Lyudmila O. Babeshko, Vera V. Ioudina, Maria Y. Mikhaleva and Irina V. Orlova

DOI: https://doi.org/10.6000/1929-7092.2019.08.69

Published: 02 October 2019

Abstract: The article is devoted to the interrelation between methods of estimating parameters of simultaneous equations. Simultaneous equations model (SEM) is commonly used to model complex socio-economic phenomena. SEM is a set of linear simultaneous equations in which response variables are among explanatory variables in each equation of regression. This causes the problem of endogeneity and leads to biased and inconsistent estimation of parameters. There is a number of special methods to solve the problem of endogeneity of regressors: method of instrumental variables (IV), indirect least squares method (ILS), two-stage least squares method (2SLS), and three-stage least squares method (3SLS). In this article, the relationship between 2SLS and IV, ILS and 2SLS, ILS and OLS with restrictions on structural parameters, as well as the equivalence of point estimates of parameters and autocovariance matrices, is shown using empirical example.

Keywords: System of simultaneous equations, instrumental variables method, parameter constraints, parameter estimates, autocovariance matrix of parameter estimates.

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Bui Anh Tuan, Michael McAleer, Nguyen Thi Tieu Dang and Kim-Hung Pho

DOI: https://doi.org/10.6000/1929-7092.2019.08.71

Published: 09 October 2019

Abstract: In the age of globalization, an effective leadership skill is the ability for quick calculation of work-related problems. From an economic perspective, fast computation often provides a competitive advantage in business, where speed, efficiency and accuracy are required. Quick calculation techniques are a central problem in modern mathematics because it shortens the time for solving technical problems. The purpose of the paper is to provide an explanation that will lead to a quick solution to a volume problem. Specifically, some convenient formulas are provided for quick calculation of the volume of the common polyhedron, together with a number of multiple-choice questions with IATA software to practice. Based on the evaluation results, reliable multiple-choice questions are used for an empirical study in Can Tho City, Vietnam on the effectiveness of the formulas for quick calculation of the polyhedron volume in spatial geometry. Statistical analysis shows that quick formulas help students to complete lessons at a higher rate, thereby contributing to improvements in the effectiveness of teaching geometry, especially the volume of the Polyhedron.

Keywords: Leadership, Knowledge Production, Polyhedron, Volume, Spatial Geometry, Quick calculation.

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Lan Le-Phuong Pham, Duc Hong Vo, Thang Cong Nguyen and Michael McAleer

DOI: https://doi.org/10.6000/1929-7092.2019.08.70

Published: 09 October 2019

Abstract: Managerial entrenchment occurs when managers are able to manipulate financing decisions to support their own interests rather than those of shareholders. Such possible actions can involve deception and fraud. Furthermore, the market timing activity is explained by managers’ financing decisions through which companies choose to raise debt or equity to finance their investment opportunities. Nevertheless, the relationship between managerial entrenchment and leverage ratio, together with the link between market timing and leverage ratio, have not been considered carefully and investigated in the Vietnamese context. The paper provides empirical evidence of the effect of managerial entrenchment and market timing through firms’ histories on leverage ratio in Vietnam using a sample of 289 non-financial firms listed on the Ho Chi Minh Stock Exchange (HOSE) during the period 2006-2017. OLS, GMM and the endogenous switching methods are used for estimating the models. Findings from the paper indicate that there is a negative relationship between managerial entrenchment and leverage ratio, and that there is a negative effect of firm history, including financial deficit, various timing measures, and stock price history on the leverage ratios of Vietnam’s listed firms.

Keywords: Managerial entrenchment, Firm histories, Leverage ratio, Endogenous switching, HOSE.

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Alí Aali-Bujari, Francisco Venegas-Martínez and Tomás Gómez-Rodríguez

DOI: https://doi.org/10.6000/1929-7092.2019.08.72

Published: 21 October 2019

Abstract: Motivation: This paper is aimed at analyzing the impact of foreign investment (FI) on economic growth (EG) in Australia, Canada, Germany, Spain, Finland, France, United Kingdom, Greece, Italy, Japan, Republic of Korea, Mexico, Netherlands, Norway, New Zealand, and USA.

Novelty: The research is: 1) concentrated in countries belonging to the OECD; 2) based on a greater number of countries, variables and periods; and 3) addressed to correcting multicollinearity and autocorrelation of data.

Methodology: A Granger causality analysis is carried out and both static and dynamic panel data models are estimated.

Data and Empirical Analysis: Data is obtained from World Bank for the period 1977-2017. The causality of Granger reveals that during the first 10 years there is a unidirectional relationship from FI toward EG. In the following 15 years, there is empirical evidence of a bidirectional causal relationship. Moreover, during the whole period of study, 7 years have a unidirectional causality from EG toward FI. Finally, estimates of both static and dynamic panel data models show that FI has a positive impact on EG in all the studied economies.

Policy Considerations: A set of recommendations for policy designers and decision makers is provided to build the appropriate instruments and incentives to encourage the attraction of FI to boost EG and, therefore, to enhance social welfare.

Keywords: Economic growth, foreign investment, Granger causality, panel data.

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