teacher quality in educational production tracking decay and student achievement growing concerns over the inadequate achievement of u s students have led to proposals to reward good teachers and penalize or fire bad ones the leading method for assessing teacher quality is value added modeling vam which decomposes students test scores into components attributed to student heterogeneity and to teacher quality implicit in the vam approach are strong assumptions about the nature of the educational production function and the assignment of students to classrooms in this paper i develop falsification tests for three widely used vam specifications based on the idea that future teachers cannot influence students past achievement in da ta from north carolina each of the vams exclusion restrictions are dramatically viola ted in particular these models indicate large effects of 5th grade teachers on 4th grade t est score gains i also find that conventional measures of individual teachers value added fade out very quickly and are at best weakly related to long run effects i discuss implic ations for the use of vams as personnel tools

information school choice and academic achievement evidence from two experiments we examine a natural experiment and a field experiment that provided direct information on school test scores to lower income families in a public school choice plan receiving information significantly increases the fraction of parents choosing higher performing schools parents with high scoring alternatives nearby were more likely to choose nonguaranteed schools with higher test scores using random variation from each experiment we find that attending a higher scoring school increases student test scores the results imply that school choice will most effectively increase academic achievement for disadvantaged students when parents have easy access to test score information and good options from which to choose

do better schools matter parental valuation of elementary education the evaluation of numerous school reforms requires an understanding of the value of better schools given the difficulty of calculating the relationship between school quality and student outcomes i turn to another method and use house prices to infer the value parents place on school quality i look within school districts at houses located on attendance district boundaries houses then differ only by the elementary school the child attends i thereby effectively remove the variation in neighborhoods taxes and school spending i find that parents are willing to pay 2 5 percent more for a 5 percent increase in test scores this finding is robust to a number of sensitivity checks

valuing english primary schools this paper provides the first empirical evidence for the uk on the effect of primary school performance on property prices we find that on average a one percentage point increase in the neighbourhood proportion of children reaching the government specified target grade pushes up neighbourhood property prices by 0 67 at 2000 property prices we calculate the social valuation of a sustained 1 improvement in primary school performance to be up to 90 per child per year our instrumental variable and semi parametric approach avoids the problems of school quality endogeneity and omitted neighbourhood variables that occur in typical property value models

measuring the impacts of teachers i evaluating bias in teacher value added estimates are teachers impacts on students test scores value added a good measure of their quality one reason this question has sparked debate is disagreement about whether value added va measures provide unbiased estimates of teachers causal impacts on student achievement we test for bias in va using previously unobserved parent characteristics and a quasi experimental design based on changes in teaching sta using school district and tax records for more than one million children we nd that va models which control for a student s prior test scores exhibit little bias in forecasting teachers impacts on student achievement although teachers have substantial impacts

does corruption cause encumbered business regulations an iv approach in this research we attempt to understand the effects of corruption on business regulations measured by number of procedures time and costs involved in satisfying governmental requisites using two stage least squares 2sls methods we lessen the problems associated with endogeneity and uncovered the existence of a robust positive statistically significant and quantitatively large direction channel from corruption to encumbered business regulations these results suggest the need to deter corruption in order to improve business regulations the quest to reduce corruption worldwide acquires new relevancy given the findings of djankov et al 2006 that countries with simple and transparent regulations grow faster

measuring the impacts of teachers ii teacher value added and student outcomes in adulthood abstract are teachers impacts on students test scores value added a good measure of their quality this question has sparked debate partly because of a lack of evidence on whether high value ad

unawareness and selective disclosure the effect of school quality information on property prices the australian government launched the my school website in 2010 to provide standardised information about the quality of schools to the australian public this paper combines data from this website with home sales data for the state of victoria to estimate the effect of the publication of school quality information on property prices we use a difference in difference approach to estimate the causal effect of the release of information about high quality and low quality schools relative to medium quality schools in the neighborhood and find that the release of information about high quality schools increases property prices by 3 6 percent whereas the release of information about low quality schools has no significant effect the findings indicate that many buyers are unaware of the relevance of school quality information and that real estate agents pursue a strategy of disclosing information about high quality schools to increase the sales price results from a survey of victorian real estate agents provide evidence in favor of this strategy

