smoking drinking and income in an effort to increase understanding of the alcohol income puzzle the finding that drinking appears to lead to higher income this paper presents maximum simulated likelihood estimates of a system of limited dependent variables governing smoking and drinking patterns and income with all else held constant moderate drinking is associated with 10 percent higher income and heavy drinking associated with 12 percent higher income than drinking abstention smoking is associated with larger effects on income than drinking single equation estimates suggest smokers earn 8 percent less than nonsmokers and the smoking penalty rises to 24 percent after correcting for endogeneity

highly skilled and well connected migrant inventors in cross border m as based on a relational view of international business we investigate the role of migrant inventors in cross border mergers and acquisitions undertaken by r d active firms we hypothesize that the migrant inventors international social networks can be leveraged by their employers in order to identify and or integrate relevant knowledge bases of acquisition targets in the inventors home country we nuance our hypothesis by means of several conditional logistic regressions on a large matched sample of deals and control cases the impact of migrant inventors increases with the distance between countries and for targets located in countries with weak administrative legal systems as well as when targets are either innovative or belong to high tech sectors or to the same sector as the acquirer and for full versus partial acquisitions

exploring the intergenerational persistence of mental health evidence from three generations this paper uses data from the 1970 british cohort study to quantify the intergenerational persistence of mental health and the long run economic costs associated with poor parental mental health we find a strong and significant intergenerational correlation that is robust to different covariate sets sample restrictions model specifications and potential endogeneity importantly the intergenerational persistence is economically relevant with maternal mental health associated with lasting effects on the child s educational attainment future household income and the probability of having criminal convictions these results do not disappear after controlling for children s own childhood and adulthood mental health

foreign direct investment and intellectual property rights evidence from hollywood s global distribution of movies and videos abstract traditional thinking about intellectual property rights ipr suggests that as a country strengthens its ipr standards firms will move their governance structures away from equity based institutions such as foreign direct investment fdi towards more market based relations such as licensing agreements this hypothesis is explored by examining the behavior of hollywood studios in both the feature film and video markets in 40 foreign countries the analysis reveals that the behavior of hollywood studios is more complex than this although moderate iprs are associated with a high degree of licensing both high and low standards of ipr encourage more integrated governance structures

the effect of drinking and smoking on the labour market outcomes of low income young adults among adults the causal drinking bonus and smoking penalty have been estimated to be as large as 12 and 24 respectively the magnitudes of these effects compare in size with many active labour market programs targeted at low income young adults this article extends the literature by examining these relationships in such a group somewhat surprisingly the data indicate that just as in the greater population young drinkers have more favourable labour market outcomes than nondrinkers however when a fixed effects approach is used to identify causal impacts there is no evidence that drinking has a positive impact on labour market outcomes and some evidence for negative returns to drinking the smoking penalty is estimated to be much smaller among this group and not statistically significant finally estimates suggest that the observed correlations between consumption and labour market outcomes are biased by unobserved characteristics of the individual as well as unobservables that change over time t

an economic theory of workaholics and alcoholics this paper considers the role of alcohol in agency problems in order to provide an economic rationale for alcoholics and workaholics in our model alcohol reduces productivity but also can make imbibers blurt private information we show that in the optimal contract low productivity workers are compelled to over indulge in alcohol while high productivity workers overproduce output thus workers are made into alcoholics and workaholics depending on their productivity we conclude that excessive drinking working may be the result not the cause of low high productivity of workers jel d82 vsop

the effects of within country linguistic and religious diversity on foreign acquisitions this article explores how within country diversity of both language and religion influences the ownership structure of foreign acquisitions commentators have acknowledged the potential importance of within country diversity but to date this issue has received minimal empirical attention we propose that diversity plays two distinct roles namely diversity within the host country may be an additional source of behavioral uncertainty and information asymmetry over and above the effects arising from cross national differences moreover diversity within the home country may increase the cognitive complexity of the decision makers moderating the firm s response to the distance and diversity of the host country results based on foreign acquisitions across 67 acquirer and 69 target countries confirm both of these roles while the main focus of this article is on the role that within country diversity plays in international business decisions it also makes contributions in terms of expanding the range of dimensions of distance investigated in the cross border acquisition literature in highlighting a potentially positive role that diversity might play in such acquisitions and in providing a potential explanation for asymmetries in distance that is differences in cognitive complexity

willingness to pay for snowmobile recreation travel cost method models with and without post season resurvey of trip count annual willingness to pay wtp for snowmobile recreation in idaho is estimated using the travel cost method tcm on site snow conditions are important and erratic thus we collect two measures o

the longitudinal structure of earnings losses among work limited disabled workers this paper asks what are the dynamic effects of disability on earnings unlike most of the previous literature it uses panel data and fixed effects methods are used to assess how the earnings of disabled workers depart from expected levels over many years before and after the date of onset of their disability the paper also examines how worker characteristics affect earnings losses from disability with particular attention paid to the age at which the person suffers onset disabled men are found to experience sharp drops in earnings that predate the measured date of onset earnings recover rapidly soon after onset with much of the immediate reduction made up in the first two post onset years a modest downward trendfollows resulting in significant long term losses in expected annual earnings of about 12 percent per year being older at onset nonwhite more chronically disabled and less educated cause the losses from disability to be larger and the recovery smaller a large portion of these differences across groups appear to derive from industry affiliation after onset the paper argues the facts are all consistent with a simple human capital explanation of the disability process

spatial geography and control in foreign acquisitions this article examines how spatial geography influences firms choice of control in cross border acquisitions cbas building our arguments on the information asymmetry in cbas we argue that geographic distance affects adverse selection and moral hazard problems in cbas geographic distance hinders acquirers efforts to assess the true value of the target firm prompting them to opt for a partial control at the same time geographic distance hampers acquirers ability to manage contractual relationships and integrate target firms prompting them to opt for a full control we argue that the cost and benefit trade off of full vs partial ownership varies at different levels of geographic distance accordingly we propose a curvilinear u shaped relationship between geographic distance and equity ownership this relationship is contingent on acquisition relatedness and the listing status of the acquirer public vs private as the geographic distance between acquirer and target increases acquirers assume higher equity stakes in related acquisitions than in unrelated acquisitions at greater geographic distances public firms acquire more equity ownership than do private firms findings from 10 181 deals across 52 acquiring and 61 target countries provide robust support for these arguments

a pint a day raises a man s pay but smoking blows that gain away this paper studies the wage effects of the use of alcohol and tobacco the analysis based on a recent survey in the netherlands shows that for males the use of tobacco has a negative wage effect of about 10 while the use of alcohol has a positive wage effect of about the same size the wages of females are not affected by smoking and drinking

