Contract enforcement and family control of business: Evidence from China

Family control of business is prevalent in developing economies, and one of the leading theories suggests that it is a response to weak contract enforcement in such economies. In this paper, we investigate the impacts of contract enforcement on the degree of family control of business using a sample of China's private enterprises. It is found that weaker contract enforcement is associated with the higher degree of family control of business. Our results are robust to the control for omitted variables and reserve causality issues, to the adjustment for the sample attrition bias, to the use of a sub-sample, and to the inclusion of other explanations for the family control of business. © 2009 Association for Comparative Economic Studies.preprin

Minimalist AdaBoost for blemish identification in potatoes

We present a multi-class solution based on minimalist Ad- aBoost for identifying blemishes present in visual images of potatoes. Using training examples we use Real AdaBoost to rst reduce the fea- ture set by selecting ve features for each class, then train binary clas- siers for each class, classifying each testing example according to the binary classier with the highest certainty. Against hand-drawn ground truth data we achieve a pixel match of 83% accuracy in white potatoes and 82% in red potatoes. For the task of identifying which blemishes are present in each potato within typical industry dened criteria (10% coverage) we achieve accuracy rates of 93% and 94%, respectively

Spectroscopy of reflection-asymmetric nuclei with relativistic energy density functionals

Quadrupole and octupole deformation energy surfaces, low-energy excitation spectra and transition rates in fourteen isotopic chains: Xe, Ba, Ce, Nd, Sm, Gd, Rn, Ra, Th, U, Pu, Cm, Cf, and Fm, are systematically analyzed using a theoretical framework based on a quadrupole-octupole collective Hamiltonian (QOCH), with parameters determined by constrained reflection-asymmetric and axially-symmetric relativistic mean-field calculations. The microscopic QOCH model based on the PC-PK1 energy density functional and $\delta$-interaction pairing is shown to accurately describe the empirical trend of low-energy quadrupole and octupole collective states, and predicted spectroscopic properties are consistent with recent microscopic calculations based on both relativistic and non-relativistic energy density functionals. Low-energy negative-parity bands, average octupole deformations, and transition rates show evidence for octupole collectivity in both mass regions, for which a microscopic mechanism is discussed in terms of evolution of single-nucleon orbitals with deformation.Comment: 36 pages, 21 figures, Accepted for Publication in Physical Review

Institutions and FDI location choice: The role of cultural distances

Using an extensive data set on foreign invested enterprises (FIEs) in the Chinese mainland, we compare the sensitivities of the location choice of foreign direct investment (FDI) from six major source countries/areas (Hong Kong, Taiwan, US, EU, Japan and Korea) toward the variation in the strength of economic institutions across China's regions. It is found that FIEs from the source countries/areas that are culturally more remote from China often exhibit a stronger aversion to regions with weaker economic institutions. Moreover, this pattern is often more salient when FDI takes the form of fully-owned enterprises (FOEs) than when it takes the form of joint ventures (JVs). © 2011 Elsevier Inc..preprin

Exporting behavior of foreign affiliates: Theory and evidence

Firms have increasingly conducted different stages of production in different countries. In particular, they may set up operations in low-cost countries (those operations are referred to as foreign affiliates in those countries) either as platforms for export or serving the growing markets there. What is the exporting behavior of foreign affiliates? In this paper, using data from China, we find that among foreign affiliates exporters are less productive than non-exporters. We then offer a theoretical explanation by incorporating into the standard firm heterogeneity model the possibility that firms could have different stages of production in different countries. © 2010 Elsevier B.V.postprin

Why do firms conduct bi-sourcing?

In acquiring the same intermediate inputs, a firm often conducts bi-sourcing, i.e., simultaneously buying from external suppliers and self-producing in an internal manufacturer. We show that the firm achieves a better bargaining position in bisourcing than in outsourcing through cross threat effect, which enhances profitability. © 2006 Elsevier B.V. All rights reserved.preprin

Government expropriation and Chinese-style firm diversification

Firm diversification across unrelated businesses is prevalent in many emerging economies, in contrast to the practices in developed economies. A fundamental difference between these two types of economies concerns with the existence of sound economic institutions including in particular the institutions constraining government expropriation of private properties. In this paper, using a survey data set of private enterprises in China, we find that severer government expropriation in the form of higher informal levies, extralegal payments, and entertainment fees causes firms to diversify. We then provide two case studies to highlight the extra costs that China’s private entrepreneurs need to bear for doing businesses, and how they can subsequently leverage their relations with government bureaucrats to diversify into various businesses.postprin

Excludable public goods: Pricing and social welfare maximization

We compare two pricing strategies - buffet pricing and usage pricing - of excludable public goods for social welfare maximization. Buffet pricing is better than usage pricing for low consumer heterogeneity, while the opposite holds for high consumer heterogeneity. © 2009 Elsevier B.V. All rights reserved.preprin

Bi-sourcing in the global economy

In organizing production, many firms conduct bi-sourcing, i.e., acquiring the same set of inputs both by buying from external suppliers (outsourcing) and carrying out in-house production (insourcing). We show that, by adopting the bi-sourcing strategy, firms can use the payoff from one supplier as a backup option in negotiating with the other supplier (the cross-threat effect). When firms conduct bi-sourcing in the global economy consisting of the high-waged North and low-waged South, they need to make the location choice for both insourcing and outsourcing. We find that the low wage in the South can encourage investment by component suppliers (the cost effect). However, firms may achieve a better cross-threat effect by relocating overly strong component supplier from the cost-advantageous South to the cost-disadvantageous North (the balancing effect). The optimal bi-sourcing strategy is determined by the interplay of the cost effect and the balancing effect. © 2009 Elsevier B.V. All rights reserved.postprin