15,158 research outputs found

    "It's just one of the wonders of the world": James Donaghue in Under the Net

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    Analyis of the central character of Iris Murdoch's Under the Net as picaresque

    Knowledge, Technology Adoption and Financial Innovation

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    Why are new financial instruments created? This paper proposes the view that financial development arises as a response to the contractual needs of emerging technologies. Exogenous technological progress generates a demand for new financial instruments in order to share risk or overcome private information, for example. A model of the dynamics of technology adoption and the evolution of financial instruments that support such adoption is presented. Early adoption may be required for financial markets to learn the technology; once learned, financial innovation boosts adoption further. Financial learning emerges as a source of technological diffusion. The analysis identifies a causality link from technology to growth which is nonetheless consistent with empirical findings of a positive effect of current financial development on future growthTechnology adoption; financial innovation; learning

    Altruism with Endogenous Labor Supply

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    This paper proposes a model of altruism with endogenous labor supply. A full characterization of the family's choices of consumption and leisure is provided. Initially, work effort is assumed to be publicly observed; this assumption is later relaxed, allowing for privately observed effort. It has been stated, in the altruism literature, that the distribution of resources within the family should not affect the allocation of consumption across its members. In other words, for families engaging in financial transfers, taking one dollar from the transfer recipient's income and adding it to the donor's should result in an increment of the initial transfer of exactly one dollar, leaving the consumption allocation unchanged. The endogenous consideration of labor supply introduces important qualifications to this "neutrality result," showing that neutrality holds only with respect to non-labor income sources. Further, when effort is privately observed, the need to convey incentives causes neutrality to break down entirely. Confronting the predictions of the model with empirical results from the literature, it is argued that, to the extent that data portray families having the ability to adjust their labor supply to changes in wages and income, there is no clear evidence of rejection of altruism. Moreover, when effort is privately observed, the predictions of the theory accord with the empirical results.

    Endogenous Political Economy: On the Inevitability of Inefficiency under the Natural Resource Curse

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    This paper is a first step toward a more fundamental theory of political economy outcomes. We start from the fundamentals of the economy, given by preferences and technology; further, we specify all available technologies for the control of resources - such as armed forces or bribing. We model the interaction of agents in this economy as a game and examine all its equilibria. Equilibrium allocations must be such that individuals maximize their utility and that no group of individuals has the incentive to modify those allocations by (additional) usage of the technologies for the control of resources. The generality of our approach enables us to answer the question "Is there something about the nature of a country that makes inefficient equilibria inevitable?" We illustrate our approach by applying it to the natural resource curse. The model predicts that inefficient outcomes - in the form of either conflict or a deterrence army solution - will always occur as long as the value of natural resources to capture is positive and the opportunity cost of time - which partly determines soldiers' wages - is finite.Endogenous political economy; conflict; deterrence; natural resource curse; inefficiency; general equilibrium

    Firm Productivity in Bangladesh Manufacturing Industries

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    The author studies the determinants of total factor productivity (TFP) for manufacturing firms in Bangladesh using data from a recent survey. She obtains TFP measures by making use of firm-specific deflators for output and inputs. Controlling for industry, location, and year fixed effects, she finds that: (1) firm size and TFP are negatively correlated; (2) firm age and TFP exhibit an inverse-U shaped relationship; (3) TFP improves with the quality of the firm's human capital; (4) global integration improves TFP; (5) firms with research and development activities and quality certifications have higher TFP, while more advanced technologies improve TFP only in the presence of significant absorptive capacity; (6) power supply problems cost firms heavily in terms of TFP losses; and (7) the presence of crime dampens TFP.Water and Industry,Economic Growth,Microfinance,Small Scale Enterprise,Economic Theory&Research

    Integration once again: The Brazilian Northeast in the context of EU-Mercosul trade relations

