The determinants of firm diversification in UK quoted companies

This paper examines the role of resource-based and governance factors in determining the boundaries of UK quoted companies, measured by both the probability and intensity of market diversification. Using a panel of over 2000 firms for the period 1988 to 2001 it is found that firm-level heterogeneity and industry characteristics account for the variability in diversification behaviour and that resource-based and governance factors interact in a complex manner not necessarily fully explained by the theoretical literature. The results also indicate that the degree of data aggregation has significant implications for the empirical modelling of market diversification.     

Panel Unit-Root Tests of OECD Stochastic Convergence

This paper uses three panel unit-root tests and finds that real per capita GDP for OECD countries and a European subsample converge stochastically for the period 1948–87 but not for the entire sample of 1900–87. For the postwar period, the differential in income gaps or speed of adjustment is eliminated at an annual rate of 4–8% for OECD economies, and 6–9% for European economies.     

Constrained Kalman Filtering: Additional Results

This paper deals with linear state space modelling subject to general linear constraints on the state vector. The discussion concentrates on four topics: the constrained Kalman filtering versus the recursive restricted least squares estimator; a new proof of the constrained Kalman filtering under a conditional expectation framework; linear constraints under a reduced state space modelling; and state vector prediction under linear constraints. The techniques proposed are illustrated in two real problems. The first problem is related to investment analysis under a dynamic factor model, whereas the second is about making constrained predictions within a GDP benchmarking estimation.     

Entry Strategies and Market Performance Causal Modeling of a Business Simulation

A key decision faced by marketing managers is the development of entry strategies for new markets. In addition to selecting which product market to enter, the manager must make decisions about the entry strategy itself. The entry strategy, whether managed actively or passively, affects the entrant's performance. In this article, Donna Green and Adrian Ryans discuss the three major components of an entry strategy: the timing of entry, the magnitude and areas of investment and the basis for competitive emphasis. They report that very little empirical research has focused on relationships between entry strategy and eventual product performance.     

On inferring standard deviations from path dependent options

Path dependent option prices are employed to derive implied standard deviations of the underlying security price process without recourse to numerical procedures. We empirically illustrate our methodology by inferring the volatility of gold prices.     

The wages of BMI: Bayesian analysis of a skewed treatment–response model with nonparametric endogeneity

We generalize the specifications used in previous studies of the effect of body mass index (BMI) on earnings by allowing the potentially endogenous BMI variable to enter the log wage equation nonparametrically. We introduce a Bayesian posterior simulator for fitting our model that permits a nonparametric treatment of the endogenous BMI variable, flexibly accommodates skew in the BMI distribution, and whose implementation requires only Gibbs steps. Using data from the 1970 British Cohort Study, our results indicate the presence of nonlinearities in the relationships between BMI and log wages that differ across men and women, and also suggest the importance of unobserved confounding for our sample of males. Copyright © 2008 John Wiley & Sons, Ltd.     

UK Assessment: Can Recession be Avoided?

There is a growing danger that the UK will suffer a serious recession in 1999. In this article, Adrian Cooper assesses the risks to the OEF/LBS forecast and considers what steps policy-makers might take to support demand and activity. With the weakness of consumer and business confidence currently posing the biggest threat, they must be seen to be decisive, with further substantial interest rate cuts essential.