A regularity theory of causality for the social sciences

Quality & Quantity - This article discusses a regularity theory of causality (RTC) for the social sciences. With RTC, causality is a relationship between X and Y characterized by three...     

Animal disease outbreaks and food market price dynamics: Evidence from regime‐dependent modelling and connected scatterplots

The economic impacts of animal disease outbreaks have been widely discussed in the literature. Most authors have centred their attention on estimating the direct costs. Recent studies have shown that the indirect economic effects might lead to equal or even higher welfare losses. This study aims to contribute to this field of research by assessing the effect of an animal disease outbreak on food market price dynamics in Mexico, accounting for the potential effect of an antitrust intervention. We employ a regime‐dependent vector error correction model and a connected scatterplot analysis. The results show that both the outbreak and the antitrust intervention caused structural breaks in food market price dynamics between producers and consumers, reflected in an increase in the absolute component of the marketing margin, with serious food security implications.     

Industry,management capabilities and firms' competitiveness: An empirical contribution

The aim of this paper is to contribute to the knowledge of strategic factors that explain the competitive position reached by firms in their activity sector. We have used a survey carried out in 1999 on 287 executives that belong to the service sector in the province of Santa Cruz de Tenerife. We have analysed the differential factors that distinguish the strategic performance of competitive vis‐à‐vis non‐competitive firms, by jointly assessing the variables representative of the sector (five competitive forces defined by Porter) and variables of an internal feature. Finally, we have moved the level of analysis from the industry to the firm; specifically, we have focused on managerial capabilities due to the significant role played by managers in the strategic decision‐making process. The use of cluster analysis to classify firms depending on their degree of competitiveness and the application of the See5 induction algorithm of rules and decision trees to determine the differential factors that distinguish competitive from non‐competitive firms, provide a methodological framework for the most significant contributions of this work. Copyright © 2004 John Wiley & Sons, Ltd.     

Determinants of a sustainable innovation system

This study seeks to identify and define the determinants of the sustainable innovation system (SIS). To achieve the objective, a qualitative approach was used through a systematic literature review using data from Web of Science (WOS) and Scopus. Two search equations were used to extract the data. In the first search equation, 69 documents were analyzed, and for the second, 102 documents were analyzed. Multiple definitions were found regarding SIS, it is worth highlighting in the findings the evolutionary process that these systems follow. As a contribution to the study, 79 determinants of an SIS are presented derived from the classic functions of an innovation system.     

University spillovers and new business location in high-technology sectors: Spanish evidence

This paper examines the relationship between knowledge spillovers from universities and new business location in high-technology sectors. We focus on the contribution to new business formation through spillovers stemming from three main university outputs: knowledge-based graduates, research activities, and technological knowledge. We construct a new dataset with information on 604 companies and 63 universities in Spain and group the data across 36 geographical areas from 2001 to 2004 (144 observations). After controlling for several traditional cost factors and agglomeration characteristics, we find that university spillovers are relevant in explaining the location of new businesses in high-technology sectors in Spain. Further, our analysis draws attention to the relevance of graduates as the main source of spillovers, while research activities and university technology do not have significant effects.     

Promotion dynamics the Peter Principle: Incumbents vs. external hires

The “Peter Principle” (Peter and Hull, 1969; Fairburn and Malcomson, 2001; Lazear, 2004) suggests that individuals are “promoted to their level of incompetence”. A corollary of the “Peter Principle” prediction is that external hires should have an advantage when competing with incumbents for a higher position. Using five years of personnel records from a single large U.S. corporation, this paper contributes to the literature on internal labor markets and intra-firm job mobility by testing this prediction for career advancement. Results support the idea of differences in promotion dynamics among incumbents and external hires, since past career advancement within the firm result in a lower probability of subsequent promotion, even after controlling for workers' heterogeneity and tenure on the current job. The advantage for external hires does not hold once other job changes (lateral transfers, task reorganizations) are considered, highlighting that promotions are a very different job placement mechanism than transfers. Overall, the evidence points out towards declining performance following promotion, as opposed to alternative competing hypothesis of probation placement or “handicapping” external candidates.     

Remittances and Development in Latin America

Flows of workers’ remittances have become a major source of external finance for developing countries and are particularly important in Latin America and the Caribbean, where they are estimated to have reached $40 billion in 2004. Not surprisingly, academics, policymakers and development practitioners in general have been devoting increasing attention to the potential development impact that these flows may have on receiving countries. This paper contributes to this debate along four dimensions. First, it reviews the evolution of remittances flows to Latin America, using Balance of Payments data, and compares these statistics with estimates of remittances income based on Household Surveys. Second, the paper describes the varying profile of remittances recipients in ten Latin American countries. Third, the paper reviews the few macro‐ and microeconomic studies that have estimated the impact of remittances on poverty and inequality. Finally, the paper expands some of the existing works to investigate the extent to which that impact is different in Latin America and varies across countries in the region.     

Remittances and the Dutch disease

Using data for El Salvador and Bayesian techniques, we develop and estimate a two-sector dynamic stochastic general equilibrium model to analyze the effects of remittances on emerging market economies. We find that, whether altruistically motivated or otherwise, an increase in remittance flows leads to a decline in labor supply and an increase in consumption demand that is biased toward non-tradables. The higher non-tradable prices serve as incentive for an expansion of that sector, culminating in reallocation of labor away from the tradable sector — a phenomenon known as the Dutch disease. Quantitative results also indicate that remittances improve the welfare of households because they smooth income flows and increase consumption and leisure levels. A BVAR analysis provides results that are consistent with the dynamics of the model.