Template-Type: ReDIF-Paper 1.0 Number: 1999.1 File-URL:https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-001.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.1 Title: From State to Market: A Survey of Empirical Studies on Privatization Author-Name: William L. Megginson Author-X-Name-First: William L. Author-X-Name-Last: Megginson Author-WorkPlace-Name: Michael F. Price College of Business, University of Oklahoma Author-Name: Jeffry M. Netter Author-X-Name-First: Jeffry M. Author-X-Name-Last: Netter Author-WorkPlace-Name: Terry College of Business, University of Georgia Abstract: This study surveys the academic and professional literature examining the privatisation of state-owned enterprises (SOEs), with a focus on empirical studies. Privatisation has been instrumental in reducing state ownership in many countries and had a transforming effect on global stock markets, although the role of SOEs in many other countries is similar to what it was two decades ago. Countries have adopted large-scale privatisation programs primarily for two reasons: first, the conclusive evidence that privately-owned firms outperform SOEs and, second, the empirical evidence clearly shows that privatisation significantly (often dramatically) improves the operating and financial performance of divested firms. Governments can also raise significant revenues by selling SOEs. While the choice between privatisation via public share offering versus through asset sales is still imperfectly understood, factors such as firm size, government fiscal condition, and the state of national economic development are important influences. Further, those countries which have chosen the mass (voucher) privatisation route have done so largely out of necessity--and face ongoing efficiency problems as a result. Governments have great discretion in pricing the SOEs they sell, especially those being sold via public share offering, and they use this discretion to pursue political and economic ends. Finally, investors who purchase the shares of firms being privatised earn significantly positive excess returns both in the short-run (due to deliberate underpricing of share issues by the government) and over one, three, and five-year investment horizons. Keywords: Capital, Investment, Employment, Financing policy, Ownership structure, Investment banking, Venture capital, Brokerage, Public economics, Sources of revenue, Public enterprises, Boundaries of public and private enterprise, Privatisation, Contracting out Classification-JEL: E22, E24, G32, G24, H27, L32, L33 Creation-Date: 199901 Template-Type: ReDIF-Paper 1.0 Number: 1999.2 File-URL:https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-002.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.2 Title: Desperately Seeking (Environmental) Kuznets Author-Name: Marzio Galeotti Author-X-Name-First: Marzio Author-X-Name-Last: Galeotti Author-WorkPlace-Name: University of Bergamo and Fondazione Eni Enrico Mattei Author-Name: Alessandro Lanza Author-X-Name-First: Alessandro Author-X-Name-Last: Lanza Author-WorkPlace-Name: International Energy Agency Abstract: The number of studies seeking to empirically characterize the reduced-form relationship between a country's economic growth and the quantity of various pollutants produced has recently increased significantly. In several cases researchers have found evidence in favor of an inverted-U "environmental Kuznets" curve. In the case of a major greenhouse gas, CO2, however, the evidence is at best mixed. This paper attempts to shed further light on this issue by using a newly developed data set covering over one hundred countries around the world for the last twenty five years and by considering alternative functional forms together with an effort to rigorously discriminate among competing alternatives. Keywords: Environment, Growth, CO2 emissions, Panel data Classification-JEL: O13, Q30, Q32, C12, C23 Creation-Date: 199901 Template-Type: ReDIF-Paper 1.0 Number: 1999.3 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-003.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.3 Title: Binary Choice with Binary Endogenous Regressors in Panel Data: Estimating the Effect of Fertility on Female Labour Participation Author-Name: Raquel Carrasco Author-X-Name-First: Raquel Author-X-Name-Last: Carrasco Author-WorkPlace-Name: CEMFI Abstract: This paper considers the estimation of binary choice panel data models with discrete endogenous regressors. We present a switching probit model which accounts for selectivity bias as well as for other forms of time invariant unobserved heterogeneity. Individual effects are allowed to be correlated with the explanatory variables, which can be predetermined as opposed to strictly exogenous. This model is applied to estimate a female participation equation with endogenous fertility and predetermined existing children and with individual effects using PSID data. We use the family sex composition as an instrument for exogenous fertility movements. The results indicate that assuming the exogeneity of fertility induces a downward bias in absolute value in the estimated negative effect of fertility on participation, although the failure to account for unobserved heterogeneity exaggerates this effect. Moreover, the estimates that deal with the endogeneity of fertility and control for fixed effects, but treat existing children as strictly exogenous produce a smaller effect of fertility than those obtained treating this variable as predetermined. Keywords: Binary choice, Panel data, Endogenous variables, Predetermined variables, Labour force participation, Fertility Classification-JEL: C21, C23, C25, J13 Creation-Date: 199901 Template-Type: ReDIF-Paper 1.0 Number: 1999.4 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-004.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.4 Title: Road Pricing: Old Beliefs, Present Awareness and Future Research Patterns Author-Name: Edoardo Marcucci Author-X-Name-First: Edoardo Author-X-Name-Last: Marcucci Author-WorkPlace-Name: Istituto di Scienze Economiche, Universita' di Urbino, Italy Abstract: The theoretical evolution of academic beliefs and practical policymakers' perceptions of road pricing (from now on rp) as an instrument of efficient and equitable allocation of resources are described and analysed. The aim of the paper is to reconstruct the logical evolution of the theory behind rp in order to understand why there has been scarce policy impact in spite of a long theoretical tradition. In so doing I try to bring to the fore the fundamental issues that will have to be tackled by future research in order to generate consensus around this policy instrument. The paper is structured in four parts. In the first part the fundamental issues of a typical rp model are considered. Among the most important aspects one recalls: first-best/second-best environment, short/long term analysis, homogeneous/heterogeneous time evaluation, perfect/imperfect information, efficiency/equity analysis, use/non-use of resources generated, private/public transportation provision. In the second part the characterising parameters have been interpreted in the light of the Smeed Report of 1964 that can be considered representative of the "old belief". In the third part the "present awareness" is expressed by an analysis of the main contents of the book Internalising the Social Costs of Transport of 1993. In the fourth part some reflections on the most promising research areas for rp implementation and acceptance are put forward. Specific research will have to be conducted concerning social acceptability and feasibility, simultaneous cost internalisation, behavioural assumptions, information and pricing interconnections. Keywords: Road pricing, Social Acceptability, Congestion, Congestion charging Classification-JEL: R41, R48 Creation-Date: 199901 Template-Type: ReDIF-Paper 1.0 Number: 1999.5 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-005.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.5 Title: Bottleneck Congestion and Modal Split Revisited Author-Name: Romeo Danielis Author-X-Name-First: Romeo Author-X-Name-Last: Danielis Author-WorkPlace-Name: Dipartimento di Scienze Economiche e Statistiche, Universita' degli Studi di Trieste, Italy Author-Name: Edoardo Marcucci Author-X-Name-First: Edoardo Author-X-Name-Last: Marcucci Author-WorkPlace-Name: Istituto di Scienze Economiche, Universita' di Urbino, Italy Abstract: The paper examines the efficiency of alternative road pricing schemes when an alternative railroad service is available. The paper uses a model, developed by Tabuchi (1993), in which road transport presents a bottleneck congestion technology while railroad transport shows economies of scale with respect to the number of train users. The competition between the two modes is assumed to be on cost basis only. It is found that if the railroad fare is set equal to the average cost, the relative efficiency of the regimes depends on parameters' values. The numerical simulation shows that the fine toll regime is generally to be preferred to the alternative regimes but when the fixed railroad cost is large enough so that the inefficient exploitation of the scale economies is less than compensated by the toll revenue. Keywords: Road transport, Public transport, Congestion, Congestion pricing Classification-JEL: R41 Creation-Date: 199901 Template-Type: ReDIF-Paper 1.0 Number: 1999.6 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-006.