A dynamic model of the interaction between state and private sector

The state behaves as if it maximizes a constrained objective function which is a weighted representation of the interests of politicians and bureaucrats. The weights determine the type of state. Firms maximize a discounted flow of dividends. The interaction between state and private sector follows from a minimum consumption level, the job preferences of labour and state influenced labour productivity.     

江浙模式及民营经济在全国的发展

Along with the implementation of reform and open up policy in China, Jiangsu and Zhejiang, two provinces have got rapid economic development and greatly contributed to China’s market transition. Jiangsu, Zhejiang together with Shanghai, have shaped China’s economic heartland—the Yangtze River Delta Economic Region. Undoubtedly, the private sector is the driving force for the tremendous economic development in the Yangtze River Delta, particularly for facilitating institutional transition and economic development. Fortunately, this kind of economic development driven by the private sector was not only restricted in the Yangtze River Delta Region, but also across the country as it has been gradually extended nationwide. This paper is to look at the development of the private sector in Jiangsu and Zhejiang areas and particularly trace its fantastic effects on nationwide economic development and market transition.      

Innovation in the medical device sector: an open business model approach for high-tech small firms

Innovation in the medical device industry is progressing rapidly with many technologies heralded as major breakthroughs. The public are often well informed about these matters, which results in a patient pull for innovations that are years from market. HTSFs operating in this environment face huge challenges in terms of realising the latent economic potential from new innovations. Open innovation offers the prospect of lower costs for innovation, faster times to market, and the chance to share risks. By developing open business models medical device companies can capture the multifaceted ideas of scientists, engineers, clinicians and indeed patients; thus allowing beneficial technologies to reach the market more quickly in a way that is evidence focused. This study uses a qualitative approach to investigate the explicit and implicit business models within HTSFs in the health care sector and provides a useful contribution to understand the challenges and identify solutions in this multi-stakeholder environment.     

Social learning with private and common values

Summary. We consider an environment where individuals sequentially choose among several actions. The payoff to an individual depends on her action choice, the state of the world, and an idiosyncratic, privately observed preference shock. Under weak conditions, as the number of individuals increases, the sequence of choices always reveals the state of the world. This contrasts with the familiar result for pure common-value environments where the state is never learned, resulting in herds or informational cascades. The medium run dynamics to convergence can be very complex and non-monotone: posterior beliefs may be concentrated on a wrong state for a long time, shifting suddenly to the correct state.Received: 6 January 2005, Revised: 5 May 2005, JEL Classification Numbers: C72, D82.Jacob K. Goeree: Correspondence toFinancial support from the National Science Foundation NSF (SBR-0098400 and SES-0079301) and the Alfred P. Sloan Foundation is gratefully acknowledged. We thank Richard McKelvey posthumously for insights and conjectures about information aggregation that helped shape our thinking about the problem. We also acknowledge helpful comments from Kim Border, Tilman Börgers, Bogachen Celen, Luis Corchon, Matthew Jackson and seminar participants at University College London, the University of Arizona, Universitat Autonoma de Barcelona, the California Institute of Technology, the 2003 annual meeting of ESA in Pittsburgh, the 2003 Malaga Workshop on Social Choice and Welfare Economics, the 2003 SAET meetings in Rhodos, and the 2003 ESSET meetings in Gerzensee.     

A bivariate zero-inflated count data regression model with unrestricted correlation

This paper proposes a computationally simple bivariate zero-inflated count data regression model with an unrestricted correlation pattern. An application to data with excess of zeros on the demand for health services is given.     

A dynamic model of the interaction between the state and the private sector

The main characteristic of the micro model developed in this paper is the endogenous behaviour of the state. The state is treated as an organization in its own right, made up of politicians and bureaucrats. Its behaviour is related to the interests of these agents and their relative power within the state organization. The economic consequenses of this interest representation by the state, and the impact of structural coercion (constraints), originating from the private sector, on these consequences, are our main concern. A particular feature of the model is that it allows for the fact that technology may be dependent on the state's activities.     

An analysis of the sources of technical change in the agricultural sector of Iran

A differential structural equation system including latent variables was applied for analyzing the sources of technical change in the agricultural sector of Iran, 1971–2005. The findings indicated that international knowledge spillover, human capital, and internal research and development expenditures have a significant role in technical progress in the agricultural sector of Iran. The findings showed that international knowledge spillover has been a more effective factor on the technical progress related to internal R&D. The technical progress was found out to be Hicks-neutral.     

