Institutional constraints on organizations: The case of Spanish car dealerships

We study the effect of organizational choice and institutions on the performance ofSpanish car dealerships. Using outlet-level data from 1994, we find that verticallyintegrateddealerships showed substantially lower labor productivity, higher labor costs andlower profitability than franchised ones. Despite these gaps in performance, no verticallyintegratedoutlet was separated until 1994, yet the few outlets that were eventuallyseparated systematically improved their performance. We argue that the conversion ofintegrated outlets into franchised ones involved significant transaction costs, due to aninstitutional environment favoring permanent, highly-unionized employment relations. Inline with this argument, we find that the observed separations occurred in distributionnetworks that underwent marked reductions in worker unionization rates, following thelegalization of temporary labor contracts.

Financing constraints, irreversibility and investment dynamics

We develop a model of an industry with many heterogeneous firms that face both financingconstraints and irreversibility constraints. The financing constraint implies that firmscannot borrow unless the debt is secured by collateral; the irreversibility constraint thatthey can only sell their fixed capital by selling their business. We use this model to examinethe cyclical behavior of aggregate fixed investment, variable capital investment, and outputin the presence of persistent idiosyncratic and aggregate shocks. Our model yields threemain results. First, the effect of the irreversibility constraint on fixed capital investmentis reinforced by the financing constraint. Second, the effect of the financing constraint onvariable capital investment is reinforced by the irreversibility constraint. Finally, the interactionbetween the two constraints is key for explaining why input inventories and materialdeliveries of US manufacturing firms are so volatile and procyclical, and also why they arehighly asymmetrical over the business cycle.

Comment on "Geochemistry, petrogenesis and tectonic setting of the Samothraki mafic suite, NE Greece: Trace-element, isotopic and zircon age constraints'' by N. Koglin, D. Kostopoulos & T. Reischmann [Tectonophysics 473, 53-68 (doi:10.1016/j.tecto.2008.10.028)]

The work by Koglin et al. (Koglin, N., Kostopoulos, D., Reichmann, T., 2009. Geochemistry, petrogenesis and tectonic setting of the Samothraki mafic Suite, NE Greece: Trace-element, isotopic and zircon age constraints. Tectonophysics 473, 53-68. doi: 10.1016/j.tecto.2008.10.028), where the authors have proposed to nullify the scenario presented by Bonev and Stampfli (Bonev, N., Stampfli, G., 2008. Petrology, geochemistry and geodynamic implications of Jurassic island arc magmatism as revealed by mafic volcanic rocks in the Mesozoic low-grade sequence, eastern Rhodope, Bulgaria. Lithos 100, 210-233) is here Put under discussion. The arguments for this proposal are reviewed in the light of available stratigraphic and radiometric age constraints, geochemical signature and tectonics of highly relevant Jurassic ophiolitic suites occurring immediately north of the Samothraki mafic suite. Our conclusion is that the weak arguments and the lack of knowledge on the relevant constraints from the regional geologic information make inconsistent the Proposal and the model of these authors. (C) 2009 Elsevier B.V. All rights reserved.

Testing financing constraints on firm investment using variable capital

We consider a dynamic multifactor model of investment with financing imperfections,adjustment costs and fixed and variable capital. We use the model to derive a test offinancing constraints based on a reduced form variable capital equation. Simulation resultsshow that this test correctly identifies financially constrained firms even when the estimationof firms investment opportunities is very noisy. In addition, the test is well specified inthe presence of both concave and convex adjustment costs of fixed capital. We confirmempirically the validity of this test on a sample of small Italian manufacturing companies.

Technology diffusion and the spatial distribution of wages in the US

What explains the spatial distribution of wages across US counties? I find that two of the most important factors are spatial technology diffusion and externalities due to the aggregate scale of production. One empirical finding supporting the importance of spatial technology diffusion is that average wages in a county decrease with the average level of schooling in neighboring counties when employment in the county and average wages in neighboring counties are held constant. All empirical results are obtained using anovel instrument for (endogenous) employment at the county-leveland take into account other factors (e.g. productivity-differencesacross states, climate) that may determine wages.

Improving generalized regression analysis for the spatial prediction of forest communities

Aim This study used data from temperate forest communities to assess: (1) five different stepwise selection methods with generalized additive models, (2) the effect of weighting absences to ensure a prevalence of 0.5, (3) the effect of limiting absences beyond the environmental envelope defined by presences, (4) four different methods for incorporating spatial autocorrelation, and (5) the effect of integrating an interaction factor defined by a regression tree on the residuals of an initial environmental model. Location State of Vaud, western Switzerland. Methods Generalized additive models (GAMs) were fitted using the grasp package (generalized regression analysis and spatial predictions, http://www.cscf.ch/grasp). Results Model selection based on cross-validation appeared to be the best compromise between model stability and performance (parsimony) among the five methods tested. Weighting absences returned models that perform better than models fitted with the original sample prevalence. This appeared to be mainly due to the impact of very low prevalence values on evaluation statistics. Removing zeroes beyond the range of presences on main environmental gradients changed the set of selected predictors, and potentially their response curve shape. Moreover, removing zeroes slightly improved model performance and stability when compared with the baseline model on the same data set. Incorporating a spatial trend predictor improved model performance and stability significantly. Even better models were obtained when including local spatial autocorrelation. A novel approach to include interactions proved to be an efficient way to account for interactions between all predictors at once. Main conclusions Models and spatial predictions of 18 forest communities were significantly improved by using either: (1) cross-validation as a model selection method, (2) weighted absences, (3) limited absences, (4) predictors accounting for spatial autocorrelation, or (5) a factor variable accounting for interactions between all predictors. The final choice of model strategy should depend on the nature of the available data and the specific study aims. Statistical evaluation is useful in searching for the best modelling practice. However, one should not neglect to consider the shapes and interpretability of response curves, as well as the resulting spatial predictions in the final assessment.

