This paper aims at explaining why countries with comparable levels of education still experience notable differences in terms of R&D and innovation. High-skilled migration, ultimately linked to differences in R&D costs, might be responsible for the persistence of such a gap. In fact, in a model where human capital accumulation and innovation are strategic complements, we show that allowing labor outflows may strengthen educational incentives in the lagging economy if migration is probabilistic in nature, but at the same time reduces the share of innovative production. Income (growth) might be consequently affected, and a positive migration chance is very unlikely to act as a substitute for educational subsidies.

This paper provides a simple matching model in which unemployed workers and employers can be matched together through social networks or through more “formal” methods of search. We show that, in some case, networks substitute for labor market and that this crowding-out effect may be socially costly. For that reason, a policy increasing the social capital of the disadvantaged workers can increase the unemployment rate and decrease workers' output.

In this paper, we study the role of habit formation in accounting for the joint behavior of the real interest rate and consumption growth following a monetary policy shock. A VAR estimation on US data shows that following a contractionary monetary policy shock, the real interest rate exhibits a persistent increase while consumption growth drops persistently. As the standard permanent income model is known to be unable to replicate this co–movement for intertemporal substitution motives, we introduce habit persistence in consumption behavior. We test the implied Euler equation using a method of moments on conditional moments (IRF) obtained from the VAR model. Our estimates of the habit persistence parameter are similar to previous results in the literature. Further, we find empirical support in favor of habit formation as a relevant assumption to represent the joint behavior of the real interest rate and consumption growth following a monetary policy shock. Finally, we show that habit formation allows weakening the intertemporal substitution mechanism.

The reform of corporate governance is again on the agenda in the wake of Enron and excessive risk-taking by financial institutions. However, the search for new and better forms of governance often seems to lack guiding principles. A theory of corporate governance ought to emerge from a theory of the firm. Yet, the literature shows how this project is both difficult and far from complete. In this paper we review how existing theory provides a variety of arguments favouring either a shareholder or a stakeholder orientation. These arguments may depend on whether the prime objective for governance is improved current performance or a more long-term focus for firms. A brief review of recent US governance reforms is given as a backdrop to discussing more far-reaching proposals that have emerged in the recent literature; a greater role for institutional investors on the one hand or a return to managerial capitalism on the other.

We develop a theoretical model where child labour results from a household's trade-off between sending a child to school or to work. Education is considered as a risky investment, since the survival of the child is not certain. We explore the effects of public expenditure on education and health on child labour, specifying a transmission mechanism for each kind of spending. On the one hand, we establish that health expenditure reduces child labour all the more as child mortality rate is high. On the other hand, a moderate aversion to risk is a necessary condition for education expenditure to reduce child labour. Our theoretical results are empirically validated on panel data from 66 developing countries between 1985 and 2000.

In Belgium, families with young dependents receive tax reliefs depending on the type of care used. In this paper we analyze the Federal government policy that allows families using formal childcare to deduct their expenses out of their taxable income. For families using parental and informal care, a tax credit is granted for each child under three years old. We find that tax deduction of childcare expenses is a progressive tax policy among the users of formal day care. On the contrary, when considering all families with young dependents the tax policies for childcare are regressive.

In non-union models, there is an ambiguous relationship between collusion on the product market and the resulting impact on the labour market. We can derive some conclusions by assuming a dual labour market with qualified and unqualified workers and taking into account the efficiency effect when employing qualified workers. The framework adopted here consists of two firms competing to hire workers on the qualified labour market, and then competing (or colluding) on the product market to sell their production. While qualified workers are heterogeneous in their specialization, firms sell imperfect substitute goods on the product market.

First, if the two firms collude in setting prices on the product market, this leads to an increase in the symmetric equilibrium wage in the qualified labour market, as well as a rise in productivity. Unions are not considered. Second, although the number of unqualified workers hired decreases along with the total employment, the wage bill can rise because of intensified competition on the qualified labour market.

The adoption of a common central Bank has modified the strategic relationships between fiscal and monetary authorities and raised in a new context the issue of debt stabilization. To study this problem, Van Aarle et al (1997) have proposed a two-country model with a common central bank. In a sense they obtained a neutrality result: the adoption of a common central bank does not modify the evolution of debt if the authorities can commit. This note reexamines this neutrality result by departing from the previous authors on three points: i) externalities are introduced between countries to account for the elasticity of the world interest rate to macro-economic policies, ii) the model features n countries, some of them remaining outside the monetary Union, iii) analytical results are given (many results of Van Aarle et al (1997) were numeric). In this extended context the neutrality result collapses: i) the institutional change introduces an asymmetry between countries, ii) countries inside the monetary union improve their long run welfare, iii) but the outside countries can win or lose under the new institutional setting.