the effect of cultural distance on entry mode choice international diversification and mne performance a meta analysis although a growing literature indicates that cultural distance that is differences between national cultures is an important determinant of organizational actions and performance both empirical and theoretical concerns abound in this study the relationships of cultural distance with entry mode choice international diversification and mne performance are examined by meta analyzing data from 66 independent samples with cumulative sample sizes ranging from 2 255 to 24 152 regression results failed to provide statistical evidence of significant relationships between cultural distance and entry mode choice international diversification and mne performance the examination of moderator effects however yielded important results we found a strong negative association between cultural distance and entry mode choice for us based mnes the cultural distance international diversification relationship was negative for high technology industries while it was positive for other industries cultural distance also had a strong positive effect on mne performance for developed country investments a similar strong positive relationship was found between cultural distance and international diversification in studies with more recent samples results of this study indicate that substantial additional research is needed before the role of cultural distance is fully understood

greenfield vs acquisition the strategy of japanese investors in the united states multinational firms can enter a foreign market by taking over existing local firms acquisitions or by setting up new ventures greenfield investments surprisingly there has been limited empirical work on this topic this paper examines the determinants of this choice by looking at japanese entries into the united states by focusing on firms of one country entering a single market we are able to separate the impact of a firm s strategy from that of the characteristics of the target industry or country this paper tests simultaneously a number of competing hypotheses the results suggest that acquisitions are used by japanese investors with weak competitive advantages while investors with strong advantages find that greenfield investments are a more efficient way to transfer these advantages to the u s acquisitions are also chosen to enter industries with either very high or very low growth rates when entry is at a scale that is large relative to the parent and when entry is into a different industry the japanese investor s previous experience of the u s market its financial situation and its status as a follower in an oligopolistic industry have no statistically significant impact on the entry mode neither do u s stock market conditions

firm ownership preferences and host government restrictions an integrated approach two approaches may explain how multinational enterprises mnes select ownership structures for subsidiaries the first argues that mnes prefer structures that minimize that transaction costs of doing business abroad the second argues that ownership structures are determined by negotiations with host governments whose outcomes depend on the bargaining power of the firm this paper presents a framework integrating these two approaches and uses statistical methods to separate their effects empirically

rising metropoli the geography of mergers and acquisitions in germany high levels of mergers and acquisitions m as were a characteristic of the global economy in the 1990s the overall effects of m as on economic welfare and their spatial implications however remain a profoundly neglected topic using three standardised indices representing the relative quantity of take overs in each german regierungsbezirk the paper demonstrates that the recent wave of m as has resulted in a major concentration of firms and economic activity in the main german metropoli the paper then turns to a study of the flows of m a transactions by means of regression analysis it identifies the main drivers of the geographical concentration of firms to be indicators of the general level of agglomeration i e regional gdp and population and the concentration of political power in the region the results also indicate that investment in r d the general level of education or unemployment when considered in combination with agglomeration indicators play a negligible role in determining m a f

institutions transaction costs and entry mode choice in eastern europe the process of change from a centrally planned system to a market economy generates an institutional framework that is only partially reformed and therefore inconsistent and unstable this leads to high transaction costs for economic agents multinational enterprises entering transition countries have to adapt their strategies to the local institutions and reduce exposure to highly imperfect markets this paper analyzes how the costs of organizing business in transition environments influence entry mode choice the empirical results show that host country institutions in transition economies have an impact on the choice of entry modes moreover different mechanisms determine the internalization of managerial and technological knowledge

the impact of recent mental health changes on employment new evidence from longitudinal data abstractthis study uses longitudinal data and four different measures of mental health to tease out the impact of psychiatric disorder onsets and recoveries on employment outcomes results suggest that developing a mental health problem leads to a significant increase in the probability of transitioning to non employment while a recovery increases the probability of return to work among the not employed with a mental health problem no consistent effect was found on hours worked and earnings research and policy attention is needed with respect to early interventions such as job retention programmes to help workers with mental health problems remain employed as well as interventions that may lead to recovery and return to work more research is needed especially with data and models that can differentiate between the effects of mental health onsets and recoveries on employment exit and return to work transitions

employment wages and alcohol consumption in russia 1 introductionconcerns regarding the relationship between alcohol consumption and labor market productivity are well grounded if problem drinking or alcoholism is considered a disease then it may have depressant effects on labor market productivity causing reductions in employment earnings and other labor market outcomes mullahy and sindelar 1993 1996 kenkel and ribar 1994 however there is a medical literature that documents a u shaped relationship between alcohol consumption and the risk of cardiovascular disease according to this literature moderate drinkers have a lower risk of cardiovascular disease than do either abstainers or heavy drinkers beaglehole and jackson 1992 doll et al 1994 consistent with this evidence several economists have found a positive association between moderate drinking and earnings berger and leigh 1988 french and zarkin 1995 heien 1996 hamilton and hamilton 1997 zarkin et al 1998 macdonald and shields 2001 this article investigates the impact of alcohol consumption on employment and wages in russia the primary contributions of the article are twofold first it enhances the economic literature on the relationship between alcohol consumption and labor market behavior by using data from a longitudinal survey the use of a longitudinal data set enables the estimation of a fixed effects model which helps avoid the potential bias caused by unobserved individual factors not captured in cross sectional models the use of a fixed effects model is an important extension to the literature because the data sets used in previous studies are cross sectional and usually lack adequate variables that could serve as identifying instruments to control for the endogeneity of alcohol consumption 1 furthermore the richness of the data set used in this article allows for the application of three alternative measures of alcohol consumption in the empirical analysis this is important because the relationship between alcohol consumption and labor market outcomes may be sensitive to the alcohol measure that is used the second notable contribution of this article is that it provides the first empirical evidence on the association between alcohol consumption and labor market outcomes in russia excessive alcohol consumption is a widespread problem in russia where per capita alcohol consumption is around 14 liters per year the world health organization who considers 8 liters to be a sign that a country has a critical consumption level for health problems quinn judge 1997 furthermore the dramatic fluctuations in mortality rates experienced in russia over the past 15 years have generated considerable attention to the potential effect of alcohol consumption on the overall health of the russian population it is important to investigate how labor market outcomes would be affected by alcohol consumption in a country which demonstrates such dramatic fluctuations in alcohol consumption and mortality consistent with the previous studies cross sectional results generally support the hypothesis of an inverse u shaped relationship between alcohol consumption and wages and employment results from the fixed effect models are found to be quite different from those of cross sectional models the positive effect of alcohol consumption on employment disappears for both males and females once the individual fixed effects are controlled for the results of the wage model lend support to a small and linear return to alcohol consumption but the effects are significant only at the 10 level the fixed effects estimates are smaller in magnitude and estimated with less precision compared with cross sectional estimates section 2 reviews the previous literature section 3 discusses the conceptual issues and empirical strategy section 4 introduces the data set section 5 provides a discussion of the results and sensitivity analyses section 6 concludes the article

