The directional profit efficiency measure: on why profit inefficiency is either technical or allocative

The directional distance function encompasses Shephard’s input and output distance functions and also allows nonradial projections of the assessed firm onto the frontier of the technology in a preassigned direction. However, the criteria underlying the choice of its associated directional vector are numerous. When market prices are observed and firms have a profit maximizing behavior, it seems natural to choose as the directional vector that projecting inefficient firms towards profit maximizing benchmarks. Based on that choice of directional vector, we introduce the directional profit efficiency measure and show that, in this general setting, profit inefficiency can be categorized as either technical, for firms situated within the interior of the technology, or allocative, for firms lying on the frontier. We implement and illustrate the analytical model by way of Data Envelopment Analysis techniques, and introduce the necessary optimization programs for profit inefficiency measurement.     

Estimation of Dynamic Nonlinear Random Effects Models with Unbalanced Panels

This paper presents estimation methods for dynamic nonlinear models with correlated random effects (CRE) when having unbalanced panels. Unbalancedness is often encountered in applied work and ignoring it in dynamic nonlinear models produces inconsistent estimates even if the unbalancedness process is completely at random. We show that selecting a balanced panel from the sample can produce efficiency losses or even inconsistent estimates of the average marginal effects. We allow the process that determines the unbalancedness structure of the data to be correlated with the permanent unobserved heterogeneity. We discuss how to address the estimation by maximizing the likelihood function for the whole sample and also propose a Minimum Distance approach, which is computationally simpler and asymptotically equivalent to the Maximum Likelihood estimation. Our Monte Carlo experiments and empirical illustration show that the issue is relevant. Our proposed solutions perform better both in terms of bias and RMSE than the approaches that ignore the unbalancedness or that balance the sample.     

Product complexity and economic development

Development is a process of transforming a country's economic structure towards the production and export of more complex products. We use Hidalgo and Hausmann's (2009) method of reflections to compute measures of product and country complexity, and rank 5107 products and 124 countries. We find that: (i) the most complex products are in machinery, chemicals, and metals, while the least complex products are raw materials and commodities, wood, textiles, and agricultural products; (ii) the most complex economies in the world are Japan, Germany, and Sweden, and the least complex, Cambodia, Papua New Guinea, and Nigeria; (iii) the major exporters of the more complex products are the high-income countries, while the major exporters of the less complex products are the low-income countries; and (iv) export shares of the more complex products increase with income, while export shares of the less complex products decrease with income.     

Why is Income Inequality Increasing in the Developed World?

We address empirically the factors affecting the dynamics of income inequality among industrialized economies. Using a panel for 32 developed countries spanning the last four decades, our results indicate that the predictions of the Stolper–Samuelson theorem concerning the effects of international trade on income inequality find support in the data if we concentrate on imports from developing countries as a trade measure, as theory would imply. We find that democratization, the interaction of technology and education, and changes in the relative power of labor unions affect inequality dynamics robustly.     

Monetary and fiscal policy interactions in a post Keynesian open-economy model

Using a post Keynesian model, this study aims to analyze the stabilizing role of fiscal and monetary policies in an open economy with a managed exchange rate regime. The real exchange rate is modeled as an endogenous variable and inflation explained using the conflicting claims approach. The dynamic properties of macroeconomic equilibrium are evaluated in different regimes of fiscal and monetary policies. The main result of this study suggests that the preferred policy regime is the one in which economic authorities are complementary and fiscal policy plays an explicitly active role. In this regime, the fiscal policy must commit to the target for the rate of capacity utilization and the monetary authority must commit to the inflation target.     

Linking nursing unit's culture to organizational effectiveness: a measurement tool

Organizational culture consists of the deep underlying assumptions, beliefs, and values that are shared by members of the organization and typically operate unconsciously. The four organizational culture traits of the Denison Organizational Culture Model (DOCM) are characteristics of organizational effectiveness, which include adaptability, involvement, consistency, and mission. Effective organizations demonstrate high levels of the four cultural traits which reflect their ability to balance the dynamic tension between the need for stability and the need for flexibility within the organization. The Denison Organizational Culture Survey (DOCS) is a measurement tool that was founded on the theoretical framework of the DOCM, and in the field of business, is one of the most commonly used tools for measuring organizational culture. The DOCS offers a promising approach to operationalizing and measuring the link between organizational culture and organizational effectiveness in the context of nursing units.     

Social capital,internationalization and absorptive capacity: The electronics and ICT cluster of the Basque Country

This article analyses the case of a successful young high technology cluster in an old industrialized European region, the electronics and information and communications technology cluster in the Basque Country (Spain). Based on the findings of this case study, we propose that social capital and internationalization play an important role in increasing the absorptive capacity of clusters (thus, the capacity of a cluster to absorb, diffuse and creatively exploit extra-cluster knowledge), and hence, in sustaining their growth and dynamism. Absorptive capacity depends on the capacity of firms to establish intra- and extra-cluster knowledge linkages. We put forward in this article the fact that social capital fosters intra-cluster knowledge linkages, and cluster's internationalization the extra-cluster knowledge ones. Therefore, social capital and internationalization are key elements to increase the absorptive capacity of a cluster and its growth. Given the accumulative, path- and place-dependent nature of social capital and knowledge creation and accumulation, we employed a largely qualitative and historical analysis, combining statistical and qualitative cluster data and interviews with key actors.     

Which Extreme Values Are Really Extreme?

We define the extreme values of any random sample of size nfrom a distribution function F as the observations exceedinga threshold and following a type of generalized Pareto distribution(GPD) involving the tail index of F. The threshold is the orderstatistic that minimizes a Kolmogorov-Smirnov statistic betweenthe empirical distribution of the corresponding largest observationsand the corresponding GPD. To formalize the definition we usea semiparametric bootstrap to test the corresponding GPD approximation.Finally, we use our methodology to estimate the tail index andvalue at risk (VaR) of some financial indexes of major stockmarkets.     

Endogenous Growth,Increasing Returns and Externalities: An Alternative Interpretation of the Evidence

A number of recent papers have used aggregate production functions in an attempt to measure the degree of returns to scale and possible external effects in US manufacturing industries. In this paper I argue that the methods used and the results obtained are deceptive. The reason is that underlying every aggregate production function is the income accounting identity that relates output in value terms to the sum of wages and profits. This identity can be transformed, depending on the empirical paths of the wage and profit rates and of the factor shares, into different mathematical forms which resemble neoclassical production functions. Estimation of these forms, as is done in the literature discussed in the paper, poses serious problems for the interpretation of the results.