EXPLAINING INNOVATIVE ACTIVITY IN SERVICE INDUSTRIES: MICRO DATA EVIDENCE FOR SWITZERLAND

In this paper, we analysed empirically the innovative behaviour of firms in the Swiss service sector building on the wide consent in economic literature that demand prospects, type and intensity of competition, market structure, factors governing the production of knowledge (appropriability, technological opportunities), financing conditions as well as firm size are the main determinants of a firm's innovative activity. For the empirical work, we used firm data from nine service industries collected by the Swiss Innovation Survey 1999. We obtained a pattern of explanation of the innovative activity which looked quite plausible across the different types of innovation measures used (input-oriented and output-oriented innovation variables); it was also consistent to that found earlier for manufacturing. In general, the empirical model captured rather the characteristics of the basic decision to innovate rather than those of the decision to choose some level of innovative activity.     

A Comparison of National and International Innovation Cooperation in Five European Countries

This paper analyses the differences between national and international innovation cooperation in five European countries: Belgium, Germany, Norway, Portugal and Switzerland. We find that absorptive capacity, incoming spillovers, appropriability and risk-sharing are more important in an international context. Furthermore innovation performance is positively influenced by international cooperation, but remains unaffected by national cooperation. Despite the heterogeneity of the investigated countries, we find similar determinants and impacts of innovation cooperation.     

Contrarian Profits and the Overreaction Hypothesis: the Case of the Athens Stock Exchange

This paper investigates the existence of contrarian profits and their sources for the Athens Stock Exchange (ASE). The empirical analysis decomposes contrarian profits to sources due to common factor reactions, overreaction to firm‐specific information, and profits not related to the previous two terms, as suggested by Jegadeesh and Titman (1995). Furthermore, in view of recent evidence that common stock returns are related to firm characteristics such as size and book‐to‐market equity, the paper decomposes contrarian profits to sources due to factors derived from the Fama and French (1993, 1996) three‐factor model. For the empirical testing, size‐sorted sub‐samples that are rebalanced annually are employed, and in addition, adjustments for thin and infrequent trading are made to the data. The results indicate that serial correlation is present in equity returns and that it leads to significant short‐run contrarian profits that persist even after we adjust for market frictions. Consistent with findings for the US market, contrarian profits decline as one moves from small stocks to large stocks, but only when market frictions are considered. Furthermore, the contribution to contrarian profits due to the overreaction to the firm‐specific component appears larger than the underreaction to the common factors.     

Short-term patterns in government bond returns following market shocks: International evidence

We employ government bond portfolios from 17 countries in order to investigate the short-run reaction of investors to price shocks. Our findings indicate a uniform return reversal pattern across countries, that persists irrespective of various robustness tests such as different datasets (Datastream/J.P. Morgan), different maturity bands, and day-of-the-week effects. Simulated trading strategies based on our results suggest that this pattern can be employed to generate economically significant profits for many country portfolios. We also demonstrate that significant zero-investment profits are possible even when instead of the expensive to replicate country bond portfolios we employ directly tradable and low transactions cost instruments, such as Bond Futures Contracts.     

Regional development and non-material public infrastructure

The aim of this paper is to investigate the conditions under which public investment can be allocated to the infrastructure in material and non-material capital so as to have a positive effect on regional development and interregional inequality. To investigate this issue, the paper focuses on the externalities created by investing in infrastructure for the transfer of information, know-how or technical knowledge.     

Peak load pricing under periodic and stochastic supply

The paper extends to the supply side previous work on peak load pricing embodying periodic and stochastic variations in demand. In a first step it introduces into the problem of periodic demand the additional problem of periodic capacity availability. Then it considers the general case where stochastic fluctuations enter both the demand and capacity availability sides. Welfare-maximising results suggest that off-peak consumers should be charged with capacity costs according to the loss-of-load probability in any period. This probability depends on periodic and random fluctuations in capacity availability. The optimal level of capacity is also affected by such fluctuations.     

Investigating the accuracy of cross-learning time series forecasting methods

The M4 competition identified innovative forecasting methods, advancing the theory and practice of forecasting. One of the most promising innovations of M4 was the utilization of cross-learning approaches that allow models to learn from multiple series how to accurately predict individual ones. In this paper, we investigate the potential of cross-learning by developing various neural network models that adopt such an approach, and we compare their accuracy to that of traditional models that are trained in a series-by-series fashion. Our empirical evaluation, which is based on the M4 monthly data, confirms that cross-learning is a promising alternative to traditional forecasting, at least when appropriate strategies for extracting information from large, diverse time series data sets are considered. Ways of combining traditional with cross-learning methods are also examined in order to initiate further research in the field.     

The Effectiveness of Government Promotion of Advanced Manufacturing Technologies (AMT): An Economic Analysis Based on Swiss Micro Data

This paper describes the approach applied and the results of an evaluation of the effects of the Swiss government programme to promote the diffusion of Advanced Manufacturing Technologies (AMT) from 1990 to 1996. The method used is based on specifying and econometrically estimating with firm data simultaneously an adoption equation which, besides the main explanatory variables as proposed by the theory of technology diffusion, includes a policy variable, and a policy equation with a set of firm characteristics and an adoption variable as regressors. The results are consistent with a positive impact of promotion on adoption of AMT, particularly a more intensive adoption of AMT for firms which did not use AMT when the programme started.