Measuring ecological niche overlap from occurrence and spatial environmental data

1. Aim - Concerns over how global change will influence species distributions, in conjunction with increased emphasis on understanding niche dynamics in evolutionary and community contexts, highlight the growing need for robust methods to quantify niche differences between or within taxa. We propose a statistical framework to describe and compare environmental niches from occurrence and spatial environmental data.¦2. Location - Europe, North America, South America¦3. Methods - The framework applies kernel smoothers to densities of species occurrence in gridded environmental space to calculate metrics of niche overlap and test hypotheses regarding niche conservatism. We use this framework and simulated species with predefined distributions and amounts of niche overlap to evaluate several ordination and species distribution modeling techniques for quantifying niche overlap. We illustrate the approach with data on two well-studied invasive species.¦4. Results - We show that niche overlap can be accurately detected with the framework when variables driving the distributions are known. The method is robust to known and previously undocumented biases related to the dependence of species occurrences on the frequency of environmental conditions that occur across geographic space. The use of a kernel smoother makes the process of moving from geographical space to multivariate environmental space independent of both sampling effort and arbitrary choice of resolution in environmental space. However, the use of ordination and species distribution model techniques for selecting, combining and weighting variables on which niche overlap is calculated provide contrasting results.¦5. Main conclusions - The framework meets the increasing need for robust methods to quantify niche differences. It is appropriate to study niche differences between species, subspecies or intraspecific lineages that differ in their geographical distributions. Alternatively, it can be used to measure the degree to which the environmental niche of a species or intraspecific lineage has changed over time.

Does it cost to be virtuous? The macroeconomic effects of fiscal constraints

We study whether and how fiscal restrictions alter the business cycle features of macrovariables for a sample of 48 US states. We also examine the typical transmission properties of fiscal disturbances and the implied fiscal rules of states with different fiscal restrictions. Fiscal constraints are characterized with a number of indicators. There are similarities in second moments of macrovariables and in the transmission properties of fiscal shocks across states with different fiscal constraints. The cyclical response of expenditure differs in size and sometimes in sign, but heterogeneity within groups makes point estimates statistically insignificant. Creative budget accounting is responsible for the pattern. Implications for the design of fiscal rules and the reform of the Stability and Growth Pact are discussed.

Seasonal and spatial species richness variation of dung beetle (Coleoptera, Scarabaeidae s. str.) in the Atlantic Forest of southeastern Brazil

The knowledge on Atlantic Forest scarab beetle fauna is quite limited. This biome is strongly degraded and these insects can be used as bioindicators since they are sensitive to forest destruction and show distinct organizational patterns in forest fragments or in areas that have been deteriorated by human activity. Thus, a study of the Scarabaeidae (sensu stricto) dung beetles fauna that inhabit Serra do Japi, São Paulo, Brazil (23º12'-23º22' S and 46º53'-47º03'W) was carried out; the monthly species richness was analyzed in six areas during one year and the vegetation's structural physiognomy was described. The areas included a conserved and a degraded valley, a northward and a southward hillside, a hilltop, and an area of secondary forest growing under eucalyptus trees. The specimens were collected using four pitfall traps baited with human feces, which remained at each spot during 48 hours. Between September, 1997 and August, 1998, 3524 individuals of 39 species were collected; the most abundant were: Canthidium trinodosum, Eurysternus cyanescens, Uroxys kratochvili, Scybalocanthon nigriceps, Uroxys lata, Canthonella sp., Dichotomius assifer, Deltochilum furcatum, Canthidium sp.2, Canthon latipes, Deltochilum rubripenne, Eurysternus sp., and Dichotomius sp.1. The number of individuals and species was greater in the hot, rainy season, when there was a correlation between the number of species and the mean annual temperature [r²= 0.69; p<0.01]. The lower winter richness was most pronounced in the conserved valley, while richness remained relatively constant in the degraded valley; abundance was much higher in the degraded valley. The cluster analysis showed that the valleys and hillsides are the most similar in relation to species composition and abundance, yet different from the secondary forest with eucalypts and the hilltop.

