Run length distributions and economic design of [`(X)]\bar X charts with unknown process variance

The run length distribution of charts with unknown process variance is analized using numerical integration. Both traditional chart limits and a method due to Hillier are considered. It is shown that setting control limits based on the pooled standard deviation, as opposed to the average sample standard deviation, provides better run length performance due to its smaller mean square error. The effect of an unknown process variance is shown to increase the area under both tails of the run length distribution. If Hillier’s method is used instead, only the right tail of the run length distribution is increased. Collani’s model for the economic design of charts is extended to the case of unknown process variance by writing his standardized objective function in terms of average run lengths.     

Relationships among functional units and new product performance: The moderating effect of technological turbulence

Though there has been plenty of research into new product success factors, only a few studies have tried to analyse whether these factors are important in different settings. In this study, we propose and test a model that links physical proximity among functional units, presence of product champions, cross-functional harmony, and new product program performance. The moderating effects of perceived technological turbulence on relationships between new product performance and its antecedents are also tested. Our results, obtained from 151 managers working for Spanish firms with a R&D department, confirm the different impact of these factors on the three measures of performance considered and also on two groups of organizations, the ones that perceive high technological turbulence and the ones that perceive low technological turbulence.     

RARE SHOCKS,GREAT RECESSIONS

We estimate a DSGE (dynamic stochastic general equilibrium) model where rare large shocks can occur, by replacing the commonly used Gaussian assumption with a Student's t‐distribution. Results from the Smets and Wouters (American Economic Review 2007; 97 : 586–606) model estimated on the usual set of macroeconomic time series over the 1964–2011 period indicate that (i) the Student's t specification is strongly favored by the data even when we allow for low‐frequency variation in the volatility of the shocks, and (ii)) the estimated degrees of freedom are quite low for several shocks that drive US business cycles, implying an important role for rare large shocks. This result holds even if we exclude the Great Recession period from the sample. We also show that inference about low‐frequency changes in volatility—and, in particular, inference about the magnitude of Great Moderation—is different once we allow for fat tails. Copyright © 2014 John Wiley & Sons, Ltd.     

Competition Policy towards Vertical Restraints in Europe and the United States

Following a brief review of the economic analysis of vertical restraints, we discuss current policy standards in both Europe and the United States. Since 1981, U.S. policy towards these restraints has been lax, and no restraints were challenged during the 12-year period between January 1981 and January 1993. More recently, the pendulum has shifted back somewhat and there is renewed interest by enforcement officials in this area. In contrast, European policy standards have been more stringent, and have paid particular attention to vertically imposed restraints that can limit trade among member countries. To a large part, their different treatment may primarily reflect the lack of consensus as to their long-run economic consequences. Consistent policy standards across jurisdictions are not likely to arise until there is general consensus as to the economic implications of these restraints.     

Why Regulation Is Needed in Emerging Markets in the Tourism Sector

The neoclassical ideal has defended the idea that markets, in a context of limited regulation, reach an optimal equilibrium automatically. We analyze this assertion in an applied manner with a case study of the emerging online market of intermediation of tourist apartments. The lack of regulation in this market causes many social and economic impacts on local communities, which can jeopardize the survival of the activity. We conclude that an analysis of markets that considers only prices results in a limited view. All externalities and their effects on the population must be taken into account, as well as the interests of the individuals involved, apart from profit‐making.     

Local Labor Supply Responses to Immigration

How natives adjust is central to an understanding of the impact of immigration in destination countries. Using detailed labor force data for Malaysia for 1990–2010, we provide estimates of native responses to immigration on multiple extensive margins and rare evidence for a developing country. Instrumental variable estimates show that increased immigration to a state causes substantial internal inward migration, consistent with the fact that immigration increases the demand for native workers. Relocating Malaysian workers are accompanied by their spouses (three‐quarters of whom are housewives) and children who attend school. We find that these effects are concentrated among middle‐ and lower‐skilled Malaysians.     

Competition, Financial Discipline and Growth

The interaction between domestic competition and economic growth of a country or region is a topic of intense policy debate. For example, in a highly-publicized book, Michael Porter (1990) strongly argues that there exists a positive causal relation between competition and growth, since competition at home forces firms to innovate and to be efficient.1 This Darwinian view of competition is supported by recent empirical evidence (e.g. Nickell (1996) or Blundell et al. (1995)) pointing at a positive correlation betweenn competition (measured eithe by the number of competitors in the same industry or by the inverse of a market share or profitability index) and productivity growth within a firm or industry.     

Optimal education and pensions in an endogenous growth model

In OLG economies with life-cycle saving and exogenous growth, competitive equilibria in general fail to achieve optimality because individuals accumulate amounts of physical capital that differ from the one that maximizes welfare along a balanced growth path (the Golden Rule). With human capital, a second potential source of departure from optimality arises, related to education decisions. We propose to recover the Golden Rule of physical and also human capital accumulation. We characterize the optimal policy to decentralize the Golden Rule balanced growth path when there are no constraints for individuals to finance their education investments, and show that it involves education taxes. Also, when the government subsidizes the repayment of education loans, optimal pensions are positive.     

A Comparison of Residents' Perceptions in Two Cruise Ports in the Mediterranean Sea

This paper examines residents' perceptions of a wide set of externalities exerted by the development of cruise tourism. The research involved data collection in two ports located in the two largest Mediterranean islands, Sicily and Sardinia, during the summer peak of the cruise season 2011. These two cruise destinations are especially interesting as they are characterized by a distinct life cycle. The empirical findings show that the two groups of residents have statistically equal perceptions on cruise activity in their destination. A correspondence analysis shows that residents have an overall positive attitude on the development of cruise tourism with respect to social, cultural and economic impacts. Nevertheless, they also feel that cruise activity has a negative impact, especially on the environment. Heterogeneity in occupation is explicitly taken into account. These findings provide directions for local policy‐makers. Copyright © 2012 John Wiley & Sons, Ltd.