The productive efficiency of a firm can be decomposed into two parts, one persistent and one transient. So far, most of the cost efficiency studies estimated frontier models that provide either the transient or the persistent part of productive efficiency. This distinction seems to be appealing also for regulators. During the last decades, public utilities such as water and electricity have witnessed a wave of regulatory reforms aimed at improving efficiency through incentive regulation. Most of these regulation schemes use benchmarking, namely measuring companies' efficiency and rewarding them accordingly. The purpose of this study is to assess the level of persistent and transient efficiency in an electricity sector and to investigate their implications under price cap regulation. Using a theoretical model, we show that an imperfectly informed regulator may not disentangle the two parts of the cost efficiency; therefore, they may fail in setting optimal efficiency targets. The introduction of minimum quality standards may not offer a valid solution. To provide evidence we use data on 28 New Zealand electricity distribution companies between 1996 and 2011. We estimate a total cost function using three stochastic frontier models for panel data. We start with the random effects model (RE) proposed by Pitt and Lee (1981) that provides information on the persistent part of the cost effciency. Then, we apply the true random effects model (TRE) proposed by Greene (2005a, 2005b) that provides information on the transient part. Finally, we use the generalized true random effects model (GTRE) that allows for the simultaneous estimation of both transient and persistent efficiency. We find weak evidence that persistent efficiency is associated to higher quality, and wrong efficiency targets are associated to lower quality compliance.
The aim of this paper is to assess the role of culture in shaping individual preferences to- wards different long-term care (LTC) arrangements. The analysis uses Swiss data from two administrative databases covering the universe of formal LTC providers between 2007 and 2013. Switzerland is a multi-cultural confederation where state administrative borders do not always coincide with cultural groups. For this reason, we exploit the within-state variation in cultural groups to show evidence about cultural differences in LTC use. In particular, we use spatial regression discontinuity design (RDD) at the language border between French-speaking and German-speaking individuals living in bilingual cantons to provide causal interpretation of the differences in formal LTC use between these two main cultural groups. Our results suggest a strong role of culture in shaping household decisions about formal LTC use. In particular, elderly people residing in regions speaking a Latin language (French, Italian and Romansh) use home-based care services more intensely and enter in nursing homes at older ages and in worse health conditions with respect to elderly people in German regions. This difference across the two cultural groups are driven by different preferences towards LTC arrangements
The Swiss economy represents an exception to the legal origin theory (e.g., Roe (2006)). Although Switzerland is a country belonging to the civil law family, many of its public companies have diffused corporate ownership, as do those in common law countries. This paper maintains that the Swiss exception relies on the complementarity between corporate ownership and policies addressing employment protection and innovation. The Swiss case presents two lessons: first, the current corporate governance is the result of a long and composite path in which politics plays a pivotal role; second, the institutional differences and similarities across countries, which one would try to explain along with the legal origin theory, can derive diversely from additional politics-based accounts, such as those referring to policies on employment protection and innovation.
This paper provides an empirical analysis of the effects of nominal exchange rate fluctuations on cross-border mobility and on retailer firms' sales. Exchange rate shocks may affect the labour supply decisions of cross-border workers and the propensity for consumers to shop across the border. By using hourly data on traffic flows in Ticino, the southernmost canton of Switzerland, and data on Italian supermarkets, I analyse the effects of the Swiss franc appreciation on cross-border travel by both Italian workers and Swiss consumers and on Italian retailers' sales. I find that a 10% appreciation of the Swiss franc increases the number of cars along the border by 1.5-3% more than in the rest of the canton. This effect is found only during specific time intervals, which differ according to the direction of the flow (the early morning from Italy to Switzerland, the afternoon from Switzerland to Italy and late morning for both directions). Moreover, I show that a stronger Swiss Franc positively affects supermarkets' sales in Italian provinces bordering Switzerland. Finally, I provide additional evidence for the labour supply hypothesis by using data on search volumes provided by Google Trends and official statistics on cross-border commuters in Switzerland.
This paper investigates the role of language in determining the degree of substitutability between foreign and native workers. To this end, we focus on Switzerland, an immigration-receiving country with four official languages spoken, three of which in common with bordering countries. We modify the model proposed by Ottaviano and Peri (2012) to account for the linguistic background of native and immigrant workers. We find that language plays a central role in determining the elasticity of substitution between foreign and native workers and accounts for much of their imperfect substitutability. These findings are robust to a number of robustness checks, such as different specifications of the model structure and the inclusion of cross-border workers. Then, we compute the total wage change for native and foreign workers caused by new immigration in flows. In the long run, the average percentage wage changes for native and foreign workers are quite small and not significant.
In this article, we study politicians’ – rather than voters’ – responses to the main political scandal in Italian recent history (Tangentopoli), and overcome endogeneity concerns by analysing the local implications of this national corruption scandal. We find that local politicians withdraw support for incumbents in parties hit by Tangentopoli – inducing increased political instability in such municipalities. Moreover, politicians in parties hit by the scandal exhibit higher rates of party switching and lower re-running rates. Scandals thus appear to decrease the value of the party “brand”, and become transmitted across politicians and levels of government via partisan cues.
