Browsing Working Papers (ECON) by Subject "kep"
Now showing items 1-16 of 16
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Bennedsen, Morten; Kongsted, Hans Christian; Meisner Nielsen, Kasper (København, 2004)[More information][Less information]
Abstract: Previous work on board size effects in closely held corporations has established a negative correlation between board size and firm performance. We argue that this work has been incomplete in analysing the causal relationship due to lack of ownership information and weak identification strategies in simultanous equation analysis. In the present paper we reexamine the causal relationship between board size and firm performance using a dataset of more than 5,000 small and medium sized closely held corporations with complete ownership information and detailed accounting data. We test the potential endogeneity of board size by using a new instrument given by the number of children of the founders of the firms. Our analysis shows that board size can be taken as exogenous in the performance equation. Furthermore, based on a flexible model specification we find that there is no empirical evidence of adverse board size effects in the typical range of three to six board members. Finally, we find a significantly negative board size effect in the minority of closely held firms which have comparatively large boards of seven or more members. URI: http://hdl.handle.net/10398/7566 Files in this item: 1
wpec092004.pdf (252.8Kb) -
Fuest, Clemens; Huber, Bernd; Nielsen, Søren Bo (København, 2004)[More information][Less information]
Abstract: Recent years have seen large swings in house prices in many countries. Motivated by housing price variations, proposals for taxing capital gains on housing have repeatedly been put forth. The idea seems to be that such taxes would curb the redistribution occurring between those owning houses and those trying to get into the market for owner-occupied housing. Our paper shows that at least in simple settings, a tax on real capital gains on housing will only lead to even bigger price swings and will not be able to redistribute between people appearing on either side of the housing market. Keywords: capital gains tax, housing market, price fluctuations JEL-Classification: H23, H24, R 31. Addresses: URI: http://hdl.handle.net/10398/7640 Files in this item: 1
wpec162004.pdf (178.3Kb) -
Inference from the Business CycleRose Skaksen, Jan; Sørensen, Anders (København, 2004)[More information][Less information]
Abstract: The relative demand for skills has increased considerably in many OECD countries during recent decades. This development is potentially explained by capital-skill complementarity and high growth rates of capital equipment. When production functions are characterized by capital-skill complementarity, relative wages and employment of skilled labor are countercyclical because capital equipment is a quasi- fixed factor in the short run. The exact behavior of the two variables depends on relative wage flexibility. Relative wages are rigid in Denmark, implying that the employment share of skills should be countercyclical. The labor market is competitive in the United States and therefore relative wages of skilled labor are expected to be countercyclical. We find that the business cycle development of the two economies is consistent with capital-skill complementarity. Keywords: capital-skill complementarity, relative wages, business cycle URI: http://hdl.handle.net/10398/7537 Files in this item: 1
wpec102004.pdf (313.9Kb) -
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Abstract: Participation rate on the Greenland labour market: situation of year 2000 A goal is that a large part of the population of normal working age is employed. The participation rate is one of the statistics used to describe the performance of the economy in this respect. Two sources are used to arrive at an estimate of the rate both for Greenland in general and for four regions defined by four so called growth towns: Nuuk, Sisimiut, Ilulissat and Qaqortoq. They are Statistic Greenland’s publications on employment and on unemployment. There are some difficulties using the available data: the employment and unemployment surveys refer to periods whereas the potential workforce is counted at a date. Furthermore persons with yearly income below an arbitrary limit of 40.000 DKK are sorted out even though they should contribute to the number of full year employed. The participation rate is found to be much higher in Nuuk than in the other regions. For Greenland as such the number is in line with figures for Western Europe and North America. Characteristics of people not in the work force are looked for. To some extent a connection exists to the number people receiving pension as disabled, people in education, and those on leave because of childbirth, but the relation is imperfect and great differences are seen between regions. URI: http://hdl.handle.net/10398/7604 Files in this item: 1
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Evidence from CEO TransitionsBennedsen, Morten; Nielsen, Kasper (København, 2004)[More information][Less information]
