profitability and productivity changes in the korean electricity industry abstract the korean electricity industry saw significant changes following the reform in april 2001 until the last decade the industry was monopolized by the korea electric power corporation kepco a state owned vertically integrated company the 2001 reform divided kepco s power generation division into six power generation companies gencos with the aim of improving efficiency and introducing competition in the electricity industry in this study we used capital total factor productivity ktfp to analyze profit changes from fixed input capital and an index number profit decomposition inpd to examine the sources of the profit changes we investigate the industry thoroughly from three points of view the overall industry over time the power generation sector by company and the transmission and distribution sectors of the korea electric power corporation kepco next we measured how the profits from productivity growth were distributed to consumers fuel suppliers employees and company owners the results suggest that a more reasonable price system for both wholesale and consumer prices needs to be implemented prior to the privatization and deregulation of the korean electricity industry

cost efficiency and electricity market structure a case study of oecd countries the oecd electricity sector has witnessed significant institutional restructuring over the past three decades as a consequence many power generation utilities now act as unregulated companies that technically compete to sell power on an open market this paper analyses the performance in term of cost efficiency for electricity generation in oecd power sector while accounting for the impact of electricity market structures we employ the short run cost function in which capital stock is treated as a quasi fixed factor input empirical models are developed for the cost function as a translog form and analysed using panel data of 25 countries during the period 1980 to 2009 we show that it is necessary to model latent country specific heterogeneity in addition to time varying inefficiency the estimated economies of scale are adjusted to take account of the importance of the quasi fixed capital input in determining cost behaviour and long run constant returns to scale are verified for the oecd generation sector the research findings suggest there is a significant impact of electricity market regulatory indicators on cost in particular public ownership and vertical integration are found to have significant and sizable increasing impacts on cost thereby indicating policy lessons on the desirable ways to implement structural electricity generation reforms

the information content of annual earnings releases a trading volume approach this paper reports the results of an empirical examination of the relations between the volume of securities traded the magnitude of surprises in annual earnings announcements and firm size although early trading volume studies e g beaver 1968 kiger 1972 and foster 1973 replicated basic information content studies with findings similar to those based on security prices we should not expect that security price and trading volume research will continue to yield identical results when more refined hypotheses are tested trading volume reflects investors activity by summing all market trades whereas security prices reflect an aggregation or averaging of investors beliefs as a result we will on occasion observe differences between price and volume reactions to earnings announcements as did morse 1981 this study extends the recent trend toward tests of more refined hypotheses by using a larger sample to examine the associations between unexpected earnings firm size and trading volume and testing whether such associations can be generalized across fiscal year end dates and stock exchange listing my results show a continuous positive relationship between trading

an investigation of market microstructure impacts on event study returns we investigate the importance of bid ask spread induced biases on event date returns as exemplified by seasoned equity offerings by nyse listed firms we document significant negative return biases on the offering day which explain a large portion of the negative event date return documented in the literature buy sell order flow imbalance is prominent around the offering and induces a relatively large spread bias if order imbalances are suspected the researcher can use returns calculated from the midpoint of the closing bid and ask quotes instead of returns calculated from closing transaction prices to avoid this return bias several studies document the impact of bid ask spreads on security return patterns which appear inconsistent with the informational efficiency of capital markets phillips and smith 1980 find spread induced bias to be important in explaining apparent arbitrage opportunities in the option markets lakonishok and smidt 1984 uncover evidence suggesting a relation between bid ask spreads and turn of the year seasonality in stock returns 1 keim 1989 and porter 1989 further document the empirical importance of

a day end transaction price anomaly a large mean price change is observed on the last daily nyse transaction this suggests that closing prices may not consistently represent stock values transaction prices are studied to further characterize the day end price rise and to determine whether it is due to any limited subsample of stocks or dates the results indicate that the phenomenon is pervasive over most firms and days some evidence suggests that it is caused by a change in the frequency of ask prices at day end

pollution claim settlements under private information abstract the classical problem of resolving a nuisance dispute between a pollution generating firm and nearby residents is modelled here as a mechanism design problem we assume that the designer of the mechanism is the firm that it is uncertain about the actual losses suffered by residents and that the initial assignment of property rights is one where each resident is entitled to prevail we derive a profitmaximizing scheme under the individual rationality and incentive compatibility constraints and examine its properties it is shown that the outcomes it yields are sometimes inefficient moreover when many residents are affected by pollution and the degree of uncertainty with respect to the losses they suffer is large these inefficiencies become rampant

the effects of inflation news on high frequency stock returns previous research using daily returns finds conflicting evidence about the relationship between unanticipated inflation news and stock returns we explore the relationship by looking at the response in minutes and trades of size based stock portfolios to unexpected changes in the regularly scheduled producer price index and consumer price index announcements in particular we answer the following three questions 1 do stocks respond to inflation news 2 what is the speed and path of that response 3 is the response stable or does it vary with the economy the direction of the news or time

bargaining and strikes strikes are generally regarded as an important economic phenomenon and yet good theoretical explanations of them are hard to come by the difficulty is to understand why rational parties should resort to a wasteful mechanism as a way of distributing the gains from trade why could not both parties be made better off by moving to the final distribution of surplus immediately or if it is uncertain to its certainty equivalent and sharing the benefits from increased production

dynamic efficiency estimation the shadow cost approach is developed in the context of the dynamic duality model of intertemporal decision making to formulate theoretical and econometric models of dynamic efficiency the dynamic efficiency model is applied to a panel of 72 u s major investor owned electric utilities using fossil fuel fired steam electric power generation over the period 1986 1999 the major results show that most electric utilities underutilized fuel relative to the aggregated labor and the maintenance input and overutilized capital in production states adopting a deregulation plan improve the performance of utilities in terms of the technical efficiency of variable inputs

