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This thesis analyzes investment incentives of strategic firms in industries where either demand is uncertain, or the good produced is economically non-storable and demand fluctuates. In those industries, investment is a long run decision, whereas production has to be adjusted short-run. Prominent examples are recently liberalized utilities such as the electricity sector. Regulated monopolies have been replaced by a small number of competing firms, which often are considered to behave strategically in order to exercise market power. Whereas the regulatory regimes prior to liberalization induced generous (over-)investment choices, we observe increasing unease of experts and policy makers regarding investment incentives in liberalized electricity markets. The first three chapters of this thesis (part one) analyze total capacity choice of strategic firms prior to producing for the spot market. We first determine the equilibrium of the market game. In the remainder of the first part we analyze the interdependency of enhanced spot market competition and firms overall capacity choice. We first analyze the impact of complete elimination of market power at the spot market giving rise to marginal cost pricing. We then consider the impact of price caps at the spot market. And finally we study the impact of reduced market power at the spot markets due to forward contracting. In the second part of the thesis firms can invest into several technologies. This allows them to determine not only their total capacity but also it's precise composition. In the absence of strategic interaction, for a single regulated firm, this has already been thoroughly analyzed in the so called peak load pricing literature, which has been widely applied for electricity markets prior to liberalization. In order to accommodate for the completely changed situation after liberalization, however, we extend this framework to the case of strategically interacting firms. Based on data of the German electricity market, we then illustrate and empirically quantify our theoretical results. We determine firms’ investment choices for different market structures and quantify the impact of spot market interventions on investment decisions and welfare. This allows us to quantify the potential for the exercise of market power, in the long run, when firms’ investment decisions are taken into account.

1. The context: The European patent system has been affected by substantial changes over the past three decades, which have raised vigorous debates at different levels. The main objective of the present dissertation is to contribute to these debates through an exploratory analysis of different changes in patenting practices – in particular the way applications are drafted and filed to patent offices –, their drivers, association with the value of patents, and potential impact on the patent system. The coming essays are therefore empirical in their essence, but are inspired by economic motivations and concerns. Their originality is threefold: it resides in the novelty of the main questions discussed, the comprehensive database specifically built to address them, and the range of statistical methods used for this purpose. The main argument throughout these pages is that patenting practices have significantly evolved in the past decades and that these developments have affected the patent system and could compromise its ability to fulfil its economic purpose. The economic objective of patents is to encourage innovation and its diffusion through the public disclosure of the inventions made. But their exploitation in the knowledge economy has assumed so many different forms that inventors have supposedly developed new patenting and filing strategies to deal with these market conditions or reap the maximum benefits from their patents. The present thesis aims at better understanding the dimensions, determinants, and some potential consequences of these developing practices. 2. The evolution: Chapter 2 presents a detailed descriptive analysis of the evolution in the size of patent applications filed to the European Patent Office (EPO). In this chapter, we propose two measures of patent voluminosity and identify the main patterns in their evolution. Based on a dataset with about 2 million documents filed at the EPO, the results show that the average voluminosity of patent applications – measured in terms of the number of pages and claims contained in each document – has doubled over the past 25 years. Nevertheless, this evolution varies widely across countries, technologies and filing procedures chosen by the applicant. This increasing voluminosity of filings has a strong impact on the workload of the EPO, which justifies the need for regulatory and policy actions. 3. The drivers: The evolution in patent voluminosity observed in chapter 2 calls for a multivariate analysis of its determinants. Chapter 3 therefore proposes and tests 4 different hypotheses that may contribute to explaining the observed inflation in size: the influence of national laws and practices and their diffusion to other countries with the progressive globalization of patenting procedures, the complexification of research activities and inventions, the emergence of new sectors with less established norms and vocabularies, and the construction of patent portfolios. The econometric results first reveal that the four hypotheses are significantly associated with longer documents and are therefore empirically supported. It appears however that the first hypothesis – the diffusion of national drafting practices through international patenting procedures – is the strongest contributor of all, resulting in a progressive harmonization of drafting styles toward American standards, which are longer by nature. The portfolio construction hypothesis seems a less important driver but nevertheless highlights substantial changes in patenting practices. These results raise two questions: Do these evolving patenting practices indicate more valuable patents? Do they induce any embarrassment for the patent system? 