Tests for model specification in the presence of alternative hypotheses: Some further results

In Davidson and MacKinnon (1981), two of the present authors proposed a novel and very simple procedure for testing the specification of a nonlinear regression model against the evidence provided by a non-nested alternative. In this paper we extend their results in several directions. First, we relax a number of the assumptions of the previous paper; we admit the possibility that the nonlinear regression functions may depend on lagged dependent variables, and we do not require that the error terms be normally distributed. Second, we show how the earlier procedure may straightforwardly be generalized to the case where the two non-nested models involve different transformations of the dependent variable. Finally, we propose a simple procedure for testing non-nested linear regression models which have endogenous variables on the right-hand side, and have therefore been estimated by two-stage least squares.     

The involvement of trade unions in quality: evidence from EC enterprises

In 1987–88 a large attitudinal survey covering all 12 Member States of the European Community was carried out by the European Foundation for the Improvement of Living and Working Conditions in Dublin which focused on various aspects of participation by employee representatives in new information technology. This paper presents evidence on one important aspect of technological change—that of participation in product and service quality.     

Reviews

DEPRIVATION IN THE OUTER CITY.

Barke, M. and Turnbull, G. 1992: Meadowell: The Biography of an “Estate with Problems”. Aldershot: Avebury, £32.00 cloth.

CHANGING BOUNDARIES OF RACE.

Jones, Trevor. 1993: Britain's Ethnic Minorities. PSI,

£15.

ENTERPRISE IN ARCADIA?

Curran, J. and Storey, D. (eds), 1993: Small Firms in Urban and Rural Locations, London and New York: Routledge, £40, hardback.

MAKING CONNECTIONS.

Turok, I. 1993: Loose connections? Foreign investment and local linkages in “Silicon Glen” Strathclyde Papers on Planning, 23. Centre for Planning, University of Strathclyde, 50 Richmond Street, Glasgow, G1 1XN. £4.00, paper.

COWLEY: THE END OF THE LINE?

Hayter, T. and Harvey, D. (eds) 1993: The Factory and the City: the Story of the Cowley Automobile Works in Oxford. London: Mansell, £40, hardback.

UPDATING SECTOR APPROACHES.

Geddes, M. and Benington, J. (eds) 1992: Restructuring the Local Economy. Harlow: Longman, £22.00, paper.

BORN AGAIN LOCAL GOVERNMENT?

Hodge, M. and Thompson, W. 1994: Beyond the Town Hall: Reinventing Local Government. Fabian Pamphlet, £3.90.     

The Viability of Keynesian Demand Management in an Open Economy Context

This paper explains why, in an open economy context, Keynes-type demand management policies appear to have lost their ability to create jobs domestically. Instead stimulatory policies tend to create an import deficit (as jobs are created abroad) and the ear of inflation domestically. The paper then suggests remedies that will resurrect Keynes-demand management policies to stimulate expansion without experiencing balance of payment problems or domestic inflation.     

Patterns of factor-saving innovation in the industrialized world

An attempt is made in this study to empirically measure the impact of factor endowment on innovation trends. A large international sample of significant innovations was used, wherein each innovation is classified according to its perceived factor-saving impact, as seen by the innovating firm, the user and industry/market observers. Then, broad trends in labor-, material- and capital-saving innovation were measured in eight European nations, the United States, United Kingdom and Japan. International variations in these trends were correlated with international variations in relative factor cost levels. A very high degree of correlation was found, supporting the position that factor endowment significantly influences innovation trends in the industrialized world.     

Estimating the covariance matrix for regression models with ar(1) errors and lagged dependent variables

We propose a simple procedure, based on an artificial linear regression, for consistently estimating the covariance matrix of the parameter estimates for linear regression models with serially correlated errors and lagged dependent variables.