MAXIMUM LIKELIHOOD ESTIMATION OF FACTOR MODELS ON DATASETS WITH ARBITRARY PATTERN OF MISSING DATA

In this paper we modify the expectation maximization algorithm in order to estimate the parameters of the dynamic factor model on a dataset with an arbitrary pattern of missing data. We also extend the model to the case with a serially correlated idiosyncratic component. The framework allows us to handle efficiently and in an automatic manner sets of indicators characterized by different publication delays, frequencies and sample lengths. This can be relevant, for example, for young economies for which many indicators have been compiled only recently. We evaluate the methodology in a Monte Carlo experiment and we apply it to nowcasting of the euro area gross domestic product. Copyright © 2012 John Wiley & Sons, Ltd.     

Stakeholder theory and practice in Europe and North America: The key to success lies in a marketing approach

Corporate reputation in Europe and North America is increasingly seen as a function of how firms treat their stakeholders. In the United States, stakeholder theory has been touted as a paradigm of good management; yet despite enlightened stakeholder practice at home, US firms continue to run into problems in Europe. Wal-Mart, Microsoft, and GE have, in one way or another, all been caught off guard when doing business in Europe. This paper suggests that some of the stakeholder relations difficulties encountered by US corporations in Europe can be explained by fundamental cultural and philosophical differences between these regions that affect how stakeholders are viewed and how relations with those groups are managed. In this paper, we examine the historical and socio-political forces influencing stakeholder theory in the US and northern Europe and then use a business-to-business marketing approach to show how US firms might develop an approach to stakeholder relations that fits the northern European environment.     

Identification and Estimation of Engel Curves with Endogenous and Unobserved Expenditures

When dealing with the estimation of Engel curves, measurement errors in expenditure data and simultaneity are likely sources of endogeneity. In this paper we study identification of the parameters that characterize an Engel curve in the presence of both. We consider specifications where budget shares are polynomials in the logarithm of total expenditure, which is the case frequently encountered in empirical applications. We propose an estimation procedure which is an extension of that in Lewbel ( 1996 ) and exploits a control function assumption to correct for the endogeneity of the true unobserved total expenditure. Copyright © 2013 John Wiley & Sons, Ltd.     

Retirement Choices in Italy: What an Option Value Model Tells Us*

Using Italian data, we estimate an option value model to quantify the effect of financial incentives on retirement choices. As far as we know, this is the first empirical study to estimate the conditional multiple‐years model put forward by Stock and Wise (1990) . This implies that we account for dynamic self‐selection bias. We also present an extended version of this model in which the marginal value of leisure is random. For the female sample, the model is able to predict almost perfectly the age‐specific hazard rates. For the male sample, we obtain a good fit. Dynamic self‐selection results in a downward bias in the estimate of the marginal utility of leisure. We perform a simulation study to gauge the effects of a dramatic pension reform. Underestimation of the value of leisure translates into sizeable over‐prediction of the impact of reform. Due to lack of data, results for males should be interpreted with caution since we are not able to fully correct for dynamic self‐selection bias.     

Psychosocial Influences on Children's Food Consumption

This exploratory study generated a grounded theory of factors influencing children's diets, particularly those that contribute to suboptimal eating and ultimately child obesity. The study involved 124 children (aged 6–12 years) and 39 of their parents from three separate junior schools (including a lower, middle, and higher socioeconomic school). Research methods included (i) interviews with children and parents and (ii) observations, drawings, and lunchbox audits with children. The findings suggest that children and parents prioritize psychosocial needs over physiological needs during food selection and consumption. This tendency toward psychosocial eating appears to be strongly reinforced by food advertising.     

Consumers' Preferences for GM Food and Voluntary Information Access: A Simultaneous Choice Analysis

Previous studies on information and consumer choices have typically assumed that information is exogenous in that information made available to consumers is generally treated as being both received and processed. Based on a choice experiment on consumers' stated preferences for genetically modified food that provides for voluntary information access, this study allows information access decisions to be endogenous to the product choice decision‐making process. Instead of assuming correlated error terms between these decisions, the approach used in this analysis builds upon structural correlations between two models that individually consider each of these two decisions. We find that the two types of decisions are related and that there is heterogeneity across individuals in the nature of this relationship. Des études antérieures sur l'information et les choix des consommateurs ont typiquement supposé que l'information est exogène, en ce sens que l'information mise à la disposition des consommateurs est généralement considérée comme étant à la fois reçue et traitée. Selon une méthode de choix expérimentaux sur les préférences déclarées des consommateurs quant aux aliments génétiquement modifiés offrant l'accès volontaire à l'information, la présente étude permet aux décisions d'accès à l'information d'être endogènes au processus de décision lié au choix du produit. Au lieu de supposer des termes d'erreur corrélés entre ces décisions, la méthode utilisée dans la présente analyse mise sur la corrélation structurale entre les deux modèles qui examinent individuellement ces deux décisions. Nous trouvons que les deux types de décisions sont liés et qu'il existe une hétérogénéité entre les individus quant à la nature de ce lien.     

The Canada/Quebec pension plan disability program and the labor force participation of older men

The effects of the Canadian disability insurance program on the labor force participation of older men are studied using pooled cross-sectional time series data from ten Canadian provinces.     

Firms’ productivity growth and R&D spillovers: An analysis of alternative technological proximity measures

This paper aim at assessing the impact of R&D spillovers on firms’ economic performance as measured by productivity growth. The construction of R&D spillovers is based on Jaffe's methodology (1988, 1996) which associates econometrics and data analysis. The main objective of the paper is to extend Jaffe's methodology by examining alternative methods for measuring R&D spillovers and to test their impacts in terms of the robustness of results. In particular, the method used to classify firms into technological clusters as well as the metrics implemented to appreciate firms’ technological proximities which enter the construction of spillovers are further investigated. In addition to R&D spillovers, firms’ own R&D capital, labour and physical capital are estimated by means of a Cobb–Douglas production function. The data set consists of a representative sample of 625 worldwide R&D intensive firms over the period 1987–1994.     

Perfectly competitive innovation

Based partially on the belief that innovation is not possible under perfect competition, a huge number of papers have been written about the nature of innovation under monopoly or oligopoly. In fact, competitive rents can and do sustain innovation in the complete absence of monopoly power. However, little is known about the source and significance of these rents, or about the way in which innovative activity takes place under conditions of competition. We begin to remedy this imbalance by examining the way in which competitive innovators earn rents both in theory and in practice.     

Modeling hard and soft facts for SMEs: Some international evidence

This paper asks how well the use of quantitative and qualitative variables can improve the assessment of companies' creditworthiness and how this result can be influenced by the economic and financial peculiarities of countries. We harden qualitative variable measures to model soft information aimed at scoring microfirms, small, and medium‐sized firms. The structural survey covers Germany, Italy, and the UK in a sample of about 17 thousand companies observed during the financial crisis. Soft facts are determined within the balanced scorecard framework in order to find out the impact of customers, business processes, learning and growth, and financial perspectives. Our findings show that credit models integrating soft variables optimize the risk estimation, but estimates are country‐specific and should be tailored to the characteristics of each economic system.