An Analysis of the Value Added by Secondary Schools in England: Is the Value Added Indicator of Any Value?*

This paper argues that the value added score published for all publicly funded secondary schools in England is an unreliable indicator of school performance. A substantial proportion of the between‐school variation in the value added score is accounted for by factors outside the school's control. These factors include several pupil‐related variables such as the proportion of pupils on free school meals, the authorized absence rate of pupils and the proportion of pupils from ethnic minority backgrounds. The value added score is also related to several school characteristics such as the school's admission policy and its subject specialism. The main policy recommendation of this paper is that the value added score should not be used as a performance indicator, but should be used to gain a better understanding of why the value added score varies between schools.     

Tariff escalation and invasive species damages

We investigate the interface between trade and damages from invasive species (IS), focusing on escalation in tariffs between raw-input and processed-good markets, and its implication for IS-based damages. The current tariff escalation in processed agro-forestry products motivates our analysis. Tariff escalation exacerbates the likelihood of IS introduction by biasing trade flows towards increased trade of primary commodity flows and against processed-product trade. We show that a reduction of tariff escalation, by lowering the tariff on processed goods increases allocative efficiency and reduces IS-based damages, a win-win situation. We also identify policy menus for trade reforms involving tariffs on both raw input and processed goods leading to win-win situations.     

Why Gaussian macro-finance term structure models are (nearly) unconstrained factor-VARs

This paper explores the implications of filtering and no-arbitrage for the maximum likelihood estimates of the entire conditional distribution of the risk factors and bond yields in Gaussian macro-finance term structure model (MTSM) when all yields are priced imperfectly. For typical yield curves and macro-variables studied in this literature, the estimated joint distribution within a canonical MTSM is nearly identical to the estimate from an economic-model-free factor vector-autoregression (factor-VAR), even when measurement errors are large. It follows that a canonical MTSM offers no new insights into economic questions regarding the historical distribution of the macro risk factors and yields, over and above what is learned from a factor-VAR. These results are rotation-invariant and, therefore, apply to many of the specifications in the literature.     

CEO Optimism and the Credibility of Open-Market Stock Repurchase Announcements

Given their low-cost and low level of commitment, open-market stock repurchase announcements are often viewed by the market with a degree of skepticism, leading to a weak initial market reaction followed by positive stock price drifts. The authors argue that the repurchase announcements made by optimistic CEOs should be more credible than those made by nonoptimistic CEOs. Our results show that optimistic CEOs are more likely to actually buy back their shares after the announcements and the abnormal returns following repurchase announcements are larger for optimistic CEOs. This evidence suggests that CEO optimism is an important factor that the market seems to overlook while evaluating the credibility of open-market repurchase announcements. Our main contribution is to link one of the most important managerial traits, optimism, to the open-market repurchases.     

Supply-Side Innovation and Technology Commercialization

The majority of research and practice tends to conceptualize innovation as a vertically coupled, intra-organizational process. We expand this perspective by conceptualizing innovation as a vertically decoupled, inter-organizational process and by studying the role of research universities as suppliers of discoveries to this market for innovation . We combined logic from agency and real options theories to explain why the outcomes of technology commercialization are a function of licensing strategies, the autonomy of technology licensing offices (TLOs), and the incentives bestowed on scientists, research departments, and TLO officers. We rely on data from licensing surveys, interviews with 128 TLO directors, and – for convergent validity – from web-based searches of the TLOs of American universities and the US Patent and Trademark Office. Results suggest that commercialization outcomes (in this case, revenue and start-up creation) are enhanced when TLOs employ diverse licensing strategies, TLOs enjoy greater autonomy, universities share revenues with scientists' departments, and universities compensate TLOs officers well. Results also show that late entrants – typically underperforming universities – inflate royalty shares to scientists as a means to rectify their commercialization record. We conclude with a discussion of this study's contribution to the literature on innovation and technology commercialization.     