Abstract: Economists have long acknowledged that the structure of the family (number of offspring, marital status, etc.) plays a crucial role in important economic decisions (e.g., labor supply, demand patterns, portfolio choice, educational attainment). In this paper we investigate the link between family structure and corporate decisions of family firms. Even though there is considerable anecdotal evidence on this link, there is no systematic study. This paper fills this gap. To this end, we assembled a unique dataset with accounting information from 1995 to 2002 of the universe of privately held firms in Denmark. Our dataset includes the family trees of the owners as well as personal information about all family members. This information allows us to identify family firms among privately held firms. We find that, using a 50% definition of control, 89% of privately held firms are family firms. We focus on the decision whether to choose a family member or an outsider as the next CEO. We show that the larger the pool of potential heirs, the higher the probability of family transition. Also we document that this probability is significantly lower when all offspring are female. Finally, family conflicts (proxied by divorce or multiple marriages) reduce the probability of family transition. In a robustness check we show that there is a causal effect from family structure to corporate decisions. We do this by instrumentimg the number of children with sibling sex composition and by restricting the sample to one in which founders had their last child years before founding the firm. URI: http://hdl.handle.net/10398/7631 Files in this item: 1
wpec032004.pdf (354.0Kb) -
Olai Hansen, Bodil; Keiding, Hans (København, 2004)[More information][Less information]
Abstract: We consider a simple model of international trade under uncertainty, where production takes time and is subject to uncertainty. The riskiness of production depends on the choices of the producers, not observable to the general public, and these choices are influenced by the availability and cost of credit. If investment is financed by a bond market, then a situation may arise where otherwise identical countries end up with different levels of interest and different choices of technique, which again implies differences in achieved level of welfare. Under suitable conditions on the parameters of the model, the market may not be able to supply credits to one of the countries. The introduction of financial intermediaries with the ability to control the debtors may change this situation in a direction which is welfare improving (in a suitable sense) by increasing expected output in the country with high interest rates, while opening up for new problems of asymmetric information with respect to the monitoring activity of the banks. Keywords: Capital outflow, financial intermediaries, moral hazard JEL classification: F36, D92, E44 URI: http://hdl.handle.net/10398/7498 Files in this item: 1
wpec072004.pdf (112.4Kb) -
Delegation and Influence Under Alternative Political StructuresBennedsen, Morten; Feldmann, Sven E. (København, 2004)[More information][Less information]
Abstract: This paper studies how interest group lobbying of the bureaucracy affects policy outcomes and how it changes the legislature’s willingness to delegate decision-making authority to the bureaucracy. We extend the standard model of delegation to account for interest group influence during the implementation stage of policy and apply it to different institutional structures of government. The paper addresses the following questions: First, how does the decision to delegate change when the bureaucratic agent is subject to external influence? What cost does this influence impose on the legislative principal? Finally, how susceptible are policy choices to bureaucratic lobbying under different government structures? In answering these questions, the paper seeks to provide a comparative theory of lobbying and to explain the different patterns of interest group activity across political systems. URI: http://hdl.handle.net/10398/7561 Files in this item: 1
wpec042004.pdf (256.8Kb) -
A Tax Optimality IndexRaimondos-Møller, Pascalis; Woodland, Alan D. (København, 2004)[More information][Less information]
Abstract: This paper introduces an index of tax optimality that measures the distance of some current tax structure from the optimal tax structure in the presence of public goods. In doing so, we derive a [0, 1] number that reveals immediately how far the current tax configuration is from the optimal one and, thereby, the degree of efficiency of a tax system. We call this number the Tax Optimality Index. We show how the basic method can be altered in order to derive a revenue equivalent uniform tax, which measures the size of the public sector. A numerical example is used to illustrate the method developed. JEL Code: H21, H41. Keywords: Tax optimality index, excess burden, distance function. Authors Affiliations: Raimondos-Møller: Copenhagen Business School, CEPR, CESifo, and EPRU. Woodland: University of Sydney. URI: http://hdl.handle.net/10398/7534 Files in this item: 1
wpec052004.pdf (385.9Kb) -
Huizinga, Harry; Nielsen, Søren Bo (København, 2004)[More information][Less information]
Abstract: Internationalization offers enhanced opportunities for individuals to place savings abroad and evade domestic saving taxation. This paper asks whether the concomi- tant loss of saving taxation necessarily is harmful. To this end we construct a model of many symmetric countries in which public goods are financed by taxes on saving and investment. There is international cross-ownership of firms, and countries are assumed to be unable to tax away pure profits. Countries then face an incentive to impose a rather high investment tax also borne by foreigners. In this setting, the loss of the saving tax instrument on account of international tax evasion may prevent the overall saving-investment tax wedge from becoming too high, and hence may be beneficial for moderate preferences for public goods. A world with 'high- spending' governments, in contrast, is made worse off by the loss of saving taxes, and hence stands to gain from international cooperation to restore saving taxation. JEL-Classifcation: H87, H21 Keywords: Capital income taxation, cross-ownership, coordination URI: http://hdl.handle.net/10398/7535 Files in this item: 1
