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The purpose of this paper is to analyze the differential impact each of the dominant theoretical explanations has on innovation persistence. The authors hereby differentiate the degree of novelty, distinguishing between innovation based on invention (new products for the international market) and those based on imitation or adoption processes (new products for the company or new products in the national market).

Placing this study in the context of a developing country, the authors apply an ordered probit model inflated in zeros (ZIOP). This methodology enables one to not only provide results not biased by the excess of zeros but also take into account the unobserved heterogeneity with respect to the sources of zeros (that is those firms which do not innovate). The empirical analysis is based on three Colombian innovation surveys carried out between 2003 and 2008 by the Colombian National Statistics Department.

The results provide empirical evidence that two elements are essential for both types of innovation persistence: accessing external financial resources and learning through interaction. Furthermore, the sunk R&D cost approach and technological learning explain persistence in innovation of new products for the international market.

The limitations of this study are directly related to the methodological choice. The authors were unable to take into consideration two sources of heterogeneity: the one related to initial conditions and the one related to the source of the many non-innovators. They opted to focus on the latter due the research question and setting of this study. Additionally, macroeconomic instability did not allow to consider a long panel; instead the authors had to rely on a short panel.

The results provide important insights to managers. Continuous investments in innovation activities are important bot to become an innovative firm as well as to improve the odds of persistently innovating. Particularly, R&D investments are a pre-requisite for new-to-the-world innovations. Finally, it is not one specific set of capabilities which is a prerequisite for the generation of innovation; rather it is a strategic combination of various skills that increase the probability to (persistently) innovate.

With innovation persistence being especially relevant for long-run dynamics behind economic growth, the results of this study provide insights into potential public policies. Governments are in a position to at least lower barriers, which might enable more firms to persistently innovate. Continuous access – less than the actual amount – to financial resources aimed at innovation activities and learning through interaction with external agents is fundamental for both kinds of innovation persistence. Both are market characteristics where governments can – at least indirectly – intervene.

Despite the existence of various theoretical approaches, the bulk of empirical research focuses on the verification of true state innovation persistence. Thus, while innovation persistency has been widely confirmed to exist to a certain degree, knowledge regarding which theoretical approach is likely to drive a firm to persistently innovation is still scarce. Additionally, this study is placed in the context of a developing country, which by most empirical research has been overlooked but is characterized by one element which is decisive for the empirical methodology: many firms do not innovate, let alone persistently innovate.

El objetivo de este artículo es analizar el impacto diferencial que cada una de las explicaciones teóricas dominantes tiene sobre la persistencia de la innovación. Para esto, diferenciamos el grado de novedad, distinguiendo entre la innovación basada en la invención (nuevos productos para el mercado internacional) y aquellas basadas en procesos de imitación o adopción (nuevos productos para el mercado nacional).

Este estudio se lleva a cabo en el contexto de un país en desarrollo, en el cual la mayoría de empresas no innovan. Consecuentemente, aplicamos un modelo probit ordenado inflado en ceros (ZIOP). Esta metodología no sólo proporciona resultados no sesgados por el exceso de ceros, sino que también tiene en cuenta la heterogeneidad no observada con respecto a las fuentes de ceros (es decir, aquellas empresas que no innovan). El análisis empírico se basa en tres Encuestas de Innovación en Colombia realizadas entre 2003 y 2008 por el Departamento Nacional de Estadísticas de Colombia.

Nuestros resultados proporcionan evidencia empírica de que tanto el enfoque de éxito genera éxito con el de capacidades son importantes. Sin embargo, se encontró que todas las variables que se desprenden de estos enfoques teóricos no están relacionadas en forma significativa con los dos tipos de persistencia estudiados. Además, el enfoque de costos hundidos de I + D se relaciona en forma robusta con la persistencia en la innovación de nuevos productos para el mercado internacional.

Las limitaciones de este estudio están directamente relacionadas con la elección metodológica. No pudimos tomar en consideración simultáneamente dos fuentes de heterogeneidad: la relacionada con las condiciones iniciales y la relacionada con el exceso de empresas no innovadoras. Optamos por centrarnos en lo último debido a la pregunta de investigación y el contexto país en el que se desarrolla esta investigación. Adicionalmente, la inestabilidad macroeconómica no permitió considerar un panel largo; por el contrario, se usó un panel corto que cubre un periodo de tiempo de estabilidad económica.

