http://hdl.handle.net/10023/22 Tue, 14 May 2013 01:45:52 GMT 2013-05-14T01:45:52Z http://hdl.handle.net/10023/3497 Abstract: The paper shows that, whenever the completion of a research project requires the overcoming of more than one research obstacle, then Research Joint Ventures enjoy an intrinsic advantage relative to independent firms. This advantage, which has hitherto escaped attention in the RJV literature, relates to the RJV’s ability to organize research more efficiently than independent firms. The fact that RJVs can be both more profitable and yield higher expected net welfare than independent firms is surprising because it is derived from a model in which RJVs do not optimize over R&D investment. The paper exploits a basic result in systems reliability theory to establish the organizational superiority of RJVs. Mon, 01 Apr 2013 00:00:00 GMT http://hdl.handle.net/10023/3497 2013-04-01T00:00:00Z La Manna, Manfredi M A The paper shows that, whenever the completion of a research project requires the overcoming of more than one research obstacle, then Research Joint Ventures enjoy an intrinsic advantage relative to independent firms. This advantage, which has hitherto escaped attention in the RJV literature, relates to the RJV’s ability to organize research more efficiently than independent firms. The fact that RJVs can be both more profitable and yield higher expected net welfare than independent firms is surprising because it is derived from a model in which RJVs do not optimize over R&D investment. The paper exploits a basic result in systems reliability theory to establish the organizational superiority of RJVs. http://hdl.handle.net/10023/3457 Abstract: We model a boundedly rational agent who su¤ers from limited attention. The agent considers each feasible alternative with a given (unobservable) probability, the attention parameter, and then chooses the alternative that maximises a prefer- ence relation within the set of considered alternatives. We show that this random choice rule is the only one for which the impact of removing an alternative on the choice probability of any other alternative is asymmetric and menu independent. Both the preference relation and the attention parameters are identi…ed uniquely by stochastic choice data. Fri, 01 Mar 2013 00:00:00 GMT http://hdl.handle.net/10023/3457 2013-03-01T00:00:00Z Manzini, Paola Mariotti, Marco We model a boundedly rational agent who su¤ers from limited attention. The agent considers each feasible alternative with a given (unobservable) probability, the attention parameter, and then chooses the alternative that maximises a prefer- ence relation within the set of considered alternatives. We show that this random choice rule is the only one for which the impact of removing an alternative on the choice probability of any other alternative is asymmetric and menu independent. Both the preference relation and the attention parameters are identi…ed uniquely by stochastic choice data. http://hdl.handle.net/10023/3418 Abstract: Using a standard open economy DSGE model, it is shown that the timing of asset trade relative to policy decisions has a potentially important impact on the welfare evaluation of monetary policy at the individual country level. If asset trade in the initial period takes place before the announcement of policy, a national policymaker can choose a policy rule which reduces the work effort of households in the policymaker’s country in the knowledge that consumption is fully insured by optimally chosen international portfolio positions. But if asset trade takes place after the policy announcement, this insurance is absent and households in the policymaker’s country bear the full consumption consequences of the chosen policy rule. The welfare incentives faced by national policymakers are very different between the two cases. Numerical examples confirm that asset market timing has a significant impact on the optimal policy rule. Tue, 01 Jan 2013 00:00:00 GMT http://hdl.handle.net/10023/3418 2013-01-01T00:00:00Z Senay, Ozge Sutherland, Alan Using a standard open economy DSGE model, it is shown that the timing of asset trade relative to policy decisions has a potentially important impact on the welfare evaluation of monetary policy at the individual country level. If asset trade in the initial period takes place before the announcement of policy, a national policymaker can choose a policy rule which reduces the work effort of households in the policymaker’s country in the knowledge that consumption is fully insured by optimally chosen international portfolio positions. But if asset trade takes place after the policy announcement, this insurance is absent and households in the policymaker’s country bear the full consumption consequences of the chosen policy rule. The welfare incentives faced by national policymakers are very different between the two cases. Numerical examples confirm that asset market timing has a significant impact on the optimal policy rule. http://hdl.handle.net/10023/3307 Abstract: The quality of contracting institutions has been thought to be of second-order importance next to the impact that good property rights institutions can have on long- run growth. Using a large range of proxies for each type of institution, we find a robust $negative$ link between the quality of contracting institutions and long-run growth when we condition on property rights and a number of additional macroeconomic variables. Although the result remains something of a puzzle, we present evidence which suggests that only when property rights institutions are good do contracting institutions appear also to be good for development. Good contracting institutions can reduce long-run growth when property rights are not secured, presumably because the gains from the (costly) contracting institutions cannot be realised. This suggests that contracting institutions can benefit growth, and that the sequence of institutional change can matter. Sun, 01 Jan 2012 00:00:00 GMT http://hdl.handle.net/10023/3307 2012-01-01T00:00:00Z Trew, Alex William The quality of contracting institutions has been thought to be of second-order importance next to the impact that good property rights institutions can have on long- run growth. Using a large range of proxies for each type of institution, we find a robust $negative$ link between the quality of contracting institutions and long-run growth when we condition on property rights and a number of additional macroeconomic variables. Although the result remains something of a puzzle, we present evidence which suggests that only when property rights institutions are good do contracting institutions appear also to be good for development. Good contracting institutions can reduce long-run growth when property rights are not secured, presumably because the gains from the (costly) contracting institutions cannot be realised. This suggests that contracting institutions can benefit growth, and that the sequence of institutional change can matter. http://hdl.handle.net/10023/3233 Abstract: This thesis examines the efficacy of markets, using both quantitative and qualitative methods in a complementary way. Specifically, it starts (in Part II) by using the results from a quantitative analysis of initial public offering (IPO) underpricing as a barometer for corporate governance failure. This quantitative work identified Russia, China and India as extreme outliers. The data set used for this work was the cross-section sample of 45 countries developed by Loughran, Ritter & Rydqvist (2008). More broadly (in Part III), the thesis takes the lead of the quantitative evidence to examine, in a qualitative framework, possible sources of corporate governance failure in China, India and Russia. This was done categorically, under the headings of Globalisation, Corporate Governance, Institutional Structure and Competitive Strategy. Data were gathered by eldwork in China, India and Russia, and these findings were then benchmarked against findings from further fieldwork in the United Kingdom. This created a unique 56,000 word database, which was used for both cross-site and within-site analysis. This indicates how both unique attributes (e.g. rule of law, transparency, regulation, etc.), and common attributes (e.g. transition from a socialist/Marxist regime, market immaturity, asymmetric information etc.), combine to explain the different morphologies of corporate governance in these three countries. The quantitative analysis (Part II) consists of exploratory data analysis (EDA) and econometric work. The exploratory data analysis establishes, through graphical means and regression techniques, a negative correlation between IPO underpricing and globalisation (as measured by the KOF index, see Dreher, 2006). Building on this, the subsequent econometric modelling suggests that economic, demographic and institutional factors are all significant determinants of IPO underpricing. The qualitative analysis carried out in Part III of the thesis, builds on and extends the quantitative analysis of Part II. This is consistent with the multiple method approach, which combines both quantitative and qualitative analysis to achieve a synthesis of findings. The qualitative analysis uses evidence from semi-structured interviews with finance professionals and opinion makers, as well as evidence from additional primary and secondary sources, which was also made available through fieldwork contacts. This analysis emphasises the especial importance of board composition, information flows, the judicial system, the stock exchanges, and financial regulators for forms of corporate governance. Fri, 30 Nov 2012 00:00:00 GMT http://hdl.handle.net/10023/3233 2012-11-30T00:00:00Z Dyrmose, Morten This thesis examines the efficacy of markets, using both quantitative and qualitative methods in a complementary way. Specifically, it starts (in Part II) by using the results from a quantitative analysis of initial public offering (IPO) underpricing as a barometer for corporate governance failure. This quantitative work identified Russia, China and India as extreme outliers. The data set used for this work was the cross-section sample of 45 countries developed by Loughran, Ritter & Rydqvist (2008). More broadly (in Part III), the thesis takes the lead of the quantitative evidence to examine, in a qualitative framework, possible sources of corporate governance failure in China, India and Russia. This was done categorically, under the headings of Globalisation, Corporate Governance, Institutional Structure and Competitive Strategy. Data were gathered by eldwork in China, India and Russia, and these findings were then benchmarked against findings from further fieldwork in the United Kingdom. This created a unique 56,000 word database, which was used for both cross-site and within-site analysis. This indicates how both unique attributes (e.g. rule of law, transparency, regulation, etc.), and common attributes (e.g. transition from a socialist/Marxist regime, market immaturity, asymmetric information etc.), combine to explain the different morphologies of corporate governance in these three countries. The quantitative analysis (Part II) consists of exploratory data analysis (EDA) and econometric work. The exploratory data analysis establishes, through graphical means and regression techniques, a negative correlation between IPO underpricing and globalisation (as measured by the KOF index, see Dreher, 2006). Building on this, the subsequent econometric modelling suggests that economic, demographic and institutional factors are all significant determinants of IPO underpricing. The qualitative analysis carried out in Part III of the thesis, builds on and extends the quantitative analysis of Part II. This is consistent with the multiple method approach, which combines both quantitative and qualitative analysis to achieve a synthesis of findings. The qualitative analysis uses evidence from semi-structured interviews with finance professionals and opinion makers, as well as evidence from additional primary and secondary sources, which was also made available through fieldwork contacts. This analysis emphasises the especial importance of board composition, information flows, the judicial system, the stock exchanges, and financial regulators for forms of corporate governance. http://hdl.handle.net/10023/3208 Abstract: The degree of stock market integration has important implication for cross-border portfolio diversification, for which the Mainland China has become an attractive destination, particularly following the gradual open-up of its A-share market to foreign institutional investors. The first part of this thesis explores the various aspects of stock market integration taking place in Mainland China, in an attempt to resolve the ambiguity between extant empirical and anecdotal evidence on the issue. The evidence drawn from different statistical perspectives collectively establishes that the Mainland Chinese stock market is in a process of further integrating with a selection of world’s developed stock markets. Nevertheless, such increased integration should not preclude foreign institutional investors from diversifying into the Chinese A-share market, as the current integration is far from being complete. Adopting appropriate risk monitoring technique for venturing into the volatile Chinese A- share market is another imperative issue faced by foreign institutional investors, whose risk practices and economic capital are largely regulated by the Basel Accord. The second leg of this thesis addresses this problem through an evaluation of various volatility forecasting models for Value-at-Risk (VaR) reporting. Our results highlight the importance of adopting heterogeneous risk monitoring models in different investment environments for the purpose of regulatory compliance and optimal economic capital allocation. Overall, the studies contained in this thesis should add knowledge to the burgeoning literature on international financial integration at large, while serving the interests of institutional investors, and financial regulatory authorities alike. Tue, 19 Jun 2012 00:00:00 GMT http://hdl.handle.net/10023/3208 2012-06-19T00:00:00Z Chen, Xing The degree of stock market integration has important implication for cross-border portfolio diversification, for which the Mainland China has become an attractive destination, particularly following the gradual open-up of its A-share market to foreign institutional investors. The first part of this thesis explores the various aspects of stock market integration taking place in Mainland China, in an attempt to resolve the ambiguity between extant empirical and anecdotal evidence on the issue. The evidence drawn from different statistical perspectives collectively establishes that the Mainland Chinese stock market is in a process of further integrating with a selection of world’s developed stock markets. Nevertheless, such increased integration should not preclude foreign institutional investors from diversifying into the Chinese A-share market, as the current integration is far from being complete. Adopting appropriate risk monitoring technique for venturing into the volatile Chinese A- share market is another imperative issue faced by foreign institutional investors, whose risk practices and economic capital are largely regulated by the Basel Accord. The second leg of this thesis addresses this problem through an evaluation of various volatility forecasting models for Value-at-Risk (VaR) reporting. Our results highlight the importance of adopting heterogeneous risk monitoring models in different investment environments for the purpose of regulatory compliance and optimal economic capital allocation. Overall, the studies contained in this thesis should add knowledge to the burgeoning literature on international financial integration at large, while serving the interests of institutional investors, and financial regulatory authorities alike. http://hdl.handle.net/10023/3204 Abstract: Over the past 30 years, the Chinese economy has been going through complex transformation from a centrally planned towards a market economy. The reform of the enterprises has played an important part in this transformation. This is in addition to macro economy reforms, as well as changes in the institutional framework. The thesis examines the implications of macroeconomic, ownership structure, well as comprehensive institutional framework changes for Chinese enterprises’ survival and R&D activities. I study the impact of both microeconomic factors and the macro economy on the financial distress of Chinese listed companies over a period of massive economic transition, 1995 to 2006. Using hazard regression analysis, I find substantial effect of firm level covariates (age, size, cash flow and gearing) on financial distress, but also significant roles for macroeconomic stability and institution effect. Business exits in my data on Chinese quoted firms are vanishingly rare, arguably because of active state protection for the failing firms.I investigate the firms’ innovation activity and efficiency of different ownership sectors. Ownership influence on R&D investment and efficiency is estimated, using productivity frontier function, for a sample of large and medium size Chinese industrial enterprises from 2000-2007. I found that the presence of state ownership is positively related to R&D investment, but negatively related to R&D performance. Foreign firms are technical leader in Chinese industries and have advantage in R&D efficiency. My results also show significant cross industries differences in R&D effort and technical level. These point out that firms possessing more innovation resources and government support are not the ones performing better technically. I extend my study into a more general mixed duopoly model in which a wel- fare maximizing public firm competes with profit maximizing private firm in R&D. I assume that different operation strategy influence firms’ tolerance of R&D spillover which plays a key role in their R&D investment mount and technology efficiency. I prove that public firm is more likely to share its R&D fruit and its higher R&D invest- ment is companied by lower efficiency. Overall, macroeconomy on firm survival and ownership structure on firm inno- vation activities are channels to understand Chinese economy reform. Because condi- tions in China were similar in many ways to other transition economies, these results provide important information about the process of economic transformation more generally. Fri, 30 Nov 2012 00:00:00 GMT http://hdl.handle.net/10023/3204 2012-11-30T00:00:00Z Han, Jie Over the past 30 years, the Chinese economy has been going through complex transformation from a centrally planned towards a market economy. The reform of the enterprises has played an important part in this transformation. This is in addition to macro economy reforms, as well as changes in the institutional framework. The thesis examines the implications of macroeconomic, ownership structure, well as comprehensive institutional framework changes for Chinese enterprises’ survival and R&D activities. I study the impact of both microeconomic factors and the macro economy on the financial distress of Chinese listed companies over a period of massive economic transition, 1995 to 2006. Using hazard regression analysis, I find substantial effect of firm level covariates (age, size, cash flow and gearing) on financial distress, but also significant roles for macroeconomic stability and institution effect. Business exits in my data on Chinese quoted firms are vanishingly rare, arguably because of active state protection for the failing firms.I investigate the firms’ innovation activity and efficiency of different ownership sectors. Ownership influence on R&D investment and efficiency is estimated, using productivity frontier function, for a sample of large and medium size Chinese industrial enterprises from 2000-2007. I found that the presence of state ownership is positively related to R&D investment, but negatively related to R&D performance. Foreign firms are technical leader in Chinese industries and have advantage in R&D efficiency. My results also show significant cross industries differences in R&D effort and technical level. These point out that firms possessing more innovation resources and government support are not the ones performing better technically. I extend my study into a more general mixed duopoly model in which a wel- fare maximizing public firm competes with profit maximizing private firm in R&D. I assume that different operation strategy influence firms’ tolerance of R&D spillover which plays a key role in their R&D investment mount and technology efficiency. I prove that public firm is more likely to share its R&D fruit and its higher R&D invest- ment is companied by lower efficiency. Overall, macroeconomy on firm survival and ownership structure on firm inno- vation activities are channels to understand Chinese economy reform. Because condi- tions in China were similar in many ways to other transition economies, these results provide important information about the process of economic transformation more generally. http://hdl.handle.net/10023/3147 Abstract: This thesis is an empirical investigation of three related capital structure dynamics of US-based multinationals and their domestic counterparts. Specifically, the thesis examined whether there are differences in capital structure adjustment speed between US-based Multinationals (hereafter, MNCs) and Domestic Corporations (hereafter, DCs), and if so, what theoretical factors contribute to the differences. At an industry level, the thesis examine whether or not industries of US-based Multinationals (MNCs) and their domestic counterparts (DCs) have different speed of capital structure adjustment toward the target level, particularly the manufacturing industry. And at the macro level, the thesis estimates the effect of macroeconomic factors (commercial paper spread, growth in aggregate capital expenditure of nonfinancial firms, and consumer price index (CPI)), and macroeconomic conditions defined by GDP, default spread, unemployment and price-output ratio on capital structure dynamics of US-based MNCs relative to DCs. Various econometric techniques were employed in the thesis to test the hypothesis that capital structure dynamics of US-based MNCs differ from DCs. Using fixed effect instrumental variables (FEIV), the empirical results shows that on average, DCs adjust to target leverage faster than MNCs. Similarly, the results support existences of capital structure differences among industries for MNCs and DCs. Sun, 01 Jan 2012 00:00:00 GMT http://hdl.handle.net/10023/3147 2012-01-01T00:00:00Z Camara, Omar This thesis is an empirical investigation of three related capital structure dynamics of US-based multinationals and their domestic counterparts. Specifically, the thesis examined whether there are differences in capital structure adjustment speed between US-based Multinationals (hereafter, MNCs) and Domestic Corporations (hereafter, DCs), and if so, what theoretical factors contribute to the differences. At an industry level, the thesis examine whether or not industries of US-based Multinationals (MNCs) and their domestic counterparts (DCs) have different speed of capital structure adjustment toward the target level, particularly the manufacturing industry. And at the macro level, the thesis estimates the effect of macroeconomic factors (commercial paper spread, growth in aggregate capital expenditure of nonfinancial firms, and consumer price index (CPI)), and macroeconomic conditions defined by GDP, default spread, unemployment and price-output ratio on capital structure dynamics of US-based MNCs relative to DCs. Various econometric techniques were employed in the thesis to test the hypothesis that capital structure dynamics of US-based MNCs differ from DCs. Using fixed effect instrumental variables (FEIV), the empirical results shows that on average, DCs adjust to target leverage faster than MNCs. Similarly, the results support existences of capital structure differences among industries for MNCs and DCs. http://hdl.handle.net/10023/3053 Abstract: This thesis aims to provide new and useful insights into the effects that various tax, labour and product market reforms have on the overall economic performance. Additionally, it aims also to provide insights about the optimal monetary and fiscal policy behaviour within the economy characterized with various real labour market frictions. We analyze the benefits of tax reforms and their effectiveness relative to product or other labour market reforms. A general equilibrium model with imperfect competition, wage bargaining and different forms of tax distortions is applied in order to analyze these issues. We find that structural reforms imply short run costs but long run gains; that the long run gains outweigh the short run costs; and that the financing of such reforms will be the main stumbling block. We also find that the effectiveness of various reform instruments depends on the policy maker's ultimate objective. More precisely, tax reforms