Factor price

About: Factor price is a research topic. Over the lifetime, 2764 publications have been published within this topic receiving 86176 citations.

Do Psychological Barriers Exist in the Stock Price Indices? Evidence from Asia's Emerging Markets

Abstract: This paper tests whether psychological barriers exist in the price levels of stock indices. Using the data from Asia's emerging markets and statistical methods, this study analyzes barrier effects around psychologically important reference levels. The results indicated the existence of a price barrier in the Taiwanese stock index. Other markets, however, do not seem to possess the effect of a selected reference point. The case of Taiwan is interpreted as evidence of a violation of market efficiency in the sense that the resulting distribution of random price level occurrences would be close to a uniform distribution in efficient markets. This research contributed to behavioral corporate finance by applying investor psychology and its effects on stock price levels.

Regional Growth: Interstate and Intersectoral Factor Reallocations

Abstract: T ESTED with regional data for the United States, the neoclassical growth model has yielded inconsistent results. Borts and Stein (1964, chapter 3) employed a simple growth model relating interregional factor movements to factor price differentials, but found little evidence of responsiveness. In a recent paper Smith (1973) found such a model consistent with the long-run factor mobility experience of states. Since a similar model was employed in both studies, the contrasting results may be ascribed to the use of inappropriate data in the test of the model of Borts and Stein, and/or inadequate model specification. They tested their model on the nonagricultural sector of each state, while Smith's model is tested on aggregate state data. Use of data on the nonagricultural sector of each state embodied the implicit assumption that capital and labor move only between states from one nonagricultural sector to another, and ignored the possibility of intersectoral factor movements. Smith avoided this potential problem by aggregating each state's output to a single sector. Thus, only interstate factor movements were relevant. In this paper, both intersectoral (within states) and interstate factor movements are considered. Factor movements affect the growth rate of a sector's capital-labor ratio, which determines the growth rate of the wage level.

Factor Price Equalization in the UK

Abstract: This paper develops a general test of factor price equalization that is robust to unobserved regional productivity differences, unobserved region-industry factor quality differences and variation in production technology across industries We test relative factor price equalization across regions of the UK Although the UK is small and densely-populated, we find evidence of statistically significant and economically important departures from relative factor price equalization Our estimates suggest three distinct relative factor price areas with a clear spatial structure We explore explanations for these findings, including multiple cones of diversification, region-industry technology differences, agglomeration and increasing returns to scale

New insights into price-setting behaviour in the United Kingdom

Abstract: It is important to understand how companies set prices, since price-setting behaviour plays a key role in the monetary policy transmission mechanism. Many surveys have been conducted in a range of countries to shed light on this issue by asking companies directly about how they set prices. This paper reviews the results of a new survey of the price-setting behaviour by the Bank of England of around 700 UK firms. In terms of how companies set prices, the survey evidence supported the use of the mark-up over costs form of pricing. Firms reviewed prices more frequently than actually changing them, with the median firm changing price only once per year, but the frequency with which companies changed their prices varied considerably across sectors. Over the past decade a significant number of firms had increased the frequency of price changes. Different factors influenced price rises and price falls. Higher costs – in particular, labour costs and raw materials – were the most important driver behind price rises, whereas lower demand and competitors’ prices were the main factor resulting in price falls. Nearly half of firms changed their prices within three months of an increase in costs or a fall in demand.

Trade and Tradability: Exports, Imports, and Factor Markets in the Salter-Swan Model

Abstract: We extend the Salter-Swan model to include both factor markets and semi-traded goods. In our model, changes in relative factor prices depend on changes in world commodity prices, factor endowments, and the trade balance. In contrast, only changes in world commodity prices can affect factor prices in the neoclassical trade model. The inclusion of semi-traded goods weakens the magnification effect in both the Stolper-Samuelson and Rybczynski theorems. When imports and domestic goods are poor substitutes, a characteristic of some commodities in developing countries, the sign of the Stolper-Samuelson theorem is reversed.