macroeconomic fundamentals price discovery and volatility dynamics in emerging bond markets abstract this study characterizes volatility dynamics in external emerging bond markets and examines how prices and volatility respond to macroeconomic news as in mature bond markets surprises about macroeconomic conditions in emerging markets are found to affect both conditional returns and volatility of external bonds with the effects on volatility being more pronounced and longer lasting than those on prices yet the process of information absorption tends to be more drawn out than in mature bond markets global and regional macroeconomic news is at least as important as local news for both price and volatility dynamics

technical efficiency of french nuclear energy plants this article analyses the efficiency of french nuclear energy plants belonging to edf electricity of france from 2004 to 2008 with a dea data envelopment analysis model the convexity model is used to investigate the technical efficiency of a representative sample of nuclear plants the results indicated that some plants have undergone an improvement in technical efficiency while others have regressed in terms of technical efficiency policy implications related to the results are discussed

bargaining with two sided incomplete information an infinite horizon model with alternating offers this paper examines an infinite horizon bargaining model incorporating five features two sided incomplete information with potentially information revealing strategies an infinite horizon uncertainty concerning the potential gains from trade an illumination of interesting qualitative bargaining issues and plausible free from arbitrarily specified out of equilibrium conjectures equilibria these features motivated in the paper have powerful implications a nash equilibrium exists and is generically both unique and sequential comparative static implications of variations in the game s specifications are developed we find that natural indications of bargaining strength emerge from the model and establish the intuitive result that an increase in a player s relative bargaining strength makes that player more likely to capture the gains from bargaining

intra firm bargaining under non binding contracts we present a new methodology for studying the problem of intra firm bargaining based on the notion that contracts cannot commit the firm and its agents to wages and employment we develop and analyse a general non cooperative multilateral bargaining framework between the firm and its employees and consider outcomes which are immune to renegotiations by any party equilibrium firm profits are characterizable as both a weighted average of a neo classical non bargaining firm s profits and a generalization of shapley value for a corresponding cooperative game furthermore the resulting payoffs induce economically significant distortions in the firm s input and organizational design decisions

effects of farm size education and off farm income on productive efficiency of dairy farmers in utah a stochasitc frontier approach this study is primarily concerned with investigating the technical allocative and scale inefficiency of owner operators of dairy farms in utah a stochastic production frontier has been applied to analyze these inefficiencies the results indicate that there is positive association between years of education and productivity of labor and capital productivity is also found to be negatively related to off farm income regarding the effects of farm size on efficiency it is found that large farms are the most efficient of all sizes considered separate estimates of technical allocative and scale inefficiencies indicate that large and medium sized farms are technically more efficient than small farms large farms on average are found to be performing much better than medium sized and small farms so far as allocative and scale inefficiency are concerned copyright 1989 by mit press

fooling all of the people some of the time a theory of endogenous sequencing in confidential negotiations we analyse a bargaining game in which one party called the buyer has the option of choosing the sequence of negotiations with other participants called sellers when the sequencing of negotiations is confidential and the sellers goods are highly complementary efficient non dissipative equilibria exist in which the buyer randomizes over negotiation sequences in these equilibria the buyer can obtain higher pay offs than in pure strategy equilibria or in public negotiations the degree of sequencing uncertainty that maximizes buyer pay offs is inversely related to the aggregate bargaining power of the sellers

efficiency analysis of hydroelectric generating plants a case study for portugal abstract this paper estimates changes in total productivity breaking this down into technically efficient change and technological change by means of data envelopment analysis dea applied to the hydroelectric energy generating plants of edp the portugal electricity company the aim of this procedure is to seek out those best practices that will lead to improved performance in the energy market we rank the plants according to their change in total productivity for the period 2001 2004 concluding that some plants experienced productivity growth while others experienced a decrease in productivity the implications arising from the study are that edp should adopt an internal benchmark management procedure in order to evaluate the relative position of each hydroelectric generating plant and to adopt managerial strategies designed to catch up with the frontier of best practices as the frontier is shifting along the time constant efforts are needed in this respect along the time

price reversals bid ask errors or market overreaction abstract we show that bid ask errors in transaction prices are the predominant source of apparent price reversals in the short run for nasdaq firms once we extract measurement errors in prices caused by the bid ask spread we find little evidence of market overreaction on the contrary we find that security returns are positively and not negatively autocorrelated we also show that bid ask errors lead to substantial spurious volatility in transaction returns about half of measured daily return variances can be induced by the bid ask effect

what drives the capital flows into brics economies understanding what drives the capital flows has important policy implications for countries in managing the direction and magnitude of such flows this paper empirically investigates the main drivers of capital flows into the fast growing brics countries in the backdrop of their growing inward capital flows employing a fully balanced panel for the period 1995 2015 we focus on among others the hitherto commonly untested variables sovereign credit ratings economic freedom and ease of doing business ranking of these countries in searching for the relevant interaction and causality among the drivers of capital flows we employ the panel granger causality test to arrive at the policy implications the results suggest that market size is a significant driver of capital flows in addition to infrastructure economic freedom in the host countries ease of doing business ranking and sovereign credit ratings are the main drivers in the long run growth of capital flows

the effects of electricity reforms on productivity and efficiency of china s fossil fired power plants an empirical analysis abstract this paper investigates the effects of electricity reforms on productivity and efficiency of china s generation plants based on the third industrial census data and the first economic census data partial factor productivity pfp analysis indicates that the productivity improvements in labor and capital inputs associated with the reforms are approximately 26 and 45 respectively the effect of the reforms on fuel expense is weakly significant but there is evidence of significant productivity improvement in fuel usage further total factor productivity tfp analysis shows that the efficiency gain from the reforms is still significant when the substitution effect of labor and capital inputs are considered though the magnitude is much lower than that of the pfp analysis the effect of the reforms on technical efficiency becomes weakly significant when fuel expense is further included in tfp analysis but a significant positive effect is expected if fuel input is measured in physical quantity