are more effective for welfare gains, but market liberalization is more valuable for generating employment. In order to advance our understanding of the tax and product market reform processes, we then develop a dynamic stochastic general equilibrium model which incorporates search-matching frictions, costly ring and endogenous job destruction decisions, as well as a distortionary progressive wage and a at payroll tax. We confirm the negative effects of marginal tax distortions on the overall economic performance. We also find a positive effect of an increase in the wage tax progressivity and product market liberalization on employment, output and consumption. Following a positive technology shock, the volatility of employment, output and consumption turns out to be lower in the reformed economy, whereas the impact effect on inflation is more pronounced. Following a positive government spending shock the volatility of employment, output and consumption is again lower in the reformed economy, but the inflation response is stronger over the whole adjustment path. We also find detrimental effects on employment and output of a tax reform which keeps the marginal tax wedge unchanged by partially offsetting a decrease in the payroll tax by an increase in the wage tax rate. If this reform is anticipated one period in advance the negative effects remain all over the transition path. We investigate the optimal monetary and fiscal policy implication of the New-Keynesian setup enriched with search-matching frictions. We show that the optimal policy features deviation from strict price stability, and that the Ramsey planner uses both inflation and taxes in order to fully exploit the benefits of the productivity increase following a positive productivity shock. We also find that the optimal tax rate and government liabilities inherit the time series properties of the underlying shocks. Moreover, we identify a certain degree of overshooting in inflation and tax rates following a positive productivity shock, and a certain degree of undershooting following a positive government spending shock as a consequence of the assumed commitment of policy maker. Fri, 01 Jan 2010 00:00:00 GMT http://hdl.handle.net/10023/3053 2010-01-01T00:00:00Z Bokan, Nikola This thesis aims to provide new and useful insights into the effects that various tax, labour and product market reforms have on the overall economic performance. Additionally, it aims also to provide insights about the optimal monetary and fiscal policy behaviour within the economy characterized with various real labour market frictions. We analyze the benefits of tax reforms and their effectiveness relative to product or other labour market reforms. A general equilibrium model with imperfect competition, wage bargaining and different forms of tax distortions is applied in order to analyze these issues. We find that structural reforms imply short run costs but long run gains; that the long run gains outweigh the short run costs; and that the financing of such reforms will be the main stumbling block. We also find that the effectiveness of various reform instruments depends on the policy maker's ultimate objective. More precisely, tax reforms are more effective for welfare gains, but market liberalization is more valuable for generating employment. In order to advance our understanding of the tax and product market reform processes, we then develop a dynamic stochastic general equilibrium model which incorporates search-matching frictions, costly ring and endogenous job destruction decisions, as well as a distortionary progressive wage and a at payroll tax. We confirm the negative effects of marginal tax distortions on the overall economic performance. We also find a positive effect of an increase in the wage tax progressivity and product market liberalization on employment, output and consumption. Following a positive technology shock, the volatility of employment, output and consumption turns out to be lower in the reformed economy, whereas the impact effect on inflation is more pronounced. Following a positive government spending shock the volatility of employment, output and consumption is again lower in the reformed economy, but the inflation response is stronger over the whole adjustment path. We also find detrimental effects on employment and output of a tax reform which keeps the marginal tax wedge unchanged by partially offsetting a decrease in the payroll tax by an increase in the wage tax rate. If this reform is anticipated one period in advance the negative effects remain all over the transition path. We investigate the optimal monetary and fiscal policy implication of the New-Keynesian setup enriched with search-matching frictions. We show that the optimal policy features deviation from strict price stability, and that the Ramsey planner uses both inflation and taxes in order to fully exploit the benefits of the productivity increase following a positive productivity shock. We also find that the optimal tax rate and government liabilities inherit the time series properties of the underlying shocks. Moreover, we identify a certain degree of overshooting in inflation and tax rates following a positive productivity shock, and a certain degree of undershooting following a positive government spending shock as a consequence of the assumed commitment of policy maker. http://hdl.handle.net/10023/2963 Abstract: This thesis analyses joint ventures which have been established between Greek enterprises and enterprises from Albania, Bulgaria, Romania and Russia. An international joint venture (IJV) is an enterprise established between two or more companies, one of which exercises its entrepreneurial activities in a foreign country. The core set of questions that this thesis addresses consist of motives for the establishment of joint ventures, partner selection criteria, control and conflict inside a joint venture, stability and performance. Another issue addressed is that of the problems which joint venturers face, as identified by Greek businessmen and academics. This framework is deployed upon an extensive body of primary source data gathered in 1994 by field work methods, using an administrated questionnaire largely within the Greek parent companies. Our research relates to evidence on 44 Greek enterprises, groups of companies, or individuals who established joint ventures with Eastern European partners after 1989. The questionnaire design is based on the notion that the expansion of the domestic boundaries of the firm abroad, and its decision to establish an IJV are the outcomes of strategic, financial and country specific motives. The key results of the thesis are that successful joint ventures in Eastern Europe have the following characteristics: 1. Dominant control by the Greek partner over the IJV, when the Eastern European partner is a bureaucrat. 2. Low perceived conflict as regards intensity and frequency over dimensions like transfer of knowledge. 3. High stability as measured by the percentage increase in share capital held by the Greek partner and by resistance to transformation to wholly owned subsidiary status of the IJV. 4. Good perceived financial performance. 5. Evolution of the IJV such that the Eastern European partner increasingly takes on a managerial role and becomes attuned to managerial modes of behaviour. 6. Shared decision making between partners to the IJV beyond the infant stage. Wed, 01 Jan 1997 00:00:00 GMT http://hdl.handle.net/10023/2963 1997-01-01T00:00:00Z Ioannis-Dionysios, Salavrakos This thesis analyses joint ventures which have been established between Greek enterprises and enterprises from Albania, Bulgaria, Romania and Russia. An international joint venture (IJV) is an enterprise established between two or more companies, one of which exercises its entrepreneurial activities in a foreign country. The core set of questions that this thesis addresses consist of motives for the establishment of joint ventures, partner selection criteria, control and conflict inside a joint venture, stability and performance. Another issue addressed is that of the problems which joint venturers face, as identified by Greek businessmen and academics. This framework is deployed upon an extensive body of primary source data gathered in 1994 by field work methods, using an administrated questionnaire largely within the Greek parent companies. Our research relates to evidence on 44 Greek enterprises, groups of companies, or individuals who established joint ventures with Eastern European partners after 1989. The questionnaire design is based on the notion that the expansion of the domestic boundaries of the firm abroad, and its decision to establish an IJV are the outcomes of strategic, financial and country specific motives. The key results of the thesis are that successful joint ventures in Eastern Europe have the following characteristics: 1. Dominant control by the Greek partner over the IJV, when the Eastern European partner is a bureaucrat. 2. Low perceived conflict as regards intensity and frequency over dimensions like transfer of knowledge. 3. High stability as measured by the percentage increase in share capital held by the Greek partner and by resistance to transformation to wholly owned subsidiary status of the IJV. 4. Good perceived financial performance. 5. Evolution of the IJV such that the Eastern European partner increasingly takes on a managerial role and becomes attuned to managerial modes of behaviour. 6. Shared decision making between partners to the IJV beyond the infant stage. http://hdl.handle.net/10023/2917 Abstract: This study investigates the links between economic and demographic variables by examining the impact of industrialization on adult mortality in eastern Scotland, c. 1810-61. Using the concept of the urban hierarchy, sixteen parishes in the counties of Angus and Fife were selected to represent different degrees of industrialization. Patterns of adult mortality in these parishes between 1810 and 1854 are then examined using data on burials from the parish registers. The results are checked by comparing them with the results obtained from an analysis of vital registration data on deaths for the period 1855-61. Thus overall trends in adult mortality are identified and then disaggregated by age, sex, cause of death and occupation. The results show that adult mortality was generally higher in the most industrialized areas. Furthermore, rates in these parishes generally increased over the period whilst in the less industrialized areas they fell. Overall most people died from infectious diseases but deaths from these causes (including tuberculosis) fell over the period. The increase in mortality appears to be in part due to a rise in deaths from respiratory diseases (especially amongst textile workers in the main industrial centres) and food- and water-borne illnesses. This suggests that industrialization had a negative impact on adult mortality rates, causing a short-term rise in mortality in the early to mid-nineteenth century. This was in part due to the direct effect industrialization had, with the shift towards textile employment probably leading to increased mortality from respiratory diseases especially amongst factory workers. The impact of industrialization also appears to have operated indirectly via the impetus it gave to urbanization and changes in the spatial distribution of the population that resulted in worsening sanitary conditions and increased exposure to infection. Mon, 01 Jan 1996 00:00:00 GMT http://hdl.handle.net/10023/2917 1996-01-01T00:00:00Z Ball, Emma This study investigates the links between economic and demographic variables by examining the impact of industrialization on adult mortality in eastern Scotland, c. 1810-61. Using the concept of the urban hierarchy, sixteen parishes in the counties of Angus and Fife were selected to represent different degrees of industrialization. Patterns of adult mortality in these parishes between 1810 and 1854 are then examined using data on burials from the parish registers. The results are checked by comparing them with the results obtained from an analysis of vital registration data on deaths for the period 1855-61. Thus overall trends in adult mortality are identified and then disaggregated by age, sex, cause of death and occupation. The results show that adult mortality was generally higher in the most industrialized areas. Furthermore, rates in these parishes generally increased over the period whilst in the less industrialized areas they fell. Overall most people died from infectious diseases but deaths from these causes (including tuberculosis) fell over the period. The increase in mortality appears to be in part due to a rise in deaths from respiratory diseases (especially amongst textile workers in the main industrial centres) and food- and water-borne illnesses. This suggests that industrialization had a negative impact on adult mortality rates, causing a short-term rise in mortality in the early to mid-nineteenth century. This was in part due to the direct effect industrialization had, with the shift towards textile employment probably leading to increased mortality from respiratory diseases especially amongst factory workers. The impact of industrialization also appears to have operated indirectly via the impetus it gave to urbanization and changes in the spatial distribution of the population that resulted in worsening sanitary conditions and increased exposure to infection. http://hdl.handle.net/10023/2892 Abstract: The problem of designing appropriate solvency regulations is addressed with respect to the U. K. life assurance industry using various theoretical and methodological techniques. These alternative approaches to the measurement of insurer solvency are explored in order to provide a framework for assessing regulations. Reviews of the current insurance regulatory environment as well as an extensive statistical and economic analysis of the life assurance industry provide a practical backdrop to subsequent model building. Building on these reviews, a 'Monte-Carlo' simulation model of an insurer portfolio is constructed to demonstrate additional considerations relevant to solvency regulation. The hypothetical insurance company is assumed to maximise the expected utility of 'ultimate surplus', which is taken as an indicator of end-of-period wealth. Five asset classes are used and liabilities are assumed fixed. The simulated run-off performance of the portfolio is evaluated in terms of the probability of insolvency demonstrating a 'U' shaped relationship between the risk preference of the insurer and the insolvency probability. Implications for the design of regulatory constraints are also assessed with respect to the simulations. In particular, the contrast between ex ante and ex post measures of insurer solvency are highlighted with the conclusion taken that current regulations might gain further insight into the underlying solvency performance of insurance companies if they were to use ex ante solvency measures. This subsequent policy prescription is qualified by two factors: first, that the value of simulations and forecasting as an ex ante measure of performance is only as good as the models used to forecast ex ante; and second, that any proposed regulatory shift must be assessed within a cost-benefit analysis. Overall, the simulation analysis suggests that current regulations provide an incomplete picture of the solvency performance of the U. K. life assurance industry. Fri, 01 Jan 1999 00:00:00 GMT http://hdl.handle.net/10023/2892 1999-01-01T00:00:00Z Gully, Benjamin R. The problem of designing appropriate solvency regulations is addressed with respect to the U. K. life assurance industry using various theoretical and methodological techniques. These alternative approaches to the measurement of insurer solvency are explored in order to provide a framework for assessing regulations. Reviews of the current insurance regulatory environment as well as an extensive statistical and economic analysis of the life assurance industry provide a practical backdrop to subsequent model building. Building on these reviews, a 'Monte-Carlo' simulation model of an insurer portfolio is constructed to demonstrate additional considerations relevant to solvency regulation. The hypothetical insurance company is assumed to maximise the expected utility of 'ultimate surplus', which is taken as an indicator of end-of-period wealth. Five asset classes are used and liabilities are assumed fixed. The simulated run-off performance of the portfolio is evaluated in terms of the probability of insolvency demonstrating a 'U' shaped relationship between the risk preference of the insurer and the insolvency probability. Implications for the design of regulatory constraints are also assessed with respect to the simulations. In particular, the contrast between ex ante and ex post measures of insurer solvency are highlighted with the conclusion taken that current regulations might gain further insight into the underlying solvency performance of insurance companies if they were to use ex ante solvency measures. This subsequent policy prescription is qualified by two factors: first, that the value of simulations and forecasting as an ex ante measure of performance is only as good as the models used to forecast ex ante; and second, that any proposed regulatory shift must be assessed within a cost-benefit analysis. Overall, the simulation analysis suggests that current regulations provide an incomplete picture of the solvency performance of the U. K. life assurance industry. http://hdl.handle.net/10023/2887 Abstract: The thesis deals with the means whereby a firm can gain a competitive advantage over its rivals. After considering how this issue is dealt with in the management literature, the thesis focuses on two possible routes to competitive advantage. The first is largely internal to the firm, and concerns the design of managerial contracts to provide managers with the incentives to act in the best interests of shareholders. The second route is external, involving strategic market moves in relation to rival firms. These two possible routes to competitive advantage are appraised in light of recent theoretical developments in 1principal-agent analysis the internal route, and the new industrial economics the external route. The final section of the thesis is empirical and deals with the share price experience of the top 100 U. K. companies since 1970. The econometric notion of cointegration is employed to test for the existence of sustained competitive advantage. The tentative conclusion reached is that while companies may be able to achieve a sustained competitive advantage, the compensation contracts employed have not been a successful means of obtaining such advantage. The suggestion is that external routes to competitive advantage might be more effective. Tue, 01 Jan 1991 00:00:00 GMT http://hdl.handle.net/10023/2887 1991-01-01T00:00:00Z Allan, Andrew C. The thesis deals with the means whereby a firm can gain a competitive advantage over its rivals. After considering how this issue is dealt with in the management literature, the thesis focuses on two possible routes to competitive advantage. The first is largely internal to the firm, and concerns the design of managerial contracts to provide managers with the incentives to act in the best interests of shareholders. The second route is external, involving strategic market moves in relation to rival firms. These two possible routes to competitive advantage are appraised in light of recent theoretical developments in 1principal-agent analysis the internal route, and the new industrial economics the external route. The final section of the thesis is empirical and deals with the share price experience of the top 100 U. K. companies since 1970. The econometric notion of cointegration is employed to test for the existence of sustained competitive advantage. The tentative conclusion reached is that while companies may be able to achieve a sustained competitive advantage, the compensation contracts employed have not been a successful means of obtaining such advantage. The suggestion is that external routes to competitive advantage might be more effective. http://hdl.handle.net/10023/2812 Abstract: The study begins by examining the orthodox theory of discrimination as a possible model with which to evaluate the socio-economic basis of race relations in Rhodesia. It is argued that it is inadequate because the theory is not grounded in the settler-colonial system, its historiography and the peripheral capitalist social formation in Rhodesia in which a complex articulation between modes of production is found. A critique is then undertaken of the principal theories hitherto used to explain the course of Rhodesian economic development - namely, dualism and those termed neo-marxist. It is argued that Barber's modification of the dualistic model of W. A. Lewis is deficient particularly because of the absence of a theory of 'primitive accumulation' and also the lack of an analysis of the political economy of the 'labour transfer', the basis of peripheral capitalist development. Arrighi's 'neo-maraist' analysis of Rhodesian development is also criticized for its inadequate theory of 'primitive accumulation' and the lack of attention paid to the labour mobilization process. An analytical alternative is proposed, based on an explanation of 'primitive capital accumulation' and the specific forms of-labour utilization found in Rhodesia in association with particular modes of production existent during the period under review. An attempt is made to specify these modes and the social relations related thereto. The labour structures found in the economic system are then examined in the context of the income distribution pattern, the class structure of the social formation and the primary 'dynamic' of Rhodesian postwar development - industrialization. It is suggested that changes in labour policy in various modes of production were essentially concerned with ensuring the maintenance of a system of cheap labour whereby employers acquired labour-power below the cost of its own reproduction. The development of peripheral capitalism under conditions of settler colonialism required changes to labour policy. These modifications left the basic structures of the socio-economic system intact, although they gave rise to substantial pressures for change, e. g. from unions and African nationalism. The State has been particularly significant in containing these socio-economic and political pressures, especially in the field of labour policy. An attempt is made to identify the changes in labour mobilization that have taken place, to assess their impact on the nature of discrimination and underdevelopment, and to point out some of the more important features of the class formation process that have resulted from the development of capitalism in Rhodesia. Wed, 01 Jan 1975 00:00:00 GMT http://hdl.handle.net/10023/2812 1975-01-01T00:00:00Z Clarke, Duncan Godfrey The study begins by examining the orthodox theory of discrimination as a possible model with which to evaluate the socio-economic basis of race relations in Rhodesia. It is argued that it is inadequate because the theory is not grounded in the settler-colonial system, its historiography and the peripheral capitalist social formation in Rhodesia in which a complex articulation between modes of production is found. A critique is then undertaken of the principal theories hitherto used to explain the course of Rhodesian economic development - namely, dualism and those termed neo-marxist. It is argued that Barber's modification of the dualistic model of W. A. Lewis is deficient particularly because of the absence of a theory of 'primitive accumulation' and also the lack of an analysis of the political economy of the 'labour transfer', the basis of peripheral capitalist development. Arrighi's 'neo-maraist' analysis of Rhodesian development is also criticized for its inadequate theory of 'primitive accumulation' and the lack of attention paid to the labour mobilization process. An analytical alternative is proposed, based on an explanation of 'primitive capital accumulation' and the specific forms of-labour utilization found in Rhodesia in association with particular modes of production existent during the period under review. An attempt is made to specify these modes and the social relations related thereto. The labour structures found in the economic system are then examined in the context of the income distribution pattern, the class structure of the social formation and the primary 'dynamic' of Rhodesian postwar development - industrialization. It is suggested that changes in labour policy in various modes of production were essentially concerned with ensuring the maintenance of a system of cheap labour whereby employers acquired labour-power below the cost of its own reproduction. The development of peripheral capitalism under conditions of settler colonialism required changes to labour policy. These modifications left the basic structures of the socio-economic system intact, although they gave rise to substantial