The price of variance risk

Between 1996 and 2014, it was costless on average to hedge news about future variance at horizons ranging from 1 quarter to 14 years. Only unexpected, transitory realized variance was significantly priced. These results present a challenge to many structural models of the variance risk premium, such as the intertemporal CAPM and recent models with Epstein–Zin preferences and long-run risks. The results are also difficult to reconcile with macro models in which volatility affects investment decisions. At the same time, the data allows us to distinguish between different disaster models; a model in which the stock market has a time-varying exposure to disasters and investors have power utility fits the major features of the variance term structure.     

The CAP and comparative advantage changes: The case of processed food and agricultural products

Conclusion This empirical study has analysed the implications of the CAP for member countries' net trade performance: To this effect it has attempted to distinguish supply and demand effects appropriately reflected in the comparative advantage concept and specific to a product, from factors related to national environment, specific to the country. Our findings have shown unambiguously that national environment effects have been relatively modest in general, compared to comparative advantage effects which have played a dominant role in determining trade performance. On the other hand, the comparative advantage gains over the period under consideration have been secured through a deliberate community policy choice and accentuated by the tendency of national governments to renationalize the CAP.This policy has undoubtedly been successful in bringing about an efficient agricultural sector for EC members and in reducing the gap in terms of comparative advantage between these countries, particularly to the benefit of the less favoured among them. However, since the CAP is basically founded on the manipulation of the price system which largely determines the present pattern of comparative advantage, a serious question could be raised as to whether this pattern will remain unaffected in the event that the support price system should come to an end, or at least be severely reshaped, in the face of the growing burden imposed on the community and the pressing need for the latter to sell the surpluses, with the aid of subsidies, on world markets. If the gains in comparative advantage could not be considered as definitively acquired, we should obviously challenge the wisdom of continuing to endure the cost of the policy.On a conceptual level, since the price system prevailing in the community has been policy determined, an investigation into the major determinants of comparative advantage for the protected products in following the Heckscher-Ohlin line which emphasizes the influence of factor endowments, whatever these factors may be, would appear to be in our opinion, irrelevant.This paper is an extension of a research on International Specialization in Differentiated Products carried out with the financial support from the Commissariat Général du Plan. The views expressed here are attributable solely to the author, who wishes to express his thanks to Olivier Gaussens for his computer assistance, and to Luc Bauwens for his helpful comments. For lack of space, the detailed computation will be sent on request.     

Regional differences in the production processes of financial and social outputs of microfinance institutions

This study uses panel data of microfinance institutions across the world to compare production processes across regions, assess the relevance of unobserved heterogeneity and estimate economies of scale. Comparing a financial production process to a multidimensional production process that accounts for the presence of outreach in the objective function suggests that financial and social output reflect complements in South Asia but not in other regions. Furthermore, we find substantial economies of scale for a pure financial production process. However, accounting for outreach lowers estimated economies of scale, suggesting that producing outreach creates high transaction costs and requires exploitation of local knowledge.     

Vietnam in transition: SMEs and the necessitating environment for entrepreneurship development

A transitional economy has been characterized as experiencing a large amount of economic and social change. SMEs can be considered as the vehicle for entrepreneurship development in such a context. The purpose of this paper is to further the investigation of the favourability of the transitional environment on SMEs and entrepreneurship in Vietnam. Using a new approach, we analyse the transitional economy discourse via examining government policies, international organization reports and academic articles on Vietnam. Our findings suggest that, in Vietnam, compared to an overall normative framework developed from a wide literature review, the settings generally support a vibrant transitional entrepreneurship development and SMEs. However, more needs to be done to build up favourable sociocultural setting and effective business support systems in the country. Implications for the relevant stakeholders and suggestions for future research in the East Asian and Central and Eastern Europe regions are also provided.     

How foreign direct investment promote institutional quality: Evidence from Vietnam

Using a unique dataset from a provincial competitiveness survey and the rising foreign direct investment (FDI) from joining the World Trade Organization (WTO), I find that variations in economic institutions across the provinces of Vietnam are associated with the flow of foreign investment. To overcome endogeneity problems, I use the minimum distance from each province to a main economic centre as an instrument for foreign investment inflows. The instrumental variable approach shows that the direction of influence is from greater foreign investment to better institutions. These results hold after controlling for various additional covariates, and are also robust to various alternative measures of institutions. I also find that foreign direct investment has greater short-term impacts on institutional quality in the northern provinces.