A multilevel government model of deficits and inflation

In this paper, an attempt is made to properly identify the link between deficits and the rate of inflation by using two alternate macroeconomic models—one based on adaptive expectations and the other on rational expectations—for a multilevel government system. It is assumed that unlike federal deficits, state deficits cannot be monetized. Nonetheless, the interaction between state and federal inflation is explicitly incorporated into the model. When expectations are formed adaptively, the model confirms the positive link between deficits and rate of inflation. However, with rational expectations, the model shows that inflation is, in part, explained by the forecast error. It is proposed that only empirical testing of the theoretical models would give credence to such conclusions.     

Development of a service quality model for academic libraries

The purpose of this research is to develop a model for the measurement of library service quality. 1629 students studying in different universities and degree awarding institutions responded to a survey. Confirmatory factor analysis developed a valid and reliable service quality measurement scale with 6 dimensions and 30 items. This research contributes to the measurement of service quality by developing a valid and reliable measurement scale in a previously neglected population. The model developed in this research can be used by librarians to measure, control and improve the service quality provided to students. This research also provides a framework for researchers to develop further library service quality scale development studies so that more concrete generalizations can be made.     

Impact of domestic financial liberalization on economic growth in Pakistan

This paper attempts to investigate the domestic components of the financial liberalization process in Pakistan and develops an index of domestic financial liberalization capturing the important dimensions of reform process. Employing the multivariate co-integration technique and error-correction mechanism, the results indicate a positive impact of the index on economic growth in the long run, while its short run impact is found to be negative. Empirical findings highlight the importance of further financial deepening and financial intermediation, in a conducive environment, that are essential components to successfully implement reforms for growth stimulation.     

Agricultural exports and economic growth in Pakistan: an econometric reassessment

Agriculture sector works as backbone of Pakistan economy. In this modern era, exports work as locomotive of growth train. Pakistan earned a handsome amount through exports of agricultural raw material and refined products. This research investigates that either there is unidirectional or bidirectional association between agricultural exports and economic growth in Pakistan? For empirical investigation of relationships between economic growth and agricultural exports in Pakistan this study used most reliable econometric estimation tools, augmented Dickey–Fuller unit root test, Johansen co-integration and Engle–Granger causality tests for 45 time series annul observations from 1970 to 2014. This research winds up that Pakistan’s agricultural exports have positive but insignificant association with gross domestic product growth. It is due to the primary and raw material agricultural products exports which cannot compete in international markets due to close competitions, lower quality and dearer price. Consequently, receive a trifling amount as exports earnings; contribute slightly in national economic growth.     

Firm selection and industry evolution: the post-entry performance of new firms

A dynamic framework based on the process of firm selection and industry evolution is used to analyse the post-entry performance of new firms. In particular, it is hypothesized that, based on the stylized fact that virtually all new firms start at a very small scale of output, firm growth and survival are shaped by the need to attain an efficient level of output. The post-entry performance of more than 11,000 U.S. manufacturing firms established in 1976 is tracked throughout the subsequent tenyear period. Firm growth is found to be negatively influenced by firm size but positively related to the extent of scale economies, capital intensity, innovative activity, and market growth. By contrast, the likelihood of survival is identified as being positively influenced by firm size, market growth, and capital intensity, but negatively affected by the degree of scale economies in the industry. When viewed through the dynamic framework of firm selection and industry evolution, the empirical results shed considerable light on several paradoxes in the industrial organization literature, such as the continued persistence over time of an asymmetrical firm-size distribution consisting predominantely of suboptimal scale firms, and the failure of capital intensity and scale economies to substantially deter the entry and start-up of new firms.     

Substitution of labour,capital and energy in the manufacturing sector of Pakistan

Share equations of labour, capital, energy and fuel types, derived from translog cost functions, are estimated by Zellner iterative method to obtain elasticities of labour, capital, energy and fuel types and elasticities of substitution between them. Labour, capital and energy appear as substitutes, natural gas and electricity as complements, and other fuels as substitutes.     

Is there a poverty trap for developing countries? Polarization: Reality or myth

A general view that as between countries ‘the rich are getting richer while the poor are getting poorer’ supported in the development literature by explanations relating to cumulative causation, economies of scale etc., and statistically based on the relation between GNP per capita in 1978 and its growth rates during 1960–1978, is shown to contain considerable elements of ‘myth’ or statistical ‘delusion’. The ‘naïve’ polarization hypothesis based on income levels at the end of the period over which growth rates are measured is left with a much weakened empirical basis when the proper substitution of levels of income at the beginning of the period is made. This is particularly so for low- and middle-income countries taken separately, while for the 18 industrialized countries a strong tendency towards convergence in per capita incomes emerges. Finally, for the growth in manufacturing value added during 1960–1977 a significant tendency towards convergence was observed in the case of a group of 24 least developed countries.     

Measuring wage effects of plant size

There are large plant size–wage effects in the Nordic countries after taking into account individual and job characteristics as well as systematical sorting of the workers into various plant-sizes. The plant size–wage elasticities we obtain are, in contrast to other dimensions of the wage distribution, comparable to the plant-size effects in other countries such as the U.S. with completely different institutions of wage setting. We also investigate the consequence of measurement error associated with the common practice of using midpoints of plant-size classes to estimate the plant size–wage elasticity. Our results indicate that using size–class midpoints yields essentially the same results as using exact measures of plant size.     

Centralization of intragroup equity ties and performance of business group affiliates

Research summary : Although prior research has suggested that equity ties are important for business groups, less attention has been paid to the specific mechanisms through which equity ties create value. We develop a framework that specifies how centralization of intragroup equity ties affects the performance of group affiliates. We use the exogenous shock of the 2008 financial crisis and a difference‐in‐differences analysis of 51,730 observations of business group affiliates in Taiwan to show that centralization of equity ties enhances affiliate performance, but such effects weaken when the environment becomes turbulent. Moreover, we find that listed affiliates obtain fewer benefits from centralization than unlisted affiliates. Overall, our study deepens scholarly understanding of not only how groups create value, but also how value is differentially appropriated among affiliates. Managerial summary : Our research speaks directly to owner‐managers of business groups with respect to creating an optimal equity network structure that binds the affiliated firms of the group. Our findings suggest to managers that the overall structure of equity ties in a business group has major implications for the performance of the affiliate firms of the group, and the network structure within the group should be designed deliberately and thoughtfully on an on‐going basis. In particular, control through centralized equity ties is performance‐enhancing in normal periods, but such control may be counterproductive as turbulence increases in business environments, or as the number of listed group firms increases. Hence, owner‐managers may consider optimizing the network structure by lowering the degree of centralized equity ties under such circumstances, or at a minimum, lowering centralized control. Copyright © 2016 John Wiley & Sons, Ltd.     

Customer perceptions of “McService”’: Relationship with return intention

The fast-food restaurant segment has been a dominant player in the restaurant industry since the 1960s. The recent changes in the needs and wants of guests have affected fast-food restaurants' ability to keep up with the trends regarding healthy and high-quality food options served at reasonable prices. The service quality perceptions assessed in this study were divided into the following constructs: overall experience, employees, ordering process, receiving order, and food quality. The results determined that the construct that influenced repeat intention was food quality, specifically the individual items “fresh food” and “food taste.” The study also found that males tended to evaluate employees more positively than females. Moreover, frequent fast-food diners only tended to have favorable perceptions with regard to the overall ordering process. Implications for practitioners and suggestions for future studies are discussed.