Modes of innovation,resources and their influence on product innovation: Empirical evidence from R&D active firms in Norway

Evolutionary theory of the firm argues that firms follow different approaches to innovation with implications for their performance. Consistent with evolutionary theory, this paper develops a taxonomy of innovation modes which capture the variation in firms' approaches to product innovation. The taxonomy is based on the open/closed innovation and exploration/exploitation literatures and identifies the following modes: “Open exploration”, “closed exploration” “open exploitation”, and “closed exploitation”. The paper theorizes that the identified innovation modes influence product innovation through their effect on the firms' technological and market resources. Using survey data from over 1000 R&D active firms in Norway analyzed with structural equation modelling it is shown how four modes of innovation are related to actual product innovation.     

Swedish auditors' view of auditing: Doing things right versus doing the right things

Abstract

This paper aims to describe and analyse the thought patterns of Swedish auditors with regard to the way in which they audit information provided by listed companies, and possible changes in their duties. Eighty-two auditors were interviewed using the repertory grid technique and open-ended interview questions. To check the stability in the thought patterns of the respondents, six retests were made and, to validate the findings, an expert panel and two reference groups consisting of auditors and other representatives of the accounting and auditing professions were consulted. Distinct patterns emerged in the mean grid of the thought patterns of all the respondents. One dimension was related to the time perspective, past versus future, and another to auditing practice. Auditors devote a relatively long time and considerable effort to objects that can be satisfactorily verified, but not to objects that they perceive as being of primary importance to investors and other stakeholders. This inconsistency in the thought patterns of the auditors is similar to the gap between auditing in practice and stakeholders' expectations of auditing, which is a phenomenon frequently found in previous research. Moreover, the auditors were very reluctant to make statements about any information except that elicited according to current practice. In addition to this traditional view, the auditors appear to be more concerned about their own situation than that of the parties they are meant to be protecting. Doing things right seems to be more important than doing the right things. That the auditors spend much time on objects that they themselves do not consider to be of primary importance for the investors and other stakeholders, and their unwillingness to change current practice is of great concern in Sweden, where there is a strong belief in self-regulation of the auditing profession.     

The impact of index‐insured loans on credit market participation and risk‐taking

Index‐insured loans offer considerable advantages over standalone insurance policies for improving farmers’ access to agricultural credit. However, research on demand for such products and their impact on profitable investment decisions has been limited and conflicting. In this article, we investigate the impact of index insurance on demand for credit and investment decisions using a lab‐in‐the‐field experiment conducted in rural Tanzania. We find that index insurance increases demand for credit and high‐risk high‐return investments.     

Losing autonomy: the Norwegian central bank during the Second World War

In the mid‐twentieth century a number of central banks around the western world lost their operational autonomy and were placed under government control. The origin of these policy changes can be traced to the intellectual and political developments of the interwar era in addition to the introduction of the Bretton Woods monetary system. The Norwegian central bank offers a particularly stark example of this phenomenon: experiencing a rapid decline from its high level of autonomy in the interwar years, to a clear subordination to the government after 1945. Through an analysis of the correspondence between the main policy makers in the exiled Norwegian government and central bank management, this article contributes to the understanding of central bank autonomy by tracing the decisive factors that led to the Norwegian central bank's loss of agency.     

Working onboard - Job perception, organizational commitment and job satisfaction in the cruise sector

This paper focuses on the perceived work environment and its influence on organizational commitment and job satisfaction in the cruise sector. Two focus group interviews were conducted in addition to one survey among the crew in an upmarket cruise line. The focus groups elicited responses concerning crew experiences of working onboard. Based on this information, a questionnaire was constructed to measure job perceptions among crew members. The results indicate that all of the experience domains were related to job commitment and job satisfaction, but that the strongest effects were found to be perceived “Respect”, the “Social atmosphere”, and “Food and living quarters”.     

Density Forecasts With Midas Models

We propose a parametric block wild bootstrap approach to compute density forecasts for various types of mixed‐data sampling (MIDAS) regressions. First, Monte Carlo simulations show that predictive densities for the various MIDAS models derived from the block wild bootstrap approach are more accurate in terms of coverage rates than predictive densities derived from either a residual‐based bootstrap approach or by drawing errors from a normal distribution. This result holds whether the data‐generating errors are normally independently distributed, serially correlated, heteroskedastic or a mixture of normal distributions. Second, we evaluate density forecasts for quarterly US real output growth in an empirical exercise, exploiting information from typical monthly and weekly series. We show that the block wild bootstrapping approach, applied to the various MIDAS regressions, produces predictive densities for US real output growth that are well calibrated. Moreover, relative accuracy, measured in terms of the logarithmic score, improves for the various MIDAS specifications as more information becomes available. Copyright © 2016 John Wiley & Sons, Ltd.     

Option pricing under fast‐varying long‐memory stochastic volatility

Recent empirical studies suggest that the volatility of an underlying price process may have correlations that decay slowly under certain market conditions. In this paper, the volatility is modeled as a stationary process with long‐range correlation properties in order to capture such a situation, and we consider European option pricing. This means that the volatility process is neither a Markov process nor a martingale. However, by exploiting the fact that the price process is still a semimartingale and accordingly using the martingale method, we can obtain an analytical expression for the option price in the regime where the volatility process is fast mean reverting. The volatility process is modeled as a smooth and bounded function of a fractional Ornstein–Uhlenbeck process. We give the expression for the implied volatility, which has a fractional term structure.     

Fuel Efficiency Improvements: Feedback Mechanisms and Distributional Effects in the Oil Market

We study the interactions between fuel efficiency improvements in the transport sector and the oil market, where the efficiency improvements are policy-induced in certain regions of the world. We are especially interested in feedback mechanisms of fuel efficiency such as the rebound effect, carbon leakage and the “green paradox”, but also the distributional effects for oil producers. An intertemporal numerical model of the international oil market is introduced, where OPEC-Core producers have market power. We find that the rebound effect has a noticeable effect on the transport sector, with the magnitude depending on the oil demand elasticity. In the benchmark simulations, we calculate that almost half of the energy savings may be lost to a direct rebound effect and an additional 10% to oil price adjustments. In addition, there is substantial intersectoral leakage to other sectors through lower oil prices in the regions that introduce the policy. There is a small green paradox effect in the sense that oil consumption increases initially when the fuel efficiency measures are gradually implemented. Finally, international carbon leakage will be significant if policies are not implemented in all regions; we estimate leakage rates of 35% or higher when only major consuming regions implement fuel economy policies. Non-OPEC producers will to a larger degree than OPEC producers cut back on its oil supply as a response to fuel efficiency policies due to high production costs.     

Sufficient conditions applied to an optimal control problem of resource management

The purpose of this paper is twofold. First, by solving an interesting problem in the theory of exhaustible resources, it is exemplified how direct sufficiency conditions should properly be used in optimal control problems. The motivation for this aspect of the paper is the almost complete negligence in the economic literature of dealing properly with sufficiency conditions. Second, an important point in the discussion of J. Aarrestad (Scand. J. Econom., 81 (1979), 522–565) is supplemented.