PAIRWISE DIFFERENCE ESTIMATION WITH NONPARAMETRIC CONTROL VARIABLES*

This article extends the pairwise difference estimators for various semilinear limited dependent variable models proposed by Honoré and Powell (Identification and Inference in Econometric Models. Essays in Honor of Thomas Rothenberg Cambridge: Cambridge University Press, 2005) to permit the regressor appearing in the nonparametric component to itself depend upon a conditional expectation that is nonparametrically estimated. This permits the estimation approach to be applied to nonlinear models with sample selectivity and/or endogeneity, in which a “control variable” for selectivity or endogeneity is nonparametrically estimated. We develop the relevant asymptotic theory for the proposed estimators and we illustrate the theory to derive the asymptotic distribution of the estimator for the partially linear logit model.     

State Development Planning: Did it Create an East Asian Miracle?

East Asian countries have recorded large increases in per capita GDP over the last fifty years. Some observers have referred to this growth as an “East Asian Miracle.” One popular explanation attributes the rapid growth to state led industrial development planning. This paper critically assesses the arguments surrounding state development planning and East Asia’s growth. Whether the state can acquire the knowledge necessary to calculate which industries it should promote and how state development planning can deal with political incentive problems faced by planners are both examined. When we look at the development record of East Asian countries we find that to the extent development planning did exist, it could not calculate which industries would promote development, so it instead promoted industrialization. We also find that what rapid growth in living standards did occur can be better explained by free markets than state planning because, as measured in economic freedom indexes, these countries were some of the most free market in the world.JEL classification: O200, O170, O530, B530, P170     

The role of gender identity in explaining sex differences in business owners' career satisfier preferences

This study examines how gender identity explains what male and female business owners look for from their careers. Results suggest that gender identity, represented by the dimensions of masculinity and femininity, serves as a cognitive mechanism that contributes to sex differences in business owners' career satisfier preferences. Masculinity mediates the relationship between sex and preferences for status-based satisfiers. Femininity mediates the relationships between sex and preferences for employee relationship satisfiers and contribution to society satisfiers. These results support the view that entrepreneurship is a gendered process and that incorporation of a feminine perspective into entrepreneurial theories and research is needed.     

Firm size,takeover profitability,and the effectiveness of the market for corporate control: Does the absence of anti-takeover provisions make a difference?

The market for corporate control is generally regarded as an important disciplinary mechanism in well developed economies. Entrenchment mechanisms commonly used by US firms in the form of anti-takeover provisions (ATPs) may offer some protection from disciplinary action, facilitating entrenchment and value-reducing behavior. One manifestation of entrenchment is poor acquisitions, with the literature reporting significant losses to large acquirers, and to acquirers with a higher number of ATPs. We examine the profitability of acquisitions in Australia, a market where US-style ATPs are prohibited. The results show that unlike their US counterparts, large Australian acquirers earn significant value for their shareholders, both in terms of announcement returns and long-run operating performance improvements. Takeover premiums are also substantially lower than those reported for the US and UK, and do not differ between large and small acquirers. Premiums are also positively correlated with long-run operating performance, indicating that they reflect real synergies, as opposed to hubris or overpayment. We also find that bidders who destroy value in takeovers are likely to be subsequently acquired. However, unlike US evidence, larger acquirers are just as likely to be targeted for takeover as smaller acquirers, indicating that size is not an effective impediment to the disciplining function of the market for corporate control in Australia. The findings are robust to several econometric issues common to the type of models used in our analysis.     

Comparing the content of regulatory impact assessments in the UK and the EU

The need for effective leadership in the UK public sector has been a prominent discourse in recent years. One aspect of this is a growing interest in talent management. This article examines the evolution of processes used for managing talent and developing leaders in the UK's National Health Service (NHS) by applying human resource management theory to an empirical case study. Our aim was to provide a constructive, but critical, analysis of the current role of managerial talent management and to comment on the suitability of the adopted approach in the NHS. Over the past three decades the NHS has come to adopt an increasingly ‘hard’ approach to talent management, i.e. rationalistic, managerial and narrowly focused on leadership competencies and senior management roles. This parallels a more general shift in the NHS from its traditional public sector ethos and humanistic values to more business-oriented values and ways of working.     

DETECTING ABNORMAL RETURNS USING THE MARKET MODEL WITH PRE-TESTED DATA

The current literature suggests various alternative procedures for increasing the power of tests to detect abnormal returns in event studies. Using randomly constructed portfolios, we simulate events and compare the results of tests using three alternative procedures: traditional, cross-sectional, and cross-sectional with standardized residuals. For each test, we compare results when all observations are included with results when the observations with high trading volume are omitted from the estimation period. The simulation results indicate that both the traditional approach with omitted observations and the cross-sectional approach using standardized residuals with all observations yield approximately the correct test sizes and significantly improve the power of tests to detect abnormal returns. However, the cross-sectional approach using standardized residuals is clearly dominant among the three procedures.     

Explicating Ethical Corporate Marketing. Insights from the BP Deepwater Horizon Catastrophe: The Ethical Brand that Exploded and then Imploded

Ethical corporate marketing—as an organisational-wide philosophy—transcends the domains of corporate social responsibility, business ethics, stakeholder theory and corporate marketing. This being said, ethical corporate marketing represents a logical development vis-a-vis the nascent domain of corporate marketing has an explicit ethical/CSR dimension and extends stakeholder theory by taking account of an institution’s past, present and (prospective) future stakeholders. In our article, we discuss, scrutinise and elaborate the notion of ethical corporate marketing. We argue that an ethical corporate marketing positioning is a prerequisite for corporations which claim to have an authentic ethical corporate identity. Our article expands and integrates extant scholarship vis-a-vis ethical corporate identities, the sustainable entrepreneur and corporate marketing. In delineating the breadth, significance, and challenges of ethical corporate marketing we make reference to the BP Deepwater Horizon (Gulf of Mexico) catastrophe of 2010.     

New Evidence on Youth Smoking Behavior based on Experimental Price Increases

The high youth smoking prevalence remains an important public policy challenge into the 21st century. This study applies a unique approach to analyzing the impact of cigarette prices on youth smoking cessation by evaluating reactions among high school students to several alternative hypothetical price increases. It concludes that many young smokers believe that they would quit smoking or decrease their smoking intensity in response to a cigarette price increase. The estimated price elasticity of cessation is between 0.930 and 0.895. The results indicate that youth expect to change their smoking behavior even when the price change is relatively small. However, the behavioral change is most dramatic among those exposed to the largest price increases, suggesting a sustained impact of higher price on cigarette consumption. (JEL I18 )