Capitalization versus Expensing: Evidence on the Uncertainty of Future Earnings from Capital Expenditures versus R&D Outlays

We propose and implement a new method to estimate the relation between R&D investments and the uncertainty of future benefits from those investments. The empirical analysis compares the relative contributions of current investments in R&D and PP&E to future earnings variability using a sample of roughly 50,000 firm-year observations from 1972–1997. Evidence is strongly consistent with the hypothesis that R&D investments generate future benefits that are far more uncertain than benefits from investments in PP&E. Our results should help the current discussion on accounting for R&D and the methodology might be helpful in standard setting in other contexts as well.     

HUMANITARIAN CRISES AND ADOLESCENT WELL-BEING: KNOWLEDGE,GAPS, AND PROSPECTS

Adolescence constitutes the second and final window of human growth and a period of specific vulnerabilities, such as early pregnancy, early marriage, HIV infection, suicide, violence, alcohol, and drugs. Only a limited body of research investigates the effects of humanitarian crises on the human capital and well-being of adolescents. The evidence focuses on the short-term effects of conflict and, to a lesser extent, natural disasters on education, physical health, and nutrition, but not on mental health. Most analyses examine the situations of individuals exposed in utero and young childhood, but rarely during adolescence. Typically missing are robust empirical identification strategies and estimates on heterogeneous effects across age or gender. The lack of quality data and challenges in defining adolescence, establishing causality, or ensuring ethical research explain the knowledge gaps. Possible ways to expand the evidence base include mixing georeferenced data on individual location with georeferenced data on crises, sharpening quasi-experimental analytical techniques, and reconsidering the current timing of demographic data collection, now spanning 4- or 5-year intervals. The failure to make such adjustments will end by ignoring specific vulnerabilities among adolescents and render sustainable progress in well-being globally, narrowing inequalities, and guaranteeing human rights to all more difficult to achieve.     

Multi-level governance for sustainable innovation in smart communities: an ecosystems approach

International Entrepreneurship and Management Journal - This paper analyses the TrentoSmartCity project to redefine Trento (an Italian municipality) as a smart community according to an ecosystems...     

Inequality,Nonhomothetic Preferences,and Trade: A Gravity Approach

We construct the first direct classification of goods as luxuries or necessities that is compatible with international trade data. We then use it to test an idea that has not been tested directly in the literature: Countries' income distributions are important determinants of their import demand, and, in particular, of the difference in their import demands of luxuries versus necessities. We interpret this result with the aid of a model in which preferences are nonhomothetic, thus relaxing a long-held and standard—but empirically dubious—assumption in the theory of international trade. Our model is strongly borne out by the results: Imports of luxuries increase with the importing country's inequality, and imports of necessities decrease with it. Our calculations imply that if income distribution in the United States became as equal as in Canada, the United States would import about 9-13% fewer luxury goods and 13-19% more necessities.     

Fiscal adjustments,labour market flexibility and unemployment

Using a panel of 17 countries for 1978–2009, we find that tax-driven consolidations increase unemployment by 0.25 percentage points. Labour market flexibility mitigates this: a one-point rise in the flexibility index reduces youth (long-term) unemployment by 0.6–0.7 (1.8–2.2) percentage points.     

Nonlinear mapping: An alternative to multidimensional scaling for product positioning

This study tests and contrasts the ability of multidimensional scaling (MDS) and nonlinear mapping (NLM) in recovering complex data structures in attribute space, and aiding researchers and practitioners in making neighborhood interpretations. The relative merits of both MDS and NLM for product positioning are explored and discussed. A formal comparison of the performance of NLM versus MDS is presented using both simulated and actual data. The results of this study provide direction as to the conditions under which a nonlinear mapping algorithm is preferable over MDS.     

Pricing farm-level agricultural insurance: a Bayesian approach

This paper applies Hierarchical Bayesian Models to price farm-level yield insurance contracts. This methodology considers the temporal effect, the spatial dependence and spatio-temporal models. One of the major advantages of this framework is that an estimate of the premium rate is obtained directly from the posterior distribution. These methods were applied to a farm-level data set of soybean in the State of the Paraná (Brazil), for the period between 1994 and 2003. The model selection was based on a posterior predictive criterion. This study improves considerably the estimation of the fair premium rates considering the small number of observations.