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.6 Title: Towards the Green Environment.Comparison of Environmental Impacts of Urban Public Transport and Automobiles Author-Name: Michael Gommers Author-X-Name-First: Michael Author-X-Name-Last: Gommers Author-WorkPlace-Name: Netherlands Economic Institute Abstract: This study compares the environmental impacts of urban public transport and automobiles (energy use, emissions, noise nuisance, waste materials and use of space). For this purpose two models have been developed FACTS-Urban (Forecasting air pollution by car traffic simulation) and MILOV (environmental impacts of PT). Current Dutch situation as well as future scenarios on the demand side and the (technological) supply side have been studied. Generally speaking PT (especially rail) is and will remain cleaner than the use of the car. However, the environmental advantage of Diesel buses over passenger cars is diminishing rapidly. Keywords: Emissions, Public transport, Policy Classification-JEL: D62, L92, R41, H53 Creation-Date: 199901 Template-Type: ReDIF-Paper 1.0 Number: 1999.7 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-007.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.7 Title: Contingent Valuation Methods.Possibilities and Problems Author-Name: Torben Holvad Author-X-Name-First: Torben Author-X-Name-Last: Holvad Author-WorkPlace-Name: Transport Research and Consultancy, University of North London Abstract: Valuation of external costs created from transport is important to undertake in order to improve the decision-making basis for transport policy. In particular, this information could be utilised with respect to policy measures for the internalisation of external costs as well as with respect to appraisal of specific transport investment projects. A number of methods towards the valuation of external costs have appeared in recent years in parallel with the increased awareness about the environmental problems created by transport. These methods include approaches based on assessing the resources required to reduce the costs as well as utility-based approaches. In particular, the so-called contingent valuation method has been put forward as a way to determine the willingness to pay for various environmental goods/functions for a sample of individuals. This method has been applied in a wide range of empirical context in the last two decades. This paper will provide a critical assessment of contingent valuation methods. In particular, the paper will consider the theoretical and empirical possibilities and problems provided by this method. The paper will include the following sections. Section 1 will identify the need to valuate external costs. In section 2 an overview of contingent valuation methods will be given. This will be followed in section 3 by an examination of the possibilities and problems involved in this method. Section 4 concludes with final remarks and suggestions for further research to improve the method. Keywords: Externality valuation, Monetarisation, Contingent valuation method Classification-JEL: D62 Creation-Date: 199901 Template-Type: ReDIF-Paper 1.0 Number: 1999.8 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-008.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.8 Title: The Distributional Impacts of Policies for the Control of Transport Externalities.An Applied General Equilibrium Model Author-Name: Inge Mayeres Author-X-Name-First: Inge Author-X-Name-Last: Mayeres Author-WorkPlace-Name: Centre for Economic Studies - K.U. Leuven, Belgium Abstract: The paper uses an applied general equilibrium model, calibrated to the situation in Belgium in 1990, to evaluate the welfare effects of small policy changes in the presence of transport externalities. The model incorporates three types of externalities: congestion, which has a feedback effect on the behaviour of the economic agents, air pollution and accidents. The model is used to perform balanced budget incidence simulations in which the marginal cost of public funds is calculated for four alternative policy instruments: a lump sum tax, the labour income tax, the fuel taxes and peak road pricing. For each of these instruments the marginal cost of public funds is calculated. The results of the model are compared with those of a model in which congestion, air pollution and accidents are assumed to remain constant at their initial level. The model contributes to the literature in two ways. First of all, it includes non-identical individuals which allows to analyse the equity effects of the policy reforms. The second contribution is related to the way in which the externalities are modelled: the feedback effect of congestion is explicitly taken into account and the value of a marginal time saving is determined endogenously in the model. The simulations show that the ranking of the instruments in terms of their marginal cost of public funds changes significantly when the effect of the reform on the externalities is taken into account. Secondly, regardless of the way in which the tax revenue is recycled, the welfare gain of peak road pricing is higher than that of the fuel tax. When the externality tax revenue is recycled through the lump sum tax the welfare gains are higher for the poorer than for the richer quintiles. On the other hand, the main beneficiary of revenue recycling through the labour income tax is the richest quintile. Consequently, when the social welfare function gives a higher weight to the welfare of individuals belonging to the poorer quintiles, the distributional impacts of the policy reforms cause the welfare gain to be higher when the revenue is recycled through an increase in the lump sum transfer rather than through a lower labour income tax rate. The link is made with the double dividend literature. A weak double dividend can be realised only when all individuals are given the same welfare weight. However, the inclusion of distributional considerations offers the possibility of realising a strong double dividend for low degrees of inequality aversion. Keywords: Marginal cost of public funds, Externalities, Equity, Applied general equilibrium model Classification-JEL: H2, H23, R41, D58 Creation-Date: 199901 Template-Type: ReDIF-Paper 1.0 Number: 1999.9 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-009.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.9 Title: Is Ecolabelling a Reliable Environmental Policy Measure? Author-Name: Cesare Dosi Author-X-Name-First: Cesare Author-X-Name-Last: Dosi Author-WorkPlace-Name: University of Padova and Fondazione Eni Enrico Mattei Author-Name: Michele Moretto Author-X-Name-First: Michele Author-X-Name-Last: Moretto Author-WorkPlace-Name: University of Padova and Fondazione Eni Enrico Mattei Abstract: Ecolabel award schemes have become increasingly popular. Their rationale is to enable (concerned) consumers to identify "green" products. By so doing, ecolabelling should stimulate environmental innovation, and induce firms to reduce the supply of conventional (polluting) products. Our analysis however points out that the two phenomena are not necessarily correlated. Through a dynamic model of investment decisions, the paper outlines the situations under which ecolabelling could induce perverse effects (increased investment in conventional technologies) and examines whether setting quantitative restrictions on the issuing of labels could constitute an antidote. Keywords: Ecolabel, Green Products, Environmental Policy, Environmental Innovation Classification-JEL: Q28, O38 Creation-Date: 199901 Template-Type: ReDIF-Paper 1.0 Number: 1999.10 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-010.