This book introduces the application of microeconometric methods for modelling various aspects of economic activity for small to large size enterprises, using methods that are based on both time-series and cross-section approaches. The information obtained from using these estimated models can then be used to inform business decisions that improve the efficiency of operations and planning.
Basic models used in the modelling of the business (single-equation and multiple-equation systems) are introduced whilst a wide range of economic activity including major aspects of financial management, demand for labour, administrative staff and labour productivity are also explored.
Microeconometrics in Business Management:
- Introduces econometric methods which can be used in the modelling of economic activity and forecasting, to help improve the efficiency of business operations and planning.
- Describes econometric entities through multiple-equation and single-equation microeconometric models.
- Explores the process of building and adapting basic microeconometric tools.
- Presents numerous micromodels based on time-series data and statistical cross-sectional sequences, which can be used in any enterprise.
- Features numerous real –world applications along with examples drawn from the authors own experience.
- Is supported by a companion website featuring practice problems and statistical data to aid students to construct and estimate micro models.
- Features end of chapter exercises with examples present in free software GRETL.
This book serves as a valuable resource for students, business management practitioners and researchers in econometric micro-model construction and various decision-making processes.
1 A Single]Equation Econometric Model 1
1.1 The essence of an econometric model 1
1.2 Specification of an econometric model 4
1.3 Estimation of an econometric model’s parameters 5
1.4 Verification of the model 10
1.5 Multiplicative econometric models 14
1.6 The limited endogenous variables 16
1.7 Econometric forecasting 20
1.7.1 The concept of econometric forecasting 20
1.7.2 The conditions of econometric forecast estimation 22
1.7.3 Forecasts based on single]equation models 23
1.7.4 Analysis of econometric forecasts’ precision 25
2 Multiple]Equation Econometric Models 29
2.1 Classification of multiple]equation models 29
2.2 A reduced form of the model 33
2.3 Identification of the model 34
2.4 Estimation of the parameters of a multiple]equation econometric model 36
2.5 Forecasts estimation based on multiple]equation models 39
3 Econometric Modeling of a Large] and Medium]Sized Enterprise’s Economic System 47
3.1 Specification of a large] and medium]sized enterprise’s econometric model 47
3.2 Structural form of an econometric model of a large] and medium]sized enterprise 50
3.3 Empirical econometric model of a medium]sized enterprise 52
3.3.1 Assumptions for an econometric empirical model 52
3.3.2 Equation of the sales income 54
3.3.3 Equation of employment 54
3.3.4 Equation of labor productivity 57
3.3.5 Equation of the average wage 57
3.3.6 Equation of the fixed assets 60
3.3.7 Equation of the technical labor equipment 60
3.4 Application of the company’s model during a decision]making process 62
4 An Empirical Econometric Model of a Small]Sized Enterprise 69
4.1 Specification of a small]sized enterprise’s econometric model 69
4.2 The structural form of a small]sized enterprise’s econometric model 71
4.2.1 The model’s total interdependent variables 71
4.2.2 The model’s predetermined variables 73
4.2.3 Structural]form’s equations of a small]sized enterprise’s econometric model 75
4.3 Equation of the cash inflows 76
4.4 Equation of the sales income 80
4.5 Equations of ready]made production 83
4.6 Equation of labor efficiency 87
4.7 Equations of the average wage 89
4.8 Equations of the net payroll 92
4.9 The employment equation 94
4.10 Equations of the fixed assets 96
4.11 Equations of wage effectiveness 103
4.12 Equations of the efficiency of implementing the fixed assets 111
4.13 Practical applicability of a small]sized enterprise’s model 115
5 Econometric Modeling in Management of Small]Sized Enterprise 119
5.1 The concept of financial liquidity and its measurement in a small]sized enterprise 119
5.2 Econometric modeling of monthly financial liquidity 123
5.3 Econometric modeling of quarterly financial liquidity 129
5.4 Econometric modeling of debt recovery efficacy 132
5.4.1 Measuring the effectiveness of debt recovery in an enterprise 132
5.4.2 Statistical analysis of debt recovery efficacy in enterprise 134
5.5 Econometric model describing interdependencies between the financial liquidity and the debt recovery efficacy in an enterprise 139
5.6 Econometric forecasting of financial liquidity 144
6 Econometric Model in the Analysis of an Enterprise’s Labor Resources 151
6.1 A study of a mechanism of the demand for labor 151
6.2 Econometric modeling of labor intensity of production 167
6.3 Econometric model in selection of an efficient worker 175
6.4 Econometric model in the selection of an efficient white]collar worker 184