Firms, destinations, and aggregate fluctuations

This paper uses a database covering the universe of French firms for the period 1990-2007 to provide a forensic account of the role of individual firms in generating aggregatefluctuations. We set up a simple multi-sector model of heterogeneous firms selling tomultiple markets to motivate a theoretically-founded decomposition of firms' annualsales growth rate into different components. We find that the firm-specific componentcontributes substantially to aggregate sales volatility, mattering about as much as thecomponents capturing shocks that are common across firms within a sector or country.We then decompose the firm-specific component to provide evidence on two mechanismsthat generate aggregate fluctuations from microeconomic shocks highlighted in the recentliterature: (i) when the firm size distribution is fat-tailed, idiosyncratic shocks tolarge firms directly contribute to aggregate fluctuations; and (ii) aggregate fluctuationscan arise from idiosyncratic shocks due to input-output linkages across the economy.Firm linkages are approximately three times as important as the direct effect of firmshocks in driving aggregate fluctuations.

Alternative tests for correct specification of conditional predictive densities

We propose new methods for evaluating predictive densities that focus on the models' actual predictive ability in finite samples. The tests offer a simple way of evaluatingthe correct specification of predictive densities, either parametric or non-parametric.The results indicate that our tests are well sized and have good power in detecting mis-specification in predictive densities. An empirical application to the Survey ofProfessional Forecasters and a baseline Dynamic Stochastic General Equilibrium modelshows the usefulness of our methodology.

Input diffusion and the evolution of production networks

What determines which inputs are initially considered and eventually adopted in the productionof new or improved goods? Why are some inputs much more prominent than others? We modelthe evolution of input linkages as a process where new producers first search for potentially usefulinputs and then decide which ones to adopt. A new product initially draws a set of 'essentialsuppliers'. The search stage is then confined to the network neighborhood of the latter, i.e., to theinputs used by the essential suppliers. The adoption decision is driven by a tradeoff between thebenefits accruing from input variety and the costs of input adoption. This has important implicationsfor the number of forward linkages that a product (input variety) develops over time. Inputdiffusion is fostered by network centrality ? an input that is initially represented in many networkneighborhoods is subsequently more likely to be adopted. This mechanism also delivers a powerlaw distribution of forward linkages. Our predictions continue to hold when varieties are aggregatedinto sectors. We can thus test them, using detailed sectoral US input-output tables. We showthat initial network proximity of a sector in 1967 significantly increases the likelihood of adoptionthroughout the subsequent four decades. The same is true for rapid productivity growth in aninput-producing sector. Our empirical results highlight two conditions for new products to becomecentral nodes: initial network proximity to prospective adopters, and technological progress thatreduces their relative price. Semiconductors met both conditions.

Sovereign default, domestic banks and financial institutions

We present a model of sovereign debt in which, contrary to conventional wisdom, government defaultsare costly because they destroy the balance sheets of domestic banks. In our model, better financial institutionsallow banks to be more leveraged, thereby making them more vulnerable to sovereign defaults.Our predictions: government defaults should lead to declines in private credit, and these declines should belarger in countries where financial institutions are more developed and banks hold more government bonds.In these same countries, government defaults should be less likely. Using a large panel of countries, we findevidence consistent with these predictions.

An alternative approach to the prevention of doping in cycling

The article proposes an alternative approach to policies for preventing doping in cycling, based on in-depth analysis of the functioning of nine of the 40 world professional teams and the careers of the 2,351 riders who were or have been professionals since 2005. The first part shows that the instruments of prevention have been based on a questionable understanding of doping as an individual moral fault, and have not produced the expected results. The second part proposes to analyse the ways in which teams and riders produce their achievments, so as to put forward an alternative to the anti-doping policies used hitherto, which have little impact on riders. The study shows that it is more pertinent to examine the forms of employment and the business models, because these have important effects on cycling professionals' conditions of work. It makes it possible to identify three dimensions of the risk of doping on which organisations can act in their antidoping policies: team organisation, riders' preparation and workload, and the precarity of employment.