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.10 Title: Bias and Efficiency of Single vs Double Bound Models for Contingent Valuation Studies.A Monte Carlo Analysis Author-Name: Pinuccia Calia Author-X-Name-First: Pinuccia Author-X-Name-Last: Calia Author-WorkPlace-Name: Department of Economics, University of Cagliari Author-Name: Elisabetta Strazzera Author-X-Name-First: Elisabetta Author-X-Name-Last: Strazzera Author-WorkPlace-Name: DRES and CRENoS, University of Cagliari Abstract: The Dichotomous Choice Contingent Valuation Method can be used either in the single or double bound formulation. The former is easier to implement, while the latter is known to be more efficient. We analyse the bias of the ML estimates produced by either model, and the gain in efficiency associated to the double bound model, in different experimental settings. We find that there are no relevant differences in point estimates given by the two models, even for small sample size, and no estimator can be said to be less biased than the other. The greater efficiency of the double bound is confirmed, although differences tend to reduce by increasing the sample size. Provided that a reliable pre-test is conducted, and the sample size is large, use of the single rather than the double bound model is warranted. Keywords: Contingent valuation, Single bound estimator, Double bound estimator, Bias, Statistical efficiency Classification-JEL: C15, C35, D60, H41, Q26 Creation-Date: 199901 Template-Type: ReDIF-Paper 1.0 Number: 1999.11 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-011.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.11 Title: Valuing the Recreational Benefits From the Creation of Nature Reserves in Irish Forests Author-Name: Riccardo Scarpa Author-X-Name-First: Riccardo Author-X-Name-Last: Scarpa Author-WorkPlace-Name: Universita' degli Studi della Tuscia, Viterbo, Italy and Centre for Research on Environmental Appraisal and Management (CREAM), University of Newcastle Upon Tyne, United Kingdom Author-Name: Susan M. Chilton Author-X-Name-First: Susan M. Author-X-Name-Last: Chilton Author-WorkPlace-Name: CASPER, Department of Economics, University of Newcastle Upon Tyne, United Kingdom Author-Name: W. George Hutchinson Author-X-Name-First: W. George Author-X-Name-Last: Hutchinson Author-WorkPlace-Name: Department of Agricultural and Food Economics, Queens University Belfast, United Kingdom Author-Name: Joseph Buongiorno Author-X-Name-First: Joseph Author-X-Name-Last: Buongiorno Author-WorkPlace-Name: Department of Forest Ecology and Management, University of Wisconsin, Madison, United States of America Abstract: Data from a large-scale contingent valuation study are used to investigate the effects of forest attributes on willingness to pay for forest recreation in Ireland. In particular, the presence of a nature reserve in the forest is found to significantly increase the visitors' willingness to pay. A random utility model is used to estimate the welfare change associated with the creation of nature reserves in all the Irish forests currently without one. The yearly impact on visitors' economic welfare of new nature reserves approaches half a million pounds per annum, exclusive of non recreational values. Keywords: Non-market valuation, Contingent valuation, Forest attributes analysis, Nature reserves. Classification-JEL: Q23, Q26 Creation-Date: 199902 Template-Type: ReDIF-Paper 1.0 Number: 1999.12 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-012.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.12 Title: Marginal External Costs of Peak and Non Peak Urban Transport in Belgium Author-Name: Leo De Nocker Author-X-Name-First: Leo De Author-X-Name-Last: Nocker Author-WorkPlace-Name: VITO, Flemish Institute for Technological Research Author-Name: Stef Vergote Author-X-Name-First: Stef Author-X-Name-Last: Vergote Author-WorkPlace-Name: VITO, Flemish Institute for Technological Research Author-Name: Luc Vinckx Author-X-Name-First: Luc Author-X-Name-Last: Vinckx Author-WorkPlace-Name: VITO, Flemish Institute for Technological Research Author-Name: Guido Wouters Author-X-Name-First: Guido Author-X-Name-Last: Wouters Author-WorkPlace-Name: VITO, Flemish Institute for Technological Research Abstract: This paper discusses intermediate results of an ongoing research project to estimate all external costs from all transport modes in Belgium. It gives estimates of the marginal external costs of air pollution from urban transport. The evaluation of the environmental impacts is based on the European ExternE accounting framework. This methodology uses the impact pathway analysis for the detailed bottom-up assessment of impacts from air pollutants. It integrates state of the art knowledge in the fields of emission modelling, dispersion modelling, dose-response functions and monetary valuation. This paper focuses on the impact of location (rural areas versus cities), regulation, traffic conditions and congestion on environmental externalities. These case studies for Belgium confirm earlier results of the ExternE project that external environmental costs of car transport are significant and that damage to public health is the dominant impact. In addition, it shows that externalities of urban peak traffic are 2 to 4 times higher than for normal urban driving conditions. Finally, it calculates which occupancy rates are required for urban public transport (trams and diesel buses) to have lower external costs compared to passenger cars. Keywords: Externalities, Urban transport, Air pollution, Congestion, Sustainable mobility Classification-JEL: H430, I310 , R490, Q300, Q490 Creation-Date: 199902 Template-Type: ReDIF-Paper 1.0 Number: 1999.13 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-013.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.13 Title: Wage Inequalities and Low Pay: The Role of Labour Market Institutions Author-Name: Claudio Lucifora Author-X-Name-First: Claudio Author-X-Name-Last: Lucifora Author-WorkPlace-Name: Political Sciences Department, University of Palermo Abstract: In this study, we investigate the role that some institutional features play in shaping the distribution of wages across a number of OECD countries. While considerable attention has been devoted in recent years to the evolution of earnings inequality and to the analysis of the competing explanations for the observed phenomena, also the existence (and persistence) of considerable structural differences - across countries - in the level of wage inequality and the incidence of low pay can shed some light on a different dimension of inequality patterns. In particular, we focus on three specific features: the effects of trade unions, the structure of collective bargaining and the existence of regulations on wages. By looking at the different moments of the distribution of earnings various dimensions of low pay have been analysed, namely the effects of the institutional setting on the mean, the dispersion and the (time) covariance of earnings. Consistent with previous work, our results suggest that institutions are a relevant factor in shaping the distribution of earnings and the incidence of low pay. We show that institutional settings differ substantially across countries and that institutional variety in the labour market is able to explain a great deal of the observed patterns in low pay across countries. Keywords: Wage inequality, Low wage employment, Labour market institutions Classification-JEL: J3, J5, P5 Creation-Date: 199902 Template-Type: ReDIF-Paper 1.0 Number: 1999.14 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-014.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.14 Title: (Self-) Enforcement of Joint Implementation and Clean Development Mechanism Contracts Author-Name: Josef Janssen Author-X-Name-First: Josef Author-X-Name-Last: Janssen Author-WorkPlace-Name: Institute for Economy and the Environment at the University of St. Gallen (IWO-HSG), Switzerland and Fondazione Eni Enrico Mattei, Milan, Italy Abstract: International climate protection investments (Joint Implementation and Clean Development Mechanism projects) are burdened with problems of contract enforcement, which prevent the realisation of efficiency gains associated with these investments. The paper analyses this problem from the perspective of non-cooperative game theory and proposes two different solutions to the co-operation problem. The first analyses the potential role of national environmental authorities in facilitating credible commitment of the project host operating under its jurisdiction. It is argued that the threat of punishing the project host if he breaches the contract may serve this purpose. The effective level of punishment is derived. The second option involves strategic delegation of contract implementation to a third party operating under the same jurisdiction as the project host. Again, the paper explores the conditions that ensure incentive-compatibility. Both options are based on the idea that the project sponsor may commit himself credibly by becoming a Stackelberg leader. Keywords: Joint Implementation, Clean Development Mechanism, climate protection, international environmental agreements, international investments, contract enforcement, co-operation, incentive compatibility Classification-JEL: D21, D62, D70, F20, F23, K12, K40, Q25, Q28, Q40 Creation-Date: 199902 Template-Type: ReDIF-Paper 1.0 Number: 1999.15 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-015.