An Econometric Analysis of I(2) Variables

This paper provides a selective survey of the recent literature dealing with I(2) variables in economic time series, that is, processes that require to be differenced twice in order to become stationary. With reference to particular economic models intuition is provided of why I(2)-and polynomial cointegration are features likely to occur in economics. The properties of I(2) series are discussed and I review topics such as: Testing for double unit roots, representations of I(2) cointegrated systems, and hypothesis testing in single equations as well as in systems of equations. Different data sets are used to illustrate the various econometric and statistical techniques.     

Probabilistic Bounds on the Virtual Multipliers in Data Envelopment Analysis: Polyhedral Cone Constraints

The paper is concerned with the incorporation of polyhedral cone constraints on the virtual multipliers in DEA. The incorporation of probabilistic bounds on the virtual multipliers based upon a stochastic benchmark vector is demonstrated. The suggested approach involves a stochastic (chance constrained) programming model with multipliers constrained to the cone spanned by confidence intervals for the components of the stochastic benchmark vector at varying probability levels. Consider a polyhedral assurance region based upon bounded pairwise ratios between multipliers. It is shown that in general it is never possible to identify a center-vector defined as a vector in the interior of the cone with identical angles to all extreme rays spanning the cone. Smooth cones are suggested if an asymmetric variation in the set of feasible relative prices is to be avoided.     

Assessing response styles across modes of data collection

Cross-mode surveys are on the rise. The current study compares levels of response styles across three modes of data collection: paper-and-pencil questionnaires, telephone interviews, and online questionnaires. The authors make the comparison in terms of acquiescence, disacquiescence, and extreme and midpoint response styles. To do this, they propose a new method, namely, the representative indicators response style means and covariance structure (RIRSMACS) method. This method contributes to the literature in important ways. First, it offers a simultaneous operationalization of multiple response styles. The model accounts for dependencies among response style indicators due to their reliance on common item sets. Second, it accounts for random error in the response style measures. As a consequence, random error in response style measures is not passed on to corrected measures. The method can detect and correct cross-mode response style differences in cases where measurement invariance testing and multitrait multimethod designs are inadequate. The authors demonstrate and discuss the practical and theoretical advantages of the RIRSMACS approach over traditional methods. Electronic supplementary material  The online version of this article (doi:) contains supplementary material, which is available to authorized users.

Why sales reps should welcome information technology: Measuring the impact of CRM-based IT on sales effectiveness

This study seeks to answer the following question: Can sales representatives enhance their performance through their acceptance of information technology (IT) tools? Using data collected from two companies, we show that despite uncertain results and the frequent resistance among salespeople to IT interventions, IT acceptance indeed has a positive effect on sales performance. This occurs because salespeople using IT expand their knowledge and, in turn, gain improved targeting abilities, enhanced presentation skills, and increased call productivity. Thus, sales representatives have a strong incentive to accept IT because doing so is likely to sharpen their own job performance.     

Infrastructure and Industrial Development: The Case of Central Java

Industrial development does not take place in all regions at the same speed. This paper seeks explanations for regional differences in the development of manufacturing industry in Central Java. Special attention is paid to the impact of infrastructure (roads, telecommunications, electricity) on industrial development. The spatial distribution of manufacturing industry is analysed by means of both secondary data at the kabupaten level and primary data on 274 firms in various parts of Central Java. In addition to demand side factors, infrastructure does indeed play an important role, but local government bureaucratic procedures for obtaining land and permits are also important.     

Non-financial Determinants of Retirement: A Literature Review

Retirement is often concentrated at specific ages—in particular the ‘normal retirement age’ and an ‘early retirement age’. Financial incentives cannot fully explain this. Moreover, the participation effect of a higher normal retirement age importantly exceeds the encompassing income effect. Based on a literature survey, we conclude that social norms, default options, and reference-dependent utility are likely explanations for the individual propensity to retire at specific retirement ages. Further empirical research on non-financial determinants of retirement is needed to fully understand individual retirement behavior.     

ARE FINANCIAL AND SOCIAL EFFICIENCY MUTUALLY EXCLUSIVE? A CASE STUDY OF VIETNAMESE MICROFINANCE INSTITUTIONS

A major debate in microfinance focuses on the existence of a trade‐off between the financial sustainability of microfinance institutions (MFIs) and their outreach to poor clients. This paper adds to this debate by analyzing whether financial and social efficiency are mutually exclusive in a context of implicit subsidies by the state and international donors. We use data from a sample of 28 Vietnamese MFIs and apply Data Envelopment Analysis (DEA) to identify the existence of a trade‐off. Our analysis shows that for Vietnamese MFIs financial and social efficiency are not related. We interpret this as evidence for the fact that there is no support to believe that there is such a trade‐off. Subsidies, based on which most Vietnamese MFIs currently operate, helps them to show high financial efficiency, while at the same time being able to attain their social goals. Nevertheless, this model may not be sustainable in the long‐term.     

Does microfinance affect income inequality?

This study addresses the question whether participation of the poor in microfinance contributes to reducing a country’s level of income inequality. Using data from 70 developing countries, we show that higher levels of microfinance participation are indeed associated with a reduction of the income gap between rich and poor people. We also show, however, that the effects of microfinance on reducing income inequality are relatively small. The results of this study add to the discussion on the impact of microfinance on poverty by showing that, although access to microfinance does seem to improve the relative income position of the poor, this improvement is modest, which is probably because the use of microfinance is generally small as compared to the size of the economy of the countries in our sample. Microfinance should, therefore, not be seen as a panacea for bringing down income inequality in a significant way.