Information in generalized method of moments estimation and entropy-based moment selection

In this paper, we make five contributions to the literature on information and entropy in generalized method of moments (GMM) estimation. First, we introduce the concept of the long run canonical correlations (LRCCs) between the true score vector and the moment function f(_vt,_θ0)$f(v_t,{\theta }_0)$ and show that they provide a metric for the information contained in the population moment condition E[f(_vt,_θ0)]=0$\mathrm{E}[f(v_t,{\theta }_0)]=0$. Second, we show that the entropy of the limiting distribution of the GMM estimator can be written in terms of these LRCCs. Third, motivated by the above results, we introduce an information criterion based on this entropy that can be used as a basis for moment selection. Fourth, we introduce the concept of nearly redundant moment conditions and use it to explore the connection between redundancy and weak identification. Fifth, we analyse the behaviour of the aforementioned entropy-based moment selection method in two scenarios of interest; these scenarios are: (i) nonlinear dynamic models where the parameter vector is identified by all the combinations of moment conditions considered; (ii) linear static models where the parameter vector may be weakly identified for some of the combinations considered. The first of these contributions rests on a generalized information equality that is proved in the paper, and may be of interest in its own right.     

Risk preferences under acute stress

Many important decisions are made under stress and they often involve risky alternatives. There has been ample evidence that stress influences decision making, but still very little is known about whether individual attitudes to risk change with exposure to acute stress. To directly evaluate the causal effect of psychosocial stress on risk attitudes, we adopt an experimental approach in which we randomly expose participants to a stressor in the form of a standard laboratory stress-induction procedure: the Trier Social Stress Test for Groups. Risk preferences are elicited using a multiple price list format that has been previously shown to predict risk-oriented behavior out of the laboratory. Using three different measures (salivary cortisol levels, heart rate and multidimensional mood questionnaire scores), we show that stress was successfully induced on the treatment group. Our main result is that for men, the exposure to a stressor (intention-to-treat effect, ITT) and the exogenously induced psychosocial stress (the average treatment effect on the treated, ATT) significantly increase risk aversion when controlling for their personal characteristics. The estimated treatment difference in certainty equivalents is equivalent to 69 % (ITT) and 89 % (ATT) of the gender-difference in the control group. The effect on women goes in the same direction, but is weaker and insignificant.     

Accounting and Auditing at the Time of Blockchain Technology: A Research Agenda

Blockchain is a distributed ledger technology expected to have significant impacts on the accounting and auditing profession. This study, applicable and timely for both accounting and auditing scholars and practitioners, explores blockchain technology and its main implications for the accounting and auditing profession. The research question addressed in this study is: What are the major themes emerging from academic research and professional reports and websites debating blockchain technology in the accounting and auditing context? A literature review of academic literature and professional reports and websites is performed to identify a taxonomy of emerging themes. The study finds that the most discussed themes in scholarly works and professional sources are governance, transparency and trust issues in the blockchain ecosystem, blockchain‐enabled continuous audits, smart contract applications and the paradigmatic shift in accountants' and auditors' roles. Based on these four themes, practical implications for accountants and auditors on how to approach the blockchain development are provided. Moreover, this study offers suggestions for future research on accounting and auditing in the blockchain era.     

ESTIMATING THE VALUE OF DELIVERY OPTIONS IN FUTURES CONTRACTS

We analyze the effect various delivery options embedded in commodity futures contracts have on the futures price. The two embedded options considered are the timing and location options. We show that early delivery is always optimal when only a timing option is present, but not so when joint options are present. The estimates of the combined options are much smaller than the comparable estimates for the timing option alone. The average value of the joint option is about 5% of the average basis on the first day of the maturity month. This suggests that joint options can increase deliverable supplies while potentially having only a small effect on basis behavior.     