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.15 Title: Taxes and Quotas for a Stock Pollutant with Multiplicative Uncertainty Author-Name: Michael Hoel Author-X-Name-First: Michael Author-X-Name-Last: Hoel Author-WorkPlace-Name: University of Oslo, Norway Author-Name: Larry Karp Author-X-Name-First: Larry Author-X-Name-Last: Karp Author-WorkPlace-Name: Department of Agriculture and Resource Economics, Berkeley, California Abstract: We compare taxes and quotas when firms and the regulator have asymmetric information about abatement costs. Damages are caused by a stock pollutant. Uncertainty enters multiplicatively, i.e. it affects the slope rather than the intercept of abatement costs. We calibrate the model using cost and damage estimates of greenhouse gases. As with additive uncertainty, taxes dominate quotas. The advantage of taxes is much greater with mulitiplicative, compared to additive uncertainty. Keywords: Pollution control, asymmetric information, taxes and quotas, stochastic control, global warming, multiplicative disturbances Classification-JEL: H21, Q28 Creation-Date: 199902 Template-Type: ReDIF-Paper 1.0 Number: 1999.16 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-016.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.16 Title: Local Electricity Distribution in Italy: Comparative Efficiency Analysis and Methodological Cross-Checking Author-Name: Gian Carlo Scarsi Author-X-Name-First: Gian Carlo Author-X-Name-Last: Scarsi Author-WorkPlace-Name: London Economics Ltd. Abstract: This paper analyses technical efficiency of local electricity distribution in Italy (1994, 1996) by using both econometric (deterministic frontier, stochastic frontier) and linear programming (Data Envelopment Analysis) tools. Cross-sectional data were examined with respect to:(a) ENEL - the Italian electricity monopolist;(b) municipal authorities (MUNIs), i.e. town-based electric utilities which sometimes hold franchises for electricity distribution within city limits.Estimation results highlighted non-exhaustion of scale economies at sample-mean values. Pooled ENEL-MUNI analysis failed to spot any systematic superiority of ENEL's units over municipalities. One-to-one comparisons confirmed that the outcomes were mixed, with ENEL's local branches outperforming MUNIs in metropolitan and (sometimes) rural areas, and MUNIs faring better in medium-sized, Po Valley towns (Northern Italy). This suggests that a case-by-case approach should be adopted by Italy's regulatory and governmental authorities when dealing with the territorial reform of electricity distribution. Similarly, any ownership transfers and/or mergers involving ENEL's units and MUNIs should depend on the varied efficiency records which were detected according to different regional and economic scenarios. Keywords: Electricity, Government Policy, Efficiency Classification-JEL: L94, L98, L51 Creation-Date: 199902 Template-Type: ReDIF-Paper 1.0 Number: 1999.17 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-017.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.17 Title: Policy Instruments and Incentives for Environmental R&D:A Market-Driven Approach Author-Name: Johan Albrecht Author-X-Name-First: Johan Author-X-Name-Last: Albrecht Author-WorkPlace-Name: University of Ghent, Belgium Abstract: Environmental policy instruments have an impact on the incentives to invest in environmental R&D and this link should deserve careful consideration when introducing new instruments. Some authors argue that environmental taxes and tradable permits have rather comparable impacts on environmental R&D but we think that only very specific conditions do lead to this kind of conclusion. If we broaden the perspective by integrating elements from the Industrial Organisation literature and depart for Pigouvian settings, a market-driven approach would link the incentive to invest in new technologies to the market potential offered by the policy instruments. If taxes turn out to be very expensive for the polluting or emitting industries, we can assume that these targeted firms would be more interested to invest in new - emission reducing - technologies than in cases where the chosen policy instrument will lead to a very limited cost. We therefore developed a dynamic model that enables to compare the incentives on environmental R&D resulting from taxes, emission trading, voluntary approaches and subsidising environmental R&D. We do not claim to capture all relevant market interactions, but our findings confirm the intuition that environmental taxes have a clearly different impact on environmental R&D compared to emission trading. Keywords: Research and Development, Environmental policy, Environmental taxes, Emission trading, Voluntary approaches, Market interactions Classification-JEL: Q28, O31, H23 Creation-Date: 199902 Template-Type: ReDIF-Paper 1.0 Number: 1999.18 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-018.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.18 Title: The Influence of Environmental Policy on Innovative Behaviour: An Econometric Study Author-Name: Jens Hemmelskamp Author-X-Name-First: Jens Author-X-Name-Last: Hemmelskamp Author-WorkPlace-Name: EU-Commission, JRC-IPTS and University of Heidelberg, Interdisciplinary Institute of Environmental Economics Abstract: The paper examines the determinants that influence the environmental innovation behaviour of companies in Germany in a multivariate context by using data from the Mannheimer Innovations Panel 1993, which was part of the Community Innovation Survey. The objective is to analyse the general structures of the determinants of environmental innovation, as well as the specific impact of environmental policy instruments as an integral part of this framework. The pressure of environmental policy instruments on the innovation behaviour of companies is reproduced by indicators, which are investigated in a written survey at the level of the German Chambers of Commerce. Keywords: Determinants of innovation, Environmental innovation, Environmental policy, Environmental standards, Environmental taxes, Firms Classification-JEL: Q58, O31, L21 Creation-Date: 199902 Template-Type: ReDIF-Paper 1.0 Number: 1999.19 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-019.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.19 Title: Post-Privatisation Ownership Structure and Productivity in Russian Industrial Enterprises Author-Name: John S. Earle Author-X-Name-First: John S. Author-X-Name-Last: Earle Author-WorkPlace-Name: Stockholm School of Economics, Central European University Abstract: This paper investigates the impact of ownership structure on the productivity performance of Russian industrial enterprises. The analysis compares the effects of several types of new private owners - insiders (managers and other employees) and outsiders (individual and institutional investors) - with continued ownership by the state, and it takes into account possible selection effects in the privatisation process that may bias the observed ownership-performance relationship. The results provide some evidence that ownership change in Russia was already having some positive effects, shortly after the conclusion of the voucher privatisation process, but that those effects were strongest in companies with concentrated outside owners. Because the design of the Russian privatisation programme appears to have been biased against such institutional investors, the latter finding only emerges after a careful analysis of the simultaneous determination of ownership and performance through the privatisation process. Keywords: Ownership Structure, Productivity, Russian industrial enterprise Classification-JEL: G3, G32, L33 Creation-Date: 199902 Template-Type: ReDIF-Paper 1.0 Number: 1999.20 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-020.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.20 Title: Business Groups, Bank Control and Large Shareholders: An Analysis of German Takeovers Author-Name: Ekkehart Boehmer Author-X-Name-First: Ekkehart Author-X-Name-Last: Boehmer Author-WorkPlace-Name: Humboldt University, Berlin Abstract: I analyse the effect of ownership structure and bank control on performance. I employ a unique data set of 715 German takeovers to test whether group structure, large shareholders, and bank control affect their value to shareholders. First, I find that takeovers increase bidder value, but generally not that of the business group surrounding it. Second, majority owners provide no clear benefit. Third, bank control is only beneficial if it is counter-balanced by another large shareholder. Fourth, the worst takeovers are completed by firms that are majority-controlled by financial institutions. Keywords: Business groups, German banks, Corporate governance, Takeovers Classification-JEL: G34, G32, G21 Creation-Date: 199902 Template-Type: ReDIF-Paper 1.0 Number: 1999.21 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-021.