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Abstract:
We argue that Corporate Social Responsibility (CSR) may affect the agency relationship inside a firm. We analyze how CSR and the threat of stakeholder activism influence effort of manager and shareholder, and describe how CSR may arise endogenously in this context. By engaging in CSR the shareholder can commit to less monitoring, increase the manager's effort, and raise profits. Even a socially indifferent shareholder may thus benefit from CSR and prefer to behave socially responsibly. He may even find it optimal to sponsor a social activist, giving it the means to exert pressure.

Corporate Social Responsibility, Corporate Governance, Stakeholder Activism

Abstract:
This paper focuses on the strategic role of corporate venture-financing carried out by a corporation (a headquarter). When the headquarter finances a venture through its corporate venture-financing arm, it can increase the complementarity between products of the venture and the headquarter. The effect of having an increase in complementarity is a softening of ex-post product-market competition with rival products. Hence, in deciding whether to finance the venture, the headquarter faces a trade-off between, on the one hand, being more aggressive ex-post in the product market, and, on the other hand, using venture financing to soften ex-post competition with substitute products.

venture capital, link between product market and financial market, innovation, entrepreneurship, corporate finance

Abstract:
This paper provides an economic evaluation of certification and ecolabeling as an important policy instrument for creating markets for biodiversity. In the paper we conclude that the success of a policy instrument for creating markets for biodiversity depends on the nature crucial factors, including the ability of the policy instrument to deal with (a) the public good nature of most of the nonmarket biodiversity benefits; (b) the asymmetric informational characteristics related to the biodiversity (and environmental friendly) market supply and demand mechanisms; (c) the impact of certification practices in the producer's costs, and (d) the cross price elasticity between regular and market certified products. Indeed, in some cases certification and ecolabeling policy instruments alone are not sufficient to guarantee a successful creation of markets for biodiversity. Finally, the certification schemes need to be sufficiently flexible to allow mutual recognition among the countries involved, as well as to meet the demand of weak sensitive markets. By mutual understanding, and learning with the past experiences, certification and ecolabeling will positively contribute to the creation of markets for biodiversity and thus expected to assist to the development of an effective and broadly accepted sustainable management of such a scarce natural resource.

Biodiversity, regulation, certification, ecolabeling, information, adverse selection, consumer awareness, command-and-control

Abstract:
We analyze the BBC TV game show 'The Weakest Link', using data from 77 episodes, covering 13,380 questions. We focus on the banking decision, where a contestant chooses to secure an amount of money for the eventual winner, or to risk it on a general knowledge question. In the latter case, should he answer correctly, the amount at stake increases exponentially. We show that banking decisions are not rational: a crude rule of thumb performs substantially better than the contestants' strategies. Yet, at least to some extent, contestants do take into account their own ability and the fact that questions are progressively more difficult.

Experimental Economics, TV Game Shows, Bounded Rationality

Abstract:
No abstract available.

Abstract:
No abstract available.

Abstract:
This paper examines an interplay between tariff policy and parallel-import policy. From a welfare point of view, a host government would prefer allowing parallel imports to prohibiting them. However, if a tariff is not at the government's disposal, there will be no parallel imports in equilibrium because a foreign manufacturer would prefer adopting a uniform pricing policy to a discriminatory pricing policy, which will prevent parallel imports from occurring. If a tariff is at the government's disposal, it can be set optimally to induce the foreign manufacturer to impose a price discrimination policy. Such a policy will facilitate entry by a parallel importer provided that parallel imports are feasible.

Abstract:
Existing studies on the impact of outsourcing on relative wages and the demand for skilled workers mainly focus on aggregate outsourcing, in which imported intermediate inputs are used as a proxy. We depart from the existing studies by focusing on various types of outsourcing based on the six-digit NAICS U.S. manufacturing data. We show that downstream materials and service outsourcing are skill biased, whereas upstream materials outsourcing is not. We also produce other supplementary results pertaining to the impact of technology, different capital inputs on relative wages, and the demand for skilled workers.

C33, F14, F15

Abstract:
We examine the relationship between banks' types of ownership and banks' efficiency using Greene's "true" panel data stochastic frontier model. We find that, even after taking unobserved heterogeneity more properly into account, state-owned banks in Indonesia are the least efficient banks and joint-venture banks are the most efficient ones.

banking, ownership types, efficiency, stochastic frontier

Abstract:
We provide a theoretical framework which addresses exchange rate pass-through within the setting of vertically related markets. In particular, foreign firms' price adjustment in response to an exchange rate shock is evaluated. This framework enables us to study the importance of cost effects of the exchange rate shock. Recent empirical evidence in Athukorala and Menon (1994) and Campa and Goldberg (1995, 1996) indicates the relevance of these cost effects. We show that one can decompose the effects on an exchange rate shocks on the final good market into a direct and indirect component. The indirect effect works through the input market. The degree of pass-through then depends on the relative importance of direct and indirect effects, which in turn depends on the nature of vertical structures and strategic firm behavior. We show that the institutional aspects of vertically related markets, i.e. vertical integration or vertical separation, play a role in explaining incomplete price adjustments in both intermediate and final good markets and the failure of PPP in the short run.