the effect of health improvements due to tobacco control on earnings in the united states there is minimal evidence causally estimating the relationship between tobacco tax policy population health and earnings this article uses state tobacco taxes as an instrument for life expectancy to estimate the effect on earnings per capita in a panel of almost 3000 counties in the united states over the period 1970 to 2000 in the first stage of the model we find that a one dollar increase in state tobacco taxes significantly increases life expectancy between 1 9 and 2 1 despite showing that tobacco tax is correlated with higher life expectancy and that theoretically improvements in health from reductions in smoking should lead to increased earnings we find an insignificant impact of the induced gains in life expectancy from tobacco policy on county level earnings per capita over the period 1970 to 2000 the lack of significance is explained through local average treatment effects and the smaller economic impact of certain policies that impact health later in life these results provide further

the construct of institutional distance through the lens of different institutional perspectives review analysis and recommendations this paper presents a review and critique of the 20 year old literature on institutional distance which has greatly proliferated we start with a discussion of the three institutional perspectives that have served as a theoretical foundation for this construct organizational institutionalism institutional economics and comparative institutionalism we use this as an organizing framework to describe the different ways in which institutional distance has been conceptualized and measured and to analyze the most common organizational outcomes that have been linked to institutional distance as well as the proposed explanatory mechanisms of those effects we substantiate our qualitative review with a meta analysis which synthesizes the main findings in this area of research building on our review and previous critical work we note key ambiguities in the institutional distance literature related to underlying theoretical perspectives and associated mechanisms distance versus profile effects and measurement we conclude with actionable recommendations for improving institutional distance research

does drug use lower wages this study using microdata from the 1980 and 1984 waves of the national longitudinal survey of youth examines the effects of drug use on wages and employment contrary to most previous researcher

alcohol use human capital and wages this article develops and estimates a model of wage determination that isolates the effects of alcohol use on wages as mediated through human capital accumulation although generally insignificant estimation results suggest that moderate alcohol use while in school or working has a positive effect on the returns to education or experience and therefore on human capital accumulation but heavier drinking reduces this gain slightly based on these results alcohol use does not appear to adversely affect returns to education or work experience and therefore has no negative effect on the efficiency of education or experience in forming human capital

responding to public disclosure of corporate social irresponsibility in host countries information control and ownership control we extend the internalization literature by theorizing on how public disclosure of corporate social irresponsibility csi can damage reputation based firm specific advantages of multinational companies mncs and how foreign subsidiary governance can subsequently be used as strategic responses specifically we distinguish between two foreign subsidiary governance mechanisms information control and ownership control that the prior literature has often assumed operate in parallel and posit that they function in divergent directions in this context furthermore we explain how two host country characteristics press freedom and regulatory quality amplify the need for mncs to utilize different governance mechanisms as responses to csi disclosure

who pays the bar tab beer consumption and economic growth in the united states what drug provides americans with the greatest pleasure and the greatest pain the answer hands down is alcohol the pain comes not only from drunk driving and lost lives but also addiction family strife crime violence poor health and squandered human potential young and old drinkers and abstainers alike all are affected every american is paying for alcohol abuse phillip j cook paying the tab the costs and benefits of alcohol control 2007 i introduction alcohol consumption has severe social and economic consequences lost productivity disability early death crime family neglect personality deterioration to name a few cook 2007 at the individual level the effects of alcohol consumption have been explored considerably by researchers in different fields including economics medicine public health criminology and sociology however few studies have examined the economic impact of alcohol use at the aggregate level probably due to the research deficiency regarding its aggregate effects some disagreement exists about the overall net benefits of alcohol use on the one hand scholars who have done extensive research on individual outcomes claim that the overall costs of alcohol use outweigh its benefits for example cook and moore 2002 120 state in their review article the production and sale of alcoholic beverages account for a small share of national product in the united states and in other advanced economies however the deleterious effects of alcohol consumption on health and safety constitute a substantial economic burden reducing our overall standard of living on the other hand organizations formed by the producers and distributors of alcoholic beverages claim that the alcoholic beverage industry contributes significantly to the u s economy through job creation and tax revenues according to beer serves america 2011 an organization sponsored by the beer institute and the national beer wholesalers association nbwa directly and indirectly the beer industry employs approximately 1 8 million americans paying them over 71 billion in wages and benefits the industry pays over 44 billion in business personal and consumption taxes including 5 3 billion in excise taxes and 5 8 billion in sales gross receipts and other taxes 1 similarly the distilled spirits council of the united states discus 1999 the national trade association representing america s leading distillers and about 70 of all distilled spirits brands sold in the united states states that the alcohol beverage industry is a major contributor to the u s economy through job creation wages and taxes 2 room and jernigan 2000 point out that the benefits reaped from the alcohol industry in terms of economic development should be weighed against the negative impacts on economic development in addition to public health they go on to say that alcohol s contribution to total production can vary tremendously from country to country generating 3 of total manufacturing value added in argentina or the netherlands but as little as 0 07 in iran aside from the aforementioned contributions of the alcohol industry to the economy often cited by the industry itself supply side efforts also play a role in the consumption of alcohol this can be done through influencing government regulation of the market for alcohol and selling cheap alcohol in bulk which has a devastating public health impact stockwell and crosbie 2001 indeed the economic burden of excessive alcohol consumption has been found to be substantial recently estimated at 223 5 billion bouchery et al 2011 although a few studies have examined the impact of macroeconomic conditions on drinking prevalence and patterns such as those by ruhm and black 2002 and ruhm 1995 we are not aware of any studies exploring the impact of alcohol consumption on economic growth

using selection on observed variables to assess bias from unobservables when evaluating swan ganz catheterization distinguishing causal effects from correlations is a key objective of research regardless of field even in medicine controlled experiments are not always practical or ethical in economics and we suspect in most other fields identification strategies based upon observational data are rarely bulletproof in their landmark study a f connors et al 1996 use propensity score matching methods with an extremely rich set of demographic characteristics and health status measures to assess whether swan ganz catheterization 1c 2 a widely used device for monitoring intensive care unit icu patients raises or lowers mortality in their sample of icu patients they find that receiving c within the first 24 hours raises mortality rates casting serious doubt on the value of this procedure for critically ill patients jay bhattacharya azeem m shaikh and edward vytlacil 2007 2008 hereafter bsv observe that since c recipients are sicker on many observed dimensions propensity score matching which ignores selection on unobservables might overstate the negative consequences of c they apply a set of bounds estimators including an extension of shaikh and vytlacil 2004 that incorporates prior information that weekend applications of recent methodology in project evaluation