alternating bid bargaining with a smallest money unit abstract in a seminal paper ariel rubinstein has shown that impatience implies determinateness of the two person bargaining problem in this note we show that this result depends also on the assumption that the set of alternatives is a continuum if the pie can be divided only in finitely many different ways for example because the pie is an amount of money and there is a smallest money unit any partition can be obtained as the result of a subgame perfect equilibrium if the time interval between successive offers is sufficiently small we also show that for a fixed discount rate all subgame perfect equilibrium payoffs of the discrete game converge to the solution obtained by rubinstein if the smallest money unit tends to zero

foreign direct investment spillovers and technical efficiency in the indonesian pharmaceutical sector firm level evidence the spillovers of foreign direct investment fdi on domestic firms performances have been highly debated for many years this article contributes to this debate by analysing spillovers effects on technical efficiency of indonesian pharmaceutical sector using a unique unbalanced panel of highly disaggregated at five digit international standard industrial classification isic 210 firms over the period 1990 1995 1001 observations the stochastic production frontier spf and the data envelopment analysis dea based on malmquist productivity indices mpi have been used to test the spillovers effects of fdi on technical efficiency the empirical results from the spf show that foreign firms are more efficient than domestic competitors and the presence of the former increases the inefficiency of the latter similarly the results from the mpi demonstrate that fdi has a negative and significant impact on technical efficiency changes in domestic competitors but generate positive spillovers to domestic s

intradaily price volume adjustments of nyse stocks to unexpected earnings the speed and path of adjustment in stocks to the degree of earnings surprise in their quarterly announcements are studied using price volume transactions data a differential price adjustment process was observed with stocks having large positive earnings surprises experiencing a faster adjustment compared with those stocks with negative earnings surprises volume transaction frequency and size were found to be directly related to the absolute degree of surprise but very favorable earnings surprise stocks experienced initially a large number of smaller trades while stocks with large unfavorable earnings surprises had relatively fewer transactions but higher volume per trade the stock market s microstructure has received increasing attention from researchers especially from an empirical perspective as transaction data on prices and volume have become more readily available 1 an important subset of this research has been the study of stock price adjustments to significant news events specifically publicly announced information with economic content should be quickly reflected in prices in an unbiased manner this paper contains a study of the intradaily adjustment in stocks to the informational content of earnings reports using price changes trading volume and transaction frequency and size we examine the transaction to transaction and time series stock behavior associated with different degrees of earnings surprise embedded in earnings announcements the degree of surprise is measured by a comparison of actual with forecasted earnings for 325 new york stock exchange nyse firms these firms are subdivided into five earnings surprise categories in order to determine whether the speed and path of their price volume adjustment processes are different one question of interest is whether the adjustment process for favorable versus unfavorable earnings surprises is similar or different another is whether any adjustment is distinguished by a few large trades or a large number of smaller

breakdown in multilateral negotiations abstract we analyze a complete information multilateral bargaining model in which a buyer is to purchase two complementary goods from two sellers binding cash offer contracts are used to govern transactions in contrast to preexisting literature we do not normalize the parties reservation utilities to zero we show that this assumption holds critical importance by demonstrating that a complete breakdown of negotiations may occur as the unique equilibrium outcome even if only two sellers are present

systematic departures from the frontier a framework for the analysis of firm inefficiency departures from a production or cost frontier may reflect the systematic effect of conditions that contribute to inefficiency to test whether some portion of frontier function departures can be systematically explained the frontier inefficiency error component is modeled as a function of various causal factors and a random component the functional form of the inefficiency error term model is chosen to assure strict one sidedness preliminary empirical results generated from electric utility data suggest the superiority of including both systematic and random components in the inefficiency error term

large block transactions the speed of response and temporary and permanent stock price effects abstract the paper investigates how quickly prices attain new equilibrium levels after large block transactions and measures the associated temporary and permanent price effects we find that prices adjust within at most three trades with most of the adjustment occurring in the first trade the temporary price effect for seller initiated transactions is related to block size but the temporary price effect observed for buyer initiated transactions is no larger than that observed in 100 share trades most of the price effect associated with block trades is permanent and is related to block size regardless of the initiating party

estimating efficiency in the hospital sector a comparison of three statistical cost frontier models this paper reports the results of an empirical comparison of three statistical cost frontier models using data from 49 spanish public hospitals the models estimated include the deterministic cost frontier a cross section stochastic cost frontier scf in which inefficiency is assumed to follow a half normal distribution and a panel data scf in which inefficiency is assumed to remain constant over time a non frontier model is also estimated the paper compares the estimates of average inefficiency obtained from the frontier models and the implied rankings of hospitals in terms of their costliness actual cost as a proportion of expected cost

market rationality and dividend announcements abstract we investigate stock market rationality by examining the timeliness and unbiasedness of the market s response to dividend announcements our initial findings for market timeliness show a sluggish market reaction to dividend announcements however when the ex dividend effect is controlled for we find no evidence of a sluggish market reaction we examine the unbiasedness of the market s response by testing whether the net announcement effect across a sample that is devoid of ex post selection bias sums to zero we observe a significant positive net announcement effect and examine several plausible conjectures for this puzzling phenomenon but none provides a satisfactory explanation

price floors and technical inefficiency in india s sugar processing industry in india cane is processed into sugar by cooperatives public enterprises and private for profit firms the indian government sets a unique floor price for each processor that is increasing in the firm s effectiveness in converting cane into sugar the floor price binds for public and private firms but not for cooperatives which rebate profits to members we argue that this price floor policy creates a disincentive for private and public firms to be technically efficient in converting cane to sugar in support of this hypothesis an analysis of 593 indian sugar factories from 1992 to 2007 reveals statistically significant differences in technical efficiency with cooperatives being the most efficient and public firms least efficient we estimate welfare losses due to the technical inefficiency attributable to the price floor policy and argue that it can be eliminated by enacting policy to base price floors upon quality of the cane input received by a factory

