Economic performance of Brazilian manufacturing firms: a counterfactual analysis of innovation impacts

This article assesses if innovators outperform non-innovators in Brazilian manufacturing during 1996-2002. To do so, we begin with a simple theoretical model and test the impacts of technological innovation (treatment) on innovating firms (treated) by employing propensity score matching techniques. Correcting for the survivorship bias in the period, it was verified that, on an average, the accomplishment of technological innovations produces positive and significant impacts on the employment, the net revenue, the labor productivity, the capital productivity, and market share of the firms. However, this result was not observed for the mark-up. Especially, the net revenue reflects more robustly the impacts of the innovations. Quantitatively speaking, innovating firms experienced a 10.8-12.5 percentage points (p.p. henceforth) higher growth on employment, a 18.1-21.7 p.p. higher growth on the net revenue, a 10.8-11.9 p.p. higher growth on labor productivity, a 11.8-12.0 p.p. higher growth on capital productivity, and a 19.9-24.3 p.p. higher growth on their market share, relative to the average of the non-innovating firms in the control group. It was also observed that the conjunction of product and process innovations, relative to other forms of innovation, presents the stronger impacts on the performance of Brazilian firms.

Multiple sclerosis decreases explicit counterfactual processing and risk taking in decision making.

INTRODUCTION: Deficits in decision making (DM) are commonly associated with prefrontal cortical damage, but may occur with multiple sclerosis (MS). There are no data concerning the impact of MS on tasks evaluating DM under explicit risk, where different emotional and cognitive components can be distinguished. METHODS: We assessed 72 relapsing-remitting MS (RRMS) patients with mild to moderate disease and 38 healthy controls in two DM tasks involving risk with explicit rules: (1) The Wheel of Fortune (WOF), which probes the anticipated affects of decisions outcomes on future choices; and (2) The Cambridge Gamble Task (CGT) which measures risk taking. Participants also underwent a neuropsychological and emotional assessment, and skin conductance responses (SCRs) were recorded. RESULTS: In the WOF, RRMS patients showed deficits in integrating positive counterfactual information (p<0.005) and greater risk aversion (p<0.001). They reported less negative affect than controls (disappointment: p = 0.007; regret: p = 0.01), although their implicit emotional reactions as measured by post-choice SCRs did not differ. In the CGT, RRMS patients differed from controls in quality of DM (p = 0.01) and deliberation time (p = 0.0002), the latter difference being correlated with attention scores. Such changes did not result in overall decreases in performance (total gains). CONCLUSIONS: The quality of DM under risk was modified by MS in both tasks. The reduction in the expression of disappointment coexisted with an increased risk aversion in the WOF and alexithymia features. These concomitant emotional alterations may have implications for better understanding the components of explicit DM and for the clinical support of MS patients.

Oaxaca-Blinder type counterfactual decomposition methods for duration outcomes

Los métodos disponibles para realizar análisis de descomposición que se pueden aplicar cuando los datos son completamente observados, no son válidos cuando la variable de interés es censurada. Esto puede explicar la escasez de este tipo de ejercicios considerando variables de duración, las cuales se observan usualmente bajo censura. Este documento propone un método del tipo Oaxaca-Blinder para descomponer diferencias en la media en el contexto de datos censurados. La validez de dicho método radica en la identificación y estimación de la distribución conjunta de la variable de duración y un conjunto de covariables. Adicionalmente, se propone un método más general que permite descomponer otros funcionales de interés como la mediana o el coeficiente de Gini, el cual se basa en la especificación de la función de distribución condicional de la variable de duración dado un conjunto de covariables. Con el fin de evaluar el desempeño de dichos métodos, se realizan experimentos tipo Monte Carlo. Finalmente, los métodos propuestos son aplicados para analizar las brechas de género en diferentes características de la duración del desempleo en España, tales como la duración media, la probabilidad de ser desempleado de largo plazo y el coeficiente de Gini. Los resultados obtenidos permiten concluir que los factores diferentes a las características observables, tales como capital humano o estructura del hogar, juegan un papel primordial para explicar dichas brechas.

Children’s understanding of counterfactual alternatives

This study examines how children integrate information about counterfactual alternatives in making judgments. Previous research in adults had shown that they make judgments on the basis of comparisons between factual events and counterfactual alternatives. We suggest that children adopt a summative strategy instead, where they focus on the presented outcomes, both real and counterfactual, and base their judgments on the overall affective quality of these outcomes. Results from a single experiment comparing adults’ and children’s responses to a counterfactual judgment task show that children do tend to use a summative strategy as opposed to the comparative strategy adopted by adults. These results were further supported by participants’ justifications of their judgments, which were alternative focused for the adults, but outcome focused for the children. The results are discussed in relation to complexity-based theories of the development of human reasoning.