4. Measuring patent value: If the former of these two questions is to be addressed, measures are needed to identify higher value patents. Chapter 4 therefore proposes a review of the state of the art on patent value indicators and analyses several issues in their measurement and interpretation. Five classes of indicators proposed in the literature may be obtained directly from patent databases: the number of countries in which each patent is enforced, the number of years during which each patent has been renewed, the grant decision taken, the number of citations received from subsequent patents, and whether it has been opposed by a third party before the EPO. Because the former two measures are closely connected (the geographical scope of protection and length of maintenance can hardly be observed independently), they have been subjected to closer scrutiny in the first section of chapter 4, which shows that these two dimensions have experienced opposite evolutions. A composite measure – the Scope-Year Index – reveals that the overall trend is oriented downwards, which may suggest a substantial decline in the average value of patents. The second section of chapter 4 returns to the five initial classes of measures and underlines their main patterns. It appears that most of them witness the well-known properties of patent value: a severe skewness and large country and technology variations. A closer look at their relationships, however, reveals a high degree of orthogonality between them and opposite trends in their evolution, suggesting that they actually capture different dimensions of a patent’s value and therefore do not always pinpoint the same patents as being the most valuable. This result strongly discourages the reliance on one of the available indicators only and opens some avenue for the creation of one potential composite index of value based upon the five indicators to maximize the chances of capturing all potentially valuable patents in a large database. The proposed index reflects the intensity of the signal provided by all 5 constituting indicators on the potential value of each patent. Its declining trend reflects a rarefaction of this signal on average, leading to different plausible interpretations. 5. The links with patent value: Based upon the six indicators of value proposed in chapter 4 (the five classical ones plus the composite), the question of the association between filing strategies and the value of patents may be analysed. This question is empirically addressed in chapter 5, which focuses on all EPO patents filed between 1990 and 1995. The first section presents a comprehensive review of the existing evidence on the determinants of patent value. The numerous contributions in the field differ widely along three dimensions (the indicator of value chosen as dependent variable, the sampling methodology, and the set of variables tested as determinants), which have translated into many ambiguities across the literature. Section 2 proposes measures to identify different dimensions of filing strategies, which are essentially twofold: they relate to the routes followed by patent filings toward the EPO (PCT, accelerated processing), and to their form (excess claims, share of claims lost in examination), and construction (by assembly or disassembly, divisional). These measures are then included into an econometric model based upon the framework provided by the literature. The proposed model, which integrates the set of filing strategy variables along with some of the classical determinants, is regressed on the six available indicators separately over the full sample. In addition, the sensitivity of the available results to the indicator and the sampling methodology is assessed through 18 geographic and 14 industrial clustered regressions and about 30 regressions over random samples for each indicator. The estimates are then compared across countries, industries and indicators. These results first reveal that filing strategies are indicative of more valuable patents and provide the most stable determinants of all. And third, the results do confirm some classical determinants in their positive association with patent value, but highlight a high degree of sensitivity of most of them to the indicator or the sample chosen for the analysis, requiring much care in generalizing such empirical results. 6. The links with patent length: Chapter 6 focuses on one particular dimension of patent value: the length of patents. To do so, the censored nature of the dependent variable (the time elapsed between the filing of a patent application and its ultimate fall into the public domain) dictates the recourse to a survival time model as proposed by Cox (1972). The analysis is original in three main respects. First of all, despite the fact that renewal data have been exploited for about two decades to obtain estimates of patent value (Pakes and Schankerman, 1984), this chapter provides – to the best of our knowledge – the first comprehensive analysis of the determinants of patent length. Second, whereas most of the empirical literature in the field focuses on granted patents and investigates their maintenance, the analysis reported here includes all patent applications. This comprehensive approach is dictated by the provisional rights provided by pending applications to their holders and by the legal uncertainty these represent for competitors. And third, the model integrates a wide set of explanatory variables, starting with the filing strategy variables proposed in chapter 5. The main results are threefold: first, they clearly show that patent rights have significantly increased in length over the past decades despite a small apparent decline in the average grant rate, but largely due to the expansion of the examination process. Second, they indicate that most filing strategies induce considerable delays in the examination process, possibly to the benefit of the patentee, but most certainly to the expense of legal uncertainty on the markets. And third, they confirm that more valuable patents (more cited or covering a larger geographical scope) take more time to process, and live longer, whereas more complex applications are associated with longer decision lags, but also with lower grant and renewal rates. 