On the (in)effectiveness of rewards in sustaining cooperation

We study the effectiveness of costly rewards in mitigating excess extraction in a standard Common Pool Resource (CPR) game experiment. We implement two treatments. In the first, rewards are a pure transfer from one player to the other. In the second, the benefits of receiving a reward are higher than the cost of providing it. Referring to the latter as “net positive” rewards, we observe that these are used more frequently than transfer rewards, and that, unlike transfer rewards, they are effective in sustaining cooperation in the CPR game. JEL Classification C72, C92, D74     

Resource utilization and procedure-related costs associated with transfemoral transcatheter aortic valve replacement

Aims: Transcatheter aortic valve implantation (TAVI) is an alternative to surgical valve replacement for patients with aortic stenosis (AS). This study assessed the impact of changing from a self-expandable (SE) valve to a balloon-expandable (BE) valve on healthcare resource use and procedural costs in a population of inoperable AS patients.

Methods: In this retrospective single center study, data for 195 patients who received either an SE or a BE valve between 2010–2014 were collected. Procedural and post-procedural healthcare resource use and cost parameters were determined for the two groups.

Results: The study showed that overall procedural time, including time required by medical personnel, was significantly shorter for TAVI using a BE compared with an SE valve. Post-surgery, patients in the BE valve group had significantly shorter hospital stays than the SE valve group, including significantly fewer days spent in the intensive care unit (ICU). Additionally, trends towards reduced 30-day mortality, incidence of new permanent pacemaker implantation, and incidence of blood transfusion were observed in the BE valve group compared with the SE valve group. Finally, total procedural costs were 24% higher in the SE compared with the BE valve group.

Limitations: The BE valve data were acquired in a single year, whereas the SE valve data were from a 5-year period. However, a year-by-year analysis of patient characteristics and study outcomes for the SE valve group showed few significant differences over this 5-year period.

Conclusions: Overall, changing from an SE to a BE valve for TAVI in patients with severe AS reduced both healthcare resource use and procedure-related costs, while maintaining patient safety. For healthcare providers, this could increase efficiency and capacity within the healthcare system, with the added advantage of reducing costs.     

Fire the manager to improve performance?Managerial turnover and incentives after privatization in the Czech Republic

This paper analyses the effect of the introduction of managerial incentives and new human capital on enterprise performance immediately after privatization in the Czech Republic. We find weak evidence for the presence of managerial incentives: only from 1997, 3 to 4 years after privatization, does poor performance significantly increase the probability of managerial change. Nevertheless, replacing the managing director in a newly privatized firm improves subsequent performance. This indicates that the privatized firms operate below potential under the incumbent management. We show that the institutional framework matters as well: managerial turnover improves performance only if the management is closely interconnected with the board of directors and thus holds effective executive authority.     

The role of diaspora in opportunity-driven entrepreneurial ecosystems: A mixed-methods study of Balkan economies

Migration is among the main factors influencing economic development in the twenty-first century. And while much research has explored the role of migration on economic growth, the role of diaspora for the development of the country-of-origin entrepreneurial ecosystems remains virtually unknown. We advance evidence that the entrepreneurial activity in a country does not depend only on the activities of the current residents but also on the ties that keep them interconnected via its diaspora to global entrepreneurial hubs and on the (intangible) resources that the diaspora makes available to local entrepreneurs. We perform a mixed-method study and provide evidence consistent with the idea that the diaspora stimulates opportunity-driven entrepreneurial activity despite potential conditions of a brain drain, by contributing essential social and human capital to the resources available locally.

     

The human experience of ethics: a review of a decade of qualitative ethical decision‐making research

Qualitative studies are an important component of business ethics research. This large amount of research covers a wide array of factors and influences on ethical decision making published between 2004 and 2014. Following the methodology of past critical reviews, this work provides a synopsis of the diverse array of qualitative studies in ethical decision making within the business ethics literature. We highlight the distinct and investigative nature of qualitative research, synthesize and summarize findings, and suggest opportunities for future research. We conclude with a recommendation for developing qualitative studies in business ethics and a call for an increased openness when considering this valuable and underrepresented strategy of inquiry.     

Specifics of Real Estate Taxation in the Czech and Slovak Republics

International Advances in Economic Research - This article is focused on the real estate tax in the Czech and Slovak Republics. Different approaches to the tax are applied (determination of...