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1 – 10 of 146Loganathan Appaia and Shalini Kandaswamy
The purpose of this paper is to determine single sampling plans (SSPs) by attributes when the number of nonconformities is distributed according to a zero-inflated Poisson (ZIP…
Abstract
Purpose
The purpose of this paper is to determine single sampling plans (SSPs) by attributes when the number of nonconformities is distributed according to a zero-inflated Poisson (ZIP) distribution.
Design/methodology/approach
Manufacturing processes have now-a-days been aligned properly and are monitored well, so that the occurrence of nonconformities would be a rare phenomenon. The information related to number of nonconformities per product will have more number of zeros. Under such circumstances, the appropriate probability distribution of the number of nonconformities is a ZIP distribution. The operating characteristic function of the sampling plan is derived.
Findings
Parameters of the sampling plans are obtained for some sets of values of (p 1, α, p 2, β). Numerical examples are given to illustrate the selection of SSPs under ZIP distribution and to study its advantages over Poisson SSP.
Originality/value
Results obtained in this paper are original and has been done for the first time in this regard. Parameters of the sampling plans are essential to make decisions either to accept or reject the lots based on the inspection of the samples.
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Robson Braga, Luiz Paulo Lopes Fávero and Renata Turola Takamatsu
The purpose of this paper is to evaluate investor behaviour related to the timing of selling financial assets based on an intuitive evaluation of the current market trend and…
Abstract
Purpose
The purpose of this paper is to evaluate investor behaviour related to the timing of selling financial assets based on an intuitive evaluation of the current market trend and growth expectation.
Design/methodology/approach
The experiment involved 1,052 volunteer participants who made decisions about stock sales in an environment that simulated a home broker platform to negotiate stocks. Zero-inflated regression models were used.
Findings
The results show that investors’ attitudes, or beliefs, determine whether they will buy or keep risky assets in their investment portfolios; they may decide to sell such assets, even though market shows an upward trend. Such results make a new contribution to behavioural finance within the context of prospect theory and the disposition effect.
Originality/value
The originality of this paper lies in the use of new and innovative techniques (zero-inflated Poisson and negative binomial regression models) applied to real data obtained experimentally.
Propósito
Este artigo estuda o comportamento de investidores relacionado ao momento da venda de ativos financeiros com base em uma avaliação intuitiva da tendência atual do mercado e da expectativa de crescimento.
Desenho/metodologia/abordagem
Nosso experimento envolveu 1,052 participantes voluntários que tomaram decisões sobre a venda de ações em um ambiente que simulava uma plataforma de corretagem para negociação. Foram utilizados modelos de regressão inflacionados de zeros.
Resultados
Os resultados mostram que as atitudes ou crenças dos investidores determinam se eles comprarão ou manterão ativos de risco em suas carteiras de investimento; eles podem decidir vender esses ativos, mesmo que o mercado mostre uma tendência ascendente. Tais resultados constituem uma nova contribuição para o campo das finanças comportamentais, dentro do contexto da teoria do prospecto e do efeito disposição.
Originalidade/valor
A originalidade deste artigo reside no uso de técnicas novas e inovadoras (modelos de regressão Poisson e binomial negativo inflacionados de zeros) aplicadas a dados reais obtidos experimentalmente.
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The purpose of this paper is to introduce the zero‐modified distributions in the calculation of operational value‐at‐risk.
Abstract
Purpose
The purpose of this paper is to introduce the zero‐modified distributions in the calculation of operational value‐at‐risk.
Design/methodology/approach
This kind of distributions is preferred when excess of zeroes is observed. In operational risk, this phenomenon may be due to the scarcity of data, the existence of extreme values and/or the threshold from which banks start to collect losses. In this article, the paper focuses on the analysis of damage to physical assets.
Findings
The results show that basic Poisson distribution underestimates the dispersion, and then leads to the underestimation of the capital charge. However, zero‐modified Poisson distributions perform well the frequency. In addition, basic negative binomial and its related zero‐modified distributions, in their turn, offer a good prediction of count events. To choose the distribution that suits better the frequency, the paper uses the Vuong's test. Its results indicate that zero‐modified Poisson distributions, basic negative binomial and its related zero‐modified distributions are equivalent. This conclusion is confirmed by the capital charge calculated since the differences between the six aggregations are not significant except that of basic Poisson distribution.
