Collusion in growing and shrinking markets: empirical evidence from experimental duopolies

We study collusive behaviour in experimental duopolies that compete in prices under dynamic demand conditions. In one treatment the demand grows at a constant rate. In the other treatment the demand declines at another constant rate. The rates are chosen so that the evolution of the demand in one case is just the reverse in time than the one for the other case. We use a box-design demand function so that there are no issues of finding and co-ordinating on the collusive price. Contrary to game-theoretic reasoning, our results show that collusion is significantly larger when the demand shrinks than when it grows. We conjecture that the prospect of rapidly declining profit opportunities exerts a disciplining effect on firms that facilitates collusion and discourages deviation.

Parametric and semiparametric estimation of sample selection models: an empirical application to the female labour force in Portugal

This comment corrects the errors in the estimation process that appear in Martins (2001). The first error is in the parametric probit estimation, as the previously presented results do not maximize the log-likelihood function. In the global maximum more variables become significant. As for the semiparametric estimation method, the kernel function used in Martins (2001) can take on both positive and negative values, which implies that the participation probability estimates may be outside the interval [0,1]. We have solved the problem by applying local smoothing in the kernel estimation, as suggested by Klein and Spady (1993).

Empirical studies in industrial location: an assessment of their methods and results

This paper surveys recent evidence on the determinants of (national and/or foreign) industrial location. We find that the basic analytical framework has remained essentially unaltered since the early contributions of the early 1980's while, in contrast, there have been significant advances in the quality of the data and, to a lesser extent, the econometric modelling. We also identify certain determinants (neoclassical and institutional factors) that tend to provide largely consistent results across the reviewed studies. In light of this evidence, we finally suggest future lines of research.

Entrepreneurial intention, cognitive social capital and culture: empirical anaylisis for Spain and Taiwan

The main purpose of this paper is building a research model to integrate the socioeconomic concept of social capital within intentional models of new firm creation. Nevertheless, some researchers have found cultural differences between countries and regions to have an effect on economic development. Therefore, a second objective of this study is exploring whether those cultural differences affect entrepreneurial cognitions. Research design and methodology: Two samples of last year university students from Spain and Taiwan are studied through an Entrepreneurial Intention Questionnaire (EIQ). Structural equation models (Partial Least Squares) are used to test the hypotheses. The possible existence of differences between both sub-samples is also empirically explored through a multigroup analysis. Main outcomes and results: The proposed model explains 54.5% of the variance in entrepreneurial intention. Besides, there are some significant differences between both subsamples that could be attributed to cultural diversity. Conclusions: This paper has shown the relevance of cognitive social capital in shaping individuals’ entrepreneurial intentions across different countries. Furthermore, it suggests that national culture could be shaping entrepreneurial perceptions, but not cognitive social capital. Therefore, both cognitive social capital and culture (made up essentially of values and beliefs), may act together to reinforce the entrepreneurial intention.

Privatization and competition in the delivery of local services: An empirical examination of the dual market hypothesis

This paper empirically analyses the hypothesis of the existence of a dual market for contracts in local services. Large firms that operate on a national basis control the contracts for delivery in the most populated and/or urban municipalities, whereas small firms that operate at a local level have the contracts in the least populated and/or rural municipalities. The dual market implies the high concentration and dominance of major firms in large municipalities, and local monopolies in the smaller ones. This market structure is harmful to competition for the market as the effective number of competitors is low across all municipalities. Thus, it damages the likelihood of obtaining cost savings from privatization.

An empirical analysis of wealth taxation: equity Vs.tax compliance

Capital taxation is currently under debate, basically due to problems of administrative control and proper assessment of the levied assets. We analyze both problems focusing on a capital tax, the annual wealth tax (WT), which is only applied in five OECD countries, being Spain one of them. We concentrate our analysis on top 1% adult population, which permits us to describe the evolution of wealth concentration in Spain along 1983-2001. On average top 1% holds about 18% of total wealth, which rises to 19% when tax incompliance and under-assessment is corrected for housing, the main asset. The evolution suggests wealth concentration has risen. Regarding WT, we analyze whether it helps to reduce wealth inequality or, on the contrary, it reinforces vertical inequity (due to especial concessions) and horizontal inequity (due to the de iure and to de facto different treatment of assets). We analyze in detail housing and equity shares. By means of a time series analysis, we relate the reported values with reasonable price indicators and proxies of the propensity to save. We infer net tax compliance is extremely low, which includes both what we commonly understand by (gross) tax compliance and the degree of under-assessment due to fiscal legislation (for housing). That is especially true for housing, whose level of net tax compliance is well below 50%. Hence, we corroborate the difficulties in taxing capital, and so cast doubts on the current role of the WT in Spain in reducing wealth inequality.

Job losses, outsourcing and relocation: Empirical evidence using microdata

Using microdata, we analyse the determinants of firm relocation and conventional outsourcing decisions as a way to reduce employment. The results for a sample of 32 countries show the relevance of factors not considered previously in the literature. Firms that are below average in quality or innovation have a higher propensity to externalise part of their production through outsourcing, while lower relative profitability and longer time to market for new products each imply a higher probability of relocation.

