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IV estimation is examined when some instruments may be invalid. This is relevant because the initial just-identifying orthogonality conditions are untestable, whereas their validity is required when testing the orthogonality of additional instruments by so-called overidentification restriction tests. Moreover, these tests have limited power when samples are small, especially when instruments are weak. Distinguishing between conditional and unconditional settings, we analyze the limiting distribution of inconsistent IV and examine normal first-order asymptotic approximations to its density in finite samples. For simple classes of models we compare these approximations with their simulated empirical counterparts over almost the full parameter space. The latter is expressed in measures for: model fit, simultaneity, instrument invalidity, and instrument weakness. Our major findings are that for the accuracy of large sample asymptotic approximations instrument weakness is much more detrimental than instrument invalidity. Also, IV estimators obtained from strong but possibly invalid instruments are usually much closer to the true parameter values than those obtained from valid but weak instruments.

In contexts of transition economies generally characterized by weak formal institutions, a rich literature remarks the important role of informal institutions in fostering entrepreneurial ecosystems. Nevertheless, in the agricultural context, little is known yet about how and why institutions shape farmer entrepreneurship. To better understand how informal institutions shape farmer entrepreneurship, this paper investigates how farmers' trust towards their buyers influence their entrepreneurial orientation (EO) in the rural context of a transition economy.

A structured survey was conducted in June–July 2017 with Albanian dairy farmers. In total, 238 milk producers were interviewed. Confirmatory factor analysis (CFA) is employed to develop measures for the latent variables of the study (e.g. farmers' trust, EO), and an instrumental variable (IV) approach is employed to estimate the effect of farmers' trust towards the buyer on their EO, by using farmers' reciprocity as a suitable IV.

Empirical findings reveal that innovativeness, risk-taking and proactivity represent effective dimensions of farmers' EO also in the rural context of a transition economy. Furthermore, farmers' trust towards their buyers shapes their EO, and, at the same time, younger and wealthier farmers are more likely to have higher levels of EO.

The results show that there is an association between farmers’ wealth and their EO. This relationship can go both ways. However, cross-sectional studies are not appropriate to investigate feedback loops.

This study addresses a knowledge gap in the institution–entrepreneurship literature in transition economies, by making two contributions. First, it tests the measurement model for farmers' EO, an established psychological antecedent of farmers' entrepreneurial activity. Second, it tests the hypothesis that farmers' trust towards their buyers may influence their EO.

The purpose of this study is to examine learning style instruments used in Arab countries to measure higher education students’ learning styles, identify the most common instruments and determine whether the reliability and validity of these instruments have been verified in Arab contexts.

A comprehensive review of the existing literature using several databases and search engines. Descriptive statistics, such as frequencies and percentages were used to present the results.

There are only a few published studies related to learning styles in Arab countries, with the majority published between 2012 and 2016 using samples drawn from Saudi Arabia, the United Arab Emirates and Iraq. The most common learning style instrument is the Felder–Silverman/Solomon Index of Learning Styles. The reliability and validity of this instrument require further investigation.

This study is not without limitations. First, it covers only publications in the English language. Second, the paper focuses on research involving higher education students. Third, only research that was available online was used in this study. Nonetheless, the findings have several implications for researchers, educators and human resource development managers. For researchers, this study highlights research gaps that need to be filled. It also serves as a basis for more analytical and in-depth studies. The data also helps educators become more informed about the learning style instruments commonly used in the Arab context and whether the results from these instruments are dependable. Human resource development managers can draw on these findings to choose instruments that have proven reliable and valid.

This study is the first attempt to examine learning style instruments used in Arab countries and to explore whether the reliability and validity of these instruments have been verified in Arab contexts. This paper is a useful contribution to research into learning styles and learning style instruments.

This paper aims to foster a new discussion on endogeneity in hospitality and tourism research.

This paper elaborates on some of the common sources of endogeneity and the methods available to address them.

The authors present a variety of methods that can be used to mitigate the endogeneity problem. The authors provide simulation evidence regarding the risk of incorrectly selecting instrumental variables. The authors also provide several important practical recommendations for future research.

There are other issues and methods of correcting for endogeneity, that is not covered in this paper. However, the paper focuses on issues and methods that can be generalized to most contexts.

The paper provides practical recommendations for more rigorous regression estimation.

This chapter studies the asymptotic properties of within-groups k-class estimators in a panel data model with weak instruments. Weak instruments are characterized by the coefficients of the instruments in the reduced form equation shrinking to zero at a rate proportional to nTδ, where n is the dimension of the cross-section and T is the dimension of the time series. Joint limits as (n,T)→∞ show that this within-group k-class estimator is consistent if 0≤δ<12 and inconsistent if 12≤δ<∞.

This paper aims to critically comment Rossiter’s “How to use C-OAR-SE to design optimal standard measures” in the current issue of EJM and provides a broader perspective on Rossiter’s C-OAR-SE framework and measurement practice in marketing in general.

The paper is conceptual, based on interpretation of measurement theory.

