Interpreting and Testing the Scaling Property in Models where Inefficiency Depends on Firm Characteristics

Let u ≥ 0 be technical inefficiency, let z be a set of variables that affect u, and let δ be the parameters of this relationship. The model satisfies the scaling property if u(z, δ) can be written as a scaling function h(z, δ) times a random variable u* that does not depend on z. This property implies that changes in z affect the scale but not the shape of u(z,δ). This paper reviews the existing literature and identifies models that do and do not have the scaling property. It also discusses practical advantages of the scaling property. The paper shows how to test the hypothesis of scaling, and other interesting hypotheses, in the context of the model of Wang, Journal of Productivity Analysis, 2002. Finally, two empirical examples are given.     

Winning the tournament for named professorships in management

We apply tournament theory to explain the process within which selection of named professorships takes place and a procedural justice test to justify winning the named professorship tournament. Specifically, we estimate the probability that management professors hold one of the highest rewards for academic research productivity, a named professorship, as a function of his or her research credentials, as measured by the number of articles published in a small core of elite management journals. Alphabetically, these are Academy of Management Journal, Academy of Management Review, Administrative Science Quarterly, Journal of Operations Management, Management Science, Operations Research, Organization Science, and Strategic Management Journal. Although each of the eight journals is positively related to the probability of attaining a named professorship, the Academy of Management Review and the Academy of Management Journal emerge as the two most influential management journals.     

Family Business Restructuring: A Review and Research Agenda

Although business restructuring occurs frequently and it is important for the prosperity of family firms across generations, research on family firms has largely evolved separately from research on business restructuring. This is a missed opportunity, since the two domains are complementary, and understanding the context, process, content, and outcome dimensions is relevant to both research streams. We address this by examining the intersection between research on business restructuring and family firms to improve our knowledge of each area and inform future research. To achieve this goal, we review and organize research across different dimensions to create an integrative framework. Building on current research, we focus on 88 studies at the intersection of family firm and business restructuring research to develop a model that identifies research needs and suggests directions for future research.     

Can Agile Project Management Be Adopted by Industries Other than Software Development?

This research paper presents evidence from an exploratory survey on the use of agile project management (APM) practices and the presence of APM enablers in 19 medium‐ and large‐sized companies from different industry sectors considering innovative projects. The results show that these companies are possibly struggling to use their current management practices in the face of different project challenges. Additionally, the presence of some APM enablers indicates opportunities to adapt the APM theory for different companies other than those in software development. Future research should explore the correlation between APM practices and enablers in order to develop “hybrid” management models for different industries.     

A nonparametric approach to market timing: evidence from Spanish mutual funds

The measuring of market timing abilities in investment portfolios is a relevant and widely analyzed question. Since the traditional parametric methodology can lead to biased results, we apply the nonparametric approach trying to overcome these biases and compare the results obtained by both methods. This comparison can help the readers to understand the role played by the assumptions behind each approach. We confirm the finding previously found in the literature about negative market timing abilities of Spanish equity fund managers. This finding suggests that neither the documented specification problems of the traditional models (heteroskedasticity, outliers and non-normality in financial data) nor the aggressiveness of some misinformed managers explain the poor timing abilities of managers.     

An empirical analysis of transitivity with four scaled preferential judgment modalities

In this paper 6 classes of weak fuzzy transitivity have been considered in a real decision problem: 200 students were asked twice about their future graduation trip, first taking into account only destination, and second considering prices, too. Each group of students compared trips by pairs, where intensities of preference could be shown by 4 linguistic labels represented by numbers from 0 to 1. The results have been analyzed in order to determine the influence of the numbers of alternatives and inherent attributes of the alternatives (destination and money) on the fulfillment of the 6 properties of fuzzy transitivity.Received: 18 February 2002, Accepted: 16 June 2003, JEL Classification: C91The financial support of the Junta de Castilla y León (Consejería de Educación y Cultura, Proyecto VA057/02) and the Spanish Ministerio de Ciencia y Tecnología, Plan Nacional de Investigación Científica, Desarrollo e Innovación Tecnológica (I + D + I) (Proyecto BEC2001-2253) and ERDF are gratefully acknowledged.     

Aid effectiveness: the role of the local elite

We study the importance of the local elite as a determinant of the effectiveness of foreign aid in developing countries. The local elite serves as an intermediary between aid donors and aid recipients through its control of the government and major firms. The likelihood of misusing aid is large if the elite is characterized by extensive economic and political power and little concern for social groups besides itself. To determine which countries have this type of elite we use a historically determined variable: the percentage of European settlers in total population in colonial times. We provide strong empirical evidence that the level of European settlement in colonial times is negatively related to the effectiveness of foreign aid as measured in a growth-regression framework. Our results are robust to the inclusion of a wide set of alternative explanatory factors advanced in the aid effectiveness literature.     

Dual equilibrium and growth cycle in Argentina

Argentina’s GDP growth cycle, tracing the high exchange rate volatility in 1970–2008, is discussed. Growth depends on foreign exchange availability. The country’s comparative advantage is in agriculture, but manufactured exports are grow faster. Two remarkably different PPP exchange rates coexist – one appropriate for agriculture and one for manufacturing – destabilising the market exchange rate. Thus, two unstable growth equilibria coexist generating GDP fluctuations. Currency devaluation sets the cycle’s ceiling and the end of devaluation sets the cycle’s floor. Chronic government deficits widen the cycle, harming institutions and decelerating growth. A land tax to finance rural investment would facilitate a high and stable exchange rate (AR$/US$) and convergence to the high growth equilibrium.     

Mobile termination rates and the receiver-pays regime

The European Commission has recently invited national regulatory authorities to decrease access charges to the cost of an efficient operator. Some large operators warned regulators and users that cutting access charges could result in the US style business model, where mobile users pay for both making and receiving calls. I show that mobile operators charge for incoming calls when the access charge is below cost even if receivers can hang up. In such a case profits are neutral with respect to the level of the access charge. I further show that ‘bill and keep’ is a constrained social optimum when the call externality is strong, even if receivers pay and can hang up. Finally, I discuss the policy implications of these results.     

Long memory in the interest rates in some Asian countries

In this paper, the stochastic behavior of short run interest rates in some Asian development countries is examined by means of using fractionally integrated semiparametric techniques. In doing so, a much richer flexibility is allowed in the dynamic behavior of the series not achieved by the classical representations based on I(0) or I(1) processes. The author uses a quasi-maximum likelihood estimation procedure of Robinson [QMLE, 1995a], which has some advantages with respect to other methods. The results show that the orders of integration of the short run interest rates in Singapore and Thailand are strictly below 1, implying mean reversion. On the contrary, the results for Malaysia, South Korea, and Philippines are less conclusive, the values of d oscillating around the unit root case.