pressures for change, e. g. from unions and African nationalism. The State has been particularly significant in containing these socio-economic and political pressures, especially in the field of labour policy. An attempt is made to identify the changes in labour mobilization that have taken place, to assess their impact on the nature of discrimination and underdevelopment, and to point out some of the more important features of the class formation process that have resulted from the development of capitalism in Rhodesia. http://hdl.handle.net/10023/2744 Abstract: This paper introduces a classification of DSGEs from a Markovian perspective, and positions the class of POMDP (Partially Observable Markov Decision Process) to the center of a generalization of linear rational expectations models. The analysis of the POMDP class builds on the previous development in dynamic controls for linear system, and derives a solution algorithm by formulating an equilibrium as a fixed point of an operator that maps what we observe into what we believe. Description: Revised and resubmitted at Computational Economics Thu, 01 Dec 2011 00:00:00 GMT http://hdl.handle.net/10023/2744 2011-12-01T00:00:00Z Kim, Seong-Hoon This paper introduces a classification of DSGEs from a Markovian perspective, and positions the class of POMDP (Partially Observable Markov Decision Process) to the center of a generalization of linear rational expectations models. The analysis of the POMDP class builds on the previous development in dynamic controls for linear system, and derives a solution algorithm by formulating an equilibrium as a fixed point of an operator that maps what we observe into what we believe. http://hdl.handle.net/10023/2630 Abstract: In the task of promoting both economic growth and development of the developing countries, both theory and development experience suggest that international co-operation in a broad sense has a vital role to play. For most developing countries, foreign trade is, and is likely to remain, the most important ingredient of such co-operation, although in the absence of a so-called new international economic order, its benefits may be smaller than most developing countries think to be equitable. But despite the overwhelming importance of trade, resource transfers from the more advanced and rich countries have a significant and in many cases, a decisive role as well to play in augmenting economic development. Resource transfers include foreign investment, financial aid and technical assistance. The present study principally examines the role of foreign aid - including both financial and technical assistance - in economic development with particular reference to the Sudan. This focus on aid is not intended to under-rate the significance of other forms of co-operation between advanced and developing countries in promoting the latter's development. This study falls into three main parts which together cover most of the principal issues related to foreign aid, and examine the situation in the Sudan. Part I is a critical review of the theoretical literature on aid and of the controversies that have arisen in the light of the different empirical investigations which have been attempted to establish its impact upon recipient economies. It also examines the rationale behind the provision of aid and the requirements which are to be satisfied if it is to be used effectively. Part II is an attempt to apply the conceptual framework of the previous part to an elucidation of the role of aid in the Sudan's economic development. It begins with a brief description of the structure of the Sudanese economy and a survey of the trends in available resources. In the light of this analysis, a number of key issues are examined: in particular the source, composition and end-use of aid funds; the significance of Arab capital; the structure of aid management, and the role of technical assistance in supplementing domestic skills. Apart from these largely qualitative appraisals, the study also attempts to apply Weisskopf's behavioural model to evaluate the contribution of foreign aid to the Sudanese economy. Part II includes an examination of the limitations of such econometric studies. Part III examines the so-called debt problem of developing countries and its extent. Since foreign aid is not wholly provided in grant form, its inflow into developing countries has been accompanied by a growing debt. Part III contains a critical appraisal of the indebtedness issue of developing countries in the light of recent debates. Its prime concern is, however, to identify the causes and to demonstrate the immediate as well as the long-term implications of debt difficulties. This is followed by a scrutiny of the debt position of the Sudan, using for this purpose both published and unpublished data. Finally, a concluding section summarizes some of the most important propositions arrived at in the dissertation. Thu, 01 Jan 1981 00:00:00 GMT http://hdl.handle.net/10023/2630 1981-01-01T00:00:00Z Abuel Nour, Abuel Gasim Mohamed In the task of promoting both economic growth and development of the developing countries, both theory and development experience suggest that international co-operation in a broad sense has a vital role to play. For most developing countries, foreign trade is, and is likely to remain, the most important ingredient of such co-operation, although in the absence of a so-called new international economic order, its benefits may be smaller than most developing countries think to be equitable. But despite the overwhelming importance of trade, resource transfers from the more advanced and rich countries have a significant and in many cases, a decisive role as well to play in augmenting economic development. Resource transfers include foreign investment, financial aid and technical assistance. The present study principally examines the role of foreign aid - including both financial and technical assistance - in economic development with particular reference to the Sudan. This focus on aid is not intended to under-rate the significance of other forms of co-operation between advanced and developing countries in promoting the latter's development. This study falls into three main parts which together cover most of the principal issues related to foreign aid, and examine the situation in the Sudan. Part I is a critical review of the theoretical literature on aid and of the controversies that have arisen in the light of the different empirical investigations which have been attempted to establish its impact upon recipient economies. It also examines the rationale behind the provision of aid and the requirements which are to be satisfied if it is to be used effectively. Part II is an attempt to apply the conceptual framework of the previous part to an elucidation of the role of aid in the Sudan's economic development. It begins with a brief description of the structure of the Sudanese economy and a survey of the trends in available resources. In the light of this analysis, a number of key issues are examined: in particular the source, composition and end-use of aid funds; the significance of Arab capital; the structure of aid management, and the role of technical assistance in supplementing domestic skills. Apart from these largely qualitative appraisals, the study also attempts to apply Weisskopf's behavioural model to evaluate the contribution of foreign aid to the Sudanese economy. Part II includes an examination of the limitations of such econometric studies. Part III examines the so-called debt problem of developing countries and its extent. Since foreign aid is not wholly provided in grant form, its inflow into developing countries has been accompanied by a growing debt. Part III contains a critical appraisal of the indebtedness issue of developing countries in the light of recent debates. Its prime concern is, however, to identify the causes and to demonstrate the immediate as well as the long-term implications of debt difficulties. This is followed by a scrutiny of the debt position of the Sudan, using for this purpose both published and unpublished data. Finally, a concluding section summarizes some of the most important propositions arrived at in the dissertation. http://hdl.handle.net/10023/2604 Abstract: Over the one and a half decades prior to the global financial crisis, advanced economies experienced a large growth in gross external portfolio positions. This phenomenon has been described as Financial Globalization. Over roughly the same time frame, most of these countries also saw a substantial fall in the level and variability of inflation. Many economists have conjectured that financial globalization contributed to the improved performance in the level and predictability of inflation. In this paper, we explore the causal link running in the opposite direction. We show that a monetary policy rule which reduces inflation variability leads to an increase in the size of gross external positions, both in equity and bond portfolios. This is a highly robust prediction of open economy macro models with endogenous portfolio choice. It holds across many different modeling specifications and parameterizations. We also present preliminary empirical evidence which shows a negative relationship between inflation volatility and the size of gross external positions. Wed, 01 Feb 2012 00:00:00 GMT http://hdl.handle.net/10023/2604 2012-02-01T00:00:00Z Devereux, Michael B. Senay, Ozge Sutherland, Alan Over the one and a half decades prior to the global financial crisis, advanced economies experienced a large growth in gross external portfolio positions. This phenomenon has been described as Financial Globalization. Over roughly the same time frame, most of these countries also saw a substantial fall in the level and variability of inflation. Many economists have conjectured that financial globalization contributed to the improved performance in the level and predictability of inflation. In this paper, we explore the causal link running in the opposite direction. We show that a monetary policy rule which reduces inflation variability leads to an increase in the size of gross external positions, both in equity and bond portfolios. This is a highly robust prediction of open economy macro models with endogenous portfolio choice. It holds across many different modeling specifications and parameterizations. We also present preliminary empirical evidence which shows a negative relationship between inflation volatility and the size of gross external positions. http://hdl.handle.net/10023/2602 Abstract: A monopolist supplies a multi-attribute good and does not know whether the consumer makes or avoids tradeoffs between attributes. We illustrate a form of exploitation to which the tradeoff-avoiding consumer is vulnerable and draw some policy-relevant conclusions. Description: Submitted to the B.E. Journal of Theoretical Economics Wed, 23 Nov 2011 00:00:00 GMT http://hdl.handle.net/10023/2602 2011-11-23T00:00:00Z Papi, Mauro A monopolist supplies a multi-attribute good and does not know whether the consumer makes or avoids tradeoffs between attributes. We illustrate a form of exploitation to which the tradeoff-avoiding consumer is vulnerable and draw some policy-relevant conclusions. http://hdl.handle.net/10023/2601 Abstract: Using a standard open economy DSGE model, it is shown that the timing of asset trade relative to policy decisions has a potentially important impact on the welfare evaluation of monetary policy at the individual country level. If asset trade in the initial period takes place before the announcement of policy, a national policymaker can choose a policy rule which reduces the work effort of households in the policymaker’s country in the knowledge that consumption is fully insured by optimally chosen international portfolio positions. But if asset trade takes place after the policy announcement, this insurance is absent and households in the policymaker’s country bear the full consumption consequences of the chosen policy rule. The welfare incentives faced by national policymakers are very different between the two cases. Numerical examples confirm that asset market timing has a significant impact on the optimal policy rule. Fri, 01 Jan 2010 00:00:00 GMT http://hdl.handle.net/10023/2601 2010-01-01T00:00:00Z Senay, Ozge Sutherland, Alan Using a standard open economy DSGE model, it is shown that the timing of asset trade relative to policy decisions has a potentially important impact on the welfare evaluation of monetary policy at the individual country level. If asset trade in the initial period takes place before the announcement of policy, a national policymaker can choose a policy rule which reduces the work effort of households in the policymaker’s country in the knowledge that consumption is fully insured by optimally chosen international portfolio positions. But if asset trade takes place after the policy announcement, this insurance is absent and households in the policymaker’s country bear the full consumption consequences of the chosen policy rule. The welfare incentives faced by national policymakers are very different between the two cases. Numerical examples confirm that asset market timing has a significant impact on the optimal policy rule. http://hdl.handle.net/10023/2599 Abstract: This paper introduces a classification of DSGEs from a Markovian perspective, and positions the class of POMDP (Partially Observable Markov Decision Process) to the center of a generalization of linear rational expectations models. The analysis of the POMDP class builds on the previous development in dynamic controls for linear system, and derives a solution algorithm by formulating an equilibrium as a fixed point of an operator that maps what we observe into what we believe. Sun, 01 Jan 2012 00:00:00 GMT http://hdl.handle.net/10023/2599 2012-01-01T00:00:00Z Kim, Seong-Hoon This paper introduces a classification of DSGEs from a Markovian perspective, and positions the class of POMDP (Partially Observable Markov Decision Process) to the center of a generalization of linear rational expectations models. The analysis of the POMDP class builds on the previous development in dynamic controls for linear system, and derives a solution algorithm by formulating an equilibrium as a fixed point of an operator that maps what we observe into what we believe. http://hdl.handle.net/10023/2595 Abstract: Standard choice theory assumes that the budget set is known to the decision-maker in advance. In contrast, we develop a model in which alternatives are examined sequentially and decision-makers exhibit `satisficing' attitudes. We axiomatically characterize our model and investigate behavioral definitions of satisfaction, attention, and preference under various choice domains. Moreover, we relate our framework to several well-known existing models. Sat, 01 Sep 2012 00:00:00 GMT http://hdl.handle.net/10023/2595 2012-09-01T00:00:00Z Papi, Mauro Standard choice theory assumes that the budget set is known to the decision-maker in advance. In contrast, we develop a model in which alternatives are examined sequentially and decision-makers exhibit `satisficing' attitudes. We axiomatically characterize our model and investigate behavioral definitions of satisfaction, attention, and preference under various choice domains. Moreover, we relate our framework to several well-known existing models. http://hdl.handle.net/10023/2568 Abstract: In this thesis we establish a relationship between the Potential Approach to interest rates and the Market Models. This relationship allows us to derive the dynamics of forward LIBOR rates and forward swap rates by modelling the state price density. It means that we are able to secure the arbitrage-free condition and positive interest rate feature when we model the volatility drifts of those dynamics. On the other hand, we develop the Potential Approach, particularly the Hughston-Rafailidis Chaotic Interest Rate Model. The early argument enables us to infer that the Chaos Models belong to the Stochastic Volatility Market Models. In particular, we propose One-variable Chaos Models with the application of exponential polynomials. This maintains the generality of the Chaos Models and performs well for yield curves comparing with the Nelson-Siegel Form and the Svensson Form. Moreover, we calibrate the One-variable Chaos Model to European Caplets and European Swaptions. We show that the One-variable Chaos Models can reproduce the humped shape of the term structure of caplet volatility and also the volatility smile/skew curve. The calibration errors are small compared with the Lognormal Forward LIBOR Model, the SABR Model, traditional Short Rate Models, and other models under the Potential Approach. After the calibration, we introduce some new interest rate models under the Potential Approach. In particular, we suggest a new framework where the volatility drifts can be indirectly modelled from the short rate via the state price density. Tue, 30 Nov 2010 00:00:00 GMT http://hdl.handle.net/10023/2568 2010-11-30T00:00:00Z Tsujimoto, Tsunehiro In this thesis we establish a relationship between the Potential Approach to interest rates and the Market Models. This relationship allows us to derive the dynamics of forward LIBOR rates and forward swap rates by modelling the state price density. It means that we are able to secure the arbitrage-free condition and positive interest rate feature when we model the volatility drifts of those dynamics. On the other hand, we develop the Potential Approach, particularly the Hughston-Rafailidis Chaotic Interest Rate Model. The early argument enables us to infer that the Chaos Models belong to the Stochastic Volatility Market Models. In particular, we propose One-variable Chaos Models with the application of exponential polynomials. This maintains the generality of the Chaos Models and performs well for yield curves comparing with the Nelson-Siegel Form and the Svensson Form. Moreover, we calibrate the One-variable Chaos Model to European Caplets and European Swaptions. We show that the One-variable Chaos Models can reproduce the humped shape of the term structure of caplet volatility and also the volatility smile/skew curve. The calibration errors are small compared with the Lognormal Forward LIBOR Model, the SABR Model, traditional Short Rate Models, and other models under the Potential Approach. After the calibration, we introduce some new interest rate models under the Potential Approach. In particular, we suggest a new framework where the volatility drifts can be indirectly modelled from the short rate via the state price density. http://hdl.handle.net/10023/2413 Abstract: In Tversky’s (1969) model of a lexicographic semiorder, a preference is generated via the sequential application of numerical criteria by declaring an alternative x better than an alternative y if the first criterion that distinguishes between x and y ranks x higher than y by an amount exceeding a fixed threshold. We generalize this idea to a fully fledged model of boundedly rational choice. We explore the connection with sequential rationalizability of choice (Apesteguia and Ballester 2010, Manzini and Mariotti 2007) and we provide axiomatic characterizations of both models in terms of observable choice data. Sun, 01 Jan 2012 00:00:00 GMT http://hdl.handle.net/10023/2413 2012-01-01T00:00:00Z Manzini, Paola Mariotti, Marco In Tversky’s (1969) model of a lexicographic semiorder, a preference is generated via the sequential application of numerical criteria by declaring an alternative x better than an alternative y if the first criterion that distinguishes between x and y ranks x higher than y by an amount exceeding a fixed threshold. We generalize this idea to a fully fledged model of boundedly rational choice. We explore the connection with sequential rationalizability of choice (Apesteguia and Ballester 2010, Manzini and Mariotti 2007) and we provide axiomatic characterizations of both models in terms of observable choice data. http://hdl.handle.net/10023/2296 Abstract: This paper analyzes exchange-rate dynamics following a money-based disinflation under different degrees of exchange-rate pass-through. Using a microfounded dynamic general equilibrium model with imperfect competition and nominal rigidities, it is shown that a monetary slowdown causes an appreciation of the exchange rate and a short-run fall in employment. Varying the degree of pass-through, however, significantly alters the magnitudes of these effects. As the degree of pass-through is reduced, the extent of the short-run appreciation of the exchange rate increases and the short-run impact of the disinflation on employment falls. Tue, 01 Apr 2008 00:00:00 GMT http://hdl.handle.net/10023/2296 2008-04-01T00:00:00Z Senay, Ozge This paper analyzes exchange-rate dynamics following a money-based disinflation under different degrees of exchange-rate pass-through. Using a microfounded dynamic general equilibrium model with imperfect competition and nominal rigidities, it is shown that a monetary slowdown causes an appreciation of the exchange rate and a short-run fall in employment. Varying the degree of pass-through, however, significantly alters the magnitudes of these effects. As the degree of pass-through is reduced, the extent of the short-run appreciation of the exchange rate increases and the short-run impact of the disinflation on employment falls. http://hdl.handle.net/10023/2286 Abstract: This paper analyses the welfare performance of a set of five alternative interest rate rules in an open economy stochastic dynamic general equilibrium model with nominal rigidities. A rule with a lagged interest rate term, high feedback on inflation and low feedback on output is found to yield the highest welfare for a small open economy. This result is robust across different degrees of openness, different sources of home and foreign shocks, alternative foreign monetary rules and different specifications for price-setting behaviour. The same rule emerges as both the Nash and cooperative equilibria in a two-country version of the model. Tue, 01 Jul 2008 00:00:00 GMT http://hdl.handle.net/10023/2286 2008-07-01T00:00:00Z Senay, Ozge This paper analyses the welfare performance of a set of five alternative interest rate rules in an open economy stochastic dynamic general equilibrium model with nominal rigidities. A rule with a lagged interest rate term, high feedback on inflation and low feedback on output is found to yield the highest welfare for a small open economy. This result is robust across different degrees of openness, different sources of home and foreign shocks, alternative foreign monetary rules and different specifications for price-setting behaviour. The same rule emerges as both the Nash and cooperative equilibria in a two-country version of the model. http://hdl.handle.net/10023/2260 Abstract: Using the standard real business cycle model with lump-sum taxes, we analyze the impact of fiscal policy when agents form expectations using adaptive learning rather than rational expectations (RE). The output multipliers for government purchases are significantly higher under learning, and fall within empirical bounds reported in the literature (in sharp contrast to the implausibly low values under RE). Effectiveness of fiscal policy is demonstrated during times of economic stress like the recent Great Recession. Finally it is shown how learning can lead to dynamics empirically documented during episodes of "fiscal consolidations." Sun, 01 Jan 2012 00:00:00 GMT http://hdl.handle.net/10023/2260 2012-01-01T00:00:00Z Mitra, Kaushik Evans, George W Honkapohja, Seppo Using the standard real business cycle model with lump-sum taxes, we analyze the impact of fiscal policy when agents form expectations using adaptive learning rather than rational expectations (RE). The output multipliers for government purchases are significantly higher under learning, and fall within empirical bounds reported in the literature (in sharp contrast to the implausibly low values under RE). Effectiveness of fiscal policy is demonstrated during times of economic stress like the recent Great Recession. Finally it is shown how learning can lead to dynamics empirically documented during episodes of "fiscal consolidations." http://hdl.handle.net/10023/2240 Abstract: Much of the literature on optimal monetary policy uses models in which the degree of nominal price flexibility is exogenous. There are, however, good reasons to suppose that the degree of price flexibility adjusts endogenously to changes in monetary conditions. This paper extends the standard New Keynesian model to incorporate an endogenous degree of price flexibility. The model shows that endogenising the degree of price flexibility tends to shift optimal monetary policy towards complete inflation stabilisation, even when shocks take the form of cost-push disturbances. This contrasts with the standard result obtained in models with exogenous price flexibility, which show that optimal monetary policy should allow some degree of inflation volatility in order to stabilise the welfare-relevant output gap. Mon, 01 Nov 2010 00:00:00 GMT http://hdl.handle.net/10023/2240 