The structure of production in urban housing: a multi-input cost function approach

This paper uses a two-stage cost function model to analyse substitution possibilities among inputs in the production of urban housing. Aggregate price indexes for groups of inputs are generated in the first stage, and then used in the estimation of the aggregate cost function in the second stage. The procedure is valid under the assumption of weak separability. The use of flexible functional forms at both stages allowed the analysis to be carried out by imposing fewer restrictions as a part of the maintained hypothesis than has been the case in the previous literature. The findings are consistent with the postulates of cost-minimising factor demand theory.     

Barriers to SME Growth in Slovenia

The paper is based on the findings of a research project which aimed to identify the critical barriers to small business growth and development in Slovenia. The key barriers identified in the research included factors linked to the institutional environment including bureaucracy, and to external financial constraints including the high cost of capital. Internal organisation and resource issues, and social support through local development coalitions were found to be less important. The research was based upon a sample survey of small firms in Slovenia, and on an econometric analysis of the sources of firms' growth. This provided evidence that firms' growth was negatively linked to firms' size, and that growth was reduced by the presence of institutional and financial barriers. The paper concludes with a discussion of the policy implications.     

An examination of the relationships among market orientation,innovation resources,reputational resources,and company performance in the transitional economy of Slovenia

We investigated relationships among market orientation, innovation and reputational resources, and their impact on market performance and financial performance within the transitional economy of Slovenia. Market orientation related positively to market and financial performance of firms indirectly through innovation and reputational resources. Reputational resources associated positively with loyalty, market share, and sales volume, innovation resources associated positively with market share, and sales volume indirectly through customer loyalty. Selected marketing resources related positively to financial performance indirectly through customer loyalty, market share, and sales volume. The implications of these findings for theory and practice are considered. Copyright © 2007 ASAC. Published by John Wiley & Sons, Ltd.     

Can Companies Influence Investor Behaviour through Advertising? Super Bowl Commercials and Stock Returns

Recent research shows that mood and attention may affect investors’ choices. In this paper we examine whether companies can create such mood and attention effects through advertising. We choose a natural experiment by investigating price reactions and trading activity for firms employing TV commercials in 19 Super Bowl broadcasts over the 1969–2001 period. We find significant positive abnormal returns for firms which are readily identifiable from the ad contents, which is consistent with the presence of mood and attention effects. For recognisable companies with the number of ads greater than the sample mean, the event is followed by an average abnormal one day return of 45 basis points. The effect appears to persist in the short term with the 20‐day post‐event cumulative abnormal returns for such firms averaging 2%. We find significant abnormal net buying activity for small trades in shares of recognised Super Bowl advertisers indicating that small investors tend to be the ones most attracted by the increased publicity.     

Calculation of scale elasticities in DEA models: direct and indirect approaches

The qualitative characterisation of returns to scale in DEA has been a research issue the last decade. However, quantitative information provides the ultimate information. This paper presents two ways of obtaining numerical values of scale elasticity by an indirect approach using efficiency scores and dual variables for radial projections of inefficient points to the frontier, and a direct approach that is more general and powerful and directly evaluates numerically scale elasticity at any point on the DEA surface along intersections with planes. The direct and indirect approaches are compared using real data and a very high correspondence is found.     

Analysing convergence in Europe using the non-linear single factor model

We investigate convergence in European price level, unit labour cost, income and productivity data over the period of 1960–2006 using the non-linear time-varying coefficients factor model proposed by Philips and Sul (2007 Econometrica 75:1771–1855). This approach is extremely flexible in order to model a large number of transition paths to convergence. We find regional clusters in consumer price level data. GDP deflator data and unit labor cost data are far less clustered than CPI data. Income per capita data indicate the existence of three convergence clubs without strong regional linkages; Italy and Germany are not converging to any of those clubs. Total factor productivity data indicate the existence of a small club including fast-growing countries and a club consisting of all other countries.     

Pitfalls of post-model-selection testing: experimental quantification

Traditional specification testing does not always improve subsequent inference. We demonstrate by means of computer experiments under which circumstances, and how severely, data-driven model selection can destroy the size properties of subsequent parameter tests, if they are used without adjusting for the model-selection step. The investigated models are representative of macroeconometric and microeconometric workhorses. The model selection procedures include information criteria as well as sequences of significance tests (“general-to-specific”). We find that size distortions can be particularly large when competing models are close, with closeness being defined relatively to the sample size.     

Selection effects in auctions for monopoly rights

We demonstrate that auctioning market licenses may result in higher market prices than assigning them via more random allocation mechanisms. When future market profit is uncertain, winning an auction is like winning a lottery ticket. If firms differ in risk attitudes, auctions select the least risk-averse firm, which, in turn, set a higher price (or a higher quantity, in case quantity is the decision variable) in the marketplace than an average firm.