This paper extends the literature on strategic delegation to a model with a semi-delegation structure. We investigate how the level of spillovers and the degree of product differentiation affect the owner's decision. It is found that owners face a prisoner's dilemma when the spillover is very small or when the products are sufficiently differentiated. Concerning behavior, managers act less aggressively in the pure market, where there are delegated-firms, than in the mixed market, where entrepreneurial and managerial firms co-exist. Furthermore, we highlight the existence of ambiguous areas where delegations make firms profitable, but unable to generate desirable welfare.
{"title":"AMBIGUITY BETWEEN PIRATE INCENTIVE AND COLLECTIVE DESIRABILITY WITHIN SEMI-DELEGATION PATTERN","authors":"K. Zhao, Wanshu Wu","doi":"10.15057/27598","DOIUrl":"https://doi.org/10.15057/27598","url":null,"abstract":"This paper extends the literature on strategic delegation to a model with a semi-delegation structure. We investigate how the level of spillovers and the degree of product differentiation affect the owner's decision. It is found that owners face a prisoner's dilemma when the spillover is very small or when the products are sufficiently differentiated. Concerning behavior, managers act less aggressively in the pure market, where there are delegated-firms, than in the mixed market, where entrepreneurial and managerial firms co-exist. Furthermore, we highlight the existence of ambiguous areas where delegations make firms profitable, but unable to generate desirable welfare.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"56 1","pages":"259-279"},"PeriodicalIF":0.6,"publicationDate":"2015-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66731253","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The potential benefits of tradable pollution permits and allowances can be limited by transaction costs. The implementation and operation of the European Union Emission Trading Scheme (EU ETS) involves transaction costs such as internal costs, capital costs, and consultancy and trading costs. This paper investigates the effect of transaction costs on market efficiency and price discovery in the EU ETS. An empirical assessment of nonlinear mean reversion is provided using threshold cointegration, which allows for asymmetric regime-dependent adjustment to the equilibrium relationship between European Union Emission Allowances (EUA) spot and futures prices. The mean reversion process reveals nonlinear and regime-dependent adjustment, and thus the empirical evidence indicates that transaction costs affect the mean reversion behavior and restrain market efficiency and price discovery.
{"title":"TRANSACTION COSTS AND NONLINEAR MEAN REVERSION IN THE EU EMISSION TRADING SCHEME","authors":"Jeonghyun Kim, Byeongseon Seo","doi":"10.15057/27600","DOIUrl":"https://doi.org/10.15057/27600","url":null,"abstract":"The potential benefits of tradable pollution permits and allowances can be limited by transaction costs. The implementation and operation of the European Union Emission Trading Scheme (EU ETS) involves transaction costs such as internal costs, capital costs, and consultancy and trading costs. This paper investigates the effect of transaction costs on market efficiency and price discovery in the EU ETS. An empirical assessment of nonlinear mean reversion is provided using threshold cointegration, which allows for asymmetric regime-dependent adjustment to the equilibrium relationship between European Union Emission Allowances (EUA) spot and futures prices. The mean reversion process reveals nonlinear and regime-dependent adjustment, and thus the empirical evidence indicates that transaction costs affect the mean reversion behavior and restrain market efficiency and price discovery.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"56 1","pages":"281-296"},"PeriodicalIF":0.6,"publicationDate":"2015-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66731312","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The impact of environmental pollution on productivity is analyzed in a dynamic two commodity model consisting of a formal sector and an informal sector. Environmental quality and public infrastructural expenditure affect productivity of private inputs in both sectors. Both the sectors pollute environment and receive the benefits of public expenditure on abatement and infrastructure but the burden of tax is imposed only on the formal sector. Properties of the steady-state growth equilibrium and of the second-best optimum fiscal policy are analyzed. The socially optimal relative size of the informal sector is less than its second-best optimal relative size in the decentralized competitive equilibrium.
