Spatiotemporal analysis of Korean ginseng farm productivity

Journal of Productivity Analysis - The past two decades has seen new methodological debates on the identification of production function. Olley and Pakes (J Polit Econ 101(6):1149–1164,...     

Index-option pricing with stochastic volatility and the value of accurate variance forecasts

In pricing primary-market options and in making secondary markets, financial intermediaries depend on the quality of forecasts of the variance of the underlying assets. Hence, pricing of options provides the appropriate test of forecasts of asset volatility. NYSE index returns over the period of 1968–1991 suggest that pricing index options of up to 90-days maturity would be more accurate when: (1) using ARCH specifications in place of a moving average of squared returns; (2) using Hull and White's (1987) adjustment for stochastic variance in the Black and Scholes formula; (3) accounting explicitly for weekends and the slowdown of variance whenever the market is closed. (JEL C22, C53, C10, G11, G12)     

A multilevel factor model: Identification,asymptotic theory and applications

This paper studies a multilevel factor model with global and country factors. The global factors affect all individuals, whereas the country factors affect only those within each specific country. A sequential procedure to identify the global and country factors separately is proposed. In the initial step, the global factors are estimated by canonical correlation analysis. Using this initial estimator, the principal component estimators (PCEs) of the global and country factors are constructed. It is shown that the PCEs estimate the spaces of the global and country factors consistently and are normally distributed in the limit. Several information criteria that can estimate the number of country factors are proposed. The number of global factors is assumed to be known. Extensive simulation results demonstrate that the sequential procedure and information criteria work well in finite samples. The method of this paper is applied to 25 OECD countries to identify an international business cycle. It is reported that the method extracts a global factor reasonably well.     

Airline customer satisfaction and loyalty: impact of in-flight service quality

The purpose of this study was to investigate the impact of the in-flight service quality on airline customer satisfaction and loyalty. This study analyzed the data from passengers of two classes: prestige (business) and economy. The results suggest that there are different factors of in-flight service quality that are important according to the customer seat class. In the case of the prestige class, there were six service quality factors of importance: alcoholic and non-alcoholic beverage, responsiveness and empathy, reliability, assurance, presentation style of food, and food quality; while the economy class showed five important service quality factors: responsiveness and empathy, food quality, alcoholic beverage, non-alcoholic beverage, and reliability. These findings imply that airline companies’ in-flight service should have different delivery strategies based on the customer seat class.     

Success factors of platform leadership in web 2.0 service business

The purpose of this study is to investigate the critical success factors of platform leadership in the Web 2.0 based service business environment. Because of the lack of theoretical foundation for this topic, we adopted relevant theory and case study analyses. Representative Web 2.0 firms which have developed platform leadership were chosen and analyzed on the basis of previous research on platform strategy through spider web analysis. This study shows that Web 2.0 firms such as Google, Flickr, and Salesforce.com differ in their competitive capabilities for platform leadership. The result of this research suggests that platform leadership in the Web 2.0 era depends on five interdependent dimensions: innovation ability, connectivity, complementarities, efficiency, and network effects.     

The Paradox of a Warranty: Can No Warranty Really Signal Higher Quality?

Signaling theory predicts that the duration of warranty correlates positively to the perception of product quality. Longer warranty lengths would lead to more favorable product quality perceptions, which in turn would foster more favorable consumer evaluations. However, the handicap principle predicts that the absence of a warranty could actually increase consumer evaluations based on the premise that only the sellers that are very confident about the quality of their products would make such an offer. Through two studies, this research shows that the no‐warranty condition can actually produce more favorable product evaluations and purchase intentions as opposed to a longer warranty offer.     

A THEORY OF KLEPTOCRACY WITH PROBABILISTIC SURVIVAL AND REPUTATION*

We develop a positive theory of kleptocracy, in which the incumbent ruler's concern about his survival probability can induce him to pursue relatively benevolent policies. But, this effect can lower the equilibrium tax rate only until the time-consistency requirement becomes a binding constraint on the equilibrium tax rate. The minimum time-consistent tax rate in a reputational equilibrium is lower the more that the ruler values prospective future revenues, but the value of prospective future revenues itself depends on the ruler's survival probability. The analysis reveals that, if a relatively benevolent tax policy is both necessary and sufficient for a high survival probability, then equilibrium tax policy is relatively benevolent. Until two or three hundred years ago, it was characteristic almost     

Appropriation,Formal and Informal Sectors,and Efficient Endowment Distribution

By adding an informal sector whose output is not subject to appropriative interactions and assuming complementarity in the inputs for market production, this paper investigates how possible asymmetries in conflict affect the allocation of resources. It is shown that when the existing gap in relative appropriative skills is being closed, more resources are allocated to appropriative activities in the economy. We are, in this case, more likely to see a reduction in market activities but an increase in home activities. A poorer party is a natural producer rather than a natural fighter, which is the usual characterization of a less endowed party in the conflict analysis. By conducting a welfare analysis, this paper shows that a market-output-maximizing initial distribution of resources endowment is such that when one party has a comparative advantage in market production over appropriation, its initial fraction of total resource endowment should be greater than its relative productivity in market production.