Economics and Business Letters

Optimal choice of relative performance indicator and product market competition

Jumpei Hamamura — 2024-07-10

We explore what performance indicator is optimal in a market competition, when firm’s owner pays compensation based on relative performance evaluation (RPE) to CEOs. Comparing the firm’s own profit with competitor’s profit, prior studies examine the RPEs. However, in RPE practices, other performance indicator is often adopted as a performance indicator with the exception of profit. Based on this motivation, from our analysis, we demonstrate that owners adopt sales as a relative performance indicator to evaluate CEO’s performance in specific economic conditions. This result has following contributions to RPE studies. First, our result will establish the future research avenue about choice of relative performance indicator. Second, our study has an important implication to empirical RPE research.

Did the Great Recession matter for health care utilization? An approach from the working-age population in Spain

Carla Blázquez Fernández — 2024-07-10

This paper tests for the determinants of health care services utilization in Spain. Data from the Spanish National Health Survey for 2006 and 2011-2012, two different phases of the economic cycle, is used. The analysis is carried out using count data models. Results show that the determinants are mainly related to gender, age, and health status. However, we find some differences prior the Great Recession and through it. Besides, there appear to be some differences between the services analysed. Findings should be considered first, under the framework of the Spanish National Health Care System and secondly, in terms of austerity measures. From a policy economic perspective, this contribution would be valuable to policymakers when planning to improve health services management.

Gold, bitcoin and the financial fear gouge

Gil Cohen — 2024-07-10

Our study investigates the hedging ability of Gold and Bitcoin to hedge against financial market crashes. We also examined the ability of the VIX fear gouge to improve the ability of those financial assets to hedge financial risks. We found a positive dependency between the current daily prices of Gold and Bitcoin with a stronger impact of Gold on Bitcoin than vice versa. We also find that in recent years (2021-2023), Gold price changes are negatively correlated to yesterday's price change of the S&P500 a day before and positively correlated to yesterday's NASDAQ price change.

Analysis of the long-run relationship between public capital, economic growth, and (non-)renewable energy consumption: a pooled mean group approach

Thai-Binh Pham — 2024-07-10

This study examines the relationships among public capital, economic growth, and (non-)renewable energy consumption in 48 countries from 1981 to 2019. Our twofold findings reveal that a 1% increase in public capital correlates with 0.34% income growth and changes in renewable and fossil-based energy consumption by 0.46% and 0.23%, respectively. A 1% rise in renewable energy use leads to a 0.39% decrease in fossil-based energy. Granger causality tests show bidirectional causality among output, public capital, private capital, and employment. Importantly, income influences both forms of energy consumption, but the reverse is not statistically significant. These findings provide policy insights for hastening the transition to a low-carbon economy, thereby supporting the achievement of SDGs 7, 8, 9, and 13.

Do female CEOs handle crisis better? Evidence from the COVID-19 pandemic

John Thornton — 2024-07-10

We examine whether firm performance in response to the shock of the COVID pandemic differed depending upon whether the CEO was female or male. We find that though female CEOs do not consistently demonstrate better management across all periods, following the shock, firms run by female CEOs were more profitable, more highly valued and more risk averse than firms run by male CEOs.