Market Integration, Matching and Wages

When it is costly for agents to find a match, integrating small markets into a larger one increases the matching difficulty. We examine such dependence of the number of matches on the market size by explicitely modelling firms' attempt to attract workers by posting wages. It is shown that integration reduces the relative market power of agents on the much shorter side of the market. Thus, if there are at least as many workers as jobs, integrating markets increases wages; if there are much fewer workers than jobs, integrating markets reduces wages. This is the case even though integration does not change the worker/job ratio in the market. Regardless of the wage response, market integration reduces social welfare when everyone is weighted equally and when other benefits of integration such as improved match qualities are absent. We characterize the upper bound on the welfare loss from increased matching difficulty and show that the marginal welfare loss shrinks as the market becomes increasingly integrated. Lorsqu'il est coûteux pour les agents économiques de trouver un partenaire d'échange, le fait d'intégrer de petits marchés dans un plus grand augmente les difficultés d'appariement. Nous examinons dans quelle mesure les nombre d'appariements dépend de la taille du marché en modélisant explicitement les tentatives de la firme d'attirer des travailleurs en affichant des salaires. Nous montrons que l'intégration réduit le pouvoir de marché des agents sur le côté le moins saturé du marché. Ainsi, s'il y a au moins autant de travailleurs que de postes, l'intégration des marchés augmente les salaires; s'il y en a beaucoup moins, l'intégration réduit les salaires. Ceci est le cas même si le ratio travailleurs/postes reste inchangé. Indépendamment de la réaction des salaires, l'intégration des marchés réduit le bien-être social lorsque chacun est pondéré uniformément et lorsque d'autres bienfaits de l'intégration comme la meilleure qualité des appariements sont absents. Nous caractérisons la limite supérieure des pertes de bien-être résultant de difficultés plus élevées d'appariement et montrons que la perte marginale de bien-être décroît lorsque le marché s'intègre de plus en plus.market integration, wage posting, endogenous matches

Screening, Bidding, and the Loan Market Tightness

Bank loans are more available and cheaper for new and small businesses in the U.S. in concentrated banking areas than in competitive banking areas. To explain this anomaly, we analyze banks' decisions to screen projects and their subsequent competition in loan provisions. It is shown that, by exacerbating the winner's curse, an increase in the number of banks can reduce banks' screening probability by so much that the number of banks that actively compete in loan provisions falls and the expected loan rate rises. This is the case when the screening cost is low, which induces all active bidders to be informed. The opposite outcome occurs when the screening cost is high, in which case there are su±ciently many uninformed banks in bidding to attenuate the winner's curse. We also brie°y examine policy implications.Loans; Screening; Bidding; Informational externality

Signalling in the Internet Craze of Initial Public Offerings

In this paper we analyze the clustering phenomenon of underpricing in initial public offerings (IPOs), where firms in a particular industry choose to issue their new shares at the same time and at great discounts. The industry consists of many firms that have private in-formation about their own qualities (high or low) and that must raise external capital first before production. In the product market, firms compete through quality ladders, where each high-quality firm monopolizes the production of a particular variety of product. We show that self-fulfilling multiple equilibria arise. In one, no firm underprices the IPO. In the other, all high-quality firms underprice their IPOs, resulting in clustering. Moreover, the clustering is more likely to occur in economic upturns than in downturns, and in an easy credit market than in a tight market.Initial public offerings; Signalling; Clustering; Multiple equilibria.

Publicity and the Clustering of IPO Underpricing

We explain why underpricing in IPOs can be large in magnitude and clustered, using a signalling model where firms have private information about their qualities (high or low). A novel feature is that a firm, if perceived by the market as high quality, benefits from the industry's publicity which is an increasing function of the amount of IPO underpricing by all high-quality firms in the industry. Despite the potential free-rider problem created by the industry's publicity, we show that a high-quality firm chooses to underprice its own IPO as the best response to other high-quality firms' underpricing. Thus, IPO underpricing is clustered.Initial public offering, Signalling, Externality, Multiple equilibria

Screening, Bidding, and the Loan Market Tightness

Bank loans are more available and cheaper for new and small businesses in the US in areas with highly concentrated banks than in areas with highly competitive banks. We explain this fact by analyzing banks' decisions to screen risky projects and their subsequent competition in loan provisions. It is shown that, by increasing a negative informational externality to an informed winner, an increase in the number of banks in the market can reduce banks' screening probability sufficiently, reduce the number of banks that actively compete in loan provisions and increase the expected loan rate. Policy implications are examined.Screening, Bidding, Loans, Informational externality

Developmental Expression of Monocarboxylate Transporter 1 and 4 in Rat Liver

PURPOSE: Monocarboxylate transporters (MCT) are proton-coupled integral membrane proteins that control the influx and efflux of endogenous monocarboxylates such as lactate, acetate and pyruvate. They also transport and mediate the clearance of drugs such as valproate and gamma-hydroxybutyrate. CD147 functions as ancillary protein that chaperones MCT1 and MCT4 to the cell membrane. There is limited data on the maturation of MCT and CD147 expression in tissues related to drug distribution and clearance. The objective of the present study was to quantify hepatic MCT1, MCT4, and CD147 mRNA, whole cell and membrane protein expression from birth to sexual maturity. METHODS: Liver tissues were collected from male and female Sprague Dawley rats at postnatal days (PND) 1, 3, 5, 7, 10, 14, 18, 21, 28, 35, and 42 (n = 3 - 5). Hepatic mRNA, total and membrane protein expression of MCT1, MCT4, and CD147 was evaluated via qPCR and western blot. RESULTS: MCT1 mRNA and protein demonstrated nonlinear maturation patterns. MCT1 and CD147 membrane protein exhibited low expression at birth, with expression increasing three-fold by PND14, followed by a decline in expression at sexual maturity. MCT4 mRNA had highest expression at PND 1, with decreasing expression towards sexual maturity. In contrast, MCT4 membrane protein exhibited minimal expression from birth through weaning before a 10-fold surge at PND35, whereupon there was a sharp decline in expression at PND42. There was a significant positive correlation between MCT1 and CD147 whole cell and membrane expression, while MCT4 membrane expression demonstrated a weak negative correlation with CD147. CONCLUSION: Our study elucidates the transcriptional and translational maturation patterns of MCT1, MCT4 and CD147 expression, with isoform- dependent differences in the liver. Changes in transporter expression during development may greatly influence drug distribution and clearance in pediatric populations

Capital Reallocation and Firm-Level Productivity Under Political Uncertainty

Does policy uncertainty affect productivity? Policy uncertainty creates delays as firms await new information about prices, costs and other market conditions before committing resources. Such delays can have real consequences on firms’ productivity and corporate decisions. First, we find that economic policy uncertainty has a negative impact on firm-level productivity. Second, debt magnifies the adverse effects of policy uncertainty on productivity, but access to external financing during periods of significant policy uncertainty shocks has a positive impact on firm� level productivity. Third, Policy uncertainty is positively related to cash holdings but this effect is mostly driven by highly productive firms and by firms with higher levels of irreversible investments since these firms face higher opportunity costs in future states. The three findings are robust to various specifications and provide an affirmative answer to the opening question