the determinants of cross border equity flows abstract we explore a new panel data set on bilateral gross cross border equity flows between 14 countries 1989 1996 we show that a gravity model explains international transactions in financial assets at least as well as goods trade transactions gross transaction flows depend on market size in source and destination country as well as trading costs in which both information and the transaction technology play a role distance proxies some information costs and other variables explicitly represent information transmission an information asymmetry between domestic and foreign investors and the efficiency of transactions the geography of information is the main determinant of the pattern of international transactions while there is weak support in our data for the diversification motive once we control for the informational friction we broaden the scope of our results by presenting some evidence linking the results on equity transactions to equity holdings

psychiatric disorders and labor market outcomes evidence from the national comorbidity survey replication this paper uses the national comorbidity survey replication to estimate effects of recent psychiatric disorder on employment hours worked and earnings we employ methods proposed in altonji et al 2005a which use selection on observable traits to provide information regarding selection along unobservable factors among males disorder is associated with reductions in labor force participation and employment when selection on observed characteristics is set equal to selection on unobserved characteristics the magnitudes of these effects for males are 9 and 14 percentage point reductions for participation and employment respectively among females we find negative associations between disorder and labor force participation and employment but these estimates are more sensitive to assumptions about selection there are no effects of disorder on earnings or hours worked among employed individuals

snow tourism and economic sustainability the financial situation of ski resorts in spain the aim of this article is to analyse the profitability of ski resorts in spain and identify its associated determining factors in order to verify whether these are economically sustainable taking

is there a wage bonus from drinking unobserved heterogeneity examined while the result that drinkers earn more than abstainers has been remarkably persistent only one paper in the literature on drinking and earnings has been written where individual fixed effects are included this study improves the current literature by utilizing a much longer panel and focuses on the low end of drinking while controlling for unobserved heterogeneity with the inclusion of individual specific effects it is found that while ols specifications yield a positive significant coefficient on current drinking even when a rich set of covariates is controlled for including individual fixed effects renders the coefficient statistically insignificant

internalization advantage and subsidiary performance the role of business group affiliation and host country characteristics we extend internalization theory by examining the contingencies associated with market internalization and its impact on foreign subsidiary survival based on a sample of 6170 subsidiary year observations in 63 countries belonging to 292 mncs from korea during 1995 2013 we find that greater product and labor market internalization have weaker impacts on the survival of subsidiaries operating in countries with more developed institutional environments but stronger for subsidiaries of mncs affiliated with business groups the impact of business group affiliation is further dependent on host country institutional development and the diversification and size of the business group

tobacco taxes and starting and quitting smoking does the effect differ by education this article uses duration analysis to investigate the role of tobacco taxes in starting and quitting smoking applying a variety of parametric duration models to a sample of irish women it finds that in general tobacco taxes do influence starting and quitting smoking in the expected direction it also finds that the effect for starting differs by education but in a nonmonotonic way with the greatest effect for women with intermediate levels of education the results for quitting suggest the greatest effect for women with the lowest level of education these results are unchanged when account is taken of unobserved heterogeneity

youth depression and future criminal behavior while the contemporaneous association between mental health problems and criminal behavior has been explored in the literature the long term consequences of such problems depression in particular have received much less attention using data from the national longitudinal study of adolescent health add health we examine the effect of depression during adolescence on the probability of engaging in a number of criminal behaviors later in life in our analysis we control for a rich set of individual family and neighborhood level factors to account for conditions that may be correlated with both childhood depression and adult criminality one novelty in our approach is the estimation of school and sibling fixed effects models to account for unobserved heterogeneity at the neighborhood and family levels furthermore we exploit the longitudinal nature of our data set to account for baseline differences in criminal behavior the empirical estimates show that adolescents who suffer from depression face a substantially increased probability of engaging in property crime we find little evidence that adolescent depression predicts the likelihood of engaging in violent crime or the selling of illicit drugs our estimates imply that the lower bound economic cost of property crime associated with adolescent depression is approximately 227 million dollars per year jel i10 k42

heterogeneity and the effect of mental health parity mandates on the labor market health insurance benefit mandates are believed to have adverse effects on the labor market but efforts to document such effects for mental health parity mandates have had limited success i show that one reason for this failure is that the association between parity mandates and labor market outcomes vary with mental distress accounting for this heterogeneity i find adverse labor market effects for non distressed individuals but favorable effects for moderately distressed individuals and individuals with a moderately distressed family member on net i conclude that the mandates are welfare increasing for moderately distressed workers and their families but may be welfare decreasing for non distressed individuals

the pot calling the kettle black a comparison of measures of current tobacco use researchers often use the discrepancy between self reported and biochemically assessed active smoking status to argue that self reported smoking status is not reliable ignoring the limitations of biochemically assessed measures and treating it as the gold standard in their comparisons here we employ econometric techniques to compare the accuracy of self reported and biochemically assessed current tobacco use taking into account measurement errors with both methods our approach allows estimating and comparing the sensitivity and specificity of each measure without directly observing true smoking status the results robust to several alternative specifications suggest that there is no clear reason to think that one measure dominates the other in accuracy

conceptualizing and measuring distance in international business research recurring questions and best practice guidelines distance is a central concept in international business research yet there is debate about the construct as well as its operationalization in this editorial we address three of the most important recurring questions posed by authors editors and reviewers by examining the theory methods and data of distance research we discuss 1 how to theorize on distance and 2 what method and 3 what data to use when constructing a distance index we develop practical recommendations grounded in theory illustrating and supporting them by calculating cross country distance indices for all available country pairs and two of the most used distance indices cultural and institutional we show that whereas a specific method to calculate distance may matter to some extent the choice for a specific cultural or institutional framework to measure cultural or institutional distance has a major impact on country pair distances overall this editorial highlights the importance of matching data and method to the theoretical argument

health a source of bias in labor supply models the inconsistency of the labor supply estimates using nonexperimental data has led to the costly income maintenance experiments that have taken place in various parts of the country in addition to being costly the analyses of experimental data also have their share of econometric problems 1 both experimental and nonexperimental studies face the problems of sample selection model specification and variable measurement in order to determine what effects the variables of interest have on labor supply all relevant factors must be included one of these control variables namely health is often included in a form which results in biased estimates in this paper we hope to show that the analysis of experimental and nonexperimental labor supply data must carefully address the health variable problem before meaningful estimates can be obtained in general three treatments emerge in the literature no control for health is used a binary variable which we shall call a disability variable is included in the model as an exogenous variable or the disability variable is used as a partitioning criterion to obtain a sample of able bodied men or women the disability variable is often the response to the question does your health prevent you from working altogether or does your health limit the kind or amount of work you could do this study will examine the bias created by each of these approaches and will suggest a method of measurement for health which does not produce biased estimates 2 health and labor supply

