the financial characteristics of firms and theories of merger activity there are a number of important reasons why economists have shown great interest in the analysis of merger activity in all advanced industrial societies the first is that merger activity has been a major cause of rising concentration in the case of the u k a comparison of five estimates made by different researchers led the authors of a 1978 government green paper 4 to the view that since the late 1950s mergers accounted for half of the growth in concentration the rise in concentration in turn creates concern because of the possible misallocation of resources the possible abuse of market power and the political and social impact of concentrated economic strengh in giant firms a second reason is that because mergers have been major instruments of growth by firms and often involve large scale financial outlays there is interest in the extent to which mergers have brought gains or losses to the firms involved including their shareholders there is a third reason which is connected more narrowly with the development of theories of the firm the unending debate between theories based on various kinds of maximising behaviour profit maximising growth maximising etc and as between maximising under constraints and forms of satisficing has led to attempts to formulate stable hypotheses drawn from such theories such hypotheses often involve the role of mergers in for example managerial utility functions principally directed at growth the role of the stock market as a market in control which can discipline firms to conform to profit maximising norms etc these three reasons for interest in merger analysis are clearly inter related and all create interest in the determinants of merger activity in looking at such determinants it is useful for analytical purposes to make some distinction between those approaches which focus on the relation between firms and their macro environment and those which concern themselves primarily with the characteristics of firms such as the degree of managerial shareholder control with assumptions as to the different expected behaviour or on such features as the presence of excess liquidity or high

balanced and unbalanced growth abstract a model is developed that shows how two sectors or regions interact out of steady state through product labor and capital markets and how if the former interaction dominates the growth of one sector pulls along the growth of the other while if the latter interactions dominate one sector or region booms while the other declines it is then shown why liberalization of foreign trade should lead to a transition from a lower to a higher steady state growth rate and why during the course of this transition growth might initially be even slower than before liberalization

erratum to balanced and unbalanced growth journal of development economics 53 1997 41 66 abstract a model is developed that shows how two sectors or regions interact out of steady state through product labor and capital markets and how if the former interaction dominates the growth of one sector pulls along the growth of the other while if the latter interactions dominate one sector or region booms while the other declines it is then shown why liberalization of foreign trade should lead to a transition from a lower to a higher steady state growth rate and why during the course of this transition growth might initially be even slower than before liberalization

the climate for innovation in industry the role of management attitudes and practices in consumer electronics abstract this article explores policy factors that may have systematically influenced the innovative vitality of the u s consumer electronics industry during the post world war ii period a series of successful innovations in electronic equipment that have become the foundation of international rivalry in this industry are examined with a focus on the several factors that might explain the relatively sluggish performance of u s firms in comparison with counterparts from japan and elsewhere the article suggests that the institutional climate for innovation pertaining to considerations that are internal to the firm like management attitudes practices and conventions are predominantly important in explaining the innovative behavior of the industry these tend to dominate the more frequently cited external or macroeconomic factors like inflation industry structure government regulation the propensities to save and invest etc a great potential for improving economic progress lies in opportunities in research and education to provide a better basis for top executives to understand the key role of technology in management and corporate strategy

does liberalization reduce agency costs evidence from the indian banking sector abstract on february 16 2002 the reserve bank of india issued a circular that signaled a policy liberalization facilitating acquisition of private sector banks in india by foreign entities portfolios of private sector and nationalized banks posted significant value gains in the days surrounding the announcement the gains by private sector banks were almost double those of nationalized banks we further analyze the firm specific abnormal returns using cross sectional regressions and find a significant relation between firm specific abnormal returns and factors typically associated with a bank s potential for takeover these results provide the first empirical support for stulz s hypothesis that one cause of the valuation gains associated with liberalization is the expected gain from a reduction of agency costs

