On Incentives in Technology Policymaking: What the EU Can Learn from U.S. Developments. CES Germany & Europe Working Papers, No. 07.7, 1997

This paper explores the incentives political and bureaucratic actors face in the institutional setting of EU technology policy. In examining the implications and assumptions of neoclassical and evolutionary theories of technological change, it tries to answer why certain theories do not obtain importance in the political wor1d. By focusing on the positive approach to policymaking, the paper examines why policy learning does not occur m certain institutional settings. In referring to EU technology programs, I show which conceptual and functional shortcomings limit the policies in question. As evaluation and oversight mechanisms have not been sufficiently developed and accepted within the institutional setting, there is much room for inefficiency. I discuss this setting within a simple agency model using two political actors and two firms performing R&D. It is easy to show that when asymmetric information applies, the firms receive positive rents and the political agent gains reputation. The outcome suggests changing the evaluation practices and embedding results in political decision making. Regarding this point, recent U.S. developments seem to have led to more efficiency. Moreover, the paper suggests delegating technology policy to other actors and discussing the empowerment of different principals on the political plane.

An empirical investigation of the effect of rights issue announcements on share returns and the determinants of abnormal returns on the Kuala Lumpur Stock Exchange

This thesis examines the effect of rights issue announcements on stock prices by companies listed on the Kuala Lumpur Stock Exchange (KLSE) between 1987 to 1996. The emphasis is to report whether the KLSE is semi strongly efficient with respect to the announcement of rights issues and to check whether the implications of corporate finance theories on the effect of an event can be supported in the context of an emerging market. Once the effect is established, potential determinants of abnormal returns identified by previous empirical work and corporate financial theory are analysed. By examining 70 companies making clean rights issue announcements, this thesis will hopefully shed light on some important issues in long term corporate financing. Event study analysis is used to check on the efficiency of the Malaysian stock market; while cross-sectional regression analysis is executed to identify possible explanators of the rights issue announcements' effect. To ensure the results presented are not contaminated, econometric and statistical issues raised in both analyses have been taken into account. Given the small amount of empirical research conducted in this part of the world, the results of this study will hopefully be of use to investors, security analysts, corporate financial managements, regulators and policy makers as well as those who are interested in capital market based research of an emerging market. It is found that the Malaysian stock market is not semi strongly efficient since there exists a persistent non-zero abnormal return. This finding is not consistent with the hypothesis that security returns adjust rapidly to reflect new information. It may be possible that the result is influenced by the sample, consisting mainly of below average size companies which tend to be thinly traded. Nevertheless, these issues have been addressed. Another important issue which has emerged from the study is that there is some evidence to suggest that insider trading activity existed in this market. In addition to these findings, when the rights issue announcements' effect is compared to the implications of corporate finance theories in predicting the sign of abnormal returns, the signalling model, asymmetric information model, perfect substitution hypothesis and Scholes' information hypothesis cannot be supported.

Formalization of the informal venture capital market - Business angel networks and syndicates

Business angels are natural persons who provide equity financing for young enterprises and gain ownership in them. They are usually anonym investors and they operate in the background of the companies. Their important feature is that over the funding of the enterprises based on their business experiences they can contribute to the success of the companies with their special expertise and with strategic support. As a result of the asymmetric information between the angels and the companies their matching is difficult (Becsky-Nagy – Fazekas 2015), and the fact, that angel investors prefer anonymity makes it harder for entrepreneurs to obtain informal venture capital. The primary aim of the different type of business angel organizations and networks is to alleviate this matching process with intermediation between the two parties. The role of these organizations is increasing in the informal venture capital market compared to the individually operating angels. The recognition of their economic importance led many governments to support them. There were also public initiations that aimed the establishment of these intermediary organizations that led to the institutionalization of business angels. This study via the characterization of business angels focuses on the progress of these informational intermediaries and their ways of development with regards to the international trends and the current situation of Hungarian business angels and angel networks.