This paper intends to relate more closely corporate governance, industry dynamics and firms performance. In this perspective, it focuses on the impact of applying the normative, best practice, shareholder value model of corporate governance on industry dynamics and related performance measured by economic as well as financial indicators. At a theoretical level, the paper presents an integrated framework based on the connection between firms governance and industry dynamics issues. But the core of the paper is to advance that the combination of corporate governance and industry dynamics also requires important investigations into empirical aspects. At a case study level, our major finding is that the adoption of the best practice model of corporate governance in the telecoms equipment supplier industry contributed to create large ups and downs in the industry dynamics affecting both economic and financial performances. At a more general level, combining two different datasets Corporate governance Quotient (CGQ) and DATASTREAM, we show the variegated impact of the normative model on industry dynamics and confirm the observed phenomenon of ups and downs amplifications formerly emphasized, at least at the level of stock market performance.

En utilisant un modèle d'appariement avec différenciation des qualifications, nous étudions l'effet du salaire minimum sur le fonctionnement du marché du travail. L'introduction d'un salaire minimum semble améliorer l'adéquation des travailleurs aux emplois en rendant les “mauvaises” associations impossibles. Trois résultats principaux sont ainsi établis. Premièrement, le salaire minimum peut augmenter l'efficacité du marché du travail. Ensuite, dès que le salaire minimum est suffisamment élevé pour contraindre effectivement la formation des salaires, les allocations chômage perdent tout effet positif sur la productivité et deviennent invariablement inefficientes (en excluant les situations de sur-emploi). Finalement, des simulations numériques montrent que l'introduction d'un salaire minimum peut être un meilleur instrument de régulation du marché du travail que l'augmentation des allocations chômage.

Cet article explore les liens empiriques entre la pluralité des formes institutionnelles et la durée de chômage pour apprécier le rôle des entreprises et de leurs modes de gestion de la main-d'œuvre dans l'allongement de la durée de chômage et dans la construction de l'employabilité des travailleurs. À partir du suivi longitudinal des chômeurs de l'enquête TDE-MLT, nous procédons à une analyse microéconométrique de la durée du premier épisode de chômage des individus en fonction des variables attachées aux entreprises et aux relations d'emploi passées. Les résultats établissent que certaines pratiques de gestion de la main-d'œuvre développées par les entreprises déterminent les parcours de chômage des individus de notre échantillon et construisent en partie la vulnérabilité des travailleurs au chômage de longue durée.

This paper studies in a model à la Bebchuk how the existence of an asymmetric information on the risk aversion of parties engaged in a trial affects the way they litigate. We first consider the situation where the plaintiff is the informed party, and solve for the equilibrium with and without pre-trial negotiations. Then, we analyze the comparative static of the model and the effects of alternative fee-shfting rules. Finally, we discuss several extensions: the case where the defendant is the informed party, the influence of the representation of litigants’ preferences, and of the existence of the optimistic bias (or self-serving bias).

During the 1980s and 1990s the argument that “maximizing shareholder value” results in superior economic performance came to dominate the corporate governance debates. In this paper, I outline the rationale for the shareholder-value perspective, and show that, rooted in agency theory, it lacks a theory of innovative enterprise. Hence it cannot be used to analyze the conditions under which the stock market supports or undermines the process of value-creation. To go beyond agency theory and its shareholdervalue perspective, I present a framework for analyzing the functions of the stock market in the business corporation and the influence of these functions on the social conditions of innovative enterprise. I then use this framework to explain why in the United States since the 1990s there has been a widespread trend in corporate stock repurchases, including a sharp acceleration in buybacks since 2003. Focusing on a list of the largest corporate repurchasers in the United States, I raise questions concerning the relation between stock buybacks and value-creating investments in the US economy as a whole. I conclude with a discussion of why companies do stock repurchases, and in particular whether they can be justified as a contribution to innovative enterprise. I argue that the ultimate justification for stock repurchases is the ideology of “maximizing shareholder value” - an ideology that works to the direct benefit of corporate executives who make corporate resource allocation decisions and who derive high levels of remuneration from munificent stock option awards.