Nuestros resultados proporcionan información importante para los gerentes. Las inversiones continuas en actividades de innovación son importantes tanto para aumentar la probabilidad de convertirse en una empresa innovadora como para mejorar las posibilidades de innovación persistente. En particular, las inversiones en I + D son un requisito para lograr innovaciones nuevas en el mundo. Finalmente, no se identificaron un conjunto único de capacidades necesarias para la generación de cualquier tipo de innovación; más bien se debe adoptar un enfoque estratégico diferenciado.

Dado que la persistencia de la innovación es especialmente relevante para las dinámicas de crecimiento económico de largo plazo, los resultados de nuestro estudio proporcionan información útil para el diseño de políticas públicas. Los gobiernos están en posición de al menos reducir las barreras que impiden que las empresas innoven persistentemente. El acceso continuo a los recursos financieros destinados a actividades de innovación y el aprendizaje a través de la interacción con agentes externos son fundamentales para ambos tipos de persistencia de innovación. Ambas son condiciones del mercado que pueden ser intervenidas, al menos indirectamente, por el gobierno.

A pesar de la existencia de tres enfoques principales sobre la persistencia en la innovación, la mayor parte de las investigaciones se han centrado en la verificación de la existencia de verdadera persistencia en innovación. Por lo tanto, aunque se ha confirmado ampliamente que la persistencia de la innovación existe hasta cierto punto, el conocimiento sobre qué enfoque teórico es probable que impulse a una empresa a innovar de manera persistente es aún escaso. Además, este estudio se ubica en el contexto de un país en desarrollo, contexto que ha sido pasado por alto en la mayoría de las investigaciones empíricas, aspecto que decisivo para la selección de la metodología empírica: muchas empresas no innovan, y mucho menos innovan persistentemente.

O objetivo deste artigo é analisar o impacto diferencial que têm sobre a persistência da inovação cada uma das explicações teóricas dominantes. Para isso diferenciamos o grau de novidade, distinguindo entre inovação baseada em invenção (novos produtos para o mercado internacional) e aqueles baseados em processos de imitação ou adoção (novos produtos para o mercado nacional).

Esta pesquisa ocorre no contexto de um país em desenvolvimento, no qual a maioria das empresas não inovam. Assim sendo, temos aplicado o modelo Probit ordenado inflado-zero (ZIOP). Essa metodologia permite não só que os resultados da pesquisa não sejam influenciados por excesso de zeros, mas também a inclusão da heterogeneidade não observada em relação às fontes de zeros (isto é, aquelas empresas que não inovam). A análise empírica baseia-se em três pesquisas sobre Inovação na Colômbia realizadas entre 2003 e 2008 pelo Departamento Nacional de Estatísticas da Colômbia.

Nossos resultados fornecem evidências empíricas que indicam que tanto a abordagem de sucesso gera sucesso quanto a abordagem de capacidade é importante. No entanto, não se encontrou que todas as variáveis que emergiram dessas abordagens teóricas foram significativamente relacionadas aos dois tipos de persistência pesquisados. Além disso, a abordagem dos custos irrecuperáveis de P and D está relacionada de forma robusta à persistência na inovação de novos produtos para o mercado internacional.

As limitações desta pesquisa estão diretamente relacionadas à escolha metodológica. Não temos podido considerar duas fontes de heterogeneidade: a relacionada às condições iniciais e a relacionada ao excesso de empresas não inovadoras. Optou-se por centrar-se nesse último devido à questão de pesquisa e ao contexto do país em que foi realizada. Além disso, a instabilidade macroeconômica não permitiu um painel longo; pelo contrário, foi utilizado um painel curto que cobre um período de estabilidade econômica.

Nossos resultados provêem informação importante para os gerentes. Investimentos contínuos em atividades de inovação são importantes tanto para aumentar a probabilidade de se tornar numa empresa inovadora quanto para melhorar as possibilidades de inovação persistente. Em particular, os investimentos em P and D são um requisito para alcançar inovações no mundo. Finalmente, um conjunto único de capacidades necessárias para a geração de qualquer tipo de inovação não foi identificado; ao contrário, uma abordagem estratégica diferenciada deve ser adotada.