Originality/value
Recently, the zero‐modified formulations are widely used in many fields because of the low frequency of the events. This article aims to describe the frequency of operational risk using zero‐modified distributions.
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Nhuong Tran, Norbert Wilson and Diane Hite
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…
Abstract
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.
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Gabriel Asare Okyere, Richard Tawiah, Richard Bruce Lamptey, William Oduro and Michael Thompson
The purpose of this paper is to assess the differences pertaining to the resources presently accessible for problem-based learning (PBL) among six colleges of Kwame Nkrumah…
Abstract
Purpose
The purpose of this paper is to assess the differences pertaining to the resources presently accessible for problem-based learning (PBL) among six colleges of Kwame Nkrumah University of Science and Technology (KNUST) in Ghana.
Design/methodology/approach
Data for the study are the cross-sectional type drawn from 1,020 students. Poisson and zero-inflated Poisson (ZIP) models were implemented on the data to ascertain the variations regarding the extent of resources available for PBL across the colleges of the university.
Findings
The study outlines the specific resources accessible for PBL across college levels of KNUST. On aggregate, 25.7 per cent reported that their respective colleges have sufficient resources, while 74.3 per cent indicated otherwise. The ZIP model exhibited superiority over the Poisson model, when compared under a Vuong test. As per the ZIP model, none of the colleges appeared to differ significantly in terms of having sufficient resource for PBL.
Practical implications
Findings are applicable to informed decision-making which targets achieving quality education through the use of PBL. Access to sufficient resources that meet the needs of colleges or departments of a University is emphasized.
Originality/value
The application of Poisson and ZIP models to aggregated count data in a PBL setting is novel.
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Dominique Lord and Srinivas Reddy Geedipally
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…
Abstract
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.
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Wael Hemrit and Mounira Ben Arab
The purpose of this paper is to examine the determinants of operational losses in insurance companies.
Abstract
Purpose
The purpose of this paper is to examine the determinants of operational losses in insurance companies.
Design/methodology/approach
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.
Findings
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.
Originality/value
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.
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Ronny Prabowo and Doddy Setiawan
We investigate the effect of female CEOs on corporate innovation using Indonesian companies. More specifically, this paper aims to answer the following research questions. First…
Abstract
Purpose
We investigate the effect of female CEOs on corporate innovation using Indonesian companies. More specifically, this paper aims to answer the following research questions. First, do firms led by female CEOs innovate more or less than firms led by male CEOs? Second, does firm size positively moderate the effect of CEO gender on corporate innovation? Our research questions imply that female CEOs' innovative performance likely depends on the size of their firms.
Design/methodology/approach
Because the dependent variable is a dummy that equals one if the firm was an innovator and zero otherwise, this study employs probit analysis to test the hypotheses empirically. As an alternative test, we use a different measure of the dependent variable (INNOV-corporate innovation) by summing the firm's responses (yes/no) to nine innovation-related questions. Because this alternative measure of INNOV exhibits a count-data characteristic with non-negative integer values and more than 70% of the total sample did not engage in innovation activities at all, this study relies on the zero-inflated Poisson regression in the robustness test.
Findings
We have shown that firms led by female CEOs exhibit a greater probability of being innovators. Further, firm size increases the positive effect of female CEOs on firms' probability of engaging in innovation activities. Further, we also find that when female CEOs manage women-owned firms, their firms are more likely to engage in innovation activities.
Research limitations/implications
This study cannot further investigate the causal relationship between CEO gender and corporate innovation (e.g. by analyzing whether CEOs with different gender affects firm innovation) because it relies on the World Bank Enterprise Survey data. Nevertheless, this study suggests that stakeholders, especially in developing countries like Indonesia, need to encourage more women to hold CEO positions, especially in larger firms, because women-led firms perform better in innovation activities.
Originality/value
Our study thus highlights that female CEOs outperform their male counterparts in innovation activities. These results support the argument that because of gender-based discrimination that they receive, female CEOs are greatly motivated to exhibit greater innovation performance. Further, it is more difficult for women to hold the CEO positions in larger firms because of these firms' more intense managerial job market.
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Xinzhong Li and Seung-Rok Park
The purpose of this paper is to indicate trade characteristics of Foreign direct investment (FDI) inflows in China and examine the dynamic interaction between FDI inflows and…
Abstract
Purpose
The purpose of this paper is to indicate trade characteristics of Foreign direct investment (FDI) inflows in China and examine the dynamic interaction between FDI inflows and China’s international trade through empirical analysis.
