the performance of published dutch stock recommendations abstract the three most widely read dutch sources of stock recommendations are published weekly in this paper these weekly recommendations are studied for the period january 1978 until december 1983 abnormal returns are calculated using the market model as a benchmark the market index used is the best linear index which under certain assumptions can be proven to yield the most powerful market model based event study it turns out that there is no significant long term abnormal return although abnormal returns are very significant in the week of publication these short term abnormal returns are more pronounced for strong recommendations and for stocks with a small normal daily trading volume this is very strong evidence for the existence of a so called self fulfilling prophecy

market efficiency and insider trading new evidence that corporate insiders earn profits from stock trading does not surprise most financial economists but that outsiders can earn abnormal returns by using pub licly available insider trading data constitutes a serious exception to stock market efficiency the authors show that this anomaly conti nues to exist despite the publication of studies attesting to its exi stence they suggest that the anomalous profits to outsiders are a ma nifestation of the size and earnings price ratio effects controlling for these factors reduces outsider profits by half the additional a ssumption of a 2 percent transactions cost makes outsider profits zer o or negative insider profits after an assumed 2 percent transactio ns cost are a moderate 3 percent per annum for annual holding period s copyright 1988 by the university of chicago

cooperative and noncooperative r d in duopoly with spillovers contrary to the usual assumption made in most oligopoly models relations among firms are seldom of a wholly cooperative or noncooperative type in many situations they compete in some fields while they cooperate in others an important example is the case of cooperative research efforts bringing fierce competitors together two types of agreement are observed first r d cooperation can take place at the so called precompetitive stage companies share basic information and efforts in the r d stage but remain rivals in the market place 1 a second type of agreement involves an extended collusion between partners creating common policies at the product level the usual justifications of this extension are the difficulties of protecting intellectual property the idea is then to allow partners who have achieved inventions together to also control together the processes and products which embody the results of their collaboration in order to recuperate jointly their r d investments 2 what could be expected from these types of agreement is a reduction in r d expenditures because of less wasteful duplication and a reduction of total production because of more reprinted from the american economic review 78 5 1133 1137 1988 center for operations research econometrics 1348 louvain la neuve belgium we are grateful to jean

stock returns before and after calls of convertible bonds ofer and natarajan 1987 report negative statistically significant cumulative average abnormal returns over five years following convertible bond calls we show that these results are obtained only if returns preceding the call dates are used for market model parameter estimation returns preceding calls tend to be positive and unusually large this means that predicted post call returns based on pre call parameter estimates are biased upward consequently the corresponding abnormal returns are biased downward we also discuss a corrected test statistic we conclude that the evidence does not indicate market inefficiency in the stock price reaction to convertible calls

environmental policy under oligopoly with endogenous market structure emission taxes under both fixed number oligopoly and endogenous market structure which are the most relevant market structures for policy issues are examined in the latter case and contrary to what is expected under imperfect competition the optimal tax could exceed marginal external damages which implies that externalities generated by oligopolistic firms could be optimally controlled by overinternalizing environmental damages under endogenous market structure a scheme consisting of a license fee and a second best underinternalizing emission tax can increase social welfare as compared to the use of a single emission tax exceeding marginal damages copyright 1995 by the editors of the scandinavian journal of economics

endogenous international joint ventures and the environment abstract this paper examines the welfare effects of emission taxes under a choice between an international joint venture jv and a full ownership fdi foreign direct investment by parent firms from a developed country the north and a developing country the south as well as their location and share decisions if the south has a poor abatement technology its best policy is to impose a relatively high emission tax to attract a full ownership fdi if it has a good abatement technology the best policy is to impose a relatively low emission tax to attract the jv furthermore deregulation of foreign ownership of the jv improves the quality of the environment

testing the environmental kuznets curve hypothesis across the u s evidence from panel mean group estimators abstract it is widely believed that greenhouse gases contribute to a warmer climate since global warming is a serious threat and greenhouse gas emissions are one of the main causes of it analyzing the effects of economic development on environment have great importance in this study the validity of the environmental kuznets curve ekc hypothesis is tested for the 50 u s states during the 1960 2010 period using recent panel data estimators that take cross sectional dependence and slope heterogeneity into account accordingly the cross sectional dependence and slope heterogeneity robust estimators augmented mean group amg and common correlated effects mean group estimator ccemg provide mixed results the amg estimator strongly validates the ekc hypothesis asserting that the ekc holds in 30 of the 50 states with turning points for income per capita lie between 1292 and 48597 on the contrary the ccemg estimator provides only weak evidence on the ekc hypothesis and the ekc holds only in 10 states with turning points between 2457 and 14603

