PITFALLS IN CROSS‐SECTION STUDIES WITH INTEGRATED REGRESSORS: A SURVEY AND NEW DEVELOPMENTS

In cross‐section studies, if the dependent variable is I(0) but the regressor is I(1), the true slope must be zero in the resulting “unbalanced regression.” A spuriously significant relationship may be found in large cross‐sections, however, if the integrated regressor is related to a stationary variable that enters the DGP but is omitted from the regression. The solution is to search for the related stationary variable, in some cases the first difference of the integrated regressor, in other cases, a categorical variable that can take on limited number of values which depend on the integrated variable. We present an extensive survey, new developments, and applications particularly in finance.     

Stochastic dominance efficient sets and stochastic spanning

Decisions in Economics and Finance - We derive sufficient conditions for non-emptiness of the efficient sets for stochastic dominance relations, usually employed in economics and finance. We do so...     

Causes and consequences of the lack of strategic foresight in the decisions of multinational enterprises to enter China

Strategic foresight, in the sense of ‘understanding the future’ [R.A. Slaughter. Futures studies as an intellectual and applied discipline. American Behavioral Scientist 42(3) (1998) 372-385; A.N. Whitehead. Modes of Thought. Free Press, New York, 1966], can play a significant role in the long term success, or failure, of business corporations. However, in understanding the development and management of strategic foresight within business enterprises, instances where lack of foresight was exhibited, can be equally instructive, especially when these business organizations are some of the world’s largest multinational corporations and they are faced with a situation they had met before: new market entry.By drawing on 42 in depth interviews, conducted by one of the authors with executives from Multinational Enterprises (MNEs) currently operating in China, this paper identifies the causes and consequences in the lack of foresight exhibited by many MNEs in their China-market entry strategies. In this way the foresight failure is distilled into two factors: Failure of understanding, and Failure of anticipation.     

Performance assessment of ensemble learning systems in financial data classification

Financial data classification plays an important role in investment and banking industry with the purpose to control default risk, improve cash and select the best customers. Ensemble learning and classification systems are becoming gradually more applied to classify financial data where outputs from different classification systems are combined. The objective of this research is to assess the relative performance of existing state‐of‐the‐art ensemble learning and classification systems with applications to corporate bankruptcy prediction and credit scoring. The considered ensemble systems include AdaBoost, LogitBoost, RUSBoost, subspace, and bagging ensemble system. The experimental results from three datasets: one is composed of quantitative attributes, one encompasses qualitative data, and another one combines both quantitative and qualitative attributes. By using ten‐fold cross‐validation method, the experimental results show that AdaBoost is effective in terms of low classification error, limited complexity, and short time processing of the data. In addition, the experimental results show that ensemble classification systems outperform existing models that were recently validated on the same databases. Therefore, ensemble classification system can be employed to increase the reliability and consistency of financial data classification task.     

Decomposition analysis of consumers' demand changes: an application to Greek consumption data

A decomposition analysis for consumer demand functions is developed. Changes in Marshallian demand or expenditure shares functions over time are decomposed into a total substitution effect, an income effect, and a habit effect. This framework is applied to post-war Greek consumption patterns through a habit persistence version of the Quadratic Almost Ideal Demand System (QUAIDS). It is found that for all commodity categories (i.e., food, beverages and tobacco, footwear and clothing, settling and housing, and others) the income effect was the main driving force in explaining changes in both quantity demanded and expenditure shares, followed by habit and total substitution effects.     

Evolution and the growth process: Natural selection of entrepreneurial traits

This research suggests that a Darwinian evolution of entrepreneurial spirit played a significant role in the process of economic development and the dynamics of inequality within and across societies. The study argues that entrepreneurial spirit evolved non-monotonically in the course of human history. In early stages of development, risk-tolerant, growth promoting traits generated an evolutionary advantage and their increased representation accelerated the pace of technological progress and the process of economic development. In mature stages of development, however, risk-averse traits gained an evolutionary advantage, diminishing the growth potential of advanced economies and contributing to convergence in economic growth across countries.     

User,Use & Utility Research

Business and Information Systems Engineering (BISE) is at a turning point. Planning, designing, developing and operating IT used to be a management task of a few elites in public ad-ministrations and corporations. But the continuous digitization of nearly all areas of life changes the IT landscape fundamentally. Success in this new era requires putting the human perspective – the digital user – at the very heart of the new digitized service-led economy. BISE faces not just a temporary trend but a complex socio-technical phenomenon with far-reaching implications. The challenges are manifold and have major consequences for all stakeholders, both in information systems and management research as well as in practice. Corporate processes have to be re-designed from the ground up, starting with the user’s perspective, thus putting usage experience and utility of the individual center stage. The digital service economy leads to highly personalized application systems while organizational functions are being fragmented. Entirely new ways of interacting with information systems, in particular beyond desktop IT, are being invented and established. These fundamental challenges require novel approaches with regards to innovation and development methods as well as adequate concepts for enterprise or service system architectures. Gigantic amounts of data are being generated at an accelerating rate by an increasing number of devices – data that need to be managed. In order to tackle these extraordinary challenges we introduce ‘user, use & utility’ as a new field of BISE that focuses primarily on the digital user, his or her usage behavior and the utility associated with system usage in the digitized service-led economy. The research objectives encompass the development of theories, methods and tools for systematic requirement elicitation, systems design, and business development for successful Business and Information Systems Engineering in a digitized economy – information systems that digital users enjoy using. This challenge calls for leveraging insights from various scientific disciplines such as Design, Engineering, Computer Science, Psychology and Sociology. BISE can provide an integrated perspective, thereby assuming a pivotal role within the digitized service led economy.     

Restructuring strategies,firms' size and atypical employment in the local productive system of Thessaloniki,Greece

Drawing upon an extended case study in six industrial sectors in the city of Thessaloniki, Greece this paper highlights that the transformation of the local production system is based on the locally specific interaction of two interrelated restructuring trajectories: a ‘weak’ strategy that is mainly associated to small/medium‐sized labour intensive enterprises and a ‘strong’ strategy which is fairly connected to large, increasingly internationalised firms. Both these strategies are found to be in need of cheap labour while they make use of the locally diversified atypical employment pools, though in different ways. In parallel, they presuppose a subordinated integration into subcontracting production systems that expands towards the regional, the Balkan and the international arena. The paper underlines that restructuring strategies in Thessaloniki, especially the prevailing ‘weak’ one, do not seem to alter the conditions of backwardness for the local productive system. Apart from leaving local structures poor in innovative production, automated machinery and non‐hierarchical networking practices they are largely based on diffused, poorly‐paid atypical employment.