Alliances and the innovation performance of corporate and public research spin-off firms

We explore the innovation performance benefits of alliances for spin-off firms, in particular spin-offs either from other firms or from public research organizations. During the early years of the emerging combinatorial chemistry industry, the industry on which our empirical analysis focuses, spin-offs engaged in alliances with large and established partners, partners of similar type and size, and with public research organizations, often for different reasons. We seek to understand to what extent alliances of spin-offs with other firms (either large- or small- and medium-sized firms) affected their innovation performance and also how this performance may have been affected by their corporate or public research background. We find evidence that in general alliances of spin-offs with other firms, in particular alliances with large firms, increased their innovation performance. Corporate spin-offs that formed alliances with other firms outperformed public research spin-offs with such alliances. This suggests that, in terms of their innovation performance, corporate spin-offs that engaged in alliances with other firms seemed to have benefitted from their prior corporate background. Interestingly, it turns out that the negative impact of alliances on the innovation performance of public research spin-offs was largely affected by their alliances with small- and medium-sized firms.     

Climate for conflict management,exposure to workplace bullying and work engagement: a moderated mediation analysis

The present study investigates a potential preventive factor in relation to workplace bullying. Specifically, we examine how climate for conflict management (CCM) may be related to less bullying, increased work engagement, as well as whether CCM is a moderator in the bullying engagement relationship. The study was based on a cross-sectional survey among employees in a transport company (N = 312). Hypotheses were tested simultaneously in a moderated mediation analysis which showed that bullying and job engagement were related (H1), CCM was related to less reports of bullying (H2), CCM was related to work engagement (H3) and that CCM was indirectly related to job engagement through bullying (H4), but only when CCM was weak (H5). That is, CCM moderated the relationship between bullying and work engagement in that this relationship only existed when CCM was low. The present study contributes to theory within this research field by showing that organizational measures may not only prevent bullying, but may also affect how employees react when subjected to bullying. Furthermore, the effect of climate in relation to bullying may be down to the narrow bandwidth facet of CCM. The study informs employers how they may act to prevent bullying while also reducing the potential negative outcomes of those cases of bullying that inevitably will show up from time to time.     

Public-Private Partnerships and Prices: Evidence from Water Distribution in France

We use an original database of 5000 French local public authorities to explore the impact of organizational choice and performance as measured by consumer prices. In quantifying the impact of the choice of public-private partnerships (PPPs) on performance, we consider the related issue of the determinants of organizational choice. We estimate a switching regressions model to account for the endogeneity of organizational choice, and find that in our sample, (i) the choice by local public authorities to engage in a PPP is not random, and (ii) conditional on the choice of a PPP, consumer prices are significantly higher on average.     

The law of one price: a test based on prices for selected inputs in New Zealand agriculture

The law of one price (LOOP) is an essential foundation of both the pure theory of trade and monetary theory. Strictly speaking, the law relates to prices of individual commodities. However, empirical tests of LOOP have often relied on aggregated data. In this paper, a model is derived and estimated using price data for 15 selected inputs in New Zealand agriculture. The results offer no support for the LOOP in the short run, and the results for the long run are mixed. It may be inappropriate, therefore, to assume that the LOOP holds generally in modelling exercises, particularly when models are used for policy purposes.     

Vergleich des verallgemeinerten nichtzentralent-Tests mit dem Binomialtest

Zusammenfassung Es sei {F _,(x); –<<, >0} mitF _,(x)=F((x–)/)–F(x) eine standardisierte Verteilungsfunktion — die Familie der zulässigen Verteilungsfunktionen. Der (früher eingeführte) verallgemeinerte nichtzentralet-Test für die Hypothese {PP ₀} mitP:=F _,(x ₀) gegen die Alternative {P>P ₀} zum Niveau wird mit dem entsprechenden nichtparametrischen Test (Test für die Hypothese {pP ₀} über den Parameterp einer Binomialverteilung gegen die Alternative {p>P ₀}) verglichen. Für dent-Test wird die relative asymptotische Effizienz bestimmt.Beide Tests lassen sich als Tests für das zur WahrscheinlichkeitP ₀ gehörende Quantil einer Verteilungsfunktion interpretieren. Der klassische zentrale Student-Test ergibt sich als Spezialfall (F(x)=(x),P ₀=0,5).