competition in regional environmental policies when plant locations are endogenous abstract a two region model is presented in which an imperfectly competitive firm produces a good with increasing returns at the plant level production of the good causes local pollution the firm decides whether to maintain plants in both regions serve both regions from a single plant or shut down if the disutility of pollution is high enough the two regions will compete by increasing their environmental taxes standards until the polluting firm is driven from the market alternatively if the disutility from pollution is not as great the regions will usually compete by undercutting each other s pollution tax rates

avoiding invasives trade related policies for controlling unintentional exotic species introductions abstract international commodity trade serves as the primary conduit for unintentional introductions of damaging exotic species we use a simple model of contaminated goods trade to analyze the optimal mix of tariffs and inspections as means of controlling damage from this negative externality among other policy relevant results we find that 1 while it is always optimal to employ tariffs there are non trivial cases in which inspections should optimally be set to zero 2 a higher infection rate requires a higher tariff but beyond a point optimal inspections decrease in the infection rate and finally 3 taking a dynamic view and considering future effects of current introductions leads unambiguously to more stringent inspections but may give rise to higher or lower tariffs

environmental innovation policy and international competition we consider one polluting industry in an open economy the national government implements a policy of industrial pollution control by inducing appropriate technological innovation to reduce toxic emissions the emission reducing innovations are developed through firm specific costly investments under different hypotheses on market structure perfect competition bertrand and cournot oligopoly international competition forces the national government to subsidize innovation the appropriate subsidy scheme varies according to the information available to the government and according to market structure if information is asymmetric the subsidy must include the information premium necessary to separate different types of firms

cooperative and noncooperative r d in an oligopoly with spillovers this paper examines the positive and normative effects of cooperative r d whereby member firms commit themselves to the joint profit maximizing level of r d in a precompetitive stage but remain fierce competitors in the product market vis a vis noncooperative r d socially first best r d and socially second best r d in the presence of sufficiently large r d spillovers neither noncooperative nor cooperative equilibria achieve even second best r d levels in the absence of spillover effects however while the cooperative r d level remains socially insufficient the noncooperative level may overshoot first and second best levels of r d copyright 1992 by american economic association

the choice of a liability regime when there is a regulatory gatekeeper consider a firm planning a project that poses a risk of environmental spillovers such a firm might be deterred by the threat of legal liability or restrained by gatekeeper regulation if regulators would be perfect gatekeepers then negligence based liability combined with regulation is more efficient that strict liability with or without regulation however if the regulator has incomplete information then any of a variety of regimes could be the most efficient harsher regimes regulation rather than laissez faire and strict liability rather than negligence are more appropriate for larger risks the choice of a liability regime is more complicated however if regulators are biased if they are biased against projects then negligence plus regulation is less likely to be the most efficient regime if regulators are biased toward projects then it is possible that apparently soft liability regimes are more desirable when risk is high

strategic r d with spillovers collusion and welfare the author considers a two stage r d then output or price duopoly game in which r d spills over so reducing the marginal cost of both the investing firm and its rival the author compares the noncooperative regime to three collusive regimes joint venture collusion on r d price fixing collusion at the price or output stage and merger collusion at both stages and evaluates under what circumstances a collusive regime improves welfare if spillovers are sufficiently large all three regimes are beneficial although mergers are more likely and price fixing less likely to produce specific benefits than are joint ventures copyright 1994 by blackwell publishing ltd

the organization of r d and environmental policy abstract we consider a setting where firms undertake emission reducing r d and the regulator who sets the emission tax is unable to commit credibly firms are subject to research spillovers in emission reduction we examine two regimes with respect to the organization of r d independent r d and an environmental r d cartel erc environmental r d is higher in the erc compared to independent r d for small damages and also for large damages when r d is efficient in contrast when damages are large and r d is inefficient the opposite is true the same ranking applies to the comparison of social welfare

