Working Papers

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Regulation, Innovation and Productivity , IE Working Paper, with Francisco Marcos

This paper estimates the average effect of regulatory intensity and administrative redtape on productivity and innovation. For this purpose we exploit the exogenous variation of the decentralization process that has taken place in Spain during the last three decades. Using objective proxies for legislative and regulatory activity such as the number of pages and number of new norms published in the regional legislative reporters we find a strong negative impact of regulatory intensity on regional innovation and productivity. This negative effect of regional regulation is not only statistically significant but also of large economic importance and can explain the absence of productivity growth of Spain in the last decades. Finally, we provide evidence that regulatory intensity has affected the size distribution of establishment reducing its skewness and therefore affecting asymmetrically more those establishments that are more likely to innovate. More

Investor's Perception of Value Creation in Environmental Strategies: The Impact of Past Environmental Performance on Future Stock Market Returns, with Carl Kock.

In this paper we test whether investors incorporate into stock market prices the future increase or decrease in firm value due to corporate strategies that cause better or worse firm environmental performance. We report strong evidence that low-polluter companies have substantial abnormal positive returns in the subsequent years after the environmental information was publicized while in the same period of time, high-polluter companies have no abnormal returns (positive or negative). On the contrary, we find exactly the opposite results when we analyze stock market behavior the exact same day the environmental information was publicly released. This is, for this exact publication date high polluter companies have significant negative abnormal returns while low-polluter companies have abnormal returns that are not statistically different than zero. Overall, our results are consistent with a world in which investors have been slow to properly evaluate future increases in firm value associated with current good firm environmental performance while on the other hand investors have correctly discounted the future negative financial effects corresponding to high-polluter companies. More

When Do Outside Directors Create Corporate Value?, with Luis Diestre.

This paper shows how outside directors are related to positive corporate performance when the level of corporate antitakeover protection is low while outside (non-management) directors are associated with negative corporate performance when companies are conveniently isolated from the discipline of the market of corporate control. These results are robust to the use of methods that alleviate traditional endogeneity problems. Our findings suggest that outside directors need the incentives provided by the threat of takeovers to properly monitor the managerial function. With this, we identify a specific mechanism that illustrates how corporate antitakeover provisions destroy corporate value. Once this negative effect of corporate antitakeover provisions on outside director incentives is taken into account, we do not find evidence that corporate antitakeover provisions destroy additional corporate value. Other direct financial incentives like outside director ownership do not seem be relevant to improve the quality of the outsider directors’ monitoring task. More

Determinants of Corporate Antitakeover Provisions

In this paper I study empirically the industry and firm characteristics that determine the level of corporate antitakeover protection. In particular, I explore the empirical implications of a managerial entrenchment view of takeover defenses versus a corporate value enhancing explanation that would support efficiency reasons behind corporate provisions that restrict shareholder rights to increase take-over defenses. I find that the level of antitakeover protection is negatively associated with the level of firm-specific organizational capital and that takeover defenses are negatively associated with stock market volatility. Furthermore, corporations that operate in less competitive product markets are more protected against takeovers. I do find evidence that firms that allow a larger degree of antitakeover protection to their managers do indeed invest more in long term projects. I develop a test to see if stock market myopically penalizes long term investments and I find that this is not the case. From this, I conclude that managers isolated from the discipline of the market for corporate control invest in longer-lived assets to build empires and not to maximize shareholder’s wealth. More

Competition of Corpses: An Empirical Study of Tomb Pricing Behavior of Spanish Council Towns.

With Francisco Marcos and Albert Sánchez. We study empirically the determinants of public tomb prices in a sample of Spanish towns. We document strong evidence in favor that cemeteries act as local monopolies that use second degree price discrimination to maximize profits. Additionally we report that local cemetery prices react to competition from private cremation companies. This competition is associated with lower price dispersion caused by an increase in the minimum niche prices with no effect on other higher niche prices. We conclude that cemeteries have accommodated and facilitated entry of private cremation companies through an increase in those niche prices more likely to affect cremation demand. More

Substitution between Product Market Competition and Financial Managerial Incentives.

Using a unique dataset of small Canadian business I analyze the relation between product market competition and the provision of managerial incentives. I find a strong negative correlation between different measures of managerial incentives and the number of competitors in their most important market. The correlation is both economically and statistically significant. The results are particularly striking for the case of self-reported monopolies. These results are consistent with theories that emphasize the role of product market competition in providing incentives through the increasing threat of termination in the presence of firm specific human capital.

