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Demand Factors (demand + factor)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting100%

Selected Abstracts

Intersectoral Labor Mobility and the Growth of the Service Sector

ECONOMETRICA, Issue 1 2006
Donghoon Lee
One of the most striking changes in the U.S. economy over the past 50 years has been the growth in the service sector. Between 1950 and 2000, service-sector employment grew from 57 to 75 percent of total employment. However, over this time, the real hourly wage in the service sector grew only slightly faster than in the goods sector. In this paper, we assess whether or not the essential constancy of the relative wage implies that individuals face small costs of switching sectors, and we quantify the relative importance of labor supply and demand factors in the growth of the service sector. We specify and estimate a two-sector labor market equilibrium model that allows us to address these empirical issues in a unified framework. Our estimates imply that there are large mobility costs: output in both sectors would have been double their current levels if these mobility costs had been zero. In addition, we find that demand-side factors, that is, technological change and movements in product and capital prices, were responsible for the growth of the service sector. [source]

Bilateral Import Protection, Free Trade Agreements, and Other Factors Influencing Trade Flows in Agriculture and Clothing

JOURNAL OF AGRICULTURAL ECONOMICS, Issue 2 2009
Thomas L. Vollrath
F1; F13; F14 Abstract Many factors shape the global network of bilateral trade including fundamental forces of supply and demand factors and government policies. This study uses the generalised gravity framework to distinguish among the different drivers that either deter or aid partner trade in land-intensive agriculture and labour-intensive clothing. The dataset used in the analysis includes bilateral trade among 70 countries in 1995, 2000 and 2005. Collectively, the 70 countries account for 85% of the world's trade in agriculture and 96% of its GDP. Empirical results lend support to the Heckscher,Ohlin explanation of trade, namely that relative factor endowments motivate cross-border trade. Results also show that tariffs are not always binding and bilateral free-trade agreements more often divert rather than create trade. [source]

The Role of Risk Management and Governance in Determining Audit Demand

JOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 9-10 2006
W. Robert Knechel
Abstract:, Most prior research into audit fees has been based on a theoretical model which treats audit fees as the by-product of a production function ignoring potential demand forces that may drive the level of the audit fee. Inspired by prior ,anomalous' results, we take a different perspective by focusing on demand factors that may affect the level of the audit fee. Using data collected from a sample of listed companies in Belgium, we consider both disclosures about risk and risk management and actual decisions about corporate governance to examine whether audit fees are higher when these demand forces exist. In general, we expect that external auditing will increase in situations where there are multiple stakeholders with individual risk profiles who can shift some of the cost of monitoring to other stakeholders. Consistent with our theory and expectations, our results indicate that audit fees are higher when a company has an audit committee, discloses a relatively high level of financial risk management, and has a larger proportion of independent Board Members. Audit fees are lower when a company discloses a relatively high level of compliance risk management. The latter result indicates that controls are only complementary as long as they are voluntary, as mandated controls act as substitutes for non-mandated controls. [source]

Firm strategy, innovation and consumer demand: a market process approach

MANAGERIAL AND DECISION ECONOMICS, Issue 4-5 2001
Paul L. Robertson
Despite recent advances by economists such as Porter and those associated with the resource-based school, the economics of demand rarely features in discussions of business strategy. Porter and the resource-based school take the characteristics of demand as given, and place almost exclusive emphasis on the role of supply-side factors in formulating strategy. Scholars in strategic marketing, by contrast, recognize the importance of demand factors, but do not analyse them from an economic standpoint. Moreover, none of the important schools of strategic management attempts to explore the relationship between supply and demand in much analytical depth. In this paper, we adopt a market process approach to strategy formulation as a preliminary step towards rectifying these problems. First, we explore the factors that affect the economics of demand, particularly in innovative situations. Second, we adapt Lancaster's attribute analysis to show how the interaction between supply and demand can be represented from a market process perspective. On the basis of our efforts, we conclude that further work in these areas would benefit students of both strategic management and economics. Copyright © 2001 John Wiley & Sons, Ltd. [source]

Does the Theory of Irreversible Investments Help Explain Movements in Office,Commercial Construction?

REAL ESTATE ECONOMICS, Issue 4 2000
Rena Sivitanidou
Focusing on the relevance of the modern investment theory in explaining movements in office,commercial construction, we attempt to advance existing empirical work in two respects. First, building on recent theoretical advances, we offer an extended empirical model of new construction that takes into account the full opportunity cost of irreversible investments in uncertain environments. Second, using updated time series of office,commercial construction across the nation's largest markets, we empirically estimate such a model to (i) explore investment behavior during 1982,1998 and (ii) detect differences, if any, in such behavior between the pre- and post-recession years. Our empirical findings are fully consistent with the theory of irreversible investments. Such findings highlight both the relevance and the relative importance of uncertainty in underlying demand factors in shaping movements in office,commercial construction, while pointing altogether to more cautionary investment behavior during the post-recession years. [source]