the impact of immigration on the british labour market using data from the british labour force survey this article provides an empirical investigation of the way immigration affects labour market outcomes of native born workers in britain set beside a theoretical discussion of the underlying economic mechanisms we discuss problems arising in empirical estimation and how to address them we show that the overall skill distribution of immigrants is remarkably similar to that of the native born workforce we find no strong evidence that immigration has overall effects on aggregate employment participation unemployment and wages but some differences according to education

acquisition targets and motives the case of the banking industry findings do not indicate poorly managed firms are more likely to be acquired than well managed firms the analysis uses a sample of 1 046texas banks that existed in 1970 out of which 201 were acqui red during the period 1970 82 a multinomial logit procedure is used to estimate the relationship between the likelihood of acquisition and the characteristics of the target firm and its market additional results suggest that firms with la rge market shares low capital asset ratios and operations in urban areas are r elatively likely to be acquired but not firms with low profits or low growth copyright 1987 by mit press

modelling the effects of immigration on regional economic performance and wage distribution a computable general equilibrium cge analysis of three european union regions pouliakas k roberts d balamou e and psaltopoulos d modelling the effects of immigration on regional economic performance and wage distribution a computable general equilibrium cge analysis of three european union regions regional studies the paper uses a regional computable general equilibrium cge model to analyse the effects of immigration on three small remote european union regions located within scotland uk greece and latvia two migration scenarios are assessed in the first total labour supply is affected in the second the importance of migratory flows by differential labour skill types is investigated the results indicate significant differences in the extent to which regional economies are affected by immigration they also suggest that remote regions are highly vulnerable to the out migration of skilled workers brain drain while the in migration of unskilled workers leads to widening wage inequality

economic consequences of deregulation evidence from the removal of voting cap in indian banks abstract we examine the effect of the 2005 banking regulation amendment bill and the 2011 banking laws amendment bill proposals for removal of the 10 percent voting rights cap in indian banks the 2011 banking laws bill was first introduced in 2005 but lapsed with the dissolution of the 14th lok sabha the bill was passed in december 2012 and raised the voting cap in private sector banks from 10 to 26 percent we present evidence that the removal of the voting cap enhances the value of votes of bank stocks by reducing the wedge between cash flow and control rights thus increasing monitoring and the probability of takeover post deregulation analysis reveals that the passage of the bill was followed by increasing blockholders number and percentage of shares held in larger and government banks furthermore a stronger negative relationship between banks profitability and size as well as share of non performing loans is observed this study makes an important contribution to the growing literature on the valuation impact and efficiency gains of liberalization of ownership restrictions in emerging markets as well as the rich literature on corporate governance and control relating to the value of voting privilege in companies with disparate voting rights

international competitiveness technical change and the state the machine tool industry in taiwan and japan abstract it is widely accepted that the growth performance of japan and the asian newly industrialized countries hong kong singapore south korea and taiwan is partly the result of the international competitiveness they have achieved in a number of export industries it remains however to explain how this competitiveness was achieved in the first part of the paper an attempt at such an explanation based on the theory of comparative advantage is critically examined it is argued that while this explanation does have some explanatory power it does not deal adequately with a the role of technical and productivity change b the causal mechanisms underlying economic growth and c the role of the state the rest of the paper examines the case of machine tools in taiwan and japan showing the importance of these three factors as well as a number of others as determinants of international competitiveness the paper ends with a discussion of policy dilemmas relating to international competitiveness in the taiwanese machine toot industry

collective efficiency growth path for small scale industry this study is concerned with the growth of small local industry in developing countries and explores one particular route for understanding and fostering such growth it focuses on the clustering of firms and the competitive advantage which they derive from local external economies and joint action captured in the concept of collective efficiency following a conceptual discussion the article explores the economic and institutional conditions which enhance or hinder collective efficiency this includes a case study which suggests that responding to opportunity and crisis requires shifting from mere reliance on external economies to joint action and from ascribed to earned trust

