Varying Coefficient Regression Models: A Review and New Developments

Varying coefficient regression models are known to be very useful tools for analysing the relation between a response and a group of covariates. Their structure and interpretability are similar to those for the traditional linear regression model, but they are more flexible because of the infinite dimensionality of the corresponding parameter spaces. The aims of this paper are to give an overview on the existing methodological and theoretical developments for varying coefficient models and to discuss their extensions with some new developments. The new developments enable us to use different amount of smoothing for estimating different component functions in the models. They are for a flexible form of varying coefficient models that requires smoothing across different covariates' spaces and are based on the smooth backfitting technique that is admitted as a powerful technique for fitting structural regression models and is also known to free us from the curse of dimensionality.     

Influences on technology strategy in the uk oil- and gas-related industry network

In the course of the last 25 years the UK has seen the emergence of a new, technologically advanced network of organisations underpinning the technical needs of the oil and gas extraction industry.The euolution of this industy network has taken place within a public policy framework which has had too central objectives: to maximize UK industrial involvement in the industry and to maximize. North Sea oil and gas extraction. The extent to which this framework has encouraged the development of new, technology-based firms has not been systematical stuided. This study examines the extent of indigenous incoltlement in the network and the influence of the currrent pressures of economic and policy changes on the performance and strategic planning of these compnies.     

Firms' Market Power,Endogenous Preferences and the Focus of Competition Policy

Conventional neoclassical views of dominance are generally restricted to a concern for a firm's market power seen in terms of the ability to raise and maintain prices above their marginal costs of production. A prime example of this approach is the application of dominant firm price leadership models, which has led to a restricted theoretical perception of the nature of market power and to an incomplete view of the social costs of monopoly power. This paper argues that a broader conception of a firm's market power leads to a quite different perspective on its conduct. In particular, if we allow dominance to involve the ability to influence product demand patterns, then the theoretical analysis of firm behaviour changes significantly. Specifically, it implies the endogeneity of preferences which, it is argued, represents an important alternative to mainstream analysis. It is suggested that we need to consider a firm's dominance not so much in terms of its pricing in the context of a particular market structure but to focus on its ability to gain advantage over its rivals in terms of 'creating' an asymmetry in the demand for its products. This has important implications for competition policy, for it suggests a need to concentrate on the 'power' of firms and less on the effects of a change in market structure. Likewise, we need to reconsider the adequacy of defining markets in terms of product demand characteristics.     

Critical Realism as a Basis for Economic Methodology: A critique

This paper considers the claim that critical realism provides a convincing critique of mainstream economics and offers a sound methodological basis for an alternative approach. It argues that critical realism presents a tendentious definition of positivism and a characterisation of mainstream economics that is misleading, and that it misrepresents the nature and purpose of the work of Hume and modern Humean philosophers. It also argues that critical realism's bold ontological claims lack epistemological support. The paper concludes that critical realism does not provide a compelling basis for economic methodology.     

Full versus quasi MLE for ARMA-GARCH models with infinitely divisible innovations

We compare the backtesting performance of ARMA-GARCH models with the most common types of infinitely divisible innovations, fit with both full maximum likelihood estimation (MLE) and quasi maximum likelihood estimation (QMLE). The innovation types considered are the Gaussian, Student’s t, α-stable, classical tempered stable (CTS), normal tempered stable (NTS) and generalized hyperbolic (GH) distributions. In calm periods of decreasing volatility, MLE and QMLE produce near identical performance in forecasting value-at-risk (VaR) and conditional value-at-risk (CVaR). In more volatile periods, QMLE can actually produce superior performance for CTS, NTS and α-stable innovations. While the t-ARMA-GARCH model has the fewest number of VaR violations, rejections by the Kupeic and Berkowitz tests suggest excessively large forecasted losses. The α-stable, CTS and NTS innovations compare favourably, with the latter two also allowing for option pricing under a single market model.     

The effects of education in early-stage agriculture: some evidence from China

The stochastic production frontier approach is used to study the effects of education on agricultural efficiency for a cross-section of 'early-stage' farms from Guanghan County, Sichuan Province, China. Education for farm families in rural China is multifaceted with a combination of formal education, intragenerational transfer of knowledge within the home, and agricultural extension services. Since our survey data span two different years with markedly different policy environments, we are able to examine not only which aspects of education affect agricultural efficiency, but also whether or not the policy environment matters. We find limited evidence that in a policy environment that is conducive to agriculture, formal education provides positive returns in agriculture. Furthermore, general education may provide greater returns than the more targeted extension services.     

International Trade and the Equilibrium Rate of Unemployment in a Heckscher-Ohlin World Economy

This paper develops a (stylized Asia-America) Heckscher-Ohlin world economy in which the equilibrium rate of unemployment is endogenous. We examine the impact of various economic shocks on unemployment in the global economy. Harrod-neutral or Hicks-neutral technical progress across all industries in Asia leads to a terms of trade improvement for America but raises America's unemployment rate. Introducing a third country such as the block of former socialist economies results in higher unemployment for both Asia and America. Protection in America lowers American equilibrium unemployment but raises Asia's unemployment. [E24]     

Can Trade Agreements Curtail Trade Creation and Prevent Trade Diversion?

This paper investigates how pre‐existing preferential trade agreements (PTAs) dilute the trade creation effect and shield the trade diversion effect of new PTAs. Countries having pre‐existing PTAs enjoy smaller gains in intra‐bloc trade because of the dilution effect and experience smaller losses or even gains in extra‐bloc trade because of the shielding effect. The findings support the proposition that PTAs could be used to fend off future trade diversion.     

A quantitative perspective of Porter's industry forces framework for investment analysis

Porter's industry forces framework is an important tool for external analysis of firms, but its qualitative nature presents numerous limitations to be used in investment analysis. This study introduces a quantitative perspective of the framework using financial information proxies. This allows investors to gauge the external factors quantitatively and to gain enhanced framework usability. In order to test its validity, the correlation movements of our quantitative perspective have been analysed. For demonstration of enhanced usability, our quantitative perspective, alongside machine learning models, was used to predict business performances. The empirical results indicate that our quantitative perspective of the framework corroborates with its original definition and that it exhibits enhanced usability than the original framework.