Three essays on short-term macroeconomics : business fluctuations, large devaluations and inflation dynamics

Résumé: At least since the Great Depression, explaining why there are business fluctuations has been one of the biggest challenges that the science of economics has had to face. The hope is that if we could better understand recessions, then we could also be more successful in overcoming them. This dissertation consists of three papers that are part of the general endeavor of economists to understand these fluctuations. The first paper discusses, for a particular model, whether a result related to fluctuations would still hold if time were modeled as continuous rather than discrete. The two other papers focus on price stickiness. The second paper discusses why, after a large devaluation, prices of non-tradables may change by only a small amount in comparison to the magnitude of the devaluation. The third paper examines price adjustment in a model in which information is imperfect and it is costly to change prices.

Three essays on the determinants of output, inflation and interest rates

Résumé: Output, inflation and interest rates are key macroeconomic variables, in particular for monetary policy. In modern macroeconomic models they are driven by random shocks which feed through the economy in various ways. Models differ in the nature of shocks and their transmission mechanisms. This is the common theme underlying the three essays of this thesis. Each essay takes a different perspective on the subject: First, the thesis shows empirically how different shocks lead to different behavior of interest rates over the business cycle. For commonly analyzed shocks (technology and monetary policy errors), the patterns square with standard models. The big unknown are sources of inflation persistence. Then the thesis presents a theory of monetary policy, when the central bank can better observe structural shocks than the public. The public will then seek to infer the bank's extra knowledge from its policy actions and expectation management becomes a key factor of optimal policy. In a simple New Keynesian model, monetary policy becomes more concerned with inflation persistence than otherwise. Finally, the thesis points to the huge uncertainties involved in estimating the responses to structural shocks with permanent effects.

Three essays in dynamic corporate finance

The three essays constituting this thesis focus on financing and cash management policy. The first essay aims to shed light on why firms issue debt so conservatively. In particular, it examines the effects of shareholder and creditor protection on capital structure choices. It starts by building a contingent claims model where financing policy results from a trade-off between tax benefits, contracting costs and agency costs. In this setup, controlling shareholders can divert part of the firms' cash ows as private benefits at the expense of minority share- holders. In addition, shareholders as a class can behave strategically at the time of default leading to deviations from the absolute priority rule. The analysis demonstrates that investor protection is a first order determinant of firms' financing choices and that conflicts of interests between firm claimholders may help explain the level and cross-sectional variation of observed leverage ratios. The second essay focuses on the practical relevance of agency conflicts. De- spite the theoretical development of the literature on agency conflicts and firm policy choices, the magnitude of manager-shareholder conflicts is still an open question. This essay proposes a methodology for quantifying these agency conflicts. To do so, it examines the impact of managerial entrenchment on corporate financing decisions. It builds a dynamic contingent claims model in which managers do not act in the best interest of shareholders, but rather pursue private benefits at the expense of shareholders. Managers have discretion over financing and dividend policies. However, shareholders can remove the manager at a cost. The analysis demonstrates that entrenched managers restructure less frequently and issue less debt than optimal for shareholders. I take the model to the data and use observed financing choices to provide firm-specific estimates of the degree of managerial entrenchment. Using structural econometrics, I find costs of control challenges of 2-7% on average (.8-5% at median). The estimates of the agency costs vary with variables that one expects to determine managerial incentives. In addition, these costs are sufficient to resolve the low- and zero-leverage puzzles and explain the time series of observed leverage ratios. Finally, the analysis shows that governance mechanisms significantly affect the value of control and firms' financing decisions. The third essay is concerned with the documented time trend in corporate cash holdings by Bates, Kahle and Stulz (BKS,2003). BKS find that firms' cash holdings double from 10% to 20% over the 1980 to 2005 period. This essay provides an explanation of this phenomenon by examining the effects of product market competition on firms' cash holdings in the presence of financial constraints. It develops a real options model in which cash holdings may be used to cover unexpected operating losses and avoid inefficient closure. The model generates new predictions relating cash holdings to firm and industry characteristics such as the intensity of competition, cash flow volatility, or financing constraints. The empirical examination of the model shows strong support of model's predictions. In addition, it shows that the time trend in cash holdings documented by BKS can be at least partly attributed to a competition effect.

