decoupling of industrial energy consumption and co2 emissions in energy intensive industries in scandinavia as methodology the ex post analysis deserves more attention as a device to calibrate energy sector models this paper studies the impact of energy prices and taxes on energy efficiency and carbon emissions of ten industrial sectors in the three scandinavian countries a database with sector specific energy prices and taxes has been established which allows the analysis to take various price reductions and tax exemptions better into account a translog factor demand system estimation for a cross industry pooled model is explored and fixed effects across industries and time is estimated the findings here confirm recent analyses which indicate higher long term elasicities for industries than normally assumed in scandinavian energy sector models with the observations on differences in energy intensities among sectors and countries the findings allow for some optimism as to the opportunities for further decoupling between trends in gross value added carbon emissions and energy consumption

debt leases taxes and the endogeneity of corporate tax status we provide evidence that corporate tax status is endogenous to financing decisions which induces a spurious relation between measures of financial policy and many commonly used tax proxies using a forward looking estimate of before financing corporate marginal tax rates we document a negative relation between operating leases and tax rates and a positive relation between debt levels and tax rates this is the first unambiguous evidence supporting the hypothesis that low tax rate firms lease more and have lower debt levels than high tax rate firms many theories of capital structure imply that all else equal the incentive to use debt financing increases with a firm s marginal tax rate due to the tax deductibility of interest expense e g modigliani and miller 1963 deangelo and masulis 1980 conversely leasing models generally predict that firms with low marginal tax rates employ relatively more leases than do firms with high marginal tax rates the logic behind the leasinlg prediction is that leases allow for the transfer of tax shields from firms that cannot fully utilize the associated tax deduction lessees to firms that can lessors e g myers dill and bautista 1976 smith and wakeman 1985 ross westerfield and jaffe 1996 despite these straightforward predictions empirically testing for tax effects is difficult because a spurious relation exists between the financing decision and many commonly used tax proxies specifically both interest expense and lease payments are tax deductible thus a firm that finances its operations with debt or leases reduces its taxable income potentially lowering its expected marginal tax rate if not properly addressed this endogeneity of the tax rate can bias an experiment in favor of finding a negative

determinants of corporate leasing policy the existing finance literature assumes the real operating cash flows from leasing or owning are invariant to the ownership of the asset and focuses on tax related incentives for corporate leasing policy our analysis suggests that taxes are important in identifying potential lessees and lessors but are less important in identifying the specific assets leased we provide a unified analysis of the various incentives affecting the lease versuspurchase decision we then show how these incentives explain the use of contractual provisions such as maintenance clauses deposits options to purchase the asset and metering when a firm buys an asset it obtains both the right to the services of that asset over the period it is owned plus the right to sell the asset at any future date with a lease the firm acquires only the right to the asset s services for a period specified in the contract the existing finance literature analyzing corporate leasing policy concentrates on the tax related incentives to lease or buy e g see miller and upton 19 myers et al 21 lewellen et al 13 franks and hodges 11 and brealey and young 4 we believe that taxes play an important role in explaining certain dimensions of leasing policy for example the choice between manufacturer and third party leasing however taxes provide only a limited explanation of why specific assets are leased rather than owned and for the choice of provisions in lease contracts in this paper we want to accomplish two things 1 to provide a unified analysis of the various incentives affecting the lease versus buy decision and 2 to employ that analysis to explain observed variation in corporate leasing policy in deriving testable hypotheses about the characteristics of lessees lessors the assets leased and provisions in lease contracts we extend the standard leaseversus buy analysis found in corporate finance textbooks e g brealey and myers

stock market returns and inflation evidence from other countries this paper investigates the relation between common stock returns and inflation in twenty six countries for the postwar period our results do not support the fisher hypothesis which states that real rates of return on common stocks and expected inflation rates are independent and that nominal stock returns vary in one to one correspondence with expected inflation there is a consistent lack of positive relation between stock returns and inflation in most of the countries

oil price shocks and european industries abstract we investigate the impact of oil price shocks at the industry level in the euro area for the period 1983 2007 we use different oil price specifications and use dynamic var models and multivariate regression to investigate how 38 different industries respond to oil price shocks we pay specific attention to the asymmetry of the industries responses regarding oil price increases and decreases we find that the impact of oil price shocks substantially differs along the different industries we find that the significance of this result also differs along the various oil price specifications the results are quite robust to the way in which we model the problem