wpec152004.pdf (172.2Kb) -
Raimondos-Møller, Pascalis; Woodland, Alan D. (København, 2004)[More information][Less information]
Abstract: This paper examines the welfare implications of non-discriminatory tariff reforms by a subset of countries, which we term a non-preferential trading club. We show that there exist coordinated tariff reforms, accompanied by appropriate income transfers between the member countries, that unambiguously increase the welfare of these countries while leaving the welfare of non-members unaltered. In terms of economic policy implications, our results show that there exist regional, MFN-consistent arrangements that lead to Pareto improvements in world welfare. JEL code: F15. Keywords: Trading clubs, non-preferential tariff reform, Kemp-Wan-Ohyama proposition. URI: http://hdl.handle.net/10398/7540 Files in this item: 1
wpec062004.pdf (262.2Kb) -
Risager, Ole (København, 2004)[More information][Less information]
Abstract: Price-earnings ratios are part of the toolkit that is used for assessing the valuation of individual firms on the stock market as well as the entire market itself. This paper presents consistent P/E series for the liquid Danish shares adjusted for share buybacks. The results show that over the period from 1969 to 2003, the average (trailing) P/E equals 13.5. The P/E reaches its lowest level in 1980, which is likely to be due to a soaring oil price, high wage increases and interest rates approaching 20 percent. Notwithstanding optimistic equity pricing also in Denmark in the late 1990s, the upturn in Danish valuations was more moderate than in the US. The correction that sets in subsequently reversed essentially the gains in the Danish P/E in the 1990s. URI: http://hdl.handle.net/10398/7620 Files in this item: 1
wpec132004.pdf (395.4Kb) -
Andersen, Torben M.; Rose Skaksen, Jan (København, 2004)[More information][Less information]
Abstract: In this paper, we set up a two-country general equilibrium model where trade unions have wage bargaining power. We show that a decrease in trade distortions inducing further product market integration gives rise to specialization gains as well as a labour market reform effect. The implications of the specialization gains are similar to an increase in labour productivity, whereas the labour market reform effect is similar to an increase in the degree of competition in the labour market. Wages, employment and welfare increase as a result of further product market integration. It is interesting to note that the labour market reform effect of product market integration is achieved despite an increase in the wage level. JEL Classification: F15, J30, J50. Keywords: Trade frictions, wage formation, employment, welfare gains. URI: http://hdl.handle.net/10398/7655 Files in this item: 1
wpec082004.pdf (310.3Kb) -
Marker-Larsen, Svend (København, 2004)[More information][Less information]
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Lund, Lars (København, 2004)[More information][Less information]
Abstract: Processing ashore of raw materials from the fisheries tend intuitively to recommend itself because more creation of value added in this manner should take place in Greenland. However, we observe the opposite tendency: production is shifted aboard on factory trawlers and catches are shipped directly to export markets or may be so after transshipping in e.g. Nuuk. It is shown that this actual development indeed is the prediction of location economics. In the case of unemployment it may be optimal to secure raw materials for processing on plants ashore, an aim that may be achieved via subsidies. The optimality of such policy is discussed using concepts from cost benefit analysis, and it is demonstrated how the shadow price of labor has a crucial role. Shifting to the macro level capacity restrictions on plants and on the labor market are pointed out. The effect of taking raw material ashore is illustrated with a macro production function, which is assumed to have a positive marginal product until the capacity limit is hit. This, however, may take place after the noninflationary augmenting level of employment has been reached. Finally the possibility of alternative and better policies than the one relying on subsidies is touched upon. URI: http://hdl.handle.net/10398/7570 Files in this item: 1
wpec012004.pdf (323.5Kb) -
Larsen, Birthe (København, 2004)[More information][Less information]
Abstract: This paper examines the implications of that workers may not be able to estimate their true costs of acquiring skills. Consequently, too few workers may acquire skills. This allows for the possibility that subsidizing education is welfare improving. Furthermore, if the presence of skill-biased technological shocks increase unemployment, this may explain why the market it-self cannot respond to this by making it sufficiently attractive to acquire skills. Consequently, the trade-off in-between subsidizing education and thereby reducing unemployment and optimizing welfare may be eliminated. We analyse this issue in a simple educational model and next in a search equilibrium model including a skill choice decision. Keywords: Education, subsidies, efficiency, unemployment. JEL codes: I20, J64. URI: http://hdl.handle.net/10398/7593 Files in this item: 1
wpec172004.pdf (269.2Kb) -
An investigation on the performance of admission characteristicsla Cour, Lisbeth; Raimondos-Møller, Pascalis (København, 2004)[More information][Less information]
Now showing items 1-16 of 16