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.21 Title: Strong Managers and Passive Institutional Investors in the UK Author-Name: Marc Goergen Author-X-Name-First: Marc Author-X-Name-Last: Goergen Author-WorkPlace-Name: Manchester School of Management Author-Name: Luc Renneboog Author-X-Name-First: Luc Author-X-Name-Last: Renneboog Author-WorkPlace-Name: Department of Business Administration, Tilburg University Abstract: The first striking feature is that ownership of the average UK company is diffuse: a coalition of at least eight shareholders is required to reach an absolute majority of voting rights. Even though the average firm has a dispersed ownership, the reader should bear in mind that there are about ten per cent of firms where the founder or his heirs are holding more than 30 per cent. The ownership structure is also shaped by regulation; the mandatory takeover threshold of 30%, for example, has an important impact on the ownership structure. In about 4% of sample companies, corporate shareholders hold just under 30 per cent of the shares. Second, institutional investors are the most important category of shareholders. However, they tend to follow passive strategies and often do not exercise the votes attached to their shares. Third, the passive stance adopted by institutions increases the already significant power of directors, who are the second most important category of shareholders. Franks, Mayer and Renneboog (1998) show that when directors own substantial shareholdings, they use their voting power to entrench their positions and they can impede monitoring actions taken by other shareholders to restructure the board, even in the wake of poor corporate performance. Fourth, there is an important market for share stakes and share stakes do not tend to be dispersed. Fifth, some of the characteristics of the British system of corporate governance, such as the proxy voting and the one-tier board structure, further strengthen the discretionary power of directors. Therefore, the main agency conflict emerging from the diffuse ownership structure is the potential expropriation of shareholders by the management. Keywords: Corporate governance, Capital and Ownership structure Classification-JEL: G32, G34 Creation-Date: 199902 Template-Type: ReDIF-Paper 1.0 Number: 1999.22 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-022.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.22 Title: Ownership and Control in the Netherlands Author-Name: Abe de Jongand Author-X-Name-First: Abe de Author-X-Name-Last: Jongand Author-WorkPlace-Name: Tilburg University, The Netherlands Author-Name: Rezaul Kabir Author-X-Name-First: Rezaul Author-X-Name-Last: Kabir Author-WorkPlace-Name: Tilburg University, The Netherlands Author-Name: Teye Marra Author-X-Name-First: Teye Author-X-Name-Last: Marra Author-WorkPlace-Name: Tilburg University, The Netherlands Author-Name: Ailsa Roell Author-X-Name-First: Ailsa Author-X-Name-Last: Roell Author-WorkPlace-Name: Tilburg University, The Netherlands and Princeton University, USA Abstract: This paper analyses ownership and control structures of Dutch listed companies. Legislation effective since 1992 mandates all shareholders with holdings of 5 percent or more in Dutch companies to disclose their holdings. Our analysis shows that the average ownership stakes of the largest and the three largest shareholders are 27% and 41%, respectively. The average ownership stakes of banks, insurance companies and other financial institutions are relatively low. We observe that voting rights are more concentrated than ownership rights; the use of a supervisory board representing interests of different stakeholders is ubiquitous; and listed companies use different forms of antitakeover defence measures. Keywords: Ownership, Control, Corporate governance Classification-JEL: G30, G32, G34 Creation-Date: 199902 Template-Type: ReDIF-Paper 1.0 Number: 1999.23 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-023.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.23 Title: Ownership and Control: A Spanish Survey Author-Name: Rafel Crespi-Cladera Author-X-Name-First: Rafel Author-X-Name-Last: Crespi-Cladera Author-WorkPlace-Name: Universitat Aut noma de Barcelona (UAB) and Universitat Illes Balears (UIB), Spain Author-Name: Miguel A. Garcia-Cestona Author-X-Name-First: Miguel A. Author-X-Name-Last: Garcia-Cestona Author-WorkPlace-Name: Universitat Autonoma de Barcelona (UAB), Spain Abstract: The paper analyses the ownership structure of a large sample of Spanish listed companies. The results are analysed in terms of governance implications under the agency theory context. The results show a picture with concentrated ownership where stock markets are relatively low important. Direct ownership and voting blocks, which account for indirect ownership through third companies, are larger for non-financial firms followed by families or individuals and financial firms other than banks. Nevertheless, the use of intermediate companies (pyramiding), is not frequent according to our data. Banks seem not to play the important role they did in the past and the recent privatisation reduced to a minimum level, state shareholdings on listed companies. Keywords: Ownership, Control, Spain Classification-JEL: G32 Creation-Date: 199902 Template-Type: ReDIF-Paper 1.0 Number: 1999.24 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-024.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.24 Title: Dominant Investors and Strategic Transparency Author-Name: Enrico C. Perotti Author-X-Name-First: Enrico C. Author-X-Name-Last: Perotti Author-WorkPlace-Name: University of Amsterdam and CEPR Author-Name: Ernst-Ludwig von Thadden Author-X-Name-First: Ernst-Ludwig von Author-X-Name-Last: Thadden Author-WorkPlace-Name: University of Lausanne and CEPR Abstract: This paper studies product market competition under a strategic transparency decision. Dominant investors can influence information collection in the financial market, and thereby corporate transparency, by affecting market liquidity or the cost of information collection. More transparency on a firm's competitive position has both strategic advantages and disadvantages: in general, transparency results in higher variability of profits and output. Thus lenders prefer less information revelation through stock market trading, since this protects firms when in a weak competitive position, while equityholders prefer more to make full use of the strategic advantage of a strong firm. We show that bank-controlled firms will tend to discourage trading to reduce price informativeness, while shareholder-run firms prefer more transparency. Our comparitive statics show that bank control may fail to keep firms less transparent as global trading volumes rise. Keywords: Transparency, Bank control, product market competition Classification-JEL: G14, G20, L10 Creation-Date: 199902 Template-Type: ReDIF-Paper 1.0 Number: 1999.25 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-025.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.25 Title: An Epistemic Characterisation of Extensive Form Rationalisability Author-Name: Pierpaolo Battigalli Author-X-Name-First: Pierpaolo Author-X-Name-Last: Battigalli Author-WorkPlace-Name: Princeton University and European University Institute Author-Name: Marciano Siniscalchi Author-X-Name-First: Marciano Author-X-Name-Last: Siniscalchi Author-WorkPlace-Name: Princeton University Abstract: We use an extensive form, universal type space to provide the following epistemic characterisation of extensive form rationalisability. Say that player i strongly believes event E if i is certain of E conditional on each of her information sets consistent with E. Our main contribution is to show that a strategy profile s is extensive form rationalisable if and only if there is a state in which s is played and (0) everybody is rational, (1) everybody strongly believes (0), (2) everybody strongly believes (0) & (1), (3) everybody strongly believes (0) & (1) & (2), .... This result also allows us to provide sufficient epistemic conditions for the backward induction outcome and to relate extensive form rationalisability and conditional common certainty of rationality. Keywords: Rationalisability, Extensive Form Games Classification-JEL: C7 Creation-Date: 199902 Template-Type: ReDIF-Paper 1.0 Number: 1999.26 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-026.