Dado que a persistência da inovação é especialmente relevante para as dinâmicas de longo prazo por trás do crescimento econômico, os resultados obtidos provêem informação útil para o desenho de políticas públicas. Os governos estão em posição de, pelo menos, reduzir as barreiras que impedem as empresas de inovar persistentemente. O acesso contínuo a recursos financeiros para atividades de inovação e a aprendizagem por meio da interação com agentes externos são fundamentais para os dois tipos de persistência de inovação. Ambas são condições do mercado que podem ser intervencionadas, pelo menos indiretamente, pelo governo.

Embora da existência de três abordagens principais sobre persistência na inovação, a maior parte das pesquisas concentraram-se em verificar a existência de verdadeira persistência na inovação. Portanto, ainda quando tem sido amplamente confirmado que a persistência da inovação existe até certo ponto, o conhecimento sobre qual abordagem teórico provavelmente alavanca uma empresa a inovar persistentemente ainda é escasso. Além disso, esta pesquisa está localizada num contexto de um país em desenvolvimento, que tem sido negligenciado na maioria das pesquisas empíricas, aspecto decisivo para a seleção da metodologia empírica: muitas empresas não inovam e muito menos inovam persistentemente.

In recent years, the demand for road traffic has continued to increase, but the casualties and economic losses caused by traffic accidents have also remained high. Therefore, the use of social service robots to manage, supervise and warn real-time traffic information has become an inevitable trend of traffic safety management.

In order to explore the inherent objective development law of road traffic accidents, in this paper, the factor analysis (FA) is used to explore the main influencing factors of traffic accidents, then the random forest algorithm is applied to build an FA–RF-based road traffic accident severity prediction model to predict two- and three-category accidents.

By comprehensively comparing the classification results of the two- and the three-category accident prediction, it also finds that due to the intersection between injuries and fatalities and the lack of necessarily external environmental information, the FA–RF model has a large degree of misjudgment for injuries and fatalities. Therefore, it is recommended to establish a real-time autonomous information communication mechanism between different kinds of social robots, which can improve the prediction of traffic accidents.

(1) A fusion model of FA–RF is considered to predict traffic accidents, which can be applied in traffic service robot. (2) It is recommended to establish a real-time autonomous information communication mechanism between different kinds of social robots, which can improve the prediction of traffic accidents.

Asset sales can have opposing effects on firm credit quality. On the one hand asset sales could signal increased credit risk resulting from distress or on the other hand they could improve internal liquidity and hence credit quality. Therefore the impact potential asset sales can have on credit quality is an empirical question and one that has previously not been examined in the literature. The paper aims to discuss these issues.

Using credit ratings as a measure of firm credit quality, in ordered probit regressions, this study finds evidence consistent with the internal liquidity view of the asset sales-credit risk relationship.

Results from ordered probit regressions of credit ratings show that the likelihood of higher credit ratings is increasing in industry-level turnover of real assets

Credit-rating agencies often cite the impact of asset sales on firm credit quality as a motivation for their rating assignments. Distress-driven asset sales could reduce firm credit quality whereas other asset sales could result in increased internal firm liquidity and hence improve firm credit quality. This bi-directional expectation leaves the question of how asset sales affect credit quality to be answered empirically and has not been previously tested in the literature.

Purpose – This chapter provides an overview of issues related to analysing crash data characterised by excess zero responses and/or long tails and how to overcome these problems. Factors affecting excess zeros and/or long tails are discussed, as well as how they can bias the results when traditional distributions or models are used. Recently introduced multi-parameter distributions and models developed specifically for such datasets are described. The chapter is intended to guide readers on how to properly analyse crash datasets with excess zeros and long or heavy tails.

Methodology – Key references from the literature are summarised and discussed, and two examples detailing how multi-parameter distributions and models compare with the negative binomial distribution and model are presented.

Findings – In the event that the characteristics of the crash dataset cannot be changed or modified, recently introduced multi-parameter distributions and models can be used efficiently to analyse datasets characterised by excess zero responses and/or long tails. They offer a simpler way to interpret the relationship between crashes and explanatory variables, while providing better statistical performance in terms of goodness-of-fit and predictive capabilities.

Research implications – Multi-parameter models are expected to become the next series of traditional distributions and models. The research on these models is still ongoing.

Practical implications – With the advancement of computing power and Bayesian simulation methods, multi-parameter models can now be easily coded and applied to analyse crash datasets characterised by excess zero responses and/or long tails.

The purpose of this paper is to examine the determinants of operational losses in insurance companies.

By using most common estimates of frequency and severity of losses that affected business‐lines during 2009, the paper integrates a quantitative aspect that reflects the mode of organization in the insurance company. In this paper, it would be more appropriate to focus on the frequency and severity of losses estimated by insurers and which are related to each category of operational risk events that took place in 2009.