debt overhang global growth opportunities and investment abstract using a pan european data set of 8 5 million firms we find that firms with high debt financing invest relatively more than otherwise similar firms if they are operating in sectors facing good global growth opportunities the positive impact of a marginal increase in debt on investment in good global growth opportunities sectors disappears if firm debt is already excessive if it is dominated by short maturities and during systemic banking crises our results are consistent with theories of the disciplining role of debt as well as with models highlighting the negative link between firm and bank related agency problems and corporate investment

financial development and financing constraints international evidence from the structural investment model this article provides evidence that financial development impacts growth by reducing financing constraints that would otherwise distort efficient allocation of investment the financing constraints are inferred from the investment euler equation by assuming that the firm s stochastic discount factor is a function of the firm s financial position specifically the stock of liquid assets the magnitude of the changes in the cost of capital is twice as large in a country with a low level of financial development as in a country with an average level of financial development the size effect business cycles and legal environment effects are also considered copyright 2003 oxford university press

valuing school quality using boundary discontinuities abstract existing research shows that house prices respond to local school quality as measured by average test scores however higher test scores could signal higher academic value added or higher ability more sought after intakes in our research we show that both school value added and student prior achievement linked to the background of children in schools affect households demand for education in order to identify these effects we improve the boundary discontinuity regression methodology by matching identical properties across admissions authority boundaries by allowing for boundary effects and spatial trends by re weighting our data towards transactions that are closest to district boundaries by eliminating boundaries that coincide with major geographical features and by submitting our estimates to a number of novel falsification tests our results survive this battery of tests and show that a one standard deviation change in either school average value added or prior achievement raises prices by around 3

does the disclosure of gun ownership affect crime evidence from new york abstract while the social costs of gun violence are high opponents of gun restrictions argue that gun ownership deters crime and creates a positive externality by increasing unobserved risk to criminals this paper investigates the evidence for these two deterrence channels exploiting the sudden disclosure of all handgun permit holders names and addresses in two new york counties permit holders have more crime incidents at their homes relative to non permit holders in the baseline which is not driven by selection into neighborhoods i find little evidence in favor of direct deterrence and little evidence of peer deterrence instead i find that victimization is associated with a higher likelihood of future gun ownership

zombie lending and depressed restructuring in japan this paper explores the role that misdirected bank lending played in prolonging the japanese macroeconomic stagnation that began in the early 1990s the investigation focuses on the wide spread practice of japanese banks of continuing to lend to otherwise insolvent firms we docu ment the prevalence of this forbearance lending and show its distorting effects on healthy firms that were competing with the impaired firms the paper by hoshi 2000 was the first to call attention to this phenomenon and its ramifi

finance firm size and growth the authors examine whether financial development boosts the growth of small firms more than large firms and hence provides information on the mechanisms through which financial development fosters aggregate economic growth they define an industry s technological firm size as the firm size implied by industrial specific production technologies including capital intensities and scale economies using cross industry cross country data the results indicate that financial development exerts a disproportionately large effect on the growth of industries that are technologically more dependent on small firms this suggests that financial development accelerates economic growth by removing growth constraints on small firms and also implies that financial development has sectoral as well as aggregate growth ramifications

an empirical investigation into the international real interest rate linkages linear dynamic stochastic processes are derived for the ex ante real interest rates from those followed by the ex post real rates under the identifying assumption of rational expectations the technique is used to study instantaneous and lagged effects of u s ex ante real rates on a number of oecd ex ante real rates the author finds significant contemporaneous correlations between ex ante real rates in the long run however real rates seem to be insulated

the effect of school choice on participants evidence from randomized lotteries school choice has become an increasingly prominent strategy for enhancing academic achievement to evaluate the impact on participants we exploit randomized lotteries that determine high school admission in the chicago public schools compared to those students who lose lotteries students who win attend high schools that are better in a number of dimensions including peer achievement and attainment levels nonetheless we find little evidence that winning a lottery provides any systematic benefit across a wide variety of traditional academic measures lottery winners do however experience improvements on a subset of nontraditional outcome measures such as self reported disciplinary incidents and arrest rates