7. Conclusions: The potential economic consequences and some policy implications of the findings from the dissertation are discussed in chapter 7. The evolution of patenting practices analysed in these works has some direct consequences for the stakeholders of the patent system. For the EPO, they generate a considerable increase in workload, resulting in growing backlogs and processing lags. For innovative firms, this phenomenon translates into an undesired increase in legal uncertainty, for it complicates the assessment of the limits to each party’s rights and hence of the freedom to operate on a market, which is precisely what the so-called ‘patent trolls’ and ‘submariners’ may be looking for. Although empirical evidence is lacking, some fear that this may result in underinvestment in research, development or commercialization activities (e.g. Hall and Harhoff, 2004). In addition, legal uncertainty is synonymous with an increased risk of litigation, which may hamper the development of SMEs and reduce the level of entrepreneurship. Finally, for society, we are left with a contrasted picture, which is hard to interpret. The European patent system wishes to maintain high quality standards to reduce business uncertainty around granted patents, but it is overloaded with the volume of applications filed, resulting in growing backglogs which translate into legal uncertainty surrounding pending applications. The filing strategies that contribute to this situation might reflect a legitimate need for more time and flexibility in filing more valuable patents, but they could also easily turn into real abuses of the system, allowing some patentees to obtain and artificially maintain provisional rights conferred by pending applications on inventions that might not meet the patentability requirements. Distinguishing between these two cases goes beyond the scope of the present dissertation, but should they be found abusive, they should be fought for they consume resources and generate uncertainty. And if legitimate, then they should be understood and the system adapted accordingly (e.g. by adjusting fees to discourage some strategies, raising the inventive step, fine-tuning the statutory term in certain technologies, providing more legal tools for patent examiners to reject unpatentable applications, etc.) so as to better serve the need of inventors for legal protection in a more efficient way, and to adapt the patent system to the challenges it is or will be facing.

<p>According to Atkinson, Banker, Kaplan and Young (1995) management accounting and control practices have an important role within today’s organizations. In order for the organization to be successful, information on the finances and performance are crucial. But in the media industry there are indications that management accounting and control practices are not as accepted as in many other industries (Tjernström, 2002). Since there have not been much research about management accounting in the media industry, compared to what have been done in other industries, like manufacturing and new economy firms, there are less knowledge from this industry.</p><p>The purpose of our thesis is to investigate, explain and analyze the management accounting practices, with focus on performance measurement and what the attitude to performance measurement is within four newspapers in Sweden. This will be done from a management perspective.</p><p>Previous research about agency theory, stewardship theory, budget, responsibility centres, operating- income and margin, reward and incentive plans, balanced scorecard and intellectual capital statement and theories about the newspaper industry are described and used.</p><p>A qualitative research with four interviews was conducted. Three were newspaper managers and one editor in chief.</p><p>From our four researched newspapers we have found that managers described management accounting and performance measurements to be important but still not communicated. Therefore, it is interesting that none of the newspapers measure performances in the editorial department. Journalists have been and are sceptical to management accounting practices and performance measurements but this attitude has changed and is not so strong and not a problem nowadays. Focus on profit has increased but is not considered as a threat to newspaper quality as long as it is not too extreme. Operating margin is the key ra-tio that all four newspapers use.</p>

This study provides evidence concerning the endogenous determination of managerial compensation contracts. To avoid the confounding effect of tax considerations, we limit our attention to the choice among long-term nonqualified incentive plans. Specifically, we consider a two-part decision faced by the firm: (1) whether to add an accounting-based "performance plan" to the existing portfolio of compensation contracts and (2) if the firm adopts a plan, the choice between a "relative" or an "absolute" performance measure. Based on some behavioral implications of performance plans which distinguish them from alternative contracts, we develop hypotheses which relate the adoption and design of a performance plan to the firm's general incentive contracting environment. We test these hypotheses using a choice-based sample, evenly divided between performance plan adopters and nonadopters. For the purposes of parameter estimation, we use the multinomial logit model to reflect the qualitative, hierarchical nature of the decision setting. Our results indicate that variables which proxy for the incentive environment can explain which firms will adopt a performance plan, and also the type of performance measure used by the adopting firms.