State subsidy and moral hazard in corporate financing

This paper investigates the impact of state subsidy on the behavior of the entrepreneur under asymmetric information. Several authors formulated concerns about state intervention as it can aggravate moral hazard in corporate financing. In the seminal paper of Holmström and Tirole (1997) a two-player moral hazard model is presented with an entrepreneur initiating a risky scalable project and a private investor (e.g. bank or venture capitalist) providing outside financing. The novelty of our research is that this basic moral hazard model is extended to the case of positive externalities and to three players by introducing the state subsidizing the project. It is shown that in the optimum, state subsidy does not harm, but improves the incentives of the entrepreneur to make efforts for the success of the project; hence in effect state intervention reduces moral hazard. Consequently, state subsidy increases social welfare which is defined as the sum of private and public net benefits. Also, the exact form of the state subsidy (ex-ante/ex-post, conditional/unconditional, refundable/nonrefundable) is irrelevant in respect of the optimal size and the total welfare effect of the project. Moreover, in case of nonrefundable subsidies state does not crowd out private investors; but on the contrary, by providing additional capital it boosts private financing. In case of refundable subsidies some crowding effects may occur depending on the subsidy form and the parameters.

Essays on durable goods consumption and firm innovation

This dissertation comprises three individual chapters. Chapter Two examines how free riding across neighbors influenced the diffusion of color television sets in rural China. Chapter Three tests for asymmetric information between a firm’s management and other investors concerning its patent output. Chapter Four discusses how knowledge stocks influence a patenting firm’s later diversification. Chapter Two documents the existence of a type of network effects—free riding across neighbors—in the consumption of color television sets in rural China, which reduces the propensity of non-owners to purchase. I construct a model of the timing of the purchase of a durable good in the presence of free riding, and test its key implications using household survey data in rural China. Chapter Three tests for asymmetric information between a firm’s management and other investors about its patent output by examining insider trading patterns and stock price changes in R&D intensive firms. It demonstrates that management has considerable information about its patent output beyond what is known to investors. It also shows that the predictive power of insider trading patterns on patent output comes from purchases rather than sales. Chapter Four discusses two sequential channels through which knowledge stocks may influence a firm’s later diversification. One is that firms with more knowledge are more likely to enter a new industry. The other is that firms’ businesses have a better chance of surviving, conditional on being formed. By examining U.S. public patenting firms in manufacturing sectors for 1984-1996, I find that knowledge stocks predict the likelihood of new industry entry when controlling for firm size. However, this predictive power is weakened when diversification effects are included. On the other hand, a survival study of newly established segments shows that initial knowledge stocks have significant positive effects on segment survival, whereas diversification effects are insignificant.

Structure of international cooperation in trade, investment and environment

This dissertation analyzes the obstacles against further cooperation in international economic relations. The first essay explains the gradual nature of trade liberalization. I show that existence of asymmetric information between governments provides a sufficient reason for gradualism to exist. Governments prefer starting small to reduce the cost of partner’s betrayal when there is sufficient degree of information asymmetry regarding the partner’s type. Learning about partner’s incentive structure enhances expectations, encouraging governments to increase their current level of cooperation. Specifically, the uninformed government’s subjective belief for the trading partner being good is improved as the partner acts cooperatively. This updated belief, in turn, lowers the subjective probability of future betrayal, enabling further progress in cooperation. The second essay analyzes the relationship between two countries facing two policy dilemmas in an environment with two way goods and capital flows. When issues are independent and countries are symmetric, signing separate agreements for tariffs (Free Trade Agreements-FTA) and for taxes (Tax Treaties-TT) provides the identical level of enforcement as signing a linked agreement. However, linkage can still improve the joint welfare by transferring the slack enforcement power in a case of asymmetric issues or countries. I report non-results in two cases where the policy issues are interconnected due to technological spillover effect of FDI. Moreover, I show that linking the agreements actually reduces enforcement when agreements are linked under a limited punishment rule and policy variables are strategic substitutes. The third essay investigates the welfare/enforcement consequences of linking trade and environmental agreements. In the standard literature, linking the agreements generate non-trivial results only when there is structural relation between the issues. I focus on institutional design of the linkage and show that even if environmental aspects of international trade are negligible linking the agreements might still have some interesting welfare implications under current GATT Rules. Specifically, when traded goods are substitutes in consumption, linking the environmental agreement with trade agreement under the Withdrawal of Equivalent Concession Rule (Article XXVIII) will reduce the enforcement. However, enforcement in environmental issue increases when the same rule is implemented in the absence of linkage.