cournot competition and green innovation an inverted u relationship we examine the relationship between competition and innovation in an industry where production is polluting and r d aims to reduce emissions green innovation we present an n firm oligopoly where firms compete in quantities and decide their investment in green r d when environmental taxation is exogenous aggregate r d investment always increases with the number of firms in the industry next we analyse the case where the emission tax is set endogenously by a regulator committed or time consistent with the aim to maximise social welfare we show that an inverted u relationship exists between aggregate r d and industry size under reasonable conditions and is driven by the presence of r d spillovers

an analysis of cooperative research and development i analyze the effects of cooperative research whereby member firms agree to share the costs andfruits of a research project before they undertake it in this model industrywide agreements tend to have socially beneficial effects when the degree ofproduct market competition is low when there are r d spillovers in the absence of cooperation when a high degree of sharing is technologically feasible and when the agreement concerns basic research rather than development activities i show that a royalty free cross licensing agreement among any number offirms lowers the equilibrium level of innovation even though it increases the efficiency of r d through sharing

prevention and treatment in environmental policy design abstract in many environmental contexts the damages that result from some externality generating activity can be reduced either through prevention prior to the occurrence of the event or treatment after that occurrence the existing literature has focused on the use of prevention only polinsky and shavell 11 consider explicitly the use of mitigation but their analysis is limited to the case of pareto efficiency in reality policymakers often pursue other objectives such as minimizing damages subject to a budget constraint or minimizing the cost of maintaining a certain safety level this paper provides an analytical framework for examining the choice of prevention vs treatment in the context of these alternative behavioral assumptions it considers first the case where the effectiveness of treatment is known at the time that the allocation decision must be made we then extend the analysis to the case where the effectiveness of treatment is uncertain and develop a framework for addressing the tradeoff between prevention and treatment under a safety rule in both cases we examine the factors that influence the allocation of resources between prevention and treatment and show that these factors can affect the second best allocations of resources in ways that are contrary to the effect under the pareto efficient allocation

the compensation regime in liability law incentives to curb environmental harm ex ante and ex post this paper analyzes private incentives for precautions against environmental harm before accidents occur and for clean up after the fact we consider the compensatory regimes used in various jurisdictions which differ in terms of the basis for compensation the level of harm clean up costs or some combination of the two and the resulting levels of compensation we establish that socially optimal decisions are usually not induced by liability law in any of the compensatory regimes however the different types and levels of compensation have distinct effects allowing the policy maker to identify the most appropriate regime for specific circumstances

pollution taxes and pollution abatement in an oligopoly supergame abstract this paper investigates the effects of an emissions tax on the incentives for oligopolists to acquire alternative pollution abatement technologies the analysis is conducted in terms of a repeated game and it is demonstrated that there are circumstances in which the firms may reject the option of acquiring the pollution abatement equipment even when this lowers their production costs

r d and abatement under environmental liability law comparing incentives under strict liability and negligence if compensation differs from harm abstract this paper analyzes equilibrium r d in pollution control and equilibrium pollution abatement by polluters who are subject to environmental liability law when the level of compensation differs from the level of environmental harm we contrast the performance of strict liability with that of the negligence rule privately optimal levels necessarily deviate from socially optimal ones under strict liability whereas private decisions are first best under negligence unless compensation is much smaller than harm it is established that the way in which privately optimal r d deviates from the first best level depends on the kind of technical change in pollution abatement counterintuitively polluters might overinvest into r d in pollution control if compensation falls short of harm and may underinvest if compensation exceeds harm

the effects of environmental quality misperception on investments and regulation abstract this paper analyzes whether consumers misperception on the quality of the product influences firms investment choices we examine a setup with horizontal and vertical green differentiation where consumers are heterogeneous in the exogenous perception of environmental quality demands true qualities and profits are increasing in the perception of higher quality while the investment in green quality is high for high and low degrees of product substitutability we further consider the introduction of either an emission tax or an environmental standard both interventions increase the investment in green quality we show that for low marginal damages the environmental standard increases quality while taxation is more effective when the environmental damage is large

tariffs and environmental taxes in the presence of environmental r d it is generally held that trade liberalization results in less stringent environmental regulations which suggests that policies regulating trade and the environment are positively correlated this paper examines whether this monotonic relationship still holds true when pollution reducing environmental research and development erd ii an environmental tax instrument only and iii both regulatory instruments to correct for distortions relating to trade and the environment we find that if it is not possible to abate pollution completely through er d then the monotonic relationship between tariffs and environmental taxes is sustained however if it is possible to fully abate pollution through er d then the optimal tariff environmental tax may not increase monotonically with taxes tariffs when both environmental taxes and tariffs are employed these two policies may be strategic substitutes a positive relationship between tariffs and environmental taxes may not be applicable