structural innovation and efficiency effects of environmental regulation evidence from china s carbon emissions trading pilot conventional wisdom argues that environmental regulation can trigger both structural adjustments and enhanced innovation we test this conjecture by using a difference in differences approach to analyze the impacts of china s carbon emission trading cet pilot policy on energy consumption we find that compliance with the cet regulation has triggered statistically significant adjustments in energy structure industrial structure and technological innovation adjustments in industrial structure also contribute to enhanced total factor energy efficiency whereas increased technological innovation has mixed effects on energy efficiency we show that in the short run government led innovation does not immediately contribute to improvement in energy efficiency whereas enterprise led innovation has a negative impact it indicates that cet regulation can affect energy efficiency through industrial structure and technological innovation overall our results provide new evidence for the strong version of the porter hypothesis our results also provide strong scientific support for china s recent transition towards market based carbon mitigation strategies

stock returns inflationary expectations and real activity this paper tests the fisher hypothesis that real stock returns are independent of inflationary expectations on data for the finnish economy a significant negative relationship is found when stock returns are regressed on the rate of inflation a possible explanation is that higher inflation may proxy a drop in the money demand induced by a lower growth in real activity which simultaneously implies a drop in expected future profits and thus a drop in stock prices to test this hypothesis actual growth in real activity is included in the regression equation for aggregate stock returns significant negative coefficients are however still obtained for expected as well as unexpected inflation it is further shown that these relations are quite insensitive to the specification of the expectations formation mechanism

a review of industrial energy and climate policies in japan and sweden with emphasis towards smes abstract the threat of increased global warming resulting from the use of fossil fuels stresses decision makers to formulate and adopt policies towards different sectors of the economy in light of the great earthquake in japan 2011 energy efficiency also plays an important role in meeting the challenge of power supply shortage energy policies towards industry are of particular importance as a major part of the energy in the economy is used in industrial production the number of papers investigating and presenting experience from energy end use policies are scarce furthermore for those present they often only include a very brief analysis from a public point of view evaluations of energy programs are of major importance to measure the performance of the programs from an energy policy designer point of view it is of major importance to not only see the cost effectiveness of the policy but also to understand the fundamental mechanisms for the success or failure of an industrial energy program in order to learn how to improve future programs the aim of this paper is to present a review of energy end use policy instrument in japan and sweden towards the industrial sector from 1990 to 2014 with special emphasis on industrial smes from the results presented some general conclusions can be made 1 results show that the cost effectiveness differs substantially between the evaluated programs and 2 that from a governmental point of view subsidies towards energy audit programs seem like the most cost effective policy in addition to this 3 the results from the review also stress the importance of a clear strategy for every energy program on how the program is going to be evaluated ex ante or ex post and how the performance of the program is to be measured this structure should be included from the start of the program

swedish industry and kyoto an assessment of the effects of the european co2 emission trading system we assess the effects on swedish industry input demands and output of different climate policy scenarios connected to energy policy induced by the kyoto protocol we use a unique dataset containing

energy taxes as a signaling device an empirical analysis of consumer preferences this paper presents an econometric study dealing with household demand in sweden the main objective is to empirically examine the differences in consumer reaction to the introduction of or the change in environmental taxes main focus is on environmental taxes as a signaling device the hypothesis is that the introduction of an environmental tax provides new information about the properties of the directly taxed goods this in turn may affect consumer preferences for these goods hence altering the consumption choice the result from the econometric analysis shows that all goods have negative own price elasticities and positive income elasticities concerning the signalling effect of environmental taxes the results are somewhat ambiguous the tax elasticity for energy goods used for heating seems to be significantly higher than the traditional price elasticity whereas the opposite seems to be the case for energy goods used for transportation

economic growth and environmental degradation the environmental kuznets curve and sustainable development abstract in this paper we critically examine the concept of the environmental kuznets curve ekc it proposes that there is an inverted u shape relation between environmental degradation and income per capita so that eventually growth reduces the environmental impact of economic activity the concept is dependent on a model of the economy in which there is no feedback from the quality of the environment to production possibilities and in which trade has a neutral effect on environmental degradation the actual violation of these assumptions gives rise to fundamental problems in estimating the parameters of an ekc the paper identifies other econometric problems with estimates of the ekc and reviews a number of empirical studies the inference from some such ekc estimates that further development will reduce environmental degradation is dependent on the assumption that world per capita income is normally distributed when in fact median income is far below mean income we carry out simulations combining ekc estimates from the literature with world bank forecasts for economic growth for individual countries aggregating over countries to derive the global impact within the horizon of the bank s forecast 2025 global emissions of so 2 continue to increase forest loss stabilizes before the end of the period but tropical deforestation continues at a constant rate throughout the period