2010-11-01T00:00:00Z Senay, Ozge Sutherland, Alan Much of the literature on optimal monetary policy uses models in which the degree of nominal price flexibility is exogenous. There are, however, good reasons to suppose that the degree of price flexibility adjusts endogenously to changes in monetary conditions. This paper extends the standard New Keynesian model to incorporate an endogenous degree of price flexibility. The model shows that endogenising the degree of price flexibility tends to shift optimal monetary policy towards complete inflation stabilisation, even when shocks take the form of cost-push disturbances. This contrasts with the standard result obtained in models with exogenous price flexibility, which show that optimal monetary policy should allow some degree of inflation volatility in order to stabilise the welfare-relevant output gap. http://hdl.handle.net/10023/2231 Abstract: Over the one and a half decades prior to the global financial crisis, advanced economies experienced a large growth in gross external portfolio positions. This phenomenon has been described as Financial Globalization. Over roughly the same time frame, most of these countries also saw a substantial fall in the level and variability of inflation. Many economists have conjectured that financial globalization contributed to the improved performance in the level and predictability of inflation. In this paper, we explore the causal link running in the opposite direction. We show that a monetary policy rule which reduces inflation variability leads to an increase in the size of gross external positions, both in equity and bond portfolios. This is a highly robust prediction of open economy macro models with endogenous portfolio choice. It holds across many different modeling specifications and parameterizations. We also present preliminary empirical evidence which shows a negative relationship between inflation volatility and the size of gross external positions. Sun, 01 Jan 2012 00:00:00 GMT http://hdl.handle.net/10023/2231 2012-01-01T00:00:00Z Devereux, Michael B. Senay, Ozge Sutherland, Alan Over the one and a half decades prior to the global financial crisis, advanced economies experienced a large growth in gross external portfolio positions. This phenomenon has been described as Financial Globalization. Over roughly the same time frame, most of these countries also saw a substantial fall in the level and variability of inflation. Many economists have conjectured that financial globalization contributed to the improved performance in the level and predictability of inflation. In this paper, we explore the causal link running in the opposite direction. We show that a monetary policy rule which reduces inflation variability leads to an increase in the size of gross external positions, both in equity and bond portfolios. This is a highly robust prediction of open economy macro models with endogenous portfolio choice. It holds across many different modeling specifications and parameterizations. We also present preliminary empirical evidence which shows a negative relationship between inflation volatility and the size of gross external positions. http://hdl.handle.net/10023/2173 Abstract: In this paper, we consider a producer who faces uninsurable business risks due to incomplete spanning of asset markets over stochastic goods market outcomes, and examine how the presence of the uninsurable business risks affects the producer's optimal pricing and production behaviours. Three key (inter-related) results we find are: (1) optimal prices in goods markets comprise ‘markup’ to the extent of market power and ‘premium’ by shadow price of the risks; (2) price inertia as we observe in data can be explained by a joint work of risk neutralization motive and marginal cost equalization condition; (3) the relative responsiveness of risk neutralization motive and marginal cost equalization at optimum is central to the cyclical variation of markups, providing a consistent explanation for procyclical and countercyclical movements. By these results, the proposed theory of producer leaves important implications both micro and macro, and both empirical and theoretical. Sun, 01 Jan 2012 00:00:00 GMT http://hdl.handle.net/10023/2173 2012-01-01T00:00:00Z Kim, Seong-Hoon Moon, Seongman In this paper, we consider a producer who faces uninsurable business risks due to incomplete spanning of asset markets over stochastic goods market outcomes, and examine how the presence of the uninsurable business risks affects the producer's optimal pricing and production behaviours. Three key (inter-related) results we find are: (1) optimal prices in goods markets comprise ‘markup’ to the extent of market power and ‘premium’ by shadow price of the risks; (2) price inertia as we observe in data can be explained by a joint work of risk neutralization motive and marginal cost equalization condition; (3) the relative responsiveness of risk neutralization motive and marginal cost equalization at optimum is central to the cyclical variation of markups, providing a consistent explanation for procyclical and countercyclical movements. By these results, the proposed theory of producer leaves important implications both micro and macro, and both empirical and theoretical. http://hdl.handle.net/10023/2130 Abstract: This thesis includes four essays, of which each comprises two original contributions. Based on this thesis’ eight contributions, we add knowledge or understanding to the literatures on responsible investment, research output analyses and investment performance evaluation. First, we develop the first generic, reliable approach to benchmark research area output (e.g. journal articles or books), which we expect to appeal to governments’ increasing interest in monitoring their research funding investments. Second, we apply this approach to the research area of responsible investment, which is currently backed by an about $ 7 trillion industry. We find that the (quality weighted) quantity of responsible investment’s research output is statistically significantly under-proportional compared with peer research areas. One of several explanations for this result lies in the intransparency of the current responsible investment literature. Third, we develop an approach to research synthesis, which improves a research area’s transparency without experiencing many weaknesses of conventional literature reviews. We title this approach Influential Literature Analysis (ILA). Fourth, we apply ILA to the relatively intransparent responsible investment literature. One of our many findings is that responsible assets with their ceteris paribus under-proportional total risk might appear artificially unattractive when assessed by the most common investment performance measure, the Sharpe ratio, which is biased in favour of high risk assets due to its currently unsolved negative excess return problem. Fifth, we develop a generic, reliable and robust solution to the negative Sharpe ratio problem, which investors can customise according to their specific increasing incremental disutility of risk functions. Six, we generalise our solution to the negative Sharpe ratio problem, which allows us to solve the negative (excess) return problems of over twenty other investment performance measures. Seventh, we develop independent, statistically sophisticated tests of the sufficiency and quality of suggested solutions to the negative Sharpe ratio problem, since all existing tests a-priori assume the superiority of a specific solution. In contrast, our tests are only based on the Sharpe ratio itself and two basic axioms of investment theory. Hence, they are conceptually unrelated to our solutions. Eighth, we apply these tests using two different data samples to all existing solutions to the negative Sharpe ratio problem. We find that investors are best advised to use our solutions, the H⁶-, H⁷- or H⁸-measure, in their evaluation of investment performance from a Sharpe ratio like perspective. Fri, 01 Jan 2010 00:00:00 GMT http://hdl.handle.net/10023/2130 2010-01-01T00:00:00Z Hoepner, Andreas G. F. This thesis includes four essays, of which each comprises two original contributions. Based on this thesis’ eight contributions, we add knowledge or understanding to the literatures on responsible investment, research output analyses and investment performance evaluation. First, we develop the first generic, reliable approach to benchmark research area output (e.g. journal articles or books), which we expect to appeal to governments’ increasing interest in monitoring their research funding investments. Second, we apply this approach to the research area of responsible investment, which is currently backed by an about $ 7 trillion industry. We find that the (quality weighted) quantity of responsible investment’s research output is statistically significantly under-proportional compared with peer research areas. One of several explanations for this result lies in the intransparency of the current responsible investment literature. Third, we develop an approach to research synthesis, which improves a research area’s transparency without experiencing many weaknesses of conventional literature reviews. We title this approach Influential Literature Analysis (ILA). Fourth, we apply ILA to the relatively intransparent responsible investment literature. One of our many findings is that responsible assets with their ceteris paribus under-proportional total risk might appear artificially unattractive when assessed by the most common investment performance measure, the Sharpe ratio, which is biased in favour of high risk assets due to its currently unsolved negative excess return problem. Fifth, we develop a generic, reliable and robust solution to the negative Sharpe ratio problem, which investors can customise according to their specific increasing incremental disutility of risk functions. Six, we generalise our solution to the negative Sharpe ratio problem, which allows us to solve the negative (excess) return problems of over twenty other investment performance measures. Seventh, we develop independent, statistically sophisticated tests of the sufficiency and quality of suggested solutions to the negative Sharpe ratio problem, since all existing tests a-priori assume the superiority of a specific solution. In contrast, our tests are only based on the Sharpe ratio itself and two basic axioms of investment theory. Hence, they are conceptually unrelated to our solutions. Eighth, we apply these tests using two different data samples to all existing solutions to the negative Sharpe ratio problem. We find that investors are best advised to use our solutions, the H⁶-, H⁷- or H⁸-measure, in their evaluation of investment performance from a Sharpe ratio like perspective. http://hdl.handle.net/10023/2098 Abstract: The factor determinants of industry and investment location patterns in transition economies can be expected to differ from those frequently observed in developed countries. Historically, centrally planned economies have suffered from inefficient industrial policies that are generally assumed to have had distortive effects on spatial location of industry. The process of economic transition and regional integration that followed the demise of socialist structures is assumed to have subsequently affected the geographical distribution of economic activities within and between countries of the region. Given the above this thesis capitalises on the quasi-natural experiment setting to further explore industry and investment location decisions in transition economies. In particular, the research presented here follows three main objectives. First, it intends to provide a comprehensive picture of changes in industry location patterns over time. Second, it aims to contribute to the debate on factor determinants of industry location at various levels of spatial aggregation. Third, it seeks to explore location determinants of foreign direct investors in particular, given their pivotal role for economic development of transition economies. In all instances, the research is geared towards a better understanding of the role of institutional factors, such as reforms and policies, in affecting distribution of economic activity across space. Thus, the work conducted qualifies as a further contribution to the analysis of structural changes that have affected the economies under examination. In broad terms, the findings presented here point towards significant changes in spatial location patterns of industry and investments that are leading to increased polarisation of economic landscape over time. Nonetheless, we find evidence that certain institutional factors qualify as viable policy levers, thereby providing ample scope for policy makers to impact existing location patterns of economic activity. Wed, 01 Jun 2011 00:00:00 GMT http://hdl.handle.net/10023/2098 2011-06-01T00:00:00Z Šerić, Adnan The factor determinants of industry and investment location patterns in transition economies can be expected to differ from those frequently observed in developed countries. Historically, centrally planned economies have suffered from inefficient industrial policies that are generally assumed to have had distortive effects on spatial location of industry. The process of economic transition and regional integration that followed the demise of socialist structures is assumed to have subsequently affected the geographical distribution of economic activities within and between countries of the region. Given the above this thesis capitalises on the quasi-natural experiment setting to further explore industry and investment location decisions in transition economies. In particular, the research presented here follows three main objectives. First, it intends to provide a comprehensive picture of changes in industry location patterns over time. Second, it aims to contribute to the debate on factor determinants of industry location at various levels of spatial aggregation. Third, it seeks to explore location determinants of foreign direct investors in particular, given their pivotal role for economic development of transition economies. In all instances, the research is geared towards a better understanding of the role of institutional factors, such as reforms and policies, in affecting distribution of economic activity across space. Thus, the work conducted qualifies as a further contribution to the analysis of structural changes that have affected the economies under examination. In broad terms, the findings presented here point towards significant changes in spatial location patterns of industry and investments that are leading to increased polarisation of economic landscape over time. Nonetheless, we find evidence that certain institutional factors qualify as viable policy levers, thereby providing ample scope for policy makers to impact existing location patterns of economic activity. http://hdl.handle.net/10023/1975 Abstract: This thesis is among the first market microstructure studies of an index futures market with designated market makers in the academic literature. The purpose of this thesis is to investigate intraday patterns of key variables, the relative size of the components of the quoted bid-ask spread, and the order decisions of uninformed traders, in a continuous dealer market for index futures with market makers. Overall, our findings aim to contribute to a better understanding of the roles of market makers and public customers in price formation. Intraday patterns of financial market variables such as trade price, volume, trade size, quoted spreads, depth, and volatility separately for designated market makers and public customers are examined. The lack of relevant and appropriate data in futures markets, as evidenced by Hasbrouck (2003) and Kurov (2005), has inhibited the growth of market microstructure in futures markets. Individual orders, quotes, trader identification, and transactions from June 2003 to December 2004, for FTSEurofirst 80 and 100 index futures are used in the study. Inclusion of the parties to order execution distinguishes this data set from most other futures microstructure sources. As this thesis is the first known academic study of the extant market microstructure of the FTSEurofirst index futures, the institutional aspects of the trading process for the FTSEurofirst index futures are also explored. An alternative method for estimating three cost components as a proportion of the bid-ask spread is developed. A framework is developed for the order decision process of an uninformed trader for the first time in a futures market with market makers. The results of this thesis may have implications for other financial markets and the field of market microstructure. Sat, 01 May 2010 00:00:00 GMT http://hdl.handle.net/10023/1975 2010-05-01T00:00:00Z Faciane, Kirby This thesis is among the first market microstructure studies of an index futures market with designated market makers in the academic literature. The purpose of this thesis is to investigate intraday patterns of key variables, the relative size of the components of the quoted bid-ask spread, and the order decisions of uninformed traders, in a continuous dealer market for index futures with market makers. Overall, our findings aim to contribute to a better understanding of the roles of market makers and public customers in price formation. Intraday patterns of financial market variables such as trade price, volume, trade size, quoted spreads, depth, and volatility separately for designated market makers and public customers are examined. The lack of relevant and appropriate data in futures markets, as evidenced by Hasbrouck (2003) and Kurov (2005), has inhibited the growth of market microstructure in futures markets. Individual orders, quotes, trader identification, and transactions from June 2003 to December 2004, for FTSEurofirst 80 and 100 index futures are used in the study. Inclusion of the parties to order execution distinguishes this data set from most other futures microstructure sources. As this thesis is the first known academic study of the extant market microstructure of the FTSEurofirst index futures, the institutional aspects of the trading process for the FTSEurofirst index futures are also explored. An alternative method for estimating three cost components as a proportion of the bid-ask spread is developed. A framework is developed for the order decision process of an uninformed trader for the first time in a futures market with market makers. The results of this thesis may have implications for other financial markets and the field of market microstructure. http://hdl.handle.net/10023/1719 Abstract: This thesis is a technical inquiry into remedies for high inflation. In its center there is the usual tradeoff between inflation aversion on the one hand and some benefit from inflation via Phillips curve effects on the other hand. Most remarkable and pioneering work for us is the famous Barro-Gordon model - see (Barro & Gordon 1983a) respectively (Barro & Gordon 1983b). Parts of this model form the basis of our work here. Though being well known the discretionary equilibrium is suboptimal the question arises how to overcome this. We will introduce four different models, each of them giving a different perspective and way of thinking. Each model shows a (sometimes slightly) different way a central banker might deliver lower inflation than the one shot Barro-Gordon game at a first glance would suggest. To cut a long story short we provide a number of reasons for believing that the purely discretionary equilibrium may be rarely observed in real life. Further the thesis provides new insights for derivative pricing theories. In particular, the potential role of financial markets and instruments will be a major focus. We investigate how such instruments can be used for monetary policy. On the contrary these financial securities have strong influence on the behavior of the central bank. Taking this into account in chapters 3 and 4 we come up with a new method of pricing inflation linked derivatives. The latter to the best of our knowledge has never been done before - (Persson, Persson & Svenson 2006), as one of very view economic works taking into account financial markets, is purely focused on the social planer's problem. A purely game theoretic approach is done in chapter 2 to change the original Barro-Gordon. Here we deviate from a purely rational and purely one period wise thinking. Finally in chapter 5 we model an asymmetric information situation where the central banker faces a trade off between his current objective on the one hand and benefit arising from not perfectly informed agents on the other hand. In that sense the central bank is also concerned about its reputation. Sat, 01 Jan 2011 00:00:00 GMT http://hdl.handle.net/10023/1719 2011-01-01T00:00:00Z Geissler, Johannes This thesis is a technical inquiry into remedies for high inflation. In its center there is the usual tradeoff between inflation aversion on the one hand and some benefit from inflation via Phillips curve effects on the other hand. Most remarkable and pioneering work for us is the famous Barro-Gordon model - see (Barro & Gordon 1983a) respectively (Barro & Gordon 1983b). Parts of this model form the basis of our work here. Though being well known the discretionary equilibrium is suboptimal the question arises how to overcome this. We will introduce four different models, each of them giving a different perspective and way of thinking. Each model shows a (sometimes slightly) different way a central banker might deliver lower inflation than the one shot Barro-Gordon game at a first glance would suggest. To cut a long story short we provide a number of reasons for believing that the purely discretionary equilibrium may be rarely observed in real life. Further the thesis provides new insights for derivative pricing theories. In particular, the potential role of financial markets and instruments will be a major focus. We investigate how such instruments can be used for monetary policy. On the contrary these financial securities have strong influence on the behavior of the central bank. Taking this into account in chapters 3 and 4 we come up with a new method of pricing inflation linked derivatives. The latter to the best of our knowledge has never been done before - (Persson, Persson & Svenson 2006), as one of very view economic works taking into account financial markets, is purely focused on the social planer's problem. A purely game theoretic approach is done in chapter 2 to change the original Barro-Gordon. Here we deviate from a purely rational and purely one period wise thinking. Finally in chapter 5 we model an asymmetric information situation where the central banker faces a trade off between his current objective on the one hand and benefit arising from not perfectly informed agents on the other hand. In that sense the central bank is also concerned about its reputation. http://hdl.handle.net/10023/1632 Abstract: This thesis reports on the economic analysis of trade secrets via data collected from prosecutions under the U.S. Economic Espionage Act (EEA.) Ratified in 1996, the EEA increases protection for trade secrets by criminalizing the theft of trade secrets. The empirical basis of the thesis is a unique database constructed using EEA prosecutions from 1996 to 2008. A critical and empirical analysis of these cases provides insight into the use of trade secrets. The increase in the criminal culpability of trade secret theft has important impacts on the use of trade secrets and the incentives for would-be thieves. A statistical analysis of the EEA data suggest that trade secrets are used primarily in manufacturing and construction. A cluster analysis suggests three broad categories of EEA cases based on the type of trade secret and the sector of the owner. A series of illustrative case studies demonstrates these clusters. A critical analysis of the damages valuations methods in trade secrets cases demonstrates the highly variable estimates of trade secrets. Given the criminal context of EEA cases, these valuation methods play an important role in sentencing and affect the incentives of the owners of trade secrets. The analysis of the lognormal distribution of the observed values is furthered by a statistical analysis of the EEA valuations, which suggests that the methods can result in very different estimates for the same trade secret. A regression analysis examines the determinants of trade secret intensity at the firm level. This econometric analysis suggests that trade secret intensity is negatively related to firm size. Collectively, this thesis presents an empirical analysis of trade secrets. Mon, 01 Nov 2010 00:00:00 GMT http://hdl.handle.net/10023/1632 2010-11-01T00:00:00Z Searle, Nicola C. This thesis reports on the economic analysis of trade secrets via data collected from prosecutions under the U.S. Economic Espionage Act (EEA.) Ratified in 1996, the EEA increases protection for trade secrets by criminalizing the theft of trade secrets. The empirical basis of the thesis is a unique database constructed using EEA prosecutions from 1996 to 2008. A critical and