Trade and product innovations as sources for productivity increases: an empirical analysis

Increases in total factor productivity (TFP) are commonly associated with technological innovations measured by the stock of R&D. Empirical evidence seems to corroborate this relationship. However, in trading countries like The Netherlands, productivity increases, even in industry, can also be the result of innovations in the way transactions are managed. These innovations reduce transaction costs and exploit the welfare gains from (further) international division of labour. Such innovations are only partly included in R&D data. Consequently there is not much attention for these ‘trade innovations’—as we label them—in policy. In an empirical analysis this paper compares the influence of trade innovations with the influence of the stock of R&D on TFP in The Netherlands. The regression results show that in this country trade innovations are as important for TFP as technological innovations which directly affect the efficiency of production, which we label ‘product innovations’.      

Sounding the alarm: Impact of political instability on growth and fiscal health of the Indian economy

A noticeable change evident in the Indian political scenario since the eighties has been a sharp rise in the frequency with which governments have been ousted out of power. This augurs well for Indian democracy as it reflects a ‘political awakening’. Such changes in government, after an election reflect ‘orderly’: transfer of power and are inherent to the democratic form of governance. However, a close scrutiny of the political scenario at the state government level shows that there have been very frequent changes in government between elections. A high frequency of changes in government could be expected to result in frequent reversals or modifications in policy decisions and have a destabilizing effect on the economy. The present study is an empirical exercise undertaken at the level of state governments. It makes a first attempt to examine the impact of political instability on growth and on the fiscal health of the Indian economy. Received: September 25, 2000/Accepted: January 11, 2002 RID="*" ID="*" Sincere thanks to Professors Ajit Karnik and Abhay Pethe for their comments and suggestions. I would also like to thank the two anonymous referees for their insightful comments and suggestions, which have been of great help. The usual disclaimer applies.     

Multivariate ‘analysis of dispersion’ in the presence of intra-class correlation

Summary Subsequent to a review of the effects of familial or intra-class correlation (=ϱ) on the univariateF, or analysis of variance tests, and of methods for obtaining confidence limits for ϱ, results are presented on the effects of familial correlations in tests in multivariate ‘analysis of dispersion’. Methods for obtaining confidence limits are given in the case where a common variance-covariance matrix may be assumed for the successive multivariate samples.     

Evaluating the Validity of Self-Reported Deviant Behavior Using Vignette Analyses

In this paper, the validity of vignette analyses of various forms of deviant behavior in the presence of opportunities is analyzed on the basis of ideas derived from cognitive psychology. Abelson’s Script Theory together with insights into human memory of visual and verbal information, allow the assumption that vignette analyses using visual stimuli are valid measures of deviant behavior in particular. The study includes an empirical examination of these ideas (n = 450). Nonparticipant observations and vignette analyses with visual and verbal material were carried out with regard to three forms of deviant behavior occurring in the presence of opportunities presenting themselves in everyday life. Observed and self-reported frequencies of deviant behavior or deviant intentions were counted and cross-tabulated. Log-linear analyses with dummy coding using observation data as reference category were run. Data analyses yielded the result that frequencies of deviant behavior were related to the techniques of data collection under consideration. Especially vignette analyses of the return of ‘lost letters’ that use both visual and verbal stimuli overestimate ‘actual’ (i.e. observed) return rates. This result is discussed with regard to the underlying methodological assumptions as well as its implications.     

Measuring opinion distributions

In this study it will be argued that the perceived distribution of opinions among others is important for opinion research. Three different ways of measuring the perception of opinion distributions in survey research are compared: (a) by means of a questionwhat most people think about an issue, (b) by means of a questionhow many people are perceived to agree with an issue-statement, (c) by means of ‘line-production-boxes’, a special version ofmagnitude estimation. The results indicate that ‘line-production-boxes’ can improve data quality, but have also some drawbacks which will have to be dealt with. ‘Line-production-boxes’ give a wealth of information about individual differences in the forms of perceived opinion distributions. Although the normal distribution is used often, many other distribution forms are also used. The method of ‘line-production-boxes’ is compared with the method of estimating percentage points. Although high correlations suggest a good concurrent validity, some systematic differences do exist. New research directions are suggested.     

Do size and unobservable company factors explain stock price reversals?

We use daily price data from the Egyptian stock market and a Loser portfolio of 20 IPOs from the late 1990s that experienced dramatic 1-day price falls in the period 2004 to 2007 to estimate a 2-way fixed effects model of CARs. Observable covariates are company size and turnover growth and unobservables company and period fixed effects. Our results provide evidence of significant price reversal over the first 40 post-event days. Firm size is negatively correlated with post-event CARs, consistently with the argument that small firms have a stronger tendency to price-reverse due to greater informational opacity. But permanent, unobservable company-specific factors, account for a much larger percentage of post-event variation in stock prices and indicate an underlying heterogeneity in investor responses to initial price falls not uncovered before in the literature. Strong negative company effects following a price fall are found to presage reinforcing ‘long term’ price falls and strong positive company effects to presage countervailing ‘long term’ price reversals. At the extremes these company effects are sufficiently large to suggest that a trading strategy based on them would be profitable.     

