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This chapter estimates a dynamic reduced-form model of intra-firm promotions using an employer–employee panel of over 300 of the largest corporations in the United States in the period from 1981 to 1988. The estimation conditions on unobserved individual heterogeneity and allows for both an endogenous initial condition and sample attrition linked to individual heterogeneity in demonstrating the relative importance of variables that influence promotion. The role of the executive’s functional area in promotion is considered along with the existence and source of promotion fast tracks. We find that while the principal determinant of promotions is unobserved individual heterogeneity, functional area has a high explanatory power, resulting in promotion probabilities that differ by functional area for executives at the same reporting level and firm. No evidence is found that an executive’s recent speed of advancement in pay grade has a positive causal impact on in-sample promotions after conditioning on the executive’s career speed of advancement, except for the lowest level executives the data. Fast tracks appear to largely result from heterogeneity in persistent individual characteristics, not from an inherent benefit in recent advancement itself.

This article estimates the loan spread equation taking into account the endogenous matching between banks and firms in the loan market. To overcome the endogeneity problem, I supplement the loan spread equation with a two-sided matching model and estimate them jointly. Bayesian inference is feasible using a Gibbs sampling algorithm that performs Markov chain Monte Carlo (MCMC) simulations. I find that medium-sized banks and firms tend to be the most attractive partners, and that liquidity is also a consideration in choosing partners. Furthermore, banks with higher monitoring ability charge higher spreads, and firms that are more leveraged or less liquid are charged higher spreads.

The purpose of this paper is to analyse the determinants of the survival of Spanish companies.

Two approaches are used and they are complementary. The first approach analyses the determinants of survival probability. For this purpose, a binary choice model is built and estimated using a sample of companies from the main economic sectors taken from the SABI database. Likewise, the Blinder–Oaxaca decomposition is applied to quantify the difference between companies with employees and without employees and the proportion of this difference that owes to observed factors or unobserved factors. Finally, the second approach is a survival analysis carried out through the Cox proportional hazard model that identifies the determinants of the duration of business activity.

The results of the empirical analysis show that companies without employees present less favourable conditions for survival at all stages of their evolution than companies with employees.

The contribution of this study to the empirical literature consists in analysing the difference between companies with and without employees. Due to the structure of Spanish companies, this aspect and the determinants of such difference are essential for policymakers to increase the survival for companies.

The purpose of this paper is to examine the sources of direct real estate portfolio returns and their relative performance against Investment Property Databank (IPD) benchmark returns. Active property management consists of the concepts of property transaction execution and operational management, which can be classified as the main drivers of excess return sources.

Using a sample of three different portfolios managed by two institutional investors, the paper is able to estimate the relevant factors of active property management on annual excess returns for commercial and residential property sectors via a panel regression technique.

Empirical evidence shows that property‐specific effects exhibit significant sources of excess returns, but property management cannot be identified as their main driver. Furthermore, the sources of excess returns do not differ significantly across sectors; when controlled for property age and size, it is found that their influence is rather limited.

Information about the drivers of excess returns and their variations among property types may lead to superior investment decisions during portfolio rebalancing, and thus promote more efficient capital allocation. Information about return factors, i.e. about property and operational management, can substantially improve property selection and market timing in the asset allocation process. Hence, investors basing their property investment strategies on the impact of selected return factors could enhance the risk‐adjusted performance of their property portfolios.

This paper aims to contribute to the existing literature by identifying and quantifying the excess return sources of a given property portfolio over a predefined benchmark. Due to the lack of property‐related data, there is only limited research on the sources of direct property returns, such as property characteristics or active property management. The authors explore three main questions in this paper. First, they examine sources of excess returns over a benchmark index for several property sectors. Second, they analyze whether the drivers of excess returns vary significantly across these sectors. Third, they determine to what extent excess property returns are influenced by the “economic age” and “rentable area” of a building.

The purpose of this paper is to examine producer preferences for changing Farm Animal Welfare (FAW) levels in regards to sheep and goat husbandry in Bursa-Turkey.

The paper tests “panel estimators” in a stated preference data by using the payment card question format. Probit panels are employed to measure individual effects on FAW levels by considering producers’ willingness to accept. Three different FAW levels were identified for valuation as “base” level, “better” level, and the “best” level. The current study suggests a protocol with WTA(P) nomenclature to resolve complexity issues in FAW studies by investigating producers rather than consumers because the scenarios regarding FAW levels include quite technical and difficult topics which are vague to consumers.

If half of the total number of the sheep and goats in Turkey are assumed to be in bad animal welfare conditions, which are worse than base level, the non-use benefits of bringing them to at least the base level would be about US$130.3m. Figures would be 166.2m US$/year and 175m US$/year for “better” and “best” FAW conditions, respectively.

This paper provides a contribution to the existing literature by examining the producers’ responses to new FAW schemes. Also it helps policy makers to understand producers’ environmental behavior as well as their sensitivity to FAW schemes.

The purpose of this paper is to investigate whether a statistically significant relationship exists between environmental quality, as measured by consumption-related air pollution, and public debt in Europe. In addition, since the debt burden is one of the most important indicators of fiscal soundness within the European Union (EU) Treaty and the subsequent fiscal compact, the authors propose a simple test to determine whether participation in EU Treaties has shaped the empirical relationship between fiscal policy/public debt and environmental performance.

To this end, the authors built a panel data set that covers 24 European countries over the period 1996–2015.

