Economic Transition and Growth: A Replication

Phillips and Sul (Journal of Applied Econometrics 2009, 24 , 1153–1185) provide an algorithm to identify convergence clubs in a dynamic factor model of economic transition and growth. We provide a narrow replication of their key results, using the open source R software instead of the original GAUSS routines. We are able to exactly replicate their results on convergence clubs, corresponding point estimates and standard errors. We comment on minor differences between their reported results and their clustering algorithm. We propose simple adjustments of the original algorithm to make manual intervention unnecessary. The adjustments allow automated application of the algorithm to other data. Copyright © 2016 John Wiley & Sons, Ltd.     

THE "REAL" CHINESE GROSS DOMESTIC PRODUCT (GDP) FOR THE PRE-REFORM PERIOD 1952–77

This paper develops an econometric method based on the relationship between GDP and NMP to estimate an unknown Chinese GDP series of 1952–77 using recently available Chinese GDP data of 1978–90 and a reconstructed NMP series of 1952–90. In this manner, a long-term (1952–90) series of China's GDP has been obtained for long-term analyses. A reassessment of Chinese economic performance of 1952–90 using this series suggests that the paper's estimate provides a reasonable reflection of both the Chinese pre-and post-reform economic growth in terms of production structure, growth pattern and policy changes. A series of China's per capita GDP in U.S. dollars which is comparable to the World Bank's estimate for the early 1980s has also been obtained.     

Analyzing Potentials for Reducing the Energy Requirement of Households in The Netherlands

The energy requirement of households represents a useful concept in studying energy use in relation to production structures and consumption patterns. Reduction potentials of the energy requirement for households provide insight on the possibilities for reducing energy use in the whole economy. We determine reduction potentials by means of implementing energy conservation options in an input–output model for calculating the household energy requirement. The implementation of a set of technical energy conservation options results in a reduction in the energy requirement of Dutch households by 55%. The reduction potential based on a set of demand-side options is 9%. The combination of both sets of conservation options results in a reduction potential of 59%. Therefore, by combining (sets of) options, some effects are cancelled out.     

On nonparametric estimation of a hedonic price function

Recently, using mixed data on Canadian housing, Parmeter, Henderson, and Kumbhakar (Journal of Applied Econometrics 2007; 22 : 695–699) found that a nonparametric approach for estimating a hedonic house price function is superior to formerly suggested parametric and semiparametric specifications. We carefully reanalyze these specifications for this dataset by applying a recent nonparametric specification test and simulation‐based prediction comparisons. For the case at issue our results suggest that a previously proposed parametric specification does not have to be rejected and we illustrate how nonparametric methods provide valuable insights during all modeling steps. Copyright © 2010 John Wiley & Sons, Ltd.     

Psychological ownership and organizational optimism amid China's corporate transformation: effects of an employee ownership scheme and a management-dominated board

Ownership reform was introduced to Chinese state-owned enterprises in the early 1990s, to allow employees to own a share of their enterprises and to bring changes to the underlying structure of governance. However, effectiveness of this reform has yet to be ascertained. This study examines the effects of the new employee stock ownership scheme and board compositions on the attitudes employees hold towards their jobs and organizations, as well as their perceptions of ownership. We developed a theoretical model on how participation in a stock ownership scheme (an employee's characteristic) and the composition of the board of governance (a firm characteristic) may be linked to job satisfaction and, in turn, to outcome variables such as psychological ownership and organizational optimism. This model was tested on 510 employees randomly sampled from ten stock-holding enterprises in urban Shanghai. Results indicate that participation in a stock ownership scheme has a positive effect on attitudes towards ownership, but that a board dominated by senior managers leads to gloomy perception of a firm's future. These effects were partially mediated by the satisfaction that employees felt in their jobs. The implications of these findings for management practices in China are discussed.     

Computerized Decision Support Systems and Text Analysis: Evaluating CETA

Computers can play several different roles in text analysis. We will examine one of these, computerized decision support systems; first giving a brief introduction to the general features of this family of software and then focusing on CETA (Computer Aided Evaluative Text Analysis) – developed by Van Cuilenburg et al. (1988) – a well known example of this type of computer assisted text analysis tool. After outlining the principles and recommended procedures for the use of CETA, we will formulate several hypotheses concerning its strengths and weaknesses. These will be tested by means of a case study: an in-depth analysis of news coverage by the New York Times of the air traffic controllers' strike against the Reagan administration in the early 1980s. We will focus primarily on one key NYT editorial to illustrate the potential and limitations of CETA.     

The attack on share buybacks

Corporate share buybacks are under attack, mainly from the political left, but also to some degree from the right. Critics advocate increasing the tax on buybacks in the hope of inducing firms to invest more and in ways that benefit workers. This attack on buybacks reflects a misunderstanding of basic (textbook-level) finance principles. The approach advocated by critics will backfire at growth-stage firms, which will invest less, not more, because a payout-tax increase will reduce the supply of equity infusions. At mature firms that are generating ample free cash flow, managers can easily evade the (unattractive-for-shareholders) real investments that critics desire by investing retained cash in financial assets. Buyback critics should recognise that punishing cash payouts per se would be counterproductive, and should focus instead on making a case for legislation that creates incentives that directly promote the specific behaviours they desire.     

Government ideology and international migration*

We provide the first empirical evidence that government ideology affects the choice of migration destinations. As ruling political parties differ in their discourse, policies, and positions on migration, the ideology differential between the host and home country governments can shape the relative generosity of the welfare system, the degree of tolerance towards out-groups, and the restrictiveness of migration policies, all acting as important drivers of international migration. Using data on bilateral migration and government ideology for OECD countries between 1990 and 2016, we show that migration flows increase when the government at the destination becomes more left-wing relative to the government at the origin, particularly when both countries are members of the European Economic Area.     

Top management tournament incentives and credit ratings

Review of Quantitative Finance and Accounting - This paper investigates whether the current level of tournament incentives for top executives is related to the firm’s future credit rating....