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.26 Title: Money, Endogenous Fertility and Economic Growth Author-Name: Alberto Petrucci Author-X-Name-First: Alberto Author-X-Name-Last: Petrucci Author-WorkPlace-Name: Universita' del Molise, Campobasso - LUISS G. Carli, Rome Abstract: This paper analyses the issue of money superneutrality through an intertemporal optimising model of capital accumulation and inflation with endogenous fertility, i.e. endogenous population growth. The model establishes an inverse relation between capital-labour ratio and population growth, which represents the crucial element for having non-superneutrality of money. A higher monetary growth rate increases fertility, since it reduces its opportunity cost, and hence diminishes capital intensity, per capita output and consumption. The reverse Tobin effect on capital-labour ratio and per capita output is matched by an increase in aggregate capital and output growth rates. In this framework, the optimal monetary growth rule, which is a distorted Friedman rule, can call for either a contraction or an expansion of the money supply. Keywords: Money Superneutrality, Fertility, Capital Accumulation Classification-JEL: O42, O11, J13 Creation-Date: 199903 Template-Type: ReDIF-Paper 1.0 Number: 1999.27 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-027.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.27 Title: Endogenous Uncertainty and Market Volatility Author-Name: Mordecai Kurz Author-X-Name-First: Mordecai Author-X-Name-Last: Kurz Author-WorkPlace-Name: Stanford University Author-Name: Maurizio Motolese Author-X-Name-First: Maurizio Author-X-Name-Last: Motolese Author-WorkPlace-Name: Stanford University Abstract: Endogenous Uncertainty is that component of economic risk and market volatility which is propagated within the economy by the beliefs and actions of agents. The theory of Rational Belief (see Kurz [1994]) permits rational agents to hold diverse beliefs and consequently, a Rational Belief Equilibrium (in short, RBE) may exhibit diverse patterns of Endogenous Uncertainty. This paper shows that most of the observed volatility in financial markets is generated by the beliefs of the agents and the diverse market puzzles which are examined in this paper, such as the equity premium puzzle, are all driven by the structure of market expectations. To make the case for this theory we present a single RBE model, which builds on developments in Kurz and Beltratti [1997] and Kurz and Schneider [1996], with which we study a list of phenomena that have been viewed as "anomalies" in financial markets. The model is able to predict the correct order of magnitude of: (i) the long term mean and standard deviation of the price\dividend ratio; (ii) the long term mean and standard deviation of the risky rate of return on equities; (iii) the long term mean and standard deviation of the riskless rate; (iv) the long term mean equity premium. In addition, the model predicts: (v) the GARCH property of risky asset returns; (vi) the Forward Discount Bias in foreign exchange markets. We also conjecture that an adaptation of the same model to markets with derivative assets will predict the appearance of "smile curves" in derivative prices. The common economic explanation for these phenomena is the existence of heterogeneous agents with diverse but correlated beliefs. Given such diversity, some agents are optimistic and some pessimistic. We develop a simple model which allows agents to be in these two states of belief but the identity of the optimists and the pessimists fluctuates over time since at any date any agent may be in these two states of belief. In this model there is a unique parameterisation under which the model makes all the above predictions simultaneously. That is, although the parameter space of the RBE is large, all parameterisations outside a small neighbourhood of the parameter space fail significantly to reproduce some subset of variables under consideration. Any parameter choice in this small neighbourhood requires the optimists to be in the majority but the rationality of belief conditions of the RBE require the pessimists to have a higher intensity level. This higher intensity has a decisive effect on the market: it increases the demand for riskless assets, decreases the equilibrium riskless rate and increases the equity premium. In simple terms, the large equity premium and the lower equilibrium riskless rate are the result of the fact that at any moment of time there are agents who hold extreme pessimistic beliefs and they have a relatively stronger impact on the market. The relative impact of these two groups of agents who are, at any moment of time, in the two states of belief is a direct consequence of the rationality of belief conditions and in that sense it is unique to an RBE. As for the correlation among the beliefs of agents, the paper shows that the dynamics of asset prices are strongly affected by such correlation. The pattern of correlation which was used in the model can be explained intuitively in terms of its effect on the dynamics of prices. The model correlation causes periods of price rises (i.e. bull markets) to develop slower than periods of decline (i.e. bear markets) hence the model dynamics does not permit prices to shoot directly from the bottom to the top but the opposite is possible and takes the form of market crashes. Note: Both the RBE model developed in this paper as well as the associated programs used to solve it are available to the public on Professor Kurz's web page at http://www.stanford.edu/~mordecai/ Keywords: Rational Expectations, Rational Beliefs, Rational Belief Equilibrium (RBE), Endogenous uncertainty, States of belief, Stock price, Discount bond, Equity premium, Market volatility, GARCH, Forward Discount Bias. Classification-JEL: D5, D84, G12 Creation-Date: 199903 Template-Type: ReDIF-Paper 1.0 Number: 1999.28 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-028.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.28 Title: Optimal Capacity Adjustment by a Multiplant Firm Author-Name: Michele Moretto Author-X-Name-First: Michele Author-X-Name-Last: Moretto Author-WorkPlace-Name: University of Padova and Fondazione Eni Enrico Mattei Abstract: The paper studies the effect of scale economies on the optimal capacity adjustment of a mutiplant firm. It is shown that with increasing economies of scale plants are ranked in decreasing order, after which the optimal choice is to scrap the largest one. On the contrary, if there are decreasing economies of scale the optimal policy would be to wait before abandoning intermediate plants. That is, decreasing economies of scale amplify the effect of uncertainty on disinvestment and tend to increase the plant's life. Keywords: Exit, Option value, Irreversibility Classification-JEL: D92, L11 Creation-Date: 199903 Template-Type: ReDIF-Paper 1.0 Number: 1999.29 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-029.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.29 Title: Labour Participation in Different Firm Organisations Author-Name: Michele Moretto Author-X-Name-First: Michele Author-X-Name-Last: Moretto Author-WorkPlace-Name: University of Padova Author-Name: Gianpaolo Rossini Author-X-Name-First: Gianpaolo Author-X-Name-Last: Rossini Author-WorkPlace-Name: University of Bologna Abstract: The main issue is the organisation of firms when different degrees of labour participation are taken into account. We start reviewing the literature on the LM firm. We then consider a less radical labour participation, i.e. the Aoki firm. We survey extensions of the Aoki's firm to the case of market uncertainty, where also the question of the optimal allocation of the shut down decision is tackled, when shareholders are not able to maximise the total payoff accruing to both workers and owners. By and large, it appears that the degree of labour participation in decisions and rent sharing in a firm is not a settled question, even though is seems to depend on the respective degree of firm specificities of production factors. Keywords: Labour participation, Firm organisation Classification-JEL: L20, D92 Creation-Date: 199903 Template-Type: ReDIF-Paper 1.0 Number: 1999.30 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-030.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.30 Title: Ownership or Performance: What Determines Board of Directors' Turnover in Italy? Author-Name: Giorgio Brunello Author-X-Name-First: Giorgio Author-X-Name-Last: Brunello Author-WorkPlace-Name: Department of Economics, University of Padua, Padua, Italy, and Research Associate, CEPR, London. Author-Name: Clara Graziano Author-X-Name-First: Clara Author-X-Name-Last: Graziano Author-WorkPlace-Name: Department of Economics, University of Udine, Udine, Italy Author-Name: Bruno Parigi Author-X-Name-First: Bruno Author-X-Name-Last: Parigi Author-WorkPlace-Name: Department of Economics, University of Padua, Padua, Italy Abstract: This paper analyses the turnover of board of directors members on a sample of companies listed on the Milan Stock Exchange in the period 1988-1996. Our aim is to investigate if board members change more frequently when company performance is poor, as the literature suggests, if this relationship is similar for C.E.O.s and other board members, and if and how the ownership structure of Italian companies affects these relationships. We use three different measures of board of directors turnovers: turnover A is the turnover of all board members; turnover B is the turnover of the President, Vice-President, C.E.O. and General Manager; finally turnover C is the turnover of C.E.O.s only. We find that changes in ownership affect turnover and that the relationship between turnover and performance is stronger in companies that have experienced a change in the controlling shareholder. Keywords: Board of Directors, Corporate governance, Financial agency Classification-JEL: G34, J63 Creation-Date: 199903 Template-Type: ReDIF-Paper 1.0 Number: 1999.31 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-031.