Generalized correlation and kernel causality with applications in development economics

New generalized correlation measures of 2012, GMC(Y|X), use Kernel regressions to overcome the linearity of Pearson's correlation coefficients. A new matrix of generalized correlation coefficients is such that when |r*_ij| > |r*_ji|, it is more likely that the column variable X_j is what Granger called the “instantaneous cause” or what we call “kernel cause” of the row variable X_i. New partial correlations ameliorate confounding. Various examples and simulations support robustness of new causality. We include bootstrap inference, robustness checks based on the dependence between regressor and error, and on the out-of-sample forecasts. Data for 198 countries on nine development variables support growth policy over redistribution and Deaton's criticism of foreign aid. Potential applications include Big Data, since our R code is available in the online supplementary material.     

How Does Relative Income and Variations in Short-Run Wellbeing Affect Wellbeing in the Long Run? Empirical Evidence From China’s Korean Minority

Cognitively appraised life satisfaction is relatively stable over time and can be considered as reflecting subjective wellbeing in the long run. Affect is transitory and can be considered as reflecting subjective wellbeing in the short run. Using the Personal Wellbeing Index to measure cognitively appraised life satisfaction and the Positive and Negative Affect Schedule to measure positive and negative affect we examine how income relative to one’s comparator group and variations in short run wellbeing impact upon wellbeing in the long run. We do so for China’s Korean ethnic minority. We find that affective state has an effect on wellbeing in the long run and that a negative shock to affectivity is more persistent than a positive shock. We also find that relative income, rather than absolute income, matters for wellbeing in the long run and that the results are consistent with a status effect.     

Performance models for unreliable flexible manufacturing systems

This paper deals with the analysis and application of queueing models for single and multi stage flexible manufacturing systems that are subject to resource failure. Exact results are derived for the single stage queueing system. Two approximations are presneted for the multi stage queueing system as a closed network. We validate the approximations by comparing their performance estimates against the exact global balance solution.     

Book Review: E.A. Wrigley (ed.), Poverty,Progress and Population., Cambridge: Cambridge University Press, 2004, XIV+ 463 pp.

Book Review

Book Review: E.A. Wrigley (ed.), Poverty, Progress and Population., Cambridge: Cambridge University Press, 2004, XIV+ 463 pp.     

Application of hybrid framework to facilitate lean six sigma implementation: a manufacturing company case experience

This study aims to propose a hybrid framework for lean six sigma (LSS) based on the prioritisation of barriers and solution approaches, to facilitate hassles free applications for handling the challenges of wastes reduction and quality improvement. The study identifies 27 LSS barriers and 22 solution approaches through literature review and utilises feedback from industry experts. For framework, study uses fuzzy AHP-PROMETHEE to prioritise LSS barriers and solution approaches. Incorporating fuzzy sets in analytical hierarchy process (AHP) ensures the optimality of barrier weights. Whereas, preference ranking organisation method for enrichment of evaluations (PROMETHEE) helps in pairwise comparisons of solution approaches with respect to each LSS barrier, facilitating fair judgements. This research guides regarding the development of framework and checks its suitability and robustness through case application of an Indian manufacturing organisation. Authors expect that researchers and practitioners will find study useful for LSS and multi criteria decision making(MCDM) domains.     

The Effect of Demand–Supply Mismatches on Firm Risk

A supply chain management (SCM) system comprises many subsystems, including forecasting, order management, supplier management, procurement, production planning and control, warehousing and distribution, and product development. Demand–supply mismatches (DSMs) could indicate that some or all of these subsystems are not working as expected, creating uncertainties about the overall capabilities and effectiveness of the SCM system, which can increase firm risk. This article documents the effect of DSMs on firm risk as measured by equity volatility. Our sample consists of three different types of DSMs announced by publicly traded firms: production disruptions, excess inventory, and product introduction delays. We find that all three types of DSMs result in equity volatility increases. Over a 2‐year period around the announcement date, we observe mean abnormal equity volatility increases of 5.62% for production disruptions, 11.19% for excess inventory, and 6.28% for product introduction delays. Volatility increases associated with excess inventory are significantly higher than the increases associated with production disruptions and product introduction delays. Across all three types of DSMs, volatility changes are positively correlated with changes in information asymmetry. The results provide some support that volatility changes are also correlated with changes in financial and operating leverage.     

The Effect of Product Development Restructuring on Shareholder Value

This article examines the effect of product development restructuring (PDR) on shareholder value. The results are based on a sample of 165 announcements made during 2002–2011. PDR announcements are associated with an economically and statistically significant positive stock market reaction. Over a two‐day period (the day of the announcement and the day preceding the announcement), the mean (median) market reaction is 1.63% (0.87%). The market reaction is generally positive regardless of the PDR purpose or action. Although the market reaction is more positive for higher R&D intensity firms, it is not directly affected by the firm's prior financial performance or whether the firm's primary PDR objective is to increase revenues or cut costs. However, the interaction between the firm's prior financial performance and its primary PDR objective is significant. For firms that are financial outperformers, the market reaction is more positive if the firm's primary PDR objective is to increase revenues. For financial underperformers, the market reaction is more positive if the firm's primary PDR objective is to cut costs.     

Corruption as a site for contested meaning: Elite constructions in India

This paper investigates the problem of corruption in India from a social constructionist perspective. The constructions of corruption among five elite groups (bureaucrats, judges, politicians, industrialists, and journalists) in the southern state of Andhra Pradesh were obtained through a total of 60 interviews. Members of these five elite groups play a critical role in constructing the problem of corruption for public discourse. These elite groups, with the possible exception of the media elite, are also primary targets of public accusations of corrupt behavior. This paper examines three major issues related to corruption: the definition of corruption, the so-called functionality of corruption, and the role of culture in fostering or inhibiting corruption. Narrow/legalistic or broad/moralistic definitions of corruption, the acceptance or rejection of functionality, and modernist or nationalist responses to the question of culture are shown to constitute the varied structures of reality constructed by the different elite groups. These constructions of the corrupt reality in India are explained with reference to specific interests of the elites and their positions in the social structure. Instead of treating corruption as an objective condition, this study seeks to view corruption as a process in which strategic elites in society, define the problem and negotiate solutions to it.A previous version of this paper was presented at the 1991 New York Conference for Asian Studies, Cornell University, Ithaca.