Collateral Value and Corporate Investment: Evidence from the French Real Estate Market

This paper is an empirical study of the effect of shocks to firms' collateral, with a focus on land holdings. We find evidence that stand-alone French firms are credit constrained. They invest up to .39¬ more per extra euro of collateral, and they finance this additional investment by issuing more debt. This result is obtained by looking at the specific case of the Ile de France real estate bubble of the 90s, which we use as a natural experiment providing exogenous variations in land value. Consistent with the view of efficient internal capital markets, we find that the effect collateral on corporate investment is limited to stand-alone firms.Internal financial markets, real estate bubble

GDP Per Capita Measured in Purchasing Power Standard: an Analysis of Results

Eurostat regularly issues GDP per capita statistics in purchasing power standards, for member countries of the European Union. This paper aims at recalling the main methodological elements used in order to compute these statistics, at presenting their interest and their limits. We highlight the main conclusions that can be drawn from them.GDP measurement, purchasing power standard, European Union

Investigating the Origins of Capitalism-Aversion

There are two non-mutually exclusive theories of individual variations in pro-capitalism opinions. The first theory views pro-capitalism opinions as self-serving: Individuals are opposed to market forces when they threaten their economic rents. The second theory views differences in such opinions as reflecting genuine disagreement on the efficiency of various economic systems. Using individual data, we investigate the validity of both theories, focusing on attitudes toward private ownership, private profit and competition. We find evidence that the first theory explains some of the variations in attitudes. However, consistent with the second theory, we also find evidence of individual learning about the comparative virtues of economic systems. The learning is slow, home-biased and path-dependent. Long-run cultural and historical determinants of pro-market attitudes, such as religion and legal origins, explain more than 40% of the cross-country variations in capitalism aversion. Last, we provide tentative evidence that at the country level, pro-market opinions affect the nature of economic institutions. Our results suggest that the feasibility of economic reform does not depend solely on its impact on the distribution of rents; ideological a-prioris are likely to be important as well

Vertical Separation as a Defense against Strong Suppliers

We provide a simple model to investigate decisions about vertical separation. The key feature of this model is that more than one input is required for the final product of the downstream monopolist. We show that as the bargaining powers of independent complementary input suppliers grow larger, the downstream monopolist tends to separate from its input units. The results are related to a visible difference between the vertical structures of Japanese and US auto assemblers

Artificial intelligence (AI): multidisciplinary perspectives on emerging challenges, opportunities, and agenda for research and practice

As far back as the industrial revolution, great leaps in technical innovation succeeded in transforming numerous manual tasks and processes that had been in existence for decades where humans had reached the limits of physical capacity. Artificial Intelligence (AI) offers this same transformative potential for the augmentation and potential replacement of human tasks and activities within a wide range of industrial, intellectual and social applications. The pace of change for this new AI technological age is staggering, with new breakthroughs in algorithmic machine learning and autonomous decision making engendering new opportunities for continued innovation. The impact of AI is significant, with industries ranging from: finance, retail, healthcare, manufacturing, supply chain and logistics all set to be disrupted by the onset of AI technologies. The study brings together the collective insight from a number of leading expert contributors to highlight the significant opportunities, challenges and potential research agenda posed by the rapid emergence of AI within a number of domains: technological, business and management, science and technology, government and public sector. The research offers significant and timely insight to AI technology and its impact on the future of industry and society in general

[Identification des modèles dynamiques de choix discret : une application à la demande d'éducation en France]

Série des documents de travail du CREST ; 9916 ; Cote de localisation : PAR. MAG. 1999/P1105; Diffusion du document : INSEE-CREST Centre de Recherche en Economie et Statistique 18 boulevard Adolphe Pinard 75675 Paris Cedex 14 (FRA) 9916Les auteurs étudient l'identification non paramétrique des modèles dynamiques de choix discret à partir de données individuelles, sans faire de restriction identifiante sur les préférences. Il y a plusieurs types d'agents, et cette hétérogénéité est inobservable à l'économètre. Dans un premier temps, il est supposé que cette hétérogénéité est également inobservable aux autres agents. Alors l'hypothèse que les agents se comportent comme si il n'y avait pas d'hétérogénéité est non testable. Ensuite, il est prouvé que le degré de sous-identification (fonctionnelle) pour l'économètre est très grand. La distribution des chocs et le facteur d'escompte ne sont pas identifiables. Une méthode d'estimation très simple en deux étapes, dont chacune est une régression non paramétrique, est ensuite appliquée pour estimer l'évolution des déterminants structurels (fonctions de coût subjectif) de la demande d'éducation pour les cohortes nées entre 1963 et 1973 afin de donner une interprétation structurelle à la hausse du taux de scolarisation des jeunes français depuis la fin des années 80. Finalement, dans le modèle théorique est introduit de l'hétérogénéité inobservable à l'économètre, mais observable par les autres agents. Les auteurs montrent que le degré de sous-identification est encore plus grand : les données n'imposent de restrictions que sur les paramètres structurels d'un des types

Contrasting Trends in Firm Volatility

Over the past decades, the real and financial volatility of listed firms has increased, while the volatility of private firms has decreased. We first provide panel data evidence that, at the firm level, sales and employment volatility are impacted by changes in the degree of ownership concentration. We then construct a model with private and listed firms where risk-taking is a choice variable at the firm-level. Due to general equilibrium feedback, we find that both an increase in stock market participation and integration in international capital markets generate opposite trends in volatility for private and listed firms