seniority and maturity of debt contracts abstract this paper provides a model of how borrowers with private information about their credit prospects choose seniority and maturity of debt increased short term debt leads lenders to liquidate too often it also increases the sensitivity of financing costs to new information although better than average borrowers desire information sensitivity the model implies that short term debt will be senior to long term debt and that long term debt will allow the issue of additional future senior debt the model also has implications on the structure of leveraged buyouts and on how various types of lenders respond to potential defaults

forecasting inflation using interest rate and time series models some international evidence it has been suggested that inflation forecasts derived from short term interest rates are as accurate as time series forecasts previous analyses of this notion have focused on u s data providing mixed results in this article the authors extend previous work by testing the hypothesis using data taken from the united states and five other countries using monthly eurocurrency rates and the consumer price index for the period 1967 86 their results indicate that time series forecasts of inflation have equal or lower forecast errors and have unbiased predictions more often than the interest rate based forecasts copyright 1990 by the university of chicago

good principals or good peers parental valuation of school characteristics tiebout equilibrium and the incentive effects of competition among jurisdictions good principals or good peers parental valuation of school characteristics tiebout equilibrium and the incentive effects of competition among jurisdictions by j esse m r othstein school choice policies may by aligning admin istrators incentives with parental demand yield improved efficiency in educational production milton friedman 1962 john e chubb and terry m moe 1990 but eric a hanushek 1981 cautions if the efficiency of our school systems is due to poor incentives for teachers and admin istrators coupled with poor decision making by consumers it would be unwise to expect much from programs that seek to strengthen market forces in the selection of schools p 35 empha sis added poor decision making is not required parents may rationally choose schools with pleasant surroundings athletic facilities cultural advantages ibid p 34 over those that most efficiently pursue academic performance they may prefer poorly run schools with good peer groups over those that are more effective but en roll worse students j douglas willms and frank h echols 1992 1993 or they may simply be unable to identify effective schools thomas j kane and douglas o staiger 2002 any factor that leads parents to choose any but the most effective available schools will tend to dilute the incentives for efficient management that choice might otherwise create this study examines the distribution of stu dent outcomes across schools within metropol itan housing markets for evidence on parental demand economists have long noted that par ents choices among residential locations are potentially informative about how more com plete choice systems may operate charles m tiebout 1956 melvin v borland and roy m howsen 1992 caroline m hoxby 2000 rothstein 2005 1 i ask whether school effec tiveness plays a sufficiently important role in these decisions to create meaningful incentives for more productive school management i adopt a specific understanding of effective ness appropriate to the question at hand a substantial portion of between school differ ences in student performance can be attributed to differences in student body composition this portion includes the effects of individual stu dent characteristics on their own test scores any direct peer group effects and any indirect ef fects of a school s composition on the quality of its instruction if wealthy schools attract better teachers joseph r antos and sherwin rosen 1975 or more parental involvement this is for my purposes a peer effect it depends on the quality of the school s administration only via school composition a school administrator cannot attract demand by offering a school with wealthy students as these can be offered only if wealthy families demand the school in the first place only the remaining portion of a school s contribution to test scores is effectiveness 2 department of economics and woodrow wilson school princeton university wallace hall 3 rd floor princeton nj 08544 e mail jrothst princeton edu i thank alan auerbach tom davidoff caroline hoxby jus tin mccrary rob mcmillan john quigley cecilia rouse emmanuel saez till von wachter four anonymous refer ees editor robert moffitt seminar participants at several institutions and especially david card for helpful sugges tions i am grateful to the college board for essential data and to a national science foundation graduate research fellowship and the fisher center for real estate and urban economics at uc berkeley for funding see cecilia elena rouse 1998 julie b cullen et al 2005 william g howell et al 2002 and alan b krueger and pei zhu 2004 for analyses of several existing nonresidential choice programs though none focuses on the particular issue studied here this definition avoids the need to find observable de terminants of effectiveness which have proved elusive hanushek 1986 my definition however ignores a school s contribution to nontest outcomes e g sports or music if such outcomes motivate parental choices i will conclude that parents do not demand effective schools of

global growth opportunities and market integration we propose an exogenous measure of a country s growth opportunities by interacting the country s local industry mix with global price to earnings pe ratios we find that these exogenous growth opportunities predict future changes in real gdp and investment in a large panel of countries this relation is strongest in countries that have liberalized their capital accounts equity markets and banking systems we also find that financial development external finance dependence and investor protection measures are much less important in aligning growth opportunities with growth than is capital market openness finally we formulate new tests of market integration and segmentation by linking local and global pe ratios to relative economic growth in a perfectly integrated world economy capital should be invested where it