efficiency dynamics in indian banking a conditional directional distance approach abstract the paper contributes to the contemporary research on bank efficiency in india we analyze the efficiency dynamics of the indian banking industry from 2004 to 2012 based on the recent methodological developments of the conditional and unconditional directional distances introduced by daraio and simar 2014 we apply a conditional directional distance estimator in order to analyze the dynamic effects of industry s performance levels the results indicate that foreign banks perform better compared to national and domestic private banks there is also evidence of technological change at the period before the global financial crisis however during and after the global financial crisis these gains diminished the evidence suggests that national banks fail to sustain their high performance levels gained after the industry s restructuring period finally the findings support the view that ownership structure affects banks technical efficiency levels

why do banks merge the banking industry is consolidating at an accelerating pace yet no conclusive results have emerged on the benefits of mergers and acquisitions in order to investigate the motives and results of each type of deal we consider separately acquisitions that is the purchase of the majority of voting shares and mergers using italian data mergers seek to improve income from services but the increase is offset by higher staff costs return on equity improves because of a decrease in capital acquisitions aim to restructure the loan portfolio of the acquired bank improved lending policies result in higher profits

the effect of low skilled immigration on u s prices evidence from cpi data i exploit the large variation across u s cities and through time in the relative size of the low skilled immigrant population to estimate the causal effect of immigration on prices of nontraded goods and services using an instrumental variables strategy i find that at current immigration levels a 10 percent increase in the share of low skilled immigrants in the labor force decreases the price of immigrant intensive services such as housekeeping and gardening by 2 percent wage equations suggest that lower wages are a likely channel through which these effects take place however wage effects are significantly larger for low skilled immigrants than for low skilled natives implying that the two are imperfect substitutes

externalities in economies with imperfect information and incomplete markets this paper presents a simple general framework for analyzing externalities in economies with incomplete markets and imperfect infonnation by identifying the pecuniary effects of these externalities that net out the paper simplifies the problem of determining when tax interventions are pareto improving the approach indicates that such tax interventions almost always exist and that equilibria in situations of imperfect information are rarely constrained pareto optima it can also lead to simple tests based on readily observable indicators of the efficacy of particular tax policies in situations involving adverse selection signaling moral hazard incomplete contingent claims markets and queue rationing equilibria traditional discussions of externalities have emphasized the distinction between technological externalities in which the action of one individual or firm directly affects the utility or profit ofanother and pecuniary externalities in which one individual s or firm s actions affect another only through effects on prices while the presence of technological externalities imply in general that a competitive equilibrium may not be pareto efficient pecuniary externalities hy themselves are not a source of inefficiency the fact that prices change has of course important consequences there are both distributional and allocational effects but the distribution effects net out gains for example hy firms whose prices increase are precisely offset by losses e g to individuals who must pay higher prices and there are no welfare losses from the allocation effects as long as the price changes involved are small if firms are maximizing profits and individuals are maximizing utility both facing prices that correctly refiect opportunity costs then standard envelope theorem arguments imply that changes in profits or utility induced by changes in allocations resulting from any small change in prices are negligible

boards of directors ownership and regulation in this paper we examine whether regulation can be used to substitute for internal monitoring mechanisms percentage of outside directors officer and director common stock ownership and ceo chair duality to control for agency conflicts in a firm we find that in general the percentage of outside directors is negatively related to insider stock ownership but is not affected by ceo chair duality ceo chair duality is however less likely when insider stock ownership increases we find these internal monitoring mechanisms to be significantly less related with regulated firms banks and utilities we conclude that to the extent that regulations reduce the impact of managerial decisions on shareholder wealth effective internal monitoring of managers becomes less important in controlling agency conflicts 2002 elsevier science b v all rights reserved

