Michelle Haynes

Funding Higher Education in the UK: The Role of Fees and Loans

Higher education has undergone considerable expansion in recent decades in a number of OECD countries. Expansion has been especially dramatic in the UK where aggregate student numbers have doubled in 20 years. However, over the same period, funding per student has halved in real terms. In the UK as well as in other countries, most notably Australia, innovation to diversify the funding base has taken place. This has included a limited role for fee contributions. This paper makes the case for much greater reliance on fee contributions from students, accompanied by a greater availability of income contingent loans.

The determinants of corporate divestment in the UK

Abstract It has been widely suggested that since the early 1980s many diversified firms narrowed the scope of their activities by refocusing on their core businesses, primarily through divestment activity. This study examines the extent and determinants of divestment across a large sample of UK firms over the period 1985–1989. Divestment is analysed using both a proportions and count data (Poisson and negative binomial regressions) approach. The results confirm that corporate divestment is not merely a reflection of managerial idiosyncrasies or mean reversion behaviour in the activities undertaken, but is a purposeful response to exogenous change in a manner broadly consistent with both the agency theoretic and strategic views of the firm.

The Productivity Impact of IT Deployment: An Empirical Evaluation of ATM Introduction

The term ‘IT paradox’ has been widely used to describe the apparent failure of much economic research to discover significant productivity gains associated with IT investment. In part this has been ascribed to measurement problems associated with both IT inputs and with outputs in IT‐intensive industries. The current paper seeks to circumvent these difficulties by taking the ATM as a clearly defined embodied IT application and then using anaugmented production function approach to isolate its productivity effectsacross a sample of UK building societies, over the period of the ATM’sdiffusion. The paper finds no support for the ‘IT paradox’ and reports large robust and statistically significant productivity gains associated with ATM introduction.

The productivity effects of bank mergers: Evidence from the UK building societies

Abstract This paper presents an empirical investigation of the impact of acquisition activity on financial intermediary productivity. Specifically, it uses an augmented production function approach to investigate the impact of acquisition, after controls for input changes. The model is estimated on an unbalanced panel of 93 UK building societies over the period 1981–1993, using data on their core financial intermediation activities which, it is suggested are particularly appropriate for our purposes. In contrast to much of the existing merger literature, which for the most part uses financial performance data, our results DO indicate significant and substantial productivity gains following acquisition. These are consistent with an acquisitions process in which less efficient firms are acquired and reorganized. The post-merger gains appear to increase substantially in the post-deregulation period, when pressures to minimize cost are widely considered to have increased.

The determinants of corporate divestment: evidence from a panel of UK firms

Abstract It is widely perceived that during the past 15–20 years a substantial number of diversified firms have disposed of their peripheral activities to concentrate upon their core businesses. This study examines the determinants of divestment using an unbalanced panel of UK firms over the period 1985–1991. Divestment is analysed using both a proportion and count data approach. The results suggest that divestment is a purposeful response to financial, corporate governance and strategic variables and, as such, appears broadly consistent with both the agency theoretic and strategic views of the firm.

The Impact of Divestment on Firm Performance: Empirical Evidence from a Panel of UK Companies

It has widely been suggested that during the 1980s many diversified firms narrowed the scope of their activities by refocusing on core businesses, primarily through divestment activity. This study examines the impact of divestment on firm performance, using an unbalanced panel of 132 UK quoted companies over the period 1985 to 1993. The results suggest that divestment has a positive, significant and substantial effect in raising the profitability of the vendor company. We find limited support for the view that the benefit from divestment is greater for larger and/or more diversified firms and firms operating with weak governance arrangements.

Adjustment, employment characteristics and intra-industry trade

Adjustment, Employment Characteristics and Intra-Industry Trade. — In this paper we use data on individual workers to investigate a number of dimensions of adjustment and relate these to trade. Specifically, we estimate the relative incidence of changes in workers’ employment status with regard to sector, firm, occupation and region. We relate the incidence of adjustment to a range of labour market characteristics and indicators of trade exposure. Our findings are not consistent with the notion that there is a systematic relationship between the type of trade expansion (inter- or intra-industry) and the type of employment adjustment (within or between industry adjustment) or that there is less labour market adjustment associated with intra- than inter-industry trade.

Estimating the Wage Costs of Inter- and Intra-Sectoral Adjustment

Estimating the Wage Costs of Inter- and Intra-Sectoral Adjustment. — The proposition that labour market adjustments to intra-industry trade are less costly than adjustments to inter-industry trade is a widely-held belief amongst trade economists. If there are significant sector-specific skills, then this ‘smooth adjustment hypothesis’ seems intuitive. Direct evidence relating to this issue remains largely anecdotal. In this paper we estimate the returns to tenure within jobs, industries and occupations in order to predict the costs, in terms of wage losses, of moving jobs between and within sectors. We find no compelling evidence that wage costs of moving between industries are larger than the costs of moving within industries.

Entry and Exit Behavior in the Absence of Sunk Costs: Evidence from a Price Comparison Site

This paper explores entry and exit at a price comparison site (PCS) where the sunk costs of participation are effectively zero. We first use a panel of 295 products on NexTag.com to estimate an error correction model of net entry. While the results support our characterization of the PCS as a zero sunk cost market in which potential sellers behave as Kirznerian entrepreneurs, in responding to opportunities, it is clear the net entry flow involves participants with widely differing behavior. This is investigated by examining exit and re-entry decisions at the seller level which reveal that size and reputation determine individual responses to market opportunities.

The Economic Significance of User-Generated Feedback

Abstract This paper examines the impact of user-generated feedback on price at a price comparison site or shopbot. It employs a modified hedonic price function to explore the use made by current potential consumers of the experience of past actual consumers in evaluating quality attributes that were not observable when the product was initially launched on to the market. Using a database of daily observations on 211 digital cameras traded on NexTag.com, we find that the product’s star rating, reflecting all the available individual assessments of the product, has a significant negative impact on the discount on the manufacturer’s recommended selling price at which the product is offered.