{"title":"ENVIRONMENTAL POLLUTION, INFORMAL SECTOR, PUBLIC EXPENDITURE AND ECONOMIC GROWTH","authors":"M. Gupta, Trishita Ray Barman","doi":"10.15057/27193","DOIUrl":"https://doi.org/10.15057/27193","url":null,"abstract":"The impact of environmental pollution on productivity is analyzed in a dynamic two commodity model consisting of a formal sector and an informal sector. Environmental quality and public infrastructural expenditure affect productivity of private inputs in both sectors. Both the sectors pollute environment and receive the benefits of public expenditure on abatement and infrastructure but the burden of tax is imposed only on the formal sector. Properties of the steady-state growth equilibrium and of the second-best optimum fiscal policy are analyzed. The socially optimal relative size of the informal sector is less than its second-best optimal relative size in the decentralized competitive equilibrium.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"111 1","pages":"73-91"},"PeriodicalIF":0.6,"publicationDate":"2015-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66731342","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We explain why 'frivolous suits (FS)' occur particularly under complete information. Existing analyses such as the 'traditional' and the 'early-defense-cost' models are not fully robust in that they either drop the plaintiff's withdrawal option or rely on a restrictive assumption that the defendant loses immediately unless he early defends himself at high cost. We pursue a more generalized explanation. We offer an infinite-period litigation model with uncertainty which reflects the reality more consistently. We then show that FS can occur as a subgame perfect equilibrium since the defendant over the pre-trial stage may settle with FS to save future time and/or trial costs. We further demonstrate that FS can occur even under the British rule of fee shifting.
{"title":"FRIVOLOUS SUITS IN THE INFINITELY-REPEATED LITIGATION GAME WITH UNCERTAINTY","authors":"Iljoong Kim, Jaehong Kim","doi":"10.15057/27196","DOIUrl":"https://doi.org/10.15057/27196","url":null,"abstract":"We explain why 'frivolous suits (FS)' occur particularly under complete information. Existing analyses such as the 'traditional' and the 'early-defense-cost' models are not fully robust in that they either drop the plaintiff's withdrawal option or rely on a restrictive assumption that the defendant loses immediately unless he early defends himself at high cost. We pursue a more generalized explanation. We offer an infinite-period litigation model with uncertainty which reflects the reality more consistently. We then show that FS can occur as a subgame perfect equilibrium since the defendant over the pre-trial stage may settle with FS to save future time and/or trial costs. We further demonstrate that FS can occur even under the British rule of fee shifting.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"31 3 1","pages":"21-33"},"PeriodicalIF":0.6,"publicationDate":"2015-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66730925","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We examine the strategic interaction between two governments in an international mixed duopoly market, in which a state-owned enterprise competes with private enterprises under different regimes of privatization policies with import tariffs and environmental taxes. We find that bilateral privatization leads to higher tariffs than no privatization, but unilateral privatization yields the highest tariff for a privatized country and the lowest tariff for a non-privatized country. However, a higher environmental tax is called for when a privatization policy is practiced. We also investigate a privatization choice game between two governments and show that unilateral privatization is the Nash equilibrium of the game. Finally, we compare the local optimum with the global optimum and show that the latter is independent of the regimes of privatization policies. We find a need for trade and environmental policy coordination between the two governments for global welfare maximization.
{"title":"Strategic Privatization with Tariffs and Environmental Taxes in an International Mixed Duopoly","authors":"Lili Xu, Sang‐Ho Lee","doi":"10.15057/27190","DOIUrl":"https://doi.org/10.15057/27190","url":null,"abstract":"We examine the strategic interaction between two governments in an international mixed duopoly market, in which a state-owned enterprise competes with private enterprises under different regimes of privatization policies with import tariffs and environmental taxes. We find that bilateral privatization leads to higher tariffs than no privatization, but unilateral privatization yields the highest tariff for a privatized country and the lowest tariff for a non-privatized country. However, a higher environmental tax is called for when a privatization policy is practiced. We also investigate a privatization choice game between two governments and show that unilateral privatization is the Nash equilibrium of the game. Finally, we compare the local optimum with the global optimum and show that the latter is independent of the regimes of privatization policies. We find a need for trade and environmental policy coordination between the two governments for global welfare maximization.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"56 1","pages":"135-154"},"PeriodicalIF":0.6,"publicationDate":"2015-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66731070","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In light of the increases in prevalence of alcohol consumption, the objective of the present study is to examine the socioeconomic determinants of alcohol consumption in Malaysia. The Third National Health and Morbidity Survey (NHMS III) consisting of 13477 non-Malay respondents is used. The present study applies two logit models to analyse the factors affecting the likelihood of heavy and light alcohol drinking. The results show that the likelihood of heavy alcohol drinking is positively associated with younger individuals, lower income earners, males, the less-educated, non-singles, rural dwellers and the employed, whereas, the likelihood of light alcohol drinking is positively associated with higher income earners, the well-educated, urban dwellers and the unemployed. Based on these findings, several policy implications are discussed.