Perceptions of twelve-step mutual-help groups and their associations with motivation, treatment attendance and alcohol outcomes among chronically homeless individuals with alcohol problems.

BACKGROUND: Twelve-step mutual-help groups (TMGs) are among the most available forms of support for homeless individuals with alcohol problems. Qualitative research, however, has suggested that this population often has negative perceptions of these groups, which has been shown to be associated with low TMG attendance. It is important to understand this population's perceptions of TMGs and their association with alcohol outcomes to provide more appropriate and better tailored programming for this multiply affected population. The aims of this cross-sectional study were to (a) qualitatively examine perception of TMGs in this population and (b) quantitatively evaluate its association with motivation, treatment attendance and alcohol outcomes. METHODS: Participants (N=62) were chronically homeless individuals with alcohol problems who received single-site Housing First within a larger evaluation study. Perceptions of TMGs were captured using an open-ended item. Quantitative outcome variables were created from assessments of motivation, treatment attendance and alcohol outcomes. RESULTS: Findings indicated that perceptions of TMGs were primarily negative followed by positive and neutral perceptions, respectively. There were significant, positive associations between perceptions of TMGs and motivation and treatment attendance, whereas no association was found for alcohol outcomes. CONCLUSIONS: Although some individuals view TMGs positively, alternative forms of help are needed to engage the majority of chronically homeless individuals with alcohol problems.

Innovative implementation by non-state actors in environment-related areas : towards a positive implementation gap ?

This contribution (presented in the first International Conference on Public Policy (ICPP) in Grenoble in June 2013) explores the phenomena of innovation in action ("innovative implementation"). To do so, we operationalize "innovative implementation" as a strategy by which (coalitions of) non-state actors seek to develop ad hoc solutions to address a given environmental issue, going beyond what is provided for in formal policy designs. Following an inductive research strategy, we elaborate a conceptual framework whose main advantage is to bring the actors and their coalition (in all their diversity) back in the analysis. More concretely, we state that perceiving implementation as broader 'social interaction processes' (De Boer & Bressers 2011) within which actors play strategic 'games' (Bardach 1977, Scharpf 1997) opens interesting lines of research to better account for their innovative and strategic behaviours. In a second step, we apply this framework to three strategies of innovative implementation in different contexts, and identify on this basis empirical regularities in the individual pathways related to the emergence and success (or failure) of these strategies.

Drinking locations and alcohol-related harm: Cross-sectional and longitudinal associations in a sample of young Swiss men.

BACKGROUND: Alcohol consumption--in particular drinking volume (DV) and risky single occasion drinking (RSOD)--has been related to a wide range of negative consequences and health problems. Previous studies also suggested that drinking in certain locations may be more strongly associated with the occurrence of alcohol-related harm than drinking in others. However, they were conducted in countries culturally and legally different from European countries and were limited to cross-sectional designs. This study investigates the cross-sectional and longitudinal associations of alcohol-related harm with DVs in different locations in a sample of young Swiss men. METHODS: A representative sample of 4536 young Swiss male drinkers completed baseline and 15-month follow-up questionnaires. These assessed DVs in 11 locations, alcohol-related harm (i.e. number of alcohol-related consequences and alcohol use disorder criteria) and frequency of RSOD. Cross-sectional and longitudinal associations of alcohol-related harm with DVs in each location were tested using regression models, with and without adjustment for frequency of RSOD. RESULTS: Both cross-sectional and longitudinal analyses showed significant positive associations between alcohol-related harm and DVs at friends' homes, in discos/nightclubs and in outdoor public places, when controlling for frequency of RSOD. In contrast, the contribution of DVs at one's own home and in restaurants was consistently not significant when adjusted for frequency of RSOD. When controlling for RSOD, associations between alcohol-related harm and DVs in bars/pubs, when playing sports, during other leisure activities, at cinemas/theatres, during sporting events, and during special events were not consistent between cross-sectional and longitudinal analyses. CONCLUSION: Results suggest that prevention interventions should not only target reducing the overall volume of alcohol consumed and the frequency of RSOD in general, but they should additionally focus on limiting alcohol consumption in outdoor public places, discos/nightclubs, and in friends' homes in particular, or at least on preventing harm occurring in these occasions.

