An empirical model of mainframe computer investment

This paper introduces a dynamic model of investment decisions in mainframe computer systems. I estimate and test the model using detailed micro data from a company in the telecommunications industry. The model accounts for ‘technological depreciation’ which distinguishes computers from other investment goods where physical depreciation is typically a key factor underlying replacement investment decisions. The company increased its installed mainframe computer capacity by over 30‐fold over the 10‐year sample period. Part of this growth was undoubtedly due to the huge increase in performance and the corresponding drop in the per unit cost of processing capacity of mainframes, a consequence of ‘Moore's law’. However, there was also tremendous growth in the need for computers for billing, account processing and other tasks, due to the rapid growth in the telecommunications industry over this same time period. I estimate the unknown parameters of the investment model using a nonlinear least squares–nested fixed‐point algorithm (NLS‐NFXP), which solves the Bellman equation underlying the dynamic model of investment and replacement of mainframe computers by nonlinear least squares. I demonstrate that it is feasible to estimate this model on an ordinary PC, whereas standard discretization approaches to solving the firm's optimal investment policy might not even be feasible using supercomputers. I show that the estimated model fits the data very well, and accurately captures the large growth in installed mainframe capacity, the timing and magnitude of replacement investment, as well as periodic upgrades of existing mainframe units. I use the model to decompose how much of the 30‐fold increase in mainframe computer capacity is due to ‘Moore's law’ (i.e. the huge drop in the unit cost of installed mainframe capacity), and how much is due to the growth in demand for services of mainframes, due to the rapid growth in demand for telecommunications services (particularly cell phone accounts) by the firm's customers. Copyright © 2010 John Wiley & Sons, Ltd.     

Models of regional growth: An empirical evaluation

Cross section data are used to test two types of regional growth models: the demand and the supply based models. While the demand based model explained twice as much of the interregional variations in growth rates as did the supply model, we found that the basic element of the supply model, factor mobility, contributes significantly to the determination of regional growth. A model combining both demand and supply is developed and fitted tothe data. The performance of this model as judged by goodness of fit and dynamic simulations is remarkable. Long-run implications are derived from dynamic simulations.     

Designing vendor evaluation systems: An empirical analysis

Companies today are increasing efforts to develop their vendor evaluation system (VES) to qualify and select the best suppliers, monitor their performance and foster continuous improvement. VES lies at the intersection of three disciplines: purchasing management, supply chain management, and performance management. The extant literature especially focuses on vendor rating tools from a mathematical modeling standpoint, whereas firms are mostly concerned with guidelines necessary to design and implement an effective VES. The present study develops an encompassing research framework to investigate VES by means of thirteen case studies. In particular, the paper investigates VES design in terms of strategic alignment, process configuration and execution, as well as corresponding benefits and costs, exploring how the combination of the previous elements determines company satisfaction. Three groups of VESs are identified, leading to different levels of satisfaction.     

Political events and the foreign direct investment decision: An empirical examination

This study investigates the impact of political events on US manufacturing direct investment in Latin America. The relationship between foreign direct investment and political events (and economic factors) is examined through regression analysis of pooled time-series (21 years) and cross-sectional (8 countries) data. In contrast to previous studies using an econometric approach, this study finds that political events do affect direct investment decisions. Specifically, both intra-nation and inter-nation conflict and co-operation have an impact on US direct investment decisions concerning Latin American countries. In addition, the host country's market size and market growth affect these decisions by US multinational firms.     

Institutions and public investment: an empirical analysis

This paper investigates the effect of institutional quality on the levels, volatility and quality of public investment. Our findings suggest an inverse relationship between public investment levels and institutional quality, supporting the idea that governments use public investment as a vehicle for rent seeking. We also find that lower quality of governance increases the volatility of public investment. Finally, we provide some tentative evidence of a positive relationship between institutional quality and the quality of infrastructure. Policymakers who aim to reduce infrastructure needs through capital spending should take measures to strengthen institutional capacity to manage public investments.     

Family management,family succession,and R&D investment: An empirical study

Using data from the statements issued by A-share family firms listed on Chinese stock markets between 2008 and 2019, this paper explores the impacts of family management and family succession on R&D investment. We draw on the perspective of restricted and extended socioemotional wealth and differentiate exploitative R&D and explorative R&D in a detailed study. The study finds that the proportion of family members among board members or senior executives and the kinship of the CEO or chair of the board of directors have different effects on R&D investment, indicating that a diversity exists in how family members identify their role within the company. Furthermore, the participation of the controller’s children in the enterprise can promote explorative R&D investment instead of exploitative R&D, but only during the process of intergenerational succession. The findings differ from prior research in calling attention to the facts that the impact of family management is not always homogeneous owing to the dispersion of family members into different positions, and it can be misleading to conclude that R&D investment is more conservative in family businesses without considering the structure of R&D investment.

