Introducing Environmental Variables in Nonparametric Frontier Models: a Probabilistic Approach

This paper proposes a general formulation of a nonparametric frontier model introducing external environmental factors that might influence the production process but are neither inputs nor outputs under the control of the producer. A representation is proposed in terms of a probabilistic model which defines the data generating process. Our approach extends the basic ideas from Cazals et al. (2002) to the full multivariate case. We introduce the concepts of conditional efficiency measure and of conditional efficiency measure of order-m. Afterwards we suggest a practical way for computing the nonparametric estimators. Finally, a simple methodology to investigate the influence of these external factors on the production process is proposed. Numerical illustrations through some simulated examples and through a real data set on Mutual Funds show the usefulness of the approach.JEL Classification: C13, C14, D20     

Macroeconomic adjustment programmes in the euro area: an overall assessment

Since the start of EMU (Economic and Monetary Union), the euro area, and more broadly the global economy, experienced an unprecedented credit boom. The expansion of credit was particularly strong in Greece, Ireland, Portugal and Cyprus and all of them subsequently needed official financial support. In each of the four programmes, financial assistance has been provided and promised against the commitment of each country to fulfil certain economic policy conditions contained in the macroeconomic adjustment programme. In general, a macroeconomic adjustment is a process driven by policies but also by changes in private spending behaviour (consumption, imports, investment) and improvement in competitiveness that countries are required to undertake after a large shock. In the case of the four countries, the shock emerged as a consequence of an excessive accumulation of imbalances in different parts of the economy: in the public sector in Greece, in the housing and banking sectors in Ireland, external imbalances in Portugal and in the banking sector in Cyprus. The paper looks at the feasibility of the fiscal adjustment comparing the macroeconomic conditions in the four countries and emphasising the role of the fiscal multipliers in the process. It also assesses the fall in the output in a comparative framework, stressing the role played by the different components of demand either in amplifying the effect of the fiscal consolidation or in offsetting it. In addition, it considers formulation of the programmes as well as their implementation with most attention devoted to reforms aiming at improving competitiveness, growth and employment in the framework of a cross-country approach.     

Bayesian smooth-and-match inference for ordinary differential equations models linear in the parameters

Dynamic processes are crucial in many empirical fields, such as in oceanography, climate science, and engineering. Processes that evolve through time are often well described by systems of ordinary differential equations (ODEs). Fitting ODEs to data has long been a bottleneck because the analytical solution of general systems of ODEs is often not explicitly available. We focus on a class of inference techniques that uses smoothing to avoid direct integration. In particular, we develop a Bayesian smooth-and-match strategy that approximates the ODE solution while performing Bayesian inference on the model parameters. We incorporate in the strategy two main sources of uncertainty: the noise level of the measured observations and the model approximation error. We assess the performance of the proposed approach in an extensive simulation study and on a canonical data set of neuronal electrical activity.     

Assessing social impact in the field of sustainable tourism development: Evidence from Cabo Delgado (MZ)

ABSTRACT

Assessing the social impact of tourism-related activities is of paramount importance to promoting sustainable development. The present study aimed to assess the social impact of a project in Cabo Delgado (MZ), designed to increase local community residents’ employability in the emerging tourism sector through the delivery of vocational training programmes, utilising a multi-phase and mixed-method design. The study comprised three different phases (before, during, and after the intervention) and took into account the perspective of a variety of stakeholders. Programmes were perceived to be effective by local operators in the tourism sector and trainees, as they enhanced their living conditions and increased their employability. International operators and tourists, however, had not yet perceived their effectiveness. This study offers a methodological framework for social impact assessment by performing a programme evaluation as an integral part of the intervention itself. This methodology can be extended to other non-tourism related contexts.     

