Jointness of growth determinants

This paper introduces a new measure of dependence or jointness among explanatory variables. Jointness is based on the joint posterior distribution of variables over the model space, thereby taking model uncertainty into account. By looking beyond marginal measures of variable importance, jointness reveals generally unknown forms of dependence. Positive jointness implies that regressors are complements, representing distinct but mutually reinforcing effects. Negative jointness implies that explanatory variables are substitutes and capture similar underlying effects. In a cross‐country dataset we show that jointness among 67 determinants of growth is important, affecting inference and informing economic policy. Copyright © 2009 John Wiley & Sons, Ltd.     

Vertical Foreclosure Using Exclusivity Clauses: Evidence from Shopping Malls

Exclusive contracts are one of the most controversial topics in the economic analysis of antitrust. Yet, very few empirical papers analyze the determinants and the consequences of exclusive contracts. In this paper, I study exclusive contracts between hamburger restaurants and Israeli shopping malls, in which mall owners commit to prohibiting additional hamburger restaurants from entering their malls. I investigate the determinants of these exclusive contracts and examine how such contracts affect the number of hamburger restaurants and their sales. I show that exclusive contracts are less likely to be adopted in larger malls, in malls that face more competition from other malls, and in malls that opened before 1993, when McDonald's and Burger King entered the Israeli market. I then use the mall's opening year—before or after 1993—as an instrumental variable to estimate a negative effect of exclusive contracts on the number of restaurants and on total mall hamburger sales. My findings are generally consistent with anti‐competitive vertical foreclosure models.     

On economic evaluation of directional forecasts

It is commonly accepted that information is helpful if it can be exploited to improve a decision making process. In economics, decisions are often based on forecasts of the upward or downward movements of the variable of interest. We point out that directional forecasts can provide a useful framework for assessing the economic forecast value when loss functions (or success measures) are properly formulated to account for the realized signs and realized magnitudes of directional movements. We discuss a general approach to (directional) forecast evaluation which is based on the loss function proposed by Granger, Pesaran and Skouras. It is simple to implement and provides an economically interpretable loss/success functional framework. We show that, in addition, this loss function is more robust to outlying forecasts than traditional loss functions. As such, the measure of the directional forecast value is a readily available complement to the commonly used squared error loss criterion.     

Raising the bar (8)

This editorial summarizes the papers published in issue 13(3) so as to raise the bar in applied spatial economic research and highlight new trends. The first paper challenges the home market hypothesis that large countries host more firms relative to their size than small countries by considering the lobbying activities of multinational firms. The second paper analyzes the implications of a spatial weight matrix used to estimate a spatial econometric model that depends on an endogenous economic variable. By adding a spatial context, the third paper provides a novel contribution to the literature on international norms in de facto measures of human rights performance. The fourth paper examines the determinants of accepting informal work in Poland. The fifth paper deals with non-stationarity and cointegration in a dynamic spatial econometric panel data model when the number of observations in the time – rather than in the cross-sectional– domain tends to infinity.     

Institutional convergence: exit or voice?

There is a small but growing literature on the determinants of economic freedom. This paper contributes to this literature in two ways. First, it is empirically shown that β-convergence in economic freedom occurred from 1980 to 2010. Countries with low levels of economic freedom in 1980 “catch up” at a rate of 0.7 percent a year on average, ceteris paribus. Second, the structural characteristics that contribute to this institutional convergence are documented. Conditional convergence estimates suggest democratic institutions do not con- tribute to conditional convergence. Exitability, a variable that captures how easy it is for citizens to “vote with their feet” is related to the change in economic freedom from 1980 to 2010 in a statistically significant manner across all specifications. This provides some preliminary evidence as to the importance of “exit” versus “voice” with respect to the question of institutional change.     

An uncertain suggestion for gold-pricing models: the effect of economic policy uncertainty on gold prices

Gold, whether held in physical form or through financial claims, is of utmost importance to investors, central bankers, and sovereign nations alike. Yet empirically validated explanations of its volatile price remain elusive. Without an ex-post understanding of the determinants of gold prices, ex-ante forecasting is a fruitless endeavor. In this research, an index of US and European economic policy uncertainty is incorporated into a short-run pricing model for gold. The results suggest that in addition to gold being a hedge against inflation, increases in economic policy uncertainty contribute to increases in the price of gold.     

