Spurious principal components

The principal component regression (PCR) is often used to forecast macroeconomic variables when there are many predictors. In this letter, we argue that it makes sense to pre-whiten the predictors before including these in a PCR. With simulation experiments, we show that without such pre-whitening, spurious principal components can appear and that these can become spuriously significant in a PCR. With an illustration to annual inflation rates for five African countries, we show that non-spurious principal components can be genuinely relevant in empirical forecasting models.     

Public debt and economic growth in Spain, 1851–2013

In this paper we investigate the long-run relationship between public debt and economic growth in the Spanish economy for the period 1851–2013. We develop a cliometric analysis of the debt–growth nexus using novel time series methods. We find some support for a negative relationship between both variables, but no clear evidence of a debt threshold. The estimated long-run elasticity in a one-break model shows a tendency to decrease over time from a nonsignificant 0.011 to a ?0.070, indicating that a 10 percentage increase in the public debt-to-GDP ratio is associated with 0.70 percentage points lower real economic growth. Indeed, we find for the first subsample (1851–1939) either “decoupling” or “saturation,” while in the second subsample (1940–2000) the long-run elasticity coefficient becomes negative and significant. When we extend our analysis up to 2013, we find a break in 1971 coinciding with the twilight of Franco’s dictatorship and the Spanish transition to democracy.     

Authentication as Institutional Maintenance Work

Institutional maintenance work refers to actors’ deliberate effort to maintain an institution. This paper examines how actors use authentication, i.e., the relational constitution of an artefact as original or as a genuine expression of a particular type, style or person, to accomplish institutional maintenance work. We investigated contemporary adjustments to six listed buildings. These works were undertaken to keep these buildings functional while at the same time protecting their listing; by doing so they contributed to maintain the institution of Architectural Heritage. Our analysis identifies three forms of authentication: material consolidation, crafts mobilization and character enhancement. We elaborate on each of them and explain their institutional underpinnings and outcomes. The paper concludes with an articulation of authentication as a potent form of institutional maintenance work. Taking its starting point in materiality, authentication is a relational practice that helps maintain institutions relying on irreplaceable artefacts for their maintenance.     

Foreign aid preferences and perceptions in donor countries

We present original survey data on preferences for foreign aid in 24 donor countries from 2005 to 2008. On publicly-funded foreign aid (Official Development Assistance, or ODA), we find patterns that are consistent with a standard model of democratic policy formation, in which donations are treated as a pure public good. Controlling for perceptions of current ODA, we show that individual preferences for ODA are (i) negatively correlated with relative income within a country-year; and (ii) positively correlated with inequality at the country level. We extend the analysis to explain variation in the gap between desired aid and actual ODA, arguing that lobbying by high-income special interest groups can divert resources away from the median voter’s preferred level of aid. Consistent with this, we observe that ODA is significantly lower where policymakers are more susceptible to lobbying. Finally, we present a novel test of competing “crowding out” hypotheses. Self-reported private aid donations are negatively correlated with actual ODA, and positively correlated with perceived ODA. This finding is consistent with an emerging argument in the literature, whereby ODA crowds out private aid by enabling charities to forego fundraising activities and crowds in private aid through a signaling channel.     

Does it pay off for museums to foster creativity? The complementary effect of innovative visitor experiences

This paper aims to explore the link between creativity orientation, investment in visitors’ experience and operating and funding performance in tourist attractions, taking museums as a case study. The empirical work is based on an analysis of the information provided by a sample of Spanish, French, German, British and American museums. The findings highlight the positive impact of creativity orientation on museums’ operating performance, but show a curvilinear effect on funding performance. The use of new technologies and adaptation to the audience proves positive when seeking to attract visitors.     

Rent Sharing and the Compensation of Head Coaches in Power Five College Football

The monopoly and monopsony power of intercollegiate sports create significant rents, but previous studies of intercollegiate football coaches’ salaries implicitly assume that coaches are paid their marginal revenue products. In a two-stage estimation, we show that coaches share in these rents. The first stage shows that several common measures of coaches’ productivity do not affect an athletic department’s variable revenue. When we include these measures in the second-stage salary equation, their impact on pay reflects bargaining power, not productivity. We also find that several measures of fixed revenue, which are independent of the coach’s performance, increase the coach’s pay.     

The relationship between principals’ configuration of a bundle of HR practices for new teachers and teachers’ person–organisation fit

Abstract

Based on studies in the private sector showing the positive effects of strategic human resources management (SHRM) on performance, many stress the value of adopting SHRM in the public sector. However, until now, the argument for applying SHRM in the public sector remains largely theoretical. Especially in educational contexts, it is unclear through which mechanisms SHRM affects performance. Therefore, this paper zooms in on the relationship between the configuration of a bundle of human resources (HR) practices and person–organisation (P–O) fit. A mixed methods design was used to collect both qualitative and quantitative data from principals and teachers in 56 Flemish primary schools. The qualitative data, which provides insight into principals’ configuration of HR practices, were converted into numerical scores and analysed, together with the quantitative teacher data, using multilevel analysis. The results show that both principals’ strategic and HR orientation are associated with teachers’ P–O fit. This study contributes to the research field of SHRM in education by studying a bundle of HR practices and how this relates to the fit of teachers’ own values with the school culture. The practical implications for schools are discussed.     

Alternative approaches for the reformulation of economics

Journal of Economic Interaction and Coordination -     

Factors driving embodied carbon in international trade: a multiregional input–output gravity model

ABSTRACT

Concerns about the effects and consequences of climate change have notably increased in recent decades. Despite large advances in the understanding of this phenomenon, further research into the determinants of gas emissions is necessary, to shed light on the responsibilities of producers and consumers, and their potential contribution to mitigation strategies. This paper studies the trajectories and determinants of carbon embodied in world trade during a period of 15 years. Our methodology relies on a multiregional input–output model, environmentally extended. Drawing on data from the World Input–Output Database, we estimate embodied emissions in bilateral flows. Then, we assess the determinants of CO₂ emissions embodied in trade, combining input–output modelling with trade gravity panel data analysis. This paper offers a methodological approach that explains and quantifies the underlying factors of carbon trade, integrating the production and consumption perspectives and considering the geographical, structural and institutional context of countries.     

The effect of entrepreneurship education in schools on entrepreneurial outcomes: a systematic review

Management Review Quarterly - This study systematically reviewed 21 quantitative and qualitative articles on the effect of entrepreneurship education in schools. We reviewed short-term effects,...