Essays on Innovativeness and its Evaluation in Small and Medium-sized Enterprises

Tutkimus koostuu neljästä artikkelista, jotka käsittelevät suomalaisten pienten ja keskisuurten teollisuusyritysten (PKT-yritysten) innovatiivisuutta, sen attribuutteja (ominaispiirteitä) sekä indikaattoreita. Tutkimuksessa tarkastellaan sekä kirjallisuudessa esitettyjä että PKT-johtajien ja PKT-yritystenkehityshankkeiden rahoituspäätöksiin osallistuvien yritystutkijoiden haastatteluissa esittämiä innovatiivisuuden määritelmiä. Innovatiivisuusindikaattoreista tarkastellaan PKT-yritysten kehittämishankkeille sovellettavia rahoitus- ja arviointikriteerejä sekä yritysten ulkopuolisten rahoittajien että PKT-johtajien näkökulmasta. Erityistä huomiota kohdistetaan sovellettuihin laadullisiin ja ei-numeerisiin innovatiivisuuden arviointikriteereihin. Sekä kirjallisuudessa että kymmenen yritystutkijan ja kuuden esimerkkiyrityksen johtajan haastatteluissa innovaation uutuus yhdistetään innovatiivisuuteen. Muita tärkeitä innovatiivisuuteen liitettyjä ominaisuuksia olivat markkinat, muista yrityksistä erottuminen ja yksilöiden luovuus. Ihmisläheiset ja yksilöihin liittyvät näkökulmat korostuvat yritystutkijoiden ja PKT-johtajien innovatiivisuuden määritelmissä, kun taas kirjallisuudessa annetaan enemmän painoa ympäristölle, tuotteille ja markkinoille. Yritystutkijat pitivät yritykseen ja sen johtajaan liittyviä tekijöitä tärkeinä rahoitettavien kehittämishankkeiden panosten arviointikriteereinä. Tuotteiden kaupallinen menestys oli rahoittajan kannalta tärkein tulostekijä. Tarkastelluissa esimerkkiyrityksissä kehityshankkeista päättäminen ja hankkeiden arviointi on toisaalta intuitiivista ja saattaa olla tiedostamatontakin, koska yritysten kehittämistoiminta on vähäistä. Pienyritysten johtajat korostavat arvioinnissa rahallisiamittareita, vaikka sekä numeerisia että laadullisia kriteereitä sovelletaan. Todennäköisin syy tälle on pienyritysten rajalliset taloudelliset voimavarat. Toinen mahdollinen syy rahoituksellisten tekijöiden painottamiseen on, että tämän päivän ihannejohtaja ymmärretään analyyttiseksi ja mm.rahavirtoja valvovaksi. Kuitenkin innovatiiviset yritysjohtajat pitävät innovaatioiden luomista yhtenä elämän hauskoista puolista. Innovatiiviset esimerkkiyritykset ovat tulevaisuuteen ja kasvuun suuntautuneita strategisella tasolla. Operationaalisella tasolla ne tuottavat keksintöjä ja innovaatioita. Patentteja tarkastelluilla yrityksillä on kuitenkin vähän. Sekä innovatiiviset että vähemmän innovatiiviset esimerkkiyritykset ovat voimakkaasti asiakassuuntautuneita ja erikoistuneita tiettyihin tuotteisiin ja asiakkaisiin. Asiakkaiden tarpeita tyydytetään kehittämällä niitä vastaavia tuotteita. Tästä johtuu, että valtaosa yritysten kehittämistoiminnasta kohdistuu tuotteisiin tai tuotantoon.

Predictions of the MCMI-III personality disorders from NEO-PI-R domains and facets: Comparison between American and Spanish samples

Este estudio ex post facto analiza las relaciones entre las dimensiones y facetas del NEO-PI-R y los 14 trastornos de personalidad del MCMI-III en una muestra no clínica española (N = 674). Se exploran las diferencias y similitudes con los resul- tados de Dyce y O’Connor en una muestra americana con los mismos instrumentos. Como se esperaba, los análisis factoriales de facetas reteniendo cinco factores mostraron un modelo de relaciones muy similar entre ambas muestras, con un coeficiente de la congruencia total de 0,92, y coeficientes de congruencia de factor aceptables, salvo para el factor Apertura (0,68). En consonancia con las predicciones de Widiger y Widiger et al. los porcentajes de correlaciones significativas estaban alrededor de 60% en ambas muestras, y la mayoría coincidían. El análisis de regresión múltiple con dimensiones también reveló un gran parecido entre los resultados americanos y españoles, Neuroticismo fue el predictor más relacionado con los trastornos de personalidad. Se encontraron diferencias en las regresiones por facetas, aunque la varianza explicada fue prácticamente la misma que en las dimensiones. Se discute la validez transcultural y el valor predictivo del NEO-PI-R sobre los trastornos de personalidad del MCMI-III, junto con las ventajas relativas de las facetas sobre las dimensiones.

