Dynamic factor model with infinite‐dimensional factor space: Forecasting

The paper compares the pseudo real‐time forecasting performance of three dynamic factor models: (i) the standard principal component model introduced by Stock and Watson in 2002; (ii) the model based on generalized principal components, introduced by Forni, Hallin, Lippi, and Reichlin in 2005; (iii) the model recently proposed by Forni, Hallin, Lippi, and Zaffaroni in 2015. We employ a large monthly dataset of macroeconomic and financial time series for the US economy, which includes the Great Moderation, the Great Recession and the subsequent recovery (an update of the so‐called Stock and Watson dataset). Using a rolling window for estimation and prediction, we find that model (iii) significantly outperforms models (i) and (ii) in the Great Moderation period for both industrial production and inflation, and that model (iii) is also the best method for inflation over the full sample. However, model (iii) is outperformed by models (ii) and (i) over the full sample for industrial production.     

Corporate Sustainable Development: is ‘Integrated Reporting’ a Legitimation Strategy?

In the field of sustainability reporting (SR), the so‐called ‘integrated report’ (IR) is gaining momentum. In spite of its voluntary nature, a growing number of firms are adopting IR by participating in the International Integrated Reporting Council (IIRC) Pilot Programme. Stimulated by concerns on the use of SR as a legitimation strategy, the paper investigates whether the decision to adopt an IR stems from the need to repair legitimacy threats. By showing that IR adopters have significantly higher Bloomberg ESG disclosure ratings relative to non‐adopters, we reject the hypothesis of firms adopting IR as a response to a poor rating. Additionally, we show that other proxies of legitimacy pressures (size, leverage, profitability, industry) do not play a role in explaining IR adoption. Overall, our evidence suggests that corporate engagement in IR is not a matter of strategic legitimation. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

A Bayesian Approach to Improve Estimate at Completion in Earned Value Management

Forecasting represents a core project management process. Estimates at completion in terms of cost and schedule provide essential data and advice to the project team in order to lead and control the project and implement suitable corrective measures. In order to improve the forecasting process, a Bayesian model has been developed within the earned value management framework aiming to calculate a confidence interval for the estimates of both cost and schedule at the completion of the project. The model is based on the integration of data records and qualitative knowledge provided by experts. The model has been tested in an oil and gas project.     

A Conceptual Regulatory Framework for the Design and Evaluation of Complex,Participative Cultural Planning Strategies

The current hype about culture‐led local development models is causing an increasing interest in cultural policies in the broader context of urban policy. This is not necessarily a transitory situation bound to fade once the hype is over. Under certain conditions, there is room to believe that culture may indeed become a main development driver of urban systems. For this to happen, however, it is necessary to abandon simple mono‐causal developmental schemes (such as the ‘creative class’ model) and look for more articulated approaches. This calls in turn for a complex systems‐based conceptual framework that is at the same time rich enough to capture the complexity of the interdependences among policy and state variables, and manageable enough to be of practical use, not only for policy design professionals but also for local stakeholders who want to take part in collective decision‐making processes. Inclusiveness and collective decision making are almost unavoidable in the case of cultural planning strategies, as the social sustainability of culture‐based value creation processes crucially depends on boosting the level of access to cultural opportunities by local residents. In this article we present an approach that may be a tentative first step in this direction.     

The emergence of career boundaries in unbounded industries: career odysseys in the Italian New Economy

The main objective of this research1 was to study boundaries to the ‘boundaryless career’ in a novel context. Our empirical study focused on career paths leading top managers to enter emergent firms. We collected data on professional histories of a sample of top managers who operated in firms listed at the ‘Nuovo Mercato’ (New Market), the Italian equivalent of the NASDAQ. We demonstrate the existence of two major kinds of boundaries: competence-based (in the form of industry boundaries) and relation-based (in the form of professional network boundaries). A second objective of our research was to identify dominant individual career logics and to connect different career logics to the boundaryless career concept. Our data reveal the dominance of the evolutionary career logic.     

The decision to invest in a low-wage country: Evidence from Italian textiles and clothing multinationals

In this paper we investigate the firm-specific factors that account for the decision to invest in low-wage countries on the part of Italian firms in the textiles and clothing sector. This analysis is motivated by the fact that our survey data show, between 1990 and 1997, a decline of average employment in parent companies, while that in subsidiaries grew substantially. However, correlation and regression analysis show that employment in parent companies that invested in low-wage countries only seems to be negatively related with employment abroad. Our hypothesis is that investments in cheap labour countries are mainly cost-driven and are undertaken by firms that focus on a low-quality, low-cost strategy. We test this hypothesis through a probit analysis. The evidence suggests that investments to cheap labour countries are more likely to be of a vertical type, being relatively more labour-intensive compared with the parent company. Our hypothesis seems to be confirmed empirically. Investments in low-wage countries are more likely to generate abundant intra-firm trade and to be undertaken by firms with low shares of skilled employment.     

A Remark on Voters' Rationality in a Model of Representative Democracy

Voting games are characterized by the emergence of dominated strategies, that would be iteratively deleted by rational players. In this note we show, via an example, how applying iterated dominance restricts the set of equilibrium outcomes in Besley and Coate's (1997) citizen-candidate model of representative democracy.     

On the speed of convergence of some urn designs for the balanced allocation of two treatments

The present paper deals with sequential urn designs for the balanced allocation of two treatments.Wei (1977, 1978b) was among the first authors to suggest an algorithm based on the probabilistic properties of the generalized Friedman urn and recently Chen (2000) has suggested the Ehrenfest design, namely a sequential procedure based on the Ehrenfest urn process. Some extensions of these algorithms are discussed: in particular we focus on a generalization of Chen's procedure, called the Ehrenfest-type urn designs, recently introduced by Baldi Antognini (2004). By analyzing some convergence properties of the Ehrenfest process, we show that for an Ehrenfest-type urn it is possible to evaluate the variance of the design at each step and analyze the convergence to balance. Furthermore, the generalized Friedman urn and the Ehrenfest-type procedures are compared in terms of speed of convergence. The Ehrenfest design proposed by Chen converges to balance faster than the other urn procedures.