Shadow price of capital and the Furubotn–Pejovich effect: Some empirical evidence for Italian wine cooperatives

Abstract

We test the underinvestment hypothesis (the so-called Furubotn-Pejovich effect) from the specialized literature on co-ops by comparing the shadow price of capital and the dual capacity utilization index for a panel of Italian cooperative and conventional firms, 1996-2003. The results do not show any difference between co-ops and conventional firms in this respect.At the point of approximation all w n , y and z q are indexed to 1, while t and t-squared are indexed to zero [23]. This corresponds to the sample mean given the estimation procedure of normalizing all the variables in their mean. * * Their formulas are nk = ( nk +s n s k )/s n ∀n = k nn = ( nn +s 2 n −s n )/s n the values for the input shares s n being their estimated values. SHADOW PRICE OF CAPITAL AND THE FURUBOTN-PEJOVICH EFFECT † † These measures, comprehensive of the scale effect, are: B m equal to −0.004 for co-ops and −0.005 for conventional firms; B s equal to −0.022 and −0.013 and B h equal to 0.007 and 0.024.

Are Athlete-Owned Leagues a Viable Alternative for Professional Sport?

“…The data on underinvestment is mixed. Studies on French employee-owned firms (Estrin & Jones, 1998) and Italian wine cooperatives (Maietta & Sena, 2008) show no evidence supporting the underinvestment hypothesis. However, even if underinvestment is not an issue for other worker-owned firms, it is likely to be a problem for athlete-owned leagues because athletes have very short careers and new leagues often take a long time to turn profitable.…”

Statistical methods in performance analysis

“…A paper dealing with shadow prices 18 by Ornella W. Maietta and by Vania Sena closes the issue. A shadow price is the maximum price that management is willing to pay for an extra unit of a given limited resource, and its value can provide useful information to decision makers.…”

“…This special issue comprises seven papers, written by renowned experts in the field from a number of countries 10–18. In each work, various methodological and application issues that may be involved in performance data analysis are discussed.…”