Tests for cointegration rank and the initial condition

Many economic events involve initial observations that substantially deviate from long-run steady state. Such initial conditions are known to affect the power of univariate unit root tests diversely, whereas their impact on multivariate tests is largely unknown. This paper investigates the impact of the initial condition on the power of tests for cointegration rank, such as Johansen??s widely used likelihood ratio test, tests with prior adjustment for deterministic terms, and a test based on the eigenvalues of the companion matrix. We find that the power of the likelihood ratio test is increasing in the magnitude of the initial condition, whereas the power of the other tests is generally decreasing. We exploit these findings in an application to price convergence.     

Distance to the pre-industrial technological frontier and economic development

This research explores the effects of distance to the pre-industrial technological frontiers on comparative economic development in the course of human history. It establishes theoretically and empirically that distance to the frontier had a persistent non-monotonic effect on a country’s pre-industrial economic development. In particular, advancing a novel measure of the travel time to the technological frontiers, the analysis establishes a robust persistent U-shaped relation between distance to the frontier and pre-industrial economic development across countries. Moreover, it demonstrates that countries, which throughout the last two millennia were relatively more distant from these frontiers, have higher contemporary levels of innovation and entrepreneurial activity, suggesting that distance from the frontier may have fostered the emergence of a culture conducive to innovation, knowledge creation, and entrepreneurship.     

Hospitalization due to stroke and myocardial infarction in self-employed individuals and small business owners compared with paid employees in Sweden—a 5-year study

Small Business Economics - Analysing Swedish population register data, the aim of the present study is to investigate differences in acute cardiovascular disease (CVD) in terms of stroke and...     

Taxation, Labor Market Policy and High-Impact Entrepreneurship

Public policy affects the prevalence and performance of both productive and high-impact entrepreneurship. High-impact entrepreneurship prospers when knowledge is successfully generated and exploited in the economy. This process depends on complementary key actors who use their competencies in what we denote a competence bloc. Although variations in economic contexts make prescribing a general panacea impossible, a number of relevant policy areas that affect key actors can be identified. In this paper this is done in the areas of tax policy and labor market policy. It is shown that high and/or distortive taxes and heavy labor market regulations impinge on the creation and functioning of competence blocs, thereby reducing high-impact entrepreneurship.     

Convergent Validity of Attribute-Based,Choice Questions in Stated-Preference Studies

The application of attribute-based choice questions is well established in the marketing literature, but there are unique aspects of the design that warrant investigation to assess their validity for economic welfare estimation. Three design issues are investigated in this paper: (1) the placement of the monetary stimulus (policy cost to respondents) in the sequence of attributes, (2) the number of policy alternatives respondents are asked to consider in choice questions (two versus three), and (3) the inclusion, versus exclusion, of a status-quo alternative in choice questions. The data used to implement these investigations are from a survey designed to estimate the value Maine residents place on a farmland conservation easement program. Tests of convergent validity indicate that the placement of the monetary stimulus, first versus last in the list of attributes, did not affect estimates of preference parameters, significant differences between questions with three versus two alternatives did occur, and the inclusion/exclusion of a status-quo alternative did not affect preference parameters.     

Revisiting the influence of institutional forces on the written business plan: a replication study

The present paper re-analyzes and extends a study on institutional forces and the written business plan (Honig and Karlsson in J Manag 30(1):29–48, 2004). We attempt to examine to what extent critical decision making is evident in model and variable choice, and whether the implications provided by systematic replication efforts may serve to provide additional and perhaps unrecognized theoretical and/or empirical observations. We find that the key result—formal business planning does not affect performance, does not hold. In fact, we find evidence that formal business planning affects survival but not profitability. The re-analysis also reveals, that institutional antecedents to formal planning appear to be fragile and prone to researcher biases due to different coding and assumptions. Our study underscores the consequences of access to original data and coding material, and to rely upon current methodological explanations for subsequent analyses.     

Marginal taxation on labour income in Sweden from 1862 to 2010

This paper presents annual Swedish time series data on the top marginal tax wedge and marginal tax wedges on labour income for a low-, average- and high-income earner for the period 1862–2010. These data are unique in their consistency, thoroughness and timespan covered. We identify four distinct periods separated by major tax reforms. The tax system can be depicted as proportional, with low tax wedges until the Second World War. Next follows a period featuring increasing tax wedges. During the third period, starting with the 1971 tax reform and continuing throughout the 1980s, the efforts to redistribute income culminated and tax wedges peaked. The high-income earner started to pay the top marginal tax wedge which could be as high as almost 90%. The main explanations for this development are temporary crises leading to permanent tax increases, expansion of the public sector, distributional ambitions, increased local taxes, bracket-creep and the introduction of social security contributions paid by employers. The 1990–1991 tax reform represents the beginning of a new and still continuing period with decreasing marginal tax wedges.     

Mini flash crashes: Review,taxonomy and policy responses

We focus on extreme price movements known as mini flash crashes (MFCs). After reviewing the literature, we provide a taxonomy based on a sample of MFCs identified by Nanex on the U.S. financial markets over a three-year period. We detect significant differences between crashes and exchanges. In comparison to ‘up crashes’, we find that ‘down crashes’ exhibit lower absolute returns but have longer duration. We also show that the dynamics of MCFs varies across exchanges. For example, the MFCs on ARCA are on average both less severe and shorter in duration than those on the NASDAQ. We finally review all the key implications of MCFs in terms of public policy.     

Ecologies of user knowledge: linking user insight in organisations to specific projects

Failure to meet user preferences continues to prevail as a major reason for innovation project failure despite wide arrays of methods and methodologies available for addressing it. The user research and user insight availability problem appears to have become replaced by a method and insight adequacy problem. This calls for the means to better address how organisations and project teams know their users, and how this knowing is intertwined in other organisational processes. A research challenge lies in developing representational templates that are both specific enough for addressing explicit and implicit user insight and encompassing enough for linking these to the relevant project and organisational issues. We develop such a representational template based on ecologies of knowledge mapping and discuss its potential through applying it to a comparative study on two social media web service projects of the Finnish National Broadcasting Company.