Validation study of the Spanish Version of the Work-Family Conflict Questionnaire (CCTF)

In this study, a brief Work-Family Conflict (WFC) Questionnaire in the Spanish language is proposed that takes into account the two directions commonly reported in the literature: work interference with family (WIF), and family interference with work (FIW). The results obtained through exploratory factor analyses (EFA) and confirmatory factor analyses (CFA) with two independent samples, carried out for women and men, showed acceptable validity and reliability. A copy of the instrument in Spanish language is provided, together with the Amos 4 syntax to perform the factor invariance analysis for women and men. The suggested Work-Family Conflict Questionnaire (in Spanish, abbreviated as CCTF) may be useful in studies performed in the work setting, considering the special relevance of the concept in this line of research.

Emergency hospital services utilization in Lleida (Spain): a cross-sectional study of immigrant and Spanish-born populations

Background: The use of emergency hospital services (EHS) has increased steadily in Spain in the last decade while the number of immigrants has increased dramatically. Studies show that immigrants use EHS differently than native-born individuals, and this work investigates demographics, diagnoses and utilization rates of EHS in Lleida (Spain). Methods: Cross-sectional study of all the 96,916 EHS visits by patients 15 to 64 years old, attended during the years 2004 and 2005 in a public teaching hospital. Demographic data, diagnoses of the EHS visits, frequency of hospital admissions, mortality and diagnoses at hospital discharge were obtained. Utilization rates were estimated by group of origin. Poisson regression was used to estimate the rate ratios of being visited in the EHS with respect to the Spanish-born population. Results: Immigrants from low-income countries use EHS services more than the Spanish-born population. Differences in utilization patterns are particularly marked for Maghrebi men and women and sub-Saharan women. Immigrant males are at lower risk of being admitted to the hospital, as compared with Spanish-born males. On the other hand, immigrant women are at higher risk of being admitted. After excluding the visits with gynecologic and obstetric diagnoses, women from sub-Saharan Africa and the Maghreb are still at a higher risk of being admitted than their Spanish-born counterparts. Conclusion: In Lleida (Spain), immigrants use more EHS than the Spanish born population. Future research should indicate whether the same pattern is found in other areas of Spain and whether EHS use is attributable to health needs, barriers to access to the primary care services or similarities in the way immigrants access health care in their countries of origin.

Differences in pharmaceutical consumption and expenses between immigrant and Spanish-born populations in Lleida, (Spain): a 6-months prospective observational study

Background: There are few studies comparing pharmaceutical costs and the use of medications between immigrants and the autochthonous population in Spain. The objective of this study is to evaluate whether there are differences in pharmaceutical consumption and expenses between immigrant and Spanish-born populations. Methods: Prospective observational study in 1,630 immigrants and 4,154 Spanish-born individuals visited by fifteen primary care physicians at five public Primary Care Clinics (PCC) during 2005 in the city of Lleida, Catalonia (Spain). Data on pharmaceutical consumption and expenses was obtained from a comprehensive computerized data-collection system. Multinomial regression models were used to estimate relative risks and confidence intervals of pharmaceutical expenditure, adjusting for age and sex. Results: The percentage of individuals that purchased medications during a six-month period was 53.7% in the immigrant group and 79.2% in the autochthonous group. Pharmaceutical expenses and consumption were lower in immigrants than in autochthonous patients in all age groups and both genders. The relative risks of being in the highest quartile of expenditure, for Spanish-born versus immigrants, were 6.9, 95% CI = (4.2, 11.5) in men and 5.3, 95% CI = (3.5, 8.0) in women, with the reference category being not having any pharmaceutical expenditure. Conclusion: Pharmaceutical expenses are much lower for immigrants with respect to autochthonous patients, both in the percentage of prescriptions filled at pharmacies and the number of containers of medication obtained, as well as the prices of the medications used. Future studies should explore which factors explain the observed differences in pharmaceutical expenses and if these disparities produce health inequalities.

Comparison of the consumption of antidepressants in the immigrant and native populations in a Spanish health region: an observational study