is migration important for regional convergence comparative evidence for norwegian and swedish counties 1980 2000 ostbye s and westerlund o 2007 is migration important for regional convergence comparative evidence for norwegian and swedish counties 1980 2000 regional studies 41 901 915 regional convergence studies have relied on net migration data when assessing the impact of migration with heterogeneous labour the implied symmetrical treatment of immigration and emigration cannot be justified a priori because of heterogeneity among migrants gross migration flows may lead to considerable interregional redistribution of human capital even when net migration is zero moreover the effects of regional economic conditions on gross in and out migration flows may not be symmetric in this comparative study of regional growth and migration the net and the gross migration approaches are compared the results confirm ex post that the net approach cannot be justified and despite sweden and norway being similar in many ways migration has very different effects on convergence in these two countries ostbye s et

a computable general equilibrium analysis of a property tax limitation initiative in idaho idaho voters rejected a property tax limitation initiative in 1996 before the election proponents claimed the decrease in revenues would be offset from the increase in economic activity we developed a computable general equilibrium model based on tradable and non tradable sectors to hypothesize the impact on idaho s public finances household income and economic growth with and without the initiative s tax policy the model predicts that each 3 reduction in property tax revenues would result in an overall 2 loss in state and local revenues the benefits are predicted to be 35 per low income household and 738 per high income household the federal government would receive 1 additional revenues from idaho r51 most economists who use computable general equilibrium cge models to analyze the impacts of tax reforms focus their attention on the national and multi regional level 3 waters holland and weber 1997 were the first ones to use a cge model to analyze the general equilibrium impacts of a property tax reduction oregon s measure 5 on a state s economy they compared the results of a two sector goods and services cge model to those of a fixed price input output model they concluded that cge models represent a significant advancement over fixed price input output models for estimating economy wide effects of a property tax reform in addition they demonstrated the ability of these models to incorporate after tax effects on the distribution of household income one shortcoming of the waters holland and weber approach is that the goods and services sectoring scheme used in the cge model is convenient but conceptually incorrect these categories are approximations of the theoretically correct distinction of tradable and non tradable sectors in this study we evaluate the potential impact of a 50 property tax reduction proposed in the one percent initiative on idaho s economy from a general equilibrium perspective we introduce a two sector tradable and non tradable cge model for the state of idaho we argue that our approach is more conceptually accurate and deductively coherent than the waters holland and weber approach in hypothesizing the direction and size of a tax policy shock on a regional economy the distinction between tradable and non tradable sectors is important conceptually both to understand a region s economic behavior and to measure the effects of a change in policy correctly the results provide testable hypotheses on the likely impact from a

urban effects on participation and wages are there gender differences abstract this paper estimates participation and wage equations using panel data from the united kingdom to explore gender differences in urban wage and participation premiums the results suggest a small but economically significant urban participation premium for women but none for men results from the wage estimations suggest that after controlling for sample selectivity observed and unobserved heterogeneity the urban premium is larger for women this wage premium is also larger for married or cohabiting women relative to others there is also evidence of higher urban returns to experience for men and lower urban wage depreciation for both men and women

economic impacts of a property tax limitation a computable general equilibrium analysis of oregon s measure 5 a state level computable general equilibrium cge model was used to investigate economic adjustment to a property tax limitation in oregon findings under two cge model variants are compared with results using a fixed price input output type model the analysis suggests that 1 total output and income increase under the limitation with high income households benefitting most and low income households least 2 even with income growth total state and local government tax revenues and spending shrink significantly 3 the limitation makes oregon s tax system slightly less progressive at the top of the income distribution but slightly more progressive at the bottom

innovations in regional computable general equilibrium cge modelling with the emergence of regional computable general equilibrium cge models in the later 1980s there was significant optimism that they would greatly push economic policy and the empirical envelopes unlike partial equilibrium approaches or input output methods cge models can trace the impact of an economic shock or policy shock through the various sectors allowing estimates of changes in factors output and prices however many of the first generation of cge models had a black box feel to them their results could be sensitive to the functional form parameter estimates and assumptions about capital and labour flows for example in their survey article partridge and rickman 1998 11 partridge m d and rickman d s 1998 regional computable general equilibrium modeling a survey and critical appraisal international regional science review 21 205 250 crossref web of science csa view all references called on cge modellers to account for these problems and strive to produce more credible results in recent years regional cge modellers have improved their approaches producing innovative techniques to apply to real world problems