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Summary Let {F _,(x);–<<, >0} withF _,(x ₀):=F((x–)/–F(x) a standarized distribution function — the family of admissible distribution functions. The (earlier introduced) generalized noncentralt-test for the hypothesis {PP ₀} withP:=F _,(x ₀) against the alternative {P>P ₀} at level of significance is compared with the corresponding nonparametric test (Binomial test). The relative asymptotic efficiency of thet-test is determined. Both kinds of tests can be interpreted as quantiltests. In caseF(x)=(x),P ₀=0,5 one gets the classical central Student-test.

     

More pessimism than greediness: a characterization of monotone risk aversion in the rank-dependent expected utility model

Summary. This paper studies monotone risk aversion, the aversion to monotone, mean-preserving increase in risk (Quiggin [21]), in the Rank Dependent Expected Utility (RDEU) model. This model replaces expected utility by another functional, characterized by two functions, a utility function u in conjunction with a probability-perception function f. Monotone mean-preserving increases in risk are closely related to the notion of comparative dispersion introduced by Bickel and Lehmann [3,4] in Non-parametric Statistics. We present a characterization of the pairs (u,f) of monotone risk averse decision makers, based on an index of greediness G _u of the utility function u and an index of pessimism P _f of the probability perception function f: the decision maker is monotone risk averse if and only if . The index of greediness (non-concavity) of u is the supremum of taken over . The index of pessimism of f is the infimum of taken over 0 < v < 1. Thus, , with G _u = 1 iff u is concave. If then , i.e., f is majorized by the identity function. Since P _f = 1 for Expected Utility maximizers, forces u to be concave in this case; thus, the characterization of risk aversion as is a direct generalization from EU to RDEU. A novel element is that concavity of u is not necessary. In fact, u must be concave only if P _f = 1.Received: 10 April 2001, Revised: 18 November 2003, JEL Classification Numbers: D81. Correspondence to: Michéle CohenAlain Chateauneuf, Michéle Cohen, Isaac Meilijson: We are most grateful to Mark Machina, Peter Wakker and two anonymous referees for very helpful suggestions and comments.     

Would adopting the Australian dollar provide superior monetary policy in New Zealand?

Counterfactual experiments with the Reserve Bank of New Zealand's core model provide some insight into the implications for New Zealand's economic performance over the 1990s, had it credibly fixed its currency to the Australian dollar. If New Zealand had faced the relatively more stimulatory Australian monetary conditions prevailing over the 1990s, then output growth may have been temporarily boosted. However, demand pressures would have probably been greater and inflation higher. In particular, results suggest that over the latter part of the 1990s annual inflation would have been approximately 1% point higher on average. Stochastic simulation experiments provide a vehicle to analyse what the implications of currency union might be more generally. Results suggest that if New Zealand were to lose its ability to set monetary policy independent of that set in Australia, then the variability of inflation and output would increase over the business cycle.     

Learning competitive market balance

Summary We exhibit a quite natural, adaptive process generated by price-taking, noncooperative firms, supplying the same market. Under rather mild conditions, that process, being driven by marginal profits, converges to a market clearing, Cournot-Nash equilibrium. Namely, it suffices for convergence that cost functions be strictly convex and that the law of demand holds. Randomness in revenues and costs is accommodated.Support from Ruhrgas is gratefully acknowledged.     

Enterprise Risk Management and the Cost of Capital

Enterprise risk management (ERM) is a process that manages all risks in an integrated, holistic fashion by controlling and coordinating any offsetting risks across the enterprise. This research investigates whether the adoption of the ERM approach affects firms' cost of equity capital. We restrict our analysis to the U.S. insurance industry to control for unobservable differences in business models and risk exposures across industries. We simultaneously model firms' adoption of ERM and the effect of ERM on the cost of capital. We find that ERM adoption significantly reduces firm's cost of capital. Our results suggest that cost of capital benefits are one answer to the question how ERM can create value.     

RIDGE ESTIMATORS FOR PROBIT REGRESSION: WITH AN APPLICATION TO LABOUR MARKET DATA

In this paper we propose ridge regression estimators for probit models since the commonly applied maximum likelihood (ML) method is sensitive to multicollinearity. An extensive Monte Carlo study is conducted where the performance of the ML method and the probit ridge regression (PRR) is investigated when the data are collinear. In the simulation study we evaluate a number of methods of estimating the ridge parameter k that have recently been developed for use in linear regression analysis. The results from the simulation study show that there is at least one group of the estimators of k that regularly has a lower mean squared error than the ML method for all different situations that have been evaluated. Finally, we show the benefit of the new method using the classical Dehejia and Wahba dataset which is based on a labour market experiment.