modes of foreign entry a transaction cost analysis and propositions a frontier issue in international marketing is the appropriate choice of entry mode in foreign markets the objective of this paper is to offer a transaction cost framework for investigating the entry mode decision this framework provides 1 a theoretical basis for systematically interrelating the literature into propositions 2 propositions about interactions which resolve the apparently contradictory arguments advanced to date specifically the paper illustrates the feasibility of clustering 17 entry modes into the degree of control the mode provides the entrant proposes that the most appropriate i e most efficient entry mode is a function of the tradeoff between control and the cost of resource commitment advances testable propositions delimiting the circumstances under which each mode maximizes long term efficiency

modelling choice and switching behaviour between scottish ski centres the paper identifies the need to model the skier s choice of centre and the basic ideas underlying discrete choice models and their estimation it then identifies data requirements and sources the final choice of specification and the estimated parameters of the resultant nested multinomial logit model the results indicate two quite distinct markets for day trippers snow cover cost and to a lesser extent the journey length were the critical factors for those staying overnight the key determinant in this market seems to be accommodation interestingly centres which for the day tripper are competitors become for the overnight customer complementary

offshoring innovation to emerging markets organizational control and informal institutional distance the literature on innovation offshoring has focused on the dichotomous choice between two distinct investment strategies captive offshoring and outsourced offshoring we use the concept of organizational control to investigate how differences in the informal institutions that prevail in the home and host countries influence multinational enterprise mne strategy or the organizational control decision with respect to subsidiaries established to offshore innovation while the relationship between formal institutions and mne strategy has been the subject of considerable academic scrutiny less is known about the role of informal institutions we propose that the type of uncertainty precipitated by informal institutions is critical to understanding the strategic behavior of foreign investing mnes we hypothesize that an mne s organizational control over a subsidiary will be contingent upon the type of informal institutional uncertainty encountered by the subsidiary more specifically we disaggregate the informal institutions construct and develop three new more explicit latent constructs behaviorally oriented informal institutions boii technology oriented informal institutions toii and demand oriented informal institutions doii our theory posits that while an increase in boii distance will precipitate a preference for greater organizational control heightened toii and doii distances will induce the opposite outcome a preference for lower levels of organizational control

the interplay of national distances and regional networks private equity investments in emerging markets integrating social network theory with the literature on national distance we examine how the investment strategy followed by a private equity pe firm in an emerging market is affected by the interplay between two important types of national distances institutional and geographic and the firm s centrality in the regional syndication network covering over 5 000 investment transactions we use a dataset of more than 500 pe firms based in both developed and emerging markets targeting three emerging market regions latin america southeast asia and eastern europe from 1996 to 2011 the results show that depending on the level of centrality of pe firms in regional syndication networks institutional and geographic distances can have differing effects both in magnitude and direction on their investment strategies in emerging markets moreover these effects are contingent on whether the pe firm is from a developed market or an emerging market we conclude that different types of national distances can operate in dissimilar ways depending on 1 firm level factors defined at the regional level such as centrality in the regional syndication network and 2 the developed market or emerging market nature of the pe firm

family involvement and firms establishment mode choice in foreign markets abstract extant literature on foreign entry increasingly recognizes firms heterogeneity as a potential reason for inconsistency in results on the establishment mode choice that is whether and under which conditions firms should choose to enter a new country through a greenfield investment or an acquisition our study contributes to this debate by identifying family ownership and family involvement in management as potential powerful sources of such heterogeneity integrating international business studies with both corporate finance literature on family firms and recent contributions from the socio emotional wealth perspective on family ownership we claim that due to greater risk aversion and lower access to information the family involvement both in the firm ownership and management leads to a higher propensity towards greenfield initiatives vs acquisitions however we also find that such a propensity decreases with international experience especially in family owned firms given the greater ability of professionalized management to overcome family related concerns on making acquisitions our analysis on 1045 foreign initiatives undertaken by 311 italian family and non family firms between 2003 and 2013 confirms our expectations indicating family ownership as a significant driver of firms international strategies

state alcohol policies teen drinking and traffic fatalities this empirical study evaluates the policy responsiveness of teen drinking in models that can condition on the unobserved state specific attributes that may have biased conventional evaluations the results demonstrate that cross state heterogeneity can be important and that beer taxes have relatively small and statistically insignificant effects on teen drinking models of youth traffic fatalities also indicate that the conventional beer tax elasticities are not robust to additional controls for omitted variables the importance of these omitted variables is illustrated by a counterfactual which compares models of nighttime fatalities to those that occur in the daytime when the rate of alcohol involvement is substantially lower

alcohol consumption and human capital a retrospective study of the literature grossman proposed an individual s health can be viewed as one aspect of their human capital following this line of thought a number of recent papers have reported a positive impact of alcohol consumption on earnings the rationale for the existence of such a relationship is the positive impact of alcohol on physical and mental health we conduct a meta analysis to determine whether such factors as the estimation technique the presence of ex drinkers in the sample possible sample selection bias and publication bias may all contribute to these findings an additional suggestion for the positive relationship between alcohol and wages is the presence of a common set of personality traits that determines drinking behaviour and also leads to higher earnings we examine this relationship by reviewing the literature that investigates if the personality influencing aspects of alcohol consumption influences measures of human capital we also survey the significant body of research that has examined how alcohol consumption has been found to influence educational outcomes and the work force participation of problem drinkers

local knowledge transfer and performance implications for alliance formation in asia foreign firms in host country environments frequently face location based disadvantages this study proposes three means channels of overcoming local knowledge disadvantages based on a sample of 558 japanese joint ventures jvs located in southeast and east asia we find that partnering with local firms the first channel can be a primary strategy for accessing local knowledge and improving jv performance jv experience in the host country the second channel also mitigates local knowledge disadvantages and leads to increased jv performance the third channel the foreign parent s host country experience leads to increased performance in the absence of a local partner however when a jv is formed with a local partner increased parent experience in the host country leads to decreased performance suggesting that the need for a local partner declines as parent experience in a host country increases