Auditoría integrada de Información + Conocimiento: aplicación en un caso de estudio

Se presentan los resultados de la aplicación de una metodología integradora de auditoría de información y conocimiento, llevada a cabo en un Centro de Investigación del Ministerio de Ciencia, Tecnología y Medio Ambiente de la provincia de Holguín, Cuba, conformada por siete etapas con un enfoque híbrido dirigida a revisar la estrategia y la política de gestión de información y conocimiento, identificar e inventariar y mapear los recursos de I+C y sus flujos, y valorar los procesos asociados a su gestión. La alta dirección de este centro, sus especialistas e investigadores manifestaron la efectividad de la metodología aplicada cuyos resultados propiciaron reajustar la proyección estratégica en relación con la gestión de la I+C, rediseñar los flujos informativos de los procesos claves, disponer de un directorio de sus expertos por áreas y planificar el futuro aprendizaje y desarrollo profesional.

O direito antitruste na economia digital : implicações concorrenciais do acesso a dados

Dissertação (mestrado)—Universidade de Brasília, Faculdade de Direito, Programa de Pós-Graduação em Direito, 2016.

Impactos da adoção do padrão contábil IFRS no Brasil : houve redução na percepção do risco de seleção adversa pelos credores não bancários das empresas de capital aberto brasileiras?

Dissertação (mestrado)—UnB/UFPB/UFRN, Programa MultiInstitucional e Inter-Regional de Pós-Graduação em Ciências Contábeis, 2016.

Relevance or irrelevance of capital structure?

In this paper we examine the effects of asymmetric information on the nature of financial equilibrium and on the capital structure of firms. In the first model presented, the financial contracts on offer involve pooling equilibrium with no adverse selection. However, in the special case analyzed, where contracts are of mixed form, there may be a separating equilibrium and also equilibrium may not exist. Interesting result is that the separating equilibrium found is not economically efficient since aggregate investments falls short of first-best level. More importantly, capital structure does matter. The relative magnitude of outside equity makes a real difference to the quantity of aggregate investment in equilibrium.

El efecto de la definición regulatoria de banda ancha sobre la difusión y la competencia del mercado de servicios de Internet fijo en Colombia

A partir de la dinámica evolutiva de la economía de las Tecnologías de la Información y las Comunicaciones y el establecimiento de estándares mínimos de velocidad en distintos contextos regulatorios a nivel mundial, en particular en Colombia, en el presente artículo se presentan diversas aproximaciones empíricas para evaluar los efectos reales que conlleva el establecimiento de definiciones de servicios de banda ancha en el mercado de Internet fijo. Con base en los datos disponibles para Colombia sobre los planes de servicios de Internet fijo ofrecidos durante el periodo 2006-2012, se estima para los segmentos residencial y corporativo el proceso de difusión logístico modificado y el modelo de interacción estratégica para identificar los impactos generados sobre la masificación del servicio a nivel municipal y sobre las decisiones estratégicas que adoptan los operadores, respectivamente. Respecto a los resultados, se encuentra, por una parte, que las dos medidas regulatorias establecidas en Colombia en 2008 y 2010 presentan efectos significativos y positivos sobre el desplazamiento y el crecimiento de los procesos de difusión a nivel municipal. Por otra parte, se observa sustituibilidad estratégica en las decisiones de oferta de velocidad de descarga por parte de los operadores corporativos mientras que, a partir del análisis de distanciamiento de la velocidad ofrecida respecto al estándar mínimo de banda ancha, se demuestra que los proveedores de servicios residenciales tienden a agrupar sus decisiones de velocidad alrededor de los niveles establecidos por regulación.