pests and pesticides risk and risk aversion abstract theoretical and applied literature on risk in decision making for agricultural pest control is reviewed risk can affect pesticide decision making either because of risk aversion or because of its influence on expected profit it is concluded that risk does not necessarily lead to increased pesticide use by individual farmers uncertainty about some variables such as pest density and pest mortality does lead to higher optimal pesticide use under risk aversion however uncertainty about other important variables such as output price and yield leads to lower optimal levels of pesticide use neglect of these variables in most studies has led to the false assumption that pesticides are always risk reducing inputs furthermore there is evidence that in general the pesticide dosage which maximises expected profit is lower under risk than under certainty depending on the balance of forces to increase and decrease pesticide use under risk in many circumstances the net effect of risk on optimal decision making for pest control may be minimal the effect on risk of information about pest density and other variables as in integrated pest management programmes is discussed evidence on this issue is mixed a range of analytical techniques for analysing risk in pest control is reviewed throughout the paper gaps in the existing literature are identified

environmental research joint ventures under emission taxes the effect of environmentalpolicy depends crucially on the strategicbehavior of firms firms can undertakepollution abatement innovation cooperativelythrough environmental r d joint ventures rjvs environmental rjvs have not onlyenvironmental but also economic impacts threetypes of environmental rjv are discussed inthis paper r d cartelization in which firmschoose r d efforts to maximize the jointprofit rjv competition in which firms sharethe r d fruits to maximize their own profits and rjv cartelization in which firms share r dfruits and maximize the joint profit an r dcartelization minimizes output quantities maximizes the total emission and minimizes thesocial surplus an rjv cartelization with asufficiently high spillover coefficientmaximizes r d efforts minimizes the totalemission and maximizes the social surplus

compelling evidence of an environmental kuznets curve in the united kingdom the objective of this paper is to investigate the relationship between per capita emissions hbox co 2 and hbox so 2 and economic growth per capita gdp in the uk using a long span of data this paper examines the existence of a non linear relationship between emissions and economic growth using methods that do not restrict the relationship to be any particular shape the methodology employs instrumental variables in the place of per capita gdp to deal with potential concerns about errors in variables and endogeneity the empirical results provide strong support for the environmental kuznets curve with estimated turning points in 1966 and 1967 for hbox co 2 and hbox so 2 respectively these turning points correspond roughly with the introduction of the clean air act in the uk as well as the reduction in the use of coal as an energy source and together they provide a snapshot of the forces driving the turning points the paper continues by further investigating the temporal behavior of the inverted u shaped relationship the findings indicate that if emissions and per capita gdp deviate from their long run relationship emissions do the heavy lifting to restore the system to equilibrium this result is intuitively pleasing because mitigation is directly affected by legislation as opposed to declining economic growth

coexistence of gm and non gm crops with endogenously determined separation the possibility that genetically modified gm crops may contaminate non gm crops through pollen mediated gene flow presents a challenge to coexistence of gm agriculture with conventional and organic farming systems in this paper an analytical model of coexistence is developed that allows for endogenous derivation of efficient widths and allocation of pollen barriers to limit contamination of non gm crops to reflect the uncertainty that surrounds pollen dispersal mechanisms the model contains a stochastic contamination function and safety rule decision mechanism constraining the level of contamination to remain below a tolerated adventitious presence with a given probability two policies are considered and their performance is tested the tolerance level of adventitious presence and the allocation of responsibility for implementing coexistence measures to either gm or non gm farmers the relative size of gm rents the value of productivity gains and the non pecuniary benefits from gm crops rents for identity preserved non gm crops price premiums realised over the gm crop price characteristics of farms and possible variation in agricultural landscapes are also taken into account the findings indicate that conventional adventitious presence tolerances can be met without ex ante mandating large widths of pollen barriers at the policy level the findings of this paper are relevant for setting region specific pollen barriers widths and or for establishing institutions that facilitate cooperative coexistence