{"title":"SOCIOECONOMIC DETERMINANTS OF ALCOHOL CONSUMPTION AMONG NON-MALAYS IN MALAYSIA","authors":"Y. Cheah","doi":"10.15057/27194","DOIUrl":"https://doi.org/10.15057/27194","url":null,"abstract":"In light of the increases in prevalence of alcohol consumption, the objective of the present study is to examine the socioeconomic determinants of alcohol consumption in Malaysia. The Third National Health and Morbidity Survey (NHMS III) consisting of 13477 non-Malay respondents is used. The present study applies two logit models to analyse the factors affecting the likelihood of heavy and light alcohol drinking. The results show that the likelihood of heavy alcohol drinking is positively associated with younger individuals, lower income earners, males, the less-educated, non-singles, rural dwellers and the employed, whereas, the likelihood of light alcohol drinking is positively associated with higher income earners, the well-educated, urban dwellers and the unemployed. Based on these findings, several policy implications are discussed.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"56 1","pages":"55-72"},"PeriodicalIF":0.6,"publicationDate":"2015-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66730884","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper constructs the long-term series of top income shares in Korea using income tax statistics. Top income shares dropped sharply after WWII, remained low during industrialization periods, and has ascended since the mid-1990s. We suggest that the fall in the top income shares after WWII can be explained by the economic collapse and political disruption after liberation. The rising income concentration in the last 15 years could be attributable to the drastic shift in industrial structure and the institutional factors such as the reduction in the marginal tax rate and the post-crisis changes in the corporate governance system.
{"title":"Top Incomes In Korea, 1933-2010: Evidence From Income Tax Statistics","authors":"N. Kim, Jongil Kim","doi":"10.15057/27197","DOIUrl":"https://doi.org/10.15057/27197","url":null,"abstract":"This paper constructs the long-term series of top income shares in Korea using income tax statistics. Top income shares dropped sharply after WWII, remained low during industrialization periods, and has ascended since the mid-1990s. We suggest that the fall in the top income shares after WWII can be explained by the economic collapse and political disruption after liberation. The rising income concentration in the last 15 years could be attributable to the drastic shift in industrial structure and the institutional factors such as the reduction in the marginal tax rate and the post-crisis changes in the corporate governance system.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"56 1","pages":"1-19"},"PeriodicalIF":0.6,"publicationDate":"2015-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66731028","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Qian Long Kweh, Kuo-Cheng Kuo, Wei-Kang Wang, Hsian-Ming Liu
We examine the relationship between board independence, family control, and operating efficiency, and the moderating effect of family control on the relationship between board independence and operating efficiency. We apply the dynamic slacks-based measure (DSBM) model to estimate operating efficiency. Using a sample of 42 Taiwanese listed semiconductor companies for the period 2005-2012, we employ truncated regression with a bootstrapping procedure for multivariate analysis. The presence of board independence is significantly positively related to operating efficiency. Family control has a negative impact on operating efficiency. The positive effect of board independence on operating efficiency is significantly weakened in family companies.
