Valdemar Smith

Why are So Few Females Promoted into CEO and Vice-President Positions? Danish Empirical Evidence 1997-2007

The authors estimate the probability of promotion into VP and CEO positions using employer-employee data from all Danish companies observed during the period 1997 to 2007. After controlling for a large number of firm and family-related variables, including take-up history of maternity and paternity leave and proxies for female-friendly companies, a considerable gap still occurs in the promotion probabilities for CEO positions. Part of the gap is due to gender differences in the area of specialization as top executive. Women tend to cluster in VP positions in HR, R&D, and IT areas in which the chances of a CEO promotion are lower than for positions as CFOs and VPs in Sales or Production areas.

Rational Addiction and Alcohol Consumption: Evidence from the Nordic Countries

The purpose of this paper is to test Becker and Murphys (1988) rational addiction model on 35 years of time series data on alcohol consumption in each of the four Nordic countries: Denmark, Finland, Norway, and Sweden. The empirical relevance of rational addiction theory is assessed by examining the influence of past and future consumption and contemporaneous prices on current consumption. More precisely, the rational addiction model maintains that past and future consumption should have a positive effect and that current price should have the conventional negative effect on consumption. In addition, some parameter restrictions (regarding past and future prices and consumption) implied by rational addiction are tested. Finally, the own-price elasticities from rational addiction specifications are compared to those obtained from more conventional demand specifications which ignore addiction. Ignoring addiction may provide misleading estimates of the price sensitivity of alcohol consumption and this may, in turn, lead to underestimation of the effects of major changes in price policy such as those currently taking place in the Nordic countries.

Efficiency, R&D and ownership – some empirical evidence

Abstract Investments in R&D create an immaterial capital asset, which is expected to have a positive influence on firms’ efficiency and consequently on their profit. Nonetheless, the short-term effects of current investments in R&D are difficult to prove. Therefore, this paper focuses on analyses based on the technical efficiency methodology using a stochastic frontier approach in order to investigate the influence of R&D activities on the technical efficiency of the firms. Using a sample of 2370 Danish firms, the analysis suggests that R&D-active firms are significantly more efficient than other firms. The legal form of ownership also affects the efficiency significantly, whereas firms owned by large shareholders – who are expected to exert a disciplinary influence on the managers of the firm – do not seem to be more efficient than other firms.

R&D and productivity in Danish firms: some empirical evidence

The aim of the paper is to examine the relationship between R&D capital and productivity using microdata for Danish manufacturing firms. The influence of factors such as ownership, innovative characteristics and source of funding accounted for. The return to accumulated R&D capital is estimated to be in the neighbourhood of 9–12%, whereas the short-run effect of R&D is insignificant. Furthermore, the direct influence from foreign ownership, source of funding accounted for, innovative characteristics and ownership dispersion on productivity are analysed. However, none of the factors seem to have an impact on firm productivity. The same is the case for the indirect influence coming from interaction with accumulated R&D capital.

The gender pay gap in top corporate jobs in Denmark: Glass ceilings, sticky floors or both?

This paper analyses the gender gap in compensation for CEOs, Vice-Directors, and potential top executives in the 2000 largest Danish private companies based on a panel data set of employer-employees data covering the period 1996-2005. During the period, the overall gender gap in compensation for top executives and potential top executives decreased from 35 percent to 31 percent. However, contrary to many other studies, we do not find that the gender gap for Danish top executives disappears when controlling for observed individual and firm characteristics and unobserved individual heterogeneity. For CEOs, the raw compensation gap is 28 percent during the period while the estimated compensation gap after controlling for observed and unobserved characteristics increases to 30 percent. For executives below the CEO level, the estimated compensation gap is lower, ranging from 15 to 20 percent. Thus, we find evidence of both glass ceilings and sticky floors in Danish private firms.

Determinants of CEO and Board Turnover

The purpose of this paper is twofold. First, to document changes in top management and board of directors in Danish firms during 1996–98. Second, to examine whether these changes are related to the performance of firms during the preceding years. Our study differs from earlier investigations in that we not only consider removal of CEOs but also turnover of board chairmen and board members. We find that turnovers of CEOs, board chairs and members have a number of common determinants like firm size and age of the firm. Risks of removals increase with lower rates of solvency but are unaffected by profitability changes. The hypothesis that competition increases the turnover risk is not supported by the estimations.