Emergence and development of a financial cluster: the evolution of Andorra’s banking deposits in the long-term, 1931-2007

This paper explores the origins of Andorra’s financial cluster. It shows that the free movement of currency, the protection of infant industry, and geographical concentration lie at the foundation of the cluster’s competitive advantage. Drawing on a new set of data, the paper also provides for the first time an estimate of the total deposits held by Andorra’s banks between 1931 and 2007. Based on this new information, the paper reaches the conclusion that the development of the cluster went through four distinct phases in which large companies, acting as leaders, played an important role in enhancing the cluster’s business capabilities.

Developing markets of energy biomass – local and global perspectives

The thesis explores global and national-level issues related to the development of markets for biomass for energy. The thesis consists of five separate papers and provides insights on selected issues. The aim of Paper I was to identify methodological and statistical challenges in assessing international solid and liquid biofuels trade and provide an overview of the Finnish situation with respect to the status of international solid and liquid biofuels trade. We found that, for the Finnish case, it is possible to qualify direct and indirect trade volumes of biofuels. The study showed that indirect trade of biofuels has a highly significant role in Finland and may be a significant sector also in global biofuels trade. The purpose of Paper II was to provide a quantified insight into Finnish prospects for meeting the national 2020 renewable energy targets and concurrently becoming a largescale producer of forest-biomass-based second-generation biofuels for feeding increasing demand in European markets. We found that Finland has good opportunities to realise a scenario to meet 2020 renewable energy targets and for large-scale production of wood-based biofuels. The potential net export of transport biofuels from Finland in 2020 would correspond to 2–3% of European demand. Paper III summarises the global status of international solid and liquid biofuels trade as illuminated by several separate sources. International trade of biofuels was estimated at nearly 1 EJ for 2006. Indirect trade of biofuels through trading of industrial roundwood and material by-products comprises the largest proportion of the trading, with a share of about two thirds. The purpose of Paper IV was to outline a comprehensive picture of the coverage of various certification schemes and sustainability principles relating to the entire value-added chain of biomass and bioenergy. Regardless of the intensive work that has been done in the field of sustainability schemes and principles concerning use of biomass for energy, weaknesses still exist. The objective of Paper V was to clarify the alternative scenarios for the international biomass market until 2020 and identify the underlying steps needed toward a wellfunctioning and sustainable market for biomass for energy purposes. An overall conclusion drawn from this analysis concerns the enormous opportunities related to the utilisation of biomass for energy in the coming decades.

A substituição de importações no Brasil entre 1995 e 2000

This work estimates the import substitution process in Brazilian industrial sectors in a recent period and evaluates whether it is occurring naturally or is in part induced by some kind of external commercial policy. An index to measure import substitution was calculated for forty nine sectors of industry. A regression analysis with this index against effective tariffs and real effective exchange rate, during the period 1995-2000, shows that these variables (effective tariffs and real effective exchange rates) did affect the substitution index. From 1999 on, the influence of the exchange rate over the import substitution index was greater than the influence of the effective tariff, suggesting that the process of import substitution post the Brazilian currency depreciation occurred in 1999 contains elements that characterizes it as a "natural" process.