BACKGROUND: Health professionals and organizations in developed countries adapt slowly to the increase of ethnically diverse populations attending health care centres. Several studies report that attention to immigrant mental health comes up with barriers in access, diagnosis and therapeutics, threatening equity. This study analyzes differences in exposure to antidepressant drugs between the immigrant and the native population of a Spanish health region. METHODS: Cross-sectional study of the dispensation of antidepressant drugs to the population aged 15 years or older attending the public primary health centres of a health region, 232,717 autochthonous and 33,361 immigrants, during 2008. Data were obtained from computerized medical records and pharmaceutical records of medications dispensed in pharmacies. Age, sex, country of origin, visits, date of entry in the regional health system, generic drugs and active ingredients were considered. Statistical analysis expressed the percentage of persons exposed to antidepressants stratified by age, gender, and country of origin and prevalence ratios of antidepressant exposition were calculated. RESULTS: Antidepressants were dispensed to 11% of native population and 2.6% of immigrants. Depending on age, native women were prescribed antidepressants between 1.9 and 2.7 times more than immigrant women, and native men 2.5 and 3.1 times more than their immigrant counterparts. Among immigrant females, the highest rate was found in the Latin Americans (6.6%) and the lowest in the sub-Saharans (1.4%). Among males, the highest use was also found in the Latin Americans (1.6%) and the lowest in the sub-Saharans (0.7%). The percentage of immigrants prescribed antidepressants increased significantly in relation to the number of years registered with the local health system. Significant differences were found for the new antidepressants, prescribed 8% more in the native population than in immigrants, both in men and in women. CONCLUSIONS: All the immigrants, regardless of the country of origin, had lower antidepressant consumption than the native population of the same age and sex. Latin American women presented the highest levels of consumption, and the sub-Saharan men the lowest. The prescription profiles also differed, since immigrants consumed more generics and fewer recently commercialized active ingredients.

Variation of grain nitrogen content in relation with grain yield in old and modern Spanish wheats grown under a wide range of agronomic conditions in a Mediterranean region

Wheat yield and grain nitrogen concentration (GNC; mg N/g grain) are frequently negatively correlated. In most growing conditions, this is mainly due to a feedback process between GNC and the number of grains/m2. In Mediterranean conditions, breeders may have produced cultivars with conservative grain set. The present study aimed at clarifying the main physiological determinants of grain nitrogen accumulation (GNA) in Mediterranean wheat and to analyse how breeding has affected them. Five field experiments were carried out in north-eastern Spain in the 2005/06 and 2006/ 07 growing seasons with three cultivars released at different times and an advanced line. Depending on the experiment, source-sink ratios during grain filling were altered by reducing grain number/m2 either through pre-anthesis shading (unshaded control or 0.75 shading only between jointing and anthesis) or by directly trimming the spikes after anthesis and before the onset of the effective grain filling period (un-trimmed control or spikes halved 7–10 days after anthesis). Grain nitrogen content (GN content ; mg N/grain) decreased with the year of release of the genotypes. As the number of grains/m2 was also increased by breeding there was a clear dilution effect on the amount of nitrogen allocated to each grain. However, the increase in GN content in old genotypes did not compensate for the loss in grain nitrogen yield (GNY) due to the lower number of grains/m2. GN content of all genotypes increased (increases ranged from 0.13 to 0.40 mg N/grain, depending on experiment and genotype) in response to the post-anthesis spike trimming or pre-anthesis shading. The degree of source-limitation for GNA increased with the year of release of the genotypes (and thus with increases in grain number/m2) from 0.22 (mean of the four manipulative experiments) in the oldest cultivar to 0.51 (mean of the four manipulative experiments) in the most modern line. It was found that final GN content depended strongly on the source-sink ratio established at anthesis between the number of grains set and the amount of nitrogen absorbed at this stage. Thus, Mediterranean wheat breeding that improved yield through increases in grain number/m2 reduced the GN content by diluting a rather limited source of nitrogen into more grains. This dilution effect produced by breeding was further confirmed by the reversal effect produced by grain number/m2 reductions due to either pre-anthesis shading or post-anthesis spike trimming.

The ideal table grapes for the Spanish market

This paper seeks to explore a survey of consumers in Spain. The survey explores the attributes of quality that consumers are seeking and promotion of grapes via "quality" marks, which are indicators of possible ways to increase demand. The reason consumers are switching to other foods, such as dairy based snacks, is that grapes are not easy to eat, can be unreliable in terms of their quality attributes, and their price more variable. Consumers are also generally unaware of the marks quality currently used.

Ecology of Armillaria species on silver fir (Abies alba) in the Spanish Pyrenees

We describe the distribution and the ecology of three Armillaria species observed in silver fir (Abies alba) forests of the Pyrenees. We surveyed the presence and abundance of Armillaria above and belowground in 29 stands. Isolates were identified by the PCR-RFLP pattern of the IGS-1 region of their ribosomal DNA. We measured several ecological and management parameters of each stand in order to describe Armillaria infected sites. Armillaria cepistipes was the most abundant of three species observed. Armillaria gallica was dominant in soils with a higher pH and at lower elevations. Armillaria ostoyae seemed to be more frequent in stands where A. alba recently increased its dominance relative to other forest tree species. Thinning activities correlated with an increased abundance of Armillaria belowground. In 83% of the stands the same Armillaria species was observed above and belowground. It seems that in a conifer forest, A. cepistipes can be more frequent than A. ostoyae, a virulent conifer pathogen. Since logging is related to a higher abundance of Armillaria in the soil, the particular Armillaria species present in a given stand could be considered an additional site factor when making management decisions.