empirical analysis of these cases provides insight into the use of trade secrets. The increase in the criminal culpability of trade secret theft has important impacts on the use of trade secrets and the incentives for would-be thieves. A statistical analysis of the EEA data suggest that trade secrets are used primarily in manufacturing and construction. A cluster analysis suggests three broad categories of EEA cases based on the type of trade secret and the sector of the owner. A series of illustrative case studies demonstrates these clusters. A critical analysis of the damages valuations methods in trade secrets cases demonstrates the highly variable estimates of trade secrets. Given the criminal context of EEA cases, these valuation methods play an important role in sentencing and affect the incentives of the owners of trade secrets. The analysis of the lognormal distribution of the observed values is furthered by a statistical analysis of the EEA valuations, which suggests that the methods can result in very different estimates for the same trade secret. A regression analysis examines the determinants of trade secret intensity at the firm level. This econometric analysis suggests that trade secret intensity is negatively related to firm size. Collectively, this thesis presents an empirical analysis of trade secrets. http://hdl.handle.net/10023/1534 Abstract: We investigate the dynamics of a cobweb model with heterogeneous beliefs, generalizing the example of Brock and Hommes (1997). We examine situations where the agents form expectations by using either rational expectations, or a type of adaptive expectations with limited memory defined from the last two prices. We specify conditions that generate cycles. These conditions depend on a set of factors that includes the intensity of switching between beliefs and the adaption parameter. We show that both Flip bifurcation and Neimark-Sacker bifurcation can occur as primary bifurcation when the steady state is unstable. Tue, 01 Nov 2005 00:00:00 GMT http://hdl.handle.net/10023/1534 2005-11-01T00:00:00Z Lasselle, Laurence Svizzero, S Tisdell, C We investigate the dynamics of a cobweb model with heterogeneous beliefs, generalizing the example of Brock and Hommes (1997). We examine situations where the agents form expectations by using either rational expectations, or a type of adaptive expectations with limited memory defined from the last two prices. We specify conditions that generate cycles. These conditions depend on a set of factors that includes the intensity of switching between beliefs and the adaption parameter. We show that both Flip bifurcation and Neimark-Sacker bifurcation can occur as primary bifurcation when the steady state is unstable. http://hdl.handle.net/10023/974 Abstract: The literature trying to link the increase in unemployment in many western European countries since the middle of the 1970s to an increase in labour market rigidity has run into a number of problems. In particular, changes in labour market institutions do not seem to be able to explain the evolution of unemployment across time. We conclude that a new theory of medium run unemployment swings should explain the increase in unemployment in many European countries and the lack thereof in the United States. Furthermore, it should also help to explain the high degree of endogenous unemployment persistence in the many European countries and findings suggesting a link between disinflationary monetary policy and subsequent increases in the NAIRU. To address these issues, we first develop an endogenous growth sticky price model. We subject the model to an uncorrelated cost push shock, in order to mimic a scenario akin to the one faced by central banks at the end of the 1970s. Monetary policy implements a disinflation by following an interest feedback rule calibrated to an estimate of a Bundesbank reaction function. 40 quarters after the shock has vanished, unemployment is still about 1.8 percentage points above its steady state. The model also partly explains cross country differences in the unemployment evolution by drawing on differences in the size of the disinflation, the monetary policy reaction function and wage setting. We then draw some conclusions about optimal monetary policy in the presence of endogenous growth and find that optimal policy is substantially less hawkish than in an identical economy without endogenous growth. The second model introduces duration dependent skill decay among the unemployed into a New-Keynesian model with hiring frictions developed by Blanchard/Gali (2008). If the central bank responds only to inflation and quarterly skill decay is above a threshold level, determinacy requires a coefficient on inflation smaller than one. The threshold level is plausible with little steady-state hiring and firing ("Continental European Calibration") but implausibly high in the opposite case ("American calibration"). Neither interest rate smoothing nor responding to the output gap helps to restore determinacy if skill decay exceeds the threshold level. However, a modest response to unemployment guarantees determinacy. Moreover, under indeterminacy, both an adverse sunspot shock and an adverse technology shock increase unemployment extremely persistently. Fri, 01 Jan 2010 00:00:00 GMT http://hdl.handle.net/10023/974 2010-01-01T00:00:00Z Rannenberg, Ansgar The literature trying to link the increase in unemployment in many western European countries since the middle of the 1970s to an increase in labour market rigidity has run into a number of problems. In particular, changes in labour market institutions do not seem to be able to explain the evolution of unemployment across time. We conclude that a new theory of medium run unemployment swings should explain the increase in unemployment in many European countries and the lack thereof in the United States. Furthermore, it should also help to explain the high degree of endogenous unemployment persistence in the many European countries and findings suggesting a link between disinflationary monetary policy and subsequent increases in the NAIRU. To address these issues, we first develop an endogenous growth sticky price model. We subject the model to an uncorrelated cost push shock, in order to mimic a scenario akin to the one faced by central banks at the end of the 1970s. Monetary policy implements a disinflation by following an interest feedback rule calibrated to an estimate of a Bundesbank reaction function. 40 quarters after the shock has vanished, unemployment is still about 1.8 percentage points above its steady state. The model also partly explains cross country differences in the unemployment evolution by drawing on differences in the size of the disinflation, the monetary policy reaction function and wage setting. We then draw some conclusions about optimal monetary policy in the presence of endogenous growth and find that optimal policy is substantially less hawkish than in an identical economy without endogenous growth. The second model introduces duration dependent skill decay among the unemployed into a New-Keynesian model with hiring frictions developed by Blanchard/Gali (2008). If the central bank responds only to inflation and quarterly skill decay is above a threshold level, determinacy requires a coefficient on inflation smaller than one. The threshold level is plausible with little steady-state hiring and firing ("Continental European Calibration") but implausibly high in the opposite case ("American calibration"). Neither interest rate smoothing nor responding to the output gap helps to restore determinacy if skill decay exceeds the threshold level. However, a modest response to unemployment guarantees determinacy. Moreover, under indeterminacy, both an adverse sunspot shock and an adverse technology shock increase unemployment extremely persistently. http://hdl.handle.net/10023/972 Abstract: This thesis examines determinacy and E-stability of economic policy in monetary union models. Monetary policy takes the form of either a contemporaneous or a forecast based interest rate rule, while fiscal policy follows a contemporaneous government spending rule. In the absence of asymmetries, the results from the closed economy literature on learning are retained. However, when introducing asymmetries into monetary union frameworks, the determinacy and E-stability conditions for economic policy differ from both the closed and open economy cases. We find that a monetary union with heterogeneous price rigidities is more likely to be determinate and E-stable. Specifically, the Taylor principle, a key stability condition for the closed economy, is now relaxed. Furthermore, an interest rate rule that stabilizes the terms of trade in addition to output and inflation, is more likely to induce determinacy and local stability under RLS learning. If monetary policy is sufficiently aggressive in stabilizing the terms of trade, then determinacy and E-stability of the union economy can be achieved without direct stabilization of output and inflation. A fiscal policy rule that supports demand for domestic goods following a shock to competitiveness, can destabilize the union economy regardless of the interest rate rule employed by the union central bank. In this case, determinacy and E-stability conditions have to be simultaneously and independently met by both fiscal and monetary policy for the union economy to be stable. When fiscal policy instead stabilizes domestic output gaps while monetary policy stabilizes union output and inflation, fiscal policy directly affects the stability of monetary policy. A contemporaneous monetary policy rule has to be more aggressive to satisfy the Taylor principle, the more aggressive fiscal policy is. On the other hand, when monetary policy is forward looking, an aggressive fiscal policy rule can help induce determinacy. Fri, 01 Jan 2010 00:00:00 GMT http://hdl.handle.net/10023/972 2010-01-01T00:00:00Z Boumediene, Farid Jimmy This thesis examines determinacy and E-stability of economic policy in monetary union models. Monetary policy takes the form of either a contemporaneous or a forecast based interest rate rule, while fiscal policy follows a contemporaneous government spending rule. In the absence of asymmetries, the results from the closed economy literature on learning are retained. However, when introducing asymmetries into monetary union frameworks, the determinacy and E-stability conditions for economic policy differ from both the closed and open economy cases. We find that a monetary union with heterogeneous price rigidities is more likely to be determinate and E-stable. Specifically, the Taylor principle, a key stability condition for the closed economy, is now relaxed. Furthermore, an interest rate rule that stabilizes the terms of trade in addition to output and inflation, is more likely to induce determinacy and local stability under RLS learning. If monetary policy is sufficiently aggressive in stabilizing the terms of trade, then determinacy and E-stability of the union economy can be achieved without direct stabilization of output and inflation. A fiscal policy rule that supports demand for domestic goods following a shock to competitiveness, can destabilize the union economy regardless of the interest rate rule employed by the union central bank. In this case, determinacy and E-stability conditions have to be simultaneously and independently met by both fiscal and monetary policy for the union economy to be stable. When fiscal policy instead stabilizes domestic output gaps while monetary policy stabilizes union output and inflation, fiscal policy directly affects the stability of monetary policy. A contemporaneous monetary policy rule has to be more aggressive to satisfy the Taylor principle, the more aggressive fiscal policy is. On the other hand, when monetary policy is forward looking, an aggressive fiscal policy rule can help induce determinacy. http://hdl.handle.net/10023/941 Abstract: The dissertation contains essays concerning the linkages between macroeconomy and financial market or the conduct of monetary policy via DSGE modelling. The dissertation contributes to the questions of fitting macroeconomic models to the data, and so contributes to our understanding of the driving forces of fluctuations in macroeconomic and financial variables. Chapter one offers an introduction to my thesis and outlines in detail the main results and methodologies. In Chapter two I introduce a statistical measure for model evaluation and selection based on the full information of sample second moments in data. A model is said to outperform its counterpart if it produces closer similarity in simulated data variance-covariance matrix when compared with the actual data. The "distance method" is generally feasible and simple to conduct. A flexible price two-sector open economy model is studied to match the observed puzzles of international finance data. The statistical distance approach favours a model with dominant role played by the expectational errors in foreign exchange market which breaks the international interest rate parity. Chapter three applies the distance approach to a New Keynesian model augmented with habit formation and backward-looking component of pricing behaviour. A macro-finance model of yield curve is developed to showcase the dynamics of implied forward yields. This exercise, with the distance approach, reiterate the inability of macro model in explaining yield curve dynamics. The method also reveals remarkable interconnection between real quantity and bond yield slope. In Chapter four I study a general equilibrium business cycle model with sticky prices and labour market rigidities. With costly matching on labour market, output responds in a hump-shaped and persistent manner to monetary shocks and the resulting Phillips curve seems to radically change the scope for monetary policy because (i) there are speed limit effects for policy and (ii) there is a cost channel for monetary policy. Labour reforms such as in mid-1980s UK can trigger more effective monetary policy. Research on monetary policy shall pay greater attention to output when labour market adjustments are persistent. Chapter five analyzes the link between money and financial spread, which is oft missed in specification of monetary policy making analysis. When liquidity provision by banks dominates the demand for money from the real economy, money may contain information of future output and inflation due to its impact on financial spreads. I use a sign-restriction Bayesian VAR estimation to separate the liquidity provision impact from money market equilibrium. The decomposition exercise shows supply shocks dominate the money-price nexus in the short to medium term. It also uncovers distinctive policy stance of two central banks. Finally Chapter six concludes, providing a brief summary of the research work as well as a discussion of potential limitations and possible directions for future research. Fri, 25 Jun 2010 00:00:00 GMT http://hdl.handle.net/10023/941 2010-06-25T00:00:00Z Sun, Qi The dissertation contains essays concerning the linkages between macroeconomy and financial market or the conduct of monetary policy via DSGE modelling. The dissertation contributes to the questions of fitting macroeconomic models to the data, and so contributes to our understanding of the driving forces of fluctuations in macroeconomic and financial variables. Chapter one offers an introduction to my thesis and outlines in detail the main results and methodologies. In Chapter two I introduce a statistical measure for model evaluation and selection based on the full information of sample second moments in data. A model is said to outperform its counterpart if it produces closer similarity in simulated data variance-covariance matrix when compared with the actual data. The "distance method" is generally feasible and simple to conduct. A flexible price two-sector open economy model is studied to match the observed puzzles of international finance data. The statistical distance approach favours a model with dominant role played by the expectational errors in foreign exchange market which breaks the international interest rate parity. Chapter three applies the distance approach to a New Keynesian model augmented with habit formation and backward-looking component of pricing behaviour. A macro-finance model of yield curve is developed to showcase the dynamics of implied forward yields. This exercise, with the distance approach, reiterate the inability of macro model in explaining yield curve dynamics. The method also reveals remarkable interconnection between real quantity and bond yield slope. In Chapter four I study a general equilibrium business cycle model with sticky prices and labour market rigidities. With costly matching on labour market, output responds in a hump-shaped and persistent manner to monetary shocks and the resulting Phillips curve seems to radically change the scope for monetary policy because (i) there are speed limit effects for policy and (ii) there is a cost channel for monetary policy. Labour reforms such as in mid-1980s UK can trigger more effective monetary policy. Research on monetary policy shall pay greater attention to output when labour market adjustments are persistent. Chapter five analyzes the link between money and financial spread, which is oft missed in specification of monetary policy making analysis. When liquidity provision by banks dominates the demand for money from the real economy, money may contain information of future output and inflation due to its impact on financial spreads. I use a sign-restriction Bayesian VAR estimation to separate the liquidity provision impact from money market equilibrium. The decomposition exercise shows supply shocks dominate the money-price nexus in the short to medium term. It also uncovers distinctive policy stance of two central banks. Finally Chapter six concludes, providing a brief summary of the research work as well as a discussion of potential limitations and possible directions for future research. http://hdl.handle.net/10023/918 Abstract: Corporate Growth is a concept that has been widely treated in a specific way or as part of strategy theories, in definition and in econometric models and has also been studied in many different aspects and approaches. The author describes in depth the main variables affecting corporate growth and the underlying business processes. This empirical research has focused on Sales, Profit-Cash Flow, Risk, Created Shareholder Value, Market Value and Overall Performance econometric models. These panel data models are based on the 500 Companies of the Standard & Poor’s 500. The methodology used has been very strict in identifying exogenous variables, walking through the different alternative econometric models, discussing results, and, in the end, describing the practical implications in today’s business corporate management. We basically assume that the Functions/Departments act independently in the same company, many times with different objectives, and in this situation clear processes are key to clarify the situations, roles and responsibilities. We also assume that growth implies interactions among the different functions in a company and the CEO acts to lead and coach his immediate Directors as a referee of the key conflicts through his Operating Mechanism. The objective of this PhD Dissertation is to clarify the business priorities and identify the most relevant variables in every process leading to the highest efficiency in reaching a sustainable and profitable growth. It covers the lack of academic studies on the nature and specific driving factors of corporate growth and provides a working framework for Entrepreneurs and Management leading to the Company’s success. Wed, 23 Jun 2010 00:00:00 GMT http://hdl.handle.net/10023/918 2010-06-23T00:00:00Z Rosique, Francisco Corporate Growth is a concept that has been widely treated in a specific way or as part of strategy theories, in definition and in econometric models and has also been studied in many different aspects and approaches. The author describes in depth the main variables affecting corporate growth and the underlying business processes. This empirical research has focused on Sales, Profit-Cash Flow, Risk, Created Shareholder Value, Market Value and Overall Performance econometric models. These panel data models are based on the 500 Companies of the Standard & Poor’s 500. The methodology used has been very strict in identifying exogenous variables, walking through the different alternative econometric models, discussing results, and, in the end, describing the practical implications in today’s business corporate management. We basically assume that the Functions/Departments act independently in the same company, many times with different objectives, and in this situation clear processes are key to clarify the situations, roles and responsibilities. We also assume that growth implies interactions among the different functions in a company and the CEO acts to lead and coach his immediate Directors as a referee of the key conflicts through his Operating Mechanism. The objective of this PhD Dissertation is to clarify the business priorities and identify the most relevant variables in every process leading to the highest efficiency in reaching a sustainable and profitable growth. It covers the lack of academic studies on the nature and specific driving factors of corporate growth and provides a working framework for Entrepreneurs and Management leading to the Company’s success. http://hdl.handle.net/10023/905 Abstract: Much of the literature on optimal monetary policy uses models in which the degree of nominal price flexibility is exogenous. There are, however, good reasons to suppose that the degree of price flexibility adjusts endogenously to changes in monetary conditions. This paper extends the standard New Keynesian model to incorporate an endogenous degree of price flexibility. The model shows that endogenising the degree of price flexibility tends to shift optimal monetary policy towards complete inflation stabilisation, even when shocks take the form of cost-push distur¬bances. This contrasts with the standard result obtained in models with exogenous price flexibility, which show that optimal monetary policy should allow some degree of inflation volatility in order to stabilise the welfare-relevant output gap. Fri, 01 Jan 2010 00:00:00 GMT http://hdl.handle.net/10023/905 2010-01-01T00:00:00Z Sutherland, Alan Senay, Ozge Much of the literature on optimal monetary policy uses models in which the degree of nominal price flexibility is exogenous. There are, however, good reasons to suppose that the degree of price flexibility adjusts endogenously to changes in monetary conditions. This paper extends the standard New Keynesian model to incorporate an endogenous degree of price flexibility. The model shows that endogenising the degree of price flexibility tends to shift optimal monetary policy towards complete inflation stabilisation, even when shocks take the form of cost-push distur¬bances. This contrasts with the standard result obtained in models with exogenous price flexibility, which show that optimal monetary policy should allow some degree of inflation volatility in order to stabilise the welfare-relevant output gap. http://hdl.handle.net/10023/894 Abstract: This thesis comprises, firstly, a careful and detailed description of the institutional workings of the Chinese stock market; secondly, a literature review of the Chinese segmented markets and dual-listed shares price premium; and thirdly, three evidence-based contributions designed to cast new light on the Chinese A-shares premium puzzle. Publicly-listed firms in China, under certain criteria, can issue two different types of shares, namely A-shares and B-shares, to local and foreign investors respectively. These shares carry the same rights and obligations, but are however priced differently due to market segmentation. After a review of the literature on determinants of the premium, the first contribution offers a complementary explanation. I propose that the premium reflects the difference in valuation preferences between the local and foreign investors, i.e., local investors pay more attention to stock liquidity, while foreign investors pay more attention to firm’s intrinsic value, and so firms having more favorable fundamentals tend to have lower premia. The second contribution involves the examination of a controversial question that which investor group is better informed about local assets, by testing the direction of information flows between the A- and B-shares markets. Both time series methods, and panel data techniques which are used for the first time in this context, are employed, in order to get a distinct and more insightful picture against the current literature. The third contribution compares and contrasts institutional settings of China, Singapore and Thailand which have similar market segmentation and dual-listing systems; examines whether or not the premia in the three countries are caused by same factors; and tries to answer why foreign investors in China pay