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This paper generalizes the quadratic framework introduced by Le Courtois (2016) and Sumpf (2018), to obtain new credibility premiums in the balanced case, i.e. under the balanced squared error loss function. More precisely, the authors construct a quadratic credibility framework under the net quadratic loss function where premiums are estimated based on the values of past observations and of past squared observations under the parametric and the non-parametric approaches, this framework is useful for the practitioner who wants to explicitly take into account higher order (cross) moments of past data.

In the actuarial field, credibility theory is an empirical model used to calculate the premium. One of the crucial tasks of the actuary in the insurance company is to design a tariff structure that will fairly distribute the burden of claims among insureds. In this work, the authors use the weighted balanced loss function (WBLF, henceforth) to obtain new credibility premiums, and WBLF is a generalized loss function introduced by Zellner (1994) (see Gupta and Berger (1994), pp. 371-390) which appears also in Dey et al. (1999) and Farsipour and Asgharzadhe (2004).

The authors declare that there is no conflict of interest and the funding information is not applicable.

This work is motivated by the following: quadratic credibility premium under the balanced loss function is useful for the practitioner who wants to explicitly take into account higher order (cross) moments and new effects such as the clustering effect to finding a premium more credible and more precise, which arranges both parts: the insurer and the insured. Also, it is easy to apply for parametric and non-parametric approaches. In addition, the formulas of the parametric (Poisson–gamma case) and the non-parametric approach are simple in form and may be used to find a more flexible premium in many special cases. On the other hand, this work neglects the semi-parametric approach because it is rarely used by practitioners.

There are several examples of actuarial science (credibility).

In this paper, the authors used the WBLF and a quadratic adjustment to obtain new credibility premiums. More precisely, the authors construct a quadratic credibility framework under the net quadratic loss function where premiums are estimated based on the values of past observations and of past squared observations under the parametric and the non-parametric approaches, this framework is useful for the practitioner who wants to explicitly take into account higher order (cross) moments of past data.

The existence of the regional Kuznets curve, i.e. an inverted U-shaped relationship between regional disparity and economic development is widely debated and discussed. The bell-shaped curve of the spatial growth process where during the initial phase inequality increases and then reduces is theoretically supported by Myrdal (1957), Hirschman (1958), and Williamson (1965). It becomes important to understand regional Kuznets curve globally. Understanding the relationship between regional disparity and economic development becomes essential for public policy for balanced regional growth.

Regional Kuznets Curve which is an inverted U-shaped relationship between regional disparity and economic development is not a new phenomenon. Theoretical framework by Myrdal (1957), Hirschman (1958), and Williamson (1965) support the an inverted U-shaped relationship. To understand the relationship between regional disparity and economic development, the authors investigate the regional Kuznets curve by using data for 184 countries and 1765 subnational regions. Using parametric, semi-parametric, and non-parametric, it is found that there exists an inverted U-shaped relationship between regional disparity and economic development. The presence of the regional Kuznets curve is observed. As the theoretical framework suggests, regional inequality increases with income initially and decreases after attaining a certain level of income. This study identifies two stages of divergence-convergence where in the first stage, divergence across regions in a country happens with increasing income and in the later stage, convergence across regions in a country occurs with increasing income.

Using the parametric approach (panel data analysis), semi-parametric and non-parametric approaches, it is found that there exists a regional Kuznets curve. It is found that there exists an inverted-U relationship between regional inequality and per capita GNI. This suggests that the divergence-convergence passes through two stages. In the first stage, divergence across regions in a country happens with increasing income while in the later stage convergence occurs.

This research work has done three important things which fill the research gap that exists in the literature: (1) constructing the Gini coefficient to measure the regional inequality for 184 countries using 1765 subnational regional data; (2) using a parametric approach (panel data analysis) to understand the regional Kuznets phenomenon and (3) using a semi-parametric approach and non-parametric approach to understand the regional Kuznets phenomenon.

This paper aims to investigate empirically whether Islamic securities enhance economic growth in the Southeast Asian region based on the endogenous growth theory using the non-parametric analysis.

This paper applies panel quantile regression with Markov chain Monte Carlo optimization as an optimal non-parametric approach to investigate the effect of Islamic securities on economic growth starting from 2013Q4 to 2019Q4 in Southeast Asia. Total issued Islamic securities holdings are employed as a measure for Islamic securities, while the gross domestic product is employed as a proxy for economic growth. The sample includes all working Islamic financial foundations in the top progressive Islamic securities markets' countries of Southeast Asia (Malaysia, Indonesia and Brunei Darussalam).

The findings confirm that the increase of issuing Islamic securities in Islamic capital markets of Southeast Asia is increasing the levels of economic growth, reflecting the weighty role of the Islamic capital market development as an active contributor to economic growth.

This research would fill the literature gap by exploring Islamic securities–economic growth nexus in Southeast Asia using a robust non-parametric approach based on the endogenous growth theory for better estimation results. The findings of this review serve as a roadmap for financial analysts, policymakers and decision makers to stimulate the Islamic securities markets as another source of finance which can promote the economic growth.

This research is the first that investigates empirically the Islamic securities–economic growth nexus in Southeast Asia using a new empirical investigation built on the non-parametric analysis and outlined within the theoretical context of the endogenous growth model to gain robust evidence about this nexus.

The purpose of this paper is to investigate the factors influencing the total factor productivity (TFP) gap between the USA and eight Latin American countries for the period of 1970-2000.

The paper provides an explicit application of TFP estimation by employing a growth accounting approach (Solow Residual) in the presence of non-constant returns to scale and a non-parametric approach (DEA – Malmquist Index) while relaxing the scale-related constraint. A macro-based economic model of innovator and follower countries is employed to explore the linkage between technology gaps and innovations, labor productivity, trade openness, foreign direct investment, and adult workforce illiteracy rates. A pooled model and a fixed effects model are used to determine the factors of the technology gap between the innovator and the follower countries.

