A Production Model With Firm-Specific Temporal Variation in Technical Inefficiency: With Application to Spanish Dairy Farms

This paper introduces a stochastic frontier production model which accommodates firm-specific temporal variation in technical inefficiency. Unlike Cornwell, Schmidt and Sickles (1990), technical inefficiency is not modeled through the intercept of the production frontier, but through an error component model. The proposed model is a generalization of the Battese and Coelli (1992) model, which imposed a common temporal pattern upon all firms. In our application involving Spanish dairy farms, we find that the new model is preferred to the Battese and Coelli (1992) model on the basis of the likelihood ratio test. Results provide a new source of information on the different patterns of technical inefficiency change among the 82 farms in the sample.     

The Relationship between Behavioral and Attitudinal Trust: A Cross-cultural Study

We study the relationship between trust in an experiment and trust measured by means of popular survey items in different countries. Students from Chile, Colombia, India, Mexico and Sweden participate in a public goods game experiment and answer a set of standard attitudinal survey questions about trust. We find that behavioral trust and attitudinal trust significantly differ among countries. Behavioral trust is highest in Sweden, followed by Latin America, and lowest in India. Attitudinal trust is highest in Chile and Sweden, followed by India and Mexico, and lowest in Colombia. Further, the predictive power of survey items also differs among countries. Trust measured by survey items is significantly related to behavioral trust in some but not in all societies. No single survey item predicts actual trust across all countries. Plausible explanations of the inconsistent relationship between behavioral and attitudinal trust across countries are discussed.     

The gravity of financial development

The article empirically tests the link between financial constraints with the extensive (proportion of exporters) and the intensive (volume of exports) margins of international trade. The main contribution is the macroeconomic analysis of this relationship – i.e. the investigation of the effect of finance on trade of all economic sectors combined – which is further reaching than the manufactured-sector-based focus found in the current literature. The study is developed on the basis of a bilateral trade database on 104 countries between 1998 and 2007. The empirical section estimates a two-stage gravity equation using panel data and shows a positive impact of financial development on the marginal variation of the extensive margin. However, the estimate of the relationship between finance and the intensive margin shows an unexpected result. It finds inconsistent results demonstrating a relationship that is negative, positive or statistically null.     

Determinants of Hotels and Restaurants entrepreneurship: A study using GEM data

The objective of this work is to assess the influence of certain factors on the likelihood of being a Hotels and Restaurants (H&R) entrepreneur. The factors evaluated are demographic and economic variables, variables related to perceptions of the environment and personal traits, and variables measuring the individual's intellectual and social capital. The work uses logistic regression techniques to analyze a sample of 33,711 individuals in the countries participating in the GEM project in 2008. The findings show that age, gender, income, perception of opportunities, fear of failure, entrepreneurial ability, knowing other entrepreneurs and being a business angel are explanatory factors of the probability of being an H&R entrepreneur.     

Effects of dissatisfaction in tourist services: The role of anger and regret

Dissatisfied customers due to a service failure probably will switch the provider, will complain and/or will spread negative word-of-mouth. However, to what extent some specific emotions triggered by dissatisfaction can mediate between the latter and the previous mentioned behaviours? A sample of 359 users of restaurants and 308 users of hotel services has shown that, whereas anger has a significant influence on the three behaviours under study, regret only affects switching and negative word-of-mouth. Furthermore, slight differences between hotels and restaurants have been found because, in the case of restaurants, anger is not an antecedent of switching whereas regret has an inverse effect on complaining.     

Parental education,gender preferences and child nutritional status in Peru

This paper examines whether the distribution of bargaining power between parents affects nutritional indicators in the early stages of a child’s life, giving evidence that the allocation of household resources varies by the gender of the child and the parents. After accounting for the potential endogeneity of the indicator of power distribution within the household, related to assortative mating in the marriage market, this paper shows that maternal power is more positively associated with girls’ nutrition than boys’. Among households located in rural areas, resource allocation between girls and boys seems to differ. Similarly, some evidence of competition for household resources affecting girls’ nutrition is found.     

Management sub-advising in the mutual fund industry

This is a study of how contractual mechanisms can mitigate agency conflicts in sub-advised mutual funds. Sub-advising contracts allow fund families to expand their product offerings to include new investment styles and thereby gain market share. We show that costly contractual arrangements, such as co-branding, multi-advising, and performance-based compensation, can mitigate agency conflicts in outsourcing and protect investors from potential underperformance. Fund families will find it cost-effective to implement such incentive mechanisms only when investors are sophisticated in assessing manager skill. The findings help to explain why a large percentage of fund families outsource their funds to advisory firms.     

The success of job applications: a new approach to program evaluation

This paper suggests a novel approach to program evaluation that allows identification of the causal effect of a training program on the likelihood of being invited to a job interview under weak assumptions, i.e., by measuring the program-effects by pre- and post-treatment data that are very close in time for the same individual.     

Asymmetric Demand Information and Foreign Direct Investment*

We examine the FDI versus exports decision of firms competing in an oligopolistic (quantity‐setting) market under demand uncertainty and asymmetric information. Compared to a firm that chooses to export, a firm that chooses to set up a plant in the host market has superior information about local market demand. In addition to the well‐known tension between the fixed set‐up costs of investment, the additional variable costs of exports and oligopoly sizes, the incentive to invest abroad is explained by the strategic learning effect. FDI may be observed even if trade costs are zero. The analysis is robust to price competition and to the possibility that a foreign firm can engage in both FDI and exports.     

On Strategic Quantity Bidding in Multiple Unit Auctions

Standard studies of multiple unit auctions generally overlook the strategic role of bidders' quantity decisions. Using a simple equilibrium model of bidding I analyze bidders' incentives to choose quantities in discriminatory and competitive auctions. The main result is that bidders have a stronger strategic incentive to bid for fewer units in competitive auctions. Since under competition a bidder pays the lowest accepted price for each unit she gets, she may benefit from dropping her quantity to let lower-valuing bidders enter the set of winners. This prediction is consistent with empirical observations from foreign currency and spectrum auctions.