mutual fund trades and the value of contradictory private information abstract we investigate the performance of mutual funds that trade using private information these funds are uniquely identified from a set of 2730 funds with 44 315 fund periods between 1994 and 2005 we compare the alignment of fund trades with brokers recommendations which we regard as public information in the universe of informed and uninformed mutual funds funds that systematically trade counter to the public information form a homogenous subset of the privately informed funds by using private information that contradicts the public information these funds exhibit a superior average performance after we control for serial correlation in fund returns we assess this advantage as being an economically significant 1 7 per annum we also show empirically that smaller funds are better able to capture the benefit of private information

liability transfers an economic assessment of buyer and lender liability abstract this paper examines the conditions under which it is efficient to transfer liability for contamination of a given piece of property from the seller to the buyer at the time of sale and then for debt financed sales for which there is a foreclosure subsequently to the lender who has financed the purchase we identify two key potential sources of inefficiency which depend on the relative probabilities that the parties will be judgment proof at the time liability is imposed the results suggest that the efficiency effects of liability transfers will depend on the relative magnitudes of these two sources of inefficiency

market reaction to business week inside wall street column a self fulfilling prophecy abstract this study focuses on stocks mentioned in a business week bw column in which over half the stories quote an analyst as a source the results of the study show that stocks with a favorable report in bw earn positive abnormal returns at the time of the distribution of the weekly however this is true only for stocks followed by less than twenty analysts within this group the market response increases as the number of analysts decreases stocks followed by more than twenty analysts do not respond at the time of their mention in bw we further document that trading volume increases at the time of the publication of the story the six month size adjusted post bw performance of the less closely followed stocks with favorable stories is negative and offsets the abnormal return at the time of the bw story we conclude that the evidence is consistent with the self fulfilling prophecy hypothesis i e traders react to bw stories and influence the prices of stocks only to lose in the long run six months the results also show that information obtained from non analyst sources has a greater impact on stock prices than the information from analyst sources indicating that some of analysts information is already reflected in prices through their clients trading the return reversion over six months is observed for bw stories with both analyst as well as non analyst sources

incentives for advanced pollution abatement technology at the industry level an evaluation of policy alternatives abstract in this research we evaluate the incentive effects of five environmental policy instruments to promote the development and adoption of advanced pollution abatement technology in a heterogenous industry from most to least incentive the policy instruments can be rank ordered as follows i auctioned permits ii emissions taxes and subsidies iii issued marketable permits iv performance standards including performance standards in this list necessitates the assumption that they are differentiated between heterogeneous firms before the technology adoption in a way which replicates the initial emissions control distribution of the efficient incentive based instruments with the starting point normalized in this fashion the instrument rankings are invariant with respect to the size of firms the size of the industry or the industry s abatement cost structure

energy innovation and renewable energy consumption in the correction of air pollution levels abstract this study analyses the relationship between economic growth and environmental pollution specifically it investigates the presence of an environmental kuznets curve ekc in 17 oecd countries over the period of 1990 2012 the results confirm the existence of an n shaped ekc relationship between income and environmental degradation the study offers a novel methodological contribution that makes it possible to explain the environmental pollution process through the analysis of low carbon technologies this demonstrates how income levels affect energy consumption and how higher energy demand leads to a larger share of fossil sources in the energy mix and thus increased greenhouse gas ghg emissions the effect on per capita ghg emissions is explored in a model containing a dampening variable that moderates the relationship between energy consumption and income this empirical evidence helps to explain the interaction between energy regulation economic growth and carbon emissions this study also confirms the positive effect that energy innovation process exerts on environmental pollution finally it is noted that renewable energy sources help to improve air quality

