Statistical efficiency in the linear combination of forecasts

In seeking an efficient combination of forecasts which minimises the forecast error variance, many methods have been suggested. Through analysis, simulation and case studies, this paper seeks to develop insights into the statistical circumstances which influence the relative accuracy of six of these methods. The six methods chosen have all been advocated in various publications and consist of ‘equal weighting’ (i.e., pooled average), ‘optimal’ (i.e., error variance minimising), ‘optimal with independence assumption’ (i.e., error variance minimising assuming zero correlation between individual forecast errors) and three variations on the formulation of a Bayesian combination based upon posterior probabilities. The statistical circumstances reflected varying conditions of relative forecast errors, error correlations and outliers.     

PUBLIC EXPENDITURE CUTS AND JOB LOSS: A UNION RESPONSE

This article is based upon the findings of a survey which was directed at assessing the response of a public sector union to job loss amongst its members. The study was prompted by the anticipated effects on the union of cuts in public expenditure announced by Mrs. Thatcher's Government in 1979 and 1980. The purpose of the survey was, first, to investigate the processes through which job loss occurred and, secondly, to examine the ways in which the union contested those managerial decisions that affected the job security of its members. The main conclusion of the paper is that union resistance has been relatively sparse and it is suggested that this may be in part explained by the way in which job loss occurred. Of particular importance in this context is the loss of jobs through what we have called ‘job erosion’.     

Does acquirer cash level predict post-acquisition returns?

This paper investigates whether an acquirer’s pre-announcement cash level can predict post-acquisition returns. Harford (1999, Journal of Finance, 54, 1969–1997) shows that some cash-rich acquirers have lower announcement period returns than other acquirers, suggesting the market partially anticipates poor future performance. This paper shows that the acquirer’s cash level is also strongly and negatively predictive of post-acquisition returns, indicating that the announcement response is incomplete. Post-acquisition return on net operating assets (RNOA) is significantly decreasing in acquirer cash, suggesting that the market responds to subsequent poor operating performance as it is reported. Overall, these results are consistent with the market’s inattention to a less prominent accounting signal (acquirer cash) but attentiveness to a more prominent accounting signal (RNOA), as proposed by Hirshleifer and Teoh (2003, Journal of Accounting Economics, 36, 337–386).

Role conflict and changing heritage practice: ancestral tourism in Scotland

ABSTRACT

Developing mutually beneficial outcomes in service encounters can be challenging due to resource asymmetry within co-created experiences. Such encounters can result in role conflict for service providers. Limited attention has been paid to the effect on service providers of highly collaborative exchanges which require specific customisation. An example of this is ancestral tourism, a dimension of heritage consumption, in which visitors actively participate in the co-creation of experience at museums, archives and related heritage sites. These institutions, previously seen as repositories of historical information, now act as conduits for visitors to investigate their ancestral past. The purpose of this study is to explore the relationship between changing professional discourse in the cultural heritage sector, specifically ancestral tourism, and role conflict amongst staff. Through interviews conducted with professionals, the extent and outcomes of role conflict in complex and collaborative exchanges are explored.     

Leverage and acquisition performance

From an agency perspective, leverage may have a positive effect on firm performance by limiting managers’ ability to allocate resources to unproductive uses, as well as increasing pressure on them to perform well. Consequently, we might expect leverage to have a positive impact on acquisition performance. However, the increased risks associated with higher leverage, combined with the other risks inherent in an acquisition, could also cause managers to take actions to reduce risk even if doing so is contrary to value maximization. High debt levels might also limit managerial discretion over how resources are allocated during the acquisition process, which can have a negative impact on performance. We investigate the effect of leverage on post-acquisition stock performance and find that post-acquisition performance is decreasing in leverage brought by the target firm and in additional leverage taken on to execute the acquisition. This negative performance is clustered among acquirers who are already financially constrained. Our results are robust to various returns measurement methodologies and to the inclusion of several controls known to predict future returns. Our results also represent viable investment strategies, and suggest that the market underestimates difficulties that arise from acquisition-related increases in leverage.     

