Maximum Likelihood Estimation of Input Demand Models with Fixed Costs of Adjustment

Traditional models of input demand rely upon convex and symmetric adjustment costs. However, the fortune of this highly restrictive approach is due more to analytical convenience than to empirical relevance. In this note we examine the model under more realistic hypothesis of fixed costs, show that it can be cast in the form of a Double Censored Random Effect Tobit Model, derive its likelihood function, and finally evaluate the performance of the ML estimators through a Monte Carlo experiment. The performances, although strongly dependent on the degree of censoring, appear to be promising.     

Income Shifting in Italian Business Groups and some Governance Implications

This paper explores the relationship among group control, financial reporting strategies and governance implications in the pursuit of domestic tax planning. A very large number of papers deals with international tax planning in multidivisional enterprises, but very few are devoted to exploring significant incentives for national business groups to engage in tax planning strategies. In this paper we propose a one-period model relating to the tax incentives of income shifting in Italian business groups. We show that, given the total amount of expected earnings before taxes and the dividends received by the firms belonging to a business group, an optimal solution to the problem of minimizing the group tax burden exists. The optimal solution involves a gain in value for the group as a whole; nevertheless, since in business groups ownership is often differentiated among shareholders (often because of the separation between ownership and control), income shifting may determine wealth transfers, often in favor of the controlling shareholder. We therefore analyze the management and governance implications of such income shifting, for both shareholders and stakeholders (i.e. managers). This revised version was published online in July 2006 with corrections to the Cover Date.     

‘A great job and a family’: work narratives and the work and family interaction

This article investigated how work narratives of dual-earner families are materially and symbolically configured in discourses of reconciliation of work and home life. Following critical studies of the work–family interaction, this research takes into consideration symbolic and social structures and tries to look into the interrelation of factors such as job resources, job satisfaction, levels of autonomy with the self-esteem and sense of ‘self’ which parents derive from their paid work. Hochschild's concept of ‘emotional culture’ is used to explore how parents' experience of work is intertwined to their occupational groups and how it is associated with different narratives of work–family interaction. This study is conducted through qualitative methods, using in-depth semi-structured interviews on a sample of 27 dual-earner families. The data collected are composed of in-depth accounts that are then examined through the method of narrative analysis. The data indicate that, for divergent occupational levels, work generates different material and symbolic resources, which account for divergent narratives of work and home. The sociological analysis of occupational levels with the associated emotional culture of work and family then provides an exploratory model for understanding the links between social class and work–family interaction.     

Executive remuneration standards and the “conformity gap” at controlled corporations

In this paper we analyze the relationship between conformity to executive remuneration standards, corporate ownership, and the level and structure of CEO compensation for large European listed companies in the years 2007 and 2010. We show that controlled corporations conform to executive remuneration standards less than widely held firms. We also show that weaker compliance is associated with lower CEO pay and more cash-based incentive structures. We interpret this “conformity gap” from the perspective of individual firms and from a societal perspective, with the aim to contribute to frame the policy questions concerning executive pay at controlled corporations. Different policy implications depend on whether the conformity gap reflects a lower need for managerial incentives, given the monitoring by controlling shareholders, or the latter’s willingness to extract private benefits of control. We argue in this paper that the former hypothesis prevails, so that regulators should abstain from increasing the level of enforcement of executive remuneration standards.     

Special issue on “The role of intellectual capital and integrated reporting in management and governance: a performative perspective”

Journal of Management and Governance -     

CHANGING BUSINESS MODELS IN INTERNATIONAL BANK FUNDING

This paper investigates the foreign funding mix of globally active banks. Using BIS international banking statistics for a panel of 12 advanced economies, we detect a structural break in international bank funding at the onset of the great financial crisis. In their postbreak business model, banks rely less on cross‐border liabilities and, instead, tap funds from outside their jurisdictions by making more active use of their subsidiaries and branches, as well as interoffice accounts within the same banking group. (JEL C32, F65, G21)     

Multivariate Approach for Comparative Evaluations of Customer Satisfaction with Application to Transport Services

In problems related to evaluations of products or services (e.g. in customer satisfaction analysis) the main difficulties concern the synthesis of the information, which is necessary for the presence of several evaluators and many response variables (aspects under evaluation). In this article, the problem of determining and comparing the satisfaction of different groups of customers, in the presence of multivariate response variables and using the results of pairwise comparisons is addressed. Within the framework of group ranking methods and multi criteria decision making theory, a new approach, based on nonparametric techniques, for evaluating group satisfaction in a multivariate framework is proposed and the concept of Multivariate Relative Satisfaction is defined. An application to the evaluation of public transport services, like the railway service and the urban bus service, by students of the University of Ferrara (Italy) is also discussed.     

Family or friends: what counts more for drinking behaviour of young adults? / Familia o amigos: ¿qué pesa más en los hábitos de consumo de alcohol de los jóvenes?

The scientific literature stresses the importance of culture and social environment in determining what people think about alcohol consumption and consequently do. Several pieces of research have proved the influence on young adults’ alcohol use of proximal social contexts of their family and peers. The present study aimed at investigating the influence of family behaviours and norms compared to the peers’ influence in a context where the culture of alcohol is changing between the different generations. Data were collected by means of a self-report questionnaire on a sample of 598 young adults (average age 22.20 years). The variables investigated were socio-demographic characteristics, the alcohol consumption of parents and friends and the parents’ and peers’ approval of alcohol consumption. The results confirmed the role of family and friends in influencing young adults’ consumption of alcohol, stressing a difference between perceived behaviours and norms. The perceived consumption of parents and friends influenced the participants’ consumption. On the contrary, the effects of the approval of drinking were limited. Globally friends had a stronger influence on alcohol consumption in comparison with family.     

No‐Bubble Condition: Model‐Free Tests in Housing Markets

We test for the existence of housing bubbles associated with a failure of the transversality condition that requires the present value of payments occurring infinitely far in the future to be zero. The most prominent such bubble is the classic rational bubble. We study housing markets in the United Kingdom and Singapore, where residential property ownership takes the form of either leaseholds or freeholds. Leaseholds are finite‐maturity, pre‐paid, and tradeable ownership contracts with maturities often exceeding 700 years. Freeholds are infinite‐maturity ownership contracts. The price difference between leaseholds with extremely‐long maturities and freeholds reflects the present value of a claim to the freehold after leasehold expiry, and is thus a direct empirical measure of the transversality condition. We estimate this price difference, and find no evidence of failures of the transversality condition in housing markets in the U.K. and Singapore, even during periods when a sizable bubble was regularly thought to be present.     

Technology spillover and regional convergence process: a statistical analysis of the Italian case

Recent literature broadly highlight the importance of modelling technological innovation effects on economic growth. This paper develops a methodology that allows to measure technology contribution to economic convergence; the choice of a regional framework also allows to underline interregional knowledge transmission as a the major channel of technological progress. Moreover, the specification of a dynamic growth model enables to evaluate both the regional convergence and the effect of innovation on long-run labour productivity without resorting to any technology index measurement. We contribute to the methodological literature also by comparing different dynamic panel data estimation procedures and by detecting both the presence of small sample bias and the existence of a nearly unit root autoregressive process in labour productivity series. The results of an empirical analysis on Italian regions show how most of innovation resources derives from relevant spillover mechanisms. Furthermore, technology spillover intensity seems to be strongly affected by geography and productive structure of regions.Financial support by Fondazione Cassa di Risparmio di Rimini and Uniturim S.p.A. is gratefully acknowledged.