Design/methodology/approach
At first, this paper builds the probability distribution model (Poisson and negative binomial (NB)) to capture the characteristics of spatial distribution of all kinds of FDI firms in Chinese cities and provinces based on count data, so as to indicate the potentials for further introducing FDI inflows in China; Second, this paper investigates the effects of trade on FDI firms inflows based on probability regress model (Binary Logit, Tobit, NB, Poisson, zero inflated negative binomial) and shows how international trade accelerates the different kinds of FDI firms to agglomerate in Eastern, Middle and Western region by the endowments of factors; third, this paper empirically examines the magnitude and characteristics of trade effects generated by FDI inflows by building dynamic panel model based on continuous data.
Findings
First, statistical tests of probability distribution model based on count data show that there are characteristics of spatial agglomeration of FDI firms such as manufacture firm, R & D firm, managing and marketing firm and total sectors, which obey NB distribution as whole; Second, this study indicate that FDI inflows have strong positive effects on the international trade in China’s provinces and on China’s regional trade, and that most of foreign firms in China are export oriented being strongly characterized as labor-intensive industries, especially, contributions of FDI to imports are greater than the contributions of FDI to exports in China’s Middle and Western trade, and the growth of FDI trade in China’s trade volume has been strong over the past years; third, the empirical results of models based on count data and continuous data indicate that FDI inflows have significantly positive relationship with international trade, that is, the relationship between FDI and international trade in the case of China is the characteristics with complement and imports substituting relationship.
Research limitations/implications
Because of mixed data set for FDI inflows of processing and assembling trade and production-oriented FDI, efficiency-seeking and knowledge or technology – intensive FDI inflows in the past 36 years, the paper only investigate characteristics of FDI inflows in China before the turning point of financial crisis, but it is important for capturing the whole picture of trade characteristics of FDI inflows in China.
Practical implications
The derived quantitative results imply that there are still greater potentials for further introducing FDI inflows in China, and decision-maker should make policy of introducing FDI inflows which are favorable to supporting innovative activities and economic agglomeration, and preferably encourage efficiency-seeking and export-oriented FDI inflows so as enhance quality and efficiency of economic growth, which are also helpful to accelerate upgrade of Chinese industry and gradually shorten gap of growth among Eastern, Middle and Western region.
Social implications
FDI inflows in China not only stimulate the remarkable growth of bilateral trade between host country and home country, but also promote the growth of international trade between China and the rest of the world. Thus, policies of bilateral or multilateral free-trade and investment area should be encouraged, which will be also favorable to promote the growth and welfare in all the regions.
Originality/value
This paper demonstrates that spatial distributions of FDI firms in Chinese cities and provinces obey NB probability distribution pattern, and puts forward the methodology of model based on count data and continuous data. Besides, this paper quantitatively indicates trade characteristics of FDI inflows in China as well as the dynamic interaction between FDI inflows and China’s international trade.
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Luiz Paulo Lopes Fávero, Marco Aurélio dos Santos and Ricardo Goulart Serra
Branching is not the only way for foreign banks to enter a national market, and it is impractical when there are informational and cultural barriers and asymmetries among…
Abstract
Purpose
Branching is not the only way for foreign banks to enter a national market, and it is impractical when there are informational and cultural barriers and asymmetries among countries. The purpose of this paper is to analyze the determinants of cross-border branching in the Latin American banking sector, a region with regulatory disparity and political and economic instability, offering elements to a grounded strategic decision.
Design/methodology/approach
This study uses data from six Latin American countries. To account for the preponderance of zero counts, classes of zero-inflated models are applied (Poisson, negative binomial, and mixed). Model fit indicators obtained from differences between observed and estimated counts are used for comparisons, considering branches in each region established by banks from every other foreign region of the sample.
Findings
Branching by foreign banks is positively correlated with the population, GDP per capita, household disposable income, and economic freedom score of the host country. The opposite holds for the unemployment rate and entry regulations of the host country.
Originality/value
Few paper address cross-border banking in emerging economies. This paper analyzes cross-border branching in Latin America in the context of the current financial integration and bank strategy. Econometrically, its pioneering design allows modeling of inflation of zeros, over-dispersion, and the multilevel data structure. This design allowed testing of a novel country-level variable: the host country’s economic freedom score.
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