do drinkers earn less theoretical work by becker and others on human capital led initially to empirical research on the determinates of earnings interest in human capital has now spread to other areas especially health this movement is in conjunction with societal concerns regarding the role of diet and environmental factors on human well being and performance following becker 1 and grossman 9 economists expect to find a significant relationship between health and earnings health aspects of human capital have been extensively explored since the early work of grossman 9 10 good health is both beyond the control of the individual exogenous as a result of genetic factors and random events and controllable endogenous through the regulation of activities such as smoking drinking eating exercise and other informed choices this study examines the relation between earnings and drinking curiously little rigorous empirical work has been done on the relation between earnings and drinking irving fisher s claim to the contrary 1 there is little evidence that prohibition led to substantial if any productivity increases although it is established that excessive drinking leads to poor health the empirical evidence regarding earnings and drinking is mixed and inconclusive according to the u s government abusive drinkers earn less in their biennial reports to congress the national institute on alcohol abuse and alcoholism niaaa estimates the economic cost to society of alcohol abuse approximately half of this cost arises from the estimated loss in earnings productivity due to abusive drinking 2 their approach consists of estimating a wage equation which includes human capital variables as well as a dichotomous abusive drinking variable and quantity of alcohol consumed 3 berger and leigh 3 used a sample selection model to test whether drinkers earned more or less than nondrinkers they divided their sample from the 1972 73 quality of employment survey into two categories drinkers and nondrinkers using a sample selection correction estimator hedonic wage regressions for each category and by sex were estimated they found that drinkers moderate and abusive combined earned more than nondrinkers comparisons were then made between wages from each regression with demographic and human capital variables set at

efficiency and productivity of french ski resorts abstract this paper analyses french ski resorts productivity with the luenberger productivity indicator lpi based on the directional distance function it permits the calculation of a productivity indicator that is decomposed into technical efficiency change and technological change the conclusions are that productivity decreased for the majority of french ski resorts which is almost always explained by technological change finally the mixed results do not establish a clear relationship between the ski resorts size and productivity therefore the kruskal wallis test is used to statistically verify this relationship managerial implications are derived from this study

keeping it within bounds regression analysis of proportions in international business international business researchers commonly estimate proportions percentages rates or fractions so called proportional dependent variables in this paper we posit that two regression strategies are particularly pertinent to the international business field tobit and fractional regression reviewing recent international business research we find that while fractional regression is rarely used analyses from tobit regression are often incomplete or erroneously interpreted with consequences for the validity of the reported results accordingly we clarify how researchers should choose between tobit and fractional regression and interpret their results we present insights based on simple simulations and data examples with associated stata code and a decision tree for choosing between types of models for use with proportional dependent variables

the drinkers bonus in the military officers versus enlisted personnel applied economics published the first article reporting the findings of drinkers earning more than nondrinkers in 1988 the positive correlation between drinking and higher wages has existed in the economics literature on alcohol consumption for almost two decades however a clear explanation for this finding is only beginning to emerge i use data on male military personnel from the 1985 worldwide survey of alcohol and nonmedical drug use among military personnel to explore a theory of social capital specifically one way individuals can invest in social capital is through drinking in certain settings abstainers miss out on opportunities to increase their social capital stock because they forego social interaction that could result in promotion some evidence comes from exploring the wage bonus for officers versus enlisted i find the effect of different drinking levels on wages varies with station in the military officers who drink between two and 38 drinks per week earn between 2 and 8 more than o

the effect of illicit drug use on the wages of young adults this article examines the effects of cocaine and marijuana use on the wages of young adults the endogeneity of drug use in a wage equation is considered and a two stage least squares procedure is implemented the results suggest that increased use of marijuana or cocaine is associated with higher wages the positive relationship between drug use and the wage does not diminish with age i also investigate whether systematic differences in the return to measures of human capital investments can explain the positive relationship between drug use and wages

the wage effects of personal smoking history why do we observe a wage differential between smokers and non smokers pooling reports of current and prior smoking activity across 15 years from the panel study of income dynamics psid allows the reconstruction of individual smoking histories dividing the sample into smoking history groups the four largest of which are persistent smokers never smokers former smokers and future quitters reveals that there is no observed wage gap between former smokers and those who have never smoked there is however a wage gap between those smokers who will continue smoking and three other groups of individuals 1 those smokers who will quit smoking in the future 2 those smokers who have quit smoking already and 3 those who never smoked the wage gap between smokers and non smokers observed in the 1986 cross section is largely driven by those who persist as smokers 1986 2001 these results support the hypothesis that the cross sectional wage differential is not driven by smoking per se but may be driven by a non causal explanation one plausible interpretation is that a common factor such as myopia leads to reduced investment in both health capital or firm specific or other human capital

illegal drug use and employment this article investigates the relationship between employment and the use of marijuana and cocaine for males in national longitudinal survey of youth data from 1984 and 1988 previous studies yielding mixed evidence may have inadequately accounted for the simultaneity between drug consumption and employment i implement an instrumental variable procedure that identifies drug use with variables that are empirically unrelated to employment including the regional cocaine price and a state marijuana decriminalization indicator results indicate that the use of each drug substantially reduces the likelihood of employment exogeneity tests reveal that standard probit estimates are severely biased toward zero

further evidence on the economic effects of poor health this paper examines variations in current economic welfare attributable to different profiles or histories of health status over the preceding ten year period a two equation model estimated with national longitudinal survey data for four sex race groups provides convincing evidence that health problems incurred in the past adversely affect current earnings this legacy is difficult to overcome it remains even for individuals in improving health willing to devote relatively greater effort to market work a history of poor health is also shown to exact substantially different economic tolls from men and women as well as from whites and blacks

work and the accommodation of chronic illness a re examination of the health labour supply relationship this study uses a data set of over 14000 households from the state of new jersey in the usa to estimate the impact of specific chronic health conditions on the probability of employment and finds wide variation of employment impacts across chronic conditions additionally the elasticity of the employment response is generally greater for women and lower skilled workers most notable is the role of comorbidity individuals with multiple conditions have markedly lower probability of employment and chronic illness explains virtually all of the large gap in employment probability for those who have multiple conditions this is shown using a summary index of disease status that correlates closely with employment rates across age groups in the aggregate chronic disease striking in adulthood explains about 10 of the total non employment in the new jersey among those aged 35 74 finally cross sectional evidence gives little support for health as a primary determinant of the aggregate age employment profile

gender differences in labor market effects of alcoholism little is known about the role of specific health problems in affecting labor market productivity even less is known about gender differences in the labor market effects of such health problems current knowledge of health effects is based largely on samples composed exclusively of men a common practice in both economics and health research in the latter case even a congressional mandate to incorporate females in study samples is reputed to have had little effect patricia schroeder 1990 in this study we attempt to determine the structure of gender differences in labor market responses to alcoholism we use a relatively new data source that allows such comparisons by gender in a large community based sample previous studies have established that there are significant gender differences in labor market behavior differences in prevalence rates of alcoholism by gender are also well established it is estimated that 3 percent of females are currently suffering from alcoholism and twice that many have exhibited symptoms at some time for males the numbers are 10 and 20 percent respectively there is some medical evidence to indicate that physiologically women and men respond differently to alcohol for example a recent study suggests that women have greater vulnerability to the acute and chronic health conditions associated with alcoholism mario frezza et al 1990

