An IV Test for a Unit Root in Generally Trending and Correlated Panels

This paper proposes an IV‐based panel unit root test that is general enough to accommodate general error serial and cross‐section dependence, and a potentially nonlinear deterministic trend function. These allowances make the new test one of the most general around. It is also very simple to implement. Indeed, the IV statistic is asymptotically invariant to not only to all nuisance parameters characterizing the dependence of the errors and the true trend function, but also the deterministic specification of the fitted test regression.     

Why and how to compete through sustainability: a review and outline of trends influencing firm and network-level transformation

International Entrepreneurship and Management Journal - This article reviews and discusses how to compete with sustainability by reviewing the literature about sustainability, business models,...     

Fixed effects demeaning in the presence of interactive effects in treatment effects regressions and elsewhere

The present paper shows that cross-section demeaning with respect to time fixed effects is more useful than commonly appreciated, in that it enables consistent and asymptotically normal estimation of interactive effects models with heterogeneous slope coefficients when the number of time periods, T, is small and only the number of cross-sectional units, N, is large. This is important when using OLS but also when using more sophisticated estimators of interactive effects models whose validity does not require demeaning, a point that to the best of our knowledge has not been made before in the literature. As an illustration, we consider the problem of estimating the average treatment effect in the presence of unobserved time-varying heterogeneity. Gobillon and Magnac (2016) recently considered this problem. They employed a principal components-based approach designed to deal with general unobserved heterogeneity, which does not require fixed effects demeaning. The approach does, however, require that T is large, which is typically not the case in practice, and the results reported here confirm that the performance can be extremely poor in small-T samples. The exception is when the approach is applied to data that have been demeaned with respect to fixed effects.     

Who leaves after entering the primary sector? Evidence from Swedish micro-level data

Using 14 waves of panel data, this paper investigates why employeesentering the primary sector exit subsequently. Transition probabilitiesare explained by a rich set of individual, regional and sectoralcharacteristics and a discrete-time competing risks model withunrestricted base-line hazards is used to distinguish betweenexits into a job in other sectors and other exits. The resultsconfirm Jovanovic's suggestion of ‘survival of the fittestmatches’ as workers and firms learn more about the qualityof the match between them. It is found that agricultural education,higher income and sector wage differences are the main determinantsof the hazard of moving to another sector, whereas marriageand higher education lower the hazard of leaving for non-employment.     

Network capability,innovativeness, and performance: a multidimensional extension for entrepreneurship

Abstract

Small- and start-up firms in the high-tech industry usually engage in networking to overcome resource, knowledge, and competence constraints in creative, innovation-based competition. Quite often, however, network relationships fail due to lack of network capability (NC), defined as the ability to manage and gain benefits from external relationships. In the present study, we propose and examine an updated five-dimension NC construct and test its effect on innovativeness and performance. Two independent high-tech samples of small firms and start-ups support measurement properties of the proposed NC construct and suggest that the often-overlooked dimension in NC research of network relationship building is important to include in a complete NC construct. Doing so can help explain organizational innovativeness and effects on the customer, sales, and innovation performance more effectively. As a result, we find support for the proposed NC scale and the importance of network capabilities for small companies and start-ups to remain competitive.     

Euphemisms and hypocrisy in corporate philanthropy

Over the past two decades, a growing number of large multinational corporations have come to view philanthropy as an important part of their business operations. This has stimulated research on the many different strategies that are pursued by these corporations in their attempts to become more philanthropic while remaining economically responsible. In this situation, some researchers have argued, corporations run the risk of being caught out as hypocrites. Through an analysis of the corporate social responsibility reports of the biggest multinational corporations, this article shows how the risk of hypocrisy is managed communicatively through the use of euphemisms. The article argues that the use of euphemisms makes it possible to communicate both economically and philanthropically without manifest contradictions. Euphemisms, however, are also risky in their own right.     

Free Immigration and Welfare Access: The Swedish Experience

With the expansion of the European Union from 15 to 25 member countries in 2004, fears of migrants’ excessive welfare use led 14 of the 15 older member countries to impose restrictions on the access of citizens of the new member countries – the A10 countries – to their welfare systems. Sweden was the only exception. This paper evaluates the net contribution of post‐enlargement A10 immigrants to Swedish public finances in 2007. On average, A10 immigrants generate less public revenue than the population on average, but they also cost less. The net result is a zero or small positive net contribution. In particular, A10 immigrants do not benefit more from basic social welfare than the population on average. The discounted net contribution over the A10 immigrants’ lifetimes may be positive or negative depending, for example, on their income assimilation rates and on future real interest rates.     

Microfinance Traps and Relational Exchange Norms: A Field Study of Women Entrepreneurs in Tanzania

In interdependent social groups, microfinance traps occur when conflicts arise between borrowers’ affective ties related to family needs and instrumental ties related to obligations toward their loan group. Thus, the social capital that facilitates microfinancing can lead to conflicting obligations toward business needs and economic obligations toward family. Building on an inductive field study among female entrepreneurs in Tanzania, we conceptualize microfinance traps. By using relational contract theory to interpret the qualitative data, we argue that microfinance traps can be reduced by balancing role integrity, preserving norms and reciprocity, and harmonizing the social matrix toward the family and loan group.     

Should I invest with my conscience?

This paper discusses the idea that investors have moral reasons to avoid investing in certain business areas based on their own moral views towards these areas. Some have referred to this as 'conscience investing', and it is a central part of the conception of ethical investing within the socially responsible investment (SRI) movement. The paper presents what is taken to be the main arguments for this kind of investing as they are given by those who have defended it, and discusses the plausibility of these arguments from the point of view of moral philosophy. The paper argues that focusing on the moral views of individual investors is not very fruitful – there are strong reasons to think that investors do not have moral reasons to invest 'with their consciences', or, to the extent that such reasons are allowed, that they are very weak compared with other sorts of moral reasons pertaining to ethical investing.     

Speculative trading preferences of retail investor birth cohorts

This study examines the effect of investor birth cohorts on speculative investment preferences. Using retail trading and portfolio data from Finland over two decades, we find that individuals who have experienced desirable macro-economic and social conditions during adolescence, such as high gross domestic product (GDP) growth and low divorce rates, are more likely to invest in speculative stocks. A positive relation is found between the proportion of speculative-prone cohorts in the stock market and returns of stocks of lottery nature. We provide new evidence on the adverse effect of speculative investments, finding that cohorts with higher speculative investment weights on their portfolios achieve lower absolute and risk-adjusted returns. We also provide support for earlier research that identifies a positive association between recent portfolio performance and the propensity to invest in speculative stocks.