Firm internationalization and performance: Evidence for designing policies

The debate on the relationship between internationalization and performance is still open and is a hot topic for policymakers, but they ignore the impacts for most of the firms supported. The paper is based on a large database of seven years that considers quantitative-qualitative and control variables. To reduce industry and country heterogeneity we focused on the Italian automotive supply chain. We tested 5 modes of internationalization on firms’ profitability so to support the design of policies. Our results are partially in contrast with literature; therefore we identify specific environments where policies, namely for exporting, could be more effective.     

The role of macroeconomic policies in the global crisis

This paper argues that the lack of timely and decisive policy action to correct domestic and external imbalances contributed crucially to the build-up of financial excesses that led to the financial crisis and the Great Recession. We focus on 2002–2007 and perform a number of counterfactual simulations to investigate two central elements of the story, namely: (a) an over-expansionary US monetary policy and the absence of effective macro-prudential supervision, which permitted a prolonged expansion of debt-financed consumer spending and (b) the choice by China and other emerging countries to pursue an export-led growth strategy supported by pegging their currencies to the US dollar, in conjunction with sluggish domestic demand in major advanced economies characterized by low potential output growth. The results of the simulations lend support to the view that if substantial, globally coordinated demand rebalancing had been undertaken early on, the macroeconomic and financial imbalances would not have accumulated to the extent that they did and the financial turmoil might have had less drastic global consequences.     

Approximate jackknife empirical likelihood method for estimating equations

It is known that the profile empirical likelihood method based on estimating equations is computationally intensive when the number of nuisance parameters is large. Recently, Li, Peng, & Qi (2011) proposed a jackknife empirical likelihood method for constructing confidence regions for the parameters of interest by estimating the nuisance parameters separately. However, when the estimators for the nuisance parameters have no explicit formula, the computation of the jackknife empirical likelihood method is still intensive. In this paper, an approximate jackknife empirical likelihood method is proposed to reduce the computation in the jackknife empirical likelihood method when the nuisance parameters cannot be estimated explicitly. A simulation study confirms the advantage of the new method. The Canadian Journal of Statistics 40: 110–123; 2012 © 2012 Statistical Society of Canada     

Return and volatility interaction between oil prices and stock markets in Saudi Arabia

The paper aims at investigating the links between world oil price and stock sector markets in Saudi Arabia over the weekly period from January 10, 2007 until September 28, 2011. To that effect, we make use of the VAR-GARCH process developed by Ling and McAleer (2003), which has the advantage to address the issue of return and volatility spillovers among the series we consider. Globally, the empirical findings show evidence of return and volatility transmission between oil price and stock sectors. However, the spillover effects are unidirectional from oil to some sectors for returns, but bidirectional for volatility patterns with more apparent links from sectors to oil. The optimal weights and hedge ratios for oil/stock portfolio holdings are sensitive to the sectors considered, and allow a better understanding of the links between sectors and oil for investors who seek for investment opportunities and want to diversify their portfolios. The findings are of great interest and have important implications for investors, market participants and policy makers.     

IMMIGRATION,WAGES, AND COMPOSITIONAL AMENITIES

There is strong public opposition to increased immigration throughout Europe. Given the modest economic impacts of immigration estimated in most studies, the depth of anti‐immigrant sentiment is puzzling. Immigration, however, does not just affect wages and taxes. It also changes the composition of the local population, threatening the compositional amenities that natives derive from their neighborhoods, schools, and workplaces. In this paper we use a simple latent‐factor model, combined with data for 21 countries from the 2002 European Social Survey (ESS), to measure the relative importance of economic and compositional concerns in driving opinions about immigration policy. The ESS included a unique battery of questions on the labor market and social impacts of immigration, as well as on the desirability of increasing or reducing immigrant inflows. We find that compositional concerns are 2–5 times more important in explaining variation in individual attitudes toward immigration policy than concerns over wages and taxes. Likewise, most of the difference in opinion between more‐ and less‐educated respondents is attributable to heightened compositional concerns among people with lower education.     