The paper shows that, at best, Rossiter’s mathematical dismissal of convergent validity applies to the completely hypothetical (and highly unlikely) situation where a perfect measure without any error would be available. Further considerations cast serious doubt on the appropriateness of Rossiter’s concrete object, dual subattribute-based single item measures. Being immunized against any piece of empirical evidence, C-OAR-SE cannot be considered a scientific theory and is bound to perpetuate, if not aggravate, the fundamental flaws in current measurement practice. While C-OAR-SE indeed helps generate more content valid instruments, the procedure offers no insights as to whether these instruments work properly to be used in research and practice.

This paper concludes that great caution needs to be exercised before adapting measurement instruments based on the C-OAR-SE procedure, and statistical evidence remains essential for validity assessment.

This paper identifies several serious conceptual and operational problems in Rossiter’s C-OAR-SE procedure and discusses how to align measurement in the social sciences to be compatible with the definition of measurement in the physical sciences.

The persistent increase in household indebtedness is an alarming issue that is becoming a major concern for economists and governments in developing nations. Although household consumption is an essential source of economic growth, households’ failure to meet their financial obligations will be one of the causes of economic problems if the increase in consumption is largely financed by household borrowing. Therefore, this study aims to analyse the nexus between households’ indebtedness and consumption and the roles of household characteristics.

This study uses a microdata set of the Household Expenditure and Income Survey in 2019, which contained a simple random sampling of 4,730 households.

Using a simultaneous equations model, our results show a negative nexus between households’ consumption and their indebtedness. We find that household savings and size have an indirect impact on the debt service ratio, while the assets and total debt repayment instalments indirectly influence household consumption. We also identify differences in the relationship between the gender of the household head, rural and urban locations and income groups in consumption and indebtedness.

The implication of this study is that governments should adopt several programmes to increase the awareness of household financial and debt management, especially for those in the low-income group.

This study contributes to the empirical literature by establishing a microeconomic perspective of consumption and an indebtedness model focusing on the differences in household characteristics in explaining consumption and indebtedness.

The purpose of this paper is to examine the role of access to skilled labor in explaining firms’ sales growth subject to the controlling influence of a wide range of firm-specific characteristics and country-level economic and non-economic factors.

The analysis uses a consistent and large firm-level data set from the World Bank’s Enterprise Surveys that includes 138 developing countries. An instrumental variables model with a GMM estimator is used for estimating the impact of access to skilled labor on firm performance. In order to obtain more robust estimators, the analysis introduces country-level controls reflecting the influence of economic and institutional factors, such as economic and financial development, institutional governance, education and technological progress.

The results document a significant and positive association between access to skilled labor and firm performance in the developing world. The explanatory power of access to skilled labor remains broadly robust after controlling for a wide range of firm-specific characteristics: sectoral and geographical influences matter. The results also show that the association between labor skill constraints and firm performance is mitigated by country-level factors but in diverse ways. Development, institutions, education and technological progress exert various mitigating effects on firm-level behavior regarding access to skilled labor.

The paper’s novel contribution is threefold: first, it uses joint firm, sector and country-level information to analyze the role of access to skilled labor on firm performance; second, it uses consistently produced information at the firm level from 138 developing countries; and, third, it considers the controlling impact of a wide range of country-level factors that reflect a country’s overall development, institutions and evolution.

Poverty and inequality undoubtedly remain substantial challenges to economic and human developments amid growing emphasis on intellectual property rights (IPRs) (with recent advances in information and communication technology (ICTs)) and good governance. In the first empirical study on the incidence of piracy on inequality in Africa, the purpose of this paper is to examine how a plethora of factors (IPRs laws, education and ICTs and government quality) are instrumental in the piracy-inequality nexus.

Two-stage least squares estimation approaches are applied in which piracy is instrumented with IPRs regimes (treaties), education and ICTs and government quality dynamics.

The main finding suggests that, software piracy is good for the poor as it has a positive income-redistributive effect; consistent with economic and cultural considerations from recent literature. ICTs and education (dissemination of knowledge) are instrumental in this positive redistributive effect, while good governance mitigates inequality beyond the piracy channel.

As a policy implication, in the adoption IPRs, sampled countries should take account of the role less stringent IPRs regimes play on income-redistribution through software piracy. Collateral benefits include among others, the cheap dissemination of knowledge through ICTs which African countries badly need in their quest to become “knowledge economies.” A caveat, however, is that, too much piracy may decrease incentives to innovate. Hence, the need to adopt tighter IPRs regimes in tandem with increasing income-equality.

It is the first empirical assessment of the incidence of piracy on inequality in Africa: a continent with stubbornly high poverty and inequality rates.

This chapter estimates the negative effect of smoking on earnings in the context of a developing country. Using data from the 2005 Albania Living Standards Measurement Survey, models are estimated by parametric and semi-parametric methods to account for the effect of observable and unobservable characteristics that could affect individual smoking decisions and earnings. Information on the smoking behaviour of parents is used to address the endogeneity of the smoking decision. The results show that, after controlling for observed individual characteristics and parental education and taking into account unobserved heterogeneity in personal characteristics, smoking is found to have a substantial negative impact on earnings. The main results are robust to a range of alternative specifications. On average, smokers’ earnings are 19–23 percent lower than the earnings of similar non-smokers.