the effect of regulatory governance on efficiency of thermal power generation in india a stochastic frontier analysis abstract this paper investigates the impact of institutional quality typified as regulatory governance on the performance of thermal power plants in india the indian power sector was reformed in the early 1990s however reforms are effective only as much as the regulators are committed in ensuring that they are implemented we hypothesize that higher the quality of regulation in a federal indian state higher is the efficiency of electric generation utilities a translog stochastic frontier model is estimated using index of state level independent regulation as one of the determinants of inefficiency the dataset comprises a panel of 77 coal based thermal power plants during the reform period covering over 70 of installed electricity generation capacity the mean technical efficiency of 76 7 indicates there is wide scope for efficiency improvement in the sector results are robust to various model specifications and show that state level regulators have positively impacted plant performance technical efficiency is sensitive to both unbundling of state utilities and regulatory experience the policy implication is that further reforms which empower independent regulators will have far reaching impacts on power sector performance

worker substitutability and patterns of unionisation a strategic three party bargaining model is developed in which one distinguished party the firm has to reac h agreements with the other two each of which is a group of workers in the prebargaining stage the two worker groups decide whether to organize jointly or separately the main observation relates the equi librium pattern of unionization to the substitutability in production between the two groups the outcome is joint or separate unions acco rding to whether the two groups are substitute or complementary facto rs of production the analysis also considers possibilities for firm s strategic intervention in the unionization process copyright 1988 by royal economic society

contracts and externalities how things fall apart a single principal interacts with several agents offering them contracts the crucial assumption of this paper is that the outside option payoffs of the agents depend positively on how many uncontracted or free agents there are we study how such a principal unwelcome though he may be approaches the problem of contract provision to agents when coordination failure among the latter group is explicitly ruled out two variants are considered when the principal cannot re approach agents there is a unique equilibrium in which contract provision is split up into two phases in phase 1 simultaneousoffers at good though varying terms are made to a number of agents in phase 2 offers must be made sequentially and their values are discontinuously lower they are close to the very lowest of all the outside options when the principal can repeatedly approach the same agent there is a multiplicity of equilibria in some of these the agents have the power to force delay they can hold off the principal s overtures temporarily but they must succumb in finite time in both models despite beingable to coordinate their actions agents cannot resist an invasion by the principal and hold to their best payoff it is in this sense that things eventually fall apart

resource rent taxation and benchmarking a new perspective for the swiss hydropower sector the electricity generation in switzerland is mainly based on hydropower 55 of total production the exploitation of water in the hydropower sector can generate significant so called resource rents these are defined by the surplus return above the value of capital labor materials and energy used to exploit hydropower in switzerland hydropower producers pay to the state a fixed fee per kw gross capacity with this system the substantial differences in costs revenues and in the production characteristics of the hydropower plants are not taken into account in this context the following paper has two main goals 1 to discuss the introduction in the swiss hydropower sector of a new payment system based on a resource rent tax 2 to propose a combination of a rrt system with a benchmarking analysis of the production cost obtained through the estimation of a stochastic frontier variable cost function we estimate a true random effects stochastic frontier variable cost function using panel data in order to overcome the asymmetric information problem in addition using the information on cost efficiency of the single companies we show how to introduce in the rrt scheme a benchmark system which gives incentives to minimize the production costs

a letter to the editor on wage bargaining abstract the rubinstein perfect information alternating offers bargaining model is problematic when applied to wage negotiations a strike or any other industrial action is not an automatic consequence of a delay in reaching an agreement because production can continue normally also when negotiations take place this paper extends the rubinstein model to incorporate the choice of calling a strike and it is shown that in this model there is no longer a unique subgame perfect equilibrium and that strikes with a length in real time can occur in equilibrium

non cooperative bargaining and union formation we study a union formation decision problem when workers consist of two groups distinguished by different productivities workers may form either a joint union or two separate unions the whole decision process is modelled as an extensive form bargaining game workers form a joint union when the sizes or productivities of the groups are similar in the first case there is a wage differential which is more less than proportional to the productivity difference if the size of the more productive is smaller larger than that of the less productive in the second case there is no wage differential in this paper we study a union formation decision problem when workers consist of two groups distinguished by different productivities they may form either a joint union or two separate unions depending on the relative size and productivity of the two groups the whole decision process is modelled as an extensive form bargaining game in which the two groups of workers bargain with each other as well as with a firm the labour market is sharply distinguished from the goods market by the widespread practice of collective bargaining usually several groups of workers with different characteristics for example skill level or geographical location are represented as a single unit and or several employers form a single bargaining unit against a giant union this multiplicity of bargaining units creates a complicated bargaining structure and makes the outcome hard to analyse the purpose of this paper is to provide a model which captures this complexity and at the same time clarifies the underlying structure of bargaining power although economists have been aware of the multiplicity problem for a long time it has been received little rigorous theoretical treatment until recently davidson 1985 examined the possible gains that can be obtained by trade unions through joint bargaining in an oligopolistic industry there is a positive externality due to the fact that a higher wage rate in one firm generates a larger demand hence a higher wage in competing firms when a joint union is organized these externalities are internalized to the benefit of workers horn and wolinsky 1985 investigated the equilibrium pattern of unionization in an industry where a firm employs two types of workers they found that workers tend to form a single union when the two types are substitutes in the sense that the incremental contribution of one group to the firm s revenue is decreasing with respect to the size of the other group since workers bargaining power comes from the loss that they can

