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- ItemDoes attendance affect grade? An analysis of first year economics students in Ireland(Economic & Social Research Institute, 2003-01) Kirby, Ann; McElroy, Brendan; University College CorkThis paper examines the relationship between attendance and grade, controlling for other factors, in first year economics courses in University College Cork. Determinants of both class attendance and grade are specified and estimated. We find that attendance is low, at least by comparison with US evidence. Hours worked and travel time are among the factors affecting class attendance. Class attendance, and especially tutorial attendance has a positive and diminishing marginal effect on grade, while hours worked in a part-time job have a significant negative effect on grade.
- ItemThe roles of interaction and proximity for innovation by Irish high-technology businesses: policy implications(Economic and Social Research Institute, 2005-06) Jordan, Declan; O'Leary, EoinThis paper presents new survey-based evidence on the increasingly topical question of what drives innovation in Irish high-technology businesses. The extraordinary performance of the Irish economy since the 1990s has been inextricably linked to highly successful foreign-owned businesses, in sectors such as pharmaceuticals, electronics and computers (Gallagher, Doyle and O’Leary, 2002). It might be expected that innovation in these multi-nationals is largely sourced in other group companies located abroad. It is therefore pertinent to ask, in the context of the recent policy recommendations of the Enterprise Strategy Group (ESG) (2004), the extent to which these Irish subsidiaries source innovation in Ireland. This may be through their own research and development efforts and/or through interaction for the purposes of promoting innovation with other locally or regionally based businesses, Third Level Colleges and innovation support agencies, such as IDA Ireland and Enterprise Ireland. Moreover, it may be equally important to ask, in the context of the long-standing emphasis on improved performance of indigenous industry, whether indigenous high-technology businesses interact locally or regionally in order to promote innovation. Beginning with Culliton (1992) and continuing to the present, through, for example, Forfás (2004a) and the ESG (2004), Irish industrial policy has consistently promoted and supported clusters and networks. In recent years substantial State funding has also been devoted to research and development. The National Development Plan 2000-2006 (2000) allocated €2.5 billion and the government established Science Foundation Ireland. The ESG (2004) has proposed further State investment in research and development as well as new initiatives including building enterprise capability, funding collaboration between industry and Irish Third Level Colleges, introducing tax credits for research and development. There is a consensus in the Irish, and indeed the European, policy community that developing innovation through clusters and networks will be important for future Irish and European competitiveness (Bergin et al., 2003; Forfás, 2003; National Competitiveness Council, 2003; European Commission, 2003). By presenting survey based evidence on the sources of innovation in Irish high-technology industry, this paper makes an important contribution to this debate. It begins by outlining the design of the survey instrument and then presents the results. The policy implications of the results are then discussed.
- ItemDeterminants of bed net use in The Gambia: implications for malaria control(American Society of Tropical Medicine and Hygiene, 2007-05) Wiseman, V.; Scott, A.; McElroy, Brendan; Conteh, L.; Stevens, W.; Bill and Melinda Gates Foundation; Medical Research Council, The GambiaMalaria is still one of the biggest health threats in the developing world, with an estimated 300 million episodes per year and one million deaths, most of which are in sub-Saharan Africa. Although the efficacy and cost-effectiveness of treated bed nets has been widely reported, little is known about the range, strength, or interaction between different factors that influence their demand at the household level. This study modeled the determinants of bed net ownership as well as the factors that influence the number of bed nets purchased. Data was collected from 1,700 randomly selected households in the Farafenni region of The Gambia. Interviews were also held with 129 community spokespersons to explore the extent to which community level factors such as the quality of roads and access to market centers also influence demand for bed nets. The results of each model of demand and their policy implications are discussed.
- ItemMomentum profits and time-varying unsystematic risk(Elsevier, 2008-04) Li, Xiafei; Miffre, Joëlle; Brooks, Chris; O'Sullivan, NiallThis study assesses whether the widely documented momentum profits can be attributed to time-varying risk as described by a GJR-GARCH(1,1)-M model. We reveal that momentum profits are a compensation for time-varying unsystematic risks, which are common to the winner and loser stocks but affect the former more than the latter. In addition, we find that, perhaps because losers have a higher propensity than winners to disclose bad news, negative return shocks increase their volatility more than they increase those of the winners. The volatility of the losers is also found to respond to news more slowly, but eventually to a greater extent, than that of the winners.
