template-type: ReDIF-Paper 1.0
title: Innovation and Market Value.
author-name: Hall, B.H.
keywords: FINANCIAL MARKET ; INNOVATIONS ; PRICES
length: 34 pages
abstract: This paper surveys recent findings about how the financial markets value the knowledge assets of publicly traded firms. The motivation for using market value equation to price knowledge assets is discussed and the theory behind this equation is briefly presented. Then the empirical literature that relates Tobin's q to R&D and patent measures is surveyed and new results based on the US data through 1995 are presented.
classification-jel: G12 G13
creation-date: 1999
handle: RePEc:nuf:econwp:1999-W3

template-type: ReDIF-Paper 1.0
title: Earnings, Unemployment, and Housing: Evidence from a Panel of British Regions.
author-name: Cameron, G.
author-name: Muellbauer, J.
keywords: ECONOMETRICS ; EMPLOYMENT ; INCOME ; HOUSING MARKET
length: 43 pages
abstract: This paper discusses the determination of regional earnings and unemployment in the ten regions of Great Britain between 1972 and 1995, paying particular attention to their joint determination and to the influence of the housing market.
classification-jel: C33 E24 R23
creation-date: 1999
handle: RePEc:nuf:econwp:1999-W7

template-type: ReDIF-Paper 1.0
title: Sophisticated Play by Idiosyncratic Agents.
author-name: Myatt, D.P.
author-name: Wallace, C.
keywords: GAME THEORY ; ECONOMETRICS
length: 38 pages
abstract: The payoffs of a symmetric 2x2 coordination game are perturbed by agent-specific heterogeneity. Individuals observe a (possibly sampled) history of play, which forms the initial hypothesis for an opponent's behaviour. Seedings beliefs in this manner, they iteratively reason toward a Bayesian Nash equilibrium. Realised actions augment history and context evolves. Both risk-dominance and generalised risk-dominance determine equilibrium selection as heterogeneity vanishes. When sampling is sufficiently incomplete, the risk-dominant equilibrium is played irrespective of the history observed.
classification-jel: C7
creation-date: 1999
handle: RePEc:nuf:econwp:1999-W1

template-type: ReDIF-Paper 1.0
title: Covariate Measurement Error in Quadratic Regression.
author-name: Kuha, J.
author-name: Temple, J.
keywords: ECONOMETRICS ; REGRESSION ANALYSIS
length: 31 pages
abstract: We consider quadratic regression models where the explanatory variable is measured with error. The effect of classical measurement error is to flatten the curvature of the estimated function. The effect on the observed turning point depends on the location of the true turning point relative to the population mean of the true predictor. Two methods for adjusting parameter estimates for the measurement error are compared. First, two versions of regression calibration estimation are considered. The second approach uses moment-based methods which require no assumptions about the distribution of the covariates measured with error.
classification-jel: C13 C2 C3
creation-date: 1999
handle: RePEc:nuf:econwp:1999-W2

template-type: ReDIF-Paper 1.0
title: Should Firms be Required to Pay for Vocational Training?.
author-name: Stevens, M.
keywords: LABOUR MARKET ; TRAINING PROGRAMMES
length: 39 pages
abstract: This paper constructs a model of a training market affected by both problems, and examines the rationale for training levy schemes, intended to make firms increase investment in vocational training. It is shown that regulating firms, or equivalently financing a subsidy through taxation of profits, can achieve a Pareto improvement irrespective of the cause of the under-investment. However, when the levy is assessed as a proportion of wages the effect is to address capital market imperfections only.
classification-jel: J24
creation-date: 1999
handle: RePEc:nuf:econwp:1999-W4

template-type: ReDIF-Paper 1.0
title: An Empirical Analysis of the Effects of the Threat of Takeover on UK Company Performance.
author-name: Nuttal, R.
keywords: PRODUCTIVITY ; INVESTMENTS ; MERGERS ; TAKEOVERS
length: 53 pages
abstract: This paper undertakes an empirical analysis of the effects of the threst of takeover on company performance, based on a panel of 643 nonfinancial quoted UK companies over the period 1989-96. Our measure of the intensity of the threat of takeover is the predicted probability of takeover estimated recursively from a takeover likelihood model. This measure is used as an explanatory variable in models of total factor productivity, investment and dividends.
classification-jel: G34 L21
creation-date: 1999
handle: RePEc:nuf:econwp:1999-W5

