Search results

This paper studies test of hypotheses for the slope parameter in a linear time trend panel data model with serially correlated error component disturbances. We propose a test statistic that uses a bias corrected estimator of the serial correlation parameter. The proposed test statistic which is based on the corresponding fixed effects feasible generalized least squares (FE-FGLS) estimator of the slope parameter has the standard normal limiting distribution which is valid whether the remainder error is I(0) or I(1). This performs well in Monte Carlo experiments and is recommended.

In this chapter, we present fragments of previously unpublished correspondence between Ludwig Lachmann and G. L. S. Shackle on the nature of institutions. This correspondence allows us to rationally reconstruct a theory of institutions, which extends Lachmann’s theoretical work. Shackle pointed out to Lachmann that institutions might be inputs into economic activities and that they themselves may be reproduced and transformed by these activities. Lachmann in turn contended that institutions consist of “instruments of interpretation.” We develop the concept of “instruments of interpretation” as a subset of institutions. These instruments are mental models and cognitive tools which are (1) inputs complementary to capital goods (2) jointly produced, reproduced, and transformed through economic activity. We suggest that in contrast to privately produced capital goods, parts of the institutional infrastructure are produced jointly as shared goods because the use of certain institutional elements is non-exclusive and non-subtractable; these elements – instruments of interpretation – are produced and reproduced by sharing and contributions through a process of joint production. This chapter explicitly connects two different but essential themes in Lachmann’s work: capital, and institutions. By combining these two strands of Lachmann’s work, we are able to demonstrate that there is a cross-complementarity between institutional orders and capital structures. This connection in turn provides a thicker understanding of the workings of markets.

Shane and Venkataraman (2000) suggest “the field [of entrepreneurship] involves the study of sources of opportunities; the processes of discovery, evaluation, and exploitation of opportunities; and the set of individuals who discover, evaluate, and exploit them” (p. 218). However, the study of the judgment required for opportunity evaluation has been greatly overshadowed by interest in opportunity recognition and to a lesser extent opportunity exploitation. This is surprising considering the number of economic theories of the entrepreneur that recognize sound judgment as a principal quality of entrepreneurship (Cantillon, 1755; Kirzner, 1973; Knight, 1921; Mises, 1949; Say, 1840; Schumpeter, 1934; Shackle, 1955). In fact, the first recognized theory of the entrepreneur defined the entrepreneur as someone who exercises business judgment in the face of uncertainty (Cantillon, 1755/1931, pp. 47–49). Similarly, Knight (1921, p. 271) suggests that the essence of entrepreneurship is judgment, born of uncertainty, and argues that it is this judgment that delineates the function of entrepreneur from that of manager. He goes on to point out that the function of manager does not in itself imply entrepreneurship but that a manager becomes an entrepreneur when he exercises judgment involving liability to error (Knight, 1921, p. 97). However, the judgment referred to by these theorists is not just any form of judgment, it is judgment exercised in the decision of whether to take action.

This chapter contributes to the growing global VAR (GVAR) literature by showing how global and national shocks can be identified within a GVAR framework. The usefulness of the proposed approach is illustrated in an application to the analysis of the interactions between public debt and real output growth in a multicountry setting, and the results are compared to those obtained from standard single country VAR analysis. We find that on average (across countries) global shocks explain about one-third of the long-horizon forecast error variance of output growth, and about one-fifth of the long-run variance of the rate of change of debt-to-GDP. Evidence on the degree of cross-sectional dependence in these variables and their innovations are exploited to identify the global shocks, and priors are used to identify the national shocks within a Bayesian framework. It is found that posterior median debt elasticity with respect to output is much larger when the rise in output is due to a fiscal policy shock, as compared to when the rise in output is due to a positive technology shock. The cross-country average of the median debt elasticity is 1.45 when the rise in output is due to a fiscal expansion as compared to 0.76 when the rise in output follows from a favorable output shock.

This chapter revisits the Hausman (1978) test for panel data. It emphasizes that it is a general specification test and that rejection of the null signals misspecification and is not an endorsement of the fixed effects estimator as is done in practice. Non-rejection of the null provides support for the random effects estimator which is efficient under the null. The chapter offers practical tips on what to do in case the null is rejected including checking for endogeneity of the regressors, misspecified dynamics, and applying a nonparametric Hausman test, see Amini, Delgado, Henderson, and Parmeter (2012, chapter 16). Alternatively, for the fixed effects die hard, the chapter suggests testing the fixed effects restrictions before adopting this estimator. The chapter also recommends a pretest estimator that is based on an additional Hausman test based on the difference between the Hausman and Taylor estimator and the fixed effects estimator.

This chapter considers the role of entrepreneurship theory in the development of ideation techniques for entrepreneurship education. It begins by considering how metatheories impact theory construction in entrepreneurship research and discusses the role of ontology, epistemology, axiology, as well as the role of assumptions about human nature and social change. The chapter presents four different paradigms of thought that apply different philosophies and illustrates how these different paradigms conceptualize entrepreneurship and entrepreneurial opportunity differently. The four paradigms include the equilibrium paradigm, the disequilibrium paradigm, the disruptive innovation paradigm, and the social constructionism paradigm. Within each paradigm, the nature of entrepreneurial opportunity is discussed, and the chapter provides examples to show how different ideation techniques can be generated from these different conceptualizations. Forms of ideation technique are presented and explained, as they relate to each paradigm, and the chapter concludes by explaining the value of these techniques for ideation, opportunity discovery, and creation, in the entrepreneurial process.

We survey and organize over fifty years of theoretical research on status and expectation state processes. After defining some key terms in this theoretical approach, we briefly describe theories and branches in the program.

We also focus on a few theories that illustrate distinct patterns of theory growth, using them to show the variety of ways in which the research program has grown.

The program structure developed from a single set of theories on development and maintenance of group inequality in the 1960s to six interrelated branches by 1988. Between 1988 and today, the overall structure has grown to total 19 different branches. We briefly describe each branch, identifying over 200 resources for the further study of these branches.

Although the various branches share key concepts and processes, they have been developed by different researchers, in a variety of settings from laboratories to schools to business organizations. Second, we outline some important issues for further research in some of the branches. Third, we emphasize the value of developing new research methods for testing and applying the theories.

These theories have been used to explain phenomena of gender, racial, and ethnic inequality among others, and for understanding some cases of personality attributions, deviance and control processes, and application of double standards in hiring.

Status and expectation state processes often operate to produce invidious social inequalities. Understanding these processes can enable social scientists to devise more effective interventions to reduce these inequalities.

Status and expectation state processes occupy a significant segment of research into group processes. This chapter provides an authoritative overview of ideas in the program, what is known, and what remains to be discovered.