less, rather than more, as commonly observed in other segmented markets, for identical assets. It provides the first cross-country comparison evidence after 1999 with updated data. Tue, 08 Dec 2009 00:00:00 GMT http://hdl.handle.net/10023/894 2009-12-08T00:00:00Z Liang, Jing This thesis comprises, firstly, a careful and detailed description of the institutional workings of the Chinese stock market; secondly, a literature review of the Chinese segmented markets and dual-listed shares price premium; and thirdly, three evidence-based contributions designed to cast new light on the Chinese A-shares premium puzzle. Publicly-listed firms in China, under certain criteria, can issue two different types of shares, namely A-shares and B-shares, to local and foreign investors respectively. These shares carry the same rights and obligations, but are however priced differently due to market segmentation. After a review of the literature on determinants of the premium, the first contribution offers a complementary explanation. I propose that the premium reflects the difference in valuation preferences between the local and foreign investors, i.e., local investors pay more attention to stock liquidity, while foreign investors pay more attention to firm’s intrinsic value, and so firms having more favorable fundamentals tend to have lower premia. The second contribution involves the examination of a controversial question that which investor group is better informed about local assets, by testing the direction of information flows between the A- and B-shares markets. Both time series methods, and panel data techniques which are used for the first time in this context, are employed, in order to get a distinct and more insightful picture against the current literature. The third contribution compares and contrasts institutional settings of China, Singapore and Thailand which have similar market segmentation and dual-listing systems; examines whether or not the premia in the three countries are caused by same factors; and tries to answer why foreign investors in China pay less, rather than more, as commonly observed in other segmented markets, for identical assets. It provides the first cross-country comparison evidence after 1999 with updated data. http://hdl.handle.net/10023/893 Abstract: This thesis presents several problems based on papers written jointly by the author and Dr. Christian-Oliver Ewald. Firstly, the author extends the model presented by Fershtman and Nitzan (1991), which studies a deterministic differential public good game. Two types of volatility are considered. In the first case the volatility of the diffusion term is dependent on the current level of public good, while in the second case the volatility is dependent on the current rate of public good provision by the agents. The result in the latter case is qualitatively different from the first one. These results are discussed in detail, along with numerical examples. Secondly, two existing lines of research in game theoretic studies of fisheries are combined and extended. The first line of research is the inclusion of the aspect of predation and the consideration of multi-species fisheries within classical game theoretic fishery models. The second line of research includes continuous time and uncertainty. This thesis considers a two species fishery game and compares the results of this with several cases. Thirdly, a model of a fishery is developed in which the dynamic of the unharvested fish population is given by the stochastic logistic growth equation and it is assumed that the fishery harvests the fish population following a constant effort strategy. Explicit formulas for optimal fishing effort are derived in problems considered and the effects of uncertainty, risk aversion and mean reversion speed on fishing efforts are investigated. Fourthly, a Dixit and Pindyck type irreversible investment problem in continuous time is solved, using the assumption that the project value follows a Cox-Ingersoll- Ross process. This solution differs from the two classical cases of geometric Brownian motion and geometric mean reversion and these differences are examined. The aim is to find the optimal stopping time, which can be applied to the problem of extracting resources. Wed, 23 Dec 2009 00:00:00 GMT http://hdl.handle.net/10023/893 2009-12-23T00:00:00Z Wang, Wen-Kai This thesis presents several problems based on papers written jointly by the author and Dr. Christian-Oliver Ewald. Firstly, the author extends the model presented by Fershtman and Nitzan (1991), which studies a deterministic differential public good game. Two types of volatility are considered. In the first case the volatility of the diffusion term is dependent on the current level of public good, while in the second case the volatility is dependent on the current rate of public good provision by the agents. The result in the latter case is qualitatively different from the first one. These results are discussed in detail, along with numerical examples. Secondly, two existing lines of research in game theoretic studies of fisheries are combined and extended. The first line of research is the inclusion of the aspect of predation and the consideration of multi-species fisheries within classical game theoretic fishery models. The second line of research includes continuous time and uncertainty. This thesis considers a two species fishery game and compares the results of this with several cases. Thirdly, a model of a fishery is developed in which the dynamic of the unharvested fish population is given by the stochastic logistic growth equation and it is assumed that the fishery harvests the fish population following a constant effort strategy. Explicit formulas for optimal fishing effort are derived in problems considered and the effects of uncertainty, risk aversion and mean reversion speed on fishing efforts are investigated. Fourthly, a Dixit and Pindyck type irreversible investment problem in continuous time is solved, using the assumption that the project value follows a Cox-Ingersoll- Ross process. This solution differs from the two classical cases of geometric Brownian motion and geometric mean reversion and these differences are examined. The aim is to find the optimal stopping time, which can be applied to the problem of extracting resources. http://hdl.handle.net/10023/721 Abstract: This thesis contains three studies on the economics of entry into marriage; a life event that has been shown to have significant implications for the well-being (economic and otherwise) of men, women and their children. The first study examines the effect of family background on the timing of first marriage of 7,853 individuals born in 1970 in Great Britain. Hazard model analysis reveals that high levels of parental resources serve to delay entry into marriage for both males and females, although this effect fades as a young adult ages. Consistent with theories of “resource dilution”, a greater number of siblings present in the household during adolescence is associated with early marriage for both sexes. It is also found that the presence of a younger sibling in the household hastens marriage for males, while the presence of a younger brother is associated with early marriage for both sexes. The second study investigates how changes in abortion policy in Eastern Europe during the late-eighties and early-nineties may have affected female first-marriage rates. Previous studies have suggested that more liberal abortion laws should lead to a decrease in marriage rates among young women as ‘shotgun weddings’ are no longer necessary. Empirical evidence from the United States lends support to that hypothesis. This study presents an alternative theory of abortion access and marriage based on the cost of search that suggests that more liberal abortion laws may actually promote young marriage. An empirical examination of marriage data from Eastern Europe shows that countries that liberalized their abortion laws during the late-eighties and early-nineties saw an increase in marriage rates among non-teenage women. The third study uses a unique and comprehensive panel of 2441 U.S. counties spanning from 1970 to 1999 to examine the relationship between the cost of owner-occupied housing and entry into marriage. It is found that the burden of housing costs negatively affects the marriage rate. Further, it is reported that the greater the difference between the annual cost of owning a house and the annual cost of renting, the lower the marriage rate. These are important findings since they imply that government policies designed to reduce the cost of housing (such as tax advantages to owner-occupiers) have the potential to encourage entry into marriage. Fri, 26 Jun 2009 00:00:00 GMT http://hdl.handle.net/10023/721 2009-06-26T00:00:00Z Bowmaker, Simon W. This thesis contains three studies on the economics of entry into marriage; a life event that has been shown to have significant implications for the well-being (economic and otherwise) of men, women and their children. The first study examines the effect of family background on the timing of first marriage of 7,853 individuals born in 1970 in Great Britain. Hazard model analysis reveals that high levels of parental resources serve to delay entry into marriage for both males and females, although this effect fades as a young adult ages. Consistent with theories of “resource dilution”, a greater number of siblings present in the household during adolescence is associated with early marriage for both sexes. It is also found that the presence of a younger sibling in the household hastens marriage for males, while the presence of a younger brother is associated with early marriage for both sexes. The second study investigates how changes in abortion policy in Eastern Europe during the late-eighties and early-nineties may have affected female first-marriage rates. Previous studies have suggested that more liberal abortion laws should lead to a decrease in marriage rates among young women as ‘shotgun weddings’ are no longer necessary. Empirical evidence from the United States lends support to that hypothesis. This study presents an alternative theory of abortion access and marriage based on the cost of search that suggests that more liberal abortion laws may actually promote young marriage. An empirical examination of marriage data from Eastern Europe shows that countries that liberalized their abortion laws during the late-eighties and early-nineties saw an increase in marriage rates among non-teenage women. The third study uses a unique and comprehensive panel of 2441 U.S. counties spanning from 1970 to 1999 to examine the relationship between the cost of owner-occupied housing and entry into marriage. It is found that the burden of housing costs negatively affects the marriage rate. Further, it is reported that the greater the difference between the annual cost of owning a house and the annual cost of renting, the lower the marriage rate. These are important findings since they imply that government policies designed to reduce the cost of housing (such as tax advantages to owner-occupiers) have the potential to encourage entry into marriage. http://hdl.handle.net/10023/659 Abstract: In his wide ranging attempt to review the literature on economic development and welfare in relation to the environment, Lomborg claims balance and objectivity, but actually presents a thoroughly misleading picture of environmental prospects and research, global economic development, and the real determinants of human welfare. Statistician Lomborg blatantly distorts the evidence by systematically selecting statistics to support his claims that global welfare is generally improving and environmental policy is unnecessary, while denying catastrophic risks such as prolonged drought in major food growing areas (though such events cannot be ruled out by climate models). In spite of its numerous errors and biases, "the Lomborg scam" (as leading biologist E.O.Wilson aptly calls it) has been welcomed by gullible or like-minded journalists and politicians. Description: Previously in the University eprints HAIRST pilot service at http://eprints.st-andrews.ac.uk/archive/00000052/; March 2002. Forthcoming as a review article in the Scottish Journal of Political Economy Tue, 01 Jan 2002 00:00:00 GMT http://hdl.handle.net/10023/659 2002-01-01T00:00:00Z FitzRoy, Felix Smith, Ian In his wide ranging attempt to review the literature on economic development and welfare in relation to the environment, Lomborg claims balance and objectivity, but actually presents a thoroughly misleading picture of environmental prospects and research, global economic development, and the real determinants of human welfare. Statistician Lomborg blatantly distorts the evidence by systematically selecting statistics to support his claims that global welfare is generally improving and environmental policy is unnecessary, while denying catastrophic risks such as prolonged drought in major food growing areas (though such events cannot be ruled out by climate models). In spite of its numerous errors and biases, "the Lomborg scam" (as leading biologist E.O.Wilson aptly calls it) has been welcomed by gullible or like-minded journalists and politicians. http://hdl.handle.net/10023/658 Abstract: The recent rise in university-industry partnerships has stimulated an important public policy debate regarding how these relationships affect fundamental research. In this paper, we examine the antecedents and consequences of policies to promote university-industry alliances. Although the preliminary evidence appears to suggest that these partnerships have not had a deleterious effect on the quantity and quality of basic research, some legitimate concerns have been raised about these activities that require additional analysis. We conclude that additional research is needed to provide a more accurate assessment of the optimal level of commercialisation. Description: Previously in the University eprints HAIRST pilot service at http://eprints.st-andrews.ac.uk/archive/00000053/; [Originally] November 2001. This version January 2002. Forthcoming in Oxford review of economic policy Tue, 01 Jan 2002 00:00:00 GMT http://hdl.handle.net/10023/658 2002-01-01T00:00:00Z Poyago-Theotoky, Joanna Beath, John Siegel, Donald S. The recent rise in university-industry partnerships has stimulated an important public policy debate regarding how these relationships affect fundamental research. In this paper, we examine the antecedents and consequences of policies to promote university-industry alliances. Although the preliminary evidence appears to suggest that these partnerships have not had a deleterious effect on the quantity and quality of basic research, some legitimate concerns have been raised about these activities that require additional analysis. We conclude that additional research is needed to provide a more accurate assessment of the optimal level of commercialisation. http://hdl.handle.net/10023/657 Abstract: Data from a unique monetary ‘experiment’ conducted in the UK during the period 1994-97 are used to investigate the cost of political intervention in monetary policy. The paper finds that the difference between government bond yields in Germany (but not the US) and the UK was systematically related to an index of the credibility of monetary policy constructed on the basis of the frequency of agreements/ disagreements between the Minister of Finance who took the decisions on interest rates and the Bank of England, whose recommendations were published with a lag, with disagreements causing an increase in the yield differential. Description: Previously in the University eprints HAIRST pilot service at http://eprints.st-andrews.ac.uk/archive/00000055/; Revised November 2001 Mon, 01 Jan 2001 00:00:00 GMT http://hdl.handle.net/10023/657 2001-01-01T00:00:00Z Cobham, David Papadopoulos, Athanasios Zis, George Data from a unique monetary ‘experiment’ conducted in the UK during the period 1994-97 are used to investigate the cost of political intervention in monetary policy. The paper finds that the difference between government bond yields in Germany (but not the US) and the UK was systematically related to an index of the credibility of monetary policy constructed on the basis of the frequency of agreements/ disagreements between the Minister of Finance who took the decisions on interest rates and the Bank of England, whose recommendations were published with a lag, with disagreements causing an increase in the yield differential. http://hdl.handle.net/10023/656 Abstract: This paper combines collective bargaining over wages and working time with models of endogenous and neoclassical growth. Public expenditure is funded by taxes on capital and labour supplied by infinitely-lived households in a closed economy. Taxes on labour are generally inefficient in both growth models, there is a “dynamic Laffer Curve”, and employment is increased by a reduction of working hours below the collective bargaining level – except in the case of a monopoly union. Although growth is maximised by competitive (efficient) hours, welfare-optimal working time is below the collective bargain when union are ‘too weak’, and vice-versa. Description: Previously in the University eprints HAIRST pilot service at http://eprints.st-andrews.ac.uk/archive/00000056/; Revised August 2001 Wed, 01 Aug 2001 00:00:00 GMT http://hdl.handle.net/10023/656 2001-08-01T00:00:00Z FitzRoy, Felix Funke, Michael Nolan, Michael A. This paper combines collective bargaining over wages and working time with models of endogenous and neoclassical growth. Public expenditure is funded by taxes on capital and labour supplied by infinitely-lived households in a closed economy. Taxes on labour are generally inefficient in both growth models, there is a “dynamic Laffer Curve”, and employment is increased by a reduction of working hours below the collective bargaining level – except in the case of a monopoly union. Although growth is maximised by competitive (efficient) hours, welfare-optimal working time is below the collective bargain when union are ‘too weak’, and vice-versa. http://hdl.handle.net/10023/655 Abstract: While Rational Expectations have dominated the paradigm of expectations formation, they have been more recently challenged on the empirical ground such as, for instance, in the dynamics of the exchange rate. This challenge has led to the introduction of heterogeneous expectations in economic modeling. More specifically, the forecasts of the market participants have been drawn from competing views. Two behaviours are usually considered: agents are either fundamentalist or chartist. Moreover, the possibility of switching from one behaviour to the other one is also assumed. In a simple cobweb model, we study the dynamics associated with different endogenous switching process based on the path of prices. We provide an example with an asymmetric endogenous switching process built on the dynamics of past prices. This example confirms the widespread belief that fundamentalist market behaviour as compared with that of chartist tends to promote market stability. Description: Previously in the University eprints HAIRST pilot service at http://eprints.st-andrews.ac.uk/archive/00000057/ Mon, 01 Jan 2001 00:00:00 GMT http://hdl.handle.net/10023/655 2001-01-01T00:00:00Z Lasselle, Laurence Svizzero, Serge Tisdell, Clem While Rational Expectations have dominated the paradigm of expectations formation, they have been more recently challenged on the empirical ground such as, for instance, in the dynamics of the exchange rate. This challenge has led to the introduction of heterogeneous expectations in economic modeling. More specifically, the forecasts of the market participants have been drawn from competing views. Two behaviours are usually considered: agents are either fundamentalist or chartist. Moreover, the possibility of switching from one behaviour to the other one is also assumed. In a simple cobweb model, we study the dynamics associated with different endogenous switching process based on the path of prices. We provide an example with an asymmetric endogenous switching process built on the dynamics of past prices. This example confirms the widespread belief that fundamentalist market behaviour as compared with that of chartist tends to promote market stability. http://hdl.handle.net/10023/654 Abstract: The purpose of this paper is to give new insights of the method of Helleman (1980) in the context of macrodynamics. This method explains how a difference equation can be locally studied from the Feigenbaum equation in the case of a constant Jacobian matrix. First we introduce this technique. Second we apply it in two models: the model of Matsuyama (1999) and the model of Kaldor (1957). Finally we present an extension of the technique in the case of non constant (linear) Jacobian matrix and apply this extension in the model of Médio (1992). Description: Previously in the University eprints HAIRST pilot service at http://eprints.st-andrews.ac.uk/archive/00000059/ Mon, 01 Jan 2001 00:00:00 GMT http://hdl.handle.net/10023/654 2001-01-01T00:00:00Z Briec, Walter Lasselle, Laurence The purpose of this paper is to give new insights of the method of Helleman (1980) in the context of macrodynamics. This method explains how a difference equation can be locally studied from the Feigenbaum equation in the case of a constant Jacobian matrix. First we introduce this technique. Second we apply it in two models: the model of Matsuyama (1999) and the model of Kaldor (1957). Finally we present an extension of the technique in the case of non constant (linear) Jacobian matrix and apply this extension in the model of Médio (1992). http://hdl.handle.net/10023/653 Abstract: We consider an overlapping generation model based on Matsuyama (1999) and show that, whenever actual capital accumulation falls below its balanced growth path, subsidising innovators by taxing consumers has stabilising effects and increases welfare. Further, if the steady state is unstable under laissez faire, the introduction of the subsidy can make the steady state stable. Such a policy has positive welfare effects as it fosters output growth along the transitional adjustment path. Therefore, fast growing economies, in which high factor accumulation plays a crucial role alongside innovative sectors that enjoy temporary monopoly rents, should follow an unorthodox approach to stabilisation. Namely, taxing the consumers and reallocate resources to the innovative sectors. Description: Previously in the University eprints HAIRST pilot service at http://eprints.st-andrews.ac.uk/archive/00000060/ Mon, 01 Jan 2001 00:00:00 GMT http://hdl.handle.net/10023/653 2001-01-01T00:00:00Z Aloi, Marta Lasselle, Laurence We consider an overlapping generation model based on Matsuyama (1999) and show that, whenever actual capital accumulation falls below its balanced growth path, subsidising innovators by taxing consumers has stabilising effects and increases welfare. Further, if the steady state is unstable under laissez faire, the introduction of the subsidy can make the steady state stable. Such a policy has positive welfare effects as it fosters output growth along the transitional adjustment path. Therefore, fast growing economies, in which high factor accumulation plays a crucial role alongside innovative sectors that enjoy temporary monopoly rents, should follow an unorthodox approach to stabilisation. Namely, taxing the consumers and reallocate resources to the innovative sectors. http://hdl.handle.net/10023/652 Abstract: Fatás (2000) argues that in a cross-section analysis of countries there exists a positive correlation between long-term growth rates and the persistence of output fluctuations. The current paper extends this line of research by examining manufacturing sectors of an economy which can be characterised by two levels of technology; a low level and a high level. Analysis of the data reveals a positive correlation between long-term growth rates and the persistence of output fluctuations in ‘high-tech’ sectors. This empirical analysis is further supported by reformulating the model of Matsuyama (1999b) in a stochastic environment. Within this framework the model is able to capture the two main theories of growth, namely; the Solow model and the Romer model. The stochastic nature of the long run output trend is endogenous and based on technological shocks. Despite the cyclical nature of the shocks we are able to show that output fluctuations are more persistent in ‘high-tech’ sectors. Description: Previously in the University eprints HAIRST pilot service at http://eprints.st-andrews.ac.uk/archive/00000061/ Sat, 01 Jan 2000 00:00:00 GMT http://hdl.handle.net/10023/652 2000-01-01T00:00:00Z Lasselle, Laurence Aloi, Marta McMillan, David G. Fatás (2000) argues that in a cross-section analysis of countries there exists a positive correlation between long-term growth rates and the persistence of output fluctuations. The current paper extends this line of research by examining manufacturing sectors of an economy which can be characterised by two levels of technology; a low level and a high