Thesis (Ph. D.)--University of Texas at Austin, 2002. / Vita. Includes bibliographical references. Available also from UMI Company.

Through an analysis of the political structure, fiscal system, and financing mechanisms at the local level in China, this study seeks to investigate the incentives that prompted local Chinese governments to overinvest in the solar photovoltaics (PV) industry. I find that local governments have several incentives to promote economic development by supporting local industries; their support of China’s PV industry illustrates these incentives. Specifically, we find that there are three major incentives for local governments in China to overinvest in the solar PV industry. First, due to the nature of China’s tax policy, local governments have supported the PV sector to increase local revenue. Second, as these industries have become significant sources of local employment, it is hard to stop supporting them now that PV companies are having difficulties. Third, local officials seek promotions under the economic indicator system by gaining higher GDP. PV companies have been very helpful in contributing to local economic growth, thereby advancing the careers of government officials. Farsighted provinces like Jiangsu used the strength of their existing industrial base and favorable geographical location (proximity to ports) to attract visionary innovators and investors for building their PV manufacturing bases. Thanks to the distorted local political and economic incentives in China, this early wave of PV industry investments preceded a flood of imitating local governments that sought to expand their own PV manufacturing. This uncoordinated, irrational exuberance stemming from distorted, bottom-up local incentives has led to the massive PV manufacturing overcapacity in China. / text

Newly listed firms have a short history of stock value, and may initially not rely on stock price information in incentive contracting as much as seasoned firms. In this thesis, I examine managerial incentive contracts in newly listed firms by comparing CEO compensation between IPO firms and seasoned firms. For IPOs listed on NYSE from 1993 to 2001, a matching sample of seasoned firms was obtained according to criteria in industry, size and book-to-market ratio. By examining the multi-dimensions of CEO incentives, including cash compensation, option grants, stock ownership, and dismissal for the first six years after listing, I document significant differences between IPOs and seasoned firms. I find that while the sensitivity of short-term incentive pay to shareholder return is lower in IPOs than in seasoned firms, long-term incentives from CEO stock ownership are significantly more important in newly listed firms. Moreover, although CEO turnover in an IPO firm is lower, it depends on both stock-price return and accounting performance. These IPO-seasoned differences diminish over time and disappear in three to five years. My findings suggest that to motivate the manager of a newly listed firm, the board avoids short-term uncertainty associated with new stocks while emphasizing the role of shareholder value in the long run. / published_or_final_version / Economics and Finance / Master / Master of Philosophy

This thesis consists of one literature review and three self-contained essays that discuss management transfers, work incentives and age structures in family firms. In the literature review, I summarize and structure recent studies on management transfer in family firms. The first essay focuses on the incentive effects of age structure in a single firm, and argues that compressed age structures are negatively related to firm performance, which provides a mechanism that causes the underperformance of dynastic management. In the second essay, I extend the single-firm analysis to a multi-firm scenario and find children prefer to work for their own family if the age gap between levels is large. Otherwise, they leave and work for other families. As a result, increased life expectancy leads to the separation between ownership and management, and family-managed firms have more compressed age structures than their professionally managed counterparts. In the third and final essay, I study the issue of self-enforcement in promotion tournaments and find organizations using rank-order contracts may still act opportunistically even when there exists no agency problem between owners and managers. Furthermore, both the wage-seniority profile and governance structure determine the credibility of rank-order contracts, which provides an alternative rationale for returns to seniority and underperformance of dynastic management.

This dissertation consists of three essays in applied microeconomics. The first chapter offers an overview of the work, highlighting the main contributions, methodology and results.The second chapter extensively discusses how one could and should take into account two different but inter-related impacts that tournament prizes have on outcome: the sorting and the incentive effects. The sorting effect refers to the fact that if higher prizes are offered in a tournament, more able participants will join. The incentive effect of prizes relates to an increase in effort corresponding to an increase in prizes, from participants that already decided to join a competition. Previous theoretical and empirical literature focused mainly on the second effect as if relevantly economic tournaments are close in nature. Also, previous empirical studies missed an important channel through which prizes affect outcome and likely estimated biased coefficients for the incentive effect.The third chapter analyzes the impact of the first old-age relief program on the health of the elderly in the United States in the 1930s. The study attempts to provide a picture of how the elderly would fare in an economy where the Social Security system of today does not exist but instead a less birocratic and costly system is in place. The 1930s offers an economist interested in such a counterfactual analysis a unique opportunity since this is precisely the time when Social Security had not started to make payments yet but the states and the federal government became involved in financially supporting the needy elderly.The fourth chapter examines whether public messages can break bubbles in experimental asset markets. This study has policy relevancy in terms of the role a central bank might have in targeting not only inflation as currently defined but asset prices as well. Whereas this role is controversial and remains to be determined, theoretical models advanced the idea of public messages as potential coordination devices among traders in an environment that experiences a bubble. Chapter 4 details the design and results of an experiment that tests this coordination role of a public message.The final chapter summarizes the findings.

Tax incentives have been used by countries to stimulate foreign investment. Few countries doubt the effectiveness of tax incentives. Canada and Indonesia are among the many countries that offer tax incentives to attract investors. While Canada has a long history of using tax incentives to foster the development of the Alberta oil sands, Indonesia is just embarking on this strategy, especially in promoting foreign investment in remote areas. Drawing on the Canadian development of the Alberta oil sands, this thesis asks what lessons Indonesia can learn from that experience in relying on tax incentives to develop the industry. This thesis acknowledges that there are many important differences between Canada and Indonesia. Since most countries speak of using tax incentives to finance their petroleum industries, it is worth examining at least one instance of that strategy and see whether Indonesia can extract any thing of value from this examination.