an investigation of transactions data for nyse stocks using transactions data the behavior of returns and characteristics of trades at the micro level is examined a minute by minute market return series is formed and tested for normality and autocorrelation evidence of differences in return distributions is found among overnight trades trades during the first 30 minutes following the market opening trades at the close and trades during the remainder of the day the latter distribution is found to be normal unusually high returns and standard deviations of returns are found at the beginning and the end of the trading day when the beginningand end of the day effects are omitted autocorrelation in the market return series is reduced substantially a number of patterns in trading are reported this paper empirically investigates the nature of the return generating process and the characteristics of trade size price changes trading frequency and trading interval at the level of individual trades for a large sample of nyse stocks previous studies of market indices have used daily weekly or monthly

deregulation vertical unbundling and the performance of china s large coal fired power plants article i nfo in 2003 china s integrated electricity utility the state power corporation spc was unbundled and dism antled into five generation groups and two grid companies in an effort to increase competition and improve ef ficiency in this paper we study the impact of this deregulation reform on the operational efficiency for a balanced panel of 34 large power plants for the period 1997 2010 we find that on average these power plants have converged to the technological frontier over the sample period controlling for substantial heterogeneity in the technical profile we also find that the unbundling reform has boosted productivity of china s large thermal power plants however the presumably differential impacts of the reform on the previously spc managed power plants and the independent power producers in our sample are insignificant

a deterministic parametric metafrontier luenberger indicator for measuring environmentally sensitive productivity growth a korean fossil fuel power case abstract this paper contributes to the current literature by proposing an alternative parametric metafrontier productivity approach called the deterministic parametric metafrontier luenberger productivity indicator dpmlpi for measuring environmentally sensitive productivity growth incorporating technological heterogeneities the luenberger productivity indicator is constructed based on a quadratic output directional distance function with undesirable outputs and then combined with the deterministic metafrontier to develop dpmlpi the dpmlpi can be decomposed into efficiency change technological change and productivity growth gap the productivity growth gap can be further divided into efficiency change gap and technological change gap the parametric linear programming technique is used to estimate parameters and construct the metafrontier an empirical study for the korean fossil fuel power industry at the plant level is conducted for the 2003 2011 period the results show a 0 15 increase in environmentally sensitive productivity growth which is mainly driven by environmental technological change the oil fired power plants show higher levels than the coal fired ones of environmentally sensitive productivity growth and technological change performance some related policy implications are also proposed for the korean fossil fuel power sector

on the land assembly problem abstract we consider a segment of the land market where the entire available land stock is needed for the realization of some indivisible development project the stock is shared by several landholders who either collude or negotiate independently with the developer over the prices of their lots investigating the price setting behavior of the landowners and the optimal strategy of the developer we show that landowners set more moderate prices under collusion than when acting independently in the latter case the individual asking price falls with the size of the land share and the total price increases with the number of landowners as regards the optimal strategy we find that the developer will in general not offer the lowest price he expects to be accepted by the landowners

delay in multilateral bargaining under complete information abstract this paper analyzes a complete information infinite horizon multilateral bargaining model in which one player bargains with each of the other players one at a time and binding cash offer contracts are used to govern transactions under a weak stationarity condition on equilibrium strategies we characterize the set of equilibria for the game we show that when players are sufficiently patient significant delay in reaching agreements may emerge and this delay can become longer quickly as the number of involved parties rises indeed when the number of bargainers is large perpetual disagreement can occur in equilibrium journal of economic literature classification numbers c78 d23 d62

cost efficiency of electric grid utilities in china a comparison of estimates from sfa mle sfa bayes and stoned cnls with the purpose of estimating the range of cost efficiency levels of the power grid sector in china we assembled a data set including 23 provincial power grid companies spanning from 2005 to 2009 and conducted an empirical study based on the sfa mle sfa bayes and stoned cnls methodologies empirical results show that the average values of efficiency from different models vary from 0 85 to 0 92 depending especially on the assumptions underlying inefficiency content further results demonstrate that there is exogenous technical progress during the sample period and per capita gdp of the province is negatively related to the costs of the electric grid company located in the corresponding province we hope this empirical study will contribute to the debate on an efficiency based regulation scheme which was introduced to the chinese electric grid sector on a pilot base in 2014

the dependence between hourly prices and trading volume this study provides evidence on joint characteristics of hourly common stock trading vol ume and returns on the new york stock exchange average volume traded shows signifi cant differences across trading hours of the day and across days of the week average returns differ across hours ofthe day and to some extent across days ofthe week there is a strong contemporaneous relation between trading volume and returns and also a rela tion between trading volume and returns lagged up to four hours furthermore the trading volume returns relation is steeper for positive returns than for nonpositive returns

measuring productivity growth under factor non substitution an application to us steam electric power generation utilities a theoretical framework is developed for decomposing partial factor productivity and measuring technical inefficiency when the underlying technology is characterized by factor non substitution with farrell s 1957 radial index of technical inefficiency being inappropriate in this case russell non radial indices are adapted to measure technical inefficiency in a leontief type model a system of factor demand equations with a regime specific technical inefficiency term is proposed and estimated allowing for dependence across inputs using a copula approach then the paper presents a complete decomposition of partial factor productivity changes using a dataset of us steam power electric generation utilities

tax induced trading around ex dividend days abstract this paper investigates trading volume around ex dividend days for taxable distributions cash dividends it is found that trading volume increases significantly around the ex dividend day this increase is more pronounced for high yield actively traded stocks and after brokerage commissions became negotiable the results are consistent with the hypothesis that short term traders have an impact on ex day price behavior at least for taxable distributions for non taxable distributions stock splits and stock dividends we find negative abnormal volume around ex day

objectives and incentives evidence from the privatisation of great britain s power plants abstract does privatization increase plant productivity because the private owner s objective is different or because they are better able to control management and is privatization sufficient to improve productivity or is it only effective in combination with competition we answer these questions using the quasi experiment of great britain s electricity industry privatization to separate the effect of a change in objectives from a change in incentives we assume that the former only affects labor but not fuel productivity and assuming that effective competition was only introduced after privatization we are able to separately identify the effects of privatization and competition we find that privatization increased labor but not fuel productivity evidence for the importance of objectives there is no evidence that the introduction of effective competition after privatization increased labor or fuel productivity evidence that privatization increases productivity by itself