The paper finds that the frequency of operational losses is positively related to the Market Share (MARKSHARE) and the Rate of Geographic Location (RAGELOC). However, the occurrence of loss is negatively related to the Variety of Insurance Activities (VARIACT). The paper also found a decrease in the frequency of losses associated with a large number of employees. Therefore, there is a significant relationship between the Human Factor (HF) and the occurrence of operational losses. In terms of severity, the empirical study has shown that the probability of zero intensity of operational losses is negatively influenced by the Market Share (MARKSHARE) and the Rate of Geographic Location (RAGELOC). In the same framework, the Variety of Insurance Activities (VARIACT) has a negative effect on the probability of high operational loss severity.

Despite the absence of the quantitative data of operational risk, this article will discover a new research perspective to estimate the frequency and severity of operational losses in the insurance sector in Tunisia.

The purpose of the chapter is to test the hypothesis that food safety (chemical) standards act as barriers to international seafood imports. We use zero-accounting gravity models to test the hypothesis that food safety (chemical) standards act as barriers to international seafood imports. The chemical standards on which we focus include chloramphenicol required performance limit, oxytetracycline maximum residue limit, fluoro-quinolones maximum residue limit, and dichlorodiphenyltrichloroethane (DDT) pesticide residue limit. The study focuses on the three most important seafood markets: the European Union’s 15 members, Japan, and North America.Our empirical results confirm the hypothesis and are robust to the OLS as well as alternative zero-accounting gravity models such as the Heckman estimation and the Poisson family regressions. For the choice of the best model specification to account for zero trade and heteroskedastic issues, it is inconclusive to base on formal statistical tests; however, the Heckman sample selection and zero-inflated negative binomial (ZINB) models provide the most reliable parameter estimates based on the statistical tests, magnitude of coefficients, economic implications, and the literature findings. Our findings suggest that continually tightening of seafood safety standards has had a negative impact on exporting countries. Increasing the stringency of regulations by reducing analytical limits or maximum residue limits in seafood in developed countries has negative impacts on their bilateral seafood imports. The chapter furthers the literature on food safety standards on international trade. We show competing gravity model specifications and provide additional evidence that no one gravity model is superior.

The authors examine whether or not applicants and recipients of federal disability insurance (DI) inflate their self-assessed health (SAH) problems relative to others. To do this, the authors employ a technique which uses anchoring vignettes. This approach allows them to examine how various cohorts of the population interpret survey questions associated with subjective self-assessments of health. The results of the analysis suggest that DI participants do inflate the severity of a given health problem, but by a small but significant degree. This tendency to exaggerate the severity of disability problems is much more apparent among those with more education (especially those with a college degree). In contrast, racial minorities tend to underestimate severity ratings for a given disability vignette when compared to their white peers.

The purpose of this paper is to analyse the quantitative determinants of individual ratings of commercial banks (as conducted by Fitch Ratings).

The ordered probit model is applied as an extension of the standard binary probit model. The model is estimated using a sample of 681 international banks.

Banks with a greater capitalisation, larger assets, and a higher return on assets have higher bank ratings. Further, the greater is a bank's liquidity, the larger is its net interest margin and the more is the ratio of its operating expenses to total operating income the lower is a bank's rating.

Modelling the determinants of international bank ratings spanning a sample of 90 countries. Applying a model with dynamics that considers whether the rating is determined by information up to four years prior to the rating date.

This work uses survey data from the Portuguese Securities Market Commission (Comissão de Mercado de Valores Mobiliários – CMVM) to examine financial literacy and literacy bias. The main objective of this study is to shed light on this issue by identifying the individual characteristics that are associated with financial literacy, namely overconfidence and underconfidence, which in turn might help explain individuals' financial decisions. The study distinguishes two groups, i.e. students and nonstudents, and considers several characteristics that are usually employed in this stream of research.

The data are based on a survey conducted by a partnership between the CMVM and a consortium of Portuguese universities. This paper has a three-fold aim. First, it studies the main individual features associated with objective financial literacy. Second, it analyzes the relationship between those variables and the bias between self-perceived and objective literacy, distinguishing overconfidence and underconfidence. Third, and most originally, this framework was also used to examine the differences between students and nonstudents. Those aims are pursued using cross-sectional ordinary least squares (OLS) regressions, except for the study of the literacy bias, for which the authors use an ordered probit.