template-type: ReDIF-Paper 1.0
title: Takeover Likelihood Models for UK Quoted Companies.
author-name: Nuttal, R.
keywords: MARKET STRUCTURE ; MERGERS ; TAKEOVERS
length: 51 pages
abstract: This paper estimates takeover likelihood models for UK quoted companies. For a sample of 643 UK nonfinancial quoted companies over the period 1989-96, we find that the probability of being a takeover target is increasing in leverage and incidence of takeover speculation and decreasing in pre-bid performance, size and age since listing.
classification-jel: G34
creation-date: 1999
handle: RePEc:nuf:econwp:1999-W6

template-type: ReDIF-Paper 1.0
title: Pension Systems in Open Economy.
author-name: Casarico, A.
keywords: PENSION FUNDS ; SOCIAL SECURITY ; GENERATIONS
length: 51 pages
abstract: The paper focuses on the effects of the integration in a perfect world capital market of two large economies running respectively a pay-as-you-go and a fully funded pension system. Under the assumption that the pay-as-you-go is in steady state and self financing, the integration causes changes in factor prices and divergent welfare effects both across countries and across generations.
classification-jel: D91 G23 H55
creation-date: 1999
handle: RePEc:nuf:econwp:1999-W10

template-type: ReDIF-Paper 1.0
title: The Tobacco Deal.
author-name: Bulow, J.
author-name: Klemperer, P.
keywords: TOBACCO INDUSTRY ; LAW ; PUBLIC POLICY
length: 63 pages
abstract: The authors analyse the major economic issues raised by the 1997 Tobacco Resolution and the ensuing proposed legislation that were intended to settle tobacco litigation in the United States. By settling litigation largely in return for tax increases, the Resolution was a superb example of a "win-win" deal.
classification-jel: L66 L51 K32
creation-date: 1999
handle: RePEc:nuf:econwp:1999-W11

template-type: ReDIF-Paper 1.0
title: Auction Theory: a Guide to the Literature.
author-name: Klemperer, P.
keywords: AUCTIONS ; BIDDING ; ECONOMIC THEORY
length: 95 pages
abstract: This paper, forthcoming in Journal of Economic Surveys, provides an elementary non-technical, survey of auction theory, by introducing and describing some of the critical papers in the subject. (The most important of these are reproduced in a companion book, The Economic Theory of Auctions, Paul Klemperer (ed.), Edward Elgar (pub.). 1999).
classification-jel: D44
creation-date: 1999
handle: RePEc:nuf:econwp:1999-W12

template-type: ReDIF-Paper 1.0
title: Competition and Hold-Ups.
author-name: Felli, L.
author-name: Roberts, K.
keywords: COMPETITION ; MARKET STRUCTURE ; CONTRACTS
length: 21 pages
abstract: In an environment in which both workers and firms undertake match specific investments, the presence of market competition for matches may solve the hold-up problems generated by the absence of complete contingent contracts. In particular, this paper shows that in a world in which workers' and firms' investments are separeted by market competition and contracts specify a simple (non-contingent) wage payment, investments are constrained efficient. Indeed, workers and firms invest efficiently given the equilibrium matches in which they are involved.
classification-jel: L33 D40
creation-date: 1999
handle: RePEc:nuf:econwp:1999-W17

template-type: ReDIF-Paper 1.0
title: Income Inequality and Macroeconomic Volatility: an Empirical Investigation.
author-name: Breen, R.
author-name: Garcia-Penalosa, C.
keywords: INCOME ; POVERTY ; SOCIAL WELFARE
length: 41 pages
abstract: Recently, there has been a resurgence in the interest in the determinants of income inequality across countries. This paper adds to this literature by examining the role of one further explanatory variable: macroeconomic volatility. Using a cross-section of developed and developing countries, the authors regress income inequality on volatility, defined as the standard deviation of the rate of output growth. They find that greater volatility increases the Gini coefficient and the income share of the top quintile, while it reduces the share of the other quintiles. The other variable that seems to play an important role is relative labour productivity, supporting previous findings.
classification-jel: I30 O15
creation-date: 1999
handle: RePEc:nuf:econwp:1999-W20

template-type: ReDIF-Paper 1.0
title: Heart of Darkness: Public-Private Interaction Inside the R&D Black Box.
author-name: David, P.A.
author-name: Hall, B.H.
keywords: RESEARCH AND DEVELOPMENT ; PUBLIC GOODS ; PRIVATE SECTOR
length: 24 pages
abstract: This paper is a first step toward closing the analytical gap in the extensive literature on the results of interactions between public and private R&D expenditures, and their joint effects on the economy. A survey focusing on econometric studies in this area reveals a plethora of sometimes confusing and frequently contradictory estimates of the response of company financed R&D to changes in the level and nature of this category of public expenditures. Yet, a theoretical framework is provided within which the empirical results are to be interpreted.
classification-jel: H41 H42 O31 O38
creation-date: 1999
handle: RePEc:nuf:econwp:1999-W16