political decentralization and corruption evidence from around the world abstract how does political decentralization affect the frequency and costliness of bribe extraction by corrupt officials previous empirical studies using subjective indexes of perceived corruption and mostly fiscal indicators of decentralization have suggested conflicting conclusions in search of more precise findings we combine and explore two new data sources an original cross national data set on particular types of decentralization and the results of a firm level survey conducted in 80 countries about firms concrete experiences with bribery in countries with a larger number of government or administrative tiers and given local revenues a larger number of local public employees reported bribery was more frequent when local or central governments received a larger share of gdp in revenue bribery was less frequent overall the results suggest the danger of uncoordinated rent seeking as government structures become more complex

the impact of the business environment on young firm financing this paper uses a dataset of more than 70 000 firms in over 100 countries to systematically study the use of different financing sources for new and young firms in comparison to mature firms the authors find that in all countries younger firms rely less on bank financing and more on informal financing however they also find that younger firms use more bank finance in countries with stronger rule of law and better credit information and that the reliance of young firms on informal finance decreases with the availability of credit information overall the results suggest that improvements to the legal environment and availability of credit information are disproportionately beneficial for promoting access to formal finance by young firms

international interest rates and inflationary expectations abstract fama s hypothesis that short term interest rates are efficient predictors of inflation has been criticized on the grounds that his test depends critically on the constancy of the short term expected real rate of interest this paper uses an international framework where the time invariance assumption of the real rate is replaced by the assumption that short term expected real rates are identical at a point in time across countries with well developed capital markets results support fama s contention that short term nominal rates of interest reflect inflationary expectations

short term interest rates as predictors of inflation on testing the hypothesis that the real rate of interest is constant in an innovative and provocative paper in this review eugene fama presents evidence which appears to be consistent with the joint hypothesis that the real rate of interest ignoring taxes is a constant and that the market for u s treasury bills is efficient in the sense of embodying rational expectations those findings are strikingly at variance with a long list of previous studies which seemed to support the view that the real rate of interest varies over time and can be related to economic variables such as real output monetary policy and so forth 2 the methodologies which lead to these contradictory conclusions are quite different previous studies had followed the lead of irving fisher by relating nominal interest rates to distributed lags on past rates of inflation 3 these distributed lags are generally interpreted as approximations to the market s expected rate of inflation and thus any remaining variation is attributed to variation in the real rate 4 fama s methodology on the other hand draws on the fact that the difference between the market interest rate and the subsequently observed rate of inflation the ex post real interest rate consists by definition of the ex ante real interest rate plus a pure forecasting error 5 the hypothesis of market efficiency implies that these forecasting errors must be serially random thus observing ex post real rates is equivalent to observing ex ante real rates with random measurement error these errors of course confound the problem of identifying variation in the ex ante real rate in this paper we will argue that the relative magnitude of these measurement errors is such that the tests carried out by fama were not powerful enough to reject the joint hypothesis that the ex ante real rate is a constant and expectations are rational more powerful tests which are presented in this paper using the same data do lead to rejection of that hypothesis of course rejection

financial dependence and growth revisited we revisit an earlier highly influential paper on financial dependence and growth by rajan and zingales 1998 we re examine their assumptions and the robustness of their results to alternative theories and interpretations we first show that they may be implicitly testing whether financial intermediaries allow firms to better respond to global shocks to growth opportunities rather than the extent that financial intermediaries allow firms to grow in industries with an inherent technological financial dependence we propose a more direct measure of growth opportunities if u s capital markets are perfect then actual growth in the u s is a good proxy for global growth opportunities we test this directly by including u s industry growth in rajan and zingales s original specification and find that our direct growth measure outperforms their financial dependence measure and is less vulnerable to controlling for outliers and level of development this still suggests an important role for finance in the allocation of resources but shifts the emphasis from financial dependence to global growth opportunities jel f3 g1 o4