Organizational commitment and service delivery: evidence from an industrial setting in the UK

In this paper the links between organizational commitment and the delivery of service quality are explored. Using data from a survey of contact-level employees within an industrial service organization, the hypotheses that the antecedents to service quality do indeed drive the service delivery gap, that there is a relationship between organizational commitment and service delivery and that the antecedents of the service delivery gap are related to organizational commitment are tested. All three hypotheses are accepted, although the link between organizational commitment and service delivery is not very strong. However, it is found that organizational commitment is strongly tied to role ambiguity and teamwork as antecedents of the service delivery gap.     

Japanese spirit,Western economics: the continuing salience of economic nationalism in Japan

This paper outlines the contours of a new research agenda for the analysis of food price crises. By weaving together a detailed quantitative examination of changes in corporate profit shares with a qualitative appraisal of the restructuring in business control over the organisation of society and nature, the paper points to the rapid ascendance of a new power configuration in the global political economy of food: the Agro-Trader nexus. The agribusiness and grain trader firms that belong to the Agro-Trader nexus have not been mere ‘price takers’, instead they have actively contributed to the inflationary restructuring of the world food system by championing and facilitating the rapid expansion of the first-generation biofuels sector. As a key driver of agricultural commodity price rises, the biofuels boom has raised the Agro-Trader nexus's differential profits and it has at the same time deepened global hunger. These findings suggest that food price inflation is a mechanism of redistribution.     

Reflections on Social Economics in a Diverse and Open Economics

Many economists adopt a critical stance on cooperatives. One example is the claim that larger membership in cooperative banks is detrimental to performance. We re-examine this earlier finding by drawing from a richer and broader conceptual framework than used previously and conclude that in recent years, the relationship between membership and performance may be positive. In our empirical analysis, we use new data for Finnish cooperative banks and, compared to earlier work, develop an alternative measure for membership and employ improved estimation methods. A positive relationship between membership and performance in financial cooperatives is consistently found. We discuss our findings in light of an emerging body of theoretical and empirical work on cooperatives, especially for financial cooperatives, and argue that a new view of cooperatives is warranted.     

REVEALED PREFERENCE TESTS OF THE STOLPER?SAMUELSON THEOREM

This article conducts revealed preference tests of the Stolper-Samuelson theorem. If the Stolper?Samuelson theorem holds, one would expect to find a country's relatively scarce factor of production (in this case labor) harmed from trade liberalization and thus opposing trade liberalization. The reverse would be true for its relatively abundant factor of production (in this case capital). Therefore, this article examines representations made before the Canadian House of Commons committee studying the Canadian?U.S. Free Trade Agreement. Assuming representations coincide with the self-interest of the presenters, the effects of trade liberalization on factor returns are inferred. It finds strong support for the proposition that labor behaves as the Stolper?Samuelson theorem would predict and qualified support for capital behaving as the Stolper?Samuelson theorem would predict.     

The significance of employee skill in flexible work organizations

Pressures for flexibility among enterprise employees have been explained in previous studies to be largely the result of exogenous factors driven by market pressures for improved product variety, quality and service. This paper derives new insights into the concept of flexibility based on the premise that manufacturing systems based on traditional hierarchical control have significantly given way to enterprise practices that stress a direct connection between employee skill enhancement, market outcomes and rewards. Through an analysis of the 1998 Workplace Employee Relations Survey (WER98) the study provides a more substantive explanation of the variables associated with flexibility, which have become significant in the transition process towards modern enterprise practices. Flexibility is demonstrated to be not only market driven but also dependent on endogenous factors directly promoted by management that stress workforce participation, collaborative working and multifaceted skills development. We provide empirical support for these arguments from an analysis of WERS98.