Trade Liberalization and Organizational Choice

We embed a simple incomplete-contracts model of organization design in a standard two-country, perfectly-competitive trade model to examine how the liberalization of product and factor markets affects the ownership structure of firms. In our model, managers decide whether or not to integrate their firms, trading off the pecuniary benefits of coordinating production decisions with the private benefits of operating in their preferred ways. The price of output is a crucial determinant of this choice, since it affects the size of the pecuniary benefits. In particular, non-integration is chosen at "low" and "high" prices, while integration occurs only at moderate prices. Organizational choices also depend on the terms of trade in supplier markets, which affect the division of surplus between managers. We obtain three main results. First, joint product and factor market integration leads to the convergence of organization design across countries. Second, even in the absence of factor movements, the price changes triggered by liberalization of product markets can lead to significant organizational restructuring within countries. Third, the removal of barriers to factor mobility can induce further organizational changes, sometimes adversely affecting consumers, which suggests a potential complementarity between trade policy and corporate governance policy.

Trade Liberalization and Organizational Change

We embed a simple incomplete-contracts model of organization design in a standard two-country perfectly-competitive trade model to examine how the liberalization of product and factor markets affects the ownership structure of firms. In our model, managers decide whether or not to integrate their firms, trading off the pecuniary benefits of coordinating production decisions with the private benefits of operating in their preferred ways. The price of output is a crucial determinant of this choice, since it affects the size of the pecuniary benefits. In particular, non-integration is chosen at “low” and “high” prices, while integration occurs at moderate prices. Organizational choices also depend on the terms of trade in supplier markets, which affect the division of surplus between managers. We obtain three main results. First, even when firms do not relocate across countries, the price changes triggered by liberalization of product markets can lead to significant organizational restructuring within countries. Second, the removal of barriers to factor mobility can lead to inefficient reorganization and adversely affect consumers. Third, “deep integration” the liberalization of both product and factor markets ­ leads to the convergence of organizational design across countries.Firms, Contracts, Globalization

TRANSAMIDINASE OF HOG KIDNEY. I. PURIFICATION AND PROPERTIES.

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On the Significance of Returns Achieved with Equal Sector Weighted Portfolios

For years, the market portfolio has been a bastion of long term returns for the passive investor. With the launch of SSGA’s Select Sector SPDR ETFs has come evidence that a portfolio weighted equally among the sectors of the S&P 500 has outperformed the market over the past 10 years on both an absolute and risk adjusted basis. In this paper we test the outperformance of such an equally weighted portfolio against an expanded dataset to that of Sturm (2010) and that offered by the SPDR marketing material. By using sector index data for the S&P 500, the S&P TSX, and an approximation for an expanded set of Select Sector SPDR ETF returns, we find that returns of Equal Sector portfolios tend to be less volatile than the market, and also that the Equal Sector strategy tends to outperform on a risk-adjusted basis during heightened market volatility. But, we also find that the periodic excess returns of an Equal Sector strategy are not statistically significant over the period of December 31, 1989 to December 31, 2009, suggesting that excess returns of an equal sector strategy may be transitory, and therefore unreliable

Halpha rotation curves: the soft core question

We present high resolution Halpha rotation curves of 4 late-type dwarf galaxies and 2 low surface brightness galaxies (LSB) for which accurate HI rotation curves are available from the literature. Observations are carried out at Telescopio Nazionale Galileo (TNG). For LSB F583-1 an innovative dispersing element was used, the Volume Phase Holographic (VPH) with a dispersion of about 0.35 A/pxl. We find good agreement between the Halpha data and the HI observations and conclude that the HI data for these galaxies suffer very little from beam smearing. We show that the optical rotation curves of these dark matter dominated galaxies are best fitted by the Burkert profile. In the centers of galaxies, where the N-body simulations predict cuspy cores and fast rising rotation curves, our data seem to be in better agreement with the presence of soft cores.Comment: Accepted for Publication in ApJ with minor changes require

Do Prices Determine Vertical Integration?

What is the relationship between product prices and vertical integration? While the literature has focused on how integration affects prices, this paper provides evidence that prices can affect integration. Many theories in organizational economics and industrial organization posit that integration, while costly, increases productivity. It follows from firms' maximizing behavior that higher prices induce more integration. The reason is that at low prices, increases in revenue resulting from enhanced productivity are too small to justify the cost, whereas at high prices the revenue benefit exceeds the cost. Trade policy provides a source of exogenous price variation to assess the validity of this prediction: higher tariffs should lead to higher prices and therefore to more integration. We construct firm-level indices of vertical integration for a large set of countries and industries and exploit cross-section and time-series variation in import tariffs to examine their impact on firm boundaries. Our empirical results provide strong support for the view that output prices are a key determinant of vertical integration.

First optical validation of a Schwarzschild Couder telescope: the ASTRI SST-2M Cherenkov telescope

The Cherenkov Telescope Array (CTA) represents the most advanced facility designed for Cherenkov Astronomy. ASTRI SST-2M has been developed as a demonstrator for the Small Size Telescope in the context of the upcoming CTA. Its main innovation consists in the optical layout which implements the Schwarzschild-Couder configuration and is fully validated for the first time. The ASTRI SST-2M optical system represents the first qualified example for two mirrors telescope for Cherenkov Astronomy. This configuration permits to (i) maintain a high optical quality across a large FoV (ii) de-magnify the plate scale, (iii) exploit new technological solutions for focal plane sensors. The goal of the paper is to present the optical qualification of the ASTRI SST-2M telescope. The qualification has been obtained measuring the PSF sizes generated in the focal plane at various distance from the optical axis. These values have been compared with the performances expected by design. After an introduction on the Gamma Astronomy from the ground, the optical design and how it has been implemented for ASTRI SST-2M is discussed. Moreover the description of the setup used to qualify the telescope over the full field of view is shown. We report the results of the first--light optical qualification. The required specification of a flat PSF of $\sim 10$ arcmin in a large field of view ~10 deg has been demonstrated. These results validate the design specifications, opening a new scenario for Cherenkov Gamma ray Astronomy and, in particular, for the detection of high energy (5 - 300 TeV) gamma rays and wide-field observations with CTA.Comment: 6 pages, 5 figure