The aspect that the authors want to underline is a possible trade off, which is confirmed in the empirical analysis, between the public finance equilibrium and the maintenance of a public good such as air quality. However, there are important non-linearities that shape the interaction between public debt and environmental pollution. Similarly, threshold effects arise when the authors examine the interaction between EU regulation and public debt and when the authors separately examine high debt and low debt countries. When the authors account for the stabilization rules introduced by EU Treaties, a negative effect on pollution is evident; in this way, fiscal consolidation limits the positive effect of fiscal policy.

The results point out the existence of a potential trade-off between the role of EU as a regulator aiming to mitigate environmental pollution, and its role within the Stability and Growth Pact. The analysis highlights that fiscal consolidation policies, while facilitating the achievement of macroeconomic stability within EU, might have a negative side effect on the environment quality, which spreads beyond the borders of one single country.

While a number of studies have suggested that fiscal spending might contribute to the level of pollution in European countries, there is scant evidence of the effect of public debt on environmental performance. This lack of scientific knowledge is a serious shortcoming, since it may allow for an underrepresentation of the wide-ranging consequences of stabilization programmes targeting the debt-to-GDP ratio, which could affect environmental quality.

The purpose of this paper is to examine the impact of electricity prices on sectoral output in South Africa from 1994 to 2015 and also econometrically examine the impact of electricity prices on output at sectoral levels over the same period. The paper also put forth a policy proposal that brings together electricity end-users, suppliers and government regulators with the goal of conveying an effective outcome that withstands output growth without necessarily compromising social and developmental objectives.

Local sources of data were utilised in applying panel data analysis. The paper utilised the data from South Africa Reserve Bank and Quantec South Africa. The Hausman test indicated that the fixed effect estimator is the appropriate estimator for this paper. Robust estimators (such as Driscoll Kraay (SCC), feasible generalised least of squares, least square dummy variables and seemingly unrelated regression (SUR) were employed for consistent and efficient inferences. The study also utilised the SUR regression to analyse the impact of electricity prices on output at a sectoral level.

The fixed effect estimator results of this paper indicate that electricity prices have a negative impact on sectoral output. Again, the SUR estimator shows that the sectoral output disparately responds to electricity prices change in South Africa over the period 1994–2015.Thus, six out of eight sectors significantly and negatively respond to electricity prices change in South Africa. The mining and the construction sectors seem not to be affected by electricity prices changes unlike agriculture, manufacturing, government services, transport and communication finance and trade.

Although the research has attained its aims, there were some inevitable limitations. For instance, unlike the time series and cross-sectional data, the panel data were tardily assembled, since the researchers had to gather data for specific variables for each and every selected individual sector. However, this did not compromise the research findings since the panel data from both developed and developing countries are available from sources such as Easy data Quantec.

The results of the study show that electricity price is a limiting factor to the sectoral production growth in South Africa. Therefore, any conservation policies regarding energy or electricity should be implemented with caution. Indeed, the government should implement policies that increase energy and electricity supply in the country. Thus, the government should set affordable prices of electricity that benefits both the power and economic sector output. In addition, the electricity regulators should set prices that do not damage output across economic sectors in South Africa. Again, the government should continue supporting the imposition of subsidies on the economic sectors that are more sensitive to electricity price. To this end, the study provides a policy proposal (in line with the South African National Development Plan and the climatic change strategies) that connects electricity producers, government electricity regulators, consumers and the society with the goal of conveying an effective outcome that withstands output growth without necessarily compromising social and developmental objectives.

Cost-reflective electricity prices may be a burden to end users but this will assist in the maintenance and expansion of the power industry to get rid of electricity supply and demand imbalances which may escalate electricity prices in future. Indeed, the electricity end users including the society should pay a price that improves generation capacity to avoid power shortages since the lack of energy (electricity) contributes to poverty and deprivation and can contribute to economic decline. In this regard, the government should work hard to reduce the public resistance towards the cost-reflective electricity prices strategy; there is a need to keep the electricity end users informed on the economic impacts of such strategies in order for them to make informed choices.

This paper utilised the panel data for sectoral analysis. Again, the study aimed to provide policymakers with more information on the behaviour of different sectors with regards to electricity price changes, and hence assisting regulators and policymakers in future decisions on electricity price changes in relation to output at sectoral levels. Better knowledge of the link between electricity prices and the real sector output should permit better regulatory decisions to facilitate economic efficiency. Furthermore, it helps the government to identify sectors in need of power subsidies to enhance economic development.

The purpose of this paper is to investigate inflation convergence within the East African Community (EAC) as it aspires to become a currency union.

An unobserved dynamic factor model was used to decompose the variation in inflation into a component that is common across the countries in the EAC region and a component that is country specific. Convergence was measured by the percentage of variation in inflation that is common across countries.

The estimated results from the dynamic factor model for the pre‐EAC Treaty (1981:3 to 2000:2) period and post‐EAC Treaty (2000:3 to 2009:1) period suggest that the percentage variation in inflation in the EAC that is explained by the common regional component increased significantly during the post‐Treaty period.

One of the limitations of this paper is that it does not address the mechanism through which the convergence in a currency union is achieved. Future research should try to examine the link between convergence and different macroeconomic policies.

This paper suggests that the push towards forming a currency union in East Africa has led to a greater degree of inflation synchronization across different countries in the region.

The main contribution of this paper is to use an unobserved component model to estimate the degree of inflation synchronization in East African countries.