Recovering the counterfactual wage distribution with selective return migration

This paper recovers the distribution of wages for Mexican-born workers living in the U.S. if no return migration of Mexican-born workers occurred. Because migrants self-select in the decision to return, the overarching problem addressed by this study is the use of an estimator that also accounts for selection on unobservables. I find that Mexican returnees are middle- to high-wage earners at all levels of educational attainment. Taking into account self-selection in return migration, wages would be approximately 7.7% higher at the median and 4.5% higher at the mean. Owing to positive self-selection, the immigrant-native wage gap would, therefore, partially close if there was no return migration.

Regional or educational disparities? a counterfactual exercise

This work investigates the impact of schooling Oil income distribution in statesjregions of Brazil. Using a semi-parametric model, discussed in DiNardo, Fortin & Lemieux (1996), we measure how much income diíferences between the Northeast and Southeast regions- the country's poorest and richest - and between the states of Ceará and São Paulo in those regions - can be explained by differences in schooling leveIs of the resident population. Using data from the National Household Survey (PNAD), we construct counterfactual densities by reweighting the distribution of the poorest region/state by the schooling profile of the richest. We conclude that: (i) more than 50% of the income di:fference is explained by the difference in schooling; (ii) the highest deciles of the income distribution gain more from an increase in schooling, closely approaching the wage distribution of the richest region/state; and (iii) an increase in schooling, holding the wage structure constant, aggravates the wage disparity in the poorest regions/ states.

Social security effects on income distribution: a counterfactual analysis for Brazil

According to Diamond (1977), one of the reasons for the existence of social security systems is that they function as an income redistribution mechanism. There is an extensive literature that tests whether social security systems produce the desired results in developed countries (mainly for the U.S.A.). Nevertheless, there is not an obvious consensus about this social security property and there is little evidence for developing countries. In this article, we test this property for the Brazilian Social Security System. In addition, we also look at another question which has not been answered yet in the previous literature. Is the trend of social security systems increasingly progressive or regressive? We conclude that the changes in Brazilian Social Security legislation reduced inequality between 1987 and 1996, but only for the elderly. For the other age groups, there is a stable trend. Results for the period between 1996 and 2006 reveal that the Brazilian system is neutral for all cohorts. Therefore, we found out that social security systems are not an effective mechanism for income redistribution, as predicted by previous studies.

The impact of grants in the agriculture sector in Albania: a counterfactual approach

The objective of this study is to measure the impact of the national subsidy scheme on the olive and fruit sector in two regions of Albania, Shkodra and Fier. From the methodological point of view, we use a non- parametric approach based on the propensity score matching. This method overcomes problem of the missing data, by creating a counterfactual scenario. In the first step, the conditional probability to participate in the program was computed. Afterwards, different matching estimators were applied to establish whether the subsidies have affected sectors performance. One of the strengths of this study stays in the data. Cross-sectional primary data was gathered through about 250 interviews.. We have not found empirical evidence of significant effects of government aid program on production. Differences in production found between beneficiaries and non-beneficiaries disappear after adjustment by the conditional probability of participating into the program. This suggests that subsidized farmers would have performed better than the subsidized households even in the absence of production grants, revealing program self-selection. On the other hand, the scheme has affected positively the farm structure increasing the area under cultivation, but yields has not increased for beneficiaries compared to non beneficiaries. These combined results shed light on the reason of the missed impact. It could be reasonable to believe that the new plantation, in particular in the case of olives, has not yet reached full production. Therefore, we have reasons to believe on positive impacts in the future. Concerning some qualitative results, the extension of area under cultivation is strongly conditioned by the small farm size. This together with a thin land market makes extremely difficult the expansion beyond farm boundaries.

The use of counterfactual scenarios as a means to assess policy deadweight:an Irish case study

The evaluation of industrial policy interventions has attracted increasing policy and academic attention in recent years. Despite the widespread consensus regarding the need for evaluation, the issue of how to evaluate, and the associated methodological considerations, continue to be issues of considerable debate. The authors develop an approach to estimate the net additionality of financial assistance from Enterprise Ireland to indigenously owned firms in Ireland for the period 2000 to 2002. With a sample of Enterprise Ireland assisted firms, an innovative, self-assessment, in-depth, face-to-face, interview methodology was adopted. The authors also explore a way of incorporating the indirect benefits of assistance into derived deadweight estimate issue which is seldom discussed in the context of deadweight estimates. They conclude by reflecting on the key methodological lessons learned from the evaluation process, and highlight some pertinent evaluation issues which should form the focus of much future discussion in this field of research.

"It's not my fault - but only I can change it":counterfactual and prefactual thoughts of managers

In testing for the self-serving bias in performance evaluation, the authors propose that comparing managers' counterfactual and prefactual thoughts about subordinates' performance is more conclusive than the attributional approach and also offers practical advantages. In a study with 120 managers, a 4-way interaction of subordinate performance, temporal perspective, direction, and reference confirmed the predicted pattern. Managers' thoughts about how a weak performance could have been enhanced had external references, but thoughts about how such a performance could be enhanced in the future focused on the leader. This asymmetry was only observed for weak performance. Results are discussed with regard to biases in leaders' performance evaluations and to how counter- and prefactual thoughts could be used for leadership research and practice.