Externalities of R&D Expenditures

Innovation is generally recognized as a major source of economic growth. R&D investments explicitly aim at generating innovations and creating knowledge. Since knowledge has certain public good properties, positive externalities are likely to exist. In this paper, we extend well-known concepts from the input-output literature (backward multipliers) to indicate at which commodities stimuli should be targeted to enhance R&D and its positive externalities in the economy as a whole. Next, we argue that there may also be negative externalities of R&D, due to increased prices. This issue can be studied by means of forward multipliers. Both concepts are applied to the United States, 1977-90.     

Learning from input–output mixes in DEA: a proportional measure for slack‐based efficient projections

Several Data Envelopment Analysis (DEA) models use a radial distance measure that is based on the Debreu–Farrell notion of (in)efficiency. While this measure has an attractive interpretation, its use may be problematic if slacks or zeros are present in the data. The additive DEA model can perfectly deal with these problems, but the meaning of its associated scores is less intuitive than the one attached to the radial measures. We introduce an alternative efficiency measure, based on the results of the additive model, that can be decomposed in a Debreu–Farrell component and a factor that captures differences in input–output mixes with respect to those of the best practice reference observation. On an aggregate level, this second component can be considered as an indicator of the dispersion between radial efficiency measurement and results based on the Pareto–Koopmans efficiency notion. On the individual level, the measure allows us to regard relative inefficiency as resulting from (i) a divergence of implicit cost price vectors, and (ii) a cost level that is too high, even after adjustment for the implicit cost prices. Copyright © 1999 John Wiley & Sons, Ltd.     

Modeling CRS bounded additive DEA models and characterizing their Pareto-efficient points

Dealing with weighted additive models in Data Envelopment Analysis guarantees that any projection of an inefficient unit belongs to the strong efficient frontier, among other interesting properties. Recently, constant returns to scale (CRS) range-bounded models have been introduced for defining a new additive-type efficiency measure (see Cooper et al. in J Prod Anal 35(2):85–94, 2011). This paper continues such earlier work further, considering a more general setting. In particular, we show that under free disposability of inputs and outputs, CRS bounded additive models require a double set of slacks. The second set of slacks allows us to properly characterize all the Pareto-efficient points associated to the bounded technology. We further introduce the CRS partially-bounded additive models.     

Technological inefficiency indexes: a binary taxonomy and a generic theorem

Over the years following Debreu’s (1951) seminal formulation of a “coefficient of resource utilization”, a large number of indexes of technological inefficiency have been specified and a spate of papers has examined the properties satisfied by these indexes. This paper approaches the subject more synthetically, presenting generic results on classes of indexes and their properties. In particular, we consider a broad class of indexes containing almost all known indexes and a partition of this class into two subsets, slacks-based indexes and path-based indexes. Slacks-based indexes are expressed in terms of additive or multiplicative slacks for all inputs and outputs, and particular indexes are generated by specifying the form of aggregation over the coordinate-wise slacks. Path-based indexes are expressed in terms of a common contraction/expansion factor, and particular indexes are generated by specifying the form of the path to the frontier of the technology. Owing to an impossibility result in one of our earlier papers, we know that the set of all inefficiency indexes can be partitioned into three subsets: those that satisfy continuity (in quantities and technologies) and violate indication (equal to some specified value if and only if the quantity vector is efficient), those that satisfy indication and violate continuity, and those that satisfy neither. We prove two generic theorems establishing the equivalence of these two partitions: all slacks-based indexes satisfy indication and hence violate continuity, and all path-based indexes satisfy continuity and hence violate indication. We also discuss the few indexes that do not belong to either of these two sets. Our hope is that these results will help guide decisions about specification of the form of efficiency indexes used in empirical analysis.     