- ItemInvestment funds: What next?(Quantitative and Qualitative Analysis in Social Sciences, 2008-06) Cuthbertson, Keith; Nitzsche, Dirk; O'Sullivan, NiallInvestment funds provide a low cost method of sharing in the rewards from capitalism. Recently “alternative investments” such as hedge funds have grown rapidly and the trading strategies open to hedge funds are now becoming available to mutual funds and even to ordinary retail investors. In this paper we analyze problems in assessing fund performance and the prospects for investment fund sectors. Choosing genuine outperformers among top funds requires a careful assessment of non-normality, order statistics and the possibility of false discoveries. The risk adjusted performance of the average hedge fund over the last 10-15 is actually not that impressive, although the “top” funds do appear to have statistically significant positive alphas.
- ItemUK mutual fund performance: Skill or luck?(Elsevier, 2008-06) Cuthbertson, Keith; Nitzsche, Dirk; O'Sullivan, NiallUsing a comprehensive data set on (surviving and non-surviving) UK equity mutual funds, we use a cross-section bootstrap methodology to distinguish between ‘skill’ and ‘luck’ for individual funds. This methodology allows for non-normality in the idiosyncratic risk of the funds — a major issue when considering those funds which appear to be either very good or very bad performers, since these are the funds which investors are primarily interested in identifying. Our study points to the existence of stock picking ability among a relatively small number of top performing UK equity mutual funds (i.e. performance which is not solely due to good luck). At the negative end of the performance scale, our analysis strongly rejects the hypothesis that most poor performing funds are merely unlucky. Most of these funds demonstrate ‘bad skill’. Recursive estimation and Kalman ‘smoothed’ coefficients indicate temporal stability in the ex-post performance alpha's of winner and loser portfolios. We also find performance persistence amongst loser but not amongst winner funds.
- ItemIs Irish innovation policy working? Evidence from high-technology businesses(Statistical and Social Inquiry Society of Ireland, 2008-10) Jordan, Declan; O'Leary, Eoin; Enterprise IrelandIn the last decade Irish innovation policy has been focused on Higher Education Institutions (HEIs). This paper explores the effects of HEIs, in the context of interaction with other interaction agents, on the innovation output of Irish high-technology businesses. Based on a survey of 184 businesses in the Chemical and Pharmaceutical, Information and Communications Technology and Engineering and Electronic Devices sectors, the paper estimates the importance of in-house R&D activity and external interaction with HEIs, support agencies and other businesses for product and process innovation. A key finding is that the greater the frequency of direct interaction with HEIs the lower the probability of both product and process innovation in these businesses. There is some evidence of a positive indirect HEI effect, through complementarities of interactions with suppliers and support agencies. However, while external interaction is important for innovation output, there is little evidence that geographical proximity matters. These findings have important implications for Irish innovation policy. Last year’s Strategy for Science, Technology and Innovation: 2006 to 2013 committed an additional €1.88 billion for research and commercialisation programmes in HEIs. The econometric results presented suggest that this substantial public investment in HEIs may have a disappointing, and perhaps even a negative, effect on the innovation output of Irish business, thus undermining future Irish prosperity. In addition, the absence of evidence supporting the existence of Irish clusters and networks for innovation suggests that policymakers long-standing support for these have been misguided. The paper concludes by advocating that innovation is a business rather than a technological phenomenon and argues for a changed role for HEIs to one of responding to innovative businesses.
