Jonathan S. Seaton

The determinants of export behaviour in UK service firms

This paper examines the determinants of export behaviour for a panel of UK service industry firms from 1988 to 2001. Export behaviour is modelled in a dual manner: as both the decision to export and the intensity of exporting. The results indicate that firm size, research intensity, average directors pay and the variance of the sterling–dollar exchange rate all increase the probability of becoming an exporter. In addition, the results indicate that the process underlying a firms decision to export is a separate one from that determining export intensity, implying that the two decisions should be modelled separately.

The Regulation of the United Kingdom Electricity Industry: An Event Study of Price-Capping Measures

The privatization of United Kingdom utilities after 1979 established a regulatory regime based around price capping rather than return capping. This innovation was intended to provide a predictable framework that encouraged efficiency. An event methodology was used to examine stock market reaction to the main regulatory announcements affecting 12 Regional Electric Companies from flotation to 1995. The results indicate that the regulatory announcements were only a minor contributor to the persistent abnormal returns observed. The low connection between regulatory events, efficiency changes and abnormal returns at company level lead to a conclusion that the initial structural and control frameworks dominated the regulatory framework.

Explaining the decision to export: evidence from UK firms

In this study the determinants of export probability are investigated for a panel of 2134 UK firms between 1988 and 2001. Firm size, product diversification, innovation and human-capital are all found to increase the probability of exporting. It is also found that the variance of the sterling–dollar rate has a positive effect on export probability in a majority of industries, lending support to stock option theories of export behaviour.

The determinants of firm diversification in UK quoted companies

This paper examines the role of resource-based and governance factors in determining the boundaries of UK quoted companies, measured by both the probability and intensity of market diversification. Using a panel of over 2000 firms for the period 1988 to 2001 it is found that firm-level heterogeneity and industry characteristics account for the variability in diversification behaviour and that resource-based and governance factors interact in a complex manner not necessarily fully explained by the theoretical literature. The results also indicate that the degree of data aggregation has significant implications for the empirical modelling of market diversification.

The reform of academic tenure in the United Kingdom

Abstract In this paper, we examine the reform of academic tenure in the United Kingdom (UK) after the 1988 Education Reform Act. 1 We test the hypothesis that softening tenure encourages incumbent academics to consolidate their hold on academic life [ Carmichael (1988) ]. We also assess the economic significance of the English and American case law on tenure, because an understanding of the legal aspects of tenure is required to identify the possible effects of tenure reform. The years after passage of the Act provide an interesting natural experiment, as the broad effect of the legislation was to soften, though not to remove, tenure in British universities. 2 We can find support for the Carmichael hypothesis prereform but do not believe that the Act caused incumbent academics to consolidate their hold on senior posts after the reform. Tenure implies that the holder of a post cannot be removed from it except for good cause, usually based on gross moral turpitude or gross incompetence. Such removal is historically characterized by a costly procedure governed by organizational statutes, as shown in Hines v. Birkbeck College . 3 In the United Kingdom, academic tenure has been associated with open-ended contracts of employment and often had a particularly hard form before 1988. In the United States, where it has often been possible to dismiss academics for financial reasons by abolishing whole departments, tenure has taken a softer form (although often harder to obtain) and can still be held to exist even when an employment contract is of a fixed term as long as it is renewable. 4 The details of universities’ tenure statutes have always varied between institutions, in both the United Kingdom and United States, which is often overlooked. “Before 1988, could your university make academics redundant by giving notice and paying statutory redundancy pay, or was it extremely hard to sack academics—having to buy them out or use arguments based on gross moral turpitude or incompetence?”

Export intensity in UK firms

The determination of export intensity for a panel of 1623 UK firms from 1988 to 2001 was investigated. The results support most theories of export intensity, and in particular the role of firm size, product differentiation, governance and technological factors. By exploiting the heterogeneity of firm financial calendars a unique Sterling-Dollar exchange rate is calculated for each firm which is found to have a significant effect on export intensity.

Bargaining versus non-cooperation; transaction costs within marriage

Household labour supply models, which assume separate utility functions for the two principle household members, can be categorized as either non-cooperative or Pareto efficient bargaining games. In this paper a revealed preference non-parametric test is applied to UK family expenditure data to determine why some data observations are consistent with a Pareto efficient outcome. The empirical findings support the view that there are costs of bargaining within marriage and that they are typically related to the cost of female time. The implication being that as the cost of female time increases so do the transaction costs associated with a bargaining outcome.

Signalling, Disclosure And The Implications Of Financial Structure For Uk Corporate R&D

This paper investigates the impact of R&D disclosure and finance variables on the level of R&D expenditures. The question addressed is: what is the impact of changes in disclosure requirements on the relationship between R&D expenditure and the financing of firms? The question is motivated by the possible signalling role that elective disclosure may have had prior to changes in accounting practices to ensure R&D disclosure.

Modelling product and foreign market diversification decisions for UK firms

This article contributes to the firm market diversification literature by using a bivariate probit model analogous to SURE vs. OLS for probit estimation to examine the market diversification decisions for a panel of UK firms. We extend the current literature to include director remuneration and firm-specific exchange rates. We find that firm size, wages, R&D, directors remuneration and the level and variability of exchange rates all have a significant impact on the probability of a firm diversifying into foreign markets.

A nonparametric revealed preference test of optimal intra-firm resource allocation

The collective rationality hypothesis initiated by Chiappori (1988a) and applied by Seaton (1997, 2001) for a two-person household is used to distinguish the organizational behaviour of firms. Firms produce satisfaction to groups as traditional managerial and early behavioural theories of the firm of Williamson, Baumol and Marris suggest, as well as more modern principle agent models. Under certain conditions, intra-firm bargaining leads to a Pareto optimal outcome. What makes this work an important contribution is that it identifies a set of nonvacuous testable restrictions to empirically detect if firm-level data satisfy Pareto optimal behaviour for the main decision makers in the organization.