nep-ppm New Economics Papers
on All new papers
Issue of 2014‒09‒08
five papers chosen by
Arvi Kuura
Tartu Ülikool

  1. Sequential lending with dynamic joint liability in micro-finance By Shyamal Chowdhury; Prabal Roy Chowdhury; Kunal Sengupta
  2. Imitation versus Innovation: What Makes the Difference? By Spyros Arvanitis; Florian Seliger
  3. Corporate Investment Choice and Exchange Option between Production Functions By Olfa Bouasker; Jean-Luc Prigent
  4. An Empirical Investigation of Factors Affecting Small Business Success By Anis Omri; Maha Ayadi-Frikha; Anissa Chaibi
  5. New Narratives for the European Project By Andrea Saltelli; Catalin Dragomirescu-Gaina

  1. By: Shyamal Chowdhury; Prabal Roy Chowdhury; Kunal Sengupta
    Abstract: This paper develops a theory of sequential lending in groups in micro-finance that centers on the notion of dynamic incentives, in particular the simple idea that default incentives should be relatively uniformly distributed across time. In a framework that allows project returns to accrue over time (rather than at a single point), as well as strategic default, we show that sequential lending can help resolve problems arising out of coordinated default, thus improving project efficiency vis-a-vis individual lending. Inter alia, we also provide a justification for the use of frequent repayment schemes, as well as demonstrate that, depending on how it is manifested, social capital has implications for project efficiency and borrower default. We then examine the optimal choices for the MFI, demonstrating that the MFI opts for higher project sizes under group lending with limited collusion, and also provide a plausible explanation of the transition from group to individual lending.
    Keywords: collusion; coordinated default; dynamic incentives; group-lending; micro- finance; sequential financing; social capital; social sanctions
    Date: 2014–08
  2. By: Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Florian Seliger (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: The main objective of this empirical paper is to identify characteristics of imitation and innovation and shed light on possible differences between these two kinds of innovative activity. Thus, it tries to answer the following questions: (a) what are the determinants of imitative performance compared to determinants of innovative performance and (b) what are the determinants of switching from imitative to innovative behavior compared to imitators and innovators showing persistence over time. The study is based on Swiss firm data. In sum, our findings indicate that imitating firms are significantly more ‘extroverted’ than innovating firms because their activities are much more related to external R&D activities and cooperation and medium-educated personnel. Innovating firms do not rely to the same extent on the exploration of external knowledge. Their rather ‘introverted’ behavior seems be more related with intense exploitation of internal resources. Further, the profiles of different types of innovating firms show that an innovation performance hierarchy exists ranking from occasional innovators through switchers to persistently innovating firms.
    Keywords: innovation, imitation
    JEL: O31
    Date: 2014–08
  3. By: Olfa Bouasker; Jean-Luc Prigent
    Abstract: This paper examines the strategy in resource allocation of a firm which must choose between several production functions. These latter ones can differ by their respective initial investment amounts, input costs, output levels and prices...Such management problem is often posed when input values increase significantly, as for example energy and commodity prices. We determine the values of exchange options when we have to evaluate all the "Profits and Losses" (P&L) depending on the different production models, to take account of potential switches between projects during the management period. We provide a general valuation formula of the exchange options associated to these P&L by using a family of switching options.
    Keywords: corporate investment; real options; production functions; exchange options
    JEL: C6 G11 G24 L10
    Date: 2014–08–29
  4. By: Anis Omri; Maha Ayadi-Frikha; Anissa Chaibi
    Abstract: The purpose of this article is to build a mediational model of small businesses success. We investigate how the human, social and financial capital of entrepreneurs influences the capacity of small business to succeed. Our objective is then to demonstrate that these capitals are converted into success through the process of innovation. Based on an analysis of data from 228 Tunisian micro-enterprises, we concluded that the effects of these capitals on businesses success were partially mediated by the process of innovation. Our paper extends the theoritical and empirical researches on entrepreneurship by building a mediational model of small business success. This model presents the indirect effect of the human, social and financial capital on small business success via their impact on innovation.
    Keywords: Mediational model, Innovation, Success; Small businesses, Tunisia.
    JEL: L26
    Date: 2014–08–29
  5. By: Andrea Saltelli; Catalin Dragomirescu-Gaina
    Abstract: This brief synthesizes doubts about the presently prevailing European Institutions’ narrative, which we will call ‘the received wisdom’. We concentrate on the long-term challenges and plead for more thinking on the allegedly positive relation between innovation, employment and growth in the face of opposing evidence coming from international organizations and academia. We argue that business as usual is not an option to deal with the present inequality and unemployment challenges. We suggest opening up the reflection to different economic paradigms, and to other sources of legitimate knowledge and scholarship, from bio-economics, to social inquiry and to non-neoclassical economics. Foremost, we argue that no progress is possible without reconsideration of normative questions such as ‘what’ do we wish to sustain and for ‘whom’.
    Date: 2014–06

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