- ItemMalaria prevention in north-eastern Tanzania: patterns of expenditure and determinants of demand at the household level.(Biomed Central, 2009-05-07) McElroy, Brendan; Wiseman, V.; Matovu, F.; Mwengee, W.; Bill and Melinda Gates FoundationObjective. This study aims to provide a better understanding of the amounts spent on different malaria prevention products and the determinants of these expenditures. Methods. 1,601 households were interviewed about their expenditure on malaria mosquito nets in the past five years, net re-treatments in the past six months and other expenditures prevention in the past two weeks. Simple random sampling was used to select villages and streets while convenience sampling was used to select households. Expenditure was compared across bed nets, aerosols, coils, indoor spraying, using smoke, drinking herbs and cleaning outside environment. Findings. 68% of households owned at least one bed net and 27% had treated their nets in the past six months. 29% were unable to afford a net. Every fortnight, households spent an average of US $0.18 on nets and their treatment, constituting about 47% of total prevention expenditure. Sprays, repellents and coils made up 50% of total fortnightly expenditure (US$0.21). Factors positively related to expenditure were household wealth, years of education of household head, household head being married and rainy season. Poor quality roads and living in a rural area had a negative impact on expenditure. Conclusion. Expenditure on bed nets and on alternative malaria prevention products was comparable. Poor households living in rural areas spend significantly less on all forms of malaria prevention compared to their richer counterparts. Breaking the cycle between malaria and poverty is one of the biggest challenges facing malaria control programmes in Africa.
- ItemPredictability revisited: UK equity returns, 1965-2007(Blackhall Publishing, 2010) Bowen, David A.; Hutchinson, Mark C.; O'Sullivan, Niall; Irish Research Council for Humanities and Social SciencesThis study tests a large sample of UK equity returns from 1965 to 2007 for predictability. Returns are tested using the Lo and MacKinlay (1988) variance ratio test and the Chow and Denning (1993) multiple variance ratio tests. Overall, the results show strong signs of predictability. There is a size effect, in which small equities appear more predictable in the first half of the sample (1965–1985), and mid- to large-size equities appear more predictable in the second half of the sample (1986–2007).
- ItemThe market timing ability of UK mutual funds(Blackwell Publishing Ltd., 2010-01) Cuthbertson, Keith; Nitzsche, Dirk; O'Sullivan, NiallWe apply a recent nonparametric methodology to test the market timing skills of UK equity and balanced mutual funds. The methodology has a number of advantages over the widely used regression based tests of Treynor-Mazuy (1966) and Henriksson-Merton (1981). We find a relatively small number of funds (around 1%) demonstrate positive market timing ability at a 5% significance level while around 19% of funds exhibit negative timing and on average funds miss-time the market. However, controlling for publicly available information we find very little evidence of market timing ability based on private timing signals. In terms of investment styles, there are a small number of successful positive market timers amongst Equity Income and ‘All Company’ funds but not among either Small Stock funds or Balanced funds, although a few small stock funds are found to time a small stock index rather than a broad market index.
- ItemMutual fund performance: measurement and evidence(Blackwell Publishing Ltd, 2010-05) Cuthbertson, Keith; Nitzsche, Dirk; O'Sullivan, NiallThe paper provides a critical review of empirical findings on the performance of mutual funds, mainly for the US and UK. Ex-post, there are around 0-5% of top performing UK and US equity mutual funds with truly positive-alpha performance (after fees) and around 20% of funds that have truly poor alpha performance, with about 75% of active funds which are effectively zero-alpha funds. Key drivers of relative performance are, load fees, expenses and turnover. There is little evidence of successful market timing. Evidence suggests past winner funds persist, when rebalancing is frequent (i.e., less than one year) and when using sophisticated sorting rules (e.g., Bayesian approaches) - but transactions costs (load and advisory fees) imply that economic gains to investors from winner funds may be marginal. The US evidence clearly supports the view that past loser funds remain losers. Broadly speaking results for bond mutual funds are similar to those for equity funds. Sensible advice for most investors would be to hold low cost index funds and avoid holding past ‘active’ loser funds. Only sophisticated investors should pursue an active ex-ante investment strategy of trying to pick winners - and then with much caution.
- ItemThe profitability of momentum trading strategies in the Irish equity market(Blackhall Publishing, 2010-07) O'Sullivan, Fionnghuala; O'Sullivan, NiallWe examine the profitability of momentum-based trading strategies in the Irish equity market between 1988 and 2007. We investigate a range of trading strategies over alternative backward-looking ranking periods and forward-looking holding horizons as well as for alternative size momentum portfolios. We find that returns to momentum-based strategies are highly non-normally distributed, giving rise to concern about the validity of inferences based on standard statistical tests of their abnormal performance. We therefore apply a bootstrap procedure to construct nonparametric p-values for the portfolio performance measures. Overall, we find little evidence that momentum-based trading strategies would have yielded an abnormal risk-adjusted return over the period. The Irish equity market appears to be quite efficient in this respect.
