THE EFFECTS OF UNCERTAINTY ON THE LEVERAGE OF NONFINANCIAL FIRMS

This paper investigates the link between the optimal level of nonfinancial firms' short-term leverage and macroeconomic and idiosyncratic sources of uncertainty. We develop a structural model of a firm's value maximization problem that predicts a negative relationship between uncertainty and optimal levels of borrowing. This proposition is tested using a panel of nonfinancial U.S. firms drawn from the COMPUSTAT quarterly database covering the period 1993–2003. The estimates confirm that as either form of uncertainty increases, firms decrease their levels of short-term leverage. This effect is stronger for macroeconomic uncertainty than for idiosyncratic uncertainty. ( JEL C23, D8, D92, G32)     

VOTING, PUNISHMENT, AND PUBLIC GOODS

Researchers have found that voting can help increase voluntary contributions to a public good—provided enforcement through a third party. Not all collective agreements, however, guarantee third-party enforcement. We design an experiment to explore whether a voting rule with and without endogenous punishment increases contributions to a public good. Our results suggest that voting by itself does not increase cooperation, but if voters can punish violators, contributions increase significantly. While costly punishment increases contributions at the price of lower efficiency, overall efficiency for a voting-with-punishment rule still exceeds the level observed for a voting-without-punishment rule. ( JEL C92, D72, H41)     

Doing a transversal method: developing an ethics of care in a collaborative research project

Beck and Sznaider call on ‘methodological cosmopolitanism’ to transcend methodological nationalism and account for an increasingly cosmopolitanized reality. We take up their challenge by drawing on our experiences of conducting a collaborative ethnography of methodological changes in the production of population statistics within and between European national and international statistical institutes. Drawing on debates in science and technology studies, we depart from some conceptual presuppositions of methodological cosmopolitanism to define a ‘transversal method’. Referring to this method as performative and ontopolitical, we reflect on how it requires collaboration and, in our ethnography, gave rise to three practical challenges – (1) going beyond the individual project; (2) using each other's field notes; (3) and working against the national order of things. To meet these challenges, we reflect on how this method required us to practise three modes of care – thinking with others, tinkering with field notes, and dissenting within.     

Emploi des jeunes et inégalité des chances: en quoi le monde arabe est-il différent?

Le marché du travail du Moyen-Orient et de l'Afrique du Nord se caractérise par un chômage des jeunes généralisé et par un nombre disproportionné de chômeurs parmi les nouveaux diplômés. À partir des enquětes du BIT sur le passage de l'école à la vie active menées en Égypte, Jordanie et Tunisie, les auteurs regardent si cela tient à l'inégalité des chances ou à des caractéristiques structurelles induisant des discordances entre offre et demande de travail. Les principales explications seraient le faible nombre d'emplois qualifiés disponibles et le peu de valeur accordée aux qualifications acquises dans le système de formation professionnelle.     

THE KNOWLEDGE PRODUCTION FUNCTION FOR UNIVERSITY PATENTING

We estimate a knowledge production function for university patenting using an individual effects negative binomial model. We control for Research and Development expenditures, research field, and the presence of a Technology Transfer Office. We distinguish between three kinds of researchers: faculty, postdoctoral scholars (postdocs), and PhD students. For the latter two, we also distinguish by visa status. We find patent counts to relate positively and significantly to the number of PhD students and number of postdocs. Our results also suggest that not all graduate students and postdocs contribute equally to patenting but that contribution is mediated by citizenship and visa status. (JEL C25, O31, O32, O34, O38)     

Zero-Bias Locally Adaptive Density Estimators

Strategies for improving fixed non-negative kernel estimators have focused on reducing the bias, either by employing higher-order kernels or by adjusting the bandwidth locally. Intuitively, bandwidths in the tails should be relatively larger in order to reduce wiggles since there is less data available in the tails. We show that in regions where the density function is convex, it is theoretically possible to find local bandwidths such that the pointwise bias is exactly zero. The corresponding pointwise mean squared error converges at the parametric rate of O ( n ⁻¹ ) rather than the slower O ( n ^−4/5). These so-called zero-bias bandwidths are constant and are usually orders of magnitude larger than the optimal locally adaptive bandwidths predicted by asymptotic mean squared error analysis. We describe data-based algorithms for estimating zero-bias bandwidths over intervals where the density is convex. We find that our particular density estimator attains the usual O ( n ^−4/5) rate. However, we demonstrate that the algorithms can provide significant improvement in mean squared error, often clearly visually superior curves, and a new operating point in the usual bias-variance tradeoff.     

A Graphical Diagnostic for Identifying Influential Model Choices in Bayesian Hierarchical Models

Abstract. Real‐world phenomena are frequently modelled by Bayesian hierarchical models. The building‐blocks in such models are the distribution of each variable conditional on parent and/or neighbour variables in the graph. The specifications of centre and spread of these conditional distributions may be well motivated, whereas the tail specifications are often left to convenience. However, the posterior distribution of a parameter may depend strongly on such arbitrary tail specifications. This is not easily detected in complex models. In this article, we propose a graphical diagnostic, the Local critique plot, which detects such influential statistical modelling choices at the node level. It identifies the properties of the information coming from the parents and neighbours (the local prior) and from the children and co‐parents (the lifted likelihood) that are influential on the posterior distribution, and examines local conflict between these distinct information sources. The Local critique plot can be derived for all parameters in a chain graph model.     

COLLABORATION AND EVALUATION IN THE SUPPLY CHAIN: THE IMPACT ON PLANT‐LEVEL ENVIRONMENTAL INVESTMENT

Manufacturing organizations can potentially improve environmental management both by increasing the level of investment in environmental technologies and by shifting that investment away from pollution control and toward pollution prevention. However, managers must not only consider their own manufacturing operations in isolation, but also those of others along the supply chain. This paper explores two dimensions of supply chain activities—collaboration and evaluation—that might be leveraged by plant managers to improve environmental management in their own plant. The linkages with suppliers and customers were assessed. Both customer‐ and plant‐initiated collaboration were found to have a significant effect on the level and form of investment in environmental technologies for a sample of Canadian plants. Of greatest importance, as customer‐initiated collaborative activities increased, plant‐level investment in environmental management was increasingly allocated toward pollution prevention. In contrast, only very limited evidence was found that evaluative activities influenced environmental investment.     

Inequality of opportunity and (unequal) opportunities in the youth labour market: How is the Arab world different?

The Middle East and North Africa (MENA) labour market is emblematic of widespread youth unemployment and high discouragement rates, experiencing disproportionately high levels of unemployment among educated young people. Using ILO School-to-Work Transition Surveys for Egypt, Jordan and Tunisia, the authors explore whether this is related to inequality of opportunity or to deeper structural characteristics that create a mismatch between skill demand and supply on the labour market. The low availability of high-skilled jobs and the low value placed on skills gained through the system of vocational training are found to have high explanatory power.     

Advantages of Variance Stabilization

Abstract. Variance stabilization is a simple device for normalizing a statistic. Even though its large sample properties are similar to those of studentizing, many simulation studies of confidence interval procedures show that variance stabilization works better for small samples. We investigated this question in the context of testing a null hypothesis involving a single parameter. We provide support for a measure of evidence for an alternative hypothesis that is simple to compute, calibrate and interpret. It has applications in most routine problems in statistics, and leads to more accurate confidence intervals, estimated power and hence sample size calculations than standard asymptotic methods. Such evidence is readily combined when obtained from different studies. Connections to other approaches to statistical evidence are described, with a notable link to Kullback–Leibler symmetrized divergence.