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.     

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.     

ROBUST ESTIMATION OF SMALL‐AREA MEANS AND QUANTILES

Small‐area estimation techniques have typically relied on plug‐in estimation based on models containing random area effects. More recently, regression M‐quantiles have been suggested for this purpose, thus avoiding conventional Gaussian assumptions, as well as problems associated with the specification of random effects. However, the plug‐in M‐quantile estimator for the small‐area mean can be shown to be the expected value of this mean with respect to a generally biased estimator of the small‐area cumulative distribution function of the characteristic of interest. To correct this problem, we propose a general framework for robust small‐area estimation, based on representing a small‐area estimator as a functional of a predictor of this small‐area cumulative distribution function. Key advantages of this framework are that it naturally leads to integrated estimation of small‐area means and quantiles and is not restricted to M‐quantile models. We also discuss mean squared error estimation for the resulting estimators, and demonstrate the advantages of our approach through model‐based and design‐based simulations, with the latter using economic data collected in an Australian farm survey.     

Grass,Sweat, and Sun: An Exploratory Study of the Labor Market for Gardeners in South Texas*

Objective. This article takes a first exploratory step in understanding the market for home gardeners in the southwest borderlands (Laredo, Texas). Methods. A questionnaire was administered by a household member familiar with the present study who employed at least one gardener utilizing the snowball method of sample selection. Usable data (surveys) were collected from 244 individuals: 122 gardeners and 122 employers. Results. Gardeners in Laredo are almost exclusively male, Hispanic, Spanish speaking, and heads of household. Gardeners tend to be Mexican by birth and nationality, work full time as a gardener, be middle aged, and possess a middle school education. Distinctions between full‐time and part‐time gardeners (employment status) as well as formal and informal gardeners (employment process) are discussed. Cross‐tabulation analyses suggest a strong relationship between employment status and process (relationship) with health insurance coverage, enrollment in Social Security, and year‐around work. Logistic regression results also indicate previous work experience as a gardener, medical insurance, and year‐around work as a gardener are the significant variables in determining full‐time employment as a gardener. For informality, logistic regression results suggest Mexican citizenship, Mexican birthplace, and lack of Social Security are the significant explanatory variables. Conclusion. Gardening enables a mostly informal workforce from Mexico to work in south Texas in pursuit of the American dream—the ability to make a living in a way of one's own choosing.     

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.     

A multivariate time series model for the analysis and prediction of carbon monoxide atmospheric concentrations

We use a Bayesian multivariate time series model for the analysis of the dynamics of carbon monoxide atmospheric concentrations. The data are observed at four sites. It is assumed that the logarithm of the observed process can be represented as the sum of unobservable components: a trend, a daily periodicity, a stationary autoregressive signal and an erratic term. Bayesian analysis is performed via Gibbs sampling. In particular, we consider the problem of joint temporal prediction when data are observed at a few sites and it is not possible to fit a complex space–time model. A retrospective analysis of the trend component is also given, which is important in that it explains the evolution of the variability in the observed process.     

The banking industry in Jordan

This paper examines the structure and performance of the banking industry in Jordan during the period 2000–2006. The Jordanian banking industry is free of extensive state ownership and government direction of the economy. These positive features are reflected by the absence of dominant state-owned banks and by the limited use of directed credit programs, interest rate controls, and credit ceilings. The banking industry is well developed, with bank assets representing 239.80 percent of the GDP at the end of 2006, which is a high percentage compared with other developing countries in the region.     

Agricultural Exports and the Environment: A Cross‐National Study of Fertilizer and Pesticide Consumption*

Abstract The mass consumption of agrochemicals, including manufactured fertilizers and pesticides, by industrialized agricultural systems worldwide threatens human health and the health of ecosystems. The production of these agricultural inputs is a highly energy‐ and capital‐intensive process, and their application contributes to a variety of direct and indirect impacts on the environment. This study is an analysis of the relationships between international trade in agricultural products and the consumption of these synthetic compounds. Using OLS regression models and data from World Bank and UNFAO, we analyze cross‐national data to examine the relationship between structural factors, such as economic development and export intensity, and both fertilizer and pesticide consumption. The findings are considered from the opposing theoretical perspectives of international political economy (IPE) and neo‐liberal modernization (NLM). The results generally support the claims of IPE and contradict those of NLM, indicating that increases in exports of agricultural products contribute to increases in fertilizer and pesticide consumption within nations. These results call into question policies that promote increased trade liberalization in agricultural products.