Konstantinos Eleftheriou

Trade Credit, Bank Credit, and Flight to Quality: Evidence from French SMEs

This paper investigates the impact of the global financial crisis on the allocation of credit to small and medium‐sized enterprises (s). Using samples of rench s from four industries, we found support for the prediction of the flight‐to‐quality hypothesis that in bad times, credit flows away from smaller constrained firms to larger, higher grade firms. We also examined the relation between bank credit and trade credit in terms of two hypotheses: the substitution hypothesis and the complementary hypothesis. The results of fixed effects panel regressions showed that trade credit for small firms during periods of tight money acts generally as complement rather than substitute to bank credit, thus providing empirical support for the redistribution view of trade credit.

The Pricing of Audit and Non-Audit Services in a Regulated Environment: A Longitudinal Study of the UK Life Insurance Industry

This paper studies the relationship between audit and non-audit service fees in the UK life insurance industry in the period 1999-2009. Moreover, we examine the impact of ownership structure and internal governance on the level of direct audit fees. Utilizing panel data econometric techniques, we find that audit fees are positively (negatively) affected by actuarial (legal service) fees. We conclude that actuarial services generate knowledge spillover, while legal services impair auditors independence. Our results indicate that the improved corporate governance environment after the Revised Code of 2003 filtered the fundamental nature of different non-audit services. Furthermore, mutual ownership and independent board of directors increase the level of audit fees. Finally, we find evidence for the inter-temporal determination of audit fees.

Intraregional Income Convergence: Cross Section and Time Series Evidence from the USA

The publication of the ground breaking work of Baumol (1986) was the spark that ignited an enormous interest to the issue of convergence in per capita income (e.g. Aghion and Howitt 1998; Baldwin et al. 2003; Capello 2006; Le Gallo 2004; Overman and Puga 2002; Ioannides and Overman 2004; Li and Haynes 2010). As perhaps anticipated, there is a growing number of attempts to assess regional convergence using extensive datasets, such as the regions of the European Union (e.g. Button and Pentecost 1995; Cuadrado-Roura et al. 1999; Rodriguez-Pose 2001; Rodriguez-Pose and Fratesi 2004; Lopez-Bazo et al. 2004; Alexiadis and Tsagdis 2010), the US states (e.g. Christopoulos and Tsionas 2007; Checherita 2009) and the regions of individual countries (e.g. Rodriguez-Lopez et al. 2009; Hierro and Maza 2010). Most of the literature concerning convergence has been developed in terms of per-capita income using cross-section data. Nevertheless, convergence is by no means a mechanical phenomenon, which happens everywhere and always (Cuadrado-Roura 1996, p. 47). Regional convergence is characterised by rapid transformations and adjustments, properties that are difficult to be examined in a cross-section context. This has led to the development of alternative methodologies based on cointegration analysis generating a considerable amount of empirical literature (e.g. Bernard and Jones 1996; Carlino and Mills 1993; Sun et al. 2010). Still, the crucial question of the adjustment towards steady-state equilibrium, which lies at the heart of the convergence debate, remains unanswered. An approach to this issue can be provided through an Error-Correction-Model (hereafter ECM). Recent years have witnessed a growing number of attempts to implement this model to examine the evolution of regional employment and unemployment (e.g. Baddeley et al. 1998, 2000; Martin and Tyler 2000; Gray 2004; Hunt 2006; Alexiadis and Eleftheriou 2010).

Participative decision-making and job satisfaction for teachers in the UAE

Purpose – Knowledge of teachers’ participative decision making (PDM) and job satisfaction (JS) is important, as teachers comprise most of a school’s staff. The purpose of this paper is to examine the effect of teacher gender, nationality and school type on teachers’ PDM and JS in Abu Dhabi’s schools and to determine whether there any significant differences in PDM and teachers’ JS among teachers of different genders, school types and nationalities. Design/methodology/approach – A questionnaire was used to collect data for the study by measuring each responding teacher’s involvement in making school decisions in both the instructional and managerial domains and JS. The questionnaire was distributed among teachers in 28 different schools around the Emirate of Abu Dhabi. Findings – The primary results demonstrated that teachers’ PDM differs by teacher gender, nationality and school type, whereas teacher’s JS differs by teacher gender and nationality, with school type having in general no significant effect o...