the relation between stock prices and inflationary expectations the international evidence this paper provides empirical evidence on the relation between stock returns and inflationary expectations for nine countries over the period 1971 80 the fisherian assumption that real returns are independent of inflationary expectations is soundly rejected for each major stock market of the world using interest rates as a proxy for expected inflation our data provide consistent support for the geske and roll model whose basic hypothesis is that stock price movements signal negative revisions in inflationary expectations finally a weak real interest rate effect was found for some of these countries

swedish co2 emissions 1900 2010 an exploratory note abstract this paper projects swedish co 2 emissions during the period 2000 2010 based on data covering 1900 1999 swedish climate policy is currently based on the assumption that carbon emissions will increase ceteris paribus by 5 15 relative to the 1990 level this forecast has motivated a number of policy measures including carbon taxes subsidies and an information package we find however that co 2 emissions may well be lower in the future this outcome is broadly consistent with the literature on the environmental kuznets curve which portrays the relationship between emissions and gdp the key contribution of this paper is that our analysis is based on a long time series current literature is invariably based on short panel data sets while we study a single country through several phases of development our analysis also sheds some light on the key importance played by nuclear power for carbon emission projections

short term interest rates as predictors of inflation on testing the hypothesis that the real rate of interest is constant in an innovative and provocative paper in this review eugene fama presents evidence which appears to be consistent with the joint hypothesis that the real rate of interest ignoring taxes is a constant and that the market for u s treasury bills is efficient in the sense of embodying rational expectations those findings are strikingly at variance with a long list of previous studies which seemed to support the view that the real rate of interest varies over time and can be related to economic variables such as real output monetary policy and so forth 2 the methodologies which lead to these contradictory conclusions are quite different previous studies had followed the lead of irving fisher by relating nominal interest rates to distributed lags on past rates of inflation 3 these distributed lags are generally interpreted as approximations to the market s expected rate of inflation and thus any remaining variation is attributed to variation in the real rate 4 fama s methodology on the other hand draws on the fact that the difference between the market interest rate and the subsequently observed rate of inflation the ex post real interest rate consists by definition of the ex ante real interest rate plus a pure forecasting error 5 the hypothesis of market efficiency implies that these forecasting errors must be serially random thus observing ex post real rates is equivalent to observing ex ante real rates with random measurement error these errors of course confound the problem of identifying variation in the ex ante real rate in this paper we will argue that the relative magnitude of these measurement errors is such that the tests carried out by fama were not powerful enough to reject the joint hypothesis that the ex ante real rate is a constant and expectations are rational more powerful tests which are presented in this paper using the same data do lead to rejection of that hypothesis of course rejection

an analysis of spain s global and environmental efficiency from a european union perspective abstract sustainable economic growth from the environmental point of view is one of the commitments of the eu 28 different measures have been implemented to deal with this issue this work analyses spain s natural efficiency and management efficiency in their static and dynamic sense for the years 2005 2012 in comparison eu 28 the analysis has been carried out using the malmquist index and natural and managerial efficiency three variables have been considered as inputs work gross fixed capital formation and final energy consumption two variables are the outputs the gdp as a desirable output and greenhouse effect gas emissions as an undesirable output the result is that spain s managerial efficiency and natural efficiency are though their values are lower evolving in a similar manner to those of the countries which have been at the heart of the eu longer these levels of efficiency are higher than those of the block of countries which have joined the eu 28 more recently the natural malmquist index results indicate that these are the countries which have had a greater growth in productivity above spain s and the average of the more veteran countries

