Determinants and effects of formal target agreements: an empirical investigation of German firms

We investigate organizational determinants and performance effects of formal target agreements for employees based on the IAB establishment panel, a representative panel of German establishments. The results show that establishments with a high employee turnover rate, a large proportion of temporary workers, and a highly qualified workforce are significantly more likely to implement target agreements. Also, establishments with works councils installed are more likely to do so, controlling, among others, for firm size. Concerning organizational performance, we apply a first-difference and a fixed effects approach and find that establishments that implement target agreements achieve around 5 % higher total sales compared to firms that did not introduce this practice. Hence, organizations seem to benefit from the implementation of formal target agreements for employees.     

TRUST,SOCIAL CAPITAL,AND ECONOMIC DEVELOPMENT

Many argue that elements of a society's norms, culture, or social capital are central to understanding its development. However, these notions have been difficult to capture in economic models. Here we explore a possible role for “trustworthiness” as corresponding to social capital. Individuals are trustworthy when they perform in accordance with promises, even if this does not maximise their payoffs. The usual focus on incentive structures in motivating behaviour plays no role here. Instead, we emphasise more deep‐seated modes of behaviour and consider trustworthy agents being socialised to act as they do. To model this socialisation, we borrow from a process of preference evolution pioneered by Bisin and Verdier (2001). The model developed endogenously accounts for social capital and explores its role in the process of economic development. It captures in a simple, formal way the interaction between social capital and the economy's productive processes. The results obtained caution against rapid reform and provide an explanation for why late‐developing countries may not easily be able to transplant the modes of production that have proved useful in the West. (JEL: O1, O3, O4, Z1)     

Organisational Learning and Governance Through Embedded Practices

This article has two principal aims. The first is to reconcile thecompetence based approach to the firm with traditional contractualapproaches, instead of treating them as incompatible. The mainthesis advanced is that firms manage simultaneously competencesand transactions, but they do so in accordance with a specificlexicographic order of priorities. The second aim is to explorein detail the sources of knowledge formation in the firm. Theanalysis privileges anthropological readings which stress the roleof learning – both radical and incremental – within distributed communities of practice.     

Sticky Price Models of the Business Cycle: Can the Contract Multiplier Solve the Persistence Problem?

We construct a quantitative equilibrium model with firms setting prices in a staggered fashion and use it to ask whether monetary shocks can generate business cycle fluctuations. These fluctuations include persistent movements in output along with the other defining features of business cycles, like volatile investment and smooth consumption. We assume that prices are exogenously sticky for a short time. Persistent output fluctuations require endogenous price stickiness in the sense that firms choose not to change prices much when they can do so. We find that for a wide range of parameter values, the amount of endogenous stickiness is small. Thus, we find that in a standard quantitative model, staggered price‐setting, alone, does not generate business cycle fluctuations.     

Bayesian variable selection and regularization for time–frequency surface estimation

Summary.  We describe novel Bayesian models for time–frequency inverse modelling of non-stationary signals. These models are based on the idea of a Gabor regression , in which a time series is represented as a superposition of translated, modulated versions of a window function exhibiting good time–frequency concentration. As a necessary consequence, the resultant set of potential predictors is in general overcomplete—constituting a frame rather than a basis—and hence the resultant models require careful regularization through appropriate choices of variable selection schemes and prior distributions. We introduce prior specifications that are tailored to representative time series, and we develop effective Markov chain Monte Carlo methods for inference. To highlight the potential applications of such methods, we provide examples using two of the most distinctive time–frequency surfaces—speech and music signals—as well as standard test functions from the wavelet regression literature.     