Asymmetric price adjustments in US gasoline markets: impacts of spatial dependence on the ‘rockets and feathers’ hypothesis

ABSTRACT Gasoline retail prices show sometimes wild, asymmetric fluctuations over time. We explore the impact of spatial dependence on gasoline retail price formation by using for the first time an asymmetric spatial error correction model (ASpECM). We find evidence that the generally assumed symmetric price pattern is fully reversed when we account for spatial spillover effects, indicating that retail prices adjust more rapidly in an upward than in a downward direction. This finding suggests that empirical studies that ignore the role of spatial dependence and local competition may miss an important element of the nature of the gasoline price adjustment mechanism.

TO REGULATE OR TO DEREGULATE? THE ROLE OF DOWNSTREAM COMPETITION IN UPSTREAM MONOPOLY VERTICALLY LINKED MARKETS

This paper attempts to cast light to the relationship between Cournot-Bertrand controversy and monopoly regulation. To this purpose, we use a simple model of a vertically linked market, where an upstream regulated natural monopoly is trading via two-part tariff contracts with a downstream duopoly. Combining our results to those of the existing literature on deregulated markets, we argue that when the downstream competition is in prices, efficiency dictates regulating the monopoly with a marginal cost based pricing scheme. However, this type of regulation leads to significant welfare loss, when the downstream market is characterized by Cournot competition.

A Comment on 'Cross-Border Merger, Vertical Structure, and Spatial Competition'

The aim of this paper is to revise and correct the results obtained in Beladi et al. [Beladi, H., Chakrabarti, A., Marjit, S., 2010. Cross-border merger, vertical structure, and spatial competition. Economics Letters 109, 112-114]. Specifically, we prove that the Nash equilibrium locations of the downstream firms are the same in the pre-merger free-trade case as they are following a cross-border upstream merger.

Corporate Income Tax Compliance Costs and their Determinants: Evidence from Greece

This paper examines the corporate income tax compliance costs and their determinants by analyzing survey and financial statements data from firms operating in Greece. We find that corporate tax compliance costs are of considerable size and vary with several firm-specific characteristics, including the firm’s size, its age, the sector in which it operates, its location and its legal form. The paper intends to raise awareness regarding the impact of tax compliance costs, especially for countries, such as Greece, that were significantly affected by the economic and financial crisis.

Do Income Disparities Dissipate Across the US States? Experimenting with a Vector Error Correction Model

This paper examines the long-run trends in per-capita income across the US states (1929-2005). Our analysis advocates and implements a Vector Error Correction Model (VECM), in order to investigate whether disparities in per-capita income embody a stable long-run relation. The empirical application is supplemented with Factor Analysis to identify groups of States with a common behaviour in terms of per-capita income.

Regional Inequality and Human Capital Quality: The Impact of Technology on the Arrival Rate of Employment Offers

This paper aims to provide a conceptual and operational context for analysing regional inequalities. It does so by utilizing a ‘search & matching’ framework. The model, developed in this paper, maps the way in which individuals are distributed according to: 1) the abilities of individuals to perform certain, specified, tasks; and 2) the degree of regional specialization. The impacts of advances in information technology are examined explicitly in this model. While the relevant theoretical and empirical literature analyses the impact of technological progress with respect to changes in regional productivity, the present model takes an alternative perspective. This model is focused, explicitly, upon changes in the arrival of job offers and employment opportunities. The way in which individuals decide about employment, as an aftermath of changes in information technology, is constructed using the aforementioned framework. Consequently, this approach provides an account for the distribution of ‘human capital’ (from the perspective that individuals acquire jobs in sectors in which they are more productive) across regions, and, by extension, for the persistence of regional inequalities. Regional inequalities are attributed to possible mismatches, leading individuals to accept job offers from sectors in which they are less productive. Simulation experiments, then, complement the theoretical framework, while some preliminary empirical evidence using a sample of NUTS-2 and NUTS-3 regions in Europe, is also presented.