level. Analysis of the data reveals a positive correlation between long-term growth rates and the persistence of output fluctuations in ‘high-tech’ sectors. This empirical analysis is further supported by reformulating the model of Matsuyama (1999b) in a stochastic environment. Within this framework the model is able to capture the two main theories of growth, namely; the Solow model and the Romer model. The stochastic nature of the long run output trend is endogenous and based on technological shocks. Despite the cyclical nature of the shocks we are able to show that output fluctuations are more persistent in ‘high-tech’ sectors. http://hdl.handle.net/10023/575 Abstract: The initial public offering (IPO) underpricing phenomenon has frequently been noticed and generally is accepted as a puzzle in financial economics. Some of the new theories, such as behavioural finance, take the underpricing puzzle as one important form of evidence. However, some aspects of IPO underpricing have not yet been fully documented and discussed in the existing literature. This thesis tries to contribute in the following three specific areas. First, we focus on the time series properties of the level of underpricing of IPO shares and document the IPO market in the Hong Kong market from 1999 to 2005. In the data sample, strong autocorrelation within the level of underpricing has been discovered. Evidence suggests the initial selling volume plays an important role in the relationship. The links between underpricing and clustering of IPOs within different industries are weak, suggesting the reasons for underpricing are related to the market liquidity rather than to the industry-specific risk characteristics. Second, we investigate the underwriting networks to explore the relationship between underwriting business and IPO related puzzles. We find that in repeated IPOs, underwriters build up reputation and accumulate knowledge of their underwriting services. One of the great advantages of the top ranked underwriters is their relationship networks with other underwriters and institutional investors. We perform a careful examination of the underwriter syndicate and investigate the relationship of the structure of the syndicate in respect of IPO performance. Moreover, the pattern of distribution in the size of syndicates is identified and is found to be significantly related to the IPO performance. The research shows that the perspective from the underwriter syndicate is not only interesting, also necessary to understand IPOs. Third, we analyse the coordination problem in the IPO. In the research, we consider the auction method as a one-stage selling and the bookbuilding method as a two-stage selling method. The model suggests that the relationship between the underpricing level and the quality of IPO shares is non-monotone. This implication is consistent with empirical observations. In addition, regarding the issuers' proceeds in the IPOs, the auction method is better than the bookbuilding method in both noisy and noisy vanishing equilibria. The bookbuilding method may be helpful in other ways, such as maintaining liquidity or price support in secondary market. By studying liquidity, business networks and the coordination problem, the thesis does not only complement the existing research by providing unique explanations for the IPO underpricing and other related puzzles, but also opens some interesting venues for future research. Thu, 27 Nov 2008 00:00:00 GMT http://hdl.handle.net/10023/575 2008-11-27T00:00:00Z Qiao, Yongyuan The initial public offering (IPO) underpricing phenomenon has frequently been noticed and generally is accepted as a puzzle in financial economics. Some of the new theories, such as behavioural finance, take the underpricing puzzle as one important form of evidence. However, some aspects of IPO underpricing have not yet been fully documented and discussed in the existing literature. This thesis tries to contribute in the following three specific areas. First, we focus on the time series properties of the level of underpricing of IPO shares and document the IPO market in the Hong Kong market from 1999 to 2005. In the data sample, strong autocorrelation within the level of underpricing has been discovered. Evidence suggests the initial selling volume plays an important role in the relationship. The links between underpricing and clustering of IPOs within different industries are weak, suggesting the reasons for underpricing are related to the market liquidity rather than to the industry-specific risk characteristics. Second, we investigate the underwriting networks to explore the relationship between underwriting business and IPO related puzzles. We find that in repeated IPOs, underwriters build up reputation and accumulate knowledge of their underwriting services. One of the great advantages of the top ranked underwriters is their relationship networks with other underwriters and institutional investors. We perform a careful examination of the underwriter syndicate and investigate the relationship of the structure of the syndicate in respect of IPO performance. Moreover, the pattern of distribution in the size of syndicates is identified and is found to be significantly related to the IPO performance. The research shows that the perspective from the underwriter syndicate is not only interesting, also necessary to understand IPOs. Third, we analyse the coordination problem in the IPO. In the research, we consider the auction method as a one-stage selling and the bookbuilding method as a two-stage selling method. The model suggests that the relationship between the underpricing level and the quality of IPO shares is non-monotone. This implication is consistent with empirical observations. In addition, regarding the issuers' proceeds in the IPOs, the auction method is better than the bookbuilding method in both noisy and noisy vanishing equilibria. The bookbuilding method may be helpful in other ways, such as maintaining liquidity or price support in secondary market. By studying liquidity, business networks and the coordination problem, the thesis does not only complement the existing research by providing unique explanations for the IPO underpricing and other related puzzles, but also opens some interesting venues for future research. http://hdl.handle.net/10023/555 Abstract: This thesis re-examines the suspension of the gold standard rule in Britain between 1797 and 1821 within the framework of the theory of credible and time consistent monetary policy. By combining both historical and theoretical analysis the thesis challenges the prevailing theory in which the gold standard is considered as a contingent rule and the suspension as an exogenously credible regime. Firstly, the thesis analyses what made the suspension credible in the absence of the gold standard rule. It is proposed that the suspension was a credible regime, because the resumption of the gold standard at the old par value in the future was a sustainable plan. It is shown that monetary policy during the bad state -- such as war -- can still be time consistent in the absence of the formal commitment rule, if the policy maker's plan is to resume the original commitment rule when the economy returns to the good state. The equilibrium is based on trigger strategies where private agents retaliate if a policy maker deviates from its policy plan to resume the gold standard rule. Secondly, the thesis aims to establish why the gold standard rule was suspended for twenty-four years. Both historical analysis and a dynamic general equilibrium model demonstrate that the gold standard was a shock amplifier when the shocks became persistent in the 1790s, and suspension was used to restore monetary stability during the French Wars. As the suspension of cash payments was a credible regime, it maintained the value and circulation of paper currency that in turn stabilised production and consumption. Suspension increased the degree of flexibility in the economic policy as the monetary authority had an opportunity to stimulate the economy by issuing fiat money during the war, on the understanding that the fiat money so issued would be withdrawn from circulation before the gold standard resumed. Finally, it is explained why the gold standard was resumed after the relatively successful Suspension Period. The gold standard was seen as a solution to the problem that arose from the Bank of England's ambiguous role as a public and private institution. Rules were considered to be better than discretion, and the gold convertibility was a transparent principle, which maximised the long-run welfare of the society. The thesis demonstrates how already in the eighteenth century commitment to the gold standard rule had increased the efficiency of capital markets and enabled Britain to finance its eighteenth-century wars by using deficit finance. Maintaining these abilities through the gold standard was desirable. Fri, 25 Jul 2008 00:00:00 GMT http://hdl.handle.net/10023/555 2008-07-25T00:00:00Z Newby, Elisa Maria Susanna This thesis re-examines the suspension of the gold standard rule in Britain between 1797 and 1821 within the framework of the theory of credible and time consistent monetary policy. By combining both historical and theoretical analysis the thesis challenges the prevailing theory in which the gold standard is considered as a contingent rule and the suspension as an exogenously credible regime. Firstly, the thesis analyses what made the suspension credible in the absence of the gold standard rule. It is proposed that the suspension was a credible regime, because the resumption of the gold standard at the old par value in the future was a sustainable plan. It is shown that monetary policy during the bad state -- such as war -- can still be time consistent in the absence of the formal commitment rule, if the policy maker's plan is to resume the original commitment rule when the economy returns to the good state. The equilibrium is based on trigger strategies where private agents retaliate if a policy maker deviates from its policy plan to resume the gold standard rule. Secondly, the thesis aims to establish why the gold standard rule was suspended for twenty-four years. Both historical analysis and a dynamic general equilibrium model demonstrate that the gold standard was a shock amplifier when the shocks became persistent in the 1790s, and suspension was used to restore monetary stability during the French Wars. As the suspension of cash payments was a credible regime, it maintained the value and circulation of paper currency that in turn stabilised production and consumption. Suspension increased the degree of flexibility in the economic policy as the monetary authority had an opportunity to stimulate the economy by issuing fiat money during the war, on the understanding that the fiat money so issued would be withdrawn from circulation before the gold standard resumed. Finally, it is explained why the gold standard was resumed after the relatively successful Suspension Period. The gold standard was seen as a solution to the problem that arose from the Bank of England's ambiguous role as a public and private institution. Rules were considered to be better than discretion, and the gold convertibility was a transparent principle, which maximised the long-run welfare of the society. The thesis demonstrates how already in the eighteenth century commitment to the gold standard rule had increased the efficiency of capital markets and enabled Britain to finance its eighteenth-century wars by using deficit finance. Maintaining these abilities through the gold standard was desirable. http://hdl.handle.net/10023/539 Abstract: This thesis is an empirical analysis of the performance, innovation and networks of high technology firms. It is conducted at the micro-economic level, based on new empirical evidence by fieldwork methods, from the primary source data on firms in the five Scottish hi-tech clusters. The questionnaire design is cross-sectional, to which was added a time series element, and involves many unique features. It enabled the gathering of rich quantitative and qualitative data on all stages of the dynamic innovation process. The database was used in cross-sectional analysis of many key hypotheses in the hi-tech context, by robust econometric models of export, innovation (e.g. Schumpeterian hypothesis), and growth (e.g. Gibrat’s Law of Proportionate Effect) performances. The hi- tech firm’s networks, internationalisation and embeddeddness, are analysed using novel measures. A structural simultaneous equations model is developed to explain the relationship between networks, innovation and performance, by establishing a link between the innovation input, the innovation output, and performance, based on the empirical knowledge production function model. The 2-stage, 4 equations model, (using Heckman’s procedure) deals with both simultaneity and sample selection bias. Robust estimation techniques (I3SLS, Tobit) are used for estimation. The results highlight the simultaneity and selectivity issue. The hi-tech firms with aggressive innovation strategies, international markets and global products, still find it vital to be embedded in local networks, which in turn raise their performance. Technology-push factors, research networks, knowledge spillovers from markets, and a firm’s radical innovation attempts determine its innovation input intensity. Firms are unable to attain innovation success through innovation investments alone; integration of internal and external resources is important. The innovation sales intensity are not determined by innovation input, but by the demand-pull factors like customer networks, exporting, and market expansion strategies. This also applies to their export intensity. Lack of internal resources, capabilities, and government support are the major obstacles to commercialisation of innovation. Tue, 01 Jan 2008 00:00:00 GMT http://hdl.handle.net/10023/539 2008-01-01T00:00:00Z Ujjual, Vandana This thesis is an empirical analysis of the performance, innovation and networks of high technology firms. It is conducted at the micro-economic level, based on new empirical evidence by fieldwork methods, from the primary source data on firms in the five Scottish hi-tech clusters. The questionnaire design is cross-sectional, to which was added a time series element, and involves many unique features. It enabled the gathering of rich quantitative and qualitative data on all stages of the dynamic innovation process. The database was used in cross-sectional analysis of many key hypotheses in the hi-tech context, by robust econometric models of export, innovation (e.g. Schumpeterian hypothesis), and growth (e.g. Gibrat’s Law of Proportionate Effect) performances. The hi- tech firm’s networks, internationalisation and embeddeddness, are analysed using novel measures. A structural simultaneous equations model is developed to explain the relationship between networks, innovation and performance, by establishing a link between the innovation input, the innovation output, and performance, based on the empirical knowledge production function model. The 2-stage, 4 equations model, (using Heckman’s procedure) deals with both simultaneity and sample selection bias. Robust estimation techniques (I3SLS, Tobit) are used for estimation. The results highlight the simultaneity and selectivity issue. The hi-tech firms with aggressive innovation strategies, international markets and global products, still find it vital to be embedded in local networks, which in turn raise their performance. Technology-push factors, research networks, knowledge spillovers from markets, and a firm’s radical innovation attempts determine its innovation input intensity. Firms are unable to attain innovation success through innovation investments alone; integration of internal and external resources is important. The innovation sales intensity are not determined by innovation input, but by the demand-pull factors like customer networks, exporting, and market expansion strategies. This also applies to their export intensity. Lack of internal resources, capabilities, and government support are the major obstacles to commercialisation of innovation. http://hdl.handle.net/10023/476 Abstract: The objective of the thesis was to study monetary policy frameworks in developing countries. The thesis focused on three aspects of the monetary framework; the degree of central bank independence, the monetary policy strategy and the exchange rate regime. The research applied quantitative empirical analysis and in-depth case studies on Egypt, Jordan and Lebanon. The empirical research investigated three areas: 1) the phenomenon of ‘fear of floating’ and the correlation between exchange rate and macroeconomic volatility; 2) the degree of monetary policy independence in developing countries in the context of their increased integration into the global economic system; and 3) the degree of central bank independence and how it impacts both ‘fear of floating’ and monetary policy independence. The case studies allowed for an in-depth understanding of the process of setting monetary policy and the constraints under which it is formulated in developing countries. The results that emerged from the quantitative analysis highlight the impact of central bank independence in influencing the other aspects of the monetary framework, as it can mitigate fear of floating and contribute to increased monetary policy independence of world interest rates in developing countries. The case studies detailed the evolution of monetary frameworks in three countries with varying degrees of central bank independence. The degree of central bank independence increased in Egypt and Jordan as a result of severe currency crises in each country, while Lebanon provides a very different example of a developing country with an independent central bank since its inception. The conclusions that emerged from the cases suggest that central bank independence is critical in achieving exchange rate and price stability; however, developing countries should avoid focusing on exchange rate stability at the expense of other considerations for extended periods of time. In that, the results point to the benefits of proactively and pre-emptively managing the exchange rate regime. The cases also highlight the importance of the coordination between fiscal and monetary policies, as conditions of fiscal profligacy can undermine even the most independent central bank. Sun, 01 Jun 2008 00:00:00 GMT http://hdl.handle.net/10023/476 2008-06-01T00:00:00Z Maziad, Samar The objective of the thesis was to study monetary policy frameworks in developing countries. The thesis focused on three aspects of the monetary framework; the degree of central bank independence, the monetary policy strategy and the exchange rate regime. The research applied quantitative empirical analysis and in-depth case studies on Egypt, Jordan and Lebanon. The empirical research investigated three areas: 1) the phenomenon of ‘fear of floating’ and the correlation between exchange rate and macroeconomic volatility; 2) the degree of monetary policy independence in developing countries in the context of their increased integration into the global economic system; and 3) the degree of central bank independence and how it impacts both ‘fear of floating’ and monetary policy independence. The case studies allowed for an in-depth understanding of the process of setting monetary policy and the constraints under which it is formulated in developing countries. The results that emerged from the quantitative analysis highlight the impact of central bank independence in influencing the other aspects of the monetary framework, as it can mitigate fear of floating and contribute to increased monetary policy independence of world interest rates in developing countries. The case studies detailed the evolution of monetary frameworks in three countries with varying degrees of central bank independence. The degree of central bank independence increased in Egypt and Jordan as a result of severe currency crises in each country, while Lebanon provides a very different example of a developing country with an independent central bank since its inception. The conclusions that emerged from the cases suggest that central bank independence is critical in achieving exchange rate and price stability; however, developing countries should avoid focusing on exchange rate stability at the expense of other considerations for extended periods of time. In that, the results point to the benefits of proactively and pre-emptively managing the exchange rate regime. The cases also highlight the importance of the coordination between fiscal and monetary policies, as conditions of fiscal profligacy can undermine even the most independent central bank. http://hdl.handle.net/10023/464 Abstract: In this thesis, extensive research regarding the relationship between macroeconomic variables and the stock market is carried out. For this purpose the two largest stock markets in the world, namely the US and Japan, are chosen. As a proxy for the US stock market we use the S&P500 and for Japan the Nikkei225. Although there are many empirical investigations of the US stock market, Japan has lagged behind. Especially the severe boom and bust sequence in Japan is unique in the developed world in recent economic history and it is important to shed more light on the causes of this development. First, we investigate the long-run relationship between selected macroeconomic variables and the stock market in a cointegration framework. As expected, we can support existing findings in the US, whereas Japan does not follow the same relationships as the US. Further econometric analysis reveals a structural break in Japan in the early 1990s. Before that break, the long-run relationship is comparable to the US, whereas after the break this relationship breaks down. We believe that a liquidity trap in a deflationary environment might have caused the normal relationship to break down. Secondly, we increase the variable set and apply a non-linear estimation technique to investigate non-linear behaviour between macroeconomic variables and the stock market. We find the non-linear models to have better in and out of sample performance than the appropriate linear models. Thirdly, we test a particular non-linear model of noise traders that interact with arbitrage traders in the dividend yield for the US and Japanese stock market. A two-regime switching model is supported with an inner random or momentum regime and an outer mean reversion regime. Overall, we recommend investors and policymakers to be aware that a liquidity trap in a deflationary environment could also cause severe downturn in the US if appropriate measures are not implemented accordingly. Wed, 25 Jun 2008 00:00:00 GMT http://hdl.handle.net/10023/464 2008-06-25T00:00:00Z Humpe, Andreas In this thesis, extensive research regarding the relationship between macroeconomic variables and the stock market is carried out. For this purpose the two largest stock markets in the world, namely the US and Japan, are chosen. As a proxy for the US stock market we use the S&P500 and for Japan the Nikkei225. Although there are many empirical investigations of the US stock market, Japan has lagged behind. Especially the severe boom and bust sequence in Japan is unique in the developed world in recent economic history and it is important to shed more light on the causes of this development. First, we investigate the long-run relationship between selected macroeconomic variables and the stock market in a cointegration framework. As expected, we can support existing findings in the US, whereas Japan does not follow the same relationships as the US. Further econometric analysis reveals a structural break in Japan in the early 1990s. Before that break, the long-run relationship is comparable to the US, whereas after the break this relationship breaks down. We believe that a liquidity trap in a deflationary environment might have caused the normal relationship to break down. Secondly, we increase the variable set and apply a non-linear estimation technique to investigate non-linear behaviour between macroeconomic variables and the stock market. We find the non-linear models to have better in and out of sample performance than the appropriate linear models. Thirdly, we test a particular non-linear model of noise traders that interact with arbitrage traders in the dividend yield for the US and Japanese stock market. A two-regime switching model is supported with an inner random or momentum regime and an outer mean reversion regime. Overall, we recommend investors and policymakers to be aware that a liquidity trap in a deflationary environment could also cause severe downturn in the US if appropriate measures are not implemented accordingly. http://hdl.handle.net/10023/438 Abstract: This thesis aims to contribute towards a better understanding of the optimal coordination of monetary and fiscal policy in complex economic environments. We analyze the characteristics of optimal dynamics in an economy in which neither prices nor wages adjust instantaneously and