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    Integration has meant great changes for Brazilian Northeast since its becoming part of the regional division of labour that allowed the constitution of a single domestic production system in the country in the 1950s. This process required the Northeastern economy to adjust to the extent of embarking into new industrial sectors and dismantling old industrial capacity, such as textiles. This adjustment has however developed the region's industrial capacity and competitiveness which allowed it to improve exports - both foreign and interregional - and reduce its so-called "structural" trade deficit in the 1980s. This context has changed by the constitution of the South American Common Market - the Mercosul. The new trade block has inspired northeastern polititians and diverse analysts to argue that the regional economy is to become less important for Brazilian domestic market and production system, as the interindustrial links are to enhance among southern and southeastern firms. Government expenditures as well as private investments concentrated in these regions gives them the explanation for their belief. The recent moves towards increasing the commercial links between the European Union and the Mercosul bring new facts to the context. The Northeast could emerge as holding competitive advantages out of this integration process into which the Brazilian economy is getting. There could be argued that the region's historical backwardness could decrease in the context of fusions, acquisitions and the like by European capital? Would not this be the case of moving backwards to the period in which there was no integrated domestic market and the Northeast, as other regions in Brazil, basically traded with European partners. These are the main questions this paper is to answer.

    Structure and performance of the services sector in transition economies

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    This paper examines the structure and performance of the services sector in Eastern European and Central Asian countries during 1997-2004. Services represent an increasing share of total value added and employment with the major sub-sectors being wholesale trade, retail trade, inland transport, telecommunications, and real estate activities. A clear divide separates EU-5 countries from South Eastern European countries and Ukraine in terms of services labor productivity. Although a large gap in productivity also separates EU-8 countries from EU-15 countries, that gap was reduced from 1997 to 2004 as most services sub-sectors experienced fast productivity growth. High skill intensive sub-sectors and information and communications technology producers and users have exhibited higher productivity levels and growth rates relative to other sub-sectors since 2000. The author finds a positive effect of services liberalization on the productivity growth of services sub-sectors. The author also finds a positive and significant effect of services liberalization in both finance and infrastructure on the productivity of downstream manufacturing.Labor Policies,E-Business,Labor Markets,Economic Theory&Research,Transport Economics Policy&Planning

    A recursive formulation for repeated agency with history dependence

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    There is now an extensive literature regarding the efficient design of incentive mechanisms in dynamic environments. In this literature, there are no exogenous links across time periods because either privately observed shocks are assumed time independent or past private actions have no influence on the realizations of current variables. The absence of exogenous links across time periods ensures that preferences over continuation contracts are common knowledge, making the definition of incentive compatible contracts at a point in time a simple matter. In this paper, we present general recursive methods to handle environments where privately observed variables are linked over time. We show that incentive compatible contracts are implemented recursively with a threat keeping constraint in addition to the usual temporary incentive compatibility conditions.Contracts ; Employment (Economic theory) ; Econometric models

    The Determinants of Vertical Integration in Export Processing: Theory and Evidence from China

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    Using detailed product-level export data for China and a variant of the Antràs and Helpman (2004) model that includes investments in component search, we examine the sectoral determinants of foreign direct investment (FDI) versus foreign outsourcing in export processing trade. We exploit the coexistence of two regulatory export processing regimes in China, which specify who owns and controls the imported components for export processing. We find that in the regime that Chinese plants own the imported components, the share of exports from vertically integrated plants is increasing in the intensity of headquarter inputs across sectors, and is decreasing in the contractibility of inputs. These results are consistent with the property- rights theory of intra-firm trade. However, in the regime that foreign firms own the imported components, no significant relationship is found between the prevalence of vertical integration, headquarter intensity and input contractibility across sectors. The positive relationship between productivity dispersion and the export share of integrated plants across sectors, as suggested by the existing literature, is found only in the regime that foreign firms own the imported components. These results are consistent with our model, which considers ownership of imported components as an alternative to asset ownership to alleviate the hold-up problem by the export-processing plant.Intrafirm trade, vertical integration, export processing, outsourcing

    Learning-by-Exporting Effects: Are They for Real?

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    We investigate whether exposure to export markets improves plant productivity. Our estimation framework adds export experience as an additional state variable and a fixed cost of entry into export markets to Olley and Pakes’s (1996) behavioral model. We find robust evidence of a positive effect of export experience on productivity, controlling for the bias caused by self-selection of the most productive plants into exporting. The effect is stronger for plants with the most exposure to exporting, and statistically insignificant for exporters that stop exporting. Our analysis also suggests that matching methods may produce upwardly biased estimates of learning-by-exporting effects.
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