the value of school facility investments evidence from a dynamic regression discontinuity design author s cellini stephanie riegg ferreira fernando rothstein jesse abstract despite extensive public infrastructure spending surprisingly little is known about its economic return in this paper we estimate the value of school facility investments using housing markets standard models of local public goods imply that school districts should spend up to the point where marginal increases would have zero effect on local housing prices our research design isolates exogenous variation in investments by comparing school districts where referenda on bond issues targeted to fund capital expenditures passed and failed by narrow margins we extend this traditional regression discontinuity approach to identify the dynamic treatment effects of bond authorization on local housing prices student achievement and district composition our results indicate that california school districts underinvest in school facilities passing a referendum causes immediate sizable increases in home prices implying a willingness to pay on the part of marginal homebuyers of 1 50 or more for each 1 of capital spending these effects do not appear to be driven by changes in the income or racial composition of homeowners and the impact on test scores appears to explain only a small portion of the total housing price effect c 2010 by the president and fellows of harvard college and the massachusetts institute of technology

financial and legal constraints to growth does firm size matter using a unique firm level survey database covering 54 countries we investigate the effect of financial legal and corruption problems on firms growth rates whether these factors constrain growth depends on firm size it is consistently the smallest firms that are most constrained financial and institutional development weakens the constraining effects of financial legal and corruption obstacles and it is again the small firms that benefit the most there is only a weak relation between firms perception of the quality of the courts in their country and firm growth we also provide evidence that the corruption of bank officials constrains firm growth

law finance and firm growth we investigate how differences in legal and financial systems affect firms use of external financing to fund growth we show that in countries whose legal systems score high on an efficiency index a greater proportion of firms use long term external financing an active though not necessarily large stock market and a large banking sector are also associated with externally financed firm growth the increased reliance on external financing occurs in part because established firms in countries with well functioning institutions have lower profit rates government subsidies to industry do not increase the proportion of firms relying on external financing the corporate finance literature suggests that market imperfections caused by conflicts of interest and informational asymmetries between corporate insiders and investors constrain firms in their ability to fund investment projects the magnitude of these imperfections depends in part on the effectiveness of the legal and financial systems because these systems differ across countries the literature implies that there should exist systematic cross country differences in firms ability to obtain external capital to finance investment in this paper we examine whether the underdevelopment of legal and financial systems does prevent firms in some countries from investing in potentially profitable growth opportunities in particular we focus on the use of long term debt or external equity to fund growth see our earlier work demirgut kunt and maksimovic 1996a which compares firms financial structures in developed and developing countries and finds the greatest difference to be in the provision of long term credit we estimate a financial planning model to obtain the maximum growth rate that each firm in our thirty country sample could attain without access to long term financing we then compare these predicted growth rates to growth rates realized by firms in countries with differing degrees of development in their legal and financial systems our approach enables us to identify specific characteristics of the legal and financial systems that are associated with long term financing of firm growth thus we provide a micro level test of the hypoth

tests of the fisher hypothesis with international data theory and evidence the fisher hypothesis 7 8 states that nominal interest rates adjust fully to expected inflation for years tests of this hypothesis followed fisher 8 in regressing nominal rates on a distributed lag of past inflation which was used as a proxy for the expected rate of inflation see roll 15 for references fisher eventually concluded that nominal rates do not fully reflect expected inflation saying that when the cost of living is not stable the rate of interest takes the appreciation and depreciation into account to some extent but only slightly and in general indirectly 1 fisher attributed this to money illusion in more recent years other researchers have explained the non neutrality of inflation on grounds of general equilibrium sargent 16 and taxes darby 3 and feldstein 6 a new method of testing the fisher hypothesis was introduced by fama 4 he concluded that interest rates set in u s financial markets are informationally efficient fama s work highlighted the two separate although not always distinguishable elements in the fisher hypothesis 1 the effect of expected inflation on the expected real rate and 2 the question of whether or not the nominal rate reflects a rational forecast of expected inflation to test the informational efficiency of nominal rates fama 4 assumed a constant expected real rate arguing in the later paper that the efficiency test is robust with respect to the assumption of the constancy of the expected real rate this assumption has come under severe criticism carlson 2 nelson and schwert 14 on the grounds that the efficiency results are not verifiable given the actual behavior of realized real rates summers 17 extended the study of interest rates to the period 1860 to 1979 using both fisher s and fama s methods and found that the results are less favorable for the fisher hypothesis in a more recent study fama and gibbons 5 tested the fisher hypothesis using a procedure developed by ansley 1 which assumes that the expected real rate follows a random walk they concluded that nominal rates fully reflect expected inflation at the same time that the expected real rate adjusts to it this paper examines the question of whether international interest rates reflect expected inflation in their respective countries in doing so we expand on the previous work of kane and rosenthal 11 we show that although fama 4 introduced a bias into his tests his general approach was correct we then present simple time series tests and show that they fail for eurocurrency rates