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.31 Title: Valuing Tradable CO2 Permits for OECD Countries Author-Name: Larry Karp Author-X-Name-First: Larry Author-X-Name-Last: Karp Author-WorkPlace-Name: Agricultural and Resource Economics,University of California, Berkeley Author-Name: Xuemei Liu Author-X-Name-First: Xuemei Author-X-Name-Last: Liu Author-WorkPlace-Name: Agricultural and Resource Economics,University of California, Berkeley Abstract: We estimate a structural model of OECD countries in which GDP and CO2 emissions are endogenous. We use the estimated model to simulate the price of tradable CO2 permits and the efficiency gains from trade. Our estimated prices are high, relative to previous estimates, and the efficiency gains are substantial. We also find, contrary to previous literature, that higher income is associated with reduced emissions. Keywords: Tradable permits, Greenhouse gases, Carbon reductions, Environmental Kuznets curve Classification-JEL: F17, Q28, Q43 Creation-Date: 199903 Template-Type: ReDIF-Paper 1.0 Number: 1999.32 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-032.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.32 Title: Nonpoint Source Pollution Control Under Incomplete and Costly Information Author-Name: Y.H. Farzin Author-X-Name-First: Y.H. Author-X-Name-Last: Farzin Author-WorkPlace-Name: Department of Agricultural and Resource Economics,University of California, Davis Author-Name: J.D. Kaplan Author-X-Name-First: J.D. Author-X-Name-Last: Kaplan Author-WorkPlace-Name: Department of Agricultural and Resource Economics,University of California, Davis Abstract: This paper analyses the efficient management of nonpoint source pollution (NPS) under limited pollution control budget and incomplete information inherent in NPS pollution. By incorporating information acquisition into a pollution control model, it focuses on the tradeoff between data collection and treatment efforts and derives conditions under which (i) a favourable change in the state of treatment cost at one site may lead to an increase in treatment level at another site, (ii) a higher data collection cost induces more data collection, and (iii) an increase in information productivity leads to an increase in the level of data collection. A numerical simulation of the model illustrates how in managing NPS pollution the value of information acquisition depends on the degree of heterogeneity of polluting sites. Keywords: Nonpoint Source Pollution, Uncertainty, Costly information, Constrained pollution control budget Classification-JEL: D61, D81, D83, Q28 Creation-Date: 199903 Template-Type: ReDIF-Paper 1.0 Number: 1999.33 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-033.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.33 Title: Agriculture, Water Resources and Water Policies in Italy Author-Name: Antonio Massarutto Author-X-Name-First: Antonio Author-X-Name-Last: Massarutto Author-WorkPlace-Name: Dipartimento di Scienze Economiche, Universita' di Udine Abstract: This paper provides an overview of the Italian water management system, with particular reference to the links between agriculture and water resources, and emphasis on underground resources. Our objective is mainly descriptive at this level; nonetheless, we try to evaluate patterns of interaction between agriculture and water resources policy from the point of view of water sustainability. After a short description of the main hydrologic and institutional aspects, the paper goes into the analysis of the most important issues and ongoing policies. We show that the link between agriculture and groundwater is but very weak in "Mediterranean" Italy. While most of the pollution problems regard Northern Italy - that resembles much more continental Europe than Mediterranean countries with respect to hydrologic and climatic patterns - the use of the water table for irrigation is restricted to only a few areas, since most of the agricultural water is derived from surface resources. On the other side, agriculture remains by far the largest water user in Italy, and one of the primary causes of pollution. Keywords: Water Policy; Environmental Impact of Agriculture; Groundwater Protection; Environmental Policy Instruments Classification-JEL: Q18, Q25, K32 Creation-Date: 199903 Template-Type: ReDIF-Paper 1.0 Number: 1999.34 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-034.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.34 Title: The Growth-Environment Trade-off: Horizontal vs Vertical Innovations Author-Name: Andre'' Grimaud Author-X-Name-First: Andre'' Author-X-Name-Last: Grimaud Author-WorkPlace-Name: GREMAQ and IDEI, Universite' de Toulouse 1 Author-Name: Francesco Ricci Author-X-Name-First: Francesco Author-X-Name-Last: Ricci Author-WorkPlace-Name: GREMAQ, Universite' de Toulouse 1 Abstract: This paper explores the trade-off between economic growth and environmental quality along two paradigms of endogenous growth theory: variety expansion (HIP) and quality improvements (VIP). We compare the policies that match the decentralised economies' paths with the optimal "strong sustainable" growth path, characterised by growth in consumption and improvements in environmental quality. Three policy tools are employed: subsidies to monopolists and R&D, and taxes on emissions. The latter is increasing at the optimum, to keep the weight of tax revenues over output constant. All policy tools equal, the growth rate is higher in the VIP than in the HIP. The optimal subsidy to R&D is therefore greater and the cumulative loss in output smaller under HIP than the VIP. Keywords: Pollution, Endogenous Growth, Sustainable Development Classification-JEL: O41, Q20 Creation-Date: 199903 Template-Type: ReDIF-Paper 1.0 Number: 1999.35 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-035.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.35 Title: Stock-Related Compensation and Product-Market Competition Author-Name: Giancarlo Spagnolo Author-X-Name-First: Giancarlo Author-X-Name-Last: Spagnolo Author-WorkPlace-Name:Churchill College, Cambridge and Stockholm School of Economics Abstract: This paper shows that as long as the stock market has perfect foresight, some dividends are distributed, and incentives are paid more than once or are deferred, stock-related compensation packages are strong incentives for managers to support tacit collusive agreements in repeated oligopolies. The stock market anticipates the losses from punishment phases and discounts them on stock prices, reducing managers' short-run gains from any deviation. When deferred, stock-related incentives may remove all managers' short-run gains from deviation making collusion supportable at any discount factor. The results hold with managerial contracts of any length. Keywords: CEO Compensation, Delegation, Collusion, Oligopoly, Managerial incentives, Ownership and control, Corporate governance Classification-JEL: D43, G30, J33, L13, L21 Creation-Date: 199903 Template-Type: ReDIF-Paper 1.0 Number: 1999.36 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-036.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.36 Title: Environmental Dumping, Transboundary Pollution and Asymmetric Information. Some Insights for the Environmental Regulation of the European Electricity Market Author-Name: Andrea Bigano Author-X-Name-First: Andrea Author-X-Name-Last: Bigano Author-WorkPlace-Name: Center for Economic Studies, Katholieke Universiteit Leuven Abstract: In this paper we extend a model by A. Ulph (1997) on the relationship between free trade agreements, environmental regulation and trade under imperfect competition. Ulph's model focused on the effectiveness of harmonisation policies against ecological dumping. It turned out that harmonised policies are rarely optimal under perfect information, but some rationale for them is granted when asymmetric information between the Commission and national governments is considered. This paper analyses two extensions of that model: transboundary pollution and the inclusion of consumer's surplus. Our interest in these issues rests in their importance for the environmental regulation of the European electricity sector, where imperfect competition can be expected to prevail even after the opening of the Single Market. Allowing for consumers' surplus has a very limited impact on Ulph's conclusions, but considering transboundary pollution has important consequences. Under perfect information, it makes harmonisation a much more attractive option. Under asymmetric information, it affects the governments' incentives to misreport, making them stronger and changing the kind of report the Commission should be wary of, it calls for a much less differentiated treatment of the countries, and makes delegating the regulatory power to the Commission a more attractive option than acting non co-operatively. Keywords: Environmental policy,International trade,Imperfect competition,Asymmetric information,Electricity Classification-JEL: D43,D82,F1,Q2 Creation-Date: 199903 Template-Type: ReDIF-Paper 1.0 Number: 1999.37 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-037.