the leasing puzzle prevailing theories in finance and economics suggest that leases and debt are substitutes an increase in one should led to a compensating decrease in the other in particular there are three views on the magnitude of the substitution coefficient standard finance theory treats cash flows from lease obligations as equivalent to debt cash flows thus describing the tradeoff between debt and leases as one to one others are willing to use a tradeoff of leases for debt which is less than but close to one the rationale for a dollar of leases using less of debt capacity than a dollar of debt obligation is based upon the differences in the terms and nature of lease and debt contracts finally there are some who argue that since leased assets may be firm specific the risk of moral hazard may be great resulting in a tradeoff of greater than one to one that is a dollar of a lease obligation uses more of debt capacity than a dollar of a debt obligation a series of empirical tests are performed in this study on samples of approximately 600 firms covering the years 1976 through 1981 with none of the three views supported by the results instead the results indicate that leases and debt are complements greater use of debt is associated with a greater use of leasing this finding reappears consistently for each year each definition of leverage ratios and each approach to analysis this complementary relationship persists even after refinements are made to the estimation technique

rational expectations and macroeconomic forecasts the article presents extensive results from testing for bias and serially correlated errors in a collection of time series of quarterly multiperiod forecasts for six variables including real gnp growth inflation and unemployment the analysis covers responses by 79 frequent participants in economic outlook surveys conducted regularly since 1968 it shows much greater incidence of apparently systematic errors for inflation than for the other variables also the tests are more favorable to composite group forecasts than to most of the individual forecast sets

operating leases and the assessment of lease debt substitutability operating leases are estimated in the current paper to be approximately thirteen times larger than finance leases on average in recognition of this the paper investigates the degree of substitutability between leasing and non lease debt using a comprehensive measure of leasing improving on the partial measures used in prior research operating lease liabilities are estimated using the constructive capitalisation approach suggested by imhoff lipe and wright 1991 accounting horizons 5 pp 51 63 modified to incorporate company specific and uk relevant assumptions the results imply that leasing and debt are partial substitutes with 1 of leasing displacing approximately 0 23 of non lease debt on average consistent with the argument that lessors bear some risks which are not inherent in debt contracts these findings suggest that substitution effects are not uniform across lease types

is executive compensation a substitute governance mechanism to debt financing and leasing this study examines whether and how ceo equity incentives relate to financing choices i e debt and leases using manually collected ceo compensation and lease data for a sample of large uk firms we found evidence of a negative relationship between ceo equity incentives and firm leverage we also found that ceo equity incentives and leases are negatively related the results are consistent with the theory introduced in this study on the substitutability of executive compensation and firm s debt lease financing our findings represent fresh empirical evidence and renewed interpretation regarding the relationship between executive equity based incentives and firm s financing choices the substitutability theory we introduced here suggests that firms with greater use of debt and or leases will implement less equity based compensation in mitigating the agency cost of equity

operating lease decision and the impact of capitalization in a bank oriented country abstractthis article explores the reasons why firms engage in operating leases and examines the potential impact of a change in the related accounting rules we focus on the accounting advantage of off balance financing which does not affect the typical accounting based covenants especially important in bank oriented countries however we also consider other economically based arguments using manually collected operating lease data for spanish listed firms we use the constructive capitalization method to measure as if liabilities the results confirm that not only size and industry affect the decision but that firms closer to breaching their covenants are also more inclined to choose operating leases consequently it is argued that such firms will be more affected by the accounting change indeed the inclusion of liabilities in the balance sheet might tighten financial covenants in loan agreements as evidenced in the paper not surprisingly firms are strongly opposed to the accounting change

reassessing the environmental kuznets curve for co2 emissions a robustness exercise the number of studies seeking to empirically characterize the reduced form relationship between a country economic growth and the quantity of pollutants produced in the process has recently increased significantly in several cases researchers have found evidence pointing to an inverted u benvironmental kuznetsq curve in the case of co2 however the evidence is at best mixed in this paper we reconsider that evidence by assessing how robust it is when the analysis is conducted in a different parametric setup and when using alternative emissions data from the international energy agency relative to the literature our contribution can be viewed as a robustness exercise in these two respects the econometric results lead to two conclusions firstly published evidence on the ekc does not appear to depend upon the source of the data at least as far as carbon dioxide is concerned secondly when an alternative functional form is employed there is evidence of an inverted u pattern for the group of oecd countries with reasonable turning point regardless of the data set employed not so for non oecd countries as the ekc is basically increasing slowly concave according to the iea data and more bellshaped in the case of cdiac data d 2005 elsevier b v all rights reserved

carbon intensity in production and the effects of climate policy evidence from swedish industry we analyze carbon intensity performance at firm level and the effectiveness of the swedish co2 tax carbon intensity performance is derived from a production technology and measured as changes in t