Response of double-auction markets to instantaneous Selling�CBuying signals with stochastic Bid�CAsk spread

Statistical properties of order-driven double-auction markets with Bid–Ask spread are investigated through the dynamical quantities such as response function. We first attempt to utilize the so-called Madhavan–Richardson–Roomans model (MRR for short) to simulate the stochastic process of the price-change in empirical data sets (say, EUR/JPY or USD/JPY exchange rates) in which the Bid–Ask spread fluctuates in time. We find that the MRR theory apparently fails to simulate so much as the qualitative behaviour (‘non-monotonic’ behaviour) of the response function R(l) (l denotes the difference of times at which the response function is evaluated) calculated from the data. Especially, we confirm that the stochastic nature of the Bid–Ask spread causes apparent deviations from a linear relationship between the R(l) and the auto-correlation function C(l), namely, R(l) μ -C(l){R(l) \propto -C(l)}. To make the microscopic model of double-auction markets having stochastic Bid–Ask spread, we use the minority game with a finite market history length and find numerically that appropriate extension of the game shows quite similar behaviour of the response function to the empirical evidence. We also reveal that the minority game modeling with the adaptive (‘annealed’) look-up table reproduces the non-linear relationship R(l) μ -f(C(l)){R(l) \propto -f(C(l))} (f(x) stands for a non-linear function leading to ‘λ-shapes’) more effectively than the fixed (‘quenched’) look-up table does.     

Applying fuzzy quality function deployment (QFD) to identify solutions of service delivery system for port of Kaohsiung

The main purpose of this paper is to apply fuzzy quality function deployment (QFD) model to identify solutions of service delivery system (SDS) for port of Kaohsiung from the viewpoints of customers. At first, to facilitate the main issue of the QFD problem, however, the ‘what’ question of customer needs and ‘how’ problem of the services have to be made, which are two major components and be emphasized on the house of quality (HOQ) matrices. In conjunction with fuzzy sets theory, hence, the systematic procedures using fuzzy QFD were proposed in this paper. Subsequently, a case study for port of Kaohsiung demonstrated the systematic appraisal process for identifying solutions of SDS. The results of empirical study show that (1) 10 key factors are deemed as to have priority to improve the quality of SDS for Kaohsiung port; and (2) eight feasible solutions for improving service quality performance are identified. Moreover, it is suggested that port Authority of Kaohsiung should listen attentively the voice of customers and emphasize on exploiting these customer requirements effectively. And then develop the ‘how’ issues of profiles of solutions, which should continuously strengthen the perspectives of customer, internal business process, and learning and growth, respectively.     

Mechanisms that efficiently verify the optimality of a proposed action

The best known achievement of the literature on resource-allocating mechanisms and their message spaces is the first rigorous proof of the competitive mechanism's informational efficiency. In an exchange economy withN persons andK+1 commodities (including a numeraire), that mechanism announcesK prices as well as aK-compenent trade vector for each ofN−1 persons, making a total ofNK message variables. Trial messages are successively announced and after each announcement each personprivately determines, usingprivate information, whether she finds the proposed trades acceptable at the announced prices. When a message is reached with which all are content, then the trades specified in that message take place, and they satisfy Pareto optimality and individual rationality. The literature shows that no (suitably regular) mechanism can achieve the same thing with fewer thanNK message variables. In the classic proof, all the candidate mechanisms have the privacy property, and the proof uses that property in a crucial way. ‘Non-private’ mechanisms are, however, well-defined. We present a proof that forN>K,NK remains a lower bound even when we permit ‘non-private’ mechanisms. Our new proof does not use privacy at all. But in a non-private mechanism, minimality of the number of message variables can hardly be defended as the hallmark of informational efficiency, since a non-private mechanism requires some persons to know something about the private information of othersin addition to the information contained in the messages. The new proof of the lower boundNK invites a new interpretation of the competitive mechanism's informational efficiency. We provide a new concept of efficiency which the competitive mechanism exhibits and which does rest on privacy even whenN>K. To do so, we first define a class ofprojection mechanisms, wherein some of the message variables are proposed values of the action to be taken, and the rest are auxiliary variables. The competitive mechanism has the projection property, with a trade vector as its action and prices as the auxiliary variables. A projection mechanism proposes an action; for each proposal, the agents then use the auxiliary variables, together with their private information, to verify that the proposed action meets the mechanism's goal (Pareto optimality and individual rationality for the competitive mechanism) if, indeed, it does meet that goal. For a given goal, we seek projection mechanisms for which theverification effort (suitably measured) is not greater than that of any other projection mechanism that achieves the goal. We show the competitive mechanism to be verification-minimal within the class of private projection mechanisms that achieve Pareto optimality and individual rationality; that proofdoes use the privacy of the candidate mechanisms. We also show, under certain conditions, that a verification-minimal projection mechanism achieving a given goal has smallest ‘total communication effort’ (which is locally equivalent to the classic ‘message-space size’) among all private mechanisms that achieve the goal, whether or not they have the projection property.     