disclosure decisions by firms and the competition for price efficiency this paper develops a model of the relationship between investment decisions by firms and the efficiency of the market prices of their securities it is shown that more efficient security prices can lead to more efficient investment decisions this provides firms with the incentive to increase price efficiency by voluntarily disclosing information about the firm disclosure decisions are studied it is shown that firms may expend more resources on disclosure than is socially optimal this is in contrast to the concern implicit in mandatory disclosure rules that firms will expend too few resources on disclosure this paper develops a model of the relationship between firms investment decisions and the efficiency of the market prices of their securities it is shown that more efficient security prices can lead to more efficient investment decisions this provides firms with the incentive to increase price efficiency by voluntarily disclosing information about the firm disclosure decisions are studied the costs of disclosure are twofold first there are costs of producing and disseminating the information included here are opportunity costs of firms employees auditing and legal expenses costs of printing and distribution and costs associated with the release of any proprietary information second there are traders costs of assimilating the information for instance while it is not very costly to obtain a firm s 8 k and 10 k once produced it is quite costly to understand the implications of their contents while the former costs have been recognized in the literature on disclosure the latter costs have not that is while traders are sometimes viewed as having access to some costly information the information contained in firms disclosures is typically taken to be costlessly observed by all see for instance diamond 1985 and dye 1987 1 taking traders costs of learning the information content of firms disclosures into account leads to new conclusions regarding incentives to expend resources on disclosure in particular it is shown that firms may spend more on disclosure than is socially optimal this overdisclosure results from firms competing for the attention of traders this is an interesting result given the public policy concern that firms on their own will spend less on disclosure than is socially optimal

event study methodologies and the size effect abstract this study of 862 press recommendations demonstrates that the size effect can distort longer term performance measures and hence event studies relative to similar sized companies post publication performance is neutral however market adjustments the capm and market model with equally or capitalization weighted indexes all produce biased results event studies are most exposed to such bias when the measurement interval is long event securities differ systematically in size or weighting from the index constituents the size effect is large and or volatile and when capm type methodologies are used these distortions are avoided by explicitly controlling for size

the political economy of pollution taxes in a small open economy abstract this paper develops a positive theory explaining pollution tax policy outcomes in a small open economy the equilibrium tax rate depends on lobby group membership the relative importance of lobbying activities and the tax elasticity of pollution the equilibrium properties are investigated the model is extended to incorporate pollution abatement and a pollution abatement subsidy we show that total pollution may be increasing in the pollution abatement subsidy rate this effect arises because the equilibrium pollution tax rate may be decreasing in the subsidy rate due to altered political influence of the lobby groups in the political equilibrium

generalized progress of abatement technology incentives under environmental liability law this paper considers the incentives environmental liability creates to improve pollution abatement technology our analysis considers technical progress in end of pipe abatement and in the production technology used thereby generalizing the approach taken by endres et al environ resour econ 36 341 366 2007 we establish that this generalization has drastic repercussions on incentives under negligence liability while the performance of strict liability is not compromised furthermore it is demonstrated that the social desirability of investment in abatement or production technology or both decisively determines how ex ante and ex post regulation fare with respect to welfare maximization in the case of negligence liability

regulating environmental health risks under uncertainty groundwater contamination in california abstract our method for incorporating uncertainty into environmental health risk policy determination corresponds closely to the legal and political strictures governing these policies an application to a case of grounwater contamination demonstrates that 1 the desirability of developing new water supplies versus cleaning up existing ones varies across locations 2 the stringency of any given policy varies inversely with the margin of sagety required 3 the cost premiums imposed by greater aversion to uncertainty may be quite large and 4 the marginal cost of risk reduction decreases significantly as aversion to uncertainty grows implying that assessments of policies based on average risk will tend to overestimate allowable risk comparing an efficient program to the current inefficient approach to risk management indicates that the cost of inefficiency is not great

measuring the marginal cost of nonuniform environmental regulations a method is presented for measuring the marginal welfare cost of environmental regulations affecting agriculture the method incorporates output market effects and recognizes diversity in production conditions among crops regions and seasons an important advantage of the method is that only regional outputs and changes in regional production costs are needed to calculate deadweight loss thus simplifying the measurement of welfare changes this feature of the model is significant since the complexity and substantial data requirements of most existing impact models cause many environmental regulations to be enacted with inadequate analysis of their economic impacts the method also disaggregates welfare impacts by crop place and time thus encouraging the implementation of nonuniform interventions that achieve a given level of environmental quality more efficiently than uniform policies

an empirical study of the impact of corruption on environmental performance evidence from panel data this paper extends the empirical debate on the effects of corruption on environmental degradation by considering a recently available measure of environmental quality the environmental performance index this indicator is more comprehensive than the measures of air pollutant emissions commonly used in the literature and in particular can also capture the impact of pollution on human health this allows for a better understanding of the actual effects of a wide range of human activities on the ecosystem from a panel data analysis two regularities emerge first corruption deteriorates the overall environmental quality this effect is robust and persistent second our findings highlight the improvement of environmental quality as income rises even at an initial level of development this is not in contradiction with the ekc hypothesis because an increase in income levels provides positive externalities on the whole environmental quality by compensating the mere negative effects induced by industrialization on the emission levels as a consequence in emerging economies policies fighting corruption and enhancing development are very likely to improve the environmental performances