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.37 Title: Security versus Bank Finance: the Importance of a Proper Enforcement of Legal Rules Author-Name: Enrico C. Perotti Author-X-Name-First: Enrico C. Author-X-Name-Last: Perotti Author-WorkPlace-Name: MIT Sloan School of Management Author-Name: Franco Modigliani Author-X-Name-First: Franco Author-X-Name-Last: Modigliani Author-WorkPlace-Name: University of Amsterdam and CEPR Abstract: We argue that in an unreliable enforcement regime, transactions tend to become intermediated through institutions or concentrated among agents bound by some form of private enforcement. Provision of funding shifts from risk capital to debt, and from markets to institutions with long term relations. When minority investors' rights are poorly protected, the ability of firms to raise equity capital is impaired, leading to less finance for new risky ventures. More generally, fewer firms will be financed with outside equity, resulting in a low capitalisation relative to GNP and a predominance of internal (unlisted) equity and bank lending over traded securities. We report some supporting evidence on a small set of countries on the correlation between investor protection and development of security markets. We use existing measures of investor protection and corruption, as well as a price measure, the premium on voting stock, which is related to the control premium. In countries where the voting premium is large, corporate financing is dominated by bank lending and equity markets are much smaller. The other indicators are also consistent with our hypothesis, although the sample size is limited. Keywords: Financial systems, Enforcement of law, Investor protection Classification-JEL: G15, G30, K22, K42 Creation-Date: 199903 Template-Type: ReDIF-Paper 1.0 Number: 1999.38 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-038.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.38 Title: Privatisation, Political Risk and Stock Market Development in Emerging Economies Author-Name: Enrico C. Perotti Author-X-Name-First: Enrico C. Author-X-Name-Last: Perotti Author-WorkPlace-Name: University of Amsterdam and CEPR Author-Name: Pieter van Oijen Author-X-Name-First: Pieter Author-X-Name-Last: van Oijen Author-WorkPlace-Name: University of Amsterdam and Tinbergen Institute, Amsterdam Abstract: This paper investigates whether privatisation in emerging economies has a significant indirect effect on local stock market development through the resolution of political risk. We argue that a sustained privatisation programme represents a major political test which gradually resolves uncertainty over political commitment to a market-oriented policy as well as to regulatory and private property rights. We present evidence suggesting that progress in privatisation is correlated with improvements in perceived political risk. These gains tend to be gradual over the privatisation period and are significantly larger in privatising countries than in nonprivatising countries, suggesting that the resolution of such risk is endogenous to the privatisation process. Our analysis shows further that changes in political risk in general tend to have a strong effect on local stock market development and excess returns in emerging economies, suggesting that political risk is a priced factor. We conclude that the resolution of political risk resulting from successful privatisation has been an important source for the rapid growth of stock markets in emerging economies. Keywords: Privatisation, Political risk, Stock market development Classification-JEL: G15, G18, G38, F30 Creation-Date: 199903 Template-Type: ReDIF-Paper 1.0 Number: 1999.39 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-039.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.39 Title: Voluntary Environmental Agreements, Emission Taxes and International Trade: The Importance of the Timing of Strategies Author-Name: Klaus Conrad Author-X-Name-First: Klaus Author-X-Name-Last: Conrad Author-WorkPlace-Name: Mannheim University Abstract: The purpose of the paper is to narrow the gap between the widespread use of voluntary agreements and research on the rationale of such approaches. A typical example are voluntary agreements of many industries to reduce carbon dioxide emissions because of global warming. If the industry anticipates that taxes and fees will be introduced in the coming years, it seems rational to act in advance in order to mitigate the tax levels. The conventional approach in strategic trade and tax models was to look at a two-stage game where governments set taxes first and then firms react. In such a policy regime the government is concerned about the international competitiveness of its firms and sets taxes below marginal damages. In this paper, we consider a policy regime with a reversed timing. Firms commit themselves in the face of emission taxes to abatement efforts and to lower levels of the environmentally intensive output. Then the government introduces the tax. Under this timing of strategies the tax is equal to marginal damage. Firms waive profit and reduce output in order to use less of the polluting input. The reward for this behaviour will be a less strict use of policy instruments and hence lower abatement costs in the near future. Keywords: Environmental policy, Strategic trade policy, Emission taxes, Voluntary agreements Classification-JEL: D43, F13, H23 Creation-Date: 199903 Template-Type: ReDIF-Paper 1.0 Number: 1999.40 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-040.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.40 Title: Regulatory Conflict? Environmental and Economic Regulation of Electricity Generation Author-Name: Melinda Acutt Author-X-Name-First: Melinda Author-X-Name-Last: Acutt Author-WorkPlace-Name: University of Liverpool Author-Name: Caroline Elliott Author-X-Name-First: Caroline Author-X-Name-Last: Elliott Author-WorkPlace-Name: Lancaster University Abstract: Implementation of policies aimed at reducing atmospheric emissions has drawnattention to the need to integrate policies aimed at protection of the environment intoother policy areas such as energy. In this paper we are concerned with the interactionof environmental policies aimed at reducing pollution, and economic policies aimed atreducing market power, in the electricity generation industry. While our analysisfocuses on the post privatisation experiences in England and Wales, the analysis isintended to be of a wider applicability. In a theoretical model we find that there arewelfare gains to be made from a move from the current non-cooperative regulatoryregime to cooperative regulation between the environmental and economic regulators- a result that holds for the alternative environmental policies of a technology standardand an emissions tax. Keywords: Environmental regulation, Economic regulation, Electricity generation Classification-JEL: H2 L5 Q4 Creation-Date: 199903 Template-Type: ReDIF-Paper 1.0 Number: 1999.85 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL1999-085.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:1999.85 Title: The Environmental Kuznets Curve: a Survey of the Literature Author-Name: Simone Borghesi Author-X-Name-First: Simone Author-X-Name-Last: Borghesi Author-WorkPlace-Name: European University Institute Abstract: In the last few years, several studies have found an inverted-U relationship between per capita income and environmental degradation. This relationship, known as the environmental Kuznets curve (EKC), suggests that environmental degradation increases in the early stages of growth, but it eventually decreases as income exceeds a threshold level. The present paper reviews both early and recent contributions on this subject, discussing whether and to what extent such a curve can be empirically observed, and the policy implications that derive from the empirical evidence Keywords: Environmental Kuznets Curve, Growth, Pollution Classification-JEL: C23,O5,Q2,Q25,Q32 Creation-Date: 199910