This dissertation focuses on the barriers that authenticity brings to entrepreneurial outcomes such as entry of new organizations, product diversification, and introduction of new products in traditional industries. Advancing theory on organizational authenticity and geographical communities, this thesis argues that authenticity is not only an asset that organizations can choose but also a barrier for entrepreneurial attempts and the renewal of an industry. The main argument is that when community members seek after authenticity and local traditions, the establishment of new organizations and the introduction of new products can threaten the maintenance of community traditions and regional identity. In addition, geographical proximity between producers and consumers enables the development of a tightly knit fabric of relationships between market actors that are difficult to overcome by entrepreneurs. This thesis further elaborates on the resources upon which producers can rely on to overcome these constraints. In particular, family ownership and product naming strategies prove resourceful when introducing new products in traditional industries. The Franconian beer industry (Northern Bavaria, Germany) is the empirical context where I test these arguments. Being one of the oldest industrial agglomerations in Europe, the Franconian beer industry stands for a highly traditional cluster of breweries where producers and community members have a strong interest in preserving their authenticity. Founding rates as well as the product portfolio of more than 300 breweries are observed for the period 1989-2012.
In my dissertation I aim to explore the impacts of work-related mobility on job, family life and personal well-being of the travelling employees. To do so, three studies have been conducted with the purpose to investigate business travel behavioral patterns and impacts of work-related mobility on various life domains of the three segments, namely frequent corporate business travelers, expatriates and travelling academics, for whom the issues of travel stress and work-life balance are of great relevance. The first study focuses on the analysis of business travel impacts, both positive and negative ones, on the professional and private life of the 'road warriors', investigating the role of frequent work-related journeys in deteriorating work-life balance of the travelling employees. Having analyzed benefits and downsides of frequent business trips I address the possibility to enhance travel experience and improve employees' satisfaction and work productivity by means of providing travelers with the option to get involved into leisure life of visited destinations. The second paper examines factors that determine the degree of psychological success of expatriates and their satisfaction with international assignments overall, analyzing a wide array of variables from job, family and personal life domains. The research addresses the expatriation theme from the side of international assignees, providing implications for HRM departments directed towards improvement of expatriation experience. The last study sheds light on travel behavior of academics, investigating modes of travel and types of work-related trips undertaken by university employees, along with their attitude to travel and the influence of business trips on their work-life balance. The research demonstrates which trip features, work and non-work variables, as well as socio-demographic characteristics do matter when it comes to satisfaction with travel. The results of the afore-mentioned studies are relevant in terms of both theoretical contributions to the under-researched field of business travel, as well as practical implications. Apart from adding to the existing knowledge in the mobility field, the research outcomes demonstrate the necessity to carefully manage manifold aspects of business travel and expatriation in order to improve satisfaction of mobile employees with their trips of shorter or longer duration. In particular, the research sheds some light on work-life balance issues connected with travel, contributing to 'work-private life' conflict elimination and highlighting the crucial role of organizations in solving the existing problems.
Over the past 2 decades, internet use has become increasingly more a part of our every-day lives. We communicate with our friends and colleagues using the internet, we work using the internet, we also shop using the internet. We learn and increase our knowledge from information available on the internet. While on the one hand, we advance from the instant access to online contexts individualistically, on the other hand we participate as members of a community for example when we share our experiences online. The ever growing use of the internet and its flourish in new segments of our daily life brings significant changes not only to us, the individuals, but also to the organizations. In the past decade, there has been a shift in the field of organizational theory considering the environment of organizations. Current approaches extend the horizon of the classical view proclaiming that organizational environment is not only constituted by rival organizations but also their audience members. Several studies found evidence that audience members' perceptions and behavior influence organizational success. For example, category-spanning organizations on average suffer from social and economic disadvantages in markets because they cannot meet the expectations of their audiences. This shift towards understanding the effect of audience responses on the organizational outcome motivates my dissertation. More specifically, I study how individuals on-line behavior affects organizations. I analyze three aspects of internet mediated communication and their consequences to the organization. Firstly, I address the need to compare how traditional face-to-face communication compares to the modern email communication (Chapter 2). Studies tend to take it for granted, that on-line information exchange mirrors it's off-line counterpart at the work place. Although, there are great advantages in the availability of email data, as it retains communication in its completeness, it does not fully correspond to previously studied relations, like friendship or advice seeking. The characteristics of on-line communications also differ from off-line information exchange. Employees respect divisional and hierarchical boundaries in face-to-face conversations while these boundaries are blurred out within the email exchange. Secondly, I analyze a special type of on-line behavior, the on-line word-of-mouth communication among audience members (Chapter 3). Online reviews play an increasingly important role in shaping organizational performance. Drawing conclusions on how customers perceive quality and typicality of a producer and how it manifests in on-line ratings increase the predictability of producer success. Thirdly, I approach audience behavior from a collective behavior perspective (Chapter 4). Specifically, I analyze audience dynamics with threshold models. Doing so I address the micro level mechanism of how audience behavior creates certain macro level patterns of producer success rather than assuming that they are simple aggregates of individual characteristics.