基于Super-SBM模型的污水厂投资效率实证分析

随着我国对污水处理行业投资的不断增长,污水厂建设也得到了迅速的发展。由于污水厂建设具有投资规模大、投资周期长等特点,研究污水厂投资效率具有重要意义。本文针对传统的CCR模型没有考虑投入要素"松弛"和无法解决有效单元排序问题,运用Super-SBM模型对河南省新建13座污水厂投资效率进行了评价。结果表明:污水厂平均投资效率较高,但在建设单位管理费、征地移民、人员培训、勘察设计方面仍存在浪费资金现象。     

Reputation,Trust, and Rebates: How Online Auction Markets Can Improve Their Feedback Mechanisms

Reputation systems constitute an important institution, helping sustain trust in online auction markets. However, only half of buyers leave feedback after transactions, and nearly all feedback is positive. In this paper, I propose a mechanism whereby sellers can provide rebates (not necessarily in monetary form) to buyers contingent upon buyers' provision of reports. Using a game theoretical model, I show how the mechanism can increase unbiased reporting. There exists a pooling equilibrium where both good and bad sellers choose the rebate option, even though their true types are revealed through feedback. The mechanism also induces bad sellers to improve the quality of the contract.     

The Probability That a Smoker Does Not Purchase Tobacco: A Note

In this note we are concerned with the estimation of the probability that a smoker does not purchase tobacco during a survey. Usually, tobacco demand has been estimated using limited dependent variable models under the assumption that an important proportion of smokers declared a zero expenditure in tobacco. However, if the probability of non purchasing by a smoker is negligible, zeros could be ignored and the demand equation could be estimated on positive expenditure data using traditional estimation methods. Here we estimate this probability and find that it is extremely small. A novelty of this work is the use of data on the quantity and frequency of tobacco purchases during the week of the survey, instead of the more commonly used expenditure data.     

Marginal Rates and Elasticities of Substitution with Additive Models in DEA

Marginal rates and elasticities of substitution are derived from the optimal slack values obtained from modified versions of additive DEA models. Projection formulas are used to ensure that all points are on the efficient frontier as required for conformance with assumptions in micro-economics. The models used differ from standard versions in that slack values are allowed to be negative as well as positive in these additive models. This makes movement possible on efficiency frontiers, where improvement in some inputs or outputs requires worsening other inputs or outputs. A new definition is therefore introduced in which efficiency is attained only if the value of the worsenings is exactly offset by the value of the improvements. This includes, but is not restricted to, the case in which all slacks must be zero for full attainment of efficiency—as in standard versions of additive models.     

Larger,counter-intuitive and lasting – The PSM role in responding to the COVID-19 pandemic,exploring opportunities for theoretical and actionable advances

PSM has played an important role in the initial mitigation of risks caused by the COVID-19 pandemic. We explore the nature and scope of this role and develop a roadmap for PSM contributions towards greater supply chain resilience. We find that the role of PSM is (1) multidimensional; responding to supply risks but also to demand and logistics risks, (2) counter to game theory; collaboration increased instead of decrease, (3) multi-stage; beyond the initial response the hardest change efforts are still ahead. The pandemic is accelerating the journey towards future-proof PSM but not necessarily revolutionizing the future of PSM.     

Structural Change in Poland, 1980–90: Evidence from Social Accounting Multipliers and Linkage Analysis

The 1980s and the beginning of the 1990s have witnessed a period of economic reforms in Poland. The paper uses aggregated social accounting multipliers to assess whether any structural change at a macro-economic level has taken place in this period. Linkage analysis is adopted to evaluate intersectoral reallocation of resources. The results support the view that some macro-economic adjustment has taken place but they do not provide evidence of significant intersectoral shifts.     

A Quasi-Malmquist Productivity Index

The Malmquist productivity index is based on distance functions, which are reciprocals of radial Debreu-Farrell efficiency measures, and which have a number of desirable properties. Linear programming techniques are frequently employed to calculate the efficiency measures. However these techniques can leave slacks, which constitute a non-radial form of inefficiency which is not incorporated into the analysis. Thus a radial efficiency measure overstates true efficiency, the reciprocal distance function understates the distance to the relevant efficient subset, and the Malmquist productivity index is adversely affected, although in an analytically indeterminate direction. This has led us to consider a new definition of one-sided efficiency, and to develop a new nonradial efficiency measure which incorporates all slacks on the selected side. Replacing conventional radial efficiency measures with our new non-radial efficiency measures generates what we call a quasi-Malmquist productivity index. We illustrate our quasi-Malmquist productivity index with an application to productivity change in Spanish banking.     