Are two-part tariffs efficient when consumers plan ahead?: An empirical study

During the last two decades there has been an increase in using dynamic tariffs for billing household electricity consumption. This has questioned the suitability of traditional pricing schemes, such as two-part tariffs, since they contribute to create marked peak and offpeak demands. The aim of this paper is to assess if two-part tariffs are an efficient pricing scheme using Spanish household electricity microdata. An ordered probit model with instrumental variables on the determinants of power level choice and non-paramentric spline regressions on the electricity price distribution will allow us to distinguish between the tariff structure choice and the simultaneous demand decisions. We conclude that electricity consumption and dwellings’ and individuals’ characteristics are key determinants of the fixed charge paid by Spanish households Finally, the results point to the inefficiency of the two-part tariff as those consumers who consume more electricity pay a lower price than the others.

Multinational Firms’ Heterogeneity in Tax Responsiveness: the Role of Transfer Pricing

In this paper we show that the ability of multinational firms to manipulate transfer prices affects the tax sensitivity of foreign direct investment (FDI). We offer a model of international capital allocation where firms are heterogeneous in their ability to manipulate transfer prices. Perhaps paradoxically, we show that the ability to shift profits can make parent companies' investment more sensitive to host-country tax rates, as long as investors expect fisscal authorities to use price and profit detection methods. We then offer a comprehensive empirical study to test our predictions in the case of Japanese FDI. We exploit the finding that the unobservable ability to manipulate transfer prices is correlated with whole ownership of a±liates and R&D expenditure. Based on country, parent firm and sector characteristics, we estimate an investment equation on a sample of 3614 Japanese affiliates in 49 emerging countries. We obtain a greater semi-elasticity of investment to the statutory tax rate in a±liates that are wholly-owned and that have R&D intensive parents. We interpret these results as indirect evidence that abusive transfer pricing is one of the determinants of FDI activity.

The intra-industry trade for a high-income country: new empirical evidence for Italy

This paper examines the determinants of Italian intra-industry trade in horizontally and vertically differentiated products, using a dataset which eliminates the effects linked to the hypothesis of homogeneity both between countries - when specific industry characteristics are analysed - and between sectors - within the same country. In this way, within limits, we have tried to address an issue raised by Greenaway et al. in 1999 which, in the light of the current state of the literature on intra-industry trade, does not seem to have been explicitly dealt with. Our paper highlights how strong the impact of this hypothesis could be in the analyses of the determinants of intraindustry trade in the case of Italy.

Microsatellites can be misleading: an empirical and simulation study.

It has been long recognized that highly polymorphic genetic markers can lead to underestimation of divergence between populations when migration is low. Microsatellite loci, which are characterized by extremely high mutation rates, are particularly likely to be affected. Here, we report genetic differentiation estimates in a contact zone between two chromosome races of the common shrew (Sorex araneus), based on 10 autosomal microsatellites, a newly developed Y-chromosome microsatellite, and mitochondrial DNA. These results are compared to previous data on proteins and karyotypes. Estimates of genetic differentiation based on F- and R-statistics are much lower for autosomal microsatellites than for all other genetic markers. We show by simulations that this discrepancy stems mainly from the high mutation rate of microsatellite markers for F-statistics and from deviations from a single-step mutation model for R-statistics. The sex-linked genetic markers show that all gene exchange between races is mediated by females. The absence of male-mediated gene flow most likely results from male hybrid sterility.

Choice of Contracts in the British National Health Service: An Empirical Study

Following major reforms of the British National Health Service (NHS) in 1990, the roles of purchasing and providing health services were separated, with the relationship between purchasers and providers governed by contracts. Using a mixed multinomial logit analysis, we show how this policy shift led to a selection of contracts that is consistent with the predictions of a simple model, based on contract theory, in which the characteristics of the health services being purchased and of the contracting parties influence the choice of contract form. The paper thus provides evidence in support of the practical relevance of theory in understanding health care market reform.

Mass migration of juvenile Biomphalaria glabrata snails bred under semi-natural conditions

For the development of studies on snail interspecific competition special in-door laboratory channels were built. In the all five channels seeded with adult specimens of Biomphalaria glabrata mass migration of juvenile snails outside the water was observed. Most of the migrant snails presented apertural lamellae. Data collected during the period of two years, showed the regression of the migration phenomenon and the disappearance of the lamellate snails.

Commitment vs. Discretion in the UK: An Empirical Investigation of the Monetary and Fiscal Policy Regime

This paper investigates the conduct of monetary and fiscal policy in the post-ERM period in the UK. Using a simple DSGE New Keynesian model of non-cooperative monetary and fiscal policy interactions under fiscal intra-period leadership, we demonstrate that the past policy in the UK is better explained by optimal policy under discretion than under commitment. We estimate policy objectives of both policy makers. We demonstrate that fiscal policy plays an important role in identifying the monetary policy regime.