Literacy is higher in individuals of the male gender who are older, have higher incomes, live in metropolitan areas, are highly educated, have a field of study related to finance and have high self-perceived literacy. Younger people are more overconfident. Unconditionally, women are less overconfident than men, but conditionally, they overestimate their knowledge. People holding securities and with a field of study related to finance are more overconfident. The gender effect is mainly driven by students, and the impact of a field of study and of holding securities on overconfidence decreases and increases, respectively, for students. The results highlight the importance of financial education.

Due to the way that the questionnaire was made available, there is no guarantee that the sample is representative of the Portuguese general population, or, for that matter, representative of the typical Portuguese retail investors or households. Also, there is no guarantee that the same individual did not answer the questionnaire more than once, although this is highly improbable. The link to the online questionnaire was only transmitted within e-mail databases owned by the CMVM and Portuguese universities, so the authors cannot guarantee its unbiasedness.

The authors' results may help the National Plan for Financial Education (the acronym in Portuguese is PNFF) fine-tune the required actions towards different target groups and, most importantly, highlight that different groups may require different approaches aiming to narrow the gap between objective and perceived literacy. The first step should be creating procedures to provide feedback on the objective and perceived literacy of those who enroll in financial formation programs.

The study distinguishes two groups, students and nonstudents, providing additional insights that might guide policymakers on how to structure financial education to enhance individual financial behavior. This is especially important in a country such as Portugal which has the lowest objective financial literacy in the Eurozone.

This study contributes to the financial literacy literature, in particular to the stream of research that focuses on psychological biases, by shedding light on the factors associated with both individual overconfidence and underconfidence. Differentiating between students and nonstudents provides additional insights, which might guide policymakers on how to structure financial education to enhance individual financial behavior.

The paper aims to study the role of local institutions in the establishment of fast-food outlets in urban districts of Peru. In most urban districts, there are no fast-food outlets. The authors, therefore, study the effect of institutional quality on the presence or absence of these outlets and the number of outlets if these are present.

The theoretical framework in which this paper is based on is the theory of agglomeration, which establishes that firms benefit from being close to each other. In particular, the paper builds on a model of market entry and competition in geographically independent local markets. An explicit expression was found for the equilibrium number of outlets (including zero) as a function of exogenous determinants of the demand for fast-food in each market, available infrastructure and institutional quality of the district’s government. Principal component analysis was used to construct measures of institutional quality based on administrative and organizational characteristics of district’s municipalities. These measures were incorporated as explanatory variables in a zero-inflated Poisson model, which is appropriate to handle count data and to accommodate excess zeros and which also allows the specification of different models for the zero part and the positive part.

Institutional quality mainly affects the presence of fast-food outlets in a district. The quality of urban development management and use of information systems are relevant. An institutional variable particularly relevant in explaining the number of outlets is the presence of an investment programming office in the municipality. The authors confirm the general hypothesis of the paper: institutions have a role in explaining both the presence and number of fast-food outlets in a district. Overall, the results of this paper suggest that institutional quality of a municipal district is related to better infrastructure, which lowers the costs of establishing outlets.

Limitations in the availability of data at the regional and urban district level did not allow the authors to analyze other factors that affect entry decisions in the fast-food industry in Peru, such as controls to prevent corruption, legal uncertainty or crime. Another limitation was the lack of data on entry costs for each franchisee in each urban district. This forced the authors to use public infrastructure characteristics of the district as (imperfect) proxies of the entry costs.

The instruments of urban development management and information systems can be effective at attracting investment to a district. These tools operate partly through an indirect effect, namely, the improvement of district infrastructure, which is necessary to reduce the costs of establishing companies. There is also synergy between national government’s programs to attract investment and the good institutional quality in local governments. On the contrary, poor local institutions can be an obstacle to the successful implementation of those national programs.

Foreign direct investment has a positive impact on the economic development of a country through knowledge spillovers. Therefore, any administrative reform to make local government practices more efficient can have an indirect impact on development.

Principal component analysis is a statistical tool that can be important in building good measures of institutional quality by allowing the combination of different observable characteristics into one component that can be interpreted as an operational restriction. The count model allows the use of the primary, easily observable, dependent variable, namely, the number of outlets. Finally, the two-part model makes it possible to discern the effect of institutional quality on the presence or absence of outlets and the number of outlets if these are present.