Value versus Growth: The International Evidence

Value stocks have higher returns than growth stocks in markets around the world. For the period 1975 through 1995, the difference between the average returns on global portfolios of high and low book-to-market stocks is 7.68 percent per year, and value stocks outperform growth stocks in twelve of thirteen major markets. An international capital asset pricing model cannot explain the value premium, but a two-factor model that includes a risk factor for relative distress captures the value premium in international returns.     

Problems with detecting assumed mediation using the hierarchical multiple regression strategy

In human resource management (HRM) and allied fields (e.g., organizational behavior, management, and industrial and organizational psychology), tests of mediation are frequently conducted using the hierarchical multiple regression (HMR) strategy of Baron and Kenny [Baron, R. M., & Kenny, D. A. (1986). The moderator–mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51, 1173–1182]. Although previous research has identified a number of serious problems with this approach, the present study adds to the literature by identifying yet additional problems with its use in inferring the existence of mediation. Using a statistical simulation, we found that certain patterns of correlation coefficients guarantee inferences about mediation, whereas other patterns preclude such inferences. On the basis of various analyses including logistic regression and inspection of three-dimensional plots, we identified patterns of correlation coefficients needed to satisfy Baron and Kenny's [Baron, R. M., & Kenny, D. A. (1986). The moderator–mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51, 1173–1182] conditions for inferring mediation. The same patterns have no necessary relation to actual causal connections among variables in mediation models. Moreover, as a consequence of the failure of the HMR strategy to detect mediating effects, many instances of actual mediation in HRM and allied fields may have gone undetected. In view of the foregoing, we conclude that the HMR strategy should no longer be used in testing for mediation.     

Poisson Regression for Clustered Data

We compare five methods for parameter estimation of a Poisson regression model for clustered data: (1) ordinary (naive) Poisson regression (OP), which ignores intracluster correlation, (2) Poisson regression with fixed cluster‐specific intercepts (FI), (3) a generalized estimating equations (GEE) approach with an equi‐correlation matrix, (4) an exact generalized estimating equations (EGEE) approach with an exact covariance matrix, and (5) maximum likelihood (ML). Special attention is given to the simplest case of the Poisson regression with a cluster‐specific intercept random when the asymptotic covariance matrix is obtained in closed form. We prove that methods 1–5, except GEE, produce the same estimates of slope coefficients for balanced data (an equal number of observations in each cluster and the same vectors of covariates). All five methods lead to consistent estimates of slopes but have different efficiency for unbalanced data design. It is shown that the FI approach can be derived as a limiting case of maximum likelihood when the cluster variance increases to infinity. Exact asymptotic covariance matrices are derived for each method. In terms of asymptotic efficiency, the methods split into two groups: OP & GEE and EGEE & FI & ML. Thus, contrary to the existing practice, there is no advantage in using GEE because it is substantially outperformed by EGEE and FI. In particular, EGEE does not require integration and is easy to compute with the asymptotic variances of the slope estimates close to those of the ML.     

Emotional arousal and entrepreneurial outcomes: Combining qualitative methods to elaborate theory

This qualitative study of innovators in the superyacht industry blends longitudinal content analysis with narrative case vignettes to extend nascent theorizing about the antecedents and consequences associated with the arousal of entrepreneurial emotion. The empirically grounded framework induced through our research offers two key theoretical elaborations. First, it extends the existing set of theorized antecedents by highlighting the overlooked roles played by dramatic performances (staged or improvised) and ambient conditions (project, actor and venue considerations). Second, it calls attention to the consequences of emotional arousal for such entrepreneurial outcomes as generating novel solutions to specific problems encountered during the creation process, developing innovative end products, and fostering a general context for innovation.     

Price integration in the Australian rock lobster industry: implications for management and climate change adaptation

Rock lobster fisheries are Australia's most valuable wild fisheries in terms of both value of production and value of exports. Different states harvest and export different lobster species, with most of the landings being sent to the Hong Kong market. A perception in the Australian lobster industry is that the different species are independent on the export market, such that a change in landings of one species has no impact on the price of the others. This study investigates the market integration of Australian exports to Hong Kong for the four species and different exporting states. Our results indicate all four species and producers/export states are perceived to be substitutes for one another, so that, in the long run, prices paid to operators in the industry will move together. The integrated nature of the Hong Kong export market for Australian lobster suggests that the potential impacts of alternative fisheries management and development strategies at state and species levels cannot be considered in isolation, at least from an economic perspective. In addition, impacts of external shocks affecting production in one state (e.g. climate change) can be expected to affect all Australian lobster fisheries.     

The Rural Environment Protection Scheme of the Republic of Ireland

Agricultural modernisation has had an impact on the Irish environment but official policy to address this developed only slowly. The reform of the EU CAP provided the incentive for the formulation of the Rural Environment Protection Scheme (REPS). This is a wide-ranging scheme to promote environmentally friendly farming through application of 11 measures and six supplementary measures. Significant characteristics of the REPS include its: universal availability, voluntary nature, comprehensiveness, payment limitation, tailoring to individual farms and inclusion of training. There has been a high level of adoption, with participation being greatest in the small-farm west with its cattle and sheep enterprises.     

Toward a Horizonal Theory of Justice: Efficiency,Equity, Rights and Capabilities in a Free Market Economy

The theory of planning horizons and their relation to pricing, conscience and learning has been explored in some detail in terms of efficiency attributes and ecological health (Jennings 2003, Journal of Economic Issues 39:365-373, 2005, 2007a, b, 2008a). This paper addresses the equity implications of planning horizons in terms of the social role and importance of justice, rights and capabilities in a free market economy. From my earlier work, cooperation—not competition—is seen as the means to longer and broader horizons in an efficiency frame, mitigating any alleged tradeoff against equity issues. The impact of longer horizons on fairness and justice in terms of intentions and outcomes along with rights and capabilities still remains unexplored. This paper reviews the normative aspects of planning horizons, showing how ethical and ecological conscience spreads with horizon effects, strengthening goals of fairness and the internalization of social effects. In this setting, capabilities and empowerment are enhanced by respect for human rights, as social conscience spreads through interhorizonal complementarities. The features of a long-horizon world differ from myopic contexts, specifically in the relation of efficiency to other goals. This paper examines that difference in terms of its equity aspects, with regard to social justice and the role of rights and capabilities in economic cultures.     

Bounded rationality,expectations, and child labour

This paper develops a model with overlapping generations, where the household's optimal fertility, child labour, and education decisions depend on the parents’ expectations or beliefs about the return to education. It is shown that there exists a range of parental income where the fertility rate is high and children participate in the labour market and receive an incomplete education if a parent believes the return to education is low. The act of participating in the labour market reduces the child's ability to accumulate human capital; thus, the action of sending a child into the labour market is sufficient to ensure that the parents’ initially pessimistic expectations are fulfilled. It is then shown that a one‐time policy intervention, such as banning child labour and mandatory education, can be enough to move a country from the positive child labour equilibrium to an equilibrium with no child labour.