- ItemAsset price effects arising from sports results and investor mood: the case of a homogenous fan base area(Dunker & Humblot, 2011) Gallagher, Robert; O'Sullivan, Niall; Irish Research Council for Humanities and Social SciencesThis paper contributes to the behavioural finance literature that examines the asset pricing impact of mood altering events such as sports results, sunshine levels, daylight hours, public holidays, temperature etc. Specifically, we investigate whether variations in investor mood arising from wins and losses in major sporting events have an impact on stock market returns. We examine the case of Ireland. Ireland is an interesting case because its people are passionate about sport, the domestic population is relatively homogenous (rather than divided) in terms of support for Irish competitors in international competition and domestic investors comprise a large proportion of owners of Irish stocks—all factors which suggest that if a mood effect exists it should show up in this case. Generally, we do not find a strong link between sport results and stock market returns. Initial results do suggest that in events of particularly high importance, such as the knock-out stages of major competitions, losses are associated with negative returns. However, on controlling for indirect economic effects of sporting wins and losses such as on tourism and travel we find the mood effect is no longer significant.
- ItemExternal interaction, innovation and productivity: an application of the innovation value chain to Ireland(Taylor & Francis Ltd., 2011) Doran, Justin; O'Leary, EoinThis paper analyses the innovation value chain for the Irish Community Innovation Survey (CIS): 2004-2006. In estimating innovation and productivity simultaneously, it extends the CDM methodology to include a range of external knowledge sources. Feedback effects are found to be vital, with more productive firms being more innovative and vice versa. External knowledge sources affect the innovation decision but not innovation performance, thus pointing to the primacy of internal processes for the crucial task of knowledge exploitation. There is evidence of dichotomous knowledge sourcing in Ireland, with some firms sourcing from market and others, especially high-technology businesses, from non-market agents.
- ItemThe role of external interaction for innovation in Irish high-technology businesses(IP Publishing Ltd., 2011-11) Jordan, Declan; O'Leary, EoinThere is growing empirical evidence that external interaction is an important source of knowledge for business innovation. This paper contributes to the innovation literature by using new measures of interaction to explore the relative importance of external interaction for innovation in Irish high-technology businesses. Based on survey data, the paper finds that external interaction increases the probability of product and process innovation, but the effect is inconsistent across all external interaction agents. Interaction along the supply chain has a positive effect on innovation, and interaction with competitors has an insignificant effect on innovation output. Notably, the paper finds that interaction with higher education institutions has a negative effect on the probability of product and process innovation.
- ItemRegulation and firm perception, eco-innovation and firm performance(Emerald Group Publishing Limited, 2012) Doran, Justin; Ryan, GeraldinePurpose - Recent reports argue that eco-innovation is the key to realising growth. This paper examines the factors which drive eco-innovation and tests if eco-innovating firms perform better than non-eco-innovating firms. We provide insights into the role government regulation can play in directing and stimulating eco-innovation.Design/methodology/approach - The approach utilised by this paper is empirical in nature. Using a sample of 2,181 firms, gathered as part of the Irish Community Survey 2006-2008, we estimate a modified innovation production function in order to assess the impact of regulation, consumer expectations and voluntary agreements on the performance of ecoinnovation, subsequently a knowledge augmented production function is estimated to assess the impact of eco-innovation on firm performance.Findings - Our findings suggest that regulation and customer perception can explain a firm s decision to engage in eco-innovation. Eco-innovation is also found to be more important than non-eco-innovation in determining firm performance.Research limitations/implications - Due to the limited availability of accounting data thispaper uses turnover per worker as the measure of firm performance. As a result, it is not possible to assess the impact of eco-innovation on firm costs.Social implications - The finding that regulation drives eco-innovation, and that there is no trade-off between eco-innovation and higher profit margins for innovating firms, suggests that regulators and policy makers can stimulate growth and create a greener society.Originality/value - This paper provides an empirical analysis of the Porter and van derLinde s (1995) theory of environmental regulation and firm performance using novel realworld data from over 2,000 Irish businesses.
