Determinants of credit availability for high-tech start-ups

International Entrepreneurship and Management Journal - The availability of financial support for start-ups, especially high-tech start-ups, is an important factor in their growth. This paper...     

Options on portfolios with higher-order moments

We develop a simple calibration approach to generate return distributions for multivariate asset distributions and use this technique to price options on portfolios given the first four co-moments of the joint distribution of returns. The technique is fast and captures the impact of covariance, and the co-skewness and co-kurtosis tensors on the value of these options. Given the technique works for a portfolio, the same is also applicable to options on individual securities as a special simpler case.     

The DOHA Round of Multilateral Negotiations and the Embellishing Role of the Developing Economies

Despite unanswered questions about causality, trade expansion is associated with rapid real GDP growth in the developing economies. While the WTO's mandate is to liberalize multilateral trade and support its rule-based conduct, its operations have definite development relevance. After a history of non-participation in the multilateral trading system, the developing economies began to participate in it in almost an explosive manner. Several developing economies have not only emerged as important traders since the mid-1980s but as G-21 they have also made their presence felt in the on-going multilateral trade negotiations. They made decisive contributions to the July Framework Agreement of 2004. The role of the developing economies in the Doha Round of multilateral trade negotiations has gone on steadily growing. It has been christened the Development Round. It deals with several areas of special interests to the developing economies—agriculture, non-agricultural market access and services being some of the more important ones—and eventually hopes to correct the imbalances in the multilateral trade regime. A successful Doha Round would indeed contribute favorably to growth, have a discernable favorable impact over the incidence of poverty and help in achieving the first MDG.     

ORGANIZATIONAL CONTROL: AN EVOLUTIONARY PERSPECTIVE*

Much of the literature on organizational control processes has traditionally been based on concepts of cybernetics, power, and authority. This article explores an alternative way of looking at the control phenomenon by introducing the idea of an evolutionary ‘controlling’ cycle. This idea is derived by modifying the basic organizing cycle (enactment, selection, retention) to a hierarchical form, with two distinct components. The model is then applied to understand the basic control modes informing markets, bureaucracies and clans. The article concludes with some comments on the likely future directions of the bureaucratic mode of organizational control.     

Sector-specific minimum wages,economic growth,and some policy implications

Economic growth is introduced in the urban unemployment model of Harris and Todaro. It is shown that in the steady state, the optimal savings ratio is greater than the golden rule savings ratio under full employment. Also the optimal proportion of total investment allocated to the urban sector is not necessarily higher than the optimal proportion under full employment.     

Toward an integrative framework of organizational control

This paper develops an integrative organizational control model which synthesizes selected contributions of the administrative management school, organizational sociologists and organizational psychologists. The model consists of a core control system embedded in the context of organizational structure, organizational culture and the external environment. Control is defined as attempts by the organization to increase the probability that individuals will behave in ways that will lead to the attainment of organizational objectives. Control of work behavior is accomplished by the four core control mechanisms of planning, measurement, feedback and evaluation-reward. The paper presents propositions for each core control mechanism, relating its impact to work behaviors and outcomes. It also examines the manner in which the contextual factors (culture, etc.) function as control mechanisms on work behavior. Finally, the paper suggests directions for future research on the proposed model. Taken together, the model and the propositions comprise the basis for an integrative framework of organizational control.     

Small asymmetric fractional factorial plans for main effects and specified two-factor interactions

Fractional factorial plans represented by orthogonal arrays of strength two are known to be optimal in a very strong sense under a model that includes the mean and all the main effects, when all interactions are assumed to be absent. When a fractional factorial plan given by an orthogonal array of strength two is not saturated, one might think of entertaining some two-factor interactions also in the model. In such a situation, it is of interest to examine which of the two-factor interactions can be estimated via a plan represented by an orthogonal array, as also to study the overall efficiency of the plan when some interactions are in the model alongwith the mean and all main effects. In this paper, an attempt has been made to examine these issues by considering some practically useful plans for asymmetric (mixed level) factorials with small number of runs.     

Inventory of differential items selling from two shops under a single management with periodically increasing demand over a finite time-horizon

Inventories of differential items including the defective ones purchased/produced in a lot and sold from two shops (primary and secondary shops) under a single management are considered here over a finite time-horizon. A primary shop receives the differential units in a lot but sells only the non-defective ones whose demand periodically increases with time and decreases during the shortage period in such a way that it comes back to the initial value at the beginning of the next cycle. Hence in this shop, shortages are allowed and fully backlogged. Moreover, at the beginning of the next cycle, the retailer purchases purely non-defective units at a higher price to meet up the shortage amount along with the usual lot of differential units for regular sale. The defective units identified at the time of selling at the primary shop are continuously transferred to the adjacent secondary shop from which the defective ones are sold at a reduced price after some rework. Normally, the price of a defective item is fixed depending upon the quantum of its defect and people go for these items if they are cheap. Hence, demand for these units is dependent on the selling price, which is again inversely proportional to the rate of defectiveness. There may be five scenarios for dealing with defective units depending upon the coincidence of the time periods at two shops. For all scenarios, problems have been mathematically formulated and solved by the use of both parametric study and a gradient-based non-linear optimisation method. The models are illustrated with the help of numerical examples.     

Could we have predicted the recent downturn in the South African housing market?

This paper develops large-scale Bayesian Vector Autoregressive (BVAR) models, based on 268 quarterly series, for forecasting annualized real house price growth rates for large-, medium- and small-middle-segment housing for the South African economy. Given the in-sample period of 1980:01–2000:04, the large-scale BVARs, estimated under alternative hyperparameter values specifying the priors, are used to forecast real house price growth rates over a 24-quarter out-of-sample horizon of 2001:01–2006:04. The forecast performance of the large-scale BVARs are then compared with classical and Bayesian versions of univariate and multivariate Vector Autoregressive (VAR) models, merely comprising of the real growth rates of the large-, medium- and small-middle-segment houses, and a large-scale Dynamic Factor Model (DFM), which comprises of the same 268 variables included in the large-scale BVARs. Based on the one- to four-quarters-ahead Root Mean Square Errors (RMSEs) over the out-of-sample horizon, we find the large-scale BVARs to not only outperform all the other alternative models, but to also predict the recent downturn in the real house price growth rates for the three categories of the middle-segment-housing over the period of 2003:01–2008:02.     

The evolution of renminbi yuan and the protracted debate on its undervaluation: An integrated review

For virtually a decade, the undervaluation of RMB yuan has become an issue of impassioned debate in international monetary economics. This issue kept the academic and policy circles engrossed in argumentative deliberations. That RMB yuan is undervalued is widely acknowledged. With China's emergence as an economic superpower of the future, this debate no doubt has considerable merit and ramifications. This article examines sang-froid the RMB yuan undervaluation and provides a review of recent and on-going research on it. The mid-2005 currency revaluation and modification of foreign exchange regime has enormous significance in this regard. It became a defining moment in the RMB yuan debate.This article attempts to examine whether accusations of currency manipulation made against China can hold, or are merely disingenuous. It encourages the reader to see whether the RMB yuan should be further appreciated. If yes, whether the misalignment is inordinately large or of incidental order which would be corrected with the passage of time. A good number of econometric exercises were undertaken, using differing methodologies. There was a complete lack of consensus on the misalignment of the RMB yuan. It has slowly appreciated since it abandoned its dollar peg in 2005. As the Chinese economy picks up further growth momentum, the currency appreciation is expected to accelerate.