A Markov analysis of social learning and adaptation

A number of recent contributions to the literature have modelled social learning and adaptation in an economic context. Understanding the processes driving these models is important in order to explain and predict the behaviour of the economy. In this paper, we analyze the economic applications for a class of adaptive learning models with bounded rational agents. The dynamics of these economies can be thought of as arising from discrete-time Markov chains. In particular, conditions for uniqueness of equilibria, convergence and stability in the economic systems follow from the accessibility and communication structures of these Markov chains. We establish a correspondence between absorbing states of the Markov chains and economic equilibria, whether stable or unstable, and develop theorems giving conditions for absorption and recurrence. Furthermore, we develop practical applications of these theorems using a cobweb model. We use a genetic algorithm, operating under election, as an example of a well known adaptive learning process.     

The sector bias of skill-biased technical change and the rising skill premium in transition economies

We test the hypothesis that the sector bias of skill biased technical change is important in explaining the rising relative wage of skilled workers in the manufacturing sector in three Central and Eastern European transition countries. The econometric results broadly confirm that the concentration of skill biased technical change in the skill intensive sectors had a significant effect on the skill premium in these transition countries.

Elasticity of substitution and productivity, capital and skill intensity differences across firms

This paper, instrumented with six theorems, shows that differences between firms in labor productivity, capital intensity and relative demand for skilled labor can be explained by differences in the substitution parameters between capital, skilled and unskilled labor in the presence of skill biased technical change.     

Estimating the cost of equity for private firms using accounting fundamentals

Finance literature suggests the use of the Accounting Beta (BACC) as a proxy for the Capital Asset Pricing Model (CAPM) market beta to estimate the cost of equity capital when the stock price is not available. Previous researchers have aimed to achieve this objective by determining the correlation between accounting variables and the market beta. However, the magnitude of the resulting error in this correlation has remained unknown. The current study is an attempt to test the performance of the BACC as a proxy measure for the market risk and to examine the extent of the statistical error in the correlation between these two measures. Our findings indicate that BACC overestimates the market beta by between 20% and 50%. Applying some corrective measures, such as operational earnings scaled by equity, may lessen this difference to a range of 22%–25%; however, it does not eliminate the error. Our output also suggests that the BACC might be biased when used to assess the risk of small firms.     

Synergy,learning and the changing industrial structure

In a set-up of two local firms and one foreign firm, we construct a model to capture the dynamics of local industrial structure induced by formation and breakdown of cross-border joint ventures (JVs). There is a synergic gain to the JV, and the partners learn from each other. Firms play a repeated game. We characterize the resulting industrial configurations under different scenarios as defined by the extent of cost saving. In particular, we show that when cost saving is moderate, an alliance formed between two firms in the first period, breaks up and a new alliance is formed in the second period, but again it breaks up; thereafter the market becomes an oligopoly of all three firms.     

A model of trade between creative regions in the presence of sector specific learning by doing

We analyze a model of trade between two heterogeneous regions that are creative in the sense of Richard Florida. One region is larger than the other region in terms of its endowment of creative capital. Each region produces a single final good with inputs 1 and 2 that are traded. There is learning by doing only in the sector producing input 1. Our primary objective is to study the impacts of this sector specific learning by doing and trade on the economies of the two regions under consideration. Our analysis leads to two salient results. First, when a specific condition holds, the smaller region specializes completely in the production of input 1 but there is incomplete specialization in the larger region. In particular, at time t = 0, not all creative capital in the larger region is employed in sector 2 and there is some learning by doing in this larger region as well. Second, in the long run, the smaller region continues to specialize completely in the production of input 1 but the larger region specializes completely in the production of input 2.     

A theory of return‐seeking firms

We introduce a theory of return‐seeking firms to study the differences between this and profit‐maximising models. A return‐seeking objective takes into account the opportunity cost of each additional resource input to a firm's production as being a potential capital input choice in an alternative project. We find that firm supply curves cease to exist in perfectly competitive markets, that supply curves may slope up as well as down, that economies of scale are necessary for any production to occur and that firms always produce on a decreasing portion of their cost curve.     

Sources of productivity growth using the Färe-Primont decomposition. An empirical application to the Irish beef sector

Several competing methodologies for TFP estimation have been developed in the past decades. A popular approach in the literature is index number computation. The most widely implemented TFP indices face however several important limitations. For example, Fisher, Tornqvist or Malmquist TFP indices do not satisfy the transitivity test, precluding reliable direct inter-temporal comparisons. The recently developed Färe-Primont TFP index satisfies this property, and therefore it is applied to analyse the evolution of TFP in the Irish beef sector between 2010 and 2016. Moreover, this index is multiplicatively complete, allowing a consistent decomposition of TFP growth in different sources. The sample of Irish beef farms used in the analysis is clustered to account for differences in production technology in the sector. The cluster-specific TFP changes computed were found to present important differences across the seven clusters identified. Significant TFP growth was identified in five of the classes, while TFP declined for the other two. Dispersion and mobility of the TFP levels indicate a lack of structural changes in the sector regardless of the cluster considered.     