The results show that the labor productivity gap, adult work force illiteracy rates, patent filing gap, and trade openness are significant determinants of the technology gap between innovator and follower country.

Latin American countries would benefit from the technology diffusion from an innovator country; but a minimum threshold of human capital, such as adult workforce illiteracy rates and patent filing has to be met. The authors find government policies on trade openness also have large effects on technology limitations in foreign countries.

This paper is of value to researchers, policy makers, and economic development specialists trying to improve the rate of technology adoption and innovation.

The purpose of this paper is to discuss a comprehensive literature survey of studies focusing on the efficiency and productivity of the banking sector using parametric and non‐parametric frontier techniques.

Critically reviewing 106 studies published across the world from 1994 to 2011, a conceptual framework is developed for the studies assessing the efficiency and productivity of the banking industry using non‐parametric DEA frontier approach.

Both the frontier approaches, parametric and non‐parametric, are gaining an edge over the traditional financial performance measures. In the non‐parametric approach, data envelopment analysis (DEA) is widely applied to measure a bank's efficiency and productivity. Studies conducted in developed countries such as the USA, the UK and Europe are now emerging with the new concepts of banking efficiency.

These findings are based only on the critical review of 106 studies. This study suggests the direction for future research and identifies the gap in existing literature with the development of a conceptual model.

This study is original in nature and included literature published in recent issues of 2011.

Purpose – The purpose of this chapter is to estimate non-Gaussian distributions by means of Johnson distributions. An empirical illustration on hedge fund returns is detailed.

Methodology/approach – To fit non-Gaussian distributions, the chapter introduces the family of Johnson distributions and its general extensions. We use both parametric and non-parametric approaches. In a first step, we analyze the serial correlation of our sample of hedge fund returns and unsmooth the series to correct the correlations. Then, we estimate the distribution by the standard Johnson system of laws. Finally, we search for a more general distribution of Johnson type, using a non-parametric approach.

Findings – We use data from the indexes Credit Suisse/Tremont Hedge Fund (CSFB/Tremont) provided by Credit Suisse. For the parametric approach, we find that the SU Johnson distribution is the most appropriate, except for the Managed Futures. For the non-parametric approach, we determine the best polynomial approximation of the function characterizing the transformation from the initial Gaussian law to the generalized Johnson distribution.

Originality/value of chapter – These findings are novel since we use an extension of the Johnson distributions to better fit non-Gaussian distributions, in particular in the case of hedge fund returns. We illustrate the power of this methodology that can be further developed in the multidimensional case.

Anchoring vignettes have become a popular method to adjust self-assessed data for systematic differences in reporting behaviour to aid comparability, for example, of cross-country analyses. The method relies on the two fundamental assumptions of response consistency and vignette equivalence. Evidence on the validity of these assumptions is equivocal. This chapter considers the utility of the vignette approach by considering how successful the method is in moving self-assessed reports of health mobility towards objective counterparts. We draw on data from the Survey of Health, Ageing and Retirement in Europe (SHARE) and undertake pairwise country comparisons of cumulative distributions of self-reports, their objective counterparts and vignette adjusted reports. Comparison of distributions is based on tests for stochastic dominance. Multiple cross-country comparisons are undertaken to assess the consistency of results across contexts and settings. Both non-parametric and parametric approaches to vignette adjustment are considered. In general, we find the anchoring vignette methodology poorly reconciles self-reported data with objective counterparts.

Banks are important sources of external credit but they are reluctant to lend to small and medium enterprises (SMEs) due to the high credit risk involved. Therefore, Credit Guarantee Corporation (Malaysia) Limited (CGC) was set up to assist SMEs to secure loans from financial institutions in Malaysia. Being the sole issuer of credit guarantees to SMEs, the performance of CGC directly reflects the availability of credit guarantees to SMEs. Hence, to ascertain the accessibility of credit guarantees, this study evaluates the efficiency of credit guarantee schemes provided by CGC. From a non‐parametric analysis, CGC is found to be operating at a relatively low level of overall technical efficiency. Therefore, CGC should consider reallocating its existing inputs as well as increase the amount of credit guarantees granted to SMEs in order to achieve a reasonable level of efficiency.

The efficiency of execution of public works contracts is usually defined in terms of the capacity to complete works within the costs and the time agreed on in the contract. Therefore, it has been traditionally measured considering either costs overruns or delays. Our purpose is to consider both measures simultaneously, so as to develop a measure of overall efficiency of public works contracts execution. We compute this measure, through a benchmark procedure, using a non-parametric approach (DEA - Data Envelopment Analysis). The analysis is carried out employing a detailed data set of Italian public contracts for roads and highways, in the period 2000- 2005.

The purpose of this paper is to study the production and efficiency of rice growers in drought prone areas with special attention given to economic and financial factors.

The authors use a parametric stochastic frontier approach and a non-parametric data envelopment analysis.

The study found that financial and liquidity constraints negatively influence production efficiency while off-farm work positively influences efficiency in drought prone areas.

Many biotic and abiotic factors affect the production efficiency of rice growers. Among abiotic stress, drought is the strongest constraint affecting nearly one third of the total rice area in Asia and causing significant economic losses. Farmers’ economic conditions and financial constraints further exacerbate the situation. However, very few studies have analyzed the efficiency in drought prone areas and the influence of economic and financial factors. This study contributes to in this regard by augmenting economic and financial factors in the efficiency estimation of drought prone areas using parametric and non-parametric approach.