The economic performance of Swiss drinking water utilities

This paper measures the performance in terms of costs of Swiss drinking water utilities accounting for environmental factors. We estimate a translog stochastic variable cost frontier using two different techniques on an unbalanced panel of 141 water distribution utilities over the years 2002–2009, for a total of 745 observations. Results show that exogenous factors have an impact on variable cost. More precisely, we find that the share of pumped over total extracted water, population density, altitude and meteorological factors (maximum 30 days temperature and extreme precipitation events) have a significant impact on variable cost. Likelihood ratio tests emphasize the importance to include observed heterogeneity in the estimations. Efficiency rankings provided by models accounting for exogenous factors and their counterparts without them are however relatively similar. On the contrary, the efficiency ranks differ strongly between alternative estimation techniques. In assessing the economic performance of utilities, the most important choice thus seems to be about the way unobserved heterogeneity is treated.     

Machine learning model for Bitcoin exchange rate prediction using economic and technology determinants

In recent years, Bitcoin exchange rate prediction has attracted the interest of researchers and investors. Some studies have used traditional statistical and econometric methods to understand the economic and technology determinants of Bitcoin, few have considered the development of predictive models using these determinants. In this study, we developed a two-stage approach for exploring whether the information hidden in economic and technology determinants can accurately predict the Bitcoin exchange rate. In the first stage, two nonlinear feature selection methods comprising an artificial neural network and random forest are used to reduce the subset of potential predictors by measuring the importance of economic and technology factors. In the second stage, the potential predictors are integrated into long short-term memory (LSTM) to predict the Bitcoin exchange rate regardless of the previous exchange rate. Our results showed that by using the economic and technology determinants, LSTM could achieve better predictive performance than the autoregressive integrated moving average, support vector regression, adaptive network fuzzy inference system, and LSTM methods, which all use the previous exchange rate. Thus, information obtained from economic and technology determinants is more important for predicting the Bitcoin exchange rate than the previous exchange rate.     

Impact of high-speed railway construction on spatial patterns of regional economic development along the route: A case study of the Shanghai–Kunming high-speed railway

The Shanghai–Kunming high-speed railway spans the eastern, central, and western regions of China and is an important "horizontal" in the "eight vertical and eight horizontal" railway network of China. This paper estimates the direct impact of opening a high-speed railway on the spatial patterns of regional economic development along the route by integrating GIS technology, spatial panel data models, and the entropy method. The results show that the high-speed railway can significantly increase the economic aggregate and urbanization rates along the route and promote the upgrading of industrial structures, but it has a limited effect on the economic growth rate, showing a weak trend. In terms of spatial patterns, the high-speed railway significantly improves regional accessibility, the strength of economic ties, and economic potential along the route. The regional economy is characterized by weak spatial agglomeration and presents a trend of balanced development. In general, although the economic effect of HSR for the economically lagged regions is smaller in the short term than that in the economically and less economically developed regions, the high-speed railway has the greatest impact on regional economic development and spatial patterns in economically backward areas, thus the economically backward regions have a greater posterior advantage, which is conducive to balancing regional economies and narrowing regional differences.     

全球化视角下的浙江省对外开放战略

经济全球化是一个不以人的主观意志为转移的客观进程。浙江是东部沿海地区的重要组成部分,是长三角经济圈的核心区域,在我国沿海发展战略中有着无可置疑的重要性。浙江省作为我国东部沿海经济发达地区,承担着国家发展战略的枢纽与传递功能。大胆实行"走出去"战略和"海上浙江"战略,是浙江省对外开放战略目标及其实现过程的完整统一,充分表现出浙江的发展宏图。不论在国内市场还是在国际市场,全球化战略成败的关键因素在于企业国际竞争力的提高。     

MEASUREMENT,EVOLUTION, DETERMINANTS,AND CONSEQUENCES OF STATE CAPACITY: A REVIEW OF RECENT RESEARCH

There is increasing realization that state capacity is a fundamental ingredient for effective governance, and is a crucial element of long‐run economic development. This paper offers an overview of the strengths and limitations in current empirical research on the measurement of state capacity. The paper also surveys the fast emerging literature on the determinants and effects of state capacity. We argue that existing measures on governance quality used in cross‐national research can be usefully exploited to capture different aspects of state capacity, and show that post the end of the Cold War, developing economies have experienced improvements in legal, administrative and bureaucratic capacity, but the gap with advanced economies is still wide. Future research should address the short temporal coverage of available measures of state capacity, as well as providing a systematic quantitative assessment of the determinants of capacity and of its effects on development outcomes, such as health and education, which have not received sufficient scrutiny.     