- ItemAre different forms of innovation complements or substitutes?(Emerald Group Publishing Limited, 2012) Doran, JustinPurpose – The purpose of this paper is to provide an empirical analysis of whether differing forms of innovation act as complements or substitutes in Irish firms’ production functions. Design/methodology/approach – The approach adopted by this paper is empirical in nature. Data are obtained for approximately 582 firms from the Irish Community Innovation Survey 2004-2006. In total, four forms of innovation activity are identified: new to firm product, new to market product, process and organisational innovation. Formal tests for complementarity and substitutability are applied to these types of innovation to assess whether they have a complementary effect on firms’ turnover. Findings – The results suggest that there is a substantial degree of complementarity among different forms of innovation. Out of six possible innovation combinations, three are complementary while none exhibits signs of substitutability. Social implications – From a business perspective, the importance of organisational change to facilitate technological innovation is highlighted, while from a policy perspective the importance of the incentivisation of organisation and process innovation is also highlighted. Originality/value – To date, most research has focused on the impact of various forms of innovation, in isolation, on firms’ productivity. They do not consider whether these forms of innovation may in fact be linked, and that by implementing two or more innovations simultaneously, the combined benefits may be greater than the sum of the parts.
- ItemAn analysis of the interdependence of demographic factors, labour effort and economic growth in Ireland(Emerald Group Publishing Limited, 2012-03) Doran, JustinPurpose – The purpose of this article is to analyse the effects of a declining birth rate and an increasing old age-population ratio on Ireland’s economic output. Design-Methodology/Approach – This paper utilises data on the birth rate, old-age population ratio, economic output and labour effort of the Irish economy to estimate a vector-autoregressive model. The results of this model are then analysed to test for the presence of Granger causality among these variables. In doing so it is possible to assess whether there are statistically significant causal relationships existing among these factors. Subsequently, impulse response functions are derived from this model in order to assess the magnitude of the causal relationships. Findings - The results suggest that declining fertility rates and increases in the old-age dependency ratio have a significant impact on labour effort and economic output. Labour effort is also found to explain variation in the fertility rate and economic output. Economic output is found to effect labour effort and the fertility rate. Social Implications – The results derived in this paper raise interesting policy implications. It is evident that Ireland’s declining birth rate and increasing old-age population ratio are creating a demographic situation which will have implications for future economic growth. Policies need to be put in place to mitigate the negative effects these factors will have on Irish growth. Originality/Value – This paper adopts modern econometric techniques to assess the causal relationships which exist between the demographic and economic factors considered. These have not previously been applied to the Irish situation. In doing this, this paper provides an important insight into the changing dynamics of the Irish economy.
- ItemFalse discoveries in UK mutual fund performance(Blackwell Publishing Ltd, 2012-06) Cuthbertson, Keith; Nitzsche, Dirk; O'Sullivan, Niall; Irish Research Council for Humanities and Social SciencesWe use a multiple hypothesis testing framework to estimate the false discovery rate (FDR) amongst UK equity mutual funds. Using all funds, we find a relatively high FDR for the best funds of 32.8% (at a 5% significance level), which implies that only around 3.7% of all funds truly outperform their benchmarks. For the worst funds the FDR is relatively small at 7.6% which results in 22% of funds which truly underperform their benchmarks. For different investment styles, this pattern of very few genuine winner funds is repeated for all companies, small companies and equity income funds. Forming portfolios of funds recursively for which the FDR is controlled at a ‘acceptable’ value, produces no performance persistence for positive alpha funds and weak evidence of persistence for negative alpha funds.
- ItemThe effects of national and international interaction on innovation: evidence from the Irish CIS: 2004-6(2012-07) Doran, Justin; Jordan, Declan; O'Leary, EoinThis paper analyses the importance of decisions to interact nationally and internationally on the likelihood of process and product innovation for a sample of Irish firms. The key contribution is to provide an empirical test of the relative importance of geographically proximate versus distant interaction, using a two-step procedure to remove potential endogeneity in interaction decisions. In doing so it finds that only national and only international interaction have the expected positive effects on the probability of innovation, while engaging in both national and international interaction has no effect. The findings support hypotheses on the importance of both geographically proximate and distant interaction for innovation, though the lack of significance for both national and international interaction means there is no evidence to support the proposition that these forms of interaction are complementary.