The use of the mobile phone in the rural zones of Peru

PurposeThe main objective of the research is to examine whether the possession and the consumption of the service of a mobile telephone by the families of rural zones has improved their wellbeing in the last 10 years (2007–2016).Design/methodology/approachA quantitative analysis of panel data is proposed in order to analyze the effect of the use of the mobile telephone in rural zones by region of Peru during the last 10 years and capture the unobservable heterogeneity during the said period. In this manner, it is hoped to investigate the effect of the increased use of said technology in Peru.FindingsThe results obtained show that the increase in the acquisitions of mobile telephones in rural zones has had a positive impact on the wellbeing of households. Continuous business innovation driven by citizens’ needs and the greater accessibility of mobile telephones are the main reasons based on the Peruvian context under study.Originality/valueIn Peru, there has been an explosive increase in users of mobile telephones in the last 10 years. The use of this technology may be arriving in rural households before other basic services, provoking individual and social changes and creating new employment and income opportunities. This would support the recent recognition of the mobile telephone as an essential tool for development, especially in underdeveloped countries.

Decisión de localización del hogar en España. Modelo de clases latentes vs. modelo mixto.

In this work the unobservable heterogeneity respect to the choice of household’s residential location is analyzed, considering three alternatives: urban area, interurban area and rural area. It is employed latent class choice model to represent this behavior and the results are compared with the multinomial and mixed logit models. The more flexible structure of the latent class model allows us more deeply into the analysis of unobservable heterogeneity with respect to the more limited analysis of the randomness of the parameters of the mixed logit model. The empirical results indicate two classes or groups of households with differentiated behaviors regarding to the decision of location and associated to different lifestyles. Thus, certain attributes of the location of the dwelling, such as noise, pollution or delinquency, have an effect on household preference in a different way according to the class of belonging. Also, individual characteristics of the household’s head, such as age, gender or educational level, have a different impact on the preference for location according to the class of belonging. The results allow us to distinguish two lifestyles associated with each class or group of preference: suburban and urban.

Do Firms Approach the Target Working Capital Requirement? A Case of Pakistan

The study investigates the dynamism of working capital requirement (WCR) in non-financial firms listed on the Pakistan Stock Exchange from the period of 2007 to 2013. The purpose of this research is to analyze whether firms follow the target WCR, to estimate the speed with which firms adjust towards its target WCR and to investigate the firm-specific and macroeconomic determinants of WCR. Difference GMM technique is used to analyze the speed and determinants of WCR to avoid the problems of endogeneity and unobservable heterogeneity. The study gives evidence that there is an existence of target WCR in firms of Pakistan and firm require 1.6 years to completely adjust back to target WCR. The factors which are statistically significant in the determination of WCR are the level of economic activity in the country, operating cash flow, profitability, leverage, financial distress, and financing cost. The WCR is measured by net trade cycle of a firm.

Identification With Additively Separable Heterogeneity

This paper provides nonparametric identification results for a class of latent utility models with additively separable unobservable heterogeneity. These results apply to existing models of discrete choice, bundles, decisions under uncertainty, and matching. Under an independence assumption, such models admit a representative agent. As a result, we can identify how regressors alter the desirability of goods using only average demands. Moreover, average indirect utility (“welfare”) is identified without needing to specify or identify the distribution of unobservable heterogeneity.

Interpretation of the Value Relevance Indicator With(out) Dummies

In the value relevance (VR) literature, the R2 figure of a regression is considered the VR indicator. Furthermore, a financial reporting item is considered value relevant if its regression coefficient is statistically significant. The variation across the variables of interest is named unobservable heterogeneity (UH) which leads to biased estimators and generates incorrect inferences. The common approach of eliminating UH is adding dummies into a regression. However, this method adds the explanatory power of dummies to that of accounting items, and it eventually results in inflated R2 figures. Hence, R2 figures become misleading with dummies since R2 figures do not purely explain the VR of accounting items. This chapter suggests demeaning as an alternative methodology to deal with UH. Although demeaning and adding dummies are the same methodology of mitigating UH, this chapter documents that adding dummies inflates R2 figures while demeaning does not.

Development of the Financial Sector and Growth of Microfinance Institutions: The Moderating Effect of Economic Growth

This article analyzes the moderating effect the degree of economic growth has on the relationship between the development of the financial system and the microfinance industry activity. The hypotheses proposed establish that the influence of the development of the financial system on the activity of the microfinance sector will be different depending on the level of economic growth. The estimates were made using the System-GMM methodology for panel data, which allows controlling the unobservable heterogeneity and the problems of endogeneity. We find that the degree of economic growth affects the relationship between the financial sector development and microfinance activity. Under negative economic growth conditions, the development of the financial sector has a negative impact on the activity of the microfinance sector, but when economic growth is high, the development of the financial sector positively influences the activity of the microfinance sector.

Long-term scarring effect of neither working nor studying

Purpose It is increasingly important to study labour market outcomes for people who are not in employment, education, or training (NEET). Where most studies focus solely on young people, the purpose of this paper is to include both younger and older NEETs to find out if there is any long-term scarring effect, and if the effect is different between these two groups. Design/methodology/approach This study uses a twin-based estimation method for the first time to measure the long-term effect of economic inactivity on income. The analysis is based on biological twins, in order to control for individuals’ unobservable heterogeneity. It is assumed that twins are similar to each other and the only unobservable heterogeneity is at the family level. Register-based data from Statistics Sweden is used. Findings The result indicates a significant negative income effect for those who have been in NEET, and is larger for those who have been in NEET for several consecutive periods of time. Individuals who were in NEET during 2001-2003 had on average 62 per cent lower income compared with their twin in 2011. The corresponding number for individuals who were in NEET for just one period was 33 per cent. Hence, time in NEET reduces income. The results show that the long-term scarring effect is not affected by age. Originality/value This study utilises for the first time a twin-based estimation method to measure the long-term effect of inactivity. Most studies focus solely on young people, but the authors also include an older group of people.