Environmental Policy,Sustainable Development,Governance Mechanisms and Environmental Performance

We investigate the effects of environmental policy (Climate Change Act – CCA), sustainable development frameworks (Global Reporting Initiative – GRI; UN Global Compact – UNGC) and corporate governance (CG) mechanisms on environmental performance (carbon reduction initiatives – CRIs; actual carbon performance – GHG emissions) of UK listed firms. We use the generalized method of moments (GMM) estimation technique to analyse data consisting of 2245 UK firm‐year observations over the 2002–2014 period. First, we find that the CCA has a positive effect on CRIs, and this effect is stronger in better‐governed firms. Second, we find that the GRI‐based framework is positively associated with CRIs. Third, we find that firms with poor CG structures have lower actual carbon performance compared with their better‐governed counterparts. Overall, our evidence suggests that firms can symbolically conform to environmental policy (CCA) and sustainable development frameworks (GRI, UNGC) by engaging in CRIs without necessarily improving actual environmental performance (GHG emissions) substantively. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Fiscal Foresight,Limited Information and the Effects of Government Spending Shocks

We quantify the impact of government spending shocks in the US. Thereby, we control for fiscal foresight, a specific limited information problem (LIP) by utilizing the narrative approach. Moreover, we surmount the generic LIP inherent in vector autoregressions (VARs) by a factor‐augmented VAR (FAVAR) approach. We find that a positive deficit‐financed defence shock raises output by more than in a VAR (e.g. 2.61 vs. 2.04 for peak multipliers). Furthermore, our evidence suggests that consumption is crowded in. These results are robust to variants of controlling for fiscal foresight and reveal the crucial role of the LIP in fiscal VARs.     

The more the merrier? Network portfolio size and innovation performance in Nigerian firms

A positive relationship between firms' networking activities and innovativeness has been consistently established in the literature on innovation. However, studies considering different innovation types, and on developing countries are scarce. This paper addresses questions concerning the relationship between networking strategies and innovativeness of firms, using innovation survey data on Nigerian firms. Quantile regression is applied to trace the link between portfolio size and innovation at different levels of innovative success. The results show a positive relationship between a firm's innovation performance and the size of its networking portfolio. This relationship varies across different innovation types and with increasing innovation performance. The findings suggest that the widely accepted portfolio approach to external search for knowledge is not necessarily always the best—its utility depends on the firm's current level of innovative success. This poses a challenge for open innovation.     

Investigating the impact of excess zeros on hurdle‐generalized Poisson regression model with right censored count data

Typically, a Poisson model is assumed for count data. In many cases, there are many zeros in the dependent variable, thus the mean is not equal to the variance value of the dependent variable. Therefore, Poisson model is not suitable anymore for this kind of data because of too many zeros. Thus, we suggest using a hurdle‐generalized Poisson regression model. Furthermore, the response variable in such cases is censored for some values because of some big values. A censored hurdle‐generalized Poisson regression model is introduced on count data with many zeros in this paper. The estimation of regression parameters using the maximum likelihood method is discussed and the goodness‐of‐fit for the regression model is examined. An example and a simulation will be used to illustrate the effects of right censoring on the parameter estimation and their standard errors.     

Exploring the effect of gender diversity in MFIs during turbulent periods

Abstract

Gender diversity is generally recognized as relevant in microfinance, and the relationship between gender diversity and firms’ performance has received attention in academic literature. The above-mentioned relationship has not been addressed until now in the microfinance industry specifically. This study seeks to explain the role played by gender diversity in the workforce of microfinance institutions (MFIs) during turbulent periods in the firms’ performance. The study analyses data from 555 ratings of 185 MFIs from MicroFinanza Rating, a leading microfinance rating agency. The analysis shows that the number of women on the staff of MFIs is significantly and positively associated with both the Return on Equity and Operational Self-Sufficiency of MFIs, indicating a positive impact of gender diversity on firms’ performance.     