lump-sum taxes are unavailable as a source of government finance. We then propose that monetary and fiscal policy should be coordinated to satisfy a pair of simple `specific targeting rules', a rule for inflation and a rule for the growth of real wages. We show that such simple rule-based conduct of policy can do remarkably well in replicating the dynamics of the economy under optimal policy following a given shock. We study optimal policy coordination in the context of an economy where a constant proportion of agents lacks access to the asset market. We find that the optimal economy moves along an analogue of a conventional inflation-output variance frontier in response to a government spending shock, as the population share of non-Ricardian agents rises. The optimal output response rises, while inflation volatility subsides. There is little evidence that increased government spending would crowd in private consumption in the optimal economy. We investigate the optimal properties and wider implications of a macroeconomic policy framework aimed at meeting an unconditional debt target. We show that the best stationary policy in terms of an unconditional welfare measure is characterized by highly persistent debt dynamics, less history-dependence in the conduct of policy, less reliance on debt finance and more short-term volatility following a government spending shock compared with the non-stationary `timelessly optimal' plan. Tue, 01 Jan 2008 00:00:00 GMT http://hdl.handle.net/10023/438 2008-01-01T00:00:00Z Horvath, Michal This thesis aims to contribute towards a better understanding of the optimal coordination of monetary and fiscal policy in complex economic environments. We analyze the characteristics of optimal dynamics in an economy in which neither prices nor wages adjust instantaneously and lump-sum taxes are unavailable as a source of government finance. We then propose that monetary and fiscal policy should be coordinated to satisfy a pair of simple `specific targeting rules', a rule for inflation and a rule for the growth of real wages. We show that such simple rule-based conduct of policy can do remarkably well in replicating the dynamics of the economy under optimal policy following a given shock. We study optimal policy coordination in the context of an economy where a constant proportion of agents lacks access to the asset market. We find that the optimal economy moves along an analogue of a conventional inflation-output variance frontier in response to a government spending shock, as the population share of non-Ricardian agents rises. The optimal output response rises, while inflation volatility subsides. There is little evidence that increased government spending would crowd in private consumption in the optimal economy. We investigate the optimal properties and wider implications of a macroeconomic policy framework aimed at meeting an unconditional debt target. We show that the best stationary policy in terms of an unconditional welfare measure is characterized by highly persistent debt dynamics, less history-dependence in the conduct of policy, less reliance on debt finance and more short-term volatility following a government spending shock compared with the non-stationary `timelessly optimal' plan. http://hdl.handle.net/10023/427 Abstract: Sunk cost accounting refers to the empirical finding that individuals tend to let their decisions be influenced by costs made at an earlier time in such a way that they are more risk seeking than they would be had they not incurred these costs. Such behaviour violates the axioms of economic theory which states individuals should only consider incremental costs and benefits when executing investments. This dissertation is concerned whether the pervasive sunk cost phenomenon extends to corporate acquisitions and financial markets. 122 students from the University of St Andrews participated in three experiments exploring the use of sunk costs in interactive negotiation contexts and financial markets. Experiment I elucidates that subjects value the sunk cost issue higher than other issues in a multi-issue negotiation. Experiment II illustrates that bidders are influenced by the sunk costs of competing bidders in a first price, sealed-bid, common-value auction. In financial markets their exists an analogous concept to sunk cost accounting known as the disposition effect. This explains the tendency of investors to sell “winning” stocks and hold “losing” stocks. Experiment III demonstrates that trading strategies in an experimental equity market are influenced by a pre-trading brokerage cost. Not only are subjects influenced in the direction that reduces the disposition effect but also trading is diminished. Without the brokerage cost there was a significant disposition effect. JEL-Classifications C70, C90, D44, D80, D81, G11 Sun, 01 Jun 2008 00:00:00 GMT http://hdl.handle.net/10023/427 2008-06-01T00:00:00Z Kelly, Benjamin Sunk cost accounting refers to the empirical finding that individuals tend to let their decisions be influenced by costs made at an earlier time in such a way that they are more risk seeking than they would be had they not incurred these costs. Such behaviour violates the axioms of economic theory which states individuals should only consider incremental costs and benefits when executing investments. This dissertation is concerned whether the pervasive sunk cost phenomenon extends to corporate acquisitions and financial markets. 122 students from the University of St Andrews participated in three experiments exploring the use of sunk costs in interactive negotiation contexts and financial markets. Experiment I elucidates that subjects value the sunk cost issue higher than other issues in a multi-issue negotiation. Experiment II illustrates that bidders are influenced by the sunk costs of competing bidders in a first price, sealed-bid, common-value auction. In financial markets their exists an analogous concept to sunk cost accounting known as the disposition effect. This explains the tendency of investors to sell “winning” stocks and hold “losing” stocks. Experiment III demonstrates that trading strategies in an experimental equity market are influenced by a pre-trading brokerage cost. Not only are subjects influenced in the direction that reduces the disposition effect but also trading is diminished. Without the brokerage cost there was a significant disposition effect. JEL-Classifications C70, C90, D44, D80, D81, G11 http://hdl.handle.net/10023/372 Abstract: The thesis focuses on those factors which affect firm growth in the setting of the Chinese transition economy, such as size, age, entrepreneurship, resources, and environment. As regards the complexity of the business expansion mechanism, an interdisciplinary approach combining the fields of economics and management is adopted. Using fieldwork methods, new data were gathered in face-to-face interviews with 83 owner-managers of the Chinese privately owned firms in P. R. China in 2004, as well as in follow-up telephone interviews in 2006. The unique body of qualitative and quantitative data in terms of firm operation, human resources management, finance, technology and innovation, enterprise culture and competitive environment, were collected by a specially designed survey instrument, and enabled a number of new hypotheses to be tested in both economic and managerial aspects. With respect to the modern developments of Gibrat’s Law (1931) and Jovanovic’s Learning Theory (1982) in economics, the effects of two “stylized factors”, namely size and age, along with a vector of firm-specific, environmental and selection bias variables, on firm growth, were examined in Heckman’s (1979) two-step selection model with the correction for sample selection bias and heteroscedasticity. The results indicated that the “stylized facts” that smaller and younger firms grew faster were also valid in the setting of China. This thesis also explored managerial factors contributing to firm growth – viz. entrepreneurship theory, resource-based view in strategic management, and contingency theory in organizational behaviour. A variety of statistical methods were utilized to operationalize entrepreneurial orientation (EO), intangible assets (IA), and contingency factors (e.g. structure, environment, strategy, etc), and econometric models were estimated to examine their relationship with firm dynamics. The evidence suggested that IA might be more capable of facilitating firm growth than EO. However, when both were disaggregated into a lower level of attributes, the influences on growth may vary. Further, contingency theory, originally proposed for the case of larger firms in the west, was also validated in this study on the Chinese sampled firm. The combination of organizational forms and contingency configurations presented a higher power to explain business expansion. It implied that “the good fit” of contingency factors influenced firm dynamics only in a moderate way, whereas “the badness of fit” in configuration could engender either the highest or lowest firm growth, subject to their organizational structures. Fri, 30 Nov 2007 00:00:00 GMT http://hdl.handle.net/10023/372 2007-11-30T00:00:00Z Xu, Zhibin The thesis focuses on those factors which affect firm growth in the setting of the Chinese transition economy, such as size, age, entrepreneurship, resources, and environment. As regards the complexity of the business expansion mechanism, an interdisciplinary approach combining the fields of economics and management is adopted. Using fieldwork methods, new data were gathered in face-to-face interviews with 83 owner-managers of the Chinese privately owned firms in P. R. China in 2004, as well as in follow-up telephone interviews in 2006. The unique body of qualitative and quantitative data in terms of firm operation, human resources management, finance, technology and innovation, enterprise culture and competitive environment, were collected by a specially designed survey instrument, and enabled a number of new hypotheses to be tested in both economic and managerial aspects. With respect to the modern developments of Gibrat’s Law (1931) and Jovanovic’s Learning Theory (1982) in economics, the effects of two “stylized factors”, namely size and age, along with a vector of firm-specific, environmental and selection bias variables, on firm growth, were examined in Heckman’s (1979) two-step selection model with the correction for sample selection bias and heteroscedasticity. The results indicated that the “stylized facts” that smaller and younger firms grew faster were also valid in the setting of China. This thesis also explored managerial factors contributing to firm growth – viz. entrepreneurship theory, resource-based view in strategic management, and contingency theory in organizational behaviour. A variety of statistical methods were utilized to operationalize entrepreneurial orientation (EO), intangible assets (IA), and contingency factors (e.g. structure, environment, strategy, etc), and econometric models were estimated to examine their relationship with firm dynamics. The evidence suggested that IA might be more capable of facilitating firm growth than EO. However, when both were disaggregated into a lower level of attributes, the influences on growth may vary. Further, contingency theory, originally proposed for the case of larger firms in the west, was also validated in this study on the Chinese sampled firm. The combination of organizational forms and contingency configurations presented a higher power to explain business expansion. It implied that “the good fit” of contingency factors influenced firm dynamics only in a moderate way, whereas “the badness of fit” in configuration could engender either the highest or lowest firm growth, subject to their organizational structures. http://hdl.handle.net/10023/369 Abstract: The principal aim of this thesis is to examine the validity of the claim that low productivity led to a decline in Thailand’s competitiveness, and hence, to the 1997 economic crisis. For a decade from 1985 to 1995, Thailand was one of the world’s fastest-growing economies with an average real annual GDP growth of 8.4 percent. However, such growth was criticized as being simply the result of large inward investment and rapid accumulation of capital, leading to very little productivity growth, and therefore, being unsustainable in the long run. Worse still, the later surges of capital inflows came in mainly as speculative stashes, instead of as foreign direct investments in production and businesses. Hence, as predicted, the boom finally came to a sudden end in 1997. The economic growth statistics recorded severe contraction, financial market collapsed, the currency was battered, domestic demand slumped, severe excess capacity was experienced, employment deteriorated, personal and corporate income diminished, inflation and the cost of living mounted, and finally, poverty surged. This thesis utilizes a stochastic production frontier approach to verify the claim that low productivity lessened Thailand’s competitiveness. This approach, unlike the standard econometric approach, allows the existence of technical inefficiency in the production process. It also, unlike other non-parametric approaches, recognizes that such inefficiency can sometimes occur as a result of external factors that are out of the firms’ direct control, such as statistical errors and random shocks. The period covered in this thesis is from 1990 to 2002. This is divided into 2 sub-periods, i.e. the pre-crisis period (1990 – 1996) and the post-crisis period (1997 – 2002). The estimation results indicate a structural shift in the Thai manufacturing sector, from being labour intensive in the pre-crisis period to being capital intensive in the post-crisis period. The productivity level also improved post-crisis, as compared to the pre-crisis level, and is shown to follow an increasing trend. The low productive investment level in the pre-crisis period is identified as having led to the decline in the manufacturing sector’s efficiency. The thesis concludes that this low productivity level did indeed lead to the decline in Thailand’s competitiveness, and hence, to the decline of export growth, which was at that time the main source of Thailand’s economic growth; in turn, playing an important role in precipitating the 1997 economic crisis. Fri, 13 Jul 2007 00:00:00 GMT http://hdl.handle.net/10023/369 2007-07-13T00:00:00Z Arunsawadiwong, Suwannee The principal aim of this thesis is to examine the validity of the claim that low productivity led to a decline in Thailand’s competitiveness, and hence, to the 1997 economic crisis. For a decade from 1985 to 1995, Thailand was one of the world’s fastest-growing economies with an average real annual GDP growth of 8.4 percent. However, such growth was criticized as being simply the result of large inward investment and rapid accumulation of capital, leading to very little productivity growth, and therefore, being unsustainable in the long run. Worse still, the later surges of capital inflows came in mainly as speculative stashes, instead of as foreign direct investments in production and businesses. Hence, as predicted, the boom finally came to a sudden end in 1997. The economic growth statistics recorded severe contraction, financial market collapsed, the currency was battered, domestic demand slumped, severe excess capacity was experienced, employment deteriorated, personal and corporate income diminished, inflation and the cost of living mounted, and finally, poverty surged. This thesis utilizes a stochastic production frontier approach to verify the claim that low productivity lessened Thailand’s competitiveness. This approach, unlike the standard econometric approach, allows the existence of technical inefficiency in the production process. It also, unlike other non-parametric approaches, recognizes that such inefficiency can sometimes occur as a result of external factors that are out of the firms’ direct control, such as statistical errors and random shocks. The period covered in this thesis is from 1990 to 2002. This is divided into 2 sub-periods, i.e. the pre-crisis period (1990 – 1996) and the post-crisis period (1997 – 2002). The estimation results indicate a structural shift in the Thai manufacturing sector, from being labour intensive in the pre-crisis period to being capital intensive in the post-crisis period. The productivity level also improved post-crisis, as compared to the pre-crisis level, and is shown to follow an increasing trend. The low productive investment level in the pre-crisis period is identified as having led to the decline in the manufacturing sector’s efficiency. The thesis concludes that this low productivity level did indeed lead to the decline in Thailand’s competitiveness, and hence, to the decline of export growth, which was at that time the main source of Thailand’s economic growth; in turn, playing an important role in precipitating the 1997 economic crisis. http://hdl.handle.net/10023/331 Abstract: We take a critical view of the standard approach to finance and growth. The mapping between the theory and empirics is shown to be poorly understood, and this is traced to deficiencies in our understanding of the microeconomics at play. By looking at both primary and secondary historical evidence we argue that issues of aggregation are critical, and that spatial factors are also prevalent. Further, we suggest that these disaggregated elements can change over the course of an industrial revolution. A model in the spirit of standard finance and growth theories is extended to consider these further effects, and we calibrate the model to data on historical growth paths. In order to advance our understanding of the microeconomic factors that cause the observed phenomena in the finance-growth nexus, we develop a general equilibrium theory of financial intermediation in which exchange costs are endogenously determined by technologies, endowments and preferences. We suggest that incomplete contracts might be central to these phenomena. We link this framework to an understanding of power and political economy in a setting with heterogeneous agents. We develop these results numerically, showing a number of interesting interactions between markets, exchange costs and institutions in economies with different levels of wealth. The model of endogenous exchange costs can be thought of in terms of the findings coming out of our historical analysis. We outline in some detail the further steps that need to be taken before we can speak of the microfoundations of finance and growth with any confidence. First, a fully dynamic model of markets and coalitions must be embedded within a story of economic growth that can match the dynamic observations. Second, we must develop our conception of incomplete contracting and the link with institutions and political economy. The thesis thus opens a number of interesting avenues for future research. Wed, 20 Jun 2007 00:00:00 GMT http://hdl.handle.net/10023/331 2007-06-20T00:00:00Z Trew, Alex William We take a critical view of the standard approach to finance and growth. The mapping between the theory and empirics is shown to be poorly understood, and this is traced to deficiencies in our understanding of the microeconomics at play. By looking at both primary and secondary historical evidence we argue that issues of aggregation are critical, and that spatial factors are also prevalent. Further, we suggest that these disaggregated elements can change over the course of an industrial revolution. A model in the spirit of standard finance and growth theories is extended to consider these further effects, and we calibrate the model to data on historical growth paths. In order to advance our understanding of the microeconomic factors that cause the observed phenomena in the finance-growth nexus, we develop a general equilibrium theory of financial intermediation in which exchange costs are endogenously determined by technologies, endowments and preferences. We suggest that incomplete contracts might be central to these phenomena. We link this framework to an understanding of power and political economy in a setting with heterogeneous agents. We develop these results numerically, showing a number of interesting interactions between markets, exchange costs and institutions in economies with different levels of wealth. The model of endogenous exchange costs can be thought of in terms of the findings coming out of our historical analysis. We outline in some detail the further steps that need to be taken before we can speak of the microfoundations of finance and growth with any confidence. First, a fully dynamic model of markets and coalitions must be embedded within a story of economic growth that can match the dynamic observations. Second, we must develop our conception of incomplete contracting and the link with institutions and political economy. The thesis thus opens a number of interesting avenues for future research. http://hdl.handle.net/10023/330 Abstract: The impact of environmental degradation on well-being is largely ignored in terms of economic costs of development. Due in large part to measurement difficulties, the environment in the daily welfare of the world's poorest remains inadequately accounted for in development policies. The aim of this work is, therefore, to advance our understanding of the relationship between the environment and human health. Anthropogenic activities in Central Asia have severely disrupted the natural environment. The poorest, most vulnerable members of society are at an increased risk of mortality and a life-time of illness associated with worsening ecological conditions in the region. The work is by nature inter-disciplinary and pulls from many social sciences in an attempt to provide new insight into the role of long term environmental degradation and the impact on social welfare. There are three main original contributions of this work. Firstly, the research demonstrates the traditional emphasis in the literature on socioeconomic factors in explaining high rates of child mortality in Central Asia is inadequate. Secondly, for the first time in an international cross-section examining the determinants of child survival, the macro-level environment is put forth as a key determinant of excess child mortality in Central Asia. An improved measure of income is used for the first time in such a study to control for important distributional effects within and between countries. The results confirm the hypothesis that traditional determinants do not account for endemically high rates of mortality in the region. Secondly, using administrative (oblast) data from Uzbekistan, Chapter 6 presents the first study of its kind to incorporate important geographic as well as socioeconomic information in explaining variation in infant mortality due likely to ecological degradation. Ultimately, the findings demonstrate the environment must be adequately considered in all policy making aimed at improving health outcomes in the region. Wed, 20 Jun 2007 00:00:00 GMT http://hdl.handle.net/10023/330 2007-06-20T00:00:00Z Franz, Jennifer Sue The impact of environmental degradation on well-being is largely ignored in terms of economic costs of development. Due in large part to measurement difficulties, the environment in the daily welfare of the world's poorest remains inadequately accounted for in development policies. The aim of this work is, therefore, to advance our understanding of the relationship between the environment and human health. Anthropogenic activities in Central Asia have severely disrupted the natural environment. The poorest, most vulnerable members of society are at an increased risk of mortality and a life-time of illness associated with worsening ecological conditions in the region. The work is by nature inter-disciplinary and pulls from many social sciences in an attempt to provide new insight into the role of long term environmental degradation and the impact on social welfare. There are three main original contributions of this work. Firstly, the research demonstrates the traditional emphasis in the literature on socioeconomic factors in explaining high rates of child mortality in Central Asia is inadequate. Secondly, for the first time in an international cross-section examining the determinants of child survival, the macro-level environment is put forth as a key determinant of excess child mortality in Central Asia. An improved measure of income is used for the first time in such a study to control for important distributional effects within and between countries. The results confirm the hypothesis that traditional determinants do not account for endemically high rates of mortality in the region. Secondly, using administrative (oblast) data from Uzbekistan, Chapter 6 presents the first study of its kind to incorporate important geographic as well as socioeconomic information in explaining variation in infant mortality due likely to ecological degradation. Ultimately, the findings demonstrate the environment must be adequately considered in all policy making aimed at improving health outcomes in the region.