blowing up money the earnings penalty of smoking in the 1970s and the 21st century abstract we analyze the earnings penalty of smoking among swedish twins in two social contexts the 1970s when smoking was common and widely accepted and when there were relatively few tobacco laws aiming to reduce smoking and the 2000s when smoking had become more expensive stigmatizing and less common and when tobacco laws and regulations had intensified the results show that the short term earnings penalty of smoking was much higher in the 21st century than in the 1970s for men for women smokers had on average higher annual earnings compared to nonsmokers in the 1970s but lower annual earnings in the 2000s in the long run there was an earnings gap for men between never smokers and continuous smokers whereas there was a pronounced earnings bonus of smoking cessation for women the results emphasize the importance of social context and the long term horizon when evaluating the consequences of smoking for earnings

mitigating risk in international mergers and acquisitions the role of contingent payouts previous internationalization studies have focused on the entry modes employed by multinational firms but have not considered the contractual heterogeneity that underlies each mode it is important to examine these contractual details as the firm may be able to obtain some of the benefits typically associated with one entry mode while selecting another in the case of international mergers and acquisitions m as a key contractual variable is whether the parties agree to a performance contingent payout structure which can mitigate the risk of adverse selection in this paper we examine the antecedents of contingent payouts in the form of earnouts and stock payments the results indicate that firms lacking international and domestic acquisition experience turn to contingent payouts when purchasing targets in high tech and service industries firms tend to avoid contingent payouts in host countries with problems with investor protection and legal enforceability

adolescent alcohol use sociability and income as a young adult we use data from the national longitudinal survey of adolescent health add health to study how sociability and adolescent alcohol use impact personal income as a young adult we find that factors which enhance not only individual sociability but also social interaction at the community level are positively linked to future earnings of adolescents adolescents whose friends and friends of friends have greater sociability reap long term labour market rewards into adulthood after adjusting for individual and community sociability the effect of teenage alcohol consumption on labour market earnings as young adults is reduced our results suggest that earnings premiums associated with adolescent alcohol consumption may be partially explained by social network dynamics

no place like home the effect of exporting to the country of origin on the financial performance of immigrant owned smes immigrants and sustained international migration are transforming developed western countries at an unprecedented pace and scale sustained international migration is also further accentuating the already dominant presence of immigrant entrepreneurs in the international business landscape these immigrant entrepreneurs often operate small and medium sized enterprises smes that primarily export to their country of origin however conflicting findings suggest theoretical ambiguity in how the level of country of origin export intensity influences the smes financial performance adopting a contingent perspective we theorize how and when socially embedded immigrant owners derive superior performance from high country of origin export intensity based on a sample of 2584 immigrant owned smes and 6391 firm year observations we find that smes led by immigrant owners with longer stays in their country of residence and whose country of origin is geographically proximate to their country of residence generate superior financial performance from high country of origin export intensity these findings are consistent with the view that immigrant entrepreneurs international financial success is a function of network and cognition based advantages linked to their level of concurrent embeddedness in their countries of residence and origin we also provide actionable insights for immigrant entrepreneurs and for policy makers tasked to design suitable export promotion programs

alcohol and earnings does drinking yield a wage premium this paper examines the relationship between alcohol consumption and earnings for prime age males wage differentials for non moderate and heavy drinkers are estimated using a polychotomous choice model which accounts for the endogenous relationship be tween drinking and earnings we find that moderate alcohol consumption leads to increased earnings relative to abstention however heavy drinking leads to reduced earnings relative to moderate drinking heavy drinkers possess flatter age earnings profiles and attain lower returns for higher education than non and moderate drinkers these results are in contrast to previous research on substance abuse which finds no earnings drop off for heavy users

employment unemployment and problem drinking the misuse of alcohol is estimated to result in enormous economic costs composed largely of reduced labor market productivity however there has been debate on this issue the purpose of this paper is to help to resolve this debate by presenting sound structural estimates of the relationship between measures of problem drinking and of employment and unemployment the analysis is based on the 1988 alcohol supplement of the national health interview survey we find that for both men and women problem drinking results in reduced employment and increased unemployment

what s legal and what s not the regulation of opiates in 1912 this paper develops a model to explain state level opiate regulation in 1912 the personal choice of whether to engage in mainstream or deviant activity is determined by consumption technology and market prices and voting determines the legality of deviant behavior voting outcomes depend on population characteristics including diversity tolerance visiblilty of deviance and the distribution of consumption efficiencies a logit equation whose dependent variable is the presence of a state opiate prescription law is estimated results broadly support the collective choice model and disconfirm the role of interest groups particularly physicians in determining prescription regulation i introduction alcohol and nicotine may be the most dangerous drugs sold today considering their effects on health and accidents legal restrictions on the sale and private use of tobacco and alcohol are minor some currently illegal substances including marijuana and opiates might in fact be less harmful than alcohol and tobacco ff used in moderation why are some commodities legal and others not economists should be interested in the question for two reasons the first is that the work of non economists often uses economic metaphors a number of historians have described the prohibition of alcohol and opiates in america in terms of interest group politics 1 economists however have yet to explain these episodes using their own models of regulation and collective choice the second reason is that the historical facts are dramatic enough to tax the explanatory power of economics between 1890 and 1920 private transactions in alcohol and opiates went from being virtually unregulated by the federal government to complete illegality 2 this change in legal status was not a response to new scientific knowledge about the substances becker s model of household production 1981 chs 1 and 2 formalizes the questions at issue lannaccone 1988 has recently used becker s model to analyze the sociological distinction between mainstream churches and religious sects assuming individuals have differing consumption technologies he derives propositions about the characteristics of religious sects and their members iannaccone 1988 242 45 notes that churches are characterized by inclusivity and sects by exclusivity church members have more heterogeneous beliefs socialize mainly with people from outside their church and place few demands on their church for non religious support services churches are more tolerant of diverse behavior and place fewer restrictions on the conduct of members church members span a wider range of demographics than do sect members they are on average economically better off than sect members but sect members contribute more funds to their institutions the distinction between churches and sects is analogous to that between licit and illicit drug use drug users are demographically more homogeneous than nonusers more poorly socialized and more likely to spend a major portion of their time in drug related activity 3 they have lower productivity than alcohol or tobacco users both at work and in household consumption 4 and are more likely to restrict themselves to companions with similar consumption patterns kandel and maloff 1983 suggest that learning to use drugs in the subculture resembles an initiation into the rites and beliefs of a deviant sect according to winick 1974 the exit from drug taking like that from a sect is often a total burnout to zero use which occurs at a predictable time the church sect model yields such predictions about drug use and generalizes individualistic models of that activity 5 in the next section i model an individual who receives utility from consumption itself and from the attitude or state of mind in which consumption takes place consumption and attitude are the outputs of household production functions after deriving the optimum in a two activity model i analyze the choice between mainstream and deviant attitudinal activities