Barriers to Service-sector SME Internationalization in the EU Business Environment

The service sector in the global world is constantly growing: in Europe, they account currently approximately for 70 per cent of the total economy. Yet service internationalization is rather a new phenomenon: services have been traditionally seen as local entities, which also explains why research on service internationalization has properly begun only few decades ago. Even though the Single European Market allows free service movement between Member States, services do not move as actively as desired: approximately only one fifth of services are involved in cross-border trade. Therefore, the main purpose of this thesis is to analyze the barriers to service-sector SME internationalization in the EU business environment. To address the research purpose, the internationalization of service-sector SMEs in the EU area is first described and thereafter, the barriers to service-sector SME internationalization in the European context are mapped and analyzed from intra- and extra-firm perspectives. In order to understand the topic area and the phenomenon, a short glance is first taken into Europe as a business environment for service industries: the market characteristics and benefits of the common free trade area for service industries are described. Also earlier literature on service internationalization and barriers to international service trade are discussed. Due to low previous research activity on barriers specifically to international service trade, the discussion is improved by presenting general findings of barriers to SME internationalization. This research is conducted with qualitative methods: there is only a limited amount of previous research and qualitative methods provide a way of gathering in-depth information and reaching understanding from respondents’ perspectives. The evidence presented in the study was collected through six semi-structured interviews with six different small or medium sized international service firm representatives that all had the first-hand knowledge regarding their company’s process of delivering services from home market to other European countries. The results of the study provide a detailed description and analysis of intra- and extra-firm barriers to service-sector SME internationalization in the context of EU and indicate that in general, internal firm-specific barriers have a greater impact in determining firm’s possibilities to be engaged in cross-border service trade – external barriers played a smaller role. What might explain these results is that first of all, the study has full focus on service firms of smaller size and internal barriers tend to be particularly effective to SMEs as their resources, skills and capabilities are often limited, which limits internationalization possibilities. Second, the results may indicate that EU’s internal market and the free trade concept function quite well from service firms’ perspective, and the low service movement rate may be rather caused by firm’s own competences and resource-related difficulties than directly by flaws in the market. The results complete earlier literature and provide new and more detailed knowledge of barriers to cross-border service trade in the context of Europe. They also indicate that service internationalization should be observed separately from internationalization of traditional manufacturing firms due to unique service-specific characteristics. The findings of this study are particularly beneficial for small or medium sized service firm managers as it provides knowledge of delivering services across borders in Europe and of barriers that relate to that process.

Latent Variable Models for Stochastic Discount Factors.

Latent variable models in finance originate both from asset pricing theory and time series analysis. These two strands of literature appeal to two different concepts of latent structures, which are both useful to reduce the dimension of a statistical model specified for a multivariate time series of asset prices. In the CAPM or APT beta pricing models, the dimension reduction is cross-sectional in nature, while in time-series state-space models, dimension is reduced longitudinally by assuming conditional independence between consecutive returns, given a small number of state variables. In this paper, we use the concept of Stochastic Discount Factor (SDF) or pricing kernel as a unifying principle to integrate these two concepts of latent variables. Beta pricing relations amount to characterize the factors as a basis of a vectorial space for the SDF. The coefficients of the SDF with respect to the factors are specified as deterministic functions of some state variables which summarize their dynamics. In beta pricing models, it is often said that only the factorial risk is compensated since the remaining idiosyncratic risk is diversifiable. Implicitly, this argument can be interpreted as a conditional cross-sectional factor structure, that is, a conditional independence between contemporaneous returns of a large number of assets, given a small number of factors, like in standard Factor Analysis. We provide this unifying analysis in the context of conditional equilibrium beta pricing as well as asset pricing with stochastic volatility, stochastic interest rates and other state variables. We address the general issue of econometric specifications of dynamic asset pricing models, which cover the modern literature on conditionally heteroskedastic factor models as well as equilibrium-based asset pricing models with an intertemporal specification of preferences and market fundamentals. We interpret various instantaneous causality relationships between state variables and market fundamentals as leverage effects and discuss their central role relative to the validity of standard CAPM-like stock pricing and preference-free option pricing.