Survivor bias and mutual fund performance

Mutual fund attrition can create problems for a researcher becausefunds that disappear tend to do so due to poor performance.In this article we estimate the size of the bias by trackingall funds that existed at the end of 1976. When a fund mergeswe calculate the return, taking into account the merger terms.This allows a precise estimate of survivorship bias. In addition,we examine characteristics of both mutual funds that mergerand their partner funds. Estimates of survivorship bias overdifferent horizons and using different models to evaluate performanceare provided.     

Franchising,agency problems,and the cost of capital

Explanations for franchising are examined in the context of the US hotel industry. The study is distinct from previous research on franchising because it explicitly recognizes the existence of three organizational forms, whereas previous research has focused exclusively on two of these three forms. The two organizational forms examined in previous work are franchising and company ownership. The additional organizational form is company-management/investor-ownership, which involves management by the franchisor and ownership by outside investor groups. A plausible explanation for the existence of the last organizational form is based on the availability of low cost capital from non-chain sources.     

Lighting the way or stealing the shine? An examination of the duality in star scientists' effects on firm innovative performance

Do star employees enhance or constrain the innovative performance of an organization? Using data from 456 biotechnology firms between 1973 and 2003, we highlight the duality of the effects that stars have on firm performance. We show that while stars positively affect firms' productivity, their presence constrains the emergence of other innovative leaders in an organization. We find that firm productivity and innovative leadership among non‐stars in a firm are greatest when a star has broad expertise and collaborates frequently. We offer cross‐disciplinary insights into the role of human capital as a source of competitive advantage, suggesting that the value of human capital in a firm is contingent on the mutual dependence inherent in high‐status employees' relationships with other individuals in a firm. Copyright © 2014 John Wiley & Sons, Ltd.     

A general equilibrium appraisal of energy policy in Mexico

This paper develops a static neoclassical general equilibrium model of the Mexican economy that focuses on production, consumption, and exports of energy goods. The specification of the model allows the government to set prices and production levels of energy goods exogenously. Domestic prices differ from international prices, and net exports of these goods are determined residually. The level of energy exports is a major factor in the determination of the government and trade deficits. The analysis presented in this paper serves as a case study of how to design and use an applied general equilibrium model to do policy analysis. An interesting feature is that the model itself is used to determine one of the key parameters, the elasticity of substitution of non-energy imports for domestic goods.     

铜版纸胶印油墨组分的可视化分析

近年来,人们在纸张吸墨性与印品密度的关系方面进行了广泛的研究。本文将一系列热固型油墨的各组分分别印刷到铜版纸上,利用聚焦离子束（FIB）观察各组分的分布情况。然后利用同样的方法,观察成品油墨印刷时各组分的分布情况。油墨光油也适用于改良的薄层色谱（TLC）板,这些薄板与纸张涂有相同的涂层。TLC板上分离的油墨组分可以使用红外光谱来测定。实验结果表明,聚焦离子束可对进入涂料层的油墨组分进行观察,但是矿物油例外。由于其具有挥发性,在干燥后和真空环境内不能留在纸张涂层内,同时注意到当蜡溶解在油里的样品同样要求在涂层的孔隙结构有一个非常清晰的成像时,FIB图像的差异显著增加。这项研究与其他已知研究结果一致,即颜料和硬树脂留在涂层的表面,而矿物油和植物油迅速渗透进入涂层。酯类溶剂和溶解蜡同样渗入涂层。     

Lotteries, Sunspots, and Incentive Constraints

We study a prototypical class of exchange economies with private information and indivisibilities. We establish an equivalence between lottery equilibria and sunspot equilibria and show that the welfare and existence theorems hold. To establish these results, we introduce the concept of the stand-in consumer economy, which is a standard, convex, finite consumer, finite good, pure exchange economy. With decreasing absolute risk aversion and no indivisibilities, we prove that no lotteries are actually used in equilibrium. We provide a simple numerical example with increasing absolute risk aversion in which lotteries are necessarily used in equilibrium. We also show how the equilibrium allocation in this example can be implemented in a sunspot equilibrium. Journal of Economic Literature Classification Numbers: D11, D50, D82.     

Financial crises as herds: overturning the critiques

Financial crises are widely argued to be due to herd behavior. Yet recently developed models of herd behavior have been subjected to two critiques which seem to make them inapplicable to financial crises. Herds disappear from these models if two of their unappealing assumptions are modified: if their zero-one investment decisions are made continuous and if their investors are allowed to trade assets with market-determined prices. However, both critiques are overturned—herds reappear in these models—once another of their unappealing assumptions is modified: if, instead of moving in a prespecified order, investors can move whenever they choose.     

An empirical comparison of the Tucker-Messick and INDSCAL models: Measuring viewpoints about transit attributes

This investigation sought (1) to identify perceptually homogenous respondent groups by two individual differences scaling models initially proposed by Tucker and Messick, and Carroll and Chang, (2) to reveal the significance of group percepts with respect to anticipated satisfactions and socio-economic and activity pattern characteristics of group members, and (3) to test empirically the significance of formal distinctions between the two individual differences models. The study utilized judgments about 12 transit attributes of three innovative urban, public transportation modes from a sample of 243 respondents. It was possible to specify seven perceptually homogenous groups, which were distinct in terms of a qualitative analysis of their perceptual spaces and a quantitative convergent-discriminant validity analysis predicated on the distances between pairs of attributes in their spaces. The perceptual groups were shown to have interpretable links to socio-economic and activity pattern characteristics of the respondents. In addition, it was possible to statistically account for the satisfaction ratings of the respondents by the dimensions of their corresponding spaces. Since the Tucker-Messick model was shown to derive more distinct spaces for the separate groups than the INDSCAL model of Carroll and Chang, the Tucker-Messick spaces more uniquely tied a group's percepts to its corresponding satisfactions.     

On the need for fiscal constraints in a monetary union

The desirability of fiscal constraints in monetary unions depends critically on whether the monetary authority can commit to following its policies. If it can commit, then debt constraints can only impose costs. If it cannot commit, then fiscal policy has a free-rider problem, and debt constraints may be desirable. This type of free-rider problem is new and arises only because of a time inconsistency problem.     

Sudden stops,sectoral reallocations,and the real exchange rate

A sudden stop of capital flows into a developing country tends to be followed by a rapid switch from trade deficits to surpluses, a depreciation of the real exchange rate, and decreases in output and total factor productivity. Substantial reallocation takes place from the nontraded sector to the traded sector. We construct a multisector growth model, calibrate it to the Mexican economy, and use it to analyze Mexico's 1994–95 crisis. When subjected to a sudden stop, the model accounts for the trade balance reversal and the real exchange rate depreciation, but it cannot account for the decreases in GDP and TFP. Extending the model to include labor frictions and variable capital utilization, we still find that it cannot quantitatively account for the dynamics of output and productivity without losing the ability to account for the movements of other variables.