a generalized production frontier approach for estimating determinants of inefficiency in u s dairy farms this article investigates farm level efficiency of u s dairy farmers by estimating their technical and allocative efficiency technical inefficiency is assumed to be composed of a deterministic component that is a function of some farm specific characteristics and a random component by doing this we extend the stochastic frontier methodology in which determinants of technicial inefficiency are explicitly introduced in the model given the inputs variations in efficiency of farms are then explained by both deterministic and random components of technical inefficiency the empirical results indicate that a levels of education of the farmer are important factors determining technical inefficiency and b large farms are more efficient technically than small and medium sized farms both technical and allocative inefficiency are found to decrease with increase in the level of education of the farmer

technical efficiency market share and profitability of manufacturing firms in cote d ivoire the technology trap this paper investigates the sources of inefficiency of firms in cote d ivoire and exam ines to what extent these effects translate into poor performance a large majority of firms is technically inefficient producing far below the maximum attainable output level major cost savings can also be realised through enlarging the scale of activities of firms efficiency gains and scale advantages translate into a better competitive position and via their impact on market share into higher profitability however severe growth barriers and imperfect markets keep firms from realising these gains and prevent firms from catching up in technology with respect to their larger older and often foreign owned competitors

striking for a bargain between two completely informed agents this paper models the wage contract negotiation procedure between a union and a firm as a sequential bargaining process in which the union must decide in each period whether or not to strike for the duration of that period we show that there exist subgame perfect equilibria in which the union engages in several periods of strikes prior to reaching a final agreement although both parties are completely rational and fully informed this has implications for other inefficient phenomena such as tariff wars debt negotiations and wars in general we characterize the set of equilibria show that strikes can occur in real time and discuss extensions of the model such as lockouts and the possibility of multiple recontracting opportunities copyright 1991 by american economic association

the intraday speed of stock price adjustment to major dividend changes bid ask bounce and order flow imbalances abstract this paper examines the intraday stock price reaction to substantial shifts in dividend policy the results indicate the price reaction to be slower than that previously found by patell and wolfson 1984 and closer to that found with earnings announcements by woodruff and senchack 1988 possible order flow imbalances are examined by looking at the proximity of transaction prices to contemporaneous bid and ask quotes while order flow imbalances are evident for bad news announcements this is not the case for the dividend increase sample this is interpreted as evidence that the price reaction to major dividend increases are in general anticipated fifteen minute holding period returns are computed to measure the movement of equilibrium prices during the announcement period results show a rapid adjustment of prices to positive announcements with adjustment to negative announcements taking up to 75 minutes finally fifteen minute lagged bid ask returns are calculated to determine whether an investor could respond to the announcement and earn positive returns these results are found to be dependent on the transaction cost assumptions being made

predictable events and excess returns the case of dividend announcements abstract this paper hypothesizes that the risk per unit of time and the required rate of return are higher than normal during an event period whose timing can be predicted consistent with this hypothesis this paper presents empirical evidence indicating that the unconditional mean rate of return the variance of stock returns and their systematic risk are higher than usual during dividend announcement periods however the documented increases in the systematic risk are not large enough to fully explain the excess returns this finding is puzzling and hard to reconcile with existing theory

technical efficiency of finnish brewing plants a production frontier approach in recent years there has been a substantial change in the common approach to estimating production functions this is primarily the result of the stochastic frontier production model developed by aigner et al 1977 and meeusen and van den broeck 1977 their approach accords with the textbook definition of the production function which is a locus of maximum output levels from given input sets thus a one sided error term is introduced into the frontier production model since all the firms in an industry are not able to produce the frontier output this one sided error is interpreted as technical inefficiency which represents the amount by which a firm s output falls short of the maximum possible output earlier studies that applied this new approach involved estimation of the mean level of efficiency for the industry the subsequent literature has developed techniques to estimate technical inefficiency for each firm in the industry for example jondrow et al 1982 developed techniques to estimate technical inefficiency for each production unit when technical inefficiency is distributed as either half normal or exponential and is independent of the inputs used this last assumption is relaxed in kumbhakar 1987a and the estimation technique is extended to cover panel data the primary motivation for applications of frontier estimation techniques is the measurement of inefficiency this exercise thus has some direct policy relevance see schmidt 1985 86 in this paper we estimate the technical efficiency of 17 finnish brewing plants using panel data 1955 84 the distinguishing features of this study are that the data is of high quality and the observation period is long

estimation of cost effectiveness of the finnish electricity distribution utilities abstract this paper examines the cost effectiveness of finnish electricity distribution utilities we estimate several panel data stochastic frontier specifications using both cobb douglas and translog model specifications the conventional models are extended in order to model observed heterogeneity explicitly in the cost frontier models the true fixed effects model has been used as a representative of the models which account for unobserved heterogeneity and extended conventional random effect models have been used in analysing the impact of observed heterogeneity a comparison between the conventional random effects model and models where heterogeneity component is entered either into the mean or into the variance of the inefficiency term shows that relative efficiency scores diminish when heterogeneity is added to the analysis the true fixed effects model on the other hand gives clearly smaller inefficiency scores than random effects models in the paper we also show that the relative inefficiency scores and rankings are not sensitive to the cost function specification our analysis points out the importance of the efficient use of the existing distribution network the economies of scale results suggest that firms could reduce their operating costs by using networks more efficiently according to our results average size firms which have high load factors are the most efficient ones all firms have unused capacities so that they can improve cost effectiveness rather by increasing the average distributed volumes than by mergers

