to the large GDP growth effect (Bekaert and Harvey, 2005; Henry, 2000, 2003). Therefore, financial liberalization may have a positive impact on growth through its effect on the allocation of funds across firms and sectors.Free access to international capital markets allows the largest and most profitable domestic firms to borrow funds in foreign markets (Rajan and Zingales, 2003). As domestic banks loose some of their best clients, they reoptimize their lending practices seeking new clients among small and younger industrial firms. These firms are likely to be more risky than large and established companies. Screening of customers becomes prevalent as the return to screening rises. Banks, ceteris paribus, tend to focus on firms operating in comparative-advantage sectors because they are better risks. Firms in comparative-disadvantage sectors finding it harder to finance their entry into or survival in export markets either exit or refrain from entering export markets. On aggregate, one should therefore expect to see less entry, more exit, and shorter survival on export markets in those sectors after financial liberalization.The paper investigates the effect of financial liberalization on a country's export pattern by comparing the dynamics of entry and exit of different products in a country export portfolio before and after financial liberalization.The results suggest that products that lie far from the country's comparative advantage set tend to disappear relatively faster from the country's export portfolio following the liberalization of financial markets. In other words, financial liberalization tends to rebalance the composition of a country's export portfolio towards the products that intensively use the economy's abundant factors.

The INTERNORM project : bridging two worlds of expert- and layknowledge in standardization

This paper presents a pilot project to reinforce participatory practices in standardization. The INTERNORM project is funded by the University of Lausanne, Switzerland. It aims to create an interactive knowledge center based on the sharing of academic skills and the experiences accumulated by the civil society, especially consumer associations, environmental associations and trade unions to strengthen the participatory process of standardization. The first objective of the project is action-oriented: INTERNORM provides a common knowledge pool supporting the participation of civil society actors to international standard-setting activities by bringing them together with academic experts in working groups and by providing logistic and financial support to their participation to meetings of national and international technical committees. The second objective of the project is analytical: the standardization action initiated through INTERNORM provides a research field for a better understanding of the participatory dynamics underpinning international standardization. The paper presents three incentives that explain civil society (non-)involvement in standardization that try to overcome conventional resource-based hypotheses: an operational incentive, related to the use of standards in the selective goods provided by associations to their membership; a thematic incentive, provided by the setting of priorities by strategic committees created in some standardization organization; a rhetorical incentive, related to the discursive resource that civil society concerns offers to the different stakeholders.