a new database on the structure and development of the financial sector this article introduces a new database of indicators of financial structure and financial development across countries and over time the database is unique in that it combines a wide variety of indicators that measure the size activity and efficiency of financial intermediaries and markets it improves on previous efforts by presenting data on the public share of commercial banks introducing indicators of the size and activity of nonbank financial institutions and constructing measures of the size of bond and primary equity markets this article introduces a new database the first to provide comprehensive measures of the development structure and performance of the financial sector this database is the first to define and construct indicators of the size and activity of nonbank financial intermediaries such as insurance companies pension funds and non deposit money banks it is also the first to include indicators of the size of primary equity markets and primary and secondary bond markets in constructing the database authors carefully deflate measures and match stock and flow variables

hedonic markets and sorting equilibria bid function envelopes for public services and neighborhood amenities abstract hedonic regressions with house value as the dependent variable are widely used to study public services and neighborhood amenities this paper builds on the theory of household bidding and sorting across communities to derive bid function envelopes which provide a form for these regressions this approach allows for household heterogeneity and multiple amenities yields estimates of the price elasticity of amenity demand directly from the hedonic without a rosen two step procedure and provides tests of hypotheses about sorting an application to cleveland area data from 2000 yields price elasticities for school quality and neighborhood ethnic composition and supports the sorting hypotheses

reputation and school competition abstract stratification is a distinctive feature of competitive education markets that can be explained by a preference for good peers learning externalities can lead students to care about the ability of their peers resulting in across school sorting by ability this paper shows that a preference for good peers and therefore stratification can also emerge endogenously from reputational concerns that arise when graduates use their college of origin to signal their ability reputational concerns can also explain puzzling observed trends including the increase in student investment into admissions exam preparation and the decline in study time at college jel i21 i23 i26 j24

access to finance an unfinished agenda recent data compilations show that many poor and non poor people in many developing countries face a high degree of financial exclusion and high barriers in access to finance theory and empirical evidence point to the critical role that improved access to finance has in promoting growth and reducing income inequality an extensive literature shows the channels through which finance promotes enterprise growth and improves aggregate resource allocation there is less evidence at the household level however and on the effectiveness of policies to overcome financial exclusion the article summarizes recent efforts to measure and analyze the impact of access to finance and discusses the unfinished research agenda

does the market value value added evidence from housing prices after a public release of school and teacher value added value added data are an increasingly common evaluation tool for schools and teachers many school districts have adopted these methods and released the results publicly in this paper we study the release of value added data in los angeles by the los angeles times newspaper to identify how measured value added is capitalized into housing prices this analysis is the first in the us school valuation literature to examine property value responses to a value added information shock which is of interest as this measure is less correlated with demographics than typical school quality measures unique to this setting as well is the release of both school and teacher level value added data which allows us to examine how property values respond to both types of information using a difference indifferences methodology surrounding the release we find that neither school nor teacher value added scores are capitalized into home prices our results suggest that despite the contentiousness following these data releases homeowners do not consider value added models as currently constructed to be a relevant school quality measure on the margin

financial contracting and leverage induced over and under investment incentives this paper investigates the effects of seniority rules and restrictive dividend convenants on the over and under investment incentives associated with risky debt we show that increasing seniority of new debt decreases the incidence of under investment but increases over investment and vice versa under symmetric information the optimal seniority rule is to give new debtholders first claim on a new project without recourse to existing assets i e project financing under asymmetric information the optimal debt contract requires equating the expected return to new debtholders in the default state to the new project s cash flow in the same rate if this is not possible the optimal seniority rule calls for strict subordination of new debt if the expected cash flow in default is small and full seniority if it is large with regard to dividend convenants we show that their effect depends on whether or not dividend payments are conditioned on future investments when they are unconditioned allowing more dividends increases the under investment incentive in contrast conditional dividends decrease the underinvestment incentive and increase the over investment incentive

