Bias correcting adjustment coefficients in a cointegrated VAR with known cointegrating vectors

The maximum likelihood estimator of the adjustment coefficient in a cointegrated vector autoregressive model (CVAR) is generally biased. For the case where the cointegrating vector is known in a first-order CVAR with no intercept, we derive a condition for the unbiasedness of the maximum likelihood estimator of the adjustment coefficients, and provide a simple characterization of the bias in case this condition is violated. A feasible bias correction method is shown to virtually eliminate the bias over a large part of the parameter space.     

A tale of values-driven and profit-seeking social investors

The segmentation of the socially responsible investing (SRI) movement with a values-versus-profit orientation solves the puzzling evidence that both socially responsible and controversial stocks produce superior returns. We derive that the segment of values-driven investors primarily uses “negative” screens to avoid controversial stocks, while the profit-driven segment uses “positive” screens. As the result of an empirical analysis over the period 1992-2008, we base our segmentation on investment screens that help us to examine whether values affect prices. We find that, although the profit-driven segment earns abnormal returns in the short run, these profit-generating opportunities do not persist in the long run for SRI stocks. However, our conclusions highlight the observation that different views on SRI can be complementary in the short run.     

Unemployment Dynamics, and Propagation of Aggregate and Reallocation Shocks in the Netherlands

This paper models the propagation at the macro level of four types of shocks using the SVAR approach. Time series data for the Netherlands on job creation, job destruction, the number of vacancies and labour supply are used to identify aggregate demand and supply shocks, and reallocation demand and supply shocks as different sources of unemployment dynamics. Each of these four types of shocks appears to have at least some influence on unemployment both in the short and long run. The long run influence of the aggregate labour supply shock is estimated to be very limited. It indicates that additional labour supply is almost fully absorbed by labour demand in the long run.     

Teaching management accounting in a competencies-based fashion

Traditionally, management accounting has been regarded as a monodisciplinary field of study that mainly focuses on calculating costs and prices. Today, it is seen that the field encompasses an ever-increasing number of knowledge domains including, for example, economics, sociology, psychology, and ethics. Modern-day management accountants have to be able to apply elements from all of these domains when solving concrete, real-life problems. The Open University of the Netherlands has therefore tried to construct a competencies-based management accounting curriculum that uses the well-known case method and integrates issues from various knowledge domains. In the curriculum, a unique problem-solving strategy is introduced that helps students to tackle as management accountants problems they may encounter during their studies, as well as the decision-making in their daily practice. This paper aims to give an overview of one of the courses in this curriculum, highlighting the use of the aforementioned problem-solving strategy.     

Computerized Decision Support Systems and Text Analysis: Evaluating CETA

Computers can play several different roles in text analysis. We will examine one of these, computerized decision support systems; first giving a brief introduction to the general features of this family of software and then focusing on CETA (Computer Aided Evaluative Text Analysis) – developed by Van Cuilenburg et al. (1988) – a well known example of this type of computer assisted text analysis tool. After outlining the principles and recommended procedures for the use of CETA, we will formulate several hypotheses concerning its strengths and weaknesses. These will be tested by means of a case study: an in-depth analysis of news coverage by the New York Times of the air traffic controllers' strike against the Reagan administration in the early 1980s. We will focus primarily on one key NYT editorial to illustrate the potential and limitations of CETA.     

Coercion,Guidance and Mercifulness: The Different Influences of Ethics Programs on Decision-Making

The development of an ethics program is a method frequently used for organising responsible behaviour within organisations. For such a program, certain preconditions have to be created in the structure, culture and strategy. In this organisational context, managers have to take their decisions in a responsible way. This process of decision-making, embedded in an ethics program, is the main focus of this article. Ethics programs often influence decision-making in a formal way; certain norms and types of behaviour are formalised and controlled within the organisation. Subsequently, individual managers have to infer the meaning of responsible behaviour from the demands laid down in the ethics program. Such a formal ethics program has some important advantages but the dangers of such an approach are often ignored. This article discusses both the advantages and disadvantages of a formal ethics program and adds two alternative ways of stimulating responsible behaviour in the organisation. In a monological approach the reflections of the decision makers on their own values are central in differentiating between right and wrong. In a dialogical approach, the communications between decision makers and other stakeholders involved are the foundations for determining a responsible solution. Because each approach is appropriate for certain issues, a well-chosen combination is justified. Such an ethics program should be strict on certain issues but leave room for reflection and interaction on other issues.     

The permanent income hypothesis,business cycles,and regime shifts: Evidence from eight countries

Summary We provide international evidence on the joint behavior of consumption and the real rate of interest and examine the rational expectations restrictions of the permanent income hypothesis. We extend the basic model to allow for independent effects of the stage of the business cycle or a regime shift after 1979. In our eight-country sample (using 1970s–1980s data) we find a small but internationally similar rate of intertemporal substitution once we allow for a regime shift affecting the average growth of consumption after 1979. The rational expectations restrictions are formally rejected, most prominently for the United Kingdom and Japan.We thank Ivo Arnold, Eduard Bomhoff, Fanz Palm, Peter Schotman, Carlo Winder, and anonymous referees for their comments and suggestions. All remaining errors are of course our own.     

Collectivism versus individualism in Dutch employment relations

From a very centralistic and collectivistic tradition after World War Two, Dutch employment relations now show a trend towards radical decentralisation and individualisation. What might be the consequences of this trend for labour relations? Do developments still fit within a movement towards ‘organised decentralisation’ or will the existing system of labour relations be hollowed out and destroyed? And what will be the consequences for ER management at company level? We present empirical data on how companies deal with their decentralised and individualised employment relations. It appears that, in the main areas such as labour contracts, working time arrangements, reward systems and development plans, decentralisation and individualisation are taking place. It has also become clear that management as well as workers support this and that a new form of negotiation between them is developing at workplace level, resulting in what we call ‘third contracts’ that are additional to the initial labour contract and the collective agreement. Our results also highlight the pragmatic way in which companies deal with these decentralised and individualised employment relations, which, nevertheless, remain linked to the national and collective levels of bargaining. Within the multilevel system of Dutch employment relations a new balance between collectivism and individualism is emerging.     

Who's Getting Caught? An Analysis of the Australian Medicare Safety Net

The Medicare Safety Net (MSN) was introduced in March 2004 to provide financial relief for those who incur high out-of-pocket costs from medical services. The policy has the potential to improve equity. This study examines: (i) how the health and income profiles of small areas influence MSN expenditure; and (ii) the distribution of expenditure by medical service type. The results indicate that MSN expenditure is positively related to income and that patients who use private obstetricians and assisted reproductive services are the greatest beneficiaries. The MSN has possibly created greater inequities in Australia's health-care financing arrangements.