     

Trade,competitiveness and investment: an empirical assessment

ABSTRACT

The Eurozone crisis has exposed several weaknesses of the European Monetary Union economies. This paper aims to assess the impact on external competitiveness of an expansionary capital stock policy that could contribute to reduce the trade balance asymmetries within the EU and help European exporters to recover their competitive role in international markets. A policy action to increase capital stock accumulation through investment in selected European countries could generate a double dividend: increasing both price and nonprice competitiveness, so stimulating their competitive position as exporters, and consolidating the growth path of EU economy. The analysis employs a bilateral trade model built at INFORUM with several distinguishing characteristics: a comprehensive bilateral data set, econometric estimation of key parameters, and emphasis on sectoral details. Our findings show that a capital stock increase is effective in narrowing trade imbalances within EU. Heterogeneous effects are estimated for commodities in China and the US.     

The MNE investment location decision: Some empirical evidence

Factors governing MNE investment are typically divided into three groups-infrastructural variables, location-specific risk factors and government policy variables. The first objective of this paper is to assess the influence of these factors on MNE location decisions. The second objective is to test whether government participation in location tournaments (whereby local governments offer incentives to MNEs to influence their location decisions) is worthwhile. Arthur (1986,1990) points out that such participation is worthwhile if government policy has irreversible effects that persist after policy is withdrawn. In the estimation of the model, neither risk nor infrastructural factors are found to have a significant effect on the MNE investment location decision. However, there seems to be some evidence indicating that past investment decisions tend to have irreversible effects. Thus, government participation in location tournaments may be worthwhile.     

An empirical analysis of linear aggregation problems: The case of investment behavior in Japanese firms

Some economists have analysed empirically linear aggregation problems from various view-points and get results which seem to justify the use of aggregated data. However, some were based on only one experiment. Using more experiments we shall analyse empirically two important aggregation problems for the case of the investment behavior of firms. In contrast to earlier studies, our results indicate that the aggregation biases of macroparameters are rather large and the explanatory power of the macroequations is not necessarily higher than that of a sum of microequations.     

Buyout candidates and their investment banking relationships: An empirical analysis of returns adjoining buyout offers

Previous studies document a significant positive price reaction at the proposal of a buyout offer. In this study the author examines the influence of investment banking relationships on target firms associated with buyout offers. The results support the hypothesis that knowledge of an impending buyout manifests itself before a buyout’s public announcement. The evidence supports the hypothesis that investment bankers use different strategies before a buyout.     

我国投资基金选股与择时能力的实证研究

文章选择了比较成熟的单因素T-M模型和H-M模型,对2004年1月1日～2007年11月31日间194个交易周的10只基金进行业绩评价,考察证券投资基金是否在我国这种弱式有效的市场上表现出良好的选股与择时能力。结果表明,除个别基金外,我国基金整体不具备择时能力,虽具有一定的选股能力,但表现并不显著。     

Leisure and long-run risks: An empirical evaluation on value premium puzzle

I study the ability of a long-run risk model, with nonseparable leisure and consumption, to price the cross-section of U.S. equity returns over the 1948–2015 period. The stochastic discount factor features innovations to future leisure and consumption growth as factors. The model performs well, in terms of a variety of criteria, relative to competing models in explaining the cross-section of the spread in size and value portfolios.     

Indifference mapping: An empirical methodology for economic evaluation of the environment

There has been a rapid development of theoretical models to characterise and measure preferences for environmental alternatives. But this development does not seem to have been matched by the development of empirical methodologies to implement these models. The object of this paper is to develop, apply, and test such an empirical method. The method consists of deriving indifference maps to characterize choices between recreational opportunities. Demand curves are derived from the maps. The policy context of the study required the estimation of consumers' surplus values for one of the recreation activities. These values were read off the demand curves. They were validated in a partial prediction test.     

The impact of non-performing loans on bank lending in Europe: An empirical analysis

In the aftermath of the global financial crisis, considerable attention has been paid to the accumulation of non-performing loans in the balance sheet of European banks and to its potential negative effects on bank lending to the real economy. Using a dataset composed of bank-specific information and country aggregates, we study the impact of the stock and the flow of non-performing loans on the lending activities of a sample of 75 European banks between 2014 and 2018. In general, higher rates of non-performing loans, together with other variables, are associated with lower growth rates of performing loans. This effect persists across several econometric specifications and is more significant for those banks exhibiting lower growth rates of performing loans. Similarly, our econometric analysis suggests that banks with higher decreases in their rate of non-performing loans tend to lend more to the real economy, an effect which is particularly intense at the right tail of the distribution. The findings of our paper can be useful for policymakers when addressing the resolution of non-performing loans in banks.     