information shocks and the dynamics of the housing market in this paper we analyze housing market reactions to the release of previously unpublished information on school quality using high quality housing data which precisely bracket the timing of the information shock we investigate housing price dynamics within school catchment areas we find a robust short term housing market reaction to the publication of school quality indicators suggesting that this information was new to the households and that households are willing to pay for better schools the publication effect does not seem to be permanent as prices revert to pre publication levels after two to three months

paying for primary schools admission constraints school popularity or congestion school quality is capitalised in house prices if access to schools is rationed by residential location we generate empirical predictions from three different theoretical approaches linking house prices to school performance distance to school and capacity these are respectively based upon admission constraints school popularity and congestion effects we find that test score based school performance significantly increases property prices but only the best one in ten schools generate higher than average prices close by and that prices are higher close to popular over capacity schools we conclude that the empirical evidence is more in line with the school popularity model

what do parents value in education an empirical investigation of parents revealed preferences for teachers this paper examines revealed preferences of parents for their children s education using parent requests for individual elementary school teachers and information on teacher attributes including principal reports of teacher characteristics that are typically unobservable on average parents strongly prefer teachers whom principals describe as good at promoting student satisfaction though they also value teacher ability to raise academic achievement these aggregate effects mask striking differences across schools families in higher poverty schools strongly value student achievement and appear indifferent to the principal s report of a teacher s ability to promote student satisfaction the results are reversed for families in wealthier schools

school markets the impact of information approximating schools effectiveness abstract the impact of competition on school performance is likely to depend on whether parents are informed about schools effectiveness or value added which may or may not be correlated with absolute measures of their quality and on whether this information influences their school choices thereby affecting schools market outcomes this paper explores this by considering chile s sned program which seeks to identify effective schools selecting them from homogeneous groups of comparable institutions its results are widely disseminated and the information it generates is different from that conveyed by a simple test based ranking of schools which turns out to approximate a ranking based on socioeconomic status we use a sharp regression discontinuity to estimate the effect that being identified as a sned winner has on schools enrollment tuition levels and socioeconomic composition through five applications of the program we find no consistent evidence that winning a sned award affects these outcomes

foreign direct investment and external financing conditions evidence from normal and crisis times this paper investigates the effects that external financing conditions in source and destination countries have on foreign direct investment fdi in normal and crisis times using a difference in differences approach we find that source and destination countries financial development have a strong positive impact on the relative volume of fdi in financially vulnerable sectors in normal times on the other hand during the 2008 2010 global financial crisis the relative volume of fdi in financially vulnerable sectors fell relatively more in financially developed source and destination countries most notably if these countries experienced a credit crisis

unnatural selection perverse incentives and the misallocation of credit in japan we examine the misallocation of credit in japan associated with the perverse incentives faced by banks to provide additional credit to the weakest firms firms are more likely to receive additional bank credit if they arein poor financial condition because troubled japanese banks have an incentive to allocate credit to severely impaired borrowers in order to avoid the realization of losses on their own balance sheets this evergreening behavior is more prevalent among banks that have reported capital ratios close to the required minimum and is compounded by the incentives arising from extensive corporate affiliations

the curse of the haven the impact of multinational enterprise on environmental regulation abstract we analyze the behavior of multinational enterprises in the context of resource rich and poor countries and regarding high and low income countries we depart from the pollution haven hypothesis and the resource curse the pollution haven hypothesis states that multinational enterprises move their dirty operations to countries with weak environmental regulation the resource curse holds that economic growth in countries abundant in natural resources is reduced we find that more polluting firms are relatively more often located in countries with weak environmental regulation however multinational enterprises do not have a significant impact on environmental regulation in the host country it appears that it is mainly the quality of institutions that drives both the pollution haven and the resource curse