A partir des données de l'enquête SINE 98 de l'INSEE, une étude économétrique de la survie des entreprises culturelles fait apparaître les résultats suivants. Premièrement, le pourcentage d'entreprises qui meurent chaque année n'est pas stable au cours du temps et diffère selon le secteur considéré (arts visuels, spectacle vivant, patrimoine, édition, audiovisuel ou produits culturels). Le risque artisanal est très fort les trois ou quatre premières années alors que le risque industriel apparaît une fois ces premières années passées. Deuxièmement, le taux de survie des entreprises culturelles est très sensible à leur regroupement géographique. Si la proximité d'entreprises ayant la même activité est néfaste à la survie des entreprises culturelles, une forte concentration d'activités culturelles variées est très fortement bénéfique à leur survie. L'effet de synergie l'emporte sur l'effet de concurrence. Il donne un fondement à la productivité des regroupements d'entreprises culturelles qualifiés de pôle de compétitivité culturel ou de district culturel.

Différentes heuristiques ont été avancées par les psychologues et les économistes afin de rendre compte des comportements sur les marchés financiers. Elles soulignent les biais cognitifs qui affectent les croyances individuelles, et s'efforcent d'expliquer dans une certaine mesure les anomalies constatées sur les marchés financiers. L'expérimentation menée vise à tester les heuristiques de conservatisme, de représentativité et d'ancrage-ajustement dans un contexte dynamique de quinze périodes : les sujets reçoivent, à chaque période, une information financière et révisent individuellement leurs croyances quant à la qualité d'une entreprise. Les croyances observées s'avèrent incompatibles avec l'hypothèse de révision bayésienne: les sujets ont tendance à surévaluer les petites probabilités et à sous-évaluer les fortes probabilités. L'heuristique de représentativité est, de la même manière, invalidée : le traitement économétrique montre que les sujets sous-pondèrent les signaux les plus intenses, preuve qu'ils ne tirent pas parti de leurs intensités informationnelles. Les hypothèses de conservatisme et d'ancrage-ajustement sont au contraire conjointement validées : les sujets sous-pondèrent l'information nouvelle quand ils révisent leurs croyances mais ce comportement de révision est pleinement conditionné au fait que les sujets s'écartent ou se rapprochent d'une valeur d'ancrage.

In this paper we re-examine whether purchasing power parity holds in the long run in China from a two-steps procedure correcting outliers and testing unit roots. Thus, the efficient unit root tests developed by Elliott, Rothenberg and Stock (1996) and Ng and Perron (2001) are applied on the Renminbi bilateral (to the US dollar) real exchange rate, corrected from outliers, over the period 1970 to 2006 (in monthly frequency). We underlined the effects of large, but infrequent shocks due to changes of Chinese exchange policy undertaken since the China’s foreign exchange reform on the real exchange rate, in particular several devaluations between 1984-1994. We also show that there is no tendency to the purchasing power parity in China to hold in the long run during this period.

This article examines the influence of equity ownership structure (stock market listing and identity of shareholders) on human resource management practices. The empirical analysis uses the 2004-2005 Workplace Industrial Relations Survey (REPONSE survey), based on a sample of 2930 establishments with 20 employees or more, representative of the French private sector. Our findings confirm the importance of listing and, to a lesser extent, of the identity of shareholders as determinants of human resource management practices, considering temporary work arrangements (agency work, fixed-term contracts and sub-contracting), pay policy (wage levels and use of variable pay) and training expenditures.

A l'heure de l'économie du savoir et de la connaissance, l'éducation est devenue un enjeu majeur et l'enseignant a acquis une place centrale dans le processus de production d'éducation. Dans ces conditions, sont recherchés les moyens d'augmenter la performance des enseignants afin d'améliorer les résultats scolaires des élèves. La mise en place de structures incitatives (notamment la rémunération à la performance) est souvent suggérée mais les études démontrant l'efficacité des incitations restent mitigées.

Cet article propose une revue de la littérature théorique et empirique sur la façon dont les incitations affectent le comportement des enseignants. Les arguments pour et contre la mise en incitation des enseignants sont étu-diés. En particulier, nous examinons i) les difficultés à contrôler et à évaluer la performance des enseignants, ii) la question du travail en équipe dans un contexte d'individualisation de la performance et iii) le problème du multitâches lorsque les incitations portent sur seulement quelques tâches.