A note on sample size savings with the use of a single well‐controlled clinical trial to support the efficacy of a new drug

In terms of the risk of making a Type I error in evaluating a null hypothesis of equality, requiring two independent confirmatory trials with two‐sided p‐values less than 0.05 is equivalent to requiring one confirmatory trial with two‐sided p‐value less than 0.001 25. Furthermore, the use of a single confirmatory trial is gaining acceptability, with discussion in both ICH E9 and a CPMP Points to Consider document. Given the growing acceptance of this approach, this note provides a formula for the sample size savings that are obtained with the single clinical trial approach depending on the levels of Type I and Type II errors chosen. For two replicate trials each powered at 90%, which corresponds to a single larger trial powered at 81%, an approximate 19% reduction in total sample size is achieved with the single trial approach. Alternatively, a single trial with the same sample size as the total sample size from two smaller trials will have much greater power. For example, in the case where two trials are each powered at 90% for two‐sided α=0.05 yielding an overall power of 81%, a single trial using two‐sided α=0.001 25 would have 91% power. Copyright © 2004 John Wiley & Sons, Ltd.     

Simulation for the complex Bingham distribution

The complex Bingham distribution is relevant for the shape analysis of landmark data in two dimensions. In this paper it is shown that the problem of simulating from this distribution reduces to simulation from a truncated multivariate exponential distribution. Several simulation methods are described and their efficiencies are compared.     

Statistical approaches for conducting network meta-analysis in drug development

We introduce health technology assessment and evidence synthesis briefly, and then concentrate on the statistical approaches used for conducting network meta-analysis (NMA) in the development and approval of new health technologies. NMA is an extension of standard meta-analysis where indirect as well as direct information is combined and can be seen as similar to the analysis of incomplete-block designs. We illustrate it with an example involving three treatments, using fixed-effects and random-effects models, and using frequentist and Bayesian approaches. As most statisticians in the pharmaceutical industry are familiar with SAS? software for analyzing clinical trials, we provide example code for each of the methods we illustrate. One issue that has been overlooked in the literature is the choice of constraints applied to random effects, and we show how this affects the estimates and standard errors and propose a symmetric set of constraints that is equivalent to most current practice. Finally, we discuss the role of statisticians in planning and carrying out NMAs and the strategy for dealing with important issues such as heterogeneity.     

MODEL-ASSISTED HIGHER-ORDER CALIBRATION OF ESTIMATORS OF VARIANCE

In survey sampling, interest often centres on inference for the population total using information about an auxiliary variable. The variance of the estimator used plays a key role in such inference. This study develops a new set of higher‐order constraints for the calibration of estimators of variance for various estimators of the population total. The proposed strategy requires an appropriate model for describing the relationship between the response and auxiliary variable, and the variance of the auxiliary variable. It is therefore referred to as a model‐assisted approach. Several new estimators of variance, including the higher‐order calibration estimators of the variance of the ratio and regression estimators suggested by Singh, Horn & Yu and Sitter & Wu are special cases of the proposed technique. The paper presents and discusses the results of an empirical study to compare the performance of the proposed estimators and existing counterparts.     

Structural and Behavioural Changes in the Short TermPreventive Check in the Northwest Balkans in the 18th and19th Centuries

Fertility responded negatively to grain insufficiency(proxied by grain price increases), and mortality respondedpositively in Croatia-Slavonia-Srem in the 18thand 19th centuries, as in most of Europe. Shiftsin the intensity and timing of these responsesoccurred over time as social and economic structureschanged. Shifts in the elasticity of fertility withrespect to grain supply inversely mimic and lagchanges in the elasticity of mortality. Both appear tobe induced by increasing land shortage, the collapseof feudalism, and differences in the patterns ofadjustment to post-feudal conditions among former civiland military serfs. Generally, responses are strongerfor civil and former civil serfs, who may have been inless favourable economic circumstances than themilitary. Fertility responses in the year of a priceshock come to dominate those in the year following,suggesting a shift from contraception to abortion aseconomic and social conditions apparently worsened andstrategies of control intensified. Analysis of monthlyresponses supports the conjecture based on the annualresponses. The shift to the preventive check and strength of thepreventive check in the same year as the price shockis unusual in Europe and beyond. Analysis is based on25 parishes and employs lagged annual and monthly timeseries analysis with corrections for autocorrelation,in combination with ethnographic and historical data.