Credit constraints, firms' precautionary investment and the business cycle

This paper studies the macroeconomic implications of firms' investment composition choices in the presence of credit constraints. Following a negative andpersistent aggregate productivity shock, firms shift into short-term investments because they produce more pledgeable output and because they help alleviate futureborrowing constraints. This produces a short-run dampening of the effects of theshock, at the expense of lower long-term investment and future output, relativeto an economy with no credit market imperfections. The effects are exacerbatedby a steepening of the term structure of interest rates that further encourages ashift towards short-term investments in the short-run. Small temporary shocks tothe severity of financing frictions generate large and long-lasting effects on outputthrough their impact on the composition of investment. A positive financial shockproduces much stronger effects than an identical negative shock, while the responsesto positive and negative shocks to aggregate productivity are roughly symmetric.Finally, the paper introduces a novel explanation for the countercyclicality of financing constraints of firms.

Job creation under liquidity constraints: The Spanish case

This paper shows that liquidity constraints restrict jobcreation even when labor markets are flexible. In a dynamicmodel of labor demand, I show that in an environment of imperfect capital and imperfect labor markets, firms usetemporary contracts to relax financial constraints. Evidence for the predictions of the model is presented using Spanish data from the CBBE (Central de Balances del Banco de España - Balance Sheet data from the Bank of Spain). It is shown that firms substitute temporary laborfor permanent one and use less debt as their financial position improves. In particular, it is rejected that Spanish firms operate in an environment of free capital markets and of no labor adjustment costs. The labor reform of 1984, which created temporary contracts, implied to some extent a relaxation of liquidity constraints.Accordingly, firms used these contracts more extensivelyand used less debt; however, as capital markets continueto be imperfect, permanent job creation continues to beslow. Consequently, relaxation of liquidity constraints should also be part of a job creation strategy.

Small-area estimation with spatial similarity

A class of composite estimators of small area quantities that exploit spatial (distancerelated)similarity is derived. It is based on a distribution-free model for the areas, but theestimators are aimed to have optimal design-based properties. Composition is applied alsoto estimate some of the global parameters on which the small area estimators depend.It is shown that the commonly adopted assumption of random effects is not necessaryfor exploiting the similarity of the districts (borrowing strength across the districts). Themethods are applied in the estimation of the mean household sizes and the proportions ofsingle-member households in the counties (comarcas) of Catalonia. The simplest version ofthe estimators is more efficient than the established alternatives, even though the extentof spatial similarity is quite modest.

Tracking individuals shows spatial fidelity is a key regulator of ant social organization.

Ants live in organized societies with a marked division of labor among workers, but little is known about how this division of labor is generated. We used a tracking system to continuously monitor individually tagged workers in six colonies of the ant Camponotus fellah over 41 days. Network analyses of more than 9 million interactions revealed three distinct groups that differ in behavioral repertoires. Each group represents a functional behavioral unit with workers moving from one group to the next as they age. The rate of interactions was much higher within groups than between groups. The precise information on spatial and temporal distribution of all individuals allowed us to calculate the expected rates of within- and between-group interactions. These values suggest that the network of interaction within colonies is primarily mediated by age-induced changes in the spatial location of workers.

Spatial distribution of a spherical gall (Hymenoptera, Eulophidae) on Caryocar brasiliense (Caryocaraceae)

We obtained the first data on spatial distribution of a spherical galling insect (Hymenoptera, Eulophidae) at the Caryocar brasiliense Camb. (Caryocaraceae) tree level. This work was developed in two pastures in Montes Claros, Minas Gerais State, Brazil. The areas studied were: pasture 1 (in activity) and pasture 2 (abandoned pasture = savanna in recovery). We evaluated the distribution of spherical galls in: foliage orientation (slope), among leaves (border and interior of the tree crown), among leaflets (right, central, left), distal, median, and proximal as well as border, central area, and adjacent to the mid leaf vein of the leaflet, and difference between areas in 10 infested trees per area. The smaller number of spherical gall/leaflet was observed in pasture 1 than in pasture 2. More spherical galls were found on the northern in pasture 1, but in the pasture 2, the lower spherical galls were observed on the northeast than other slopes. The average number of spherical galls did not differ statistically among the three leaflets of C. brasiliense in pasture 2. However, in pasture 1, we observed highest number of spherical galls in the central leaflet. More spherical galls were found in the border than interior of the tree crown. The average number of spherical galls did not differ statistically among the longitudinal region on leaflet of C. brasiliense. The spherical gall insect preferred to colonize the leaf margin than the central portion or near mid vein on transversal regions on a leaflet.

Financing constraints and fixed-term employment contracts

This paper studies the interactions between financing constraints and theemployment decisions of firms when both fixed-term and permanent employmentcontracts are available. We first develop a dynamic model that shows theeffects of financing constraints and firing costs on employment decisions. Oncecalibrated, the model shows that financially constrained firms tend to use moreintensely fixed term workers, and to make them absorb a larger fraction of thetotal employment volatility than financially unconstrained firms do. We testand confirm the predictions of the model on a unique panel data of Italian manufacturingfirms with detailed information about the type of workers employedby the firms and about firm financing constraints.