Organizational Capital and the Existence of a Diversification and Size Discount.

I analyze the implications of a standard model of the firm where I allow heterogeneity in one unobserved component, which I label organizational capital. Under some reasonable assumptions, firms with better organizational capital are larger and have a lower rate of profit both per unit of output and per unit of input. The model, thus, generates a negative relation between size of firms and Tobin’s Q, which I find in the data. When this relation is accounted for, the well-known diversification discount disappears, suggesting that this might simply be a feature of large firms.

Other Topics (in Spanish)

Estudio sobre la Telefonía Móvil: Efectos Económicos del Estancamiento del Despliegue de las Infraestructuras

Joint with Manuel Becerra.
En este informe se analizan las consecuencias que el estancamiento actual en el despliegue de la red de antenas de telefonía móvil puede tener sobre la economía y la sociedad españolas en el futuro a medio plazo. Afortunadamente, España ha sido uno de los países punteros de nuestro entorno en el despliegue inicial de la telefonía móvil y su consolidación a finales de la década de los noventa. Además de contribuir a la mejora en la calidad de vida de los usuarios -que ya superan el 80% de la población-, también nuestra economía se ha visto beneficiada por el importante efecto positivo que el sector de telefonía móvil ha tenido sobre la actividad económica, la productividad, las arcas públicas y el empleo. Sin embargo, el estancamiento del número de antenas instaladas en nuestro país en los niveles existentes a finales del año 2000 pone en un peligro, no sólo la calidad del servicio en los próximos años, sino también las posibilidades de crecimiento económico y la absorción de nuevos desarrollos tecnológicos que se prevé se produzcan en los próximos dos o tres años.

Estimación del Impacto Económico de la Piratería en la Industria Discográfica en España

Joint work with David Allen and Georgina Tazón.
En este informe hallamos una estimación de los efectos económicos de la piratería en el sector de la música. Éste es el sector que más ha sufrido la piratería y sobre el cual disponemos de datos más antiguos que permiten hacer un estudio más fiable. Además, el efecto de la piratería sobre el sector discográfico es un indicador de lo que se puede esperar en un futuro inmediato en otros productos como las películas en formato DVD y los videojuegos. En primer lugar estimamos rigurosamente la repercusión sobre las ventas en la industria discográfica. Para ello seguimos varias metodologías que utilizan diferentes supuestos para calcular la hipotética demanda de música en España en ausencia de piratería. Utilizamos tanto datos a nivel del consumidor individual como datos macroeconómicos. Con esta información somos capaces de encontrar el efecto de la piratería sobre las ventas como la diferencia entre la demanda real registrada y la demanda estimada. Encontramos una disminución de ventas debido a la piratería en el año 2001 de entre un mínimo del 8,7% y un máximo del 37%, que se traduce en términos absolutos en unas pérdidas de entre 60 y 253 millones de euros. Para el año 2002 no podemos aplicar las mismas metodologías ya mencionadas por falta de suficiente información estadística pero hay indicios de que el efecto de la piratería podría ser mucho mayor éste último año, destacando de entre otros indicadores el comportamiento de las ventas totales de discos compactos, las cuales han sufrido una caída de alrededor de un 20%.

Introducció a la Història de la Industria de la Plata a Menorca, Estudis d'Història Econòmica 3, 1996.

Press articles (in Spanish)
La reforma de la financiación de la televisión pública: ¿Camino de servidumbre? Expansión 16th of July 2009.

Descentralización, Carga regulatoria y Desarrollo, with Francisco Marcos and Albert Sánchez. Revista Consejeros Número 28, Mayo 2008.

Efectos Disuasorios de las Instituciones de Defensa de la Competencia. 2008.

Book chapter at the book “Una reflexión sobre las Políticas de defensa de la Competencia”, edited by the Círculo de Empresarios.

El Veto del Consejo de Ministros a las Operaciones de Concentración Expansión 8th of April 2005.

El Potencial de la Teoría de Juegos Cinco Días 12th of October 2005

La Regulación de los Seguros de Deceso with Albert Sánchez, Cinco Días 7th of August 2006.

¿Es el Canon tan Malo? La Gaceta de los Negocios, 8th of February 2007.

Entendamos el Canon with Albert Sánchez, Expansión 15th of May 2007.