productivity and efficiency analysis software an exploratory bibliographical survey of the options the software available to implement and carry out efficiency analysis is crucial for the diffusion of efficiency frontier techniques among applied researchers and policy makers the implementation of up to date productivity and efficiency analysis is indeed important to advance our knowledge in many fields ranging from the public and regulated sectors to the private ones this contribution fills a gap in the existing literature and surveys the currently available options to estimate a variety of frontier methodologies using either general or dedicated programs we outline directions for future research

transparency complementarity and holdout this paper characterizes the conditions under which holdout i e bargaining inefficiency may or may not be significant in a two sided one buyer many seller model with complementarity we address this problem in a very general setup with a bargaining protocol that is symmetric and allows for both publicly observable as well as secret offers and a technology that allows for variable degrees of complementarity the central insight is that the transparency of the bargaining protocol formalized by whether offers are publicly observable or secret as well as the extent of complementarity play a critical role in generating efficiency even with perfect complementarity holdout seems to be largely resolved whenever the bargaining protocol is public but not if it is secret further irrespective of the bargaining protocol holdout is resolved if the marginal contribution of the last seller is not too large

information content and the speed of stock price adjustment the process by which security prices adjust to the release of new information is an area of study which has received much attention in accounting and finance in finance the main interest has been whether prices adjust in a rapid and unbiased manner to new information in accounting the focus has been more on whether different accounting disclosures have information content the study reported here combined both interests in that we investigated the speed of adjustment of releases of information which had different degrees of information content as illustrations dann mayers and rabb 1977 tested the sensitivity of a block trade trading rule to the speed of price adjustments this rule first suggested by grier and albin 1973 is based on the assumption that abnormal returns can be earned by purchasing shares at the block price and selling at that day s closing price dann mayers and rabb hereafter dmr found that unless one could purchase the stock within five minutes of the block trade the profitability of the grier and albin rule was seriously impaired they also found the market price to be an unbiased estimate of the closing price within 15 minutes of the block trade similarly hillmer and yu 1979 devised an alternative test for the speed of price adjustment based on a cumulative sum technique they illustrated the technique by testing for shifts in the parameters of the distributions of price changes and of transaction frequencies around five information events two earnings announcements and three defense

asymmetric information bargaining problems with many agents a yes or no decision must be made about some issue all agents must agree the coase theorem asserts that the efficient outcome will always result suppose the value positive or negative that an individual attaches to an affirmative decision is privately known to that individual it is proved under very mild conditions that with independent types as the number of agents increases the probability of an affirmative efficient decision goes to zero an example in which it is common knowledge that an affirmative decision is efficient and yet the probability of such a decision goes to zero is given

exploring the cross country gap in patenting a stochastic frontier approach abstract this paper benchmarks the patent activities of a sample of oecd countries against the world frontier and explores the sources of the cross country differences in patenting regarded as a proxy for innovation a patent production frontier is estimated for a panel of 21 oecd countries over the 1990 2002 period using stochastic frontier analysis patenting performance for each country is decomposed into basic patenting capacity and patenting efficiency the gap between europe and the world leaders in terms of basic patenting capacity remains substantial with little sign of convergence over the sample period in terms of patenting efficiency japan germany and italy have improved their relative position in recent years the gap in patenting performance between the uk and the world frontier is due to relative underperformance in both patenting capacity and efficiency in patent production institutional factors are found to be significantly associated with the patenting efficiency of an economy

the determinants of the cost efficiency of electric generating plants a stochastic frontier approach this article provides a detailed analysis of generation plant operating cost efficiency over the period 1988 1997 i estimate a stochastic frontier cost function together with a model of plant inefficiencies to measure the operating efficiencies of individual plants and identify factors that are associated with variations in plant efficiencies i find evidence that plant efficiencies are associated with capacity utilization of the plant the number of plants under utility management and ownership form i also find that regulatory restructuring activity in certain states is associated with improvements in plant operating performance the purpose of this article is to provide a detailed analysis of the operating cost efficiencies of electricity generating plants over the period 1988 1997 i estimate the operating efficiencies of fossil fueled steam generating plants and examine factors that influence plant operating performance i use the estimation procedure of battese and coelli 1995 to simultaneously estimate a stochastic frontier cost function and a function relating plant efficiency levels to plant specific factors and other explanatory variables a comprehensive data set allows me to investigate the influence of capacity utilization ownership form and utility experience on plant efficiency levels since significant regulatory change in the electricity industry had begun during this time period i also investigate the impact of state level regulatory change on plant operating efficiency a number of authors have analyzed the efficiencies of electricity generating plants relative to a best practice frontier including kopp and smith 1980 schmidt and lovell 1979 stevenson 1980 cote 1989 reifschneider and stevenson 1991 hammond 1992 pollitt 1995 and fire grosskopf and logan 1983 1985 these studies find considerable evidence of inefficiency in electricity generation during the 1960s and 1970s the present study provides more recent information regarding generating plant efficiencies during a period of significant regulatory and structural change studies investigating the determinants of power plant departures from the frontier have focused primarily on the effects of ownership mode pollitt 1995 provides a comprehensive review of these studies reifschneider and stevenson 1991 examine the impact on cost efficiency of a number of variables including the capacity utilization of the firm s generating facilities more recently knittel 2001 examines the impact of incentive regulation on plant efficiency levels steiner

a transaction data study of weekly and intradaily patterns in stock returns abstract weekly and intradaily patterns in common stock prices are examined using transaction data for large firms negative monday close to close returns accrue between the friday close and the monday open for smaller firms they accrue primarily during the monday trading day for all firms significant weekday differences in intraday returns accrue during the first 45 minutes after the market opens on monday mornings prices drop while on the other weekday mornings they rise otherwise the pattern of intraday returns is similar on all weekdays most notable is an increase in prices on the last trade of the day

