Documento de Trabajo

Investment Banking and Security Market Development: Does Finance Follow Industry?

Long-term relationships between business firms and investment banks are pervasive in developed security markets and there is evidence that better monitoring and information result from these relationships. Therefore, security markets should allocate resources better when an investment banking industry exists. We study the necessary conditions for the emergence of sustainable relationships and explore whether policy

Corporate Diversification: Good for Some Bad for Others

In this paper a model based on conflicts of interest between shareholders, the CEO and divisional managers is developed to explain why corporate diversification is good for some firms and bad for others.It is shown that when the decision to diversify is endogenous, whether diversification destroys value depends on the severity of con‡icts of interests

Evaluación de la Regulación de las Telecomunicaciones en Chile (Evaluation of Telecommunications Regulations in Chile)

Desde su privatización, las empresas de telecomunicaciones han aumentado la cobertura de los servicios, así como su eficiencia interna. Luego de la desregulación de los servicios de larga distancia, las tarifas cayeron fuertemente y algo similar ocurrió con telefonía móvil, después de que el número de operadores aumentara de dos a cuatro. Sin embargo, la

Compensation Methods in a Competitive Labor Market: the Role of Asymmetric Information

In this paper we develop an asymmetric information model that provides a rationale for the existence of pay-for-performance contracts in the absence of incentive for effort and explainswhen and in which occupations pay-for-performance is more likely to be observed. In our model competition among firms for the best workers forces firm to link pay to

Transmisión y la “ley corta” I: una nota sobre riesgo y la tasa de descuento (Transmission Prices and the “Express” Law on electricity generation: a note on risk and the discount rate)

Esta nota estudia los determinantes de la tasa de descuento apropiada para fijar peajes de transmisión. Para ello se desarrolla un modelo simple que permite descomponerla en una suma de la tasa libre de riesgo y el premio por riesgo.Los principios generales son dos: (a) la tasa de descuento debiera ser variable y anclarse en

Comparing the Net Benefits of Incentice Based and Command and Control Regulations in a Developing Context: the Case of Santiago, Chile

There are numerous studies that establish the magnitude of the static efficiency gains made possible through the use of a cost effective ambient permit system (APS) compared to command and control (CAC) or other suboptimal instruments such as an emission permit system (EPS). However the cost effectiveness of APS rests both on the efficiency gains

Firm Sponsored General Training in a Frictionless Labor Market

In this paper I show that, contrary to Becker`s (1962) Human Capital theory and consistent with the evidence, in a frictionless labor market model firms pay for general training, while the worker recives the full return on general training, and the worker and the firm share the returns on specific investments to underinvesttment in spacific

Factors that Determine the Efficiency Ranking of Second-Best Instruments for Environmental Regulation

Cost-effective policies allow minimizing the compliance costs associated to reaching a desired environmental quality target. However cost reductions associated to the use of these policies are not always significant. In this paper a conceptual model is developed to analyze explicitly the interaction among the factors that determine the compliance costs under two market based policies

Equity and Educational Performance

In this paper, we review the main issues under discussion in the field of economics of education, with a special focus on Latin America. We seek to organize the debate about educational policies by showing how these policies respond to different models based on different assumptions and hypotheses about how the educational system functions. Methodological

Bank Lending and Relationship Banking: Evidence from Chilean Firms

In this paper we empirically study bank-client relationships using a sample of manufacturing Chilean firms. We examine whether concentration and the duration of bank-firm relationships affect the terms of bank financing, evaluating both the volume of bank lending and bank loan costs. Our results indicate that lower concentration, measured by the number of banks a

How Sensitive is Volatility to Exchange Rate Regimes?

It is usually conjectured that the nominal exchange rate should be more volatileunder a free float than under a dirty float regime. This paper examines this issue for theChilean economy. Specifically, in September 1999 the Central Bank of Chile eliminated the floating band for the nominal exchange rate, which operated since 1984, and established a

Could Higher Taxes Increase the Long-Run Demand for Capital?: Theory and Evidences for Chile

Is a tax increase always detrimental for capital formation? This paper estimates a long-run demand for capital in Chile, and studies the responsiveness of firms’ desired capital stock to variations in tax rates. We combine the neoclassical model with a cointegration argument to obtain a long-run demand for capital that is valid for a general