Using Print Media Indicators in Management Fashion Research

Quantitative empirical research into ‘management fashions’ or ‘organization concepts’ is dominated by studies using print media indicators (PMI). Such research builds on the simple premise that the number of publications on an organization concept in the course of time reflects managerial interest in this concept. However, whilst PMI may be fruitfully used to study management fashions, this use is less straightforward than appears commonly assumed. We aim to fulfil the need for a methodological paper discussing the possibilities and limitations of using PMI. Thereby we draw on insights from bibliometrics and management fashion research, including our own ongoing research.     

Selective Response to Questions on Delinquency*

In the German General Survey 2000 (ALLBUS), the so-called ‘Sealed Envelope Technique’ (SET), was utilized to obtain data on an individuals’ self-admitted delinquency. The focus of this article is to discover, particularly, the reason respondents refused to fill in this confidential questionnaire in spite of the guaranteed anonymity. From a theoretical perspective of subjective expected utility, the assumption is that respondents are interested in maximizing benefits and avoiding social costs in the interview situation. Consequently, responses provided are optimal realizations of the respondents’ interest. Furthermore, the respondents’ intellectual capacity in understanding the questions, the SET applied, the interviewer characteristics, and aspects of the interview situation, were presumably responsible for refusals on sensitive questions. The ALLBUS 2000 data confirm these hypotheses. The selectivity of self-reported delinquency on matters concerning fare avoidance and tax evasion also resulted in biased model estimators of determinants regarding anticipated future delinquency. Mail survey is one supported view on improving data quality in self-admitted acts of delinquency. However, before firm conclusions can be drawn, more empirical data is needed on the processes and mechanisms involved in a respondents refusal to answer questions on delinquency. * An empirical assessment on the effectiveness of the ‘Sealed Envelope Technique’ for self-admitted delinquency through the utilization of the German General Social Survey 2000 data.     

The generalized Stackelberg equilibrium of the all-pay auction with complete information

We characterize the equilibrium of the all-pay auction with general convex cost of effort and sequential effort choices. We consider a set of n players who are arbitrarily partitioned into a group of players who choose their efforts ‘early’ and a group of players who choose ‘late’. Only the player with the lowest cost of effort has a positive payoff in any equilibrium. This payoff depends on his own timing vis-a-vis the timing of others. We also show that the choice of timing can be endogenized, in which case the strongest player typically chooses ‘late’, whereas all other players are indifferent with respect to their choice of timing. In the most prominent equilibrium the player with the lowest cost of effort wins the auction at zero aggregate cost. We thank Dan Kovenock and Luis C. Corchón for discussion and helpful comments. The usual caveat applies. Wolfgang Leininger likes to express his gratitude to Wissenschaftszentrum Berlin (WZB) for its generous hospitality and financial support.     

Equally important criteria and demanding aggregation

Within the class of weighted averages of ordered measurements on criteria of ‘equal importance’, we discuss aggregators that help assess to what extent ‘most’ criteria are satisfied, or a ‘good performance across the board’ is attained. All aggregators discussed are compromises between the simple mean and the very demanding minimum score. The weights of the aggregators are described in terms of the convex polytopes as induced by the characteristics of the aggregators, such as concavity. We take the barycentres of the polytopes as representative weights.     

Estimation of the scale matrix of a multivariate t-model under entropy loss

This paper deals with the estimation of the scale matrix of a multivariatet-model with unknown location vector and scale matrix to improve upon the usual estimators based on the sample sum of product matrix. The well-known results of the estimation of the scale matrix of the multivariate normal model under the assumption of entropy loss function have been generalized to that of a multivariatet-model. The paper is based on the first author’s unpublished Ph.D. dissertation ‘Estimation of the Scale Matrix of a Multivariate T-model’, University of Western Ontario, Canada. Present address: School of Mathematics and Statistics, The University of Sydney, NSW 2006, Australia.     