the measurement and sources of technical inefficiency in the indonesian weaving industry production function models are estimated with a time series of cross section data on indonesian weaving establishments the sources of technical inefficiency are investigated three firm attributes are identified as being potentially related to firm efhciency tbey are firm ownership age and size the importance of these attributes as sources of inefficiency in the indonesian weaving industry is investigated and the implications of the find ings discussed

china s electricity market restructuring and technology mandates plant level evidence for changing operational efficiency abstract china s electricity sector has experienced substantial efficiency improvement during the last one and a half decades the recent literature has mostly attributed the efficiency improvement to the 2002 unbundling reform with little attention paid to the large scale retrofitting process introduced by technology mandates using a unique panel dataset for hundreds of power plants from 1997 to 2010 we are able to examine the contributions from technology mandates and market restructuring we confirm the significant contributions from the unbundling reform but more importantly technology mandates have contributed at least half of the observed efficiency improvement during this period the results have significant implications for efficiency and demand forecast in the future

privatisation and the efficiency of decentralised electricity generation some evidence from inter war britain the privatization of the electricity supply industry in england and wales has established a decentralized system of supply this paper considers the efficiency of the decentralized interwar electricity supply industry a generalized stochastic frontier cost function is specificed enabling the estimation of returns to scale and inefficiency at plant level these estimates are used in turn to examine the efficiency of stations selected by the central electricity board to supply the national grid the results imply that a decentralized system was not only feasible but that the selection procedure was sensitive to efficiency differences at plant level copyright 1992 by royal economic society

sequential bargaining with incomplete information this paper describes a simple two person two period bargaining game and solves it using the concept of perfect bayesian equilibrium in which the actions of each player convey information which is used by his opponent the paper examines the effects of changes in bargaining costs the size of the contract zone and the length of the bargaining process on such aspects of the solution as the probability of impasse and the likelihood of concessions the combination of information transfer and the lack of pre commitment embodied in perfectness yields many surprising results common perceptions about the effects of parameter changes on bargaining processes are suspect and should be checked in the particular game being discussed

efficiency assessment and benchmarking of thermal power plants in india abstract per capita consumption 1 of electricity in india is many folds lesser than canada usa australia japan chaina and world average even though total energy shortage 2 and peaking shortage 3 were recorded as 11 2 and 11 85 respectively in 2008 09 reflecting non availability of sufficient supply of electricity performance improvement of very small amount can lead to large contribution in financial terms which can be utilized for capacity addition to reduce demand supply gap coal fired thermal power plants are main sources of electricity in india in this paper relative technical efficiency of 60 coal fired power plants has been evaluated and compared using ccr and bcc models of data envelopment analysis target benchmark of input variables has also been evaluated performance comparison includes small versus medium versus large power plants and also state owned versus central owned versus private owned result indicates poor performance of few power plants due to over use of input resources finding reveals that efficiency of small power plants is lower in comparison to medium and large category and also performance of state owned power plants is comparatively lower than central and privately owned study also suggests different measures to improve technical efficiency of the plants

volume and turn of the year behavior abstract this paper studies the trading characteristics of listed companies by size and year end behavior there were no transactions on nearly 25 of the days for the smallest decile even at the turn of year which is an active trading period for small companies as a result of low levels of trading and the regulations governing exchange specialists transaction prices and quotations of small listed companies may require several days to fully reflect equilibrium price changes the data confirm the existence of a year end seasonal pattern in rates of return for small companies and suggest that there may be a seasonal pattern for large companies as well

how does public information affect the frequency of trading in airline stocks abstract this paper examines how firm specific and macroeconomic announcements affect transaction rates in u s airline stocks using a version of the autoregressive conditional hazard framework of hamilton and jorda 2002 that incorporates market microstructure variables we show that on average trading intensity spikes prior and consequent to macroeconomic announcements but decreases around firm specific releases further when we use intraday crude oil futures returns as a proxy for industry relevant and globally important news we find that their effects are statistically significant with higher oil futures returns increasing the probability of trade

institutional trades and intraday stock price behavior abstract this paper examines the price effect of institutional stock trading using a unique data set that reports the transactions large and small of 37 large institutional money management firms the direction of each trade and the identity of the management firm behind each trade are known although institutional trades are associated with some price pressure we find that the average effect is small there is also a marked asymmetry between the price impact of buys versus sells we relate our findings to various hypotheses on the elasticity of demand for stocks the cost of executing transactions and the determinants of market impact although market capitalization and relative trade size influence the market impact of a trade the dominant influence is the identity of the money manager behind the trade

perfect equilibria in a negotiation model rubinstein s alternating offers bargaining model is enriched by assuming that players payoffs in disagreement periods are determined by a normal form game it is shown that such a model can have multiple perfect equilibria including inefficient ones provided that players are sufficiently patient delay is possible even though there is perfect information and the players are fully rational the length of delay depends only on the payoff structure of the disagreement game and not on the discount factor not all feasible and individually rational payoffs of the disagreement game can be supported as average disagreement payoffs indeed some negotiation games have a unique perfect equilibrium with immediate agreement

thresholds of financial development in the euro area we analyse the dynamics of financial development and economic growth in the euro area as these countries went through considerably higher levels of financial development using a balanced panel data of 38 years from 1980 to 2018 we offer new evidence on the finance growth nexus we show the presence of non linearity as there is an inverted u shaped relationship between finance and growth in the long run estimating the thresholds in the finance growth nexus we notice a threshold effect at 74 86 of gdp for domestic credit 51 of gdp for stock turnover ratio and 65 of gdp for stock market capitalisation we notice that exceeding the threshold causes deceleration in economic growth as too much finance results in crowding out effect for productive economic activities the panel granger causality test results show that financial development should be associated with optimal growth performance these findings in the euro area provide some useful policy implications to the emerging and developing economies in designing their financial development strategies