No description available.

Transportation policy is playing an increasingly important role in the transition towards more fuel-efficient vehicles and alternative fuel vehicles (AFVs). Whether the policy seeks to promote adoption through mandatory requirements or through monetary incentives, or to address issues related to adoption of AFVs, it is clear that such policies can have large-ranging impacts on the future of the US transportation system. The work I conduct in my dissertation seeks to understand these policies, in the past, present, and future. I evaluate the effects of the Energy Policy Act of 2005 (EPACT) on the adoption of HEVs. As part of EPACT, a tax credit incentives program was implemented for consumers purchasing HEVs. Using a unique fixed effects regression approach with lagged instrumental variables, I am able to estimate the effects of the incentives. I find most significant responses occur when incentives exceed $1,000 in tax cd credit. Depending on the vehicle model the presence of EPACT yielded increases in sales of 5% to 15%. This increase is relatively smaller compared to many existing studies, which my work indicates is likely the result of over-attribution of sales to policy. I go on to examine the effects of the adoption of electric vehicles on funding for transportation infrastructure. A significant portion of revenue for transportation infrastructure comes from taxes on gasoline, these funds will likely be diminished to some extent as electric vehicles are adopted as they consume little to no gasoline as fuel. Using several existing electric vehicle models, I find that at the per-vehicle level, revenue generation can be upwards of 50% lower in certain states depending on how fees are charged. The total annual revenue generation at the federal level could decrease by as much as $200 million by 2025, though this is quite a small portion of total revenues for transportation infrastructure. I demonstrate that the revenue decrease can easily be made up through small policy fee changes in either flat fixed or through incremental increases in use fees, though implementation of such policies can be difficult politically. I also focus on the recent implementation of alternative fuel vehicle incentives in the 2009 update of the CAFE standards. I demonstrate that while the AFV incentives help spur the production and adoption of AFVs, there is a short-term emissions penalty due to the structure of the policy. i find that every AFV sold results in an increase in emissions rate for another vehicle of 50-400 grams of CO2 per mile, comparable to adding an additional conventional vehicle onto the road. The cumulative effect is an increase of 20 to 70 million metric tons of CO2 for vehicles sold between 2012 and 2025. I further extends this work by investigating how other policies promoting AFV sales interact with the CAFE policy. I focus specifically on the California ZEV mandate interaction and find that there is an increase of 120 million metric tons of CO2 for new cars sold between 2012 and 2025. The analysis also demonstrates a counter intuitive effect: the greater the success of ZEV in inducing adoption of AFVs, the greater the short-term emissions penalty due to the two policies. Finally I examines the response of driving behavior response to changes in gasoline prices. Using a unique dataset obtained from Pennsylvania's Department of Transportation, we are able to observe annual driving behavior at the individual vehicle level from 2000 through 2010. We observe heterogeneity of price elasticities using two methods: separating data by quantiles over the factors of interest and by interacting the factors of interest as categorical variables with gasoline prices. We find statistically significant variations in elasticities: for driving intensities we observe values of -0.172 increasing up to -0.0576 as the amount driven annually increases, for gasoline prices we observe a range of elasticities from -0.002 to -0.05 for prices below $4/gallon with a sudden increase to -0.182 for prices above $4/gallon, lastly for fuel economies we find that below 20 MPG elasticities are highest at -0.173 with decreasing responsiveness as vehicle fuel economy increases. Heterogeneity needs to be accounted for in order to properly understand policy effects: responses based on average elasticity values are likely to be incorrect.

Tax incentives have been used by countries to stimulate foreign investment. Few countries doubt the effectiveness of tax incentives. Canada and Indonesia are among the many countries that offer tax incentives to attract investors. While Canada has a long history of using tax incentives to foster the development of the Alberta oil sands, Indonesia is just embarking on this strategy, especially in promoting foreign investment in remote areas. Drawing on the Canadian development of the Alberta oil sands, this thesis asks what lessons Indonesia can learn from that experience in relying on tax incentives to develop the industry. This thesis acknowledges that there are many important differences between Canada and Indonesia. Since most countries speak of using tax incentives to finance their petroleum industries, it is worth examining at least one instance of that strategy and see whether Indonesia can extract any thing of value from this examination.

This paper highlights the background and purpose of pay from the economic perspective as well as issues and concerns encountered by organizations when implementing the PRP (Performance-Related-Pay) scheme. Amongst the issues and concerns of implementing a PRP scheme, active participation of employees, a fair employees performance appraisal system and a constructive communication channel are some of the important criteria to be considered for an effective PRP scheme. / The paper also describes the advantages and disadvantages of PRP schemes for the consideration of readers. The research showed that the advantages of implementing a PRP scheme include productivity improvement and increases in employees motivation level. The disadvantages of such a scheme would be undue emphasis on individual performance and additional workload for the management. / It describes a competency model which may be replicated by organizations during the implementation of a PRP scheme. / Trade union leaders expressed their frustrations in terms of unwillingness of the employers to disclose financial information and the lack of fair and effective employees performance appraisal systems.This paper also includes PRP related cases established by the Malaysian Industrial Courts for the information of the readers. This paper does not provide any methodology for implementing PRP schemes. However, it offers readers some insights into PRP schemes for further research / Thesis (DBA(DoctorateofBusinessAdministration))--University of South Australia, 2006.