This dissertation examines the relationship between debt and investment-related tax shields using changes in these classes of tax shields scaled by expected operating earnings following the passage of the Economic Recovery Tax Act(ERTA) in 1981. The substitution effect predicts that a negative relationship between changes in the two classes of tax shields will be observed in response to the increased investment-related tax shields offered by ERTA. Debt tax shields should decrease following ERTA since the probability of losing the tax benefit of tax shields would rise as investment-related tax shields increased following ERTA. Firms' probability of losing the deductibility of tax shields is used to segregate the sample into two groups. For the group of firms with a low probability of losing the deductibility of tax shields, the substitution effect is inapplicable and the relation between changes in the two classes of tax shields simply represents the debt securability effect. Since fixed assets can be used as collateral for debt, the debt securability hypothesis predicts a positive relationship between changes in debt and investment-related tax shields after the passage of ERTA. The model developed to segregate debt securability from the substitution effect reveals that, as predicted, the debt securability effect is positive for all firms and that the substitution effect is negative for those firms with a large probability of losing the benefits of tax shields. This reverses the findings of prior research. Controls for pecking order theory effects are introduced into the model to assure that the substitution effect observed is not due to debt ratio as predicted by Myers (1984). The findings described above remain intact except that the debt securability effect does not exist and the substitution effect is weaker for high-debt firms. Furthermore, support is offered for the pecking order theory. These results are robust to alternate specifications of time periods tested, variable definitions, data screening criteria and model specifications.

Cette thèse s'intéresse aux effets de l'environnement concurrentiel de l'entreprise sur la rémunération incitative et sur l'effort de son dirigeant. Elle comporte trois essais, traitant chacun d'un aspect spécifique de cette problématique. En premier lieu, nous étudions, au travers d'un modèle théorique, le schéma de rémunération optimal et le niveau d'effort à l'équilibre. L'effet de la concurrence est analysé par l'entrée d'une entreprise sur un marché monopolistique. Ainsi, nous comparons les schémas de rémunération et le niveau d'effort du dirigeant entre ceux caractéristiques d'une situation de monopole et d'un duopole à la Cournot. Ce modèle est ensuite étendu à l'hypothèse d'aversion à l'inégalité. Nous montrons que l'entrée d'une entreprise affecte négativement la rémunération incitative et le niveau d'effort. Aussi, face à un dirigeant averse à l'inégalité, l'entreprise doit proposer une rémunération plus élevée afin d'implémenter le même niveau d'effort. En second lieu, nous examinons grâce à l'outil expérimental les prédictions théoriques de ces deux modèles. Nous confirmons ainsi que l'entrée d'une entreprise sur le marché réduit la rémunération incitative du dirigeant. En revanche, malgré cette réduction, le dirigeant continue à fournir le même niveau d'effort. Enfin, en troisième lieu, nous introduisons dans une nouvelle expérience la compétition entre les dirigeants en créant un différentiel de rémunération. Nous montrons que cette compétition permet à l'entreprise de réduire encore la rémunération de son dirigeant en duopole. De plus, le dirigeant compare sa rémunération avec le profit de son entreprise d'une part et avec celle de l'autre dirigeant d'autre part et cette double comparaison affecte son niveau d'effort. / This dissertation analyzes the effects of the competition on the managerial incentives and effort. The dissertation is made of three essays, each dealing with a particular aspect of the general setting. Firstly, based on a model, we focus on the compensation schemes and the effort level of the manager in equilibrium. We examine the effects of a firm entry on the monopolistic market on these schemes and on the effort level. In this model we then introduce an additional assumption that managers are averse to inequity. We show that the firm entry affects negatively both the incentive compensation and the effort level. Furthermore, the firm has to propose a high compensation so as to implement the same effort level if the manager is inequity averse. Secondly, we test the theoretical predictions of these models in the laboratory. We confirm that the firm entry reduces the incentive compensation. In return, the manager continues to supply the same effort level in spite of the reduction of the incentive compensation. Finally, we implement, in a new experiment, the competition between the managers. We show that the competition allows the firm to reduce the compensation for her manager in the duopoly environment. Furthermore, the manager compares his compensation to the firm's profit and to the other manager's compensation. These comparisons have significant effects on the manager's level of effort.