How supply chain architecture and product architecture impact firm performance: An empirical examination

In order to enhance performance, manufacturing firms are building various capabilities and utilizing supply chain networks that are geographically dispersed around the globe. This study examines how decisions related to supply chain architecture and product architecture influence organizational competitiveness. Building on the co-specialization perspective, we evaluate the performance implications of product modularity and supply chain agility. While, product modularity constitutes a product configuration related to sourcing and assembling of products, supply chain agility is a supply chain configuration related to velocity (sensing, comprehending, and responding) and visibility (supplier network, internal operations, and external environment). Both the product and supply chain architectural decisions can impact performance, individually and in conjunction with each other. We empirically test the hypothesized relationships using data collected from 103 manufacturing firms. Results show that supply chain agility and product modularity directly enhance responsiveness and enable organizations to reduce cost. Furthermore, supply chain agility partially mediates the relationship between product modularity and both responsiveness and cost reduction. We elaborate on the key contributions of this study for both research and practice, discuss limitations, and also offer various avenues for further research.     

Regional environmental and economic impact evaluation: An input-output approach

This article develops a regional input-output model which deals with both the environmental sector and the traditional treatment of the economy. The model differs from previous work in that environmental interactions are treated non-linearly and explicit account is taken of environmental feedback to the economic sector. Estimation of non-linear environmental feedback makes it possible to more accurately assess the sensitivity of the regional economic-environmental structure to shifts in final demand over time.     

Social preferences for health states: An empirical evaluation of three measurement techniques

Health state preferences measured on the general public provide useful information in their own right as well as being necessary data for the application of many health status index models. But, how should the preferences be measured? This paper reports the results of an empirical investigation in which three measurement techniques are applied to several samples of the general public to measure the social preferences for ten different health states. The standard gamble technique by von Neumann-Morgenstern, a time trade-off technique by the author, and a category scaling method are analyzed with respect to their feasibility, reliability, validity and comparability.     

The effect of human capital on occupational health and safety investment: An empirical analysis of Spanish firms

This paper analyses how firms' human capital influences their investments in occupational health and safety (OHS). We argue that the incentive to protect workers by investing in OHS is a function of the stock of human capital. The empirical analysis was based on data from the official Working Conditions Spanish Survey on OHS management. Our sample was restricted to 1,472 firms from the manufacturing and construction industries. Our results show that firms that place more emphasis on training and have a multiskilled and innovative workforce invest more in OHS. However, having technological and design skills has no impact on the investment in OHS, presumably because these skills are widely available in the labour market. Finally, the analysis suggests that some abilities such as problem solving may be affected by informational asymmetries and therefore firms may suboptimally invest in protecting these capabilities.     

Effects of the property tax on operating and investment decisions of rental property owners : An empirical test

A model of landlord behavior presented in DeSalvo (1971) is combined with the bid curve of Rosen (1974) to yield the hypothesis that, in the stationary state, a reduction in the property tax rate will lead housing capital to rise unambiguously and housing's current input either to rise or fall. Since the theory only predicts the directions of change in the inputs, the magnitudes of these changes are estimated with the result that a ten percent reduction in the tax rate will lead capital to rise by 0.6 percent and the current input by 4.9 percent, both at the one percent significance level. Thus, if, as DeSalvo suggests, upgrading is defined as a rise in capital, the null hypothesis that upgrading will not occur with a fall in the property tax rate must be rejected at the one percent level.     

The impact of government funding on research innovation: An empirical analysis of Chinese universities

The university is one of the most important places for scientific research, and it is the cradle of knowledge output and technological invention. Using the granular data of more than 1,000 universities' funding from the government in China, we investigate the impact of government funding on research innovation at the university level. The results show that government funds promote the output of research innovation of universities. The effectiveness of government funding is greater when combined with greater human capital and more platforms for international cooperation. Interestingly, further studies have found that human capital and non-government funds have a moderating influence on the effect of government funds on university research output. Moreover, there are some differences between “211 Project” (high quality) universities and “non-211 Project” universities. Finally, given the relaxation of policy for government funding of university research in 2014, we investigate the relationship between human capital (especially specialists with senior titles) and government funds in the process of research innovation. The results show that, before 2014, human capital presents a substitution relationship with government funding while it presents a complementary relationship after 2014.