The ex-post behavior of firms offering optimal employment contracts

The influential papers of Azariadas (1975) and Baily (1974) have clearly demonstrated that with imperfect labor mobility expected profit maximizing firms will offer employment contracts that will not result in profit maximizing behavior once the ‘state of nature’ is disclosed. This Letter shows that such firms will behave as if their objective were to maximize the expected utility of each individual worker subject to a profit target. The rule that emerges when there is unemployment will be shown to be formally equivalent to Meade's Rule for optimal population [Meade (1955, ch. 6)].     

Staggered prices in a utility-maximizing framework

We develop a model of staggered prices along the lines of Phelps (1978) and Taylor (1979, 1980), but utilizing an analytically more tractable price-setting technology. ‘Demands’ are derived from utility maximization assuming Sidrauski-Brock infinitely-lived families. We show that the nature of the equilibrium path can be found out on the basis of essentially graphical techniques. Furthermore, we demonstrate the usefulness of the model by analyzing the welfare implications of monetary and fiscal policy, and by showing that despite the price level being a predetermined variable, a policy of pegging the nominal interest rate will lead to the existence of a continuum of equilibria.     

Adapting and testing the Fama and French model,with some variations of company characteristics

We examine whether the Fama and French (1992) (F&F) model can be adapted to become a more versatile and flexible tool, capable of incorporating variations of company characteristics in a more dynamic form. For this, the risk factors are reconstructed at the end of each reading of monthly data. We argue that, over time, the evaluation of a company may change as a result of variations in its market price, size or book price, and we are aware that the F&F model does not accurately reflect these dynamics. Our results show that the adapted model is able to capture the behaviour of a greater number of stocks than the original F&F model and risk factors are more significant when building them through our procedure. In addition, we carry out these adaptations during a period of instability in financial markets.     

Network analysis of exchange data: interdependence drives crisis contagion

In this paper, we examine linear and nonlinear co-movements that appear in the real exchange rates of a group of 28 developed and developing countries. The matrix of Pearson correlation and Phase Synchronous coefficients have been used in order to construct a topology and hierarchy of countries by using the Minimum Spanning Tree (MST). In addition, the MST cost and global correlation coefficients have been calculated to observe the co-movements’ dynamics throughout the time sample. By comparing Pearson and Phase Synchronous information, a new methodology is emphasized; one that can uncover meaningful information pertaining to the contagion economic issue and, more generally, the debate surrounding interdependence and/or contagion in financial time series. Our results suggest some evidence of contagion in the Asian currency crises; however, this contagion is driven by previous and stable interdependence.     

Confirmatory factor analysis with missing data in a small sample: cognitive reserve in people with Down Syndrome

Quality & Quantity - The presence of missing data and small sample sizes are very common in social and health sciences. Concurrently to present a methodology to solve the small sample size and...     

Compative robustness of six tests in repeated measures designs with specified departures from sphericity

In this article we examine the behaviour of six univariate statistics for analyzing the data of a Split-plot factorial design. Except for the univariate analysis of variance, which assumes that the dispersion matrix underlying the data is spherical, the other five procedures assume absence of sphericity. However, they do so with a clear distinction between two alternatives, insofar as three of them presuppose an arbitrary correlation between the data and two presuppose serial autocorrelation. These six approaches were compared with regard to their robustness under multivariate normality in the absence of sphericity, both when there was serial autocorrelation and when there was underlying arbitrary correlation. In general, Monte Carlo comparisons show that when underlying the data there is a autoregressive stationary or decreasing structured non-stationary autoregressive process, the Hearne, Clark and Hatch procedure is the most robust. In the rest of the conditions studied, i.e., increasing structured non-stationarity autoregressive and arbitrary non-stationarity (autoregressive and with arbitrary correlation), the Greenhouse-Geisser and Lecoutre statistics display the best behaviour.     

The internationalisation of SMEs from China: The case of Ningxia Hui Autonomous Region

This paper aims to study the international expansion of small and medium-sized enterprises (SMEs) in an emerging economy. Mathews’ (2006: 5–27) linkage–leverage–learning (LLL) model is the framework applied to analyse the process of international expansion of SMEs. To operationalise the study of the barriers, the LLL model was linked to the work of Leonidou (2004: 279–302). The data was collected from 125 SMEs operating in Ningxia, China, and then analysed using multivariate regressions; the models used the firms’ export intensity at the regional, national and international level as dependent variables. Four models were run: two analysing the internal and external barriers hindering firms’ international expansion, and the other two models studying the characteristics of Chinese international companies (state funding and ownership) as independent variables. The results show that 12 of the barriers defined by Leonidou (2004) are hindering the expansion of Ningxia’s SMEs, that the ownership from the state does not play an important role in this expansion, and that the support from the state in the form of funds is helpful in the first stages of the expansion (regional level) and the funds from private sources are key to cross the country’s boundaries.     

Latin American retail: where modernity blends with tradition

Latin America's retail landscape has changed dramatically over the last 20 years. Attracted by deregulation and a sizable and growing market, modern retailers arrived looking for the next El Dorado. But signs of maturity appeared much before expected. Traditional retailers modernized their offer, while keeping their appeal to the emerging consumers. While chain retail has concentrated earlier than expected – and faster by the hand of crisis that are usual in emerging markets –, local chains have developed formats which add modernity to their understanding of their customers' base. By providing better access through convenience and credit to a broader range that even includes affordable design and quality, local chains are showing the way to the growing mass customers that form Latin America's new emerging middle class. And leveraging on this customer understanding, they are redefining concepts like convenience and crossing borders to grab the opportunity of the new emerging consumers. This article covers the evolution of retailing in Latin America over the past two decades, and provides insights on the segment that has brought the most significant growth: emerging consumers.