After the Great Recession of 2007 there was a spotlight on executive compensation. The magnitude and structure of executive pay became an area of concern to the public. As a result, company management across all sectors had to find a way to offer competitive compensation plans that aligned the interest of shareholders with that of executives. The outcome was an increased focus on tying executive pay to company performance. The level of fixed-pay incorporated into target compensation began to decreases rapidly and was replaced by “at-risk” compensation. For some, this was a major achievement in the world of executive compensation, however, others view this change as potentially dangerous. I chose to analyze the pay-mix structure and annual incentive plans of a group of bellwether companies to see if this transition is increasing company’s exposure to fraud. In this essay I attempt to tie increases in at-risk pay to increases in fraud risk, while identifying incentive goals affected by common fraud practices.

Les développements actuels de microfinance encouragent les IMF à fournir un éventail plus large de services financiers au sein d'un portefeuille multiservices comprenant de la micro-épargne, de la micro-assurance, des services bancaires mobiles. L'une des caractéristiques de cette tendance s'exprime par la volonté des IMF de développer le marché de l'épargne afin d'atteindre les clients les plus pauvres mais également d'attirer des dépôts à moindre coûts. L'évolution rapide de la microfinance a également engendré un processus de commercialisation qui implique l'ouverture du secteur aux pratiques marchandes et qui se concrétise par un changement des modes de financement des IMF. Le domaine de la microfinance est donc sujet à de nombreuses modifications qui touchent aussi bien les pratiques des IMF, que leur organisation ou leur mode de financement. L'objectif de cette thèse est alors de contribuer à la compréhension de l'impact de ces modifications sur le développement et l'efficacité des sociétés de microfinance. Pour se faire, nous nous proposons d'explorer trois thèmes particuliers, correspondant aux trois chapitres de la thèse. Premièrement, nous chercherons à identifier des mécanismes originaux d'incitations relatifs aux nouvelles pratiques des IMF (en particulier l'offre couplée de services financiers) et permettant d'assurer l'exécution des contrats de financement. Deuxièmement, nous tenterons d'évaluer la performance des IMF offrant des services de microfinance couplés (crédit plus épargne) par rapport aux IMF traditionnelles. Enfin, nous étudierons l'impact des nouvelles modalités de financement des IMF sur leurs performances à la fois financières et sociales. / It has been commonly acknowledged that in order to reach the target clienteles with loans at attractive terms and conditions, an appropriate technology for delivering financial services must be developed. Next to this, current developments in microfinance industry encourage MFIs to offer wide-ranging services within a multiservice portfolio including microsavings, microinsurance, remittances, mobile banking etc. One of the main pillars of this trend has become MFIs increasing interest in the expansion into the savings market to reach more poor clients as well as to lower costs by attracting presumably cheaper deposits. Joint services are tailored to better meet needs of the poor and aim at building sustainable financial systems and establishing closer and long-term relationship with clients. Furthermore, the rapid evolution of microfinance has generated another essential and closely related trend: commercialization. The focus of this dissertation is on three emerging issues associated with the development of microfinance sector: incentive mechanisms to address contract enforcement and screening problems, performance of MFIs though the lenses of combined microfinance services (credit plus savings), and performance of MFIs though the lenses of capital structure. The essays in the dissertation vary in research methodology: one essay is theoretical and two are empirical. Moreover, the data come from diverse microfinance units: Microfinance Information Exchange (MIX) online database and Microfinance Centre for Central & Eastern Europe and the New Independent States (MFC). As far as methods are concerned the empirical essays use less frequently applied methodologies in microfinance studies: seemingly unrelated regression (SUR) and propensity score matching (PSM).

Master of Agribusiness / Department of Agricultural Economics / Brian Niehoff / The purpose of this thesis was to examine the relative efficacy of the incentive plan for loan officers within Farm Credit of the Virginia’s, ACA (FCV). The purpose of FCV’s incentive plan includes promoting firm financial growth and stability, employee retention, and encouraging teamwork. Incentive plans are important financial decisions for companies and these plans have upside potential and downside risk that should be considered in the decision making process. A literature review was conducted to analyze incentive practices and management theory in addition to a review incentive plans from other Farm Credit associations. A survey was also conducted to understand loan officer perceptions of the current incentive plan at FCV. The results of the survey provide insight into employee perceptions about job satisfaction, intrinsic motivation, extrinsic motivation, organizational commitment, understanding of the incentive plan, and timing of incentives. Finally, observations with regards to potential improvement in the incentive plan were provided.