Detecting Financial Collapse and Ballooning Sovereign Risk

This paper proposes a new model for capturing discontinuities in the underlying financial environment that can lead to abrupt falls, but not necessarily sustained monotonic falls, in asset prices. This notion of price dynamics is consistent with existing understanding of market crashes, which allows for a mix of market responses that are not universally negative. The model may be interpreted as a martingale composed with a randomized drift process that is designed to capture various asymmetric drivers of market sentiment. In particular, the model is capable of generating realistic patterns of price meltdowns and bond yield inflations that constitute major market reversals while not necessarily being always monotonic in form. The recursive and moving window methods developed in Phillips, Shi and Yu (2015a,b; PSY), which were designed to detect exuberance in financial and economic data, are shown to have detective capacity for such meltdowns and expansions. This characteristic of the PSY tests has been noted in earlier empirical studies by the present authors and other researchers but no analytic reasoning has yet been given to explain why methods intended to capture the expansionary phase of a bubble may also detect abrupt and broadly sustained collapses. The model and asymptotic theory developed in the present paper together explain this property of the PSY procedures. The methods are applied to analyse S&P 500 stock prices and sovereign risk in European Union countries over 2001–16 using government bond yields and credit default swap (CDS) premia. A pseudo real‐time empirical analysis of these data shows the effectiveness of the monitoring strategy in capturing key events and turning points in market risk assessment.     

A directional slacks-based measure of technical inefficiency

Radial measures of efficiency estimated using linear programming (LP) methods can be biased since slack in the constraints defining the technology suggests that at least one input can be reduced, or one output can be expanded, even though a firm is deemed to be “technically efficient.” In this paper, we propose a directional slacks-based measure of technical inefficiency to account for the potential of slack in technological constraints. When no such slacks exist, directional slacks-based inefficiency collapses to the directional technology distance function. Our proposed measure helps to generalize some of the existing slacks-based measures of inefficiency. We examine the financial services provided by Japanese cooperative Shinkin banks, and estimate their inefficiency during the period 2002–2005. This inefficiency declined slightly during the period. We thus propose that slack is an important source of inefficiency which is often not captured by the directional technology distance function.     

Creating an Environment for Economic Growth: Creativity,Entrepreneurship or Human Capital?

Scholars and policymakers interested in the growth and prosperity of regions have long recognized that talent and knowledge are fundamental. Yet the question is what types of talent are needed in a growing twenty‐first‐century economy: human capital, creativity and innovation, or entrepreneurship? The latter we define broadly to include any type of risk taking, and not only radical innovation. The literature does not clearly point to one factor as being the most essential. This study assesses this question separately for rural and urban United States (US) counties. We find that human capital––measured by educational attainment––is considerably more conducive to employment growth than the share of creative occupations. Likewise, the share of small and medium businesses is also very conducive to local growth, although this does not apply to the self‐employment share. Rural and urban areas experience similar patterns, although the magnitude thereof tends to be larger for urban counties, whereas high‐technology employment share has had a positive effect in rural areas. Policy conclusions suggest that enhancing small business development and increasing educational attainment are the two strategies that are most likely to succeed.     

Regulatory focus,environmental turbulence,and entrepreneur improvisation

Improvisation is increasingly recognized as a critical strategy used by entrepreneurs for effectively dealing with unexpected events. Nevertheless, limited effort has been exerted in the investigation of the antecedents of entrepreneur improvisation. This study proposes and analyzes regulatory focus as an important antecedent of entrepreneur improvisation, and examines the moderating role of environmental turbulence in this relationship. Data are obtained from a two-wave survey of 99 entrepreneurs in the largest economic area in China. Empirical results indicate that promotion focus (but not prevention focus) is significantly related to entrepreneur improvisation. Furthermore, environmental turbulence significantly moderates the relationship between prevention focus and entrepreneur improvisation. These findings advance the understanding of entrepreneur improvisation and regulatory focus theory, and provide practical implications for entrepreneurs, investors and boards of directors.