Conditional nonparametric frontier models for convex and nonconvex technologies: a unifying approach

The explanation of productivity differentials is very important to identify the economic conditions that create inefficiency and to improve managerial performance. In the literature two main approaches have been developed: one-stage approaches and two-stage approaches. Daraio and Simar (2005, J Prod Anal 24(1):93–121) propose a fully nonparametric methodology based on conditional FDH and conditional order-m frontiers without any convexity assumption on the technology. However, convexity has always been assumed in mainstream production theory and general equilibrium. In addition, in many empirical applications, the convexity assumption can be reasonable and sometimes natural. Lead by these considerations, in this paper we propose a unifying approach to introduce external-environmental variables in nonparametric frontier models for convex and nonconvex technologies. Extending earlier contributions by Daraio and Simar (2005, J Prod Anal 24(1):93–121) as well as Cazals et al. (2002, J Econometrics 106:1–25), we introduce a conditional DEA estimator, i.e., an estimator of production frontier of DEA type conditioned to some external-environmental variables which are neither inputs nor outputs under the control of the producer. A robust version of this conditional estimator is proposed too. These various measures of efficiency provide also indicators of convexity which we illustrate using simulated and real data. Cinzia Daraio received Research support from the Italian Ministry of Education Research on Innovation Systems Project (iRis) “The reorganization of the public system of research for the technological transfer: governance, tools and interventions” and from the Italian Ministry of Educational Research Project (MIUR 40% 2004) “System spillovers on the competitiveness of Italian economy: quantitative analysis for sectoral policies” which are acknowledged. Léopold Simar received Research support from the “Interuniversity Attraction Pole”, Phase V (No. P5/24) from the Belgian Government (Belgian Science Policy) is acknowledged.     

A methodology of technological foresight: A proposal and field study

The study of one's own business future is a distinctive element of a business strategy. Innovative companies are aware of weak signals coming from the periphery and of trends in their industry, and they monitor the coherence between weak signals and trends (the external perspective) and strategic direction (the internal perspective).The literature today does not provide well-framed and complete methodologies for assessing the coherence among trends, vision and products. Therefore, the authors propose a methodology called “the methodology of future coverage”, which measures how much the strategy oriented to the future effectively covers trends and megatrends. In other words, it helps to check the contents and the coherence of the firm' vision and products and those of the trends that will have relevance for the future of the industry, and this process supplies firms with supplementary information on how to improve. The authors tested this methodology and exemplified its use via the Eurotech case study, employing longitudinal analysis.The methodology can be useful as a tool for diagnosing the coherence between trends and company strategy. Moreover, from a dynamic point of view, it can be used as a tool to check on the company's progress in following up on trends by adapting its strategy over time. Finally, the methodology can be also used as a tool for cross-comparison of the “level of future orientation” among companies in the same industry.     

Su alcunieffetti dell'adozione di iniziali finitamente additive quando il modello di base appartiene alla classe esponenziale troncata

In questo lavoro si adottano particolari iniziali finitamente additive volte a massimizzare l'associazione tra gli elementi di un processo scambiabile e vengono discussi effetti e significato complessivo di tale adozione (par. 1 e 2).Nell'ipotesi che tali distribuzioni si riferiscano al parametro di un modello appartenente alla classe esponenziale troncata si ottiene (par. 3) la corrispondente espressione per la legge di probabilità congiunta di un vettore di osservazioni (teorema 1).Nel par. 4 si suggerisce un metodo alternativo di prova per risultati di supporto al teorema 1.Nel par. 5, sotto ipotesi assai blande, si ottengono risultati relativi alla previsione in alcuni casi particolari. Interessanti sono le conseguenze sulla distribuzione predittiva e sulla distribuzione finale del parametro di troncamento.

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Summary In this paper we use finitely additive prior distributions with the aim of maximizing the association between the elements of an exchangeable process and we discuss the effects and the meaning of this assumptions (§1 and §2).Applying these distributions to the canonical parameter in elements of truncated exponential family of distributions we obtain (§3) the expression for the joint distribution of a vector of observation (theorem 1).In § 4 a different method of proof is suggested for some results pertaining theorem 1.In § 5, under mild hypotheses, we obtain some results about the expectation of the predictive distribution. We examine some droll consequences of our assumptions on the predictive and posterior distributions.

     

Why Europe will suffer more

Europeans have a tendency to call the financial crisis a US problem, or a crisis precipitated by the “Anglo-Saxon” model. The data suggest otherwise. Moreover, the corporate sector in Europe has a much lower capacity to finance investment from internal sources of funds, which implies that a recovery of investment in Europe will be much more difficult than in the USA, as long as the banking sector remains weakened by excessive levels of leverage. The cost of the crisis could thus be much larger in Europe than in the USA.