Asymmetric price range effects on vertical extensions

Vertical line extensions, both step-up and step-down, are common occurrence in consumer products. For example, Timex recently launched its luxury high-end Valentino line. On the other hand, many companies use downscale extensions to increase the overall sales volume. For instance, a number of luxury watch brands recently introduced watch collections with lower price points, like TAG Heur’s affordable watch the Aquaracer Calibre 5. Previous literature on vertical extensions has investigated how number of products in the line (Dacin and Smith 1994), the direction of the extension, brand concept (Kim, Lavack, and Smith 2001), and perceived risk (Lei, de Ruyter, and Wetzels 2008) affect extensions’ evaluation. Common to this literature is the use of models based on adaptation-level theory, which states that all relevant price information is integrated into a single prototype value and used in consumer judgments of price (Helson 1947; Mazumdar, Raj, and Sinha 2005). In the current research we argue that, while adaptation-level theory can be viewed as a useful simplification to understanding consumers’ evaluations, it misses out important contextual influences caused by a brand’s price range. Drawing on research on range-frequency theory (Mellers and Cooke 1994; Parducci 1965) we investigate the effects of price point distance and parent brand’s price range on evaluations of vertical extensions. Our reasoning leads to two important predictions that we test in a series of three experiments...

Strategic Information Acquisition: Applications to Herding and Auctions

The information that the economic agents have and regard relevant to their decision making is often assumed to be exogenous in economics. It is assumed that the agents either poses or can observe the payoff relevant information without having to exert any effort to acquire it. In this thesis we relax the assumption of ex-ante fixed information structure and study what happens to the equilibrium behavior when the agents must also decide what information to acquire and when to acquire it. This thesis addresses this question in the two essays on herding and two essays on auction theory. In the first two essays, that are joint work with Klaus Kultti, we study herding models where it is costly to acquire information on the actions that the preceding agents have taken. In our model the agents have to decide both the action that they take and additionally the information that they want to acquire by observing their predecessors. We characterize the equilibrium behavior when the decision to observe preceding agents' actions is endogenous and show how the equilibrium outcome may differ from the standard model, where all preceding agents actions are assumed to be observable. In the latter part of this thesis we study two dynamic auctions: the English and the Dutch auction. We consider a situation where bidder(s) are uninformed about their valuations for the object that is put up for sale and they may acquire this information for a small cost at any point during the auction. We study the case of independent private valuations. In the third essay of the thesis we characterize the equilibrium behavior in an English auction when there are informed and uninformed bidders. We show that the informed bidder may jump bid and signal to the uninformed that he has a high valuation, thus deterring the uninformed from acquiring information and staying in the auction. The uninformed optimally acquires information once the price has passed a particular threshold and the informed has not signalled that his valuation is high. In addition, we provide an example of an information structure where the informed bidder initially waits and then makes multiple jumps. In the fourth essay of this thesis we study the Dutch auction. We consider two cases where all bidders are all initially uninformed. In the first case the information acquisition cost is the same across all bidders and in the second also the cost of information acquisition is independently distributed and private information to the bidders. We characterize a mixed strategy equilibrium in the first and a pure strategy equilibrium in the second case. In addition we provide a conjecture of an equilibrium in an asymmetric situation where there is one informed and one uninformed bidder. We compare the revenues that the first price auction and the Dutch auction generate and we find that under some circumstances the Dutch auction outperforms the first price sealed bid auction. The usual first price sealed bid auction and the Dutch auction are strategically equivalent. However, this equivalence breaks down in case information is acquired during the auction.

Information Theoretic Results for Three-User Cognitive Channels

In this paper, we introduce the three-user cognitive radio channels with asymmetric transmitter cooperation, and derive achievable rate regions under several scenarios depending on the type of cooperation and decoding capability at the receivers. Two of the most natural cooperation mechanisms for the three-user channel are considered here: cumulative message sharing (CMS) and primary-only message sharing (PMS). In addition to the message sharing mechanism, the achievable rate region is critically dependent on the decoding capability at the receivers. Here, we consider two scenarios for the decoding capability, and derive an achievable rate region for each one of them by employing a combination of superposition and Gel'fand-Pinsker coding techniques. Finally, to provide a numerical example, we consider the Gaussian channel model to plot the rate regions. In terms of achievable rates, CMS turns out to be a better scheme than PMS. However, the practical aspects of implementing such message-sharing schemes remain to be investigated.