Ordered ranked set samples and applications to inference

Ranked set sampling (RSS) was first proposed by McIntyre [1952. A method for unbiased selective sampling, using ranked sets. Australian J. Agricultural Res. 3, 385–390] as an effective way to estimate the unknown population mean. Chuiv and Sinha [1998. On some aspects of ranked set sampling in parametric estimation. In: Balakrishnan, N., Rao, C.R. (Eds.), Handbook of Statistics, vol. 17. Elsevier, Amsterdam, pp. 337–377] and Chen et al. [2004. Ranked Set Sampling—Theory and Application. Lecture Notes in Statistics, vol. 176. Springer, New York] have provided excellent surveys of RSS and various inferential results based on RSS. In this paper, we use the idea of order statistics from independent and non-identically distributed (INID) random variables to propose ordered ranked set sampling (ORSS) and then develop optimal linear inference based on ORSS. We determine the best linear unbiased estimators based on ORSS (BLUE-ORSS) and show that they are more efficient than BLUE-RSS for the two-parameter exponential, normal and logistic distributions. Although this is not the case for the one-parameter exponential distribution, the relative efficiency of the BLUE-ORSS (to BLUE-RSS) is very close to 1. Furthermore, we compare both BLUE-ORSS and BLUE-RSS with the BLUE based on order statistics from a simple random sample (BLUE-OS). We show that BLUE-ORSS is uniformly better than BLUE-OS, while BLUE-RSS is not as efficient as BLUE-OS for small sample sizes (n<5$n<5$).     

Bayesian design in queues: An application to aeronautic maintenance

We exploit Bayesian criteria for designing M/M/c//r$M/M/c//r$ queueing systems with spares. For illustration of our approach we use a real problem from aeronautic maintenance, where the numbers of repair crews and spare planes must be sufficiently large to meet the necessary operational capacity. Bayesian guarantees for this to happen can be given using predictive or posterior distributions.     

Why Frequency is Not Well Defined for Engineering Systems with Nonexponential Failure Times

Dr. Yellman proposes to define frequency as “a time‐rate of events of a specified type over a particular time interval.” We review why no definition of frequency, including this one, can satisfy both of two conditions: (1) the definition should agree with the ordinary meaning of frequency, such as that less frequent events are less likely to occur than more frequent events, over any particular time interval for which the frequencies of both are defined; and (2) the definition should be applicable not only to exponentially distributed times between (or until) events, but also to some nonexponential (e.g., uniformly distributed) times. We make the simple point that no definition can satisfy (1) and (2) by showing that any definition that determines which of any two uniformly distributed times has the higher “frequency” (or that determines that they have the same “frequency,” if neither is higher) must assign a higher frequency number to the distribution with the lower probability of occurrence over some time intervals. Dr. Yellman's proposed phrase, “time‐rate of events … over a particular time interval” is profoundly ambiguous in such cases, as the instantaneous failure rates vary over an infinitely wide range (e.g., from one to infinity), making it unclear which value is denoted by the phrase “time‐rate of events.”     

RETHINKING THE EFFECT OF IMMIGRATION ON WAGES

This paper calculates the effects of immigration on the wages of native US workers of various skill levels in two steps. In the first step we use labor demand functions to estimate the elasticity of substitution across different groups of workers. Second, we use the underlying production structure and the estimated elasticities to calculate the total wage effects of immigration in the long run. We emphasize that a production function framework is needed to combine own‐group effects with cross‐group effects in order to obtain the total wage effects for each native group. In order to obtain a parsimonious representation of elasticities that can be estimated with available data, we adopt alternative nested‐CES models and let the data select the preferred specification. New to this paper is the estimate of the substitutability between natives and immigrants of similar education and experience levels. In the data‐preferred model, there is a small but significant degree of imperfect substitutability between natives and immigrants which, when combined with the other estimated elasticities, implies that in the period from 1990 to 2006 immigration had a small effect on the wages of native workers with no high school degree (between 0.6% and +1.7%). It also had a small positive effect on average native wages (+0.6%) and a substantial negative effect (−6.7%) on wages of previous immigrants in the long run.