Impacts of alternative degrees of freedom corrections in two and three stage least squares

There is a lack of uniformity concerning the appropriate degrees of freedom to use in estimating simultaneous equations. This issue is examined through a Monte Carlo study comparing estimates and inferences obtained using alternative choices of degrees of freedom in two and three stage least squares. While 2SLS estimates do not depend upon this choice, 3SLS estimates do. However, in the study the choice had little impact on 3SLS estimates. But the results strongly suggest that approximate tests conventionally used are much more accurate for both methods if estimated variances account for lost degrees of freedom.     

The Market for Corporate Assets: Who Engages in Mergers and Asset Sales and Are There Efficiency Gains?

We analyze the market for corporate assets. There is an active market for corporate assets, with close to seven percent of plants changing ownership annually through mergers, acquisitions, and asset sales in peak expansion years. The probability of asset sales and whole-firm transactions is related to firm organization and ex ante efficiency of buyers and sellers. The timing of sales and the pattern of efficiency gains suggests that the transactions that occur, especially through asset sales of plants and divisions, tend to improve the allocation of resources and are consistent with a simple neoclassical model of profit maximizing by firms.     

Due diligence and the demand for electricity: A cautionary tale

In 1983, the Washington Public Power Supply System (WPPSS) defaulted on tax-free revenue bonds issued to construct two of its five nuclear power plants. In subsequent litigation, the plaintiffs alleged that the bonds had been fraudulently issued because WPPSS and the other defendants should reasonably have known and disclosed that there was substantial uncertainty about the ability to meet the financial obligations created by the bonds. A model using plausible values for demand elasticities, recognized probabilities of events that would increase costs and delay construction and data used by WPPSS to construct demand forecasts for prospective bondholders suggests that such uncertainty was present at the time the bonds were issued. The values for demand elasticities and other parameters of the model were selected after a thorough review of the econometric literature on demand for electricity, beginning with the work of Fisher and Kaysen in 1962.     

The importance of informal professional networks in developing a proactive organizational culture: a public value perspective

Public value theory was used by the authors to investigate informal professional networks, perceived discretionary power, and the organizational culture that forms in physical asset management organizations. The results, from a structural equation model, indicated that informal professional networks are positively associated with higher discretionary power and a proactive asset maintenance organizational culture. In the absence of public managers promoting public value, professionals use their informal networks as a source of power to be proactive and contribute to asset reliability and public safety (public value).     

Bank Structure Conference Impact Study

The first Conference on Bank Structure and Competition was held at the Federal Reserve Bank of Chicago in 1963. Since that time, the Conference has served to stimulate and disseminate policy relevant research on issues affecting the financial services industry and as a forum for debating the relevant policy issues of the day. We evaluate the impact of the Conference on public policy and the banking and finance literature. We provide a qualitative argument that the Conference has helped promote policy change by showing that major financial reforms were typically discussed years earlier at the Conference. We then analyze data from the Social Science Citation Index and find that the Conference has had a strong and systematic impact on the banking and finance literature.     

Eliminating the "I hate you" in the supplier-purchasing relationship

Throughout time there has always been a supplier of some service or goods, and there has always been a purchaser of that service or goods. The one thing that has remained constant throughout that time is that they have an agreement not to like each other. This article will approach the subject in the "today" sense using current practical approaches that are used in all industries and will not deal with the relationships of the future. To cover this complex arena, the article will deal with four areas: (1) where we are now, (2) supplier-based concentration, (3) single sourcing, and (4) transportation techniques.     

Capability erosion dynamics

The notion of capability is widely invoked to explain differences in organizational performance, and research shows that strategically relevant capabilities can be both built and lost. However, while capability development is widely studied, capability erosion has not been integrated into our understanding of performance heterogeneity. To understand erosion, we study two software development organizations that experienced diverging capability trajectories despite similar organizational and technological settings. Building a simulation‐based theory, we identify the adaptation trap, a mechanism through which managerial learning can lead to capability erosion: well‐intentioned efforts by managers to search locally for the optimal workload balance lead them to systematically overload their organization and, thereby, cause capabilities to erode. The analysis of our model informs when capability erosion is likely and strategically relevant. Copyright © 2014 John Wiley & Sons, Ltd.     

Trade Liberalization and Economic Growth in Guyana: An Empirical Assessment using DOLS and Error Correcting Methodologies

This paper uses econometric techniques in the area of time series analysis to examine the relationship between economic performance and trade liberalization in Guyana. For this study, the base model underlying the analysis is a traditional per worker production function that has been augmented to include trade liberalization and other factors like human capital and exports. The results from this study suggest that when viewed from the long-run and short-run perspective trade liberalization has enhanced the economic performance of Guyana. Indeed, in this study both measures of trade liberalization - the average import tariff rate and the dummy variable representing the change in quota and import licensing measures, among other things - were statistically significant and correctly signed.