We examine the extent to which vertical and horizontal market structure can together explain incomplete retail pass-through. To answer this question, we use scanner data from a large U.S. retailer to estimate product level pass-through for three vertical structures: national brands, private label goods not manufactured by the retailer, and private label goods manufactured by the retailer. Our approach circumvents issues associated with internal firm prices and demonstrates that accounting for horizontal market structure is important for measuring the effects of vertical integration and reduced double marginalization on pass-through.

H UMAN capital theory posits that individuals invest in the acquisition of productive skills in order to derive higher future earnings. While the dichotomy between investments in and skills has long been recognised,t empirical tests of the theory do not usually distinguish between the two earnings components.2 In this paper the conventional earnings model is expanded to incorporate worker-financed specific training. The inclusion of tenure allows a segregation of estimates of returns to general and specific human capital. This disaggregation permits an examination of the relationship between worker-financing of specific training and interindustry wage differentials. Cross-section investigations typically report the importance of industry of employment as a wage determinant, even controlling for a myriad of individual characteristics.3 This result has been taken, perhaps prematurely, as evidence of pervasive labor market imperfections. If interindustry differences in skill specificity are important, we should expect systematic wage differentials. Increased acquisition of worker-financed specific training will be associated with lower initial wages and subsequent higher rates of wage increase. In section I we consider the implications of using alternative specifications of the earnings model. The distinction is drawn between general and specific human capital, allowing a relaxation of the assumption constraining the returns from these mix of skills to be equal across individuals. In the process of this exposition the specific training prediction of a negative relationship between industry standing wages and subsequent rates of wage growth is derived. This hypothesis is subjected to test using individual data from the 1971 National Longitudinal Survey of Young Men, and the results are reported in section II. The complication is raised that workers remain longer in jobs paying higher wages independently of specific training. A simultaneous equations model treating tenure and wage as endogenous variables is tested revealing little bias in the single equation specification. A concluding section summarizes the main findings and offers suggestions for future research in this area.

Seminal theories of the firm posit that firm ownership is allocated to minimize contractual inefficiencies. Yet, it remains unclear how much the optimal ownership choice affects firm performance in practice. This paper provides a first quantification of the gains from optimal ownership within multinational firms by exploiting a major liberalization of China’s policy restrictions on foreign ownership. The liberalization allowed previously restricted firms to become fully foreign-owned. We find that these reoptimized ownership choices raise firm output by 40% and productivity by 7.5% on average. An extended property-rights theory of the multinational firm rationalizes these effects and their heterogeneity.

August 01 2004 Inference on Predictability of Foreign Exchange Rates via Generalized Spectrum and Nonlinear Time Series Models Yongmiao Hong, Yongmiao Hong Search for other works by this author on: This Site Google Scholar Tae-Hwy Lee Tae-Hwy Lee Search for other works by this author on: This Site Google Scholar Author and Article Information Yongmiao Hong Tae-Hwy Lee Online Issn: 1530-9142 Print Issn: 0034-6535 © 2004 President and Fellows of Harvard College and the Massachusetts Institute of Technology2004 The Review of Economics and Statistics (2004) 86 (3): 840. https://doi.org/10.1162/0034653041811716 Cite Icon Cite Permissions Share Icon Share MailTo Twitter LinkedIn Views Icon Views Article contents Figures & tables Video Audio Supplementary Data Peer Review Search Site Citation Yongmiao Hong, Tae-Hwy Lee; Inference on Predictability of Foreign Exchange Rates via Generalized Spectrum and Nonlinear Time Series Models. The Review of Economics and Statistics 2004; 86 (3): 840. doi: https://doi.org/10.1162/0034653041811716 Download citation file: Ris (Zotero) Reference Manager EasyBib Bookends Mendeley Papers EndNote RefWorks BibTex toolbar search Search Dropdown Menu toolbar search search input Search input auto suggest filter your search All ContentAll JournalsThe Review of Economics and Statistics Search Advanced Search This content is only available as a PDF. © 2004 President and Fellows of Harvard College and the Massachusetts Institute of Technology2004 Article PDF first page preview Close Modal You do not currently have access to this content.

It is often documented, based on autocorrelation, variance ratio, and power spectrum, that exchange rates approximately follow a martingale process. Because these data check serial uncorrelatedness rather than martingale difference, they may deliver misleading conclusions in favor of the martingale hypothesis when the test statistics are insignificant. In this paper, we explore whether there exists a gap between serial uncorrelatedness and martingale difference for exchange rate changes, and if so, whether nonlinear time series models admissible in the gap can outperform the martingale model in out-of-sample forecasts. Applying the generalized spectral tests of Hong to five major currencies, we find that the changes of exchange rates are often serially uncorrelated, but there exists strong nonlinearity in conditional mean, in addition to the well-known volatility clustering. To forecast the conditional mean, we consider the linear autoregressive, autoregressive polynomial, artificial neural network, and functional-coefficient models, as well as their combination. The functional coefficient model allows the autoregressive coefficients to depend on investment positions via a moving-average technical trading rule. We evaluate out-of-sample forecasts of these models relative to the martingale model, using four criteria—the mean squared forecast error, the mean absolute forecast error, the mean forecast trading return, and the mean correct forecast direction. White's reality check method is used to avoid data-snooping bias. It is found that suitable nonlinear models, particularly in combination, do have superior predictive ability over the martingale model for some currencies in terms of certain forecast evaluation criteria.

Following the enactment of reforms in the mid-1990s, China's state-owned enterprises (SOEs) became more profitable. Using theoretical insights from Azmat, Manning, and Van Reenen (2012) and Karabarbounis and Neiman (2014) and econometric methods in De Loecker andWarzynski (2012), this paper finds that SOE restructuring was nevertheless limited. This is because SOE profitability gains in part reflect that they were under less political pressure to hire excess labor and also their cost of capital fell and their capital-labor elasticity of substitution generally exceeded unity. Moreover, SOE productivity lagged that of foreign and private firms.

We evaluate the temporal stability of risk preferences using a remarkable data set that combines sociodemographic information from the Danish Civil Registry with information on risk attitudes from a longitudinal field experiment. Our econometric model accounts for endogenous sample selection and attrition processes that may confound inferences about temporal stability. Our experimental design builds in randomization on the incentives for participation that facilitates empirical identification of the model. In general, we find evidence consistent with temporal stability after correcting for the effects of selection and attrition. When neglected, these effects change our inferences in an economically and statistically significant manner.