efficient pollution regulation getting the prices right this paper argues for efficient environmental regulations that equate the mar ginal damage of pollution to marginal abatement costs across space the paper estimates the source specific marginal damages of air pollution and calculates the welfare gain from making the current sulfur dioxide allowance trading pro gram for power plants more efficient the savings from using trading ratios based on marginal damages are between 310 and 940 million per year the potential savings from setting aggregate emissions efficiently and from includ ing more sources of air pollution are many times higher jel h23 q53 q58

the environmental kuznets curve does one size fit all abstract this paper uses a new panel data set on state level sulfur dioxide and nitrogen oxide emissions from 1929 1994 to test the appropriateness of the one size fits all reduced form regression approach commonly used in the environmental kuznets curve literature empirical results provide initial evidence that an inverted u shape characterizes the relationship between per capita emissions and per capita incomes at the state level parameter estimates suggest however that previous studies which restrict cross sections to undergo identical experiences over time may be presenting statistically biased results

a model of optimal import phytosanitary inspection under capacity constraint growth and liberalization of world trade have increased the risks of introduction of quarantine plant pests into importing countries import inspection of incoming commodities is a major tool for prevention of pest introductions related to world trade but inspection capacities are limited this article develops a theoretical and an empirical model for the optimal allocation of inspection effort for phytosanitary inspection of imported commodities when the inspecting agency has a limited capacity it is shown that the optimal allocation of inspection effort equalizes marginal costs of pest introduction across risky commodity pathways the numerical illustration finds the optimal allocation of inspection effort of chrysanthemum cuttings imported in the netherlands the numerical results suggest that ceteris paribus greater inspection effort should be allocated to pathways whose inspection yields a greater reduction in the expected costs of pest introduction the numerical results also suggest that import inspection has a high marginal benefit in particular we found that each additional euro of the inspection capacity decreases the expected costs of pest introduction from 18 to 49 euros depending on the initial inspection capacity

firm characteristics and analyst following abstract this paper examines the major determinants of the number of analysts following a firm a simple model of analyst following is proposed and several firm characteristics are suggested that are likely to influence the extent of a firm s analyst following by either affecting the aggregate demand for or supply of analyst services or both for the firm almost all of these characteristics are found to be strongly significant in affecting the extent of analyst following of firms and the empirical results generally accord well with economic intuition

indivisible toxic torts the economics of joint and several liability cost effective or efficient pollution control has traditionally devoted most of its attention to analyzing the effects of legislative or regulatory policy instruments such as emission taxes or marketable emission permits recent contributions have expanded this focus to include the effects of monitoring and enforcement policies 2 with a few noteworthy exceptions 3 however the role of the court system in general and liability law in particular have not received analytical attention among environmental economists in proportion to their importance in resource allocation

stock price reactions to the wall street journal s securities recommendations this paper examines the impact of the heard on the street hots column of the wall street journal on common stock prices the results of the study indicate that the hots column appears to have an impact on stock prices on the publication day however we also find a smaller but statistically significant impact on two days preceding the pub lication the significant abnormal returns on these days are associated with higher trading volume the reaction of stock prices is symmetric with respect to the buy and sell recom mendations and the impact of single company recommendations is greater than the im pact of the multi company recommendations i introduction the efficient market hypothesis assumes that security prices fully and instantaneously reflect all available information considerable evidence has been accumulated during the past decades in support of the hypothesis the acceptance of the hypothesis has raised questions about the economic value of professional investment advice if the market is efficient then the management of port folios based on these recommendations should not consistently outperform the market why then are investors still willing to pay for this information examples of the advice include low cost financial publications brokerage house rec ommendations and subscription financial newsletters that sell for hundreds of dollars recent studies argue that investment advisors can provide information to investors at a lower cost than the investors cost of information production millon and thakor 1985 develop a model that explains the existence of investment advisory agencies they argue that if the information of investment advisory agencies permits security analysts to share information about common uncertainties that affect the value of firms as a whole such as the return on the market portfolio then investment advisory agencies can produce information more cheaply than individual investors this model is consistent with the study of