The Influence of Institutional and Task Environment Relationships on Organizational Performance: The Canadian Construction Industry

This study compared the influence of organizations' relationships to the institutional versus task environment on organizational performance in the Canadian construction industry. This industry is characterized by both intense institutional regulation and strong market competition. Regulatory stringency and resource stringency were proposed as key determinants of the relative importance of institutional versus task environment relations in predicting organizational profitability and productivity. Results favoured the contribution of task environment relations to organizational success in support of an economic or strategic perspective on organizations. However, under highly stringent conditions, institutional relations were shown to be associated significantly with performance, suggesting that future research needs to consider both institutional and task environment effects on organizational performance and success.     

Productivity and Efficiency Measurement in Our “New Economy”: Determinants,Interactions, and Policy Relevance

Interpreting and using productivity and efficiency measures requires establishing the determinants and implications of observed performance. This is not a simple task, however, given the complex interactions among economic entities in modern markets. Identifying and quantifying performance drivers often involves parametric estimation of models with explicit performance factors build into functions representing technology and behavior. Here I overview some such studies in the literature on food system economic performance, to emphasize the potential to empirically represent a more complex web of technological and market phenomena than in standard productivity analyses, to enhance the measures' interpretability and relevance for policy guidance.     

Information lag and dynamic stability

The role of information in economic dynamics is examined. A misconception that the removal of uncertainty always brings additional stability to an existing equilibrium is clarified. It is shown that the relation between information and equilibrium stability is not monotonic. Removing information lag may be either beneficial or detrimental to the stability of an economic equilibrium. Although the focus is on two-dimensional economic system where economically plausible possibilities are studied in theory and numerically illustrated, the conclusions have general implications to any multi-dimensional system.     

New highways as economic development tools: An evaluation using quasi-experimental matching methods

Stimulating economic growth and development in rural and economically lagging regions is the goal of several federal and state highway programs. This paper examines the effectiveness of highway investment as an economic development tool. A quasi-experimental matching method is used to examine the effects of interstate highways on counties which obtained links during the period 1963–1975 or are in close proximity to these newly linked counties. The results show that the beneficiaries of the interstate links in terms of economic growth are interstate counties in close proximity to large cities or having some degree of prior urbanization, such as a city with more than 25,000 residents. Rural interstate and off-interstate counties exhibit few positive effects.     

The demand for M3 in the euro area

In this paper, an empirically stable money demand model for M3 in the euro area is constructed. Starting with a multivariate system, three cointegrating relationships with economic content are found: (i) the spread between the long‐term and the short‐term nominal interest rates, (ii) the long‐term real interest rate, and (iii) a long‐run demand for broad money M3. There is evidence that the determinants of M3 money demand are weakly exogenous with respect to the long‐run parameters. Hence, following a general‐to‐specific modelling approach, a parsimonious conditional error‐correction model for M3 money demand is derived which can be interpreted economically. For the conditional model, long‐run and short‐run parameter stability is extensively tested and not rejected. Copyright © 2001 John Wiley & Sons, Ltd.     

会计信息质量实证研究:评述与借鉴

西方学者探索了一些会计信息质量的量化衡量方法,并在此基础上对会计信息质量的决定因素、会计信息质量影响资本资产回报或资本成本以及其它经济后果等内容进行了实证研究。本文对西方会计信息质量实证研究的现状和主要观点进行综述和评价,并分析其对我国相关研究的借鉴意义。     

THE ILLUSORY TAX BASE: WHY TAXES ON CAPITAL ARE COUNTERPRODUCTIVE

Taxes on capital are economically and socially counterproductive. The economy and society would benefit from their abolition. The obstacle to their abolition is not financial or economic but a failure of political will. This article looks at taxes on capital from an economic perspective: how do they differ from other taxes, what costs do they impose on the economy, and what are the consequences of their abolition? And, even if they are a failure economically, can they be justified socially or politically?     

On the Degree of Property Tax Assessment Inequity in Complex Tax Jurisdictions

A bstract . The extent of interest in the degree of inequity in property assessment is indicative of the importance of identifying determinants of assessment inequity. Previous attempts to identify such determinants were certainly incomplete. An additional variable is offered for the list that would be expected to explain statistically the degree of inequity in the distribution of property tax liabilities , in general, and to examine specifically the relationship between assessment, inequity and the degree of complexity for assessing Jurisdictions. The latter are often complex in the sense that individual properties, although subject to a set of two or more nominal tax rates on assessed values, are not subject to the same set of nominal tax rates. It is argued—to the extent that individual property tax liabilities are capitalized in sale prices for individual properties —that the greater the number of specific property tax rates on assessed value , the greater is the expected frequency of change in such specific property tax rates and, therefore, the higher the expected value of the measure of the degree of inequity.