A modified logit model for time series with an application to the pricing behaviour of manufacturing firms in Australia

The modified logit model (Amemiya and Nold, 1975) is generalised to the case where the error term is autocorrelated. The asymptotic distribution (as n →∞ and T →∞) of a feasible GLS estimator of β is derived. Tests of linear restrictions on β and the significance of ρ are presented. The results of the applied work suggest that the factors which explain the pricing behaviour of manufacturing firms, as reported in the tendency survey conducted by the Australian Chamber of Commerce and Industry and the Westpac Banking Corporation, include historical inflation rates of up to 7 quarters and capacity utilisation. First version received: March 2001/Final version received: July 2002 RID="*" ID="*"  The first draft of this paper was written while the author was on study leave at the Department of Econometrics, University of Sydney, Australia.     

The reference model of competitiveness factors for SME medical sector

The paper presents the issue of SME competitiveness in terms of determining their competitive position on the market. The proposed reference model, focused on the evaluation of the competitiveness of a selected group of SMEs on the market of medical services, was developed to support strategic decision-making. The usefulness of the model is verified in the process of determining the competitive position of a selected group of participants, applying research methods of strategic analysis. Relationships, observed during the study, occurring between the competitiveness factors and the competitive position taken by a company, provide knowledge, whose utilization directs the company's business to improving its market performance, organizational and economic conditions.     

A review of experience curve analyses for energy demand technologies

Transitioning towards a sustainable energy system requires the large-scale introduction of novel energy demand and supply technologies. Such novel technologies are often expensive at the point of their market introduction but eventually become cheaper due to technological learning. In order to quantify potentials for price and cost decline, the experience curve approach has been extensively applied to renewable and non-renewable energy supply technologies. However, its application to energy demand technologies is far less frequent. Here, we provide the first comprehensive review of experience curve analyses for energy demand technologies. We find a widespread trend towards declining prices and costs at an average learning rate of 18 ± 9%. This finding is consistent with the results for energy supply technologies and for manufacturing in general. Learning rates for individual energy demand technologies are symmetrically distributed around the arithmetic mean of the data sample. Absolute variation of learning rates within individual technology clusters of 7 ± 4%-points and between technology clusters of 7 ± 5%-points both contribute to the overall variability of learning rates. Our results show that technological learning is as important for energy demand technologies as it is for energy supply technologies. Applying the experience curve approach to forecast technology costs involves, however, unresolved uncertainties, as we demonstrate in a case study for the micro-cogeneration technology.     

The importance of social learning and culture for sustainable water management

Currently water resources management is undergoing a major paradigm shift. Water resources management has a strong engineering tradition based on controlling environmental problems with technical solutions. The management of risks relied on the ability to predict extremes and limit their impact with technical means such as dikes, dams and reservoirs. In this paradigm, belief systems, human attitudes and collective behaviours are perceived as external boundary conditions and not as integral part of management. However, the situation has started to change dramatically. Over the past years, integrated water resources management has become the reigning paradigm. The importance of governance and cultural adaptation has become a major issue of concern. At the same time, there is a paucity of adequate scientific concepts that would allow addressing these issues. This paper introduces a concept for social learning developed in the European project HarmoniCOP and discusses its implications for the cultural and institutional context of water resources management. It aims to contribute to the new paradigm of integrated resource management by discussing the importance of processes of culture and social learning for environmental resources management, in general, and water resources management, in particular.     

Is the Fed’s news perception different from the private sector’s?

The recent literature on monetary policy has dedicated considerable attention to modelling agents’ processing of information about the future in real time. This paper contributes to this growing strand by investigating the implied differences in the so-called news shocks estimated from the standard New Keynesian dynamic stochastic general equilibrium (DSGE) model using the real-time data sets from the Survey of Professional Forecasters (SPF) and the Federal Reserve’s Greenbook (GB) forecasts. Alternative specifications with either the SPF or GB forecasts aim to delineate the differences in the private sector’s and the Fed’s expectations of future macroeconomic outcomes and identify the differences in their perception of news shocks. Our results indicate that while the demand news shocks have very similar distributions in the two datasets, the monetary and cost-push news shocks from the models estimated on the GB data tend to be larger than those from the SPF. These findings suggest that the Federal Reserve’s forecasting methods allow for more variation in future outcomes than the SPF’s. These findings mesh well with the extant literature on the superiority of the Fed’s forecasts relative to the private sector’s and provide a structural explanation for the source of this superiority.