Explaining participation in off-the-books entrepreneurship in Ukraine: a gendered evaluation

Despite the growing recognition that many entrepreneurs conduct some or all of their trade off-the-books, few have evaluated whether there are variations in the rationales of men and women engaging in this shadow enterprise culture. Reporting face-to-face interviews with 331 entrepreneurs in Ukraine during 2005–06, of whom 90 per cent operated partially or wholly off-the-books, the finding is that women are largely ‘reluctant’ entrepreneurs and men more commonly chiefly ‘willing’ entrepreneurs, although both motives are normally co-present to differing degrees in entrepreneurs’ explanations and their relative importance changes over time. The paper concludes by discussing the implications for both further research and public policy.     

Order Effects in Batteries of Questions

Batteries of questions with identical response items are commonly used in survey research. This paper suggests that question order has the potential to cause systematic positive or negative bias on responses to all questions in a battery. Whilst question order effects have been studied for many decades, almost no attention has been given to this topic. The primary aim is to draw attention to this effect, to demonstrate its possible magnitude, and to discuss a range of mechanisms through which it might occur. These include satisficing, anchoring and cooperativeness. The effect seems apparent in the results of a recent survey. This was a survey of Emergency Department patients presenting to Wollongong Hospital (Australia) with apparently less urgent conditions in 2004. Two samples were taken. Question order was fixed in the first sample (n = 104; response rate RR2 = 94%), but randomised in the second sample (n = 46; response rate RR2 = 96%). Respondents were asked to indicate whether each of 18 reasons for presenting to the ED was a ‘very important reason’ a ‘moderately important reason’ or ‘not a reason’ The mean number of very important reasons selected was 56% higher in the first sample as compared to the second sample.     

A cross-country comparison of productivity growth using the generalised metafrontier Malmquist productivity index: with application to banking industries in Taiwan and China

This paper is an extension of the metafrontier Malmquist productivity index, which takes into account the effect of scale efficiency change in its decomposition for both the non-parametric and parametric frameworks. Meanwhile, the ‘catch-up’ in the index is also disintegrated as two components: pure technological catch-up and frontier catch-up. An empirical application that uses unbalanced panel data of the Taiwanese and Chinese commercial banking industry is also conducted under a parametric framework. The results reveal that the adverse scale efficiency change is the key factor to inducing the inferior productivity growth seen in Chinese banks compared with Taiwanese banks, which spotlights the importance of the scale efficiency change term on productivity measures. It also provides one possible explanation for the recent hot issue about the motives for the two shores of the Taiwan Straits advancing financial openness to each other and mutually signing a banking Memorandum of Understanding.     

Estimating regression coefficients from survey data by asymptotic design-cum-model based approach

Postulating a linear regression of a variable of interest on an auxiliary variable with values of the latter known for all units of a survey population, we consider appropriate ways of choosing a sample and estimating the regression parameters. Recalling Thomsen’s (1978) results on non-existence of ‘design-cum-model’ based minimum variance unbiased estimators of regression coefficients we apply Brewer’s (1979) ‘asymptotic’ analysis to derive ‘asymptotic-design-cummodel’ based optimal estimators assuming large population and sample sizes. A variance estimation procedure is also proposed.     

Pre-assigned rents and bureaucratic friction

In this paper we study the endogenous determination of bureaucratic friction in a bureaucratic contest with () and without (n = 1) rent contestability. When n= 1 bureaucratic impediments induce the individual to undertake rent-securing activities at the same level as in the two-player rent-seeking contest. However, under rent contestability the bureaucracy no longer serves as a means of extracting resources from the public. The paper concludes with the study of the effect of ‘net costs’ on bureaucratic friction. It turns out that under cotestability the only reason for creating bureaucratic friction is the ‘negative costs’ it incurs while when n = 1 the effect of the bureaucrat's net costs of generating bureaucratic friction on the optimal degree of such friction is ambiguous. Received: October 30, 2000 / Accepted: December 28, 2001 RID="*" ID="*" The authors are grateful to two anonymous referees for their valuable comments     

Reflections on PATCO’s Legacy: Labor’s Strategic Challenges Persist

The 1981 PATCO strike stands out as a symbol of union decline. The penchant to stigmatize PATCO detracts from important aspects of the union’s unorthodox strategy. Preparations for 1981 negotiations were coordinated by rank-and-file activists who referred to themselves as ‘choir boys’. An extensive mobilization network cultivated by the ‘choir boys’ contributed to cohesiveness and in effect democratized PATCO. The union’s effectiveness in building internal solidarity was its most notable accomplishment. Twenty-first-century labor-movement revitalization will require not only strong, creative leadership but also rank-and-file mobilization in the mold of PATCO’s ‘choir boy’ system. It is this type of grassroots activism that has the potential to promote an internal culture of militant action which can serve as the foundation for union growth.