Systems GMM estimates of the Feldstein–Horioka puzzle for the OECD countries and tests for structural breaks

A systems GMM estimation method is used to estimate the Feldstein–Horioka equation from 1960 to 2007 with a panel of 13 OECD countries. It is found that the Feldstein–Horioka puzzle exists in a weaker form with a much reduced saving retention coefficient. The Bretton Woods agreement in particular seems to have weakened the Feldstein–Horioka puzzle by significantly improving international capital mobility. In comparison the Maastricht agreement seems to have improved capital mobility only by a small magnitude. The Blundell and Bond systems GMM method and structural break tests of Mancini-Griffoli and Pauwels are used in this paper.     

The order of integration for quarterly macroeconomic time series: A simple testing strategy

An empirical example and a simulation study show that much more attention should be devoted to the practical issue of selecting the maximum admissible order of integration for quarterly macroeconomic time series. In fact, it is shown that when that order is too high, one may get (spurious) evidence for an excessive number of unit roots, resulting in an overdifferenced series. Besides introducing a simple and intuitive definition for the order of integration of quarterly time series, this paper also presents a simple testing strategy to determine that order for the case of macroeconomic data.Helpful comments and suggestions from João Santos Silva and Paulo Rodrigues are gratefully acknowledged. I am also grateful to two anonymous referees, whose comments and suggestions helped improving this paper. Obviously, the usual disclaimer applies. This work has also benefited from financial support from Fundação para a Ciência e Tecnologia (FCT), through Programa POCTI (ECO/33778/2000). A previous version of this paper was presented at the Royal Economic Society Conference, March 2002, Warwick.     

Too Small or Too Big to Survive: Foreign Direct Investment and Divestment in Breweries

The paper focuses on both the economic and noneconomic multilateral relationships inside and outside the TNCs’ own business networks in the processes of the firms’ internalization on the example of foreign direct investment and divestment in breweries in the UK and Poland. The mode of TNCs’ entry in breweries in the mature economy of the UK and transformation economy in Poland is less country specific and more associated with the international environment of network relationships. The paper presents both structures of the international networks connections as well as the ways they have been created. The system analysis is used.     

Country effect on firm performance: A multilevel approach

The debate about the impact of environmental constraints on firm performance in developing countries is relevant for business enterprises and governments. However, the academic literature offers limited empirical evidence comparing firm performance in emerging and developed countries. This paper performs a statistical analysis based on a sample of more than 10,000 firms in a 10-year span. A cross-classified 3-level hierarchical linear model allows the estimation of country, industry and country-industry interaction effects, which have roughly the same relative importance each. The analytical procedure is able to estimate the influence of each specific country on firm performance and produce a ranking of nations based on this effect. Country effects have a greater positive influence on firm performance in emerging countries than in more developed economies.     

On improving the least squares Monte Carlo option valuation method

This paper studies various possible approaches to improving the least squares Monte Carlo option valuation method. We test different regression algorithms and suggest a variation to estimating the option continuation value, which can reduce the execution time of the algorithm by one third. We test the choice of varying polynomial families with different number of basis functions. We compare several variance reduction techniques, and find that using low discrepancy sequences can improve the accuracy up to four times. We also extend our analysis to compound and mutually exclusive options. For the latter, we propose an improved algorithm which is faster and more accurate.     

Development of functional food with the participation of the consumer. Motivators for consumption of functional products

The purpose of the study was (1) to define the most important characteristics of functional food affecting purchasing decisions; (2) diagnose the importance of the healthful properties of functional food; (3) identify preferences for carriers (base product) and the importance of the functional components essential in the choice of functional products; and (4) get to know the motives by which consumers are guided when purchasing functional food. The data were collected through direct interview (n = 200). The research tool was a questionnaire divided into four sections. The first one included quality attributes. The second one included healthful properties, functional components and carriers. The third one concerned the motives for purchasing functional food and included the consequences and values. In the fourth section the participants were asked about gender, age and education. The results of this study allowed determining the most important attributes of functional food products. Among quality attributes the most important are safe food, natural product and healthy product. The most important organoleptic attributes include nice taste. Very important attributes of packaging and labelling include expiry date and information on the healthful properties of the product. The most important healthful properties are associated with the attributes (1) strengthens the immune system; (2) reduces the risk of certain cancers; (3) reduces the risk of cardiovascular diseases; (4) helps maintain the correct body weight; (5) strengthens eyesight; (6) improves memory; and (7) improves physical condition. The functional components concern mainly vitamins and minerals, omega‐3 fatty acids and dietary fibre. As the best base products, consideration was given to bread, dairy products, cereal products, mixtures of fruits and vegetables and meat products. In the motivation system there were distinguished functional consequences that included improvement of health, needs of the organism, and healthy eating and psychological consequences such as conscious choice and health promotion. The most important autotelic values include good health and long life, health safety, inner harmony, self‐respect and self‐confidence. The means to achieve these goals are responsibility for health and care for health. The study provides bases for a better understanding of the consumer's needs and optimization of activities related to the development and consumption of functional food. The results of this study may provide valuable support for actions connected with the promotion and marketing of food products.