capital market imperfections and the incentive to lease abstract this paper evaluates the influence of financial contracting costs on public corporations incentives to lease fixed capital we argue that firms facing high costs of external funds can economize on the cost of funding by leasing we construct several measures of leasing propensity plus some a priori indicators of the severity of financial constraints facing firms we find that the share of total annual fixed capital costs attributable to either capital or operating leases is substantially higher at lower rated non dividend paying cash poor firms those likely to face relatively high premiums for external funds

decomposition analysis for assessing the progress in decoupling industrial growth from co2 emissions in the eu manufacturing sector decomposition analysis is used in this paper not only to explain changes in industrial co2 emissions but also to comparatively evaluate the progress made in 14 eu countries in decoupling emissions from industrial growth the analysis is performed for the period 1990 2003 by distinguishing two time intervals for assessing progress prior to and following the agreement on the kyoto protocol the refined laspeyres model is used to determine the impact of 5 explanatory factors output energy intensity structure fuel mix and utility mix the obtained results are further elaborated in order to assess the real efforts undertaken in each country and their effectiveness in dissociating the economic and environmental dimensions of development moreover a rescaling procedure is implemented in order to adjust efforts to the average progress in the eu and proceed to a fair comparative evaluation it is found that most eu countries made a considerable but not always sufficient decoupling effort while no significant acceleration is observed in the post kyoto period

technical scale and allocative efficiencies of turkish banking industry this paper investigates input and output efficiency in the turkish banking industry to understand the impact of size international variables ownership control and governance on profit cost allocative technical pure technical and scale efficiency measures employing a non parametric approach along with a parametric approach we estimate the efficiency of turkish banks over the 1988 1996 period this period allows us to account for the changes in the macro economy and regulatory treatment of the turkish banking industry over time our results suggest that the heterogeneous characteristics of banks have significant impact on their efficiency moreover cost and profit efficiencies of the turkish banks have exacerbated over time results also indicate that the dominant source of inefficiency in turkish banking is due to technical inefficiency rather than allocative inefficiency which is mainly attributed to diseconomies in scale to the extent that they chose an inefficient level of production bank management is responsible for scale inefficient operations however increasing demand for banking services in the nineties fueled by the state s increasing demand for funds to finance chronic budget deficits and high growth policies and the oligopolistic nature of the turkish banking market do not justify scale adjustments our policy suggestions are that the government implement financial reform packages that foster competition in the banking market and that the industry devise incentive schemes to improve managerial efficiency

convergence of carbon dioxide performance across swedish industrial sectors an environmental index approach the overall objective of the paper is to analyze convergence of co2 emission intensity across manufacturing sectors in sweden our approach differs from previous work on carbon convergence in that

financial constraints and cash cash flow sensitivity this article explores the cash cash flow relationship by comparing financially constrained and financially unconstrained companies unlike previous research we test the sensitivity of cash to cash flow by considering unlisted firms as constrained and listed firms as unconstrained our empirical evidence is based on findings from spanish firms and is consistent with the core rationale that unlisted firms face more difficulties than their listed counterparts when looking for funding from external markets as a result unlisted firms tend to hoard significant amounts of cash out of the generated cash flow while listed firms do not our findings are robust to a number of additional empirical tests

environmental investment and firm performance a network approach abstract this study examines the role of investment in environmental production practices for both environmental performance and energy efficiency over time we employ a network dea approach that links successive production technologies through intertemporal investment decisions with a period by period estimation this allows us to estimate energy efficiency and environmental performance separately as well as productivity change and its associated decompositions into efficiency change and technology change incorporating a network model also allows us to account for both short term environmental management practices and long term environmental investments in each of our productivity measures we apply this framework to a panel of detailed plant level production data for swedish manufacturing firms covering the years 2002 2008

stock prices asset portfolios and macroeconomic variables in ten european countries abstract this paper investigates the relationship between stock indices asset portfolios and macroeconomic variables in ten european countries it is shown that employment imports inflation and interest rates are inversely related to stock prices expectations about future real activity measures for money and the u s yield curve are positively related to stock prices a portfolio of european stock indices was constructed and it is shown that this portfolio is the variable that most strongly explains the variation in the stock prices the associations between stock prices and macroeconomic variables are shown to be strongest in germany the netherlands switzerland and the united kingdom there is a high degree of similarity between the effects in the first three of these countries in several instances the stock prices are related to historic value of economic variables indicating that predictive models can be constructed