Regional income effects and renewable fuels : Increased usage of renewable energy sources in Danish rural areas and its impact on regional incomes

CO2 emission is a worldwide problem and in the attempt to reduce these emissions, renewable energy sources may be considered serious alternatives to the present usage of fossil fuels. As part of a research programme financed by the Danish Energy Agency, data concerning the different heating technologies based on oil and wood fuels have been collected. Private and social costs are estimated and these economic data are used when analysing regional income effects of increased consumption of fuels (e.g. wood) locally produced. The impacts on income and tax revenues are calculated from multiplier expressions, constructed with rights to the measurement of local effects.

Do expert ratings or economic models explain champagne prices

This analysis deals with the retail prices of champagne sold on the Scandinavian markets. The markets for champagne in these countries are rather small, of course, although the consumption of still wines has increased relatively fast during the last decades. A large number of French champagnes are available to the Scandinavian consumers, but there seems to be less price competition in the market concerning champagne as compared to still wine. The demand for champagne is most likely less price sensitive as it is usually perceived as a luxury good which to a large extent is bought on special occasions like weddings, New Years Evening, etc. Thus, the demand must be assumed to be price inelastic but of course the prices must be assumed to reflect the underlying quality of the champagnes. However, because champagne is bought with low frequency, many consumers do most likely not have/seek full information on the champagne. Some consumers rely on the reputation of particular brands, e.g. ‘Les Grandes Marques de Champagne’, some consumers choose to gain information from sensory rating of champagne, e.g. Robert Parker or Wine Spectator. In fact, the majority of champagne dealers use points given by Parker and/or Wine Spectator in their advertising of champagne. Accordingly the aim of this paper is to analyse the price formation of champagne prices on the Scandinavian markets, i.e. to what extent can prices be explained by the ratings of Robert Parker or Wine Spectator; or does a hedonic price function perform best? In order to address this question champagne prices at retail level in the Scandinavian countries have been collected along with a whole range of ‘quality attributes’ for these wines. Overall, the data set includes approximately 350 observations representing the main champagne producers and covering all 3 countries reasonably well. The main data sources are Vinmonopolet (Norway) and Systembolaget (Sweden). For Denmark the data are obtained from a whole range of wine merchants, supermarkets etc., as Denmark is a free market in contrast to the state regulations in Norway and Sweden. In order to estimate a hedonic price function a number of attributes like the grapes used, the vintage, indicators of sweetness, freshness etc. are included as far as such data are available. Furthermore, the quality assessments of professional wine experts are included from Robert Parker, Wine Spectator and the French ‘1855 Notation’ (1855.com), although, as expected, not all champagnes sold in Scandinavia are rated by the wine experts, who obviously only deal with the high-end segment.

R&D, export and productivity: testing the Bustos model on Danish data

In this article, a unique data set for Danish manufacturing firms has been used to analyse the interplay between export, R&D investments and productivity. In addition to traditional tests, a nonparametric test for differences in stochastic distributions gives evidence that the productivity distribution of firms that export and engage in R&D dominates the productivity distribution of firms that are exporters without engaging in R&D. Furthermore, the productivity distribution of the latter group of firms dominates that of firms who are neither R&D-active nor exporters. This conclusion applies to the years before, under and after the economic downward spiral in the world economy, i.e. 2007 to 2010. Overall, this result confirms the hypothesis of Bustos (2011) for Argentina, and for the results for German firms, see Wagner (2012b) and Vogel and Wagner (2012). However, for 2009 the findings are less clear, mainly due to the relative productivity cutback, which some exporting firms faced at the beginning of the downturn in the world economy.

The Military Action in Iraq 2003: Did the US Consumer Boycott of French Wines Have any Economic Effects?

The public opinion in the US turned against France and to some extent Germany for not supporting the armed intervention in Iraq. From early 2003 a boycott of French goods, especially wines, by American consumers became an issue which affected sales of French wines in the US. This paper analyses how the boycott affected the demand for French wine on the American market using international trade data. The effect may have been only temporary. We estimate it at some 120 million US dollars. (JEL classification: C22, D12)