Efficient rank tests for semiparametric competing risk models

We consider a semiparametric competing risk model given by k independent survival times. The paper offers an asymptotic treatment of tests for the semiparametric null hypothesis of equality of the underlying risks. It turns out that modified rank tests are asymptotically efficient for certain semiparametric submodels, where the baseline hazard is a nuisance parameter. In addition, the asymptotic relative efficiency of the present tests is derived. A comparison of asymptotic power functions can then be used to classify various tests proposed earlier in the literature. For instance a chi-square type test is efficient for proportional hazards. Data driven tests of likelihood ratio type are proposed for cones of alternatives. We will consider certain stochastically increasing alternatives as a special example. The paper shows how the concept of local asymptotic normality of Le Cam works for hazard oriented models.     

The efficiency of top agents: An analysis through service strategy in tennis

We consider the question whether top tennis players in a top tournament (Wimbledon) employ an optimal (efficient) service strategy. While we show that top players do not, in general, follow an optimal strategy, our principal result is that the estimated inefficiencies are not large: the inefficiency regarding winning a point on service is on average 1.1% for men and 2.0% for women, implying that–by adopting an efficient service strategy–players can (on average) increase the probability of winning a match by 2.4%-points for men and 3.2%-points for women. While the inefficiencies may seem small, the financial consequences for the efficient player at Wimbledon can be substantial: the expected paycheck could rise by 18.7% for men and even by 32.8% for women. We use these findings to shed some light on the question of whether economic agents are successful optimizers.     

USING HAPPINESS DATA FOR ENVIRONMENTAL VALUATION: ISSUES AND APPLICATIONS

Abstract.  In addition to standard methods of environmental valuation, a novel approach has recently emerged which models individuals' self-rated happiness as a function of their incomes and the prevailing environmental conditions. The estimated relationship is used to calculate the trade-off people would be willing to make between income and environmental conditions, i.e. the increase in income necessary to compensate individuals for any given decline in environmental quality. While the basic idea is simple, the theoretical and empirical details may be complex, and they may vary from application to application. This paper discusses the relevant conceptual and methodological issues and reviews applications to air and water pollution, noise nuisance, climate parameters, and natural hazards.     

A quintessential immigrant niche? The non-case of immigrants in the Dutch construction industry

Students of immigrant entrepreneurship show a distinct preference for ethnic concentrations. They focus on small entrepreneurship in sectors with large concentrations of immigrant businesses or on ethnic commercial precincts. This preference stems from practical and theoretical considerations. It seems that the study of such concentrations, or niches, is essential to the theoretical understanding of the structural determinants of small entrepreneurship and the processes of economic incorporation of immigrants. This paper challenges this orthodoxy. It argues that it is important to assess the factors and processes that positively and negatively affect the formation of niches. This argument is corroborated by an analysis of the construction industry in the Netherlands. According to Waldinger (1995: 577), ‘construction represents the quintessential ethnic niche’, but immigrants in the Netherlands did not carve out a niche. This exceptional situation can be attributed to a sector-specific configuration of social, economic and institutional processes.     

Expatriate or local bosses? HCN subordinates' preferences in leadership behaviour

This article explores host-country national subordinates’ preferences in leadership behaviour comparing expatriate bosses and local bosses. From a sample of 240 middle managers in Hong Kong with experience with both local Chinese bosses and expatriate bosses from a broad spectrum of Western and Asian countries, it was found that the subordinate managers assessed the leadership behaviour of their expatriate bosses to be significantly closer to that of their perceived ideal boss. American leadership behaviour was the most preferred and Japanese leader style was the least preferred, with British leadership style comprising a middle group. Implications of these findings for international business firms and future academic research are discussed.     

The process of consultation: responding to challenge

China could be a challenging destination for Western business expatriates. However, their extent of adjustment to life and work could be contingent on the size of the location of their assignment. Maybe Westerners adjust more easily to large cities with their more Western-style way of life and consumption patterns than to less Westernized small towns and villages. To examine this proposition, a mail survey was directed at Western business expatriates assigned to locations of varying size in China. As expected, results showed that the size of the location was positively associated with adjustment to the general non-work environment as well as with work adjustment. Surprisingly, there was no relationship between the size of the location and adjustment to interacting with host nationals, presumably due to language problems. The distinct implications of these findings are discussed in detail.     

MULTIVARIATE METHODS FOR MONITORING STRUCTURAL CHANGE

Detection of structural change is a critical empirical activity, but continuous ‘monitoring’ for changes in real time raises well‐known econometric issues that have been explored in a single series context. If multiple series co‐break then it is possible that simultaneous examination of a set of series helps identify changes with higher probability or more rapidly than when series are examined on a case‐by‐case basis. Some asymptotic theory is developed for maximum and average CUSUM detection tests. Monte Carlo experiments suggest that these both provide an improvement in detection relative to a univariate detector over a wide range of experimental parameters, given a sufficiently large number of co‐breaking series. This is robust to a cross‐sectional correlation in the errors (a factor structure) and heterogeneity in the break dates. We apply the test to a panel of UK price indices. Copyright © 2011 John Wiley & Sons, Ltd.     

Organizing innovation projects under technological turbulence

Research on the organization of innovation projects suggests that increased project flexibility is a common reaction to high levels of technological turbulence. However, existing definitions of project flexibility are inconsistent and sometimes unclear, and empirical evidence is limited. This article makes an important distinction between flexible project planning and flexible project specifications. A negative relationship is found between flexible project planning and innovation project performance, whereas flexible product specifications are found to contribute positively.This article also examines how technological turbulence contributes to the choice of flexible or inflexible strategies. Technological turbulence can be present in the external environment or can be internal to the firm, when radically new products are developed. The findings suggest that when businesses perceive technological turbulence in the environment they are more likely to adopt flexible approaches to innovation in an attempt to adapt to external pressures. In technologically innovative projects, product specifications are likely to remain fixed while project organization is likely to be adapted to the needs of the project.Taken together, the findings suggest that innovation projects should maintain stable organization, schedules and budgets, but stay flexible about product specifications. Vigilance with regards to external and internal conditions of technological turbulence, which may lead organizations to be more flexible in terms of project planning, is needed.     

Does unemployment lead to a less healthy lifestyle?

In this article, we use 22 years of data from the German Socio-Economic Panel and information on plant closures to investigate the effects of unemployment on four indicators of unhealthy lifestyles: diet, alcohol consumption, smoking and (a lack of) physical activity. In contrast to much of the existing literature, which unlike our analysis is unable to assess causality, our results provide little evidence that unemployment gives rise to unhealthy lifestyles.     

Unbundling institutional determinants of multinational investments

Previous studies often examined how a broad-based institution affects foreign direct investment (FDI) flows across countries. However, analysis of differential impacts of two or more constituent institutions within a broad-based institution appears to be more useful for policy decision-making. There is a paucity of studies on how constituent institutions within a broad measure of institution affect FDI across countries. Our article constitutes the first attempt in bridging this gap. In this article, we examine the relative effects of property rights institution (PI) and contracting institution (CI) on investment flows. Our results show that PI is much more important than CI in determining the cross-border flows of FDI and affiliate sales. Moreover, PI is found to be more important for FDI than for affiliate sales, indicating that final goods are less of a concern for being expropriated by governments and powerful elites than capital goods. Through unbundling a broad-based institution and examining how the constituent institutions affect investments flows, our article provides practical location decisions for investments in FDI, mergers and acquisitions (M&A) and affiliate sales.