Estimating persistent and transient technical efficiency and their determinants in the presence of heterogeneity and endogeneity

We develop an estimation procedure that generates consistent estimates of the technology parameters, long-run (persistent) and short-run (transient) technical inefficiencies and the marginal effects of their determinants for the stochastic frontier model developed by Colombi et al. (2014, Journal of Productivity Analysis 42, 123) and Kumbhakar et al. (2014, Journal of Productivity Analysis 41, 321). Our approach accounts for three sources of potential endogeneity: (i) unobserved heterogeneity; (ii) simultaneity of input use with both types of technical efficiency; (iii) potential correlation of the noise term with the regressors. Using this approach we examine the effect of direct payments and farm size on the persistent and transient technical efficiency of French crop farms before and after the European Union's Common Agricultural Policy decoupling reform of 2003. Our results show that subsidy payments per hectare of utilised agricultural land had a significant positive effect on persistent technical efficiency and a significant negative effect on transient technical efficiency during the period before decoupling. For the period after the reform, the effect of subsidies is found to be significantly negative for persistent technical efficiency and insignificant for transient technical efficiency. The overall effect of subsidies on technical efficiency is found to be negative in both periods, albeit substantially lower in the period after decoupling. The effect of farm size on technical efficiency is found to be significant only for the period prior to the reform: it reduced persistent technical inefficiency but increased transient technical inefficiency during that period.     

Identification of technological structures using patent statistics

This paper studies the use of patent statistics in identifying four aspects of technological structure, namely, the potential knowledge pool, cumulativeness, inter-firm homogeneity in technology levels, and the scope of innovations. The firms are sampled from the chemical (CHEM), the computer (COM) and the electrical and electronic (EE) industries worldwide. Using the proxies defined, we find that (i) the contributions of intra-industry spillover are low, at 12%, 10%, and 9% for the three industries respectively; (ii) they can internalize 15%, 19% and 13% of their previous research efforts respectively; and (iii) a positive relationship between knowledge spillover and technology overlap, and between scope of innovation and number of patents being cited in future.     

The relationship between capital and liquidity prudential instruments

Journal of Regulatory Economics - Basel III introduced unweighted capital standard and new regulatory liquidity standards to complement the revised risk-weighted capital requirements. This change...     

The impact of mentoring quality on protégés' organization‐based self‐esteem and proactive behavior: The moderating role of traditionality

Based on self‐consistency theory, this study examined the relationship between mentoring quality as perceived by protégés and protégés' proactive behavior. It focused on the mediating role of organization‐based self‐esteem (OBSE) and the moderating role of traditionality. To examine these relationships, we administrated three‐wave surveys to 237 subordinate–supervisor dyads in a construction enterprise. The results of hierarchical linear modeling demonstrated that (a) mentoring quality and proactive behavior had a positive relationship; (b) OBSE mediated this relationship; and (c) traditionality strengthened both the relationship between mentoring quality and OBSE and the indirect effect of mentoring quality on proactive behavior via OBSE. Our findings have theoretical and practical implications for research on mentoring and proactive behavior.     

Trade liberalization and the environment: The case of intra-industry trade

Abstract

While a large body of literature examines the environmental impact of trade on the environment, this discussion focuses largely on the context of inter-industry trade. Empirical evidence has long suggested that an increasing share of international trade takes the form of intra- rather than inter-industry trade. In an attempt to fill this gap, the present paper uses a price-setting duopoly model of intra-industry trade to highlight the environmental consequences of trade liberalization when oligopolistic rivalry rather than comparative advantage drives international trade. We find that the environmental impact of trade liberalization depends mostly on two factors, namely, on the nature of pollution (i.e. whether it is local, transboundary or global) and on which country liberalizes trade (i.e. whether it is the ‘clean’ country or the ‘dirty’ country).     

Heterogeneity in Production Structures and Efficiency: An Analysis of the Czech Food Processing Industry

The present study analyses firm heterogeneity and sector‐specific technology. The theoretical model stands on the assumption of maximizing the return on capital and overcomes problems involved in simple profit maximization. The results show that a random parameter model with sector dummies and heteroscedasticity is the most appropriate model specification for distinguishing firm‐level and sector‐level efficiency and heterogeneity. The heterogeneity among firms as well as among sectors was found to be an important characteristic in Czech food processing. This holds for production technology as well as for technical efficiency. Moreover, the decomposition of total variance shows that intrasectoral differences in technologies are much more pronounced than the intersectoral differences. The differences in intrasector heterogeneity also suggest that the food processing industry will be subject to accelerated structural change in the coming years. Moreover, we found that on average the companies highly exploit their production possibilities. However, some companies cannot keep pace with competitors. Because leapfrogging does not appear to be present in selected industries (except for Milling), structural change is expected to occur in such a way that the most successful companies will strengthen their position.     

Do Conspicuous Consumers Pay Higher Housing Premiums? Spatial and Temporal Variation in the United States

This study is the first to examine the relationship between conspicuous demand and housing price dynamics. We hypothesize that conspicuous consumers would want high‐end homes to signal their wealth and this housing consumption behavior would induce greater deviations from fundamental house prices. We test this by using a unique dataset that matches the consumers’ appetite for nonhousing luxury goods from Google Insights for Search to housing premiums that they pay for high‐end houses in U.S. Metropolitan Statistical Areas (MSAs) during 2004–2011. The estimation results demonstrate that controlling for a wide range of MSA demographic and economic characteristics, conspicuous demand has a significant, positive relationship with housing premiums. This relationship varies spatially and temporally. Conspicuous demand has a stronger relationship with a price increase in high‐end homes in MSAs with a steady, higher housing premium than in MSAs with a volatile, lower premium during the boom period. In MSAs with a steady, higher housing premium, the relationship remains significant even during the bust period, potentially contributing to maintaining higher housing premiums.     

Co-opted directors,gender diversity,and crash risk: evidence from China

Review of Quantitative Finance and Accounting - This study examines how the composition of the board of directors at Chinese firms affects crash risk. The results indicate that co-opted directors...