foreign portfolio investment and financial constraints of small firms the article examines the impact of foreign portfolio investment fpi and constrains on small firms fpi has significant influence on a country s economic development and improvement in spite of the fact that the degree of constraints differ across counties and firms it is mostly small firms that suffer constrains from foreign investment constraints that are significantly lower in richer larger and faster growing countries this paper seeks to shed light on the factors that bring foreign investors to georgia on the motives of these investors on some of the constraints and barriers evidenced in the georgian investment environment and on the amount fdi and fpi flow in georgia in last years finally we summarize and provide some recommendations on how to increase the competitiveness of the country s investment climate in retaining existing and attracting new foreign and domestic investors

investment climate and firm productivity an application to vietnamese manufacturing firms abstractthe fundamental aspect of a national competitive advantage is a good investment climate understanding the role of the investment climate in generating firm productivity has received extensive attention by policymakers and economists in many countries the article studies the effect of different dimensions of the investment climate on firm productivity using a large dataset of vietnamese manufacturing firms the article finds that deficiencies in the investment climate are prejudicial to firm productivity and competition furthermore in examining the effect of corruption in association with the quality of the business environment the study also investigates the possibility that corruption may compensate firms for a bad investment climate or at least may neutralize the negative impact of inefficient government regulations in other words corruption acts as speed money to improve the efficacy of the provision of public services or provides leeway for entrepreneurs to bypass the inefficient reg

the maturity structure of corporate debt we provide an empirical examination of the determinants of corporate debt maturity our evidence offers strong support for the contracting cost hypothesis firms that have few growth options are large or are regulated have more long term debt in their capital structure we find little evidence that firms use the maturity structure of their debt to signal information to the market the evidence is consistent however with the hypothesis that firms with larger information asymmetries issue more short term debt we find no evidence that taxes affect debt maturity

employment and smes during crises the persistent increasing duration of unemployment has become an issue during economic crises although lay offs at large firms normally make headlines during crises we still know little about the potential impact of firm size on adjustment behavior in a crisis we studied effects of firm size on employment growth during economic slowdowns using a rich microeconomic database for the 1988 2007 period in portuguese manufacturing industry the results show that economic downturns affect firm growth negatively this negative effect is found to be higher for larger firms both during and immediately following crisis periods small and medium sized enterprises smes emerge as potential stabilizers in downturn periods however larger firms seem to be able to quickly recover from downturn periods our results contribute to the scarce literature and to the understanding of the portuguese case where many smes secure most jobs these first results may be useful because smes play a determinant role in other european union economies

finance and the sources of growth the authors evaluate whether the level of development in the banking sector exerts a causal impact on economic growth and its sources total factor productivity growth physical capital accumulation and private saving they use 1 a pure cross country instrumental variable estimator to extract the exogenous component of banking development and 2 a new panel technique that controls for country specific effects and endogeneity they find that banks do exert a large causal impact on total factor productivity growth which feeds through to overall gdp gross domestic product growth the long run links between banking development and both capital growth and private savings are more tenuous

small and medium size enterprises access to finance as a growth constraint abstract this paper presents recent research on access to finance by small and medium size enterprises smes smes form a large part of private sector in many developed and developing countries while cross country research sheds doubt on a causal link between smes and economic development there is substantial evidence that small firms face larger growth constraints and have less access to formal sources of external finance potentially explaining the lack of smes contribution to growth financial and institutional development helps alleviate smes growth constraints and increase their access to external finance and thus levels the playing field between firms of different sizes specific financing tools such as leasing and factoring can be useful in facilitating greater access to finance even in the absence of well developed institutions as can systems of credit information sharing and a more competitive banking structure

corruption in bank lending to firms cross country micro evidence on the beneficial role of competition and information sharing abstract building on the important study by beck demirguc kunt and levine 2006 bank supervision and corruption in lending journal of monetary economics 53 2131 2163 we examine the effects of both borrower and lender competition as well as information sharing via credit bureaus registries on corruption in bank lending using the unique world bank data set wbes covering more than 4 000 firms across 56 countries with information on credit bureaus registries assembled by djankov mcliesh and shleifer 2007 private credit in 129 countries journal of financial economics 84 299 329 and bank regulation data collected by barth caprio and levine 2006 rethinking bank regulation till angels govern cambridge university press new york to measure bank competition and information sharing we find strong evidence that both banking competition and information sharing reduce lending corruption and that information sharing also helps enhance the positive effect of competition in curtailing lending corruption we also find that the ownership structure of firms and banks legal environment and firm competition all exert significant impacts on lending corruption