{"title":"BOARD INDEPENDENCE, FAMILY CONTROL, AND PERFORMANCE IN TAIWANESE LISTED SEMICONDUCTOR COMPANIES","authors":"Qian Long Kweh, Kuo-Cheng Kuo, Wei-Kang Wang, Hsian-Ming Liu","doi":"10.15057/27192","DOIUrl":"https://doi.org/10.15057/27192","url":null,"abstract":"We examine the relationship between board independence, family control, and operating efficiency, and the moderating effect of family control on the relationship between board independence and operating efficiency. We apply the dynamic slacks-based measure (DSBM) model to estimate operating efficiency. Using a sample of 42 Taiwanese listed semiconductor companies for the period 2005-2012, we employ truncated regression with a bootstrapping procedure for multivariate analysis. The presence of board independence is significantly positively related to operating efficiency. Family control has a negative impact on operating efficiency. The positive effect of board independence on operating efficiency is significantly weakened in family companies.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"56 1","pages":"93-115"},"PeriodicalIF":0.6,"publicationDate":"2015-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66731329","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Instead of exploring the uncertainty about the existence of a unit root in the long-span U.S. real GDP series as in previous studies, e.g., Rudebusch (1993), in this study we investigate the uncertainty about the state (permanence vs. transitoriness) of the output shock period by period by using the “innovation regime-switching” (IRS) model. In this model the effect of a shock may be permanent or transitory in different time periods. By applying the IRS model to the 1870-2008 annual U.S. real GDP data, we find that the output shocks in the periods of the 1893 depression, the 1907 financial panic, the two World Wars and the Great Depression are likely to have had a large but transitory effect, whereas the output shocks in the remaining periods are likely to have had a permanent effect. This result suggests that the long span real GDP is neither a unit-root series nor a trend-stationary series.
{"title":"UNCERTAIN EFFECTS OF SHOCKS VS. UNCERTAIN UNIT ROOT: AN ALTERNATIVE VIEW OF U.S. REAL GDP","authors":"Yu-Lieh Huang, Chao-Hsi Huang","doi":"10.15057/27191","DOIUrl":"https://doi.org/10.15057/27191","url":null,"abstract":"Instead of exploring the uncertainty about the existence of a unit root in the long-span U.S. real GDP series as in previous studies, e.g., Rudebusch (1993), in this study we investigate the uncertainty about the state (permanence vs. transitoriness) of the output shock period by period by using the “innovation regime-switching” (IRS) model. In this model the effect of a shock may be permanent or transitory in different time periods. By applying the IRS model to the 1870-2008 annual U.S. real GDP data, we find that the output shocks in the periods of the 1893 depression, the 1907 financial panic, the two World Wars and the Great Depression are likely to have had a large but transitory effect, whereas the output shocks in the remaining periods are likely to have had a permanent effect. This result suggests that the long span real GDP is neither a unit-root series nor a trend-stationary series.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"56 1","pages":"117-134"},"PeriodicalIF":0.6,"publicationDate":"2015-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66731269","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper investigates the role of institutional investors as corporate monitors by analyzing the relationship between proxy voting decisions and firm performance in Korea. We find that institutional investors support more proposals when firm performance is strong. They are more likely to support the proposals when ownership of the blockholder and foreign investors are high. It suggests that institutional investors monitor firms through active voting on the proposals relating to performance. On the contrary, National Pension Service' affirmative voting decisions is negatively related to firm performance. Furthermore, we also find that institutional investors' voting is significantly related to the long-term performance and impact the pass of proposal and they more carefully monitor financially distressed firm.
{"title":"CORPORATE GOVERNANCE AND FIRM PERFORMANCE: EVIDENCE FROM INSTITUTIONAL INVESTORS AND PROXY VOTING IN KOREA","authors":"Sanglae Lee","doi":"10.15057/27195","DOIUrl":"https://doi.org/10.15057/27195","url":null,"abstract":"This paper investigates the role of institutional investors as corporate monitors by analyzing the relationship between proxy voting decisions and firm performance in Korea. We find that institutional investors support more proposals when firm performance is strong. They are more likely to support the proposals when ownership of the blockholder and foreign investors are high. It suggests that institutional investors monitor firms through active voting on the proposals relating to performance. On the contrary, National Pension Service' affirmative voting decisions is negatively related to firm performance. Furthermore, we also find that institutional investors' voting is significantly related to the long-term performance and impact the pass of proposal and they more carefully monitor financially distressed firm.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"56 1","pages":"35-53"},"PeriodicalIF":0.6,"publicationDate":"2015-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66730902","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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