a meta analytic assessment of the effect of immigration on wages in our increasingly interconnected and open world international migration is becoming an important socio economic phenomenon for many countries since the early 1980s many studies have been undertaken of the impact of immigration on host labour markets borjas 2003 noted that the estimated effect of immigration on the wage of native workers varies widely from study to study and sometimes even within the same study in addition these effects cluster around zero such a small effect is a rather surprising outcome given that in a closed competitive labour market an increase in labour supply may be expected to exert a downward pressure on wages we revisit this issue by applying meta analytic techniques to a set of eighteen papers which altogether generated 348 estimates of the percentage change in the wage of a native worker with respect to a one percentage point increase in the ratio of immigrants over native workers while many studies in our database employ us data estimates are also obtained from germany the netherlands france norway austria israel and australia our analysis shows that results vary across countries and are inter alia related to the type of modelling approach technical issues such as publication bias and quality of the estimates are addressed as well

economic reform in developing countries some conceptual issues abstract this paper is an effort to show that the outcome of stabilization and structural adjustment policies largely based on the neoclassical economic rationale was justifiable neither in terms of the analytical nor the historical literature the very ideological nature and the inherent contradictions of policies inhibited successful implementation and accentuated poverty and inequity in developing countries by drawing on the views of various contemporary schools of economic thought the paper also questions the validity of the international financial institutions claims of consensus on development policy the paper emphasizes that in social science research and more so in policy prescriptions the search for consensus may in fact be futile

how significant are externalities for development if one man starts a new idea it is taken up by others and combined with suggestions of their own and thus it becomes the source of further new ideas and presently subsidiary trades grow up in the neighbourhood supplying it with implements and materials marshall 1920 p 225

can taiwan s second movers upgrade via branding abstract taiwan one of the best performers among latecomers has successfully entered mature high tech from the 1980s but has yet to close the technological gap with the west the paper examines why most of the successful second movers in taiwan do not pursue r d intensive and own brand strategies to catch up and whether they may do so in the future it is argued here that the second mover expands by relying upon accumulated organizational capabilities based on subcontracting manufacturing hence implying likely path dependence in development thus the strategy of choice for most will be upgrading subcontracting cross industry subcontracting and then own brand manufacturing in that order among the structural factors affecting the firm s strategic choice the industrial policy has been a crucial one south korea has produced some successful global brands supported by the state s national champion policy and long term commitment to the chaebol the emerging china has also adopted a highly ambitious national champion strategy the fact that the government in taiwan has never adopted a national champion strategy helps to partly explain the evolutionary path of taiwan s second movers and attests to the importance of industrial policy unless taiwan s policy environment changes significantly the current trend may continue in the foreseeable future

firm level knowledge accumulation and regional dynamics two bodies of literature have contributed significantly to our insight into the forces driving competitiveness and economic growth regional agglomeration studies emphasise the favourable impact of geographical proximity on regional economic performance particularly through knowledge spillovers however the firms that constitute those agglomerations largely remain black boxes in contrast studies dealing with technological learning explain economic performance at firm level without systematically taking account of the effects of geographical proximity the aim of the paper is to propose a possible way to bridge this gap this contributes to our understanding of the determinants of economic growth in industrial clusters an empirical illustration of a capital goods cluster is elaborated

the capital account and regional balance of payments problems many regional issues can be expressed in terms of regional balance of payments accounts this framework in turn highlights a feature of regional economics to which little attention is paid inter regional capital flows it is the presumption that these flows accommodate demand which explains the apparent absence of regional balance of payments problems in fact if capital flows are not accommodating then regional balance of payments problems may be more serious than for countries with separate currencies since they require income adjustment having explained the balance of payments accounts in regional terms and the nature and significance of inter regional capital flows the paper concludes with a discussion of data requirements with particular reference to the scottish case