the demand for beer wine and spirits a survey of the literature the demand for alcohol literature is vast and much conflicting information about the nature of the demand for alcoholic beverages has been published this paper presents a survey of the literature and then uses the technique of meta regression analysis to establish insights into the nature of the demand for beer wine and spirits unlike previous meta studies of the demand for alcoholic beverages this study adjusts for the precision of each elasticity estimate the analysis presented suggests reported elasticity estimates will be influenced by such factors as estimation technique data frequency and time period under consideration with respect to time the findings suggest that the demand for alcoholic beverages has become less inelastic since the mid 1950s and that the income elasticity has been falling since the mid 1960s the analysis also found support for the idea that alcohol as a commodity group is a necessity and that consumers respond to price discounting with inventory behaviour rather than true substitution behaviour little support is found for the idea that the demand for alcoholic beverages varies fundamentally across most countries although wine may be an exception language en

the morning after alcohol misuse and employment problems using a rich recent and nationally representative longitudinal survey specifically designed to examine alcohol use and associated problems we investigate the effects of alcohol misuse on a series of understudied and perhaps less common employment problems such problems include being fired or laid off from a job sustained unemployment and conflicts with a supervisor and or co worker after controlling for time invariant omitted variables via fixed effects estimation we find evidence that three measures of alcohol misuse are significantly related to employment problems the results offer new information on the potential adverse labour market effects of alcohol misuse and shed light on potential mechanisms through which alcohol misuse may impact intensive labour supply and or wages

determinants of the share of equity sought in cross border acquisitions the extent of ownership in foreign market entry is an important topic in the entry mode literature yet the determinants of the share of ownership sought in cross border acquisitions cbas have not received much research attention drawing on multiple theoretical explanations we develop and test hypotheses on factors influencing the share of equity sought by foreign firms in cbas findings based on a sample of cbas by us firms show that the share of equity sought is influenced by many factors including the cost of valuing local firm assets difficulty in integrating local firm managers in culturally distant countries the cost of separating desired assets from the rest of the local firm and the cost of resource commitment under exogenous uncertainty

selection on observed and unobserved variables assessing the effectiveness of catholic schools in this paper we measure the effect of catholic high school attendance on educational attainment and test scores because we do not have a good instrumental variable for catholic school attendance we develop new estimation methods based on the idea that the amount of selection on the observed explanatory variables in a model provides a guide to the amount of selection on the unobservables we also propose an informal way to assess selectivity bias based on measuring the ratio of selection on unobservables to selection on observables that would be required if one is to attribute the entire effect of catholic school attendance to selection bias we use our methods to estimate the effect of attending a catholic high school on a variety of outcomes our main conclusion is that catholic high schools substantially increase the probability of graduating from high school and more tentatively attending college we find little evidence of an effect on test scores

health time allocation and work empirical evidence from turkey abstractthis article investigates the relationship between health status and time allocation decisions of individuals although many studies address impacts of health on labour supply few studies

alcohol taxes and labor market outcomes abstract we present reduced form estimates of the effect of alcohol taxes on employment weekly work hours and wages the reduced form estimates are meaningful in two ways first they provide estimates of the effect of an important public policy tool alcohol taxes and second they can be used to evaluate hypotheses about the structural effects of alcohol use on labor market outcomes estimates indicate that there is a weak and indeterminate relationship between alcohol taxes and labor market outcomes this implies that alcohol use does not adversely affect labor market outcomes and is inconsistent with findings from previous studies

the impact of institutional hazards on foreign multinational activity a contingency perspective prior studies have shown that institutional hazards in the form of formal governance deficiencies and informal cultural distance are both negatively related to the amount of foreign multinational activity in countries we argue that the strength of these negative relationships varies systematically with the type of foreign activity horizontal or vertical and the type of institutional hazard governance or cultural because institutional hazards striking vertical affiliates generally also have negative consequences for other parts of a multinational enterprise mne while those striking horizontal affiliates do not we hypothesize that institutional hazards are more negatively related to vertical foreign activity than to horizontal foreign activity since cultural hazards can generally be reduced or resolved once they materialize while governance hazards cannot we also hypothesize that the impact of governance hazards on each type of foreign activity is more negative than the impact of cultural hazards on that type of activity a panel data analysis of sales by us foreign affiliates to affiliated and local unaffiliated customers over the period 1996 2004 lends support to these hypotheses our findings thus show that the impact of institutional hazards on foreign mne activity is more complex than previously assumed

the effect of national culture on the choice of entry mode characteristics of national cultures have frequently been claimed to influence the selection of entry modes this article investigates this claim by developing a theoretical argument for why culture should influence the choice of entry two hypotheses are derived which relate culture to entry mode choice one focusing on the cultural distance between countries the other on attitudes towards uncertainty avoidance using a multinomial logit model and controlling for other effects the hypotheses are tested by analysing data on 228 entries into the united states market by acquisition wholly owned greenfield and joint venture empirical support for the effect of national culture on entry choice is found

the effect of alcohol use on wages 1988 the effect of alcohol use on wages applied economics vol 20 no 10 pp 1343 1351

how large are the effects from changes in family environment a study of korean american adoptees i analyze a new set of data on korean american adoptees who were quasi randomly assigned to adoptive families i find large effects on adoptees education income and health from assignment to parents with more education and from assignment to smaller families parental education and family size are significantly more correlated with adoptee outcomes than are parental income or neighborhood characteristics outcomes such as drinking smoking and the selectivity of college attended are more determined by nurture than is educational attainment using the standard behavioral genetics variance decomposition i find that shared family environment explains 14 percent of the variation in educational attainment 35 percent ofthe variation in college selectivity and 33 percent of the variation in drinking behavior

explaining the national cultural distance paradox past studies of the relationship between national cultural distance and entry mode choice have produced conflicting results some scholars find cultural distance associated with choosing wholly owned modes others find cultural distance linked to a preference for joint ventures in this paper we provide both theoretical and empirical evidence to explain the discrepant findings and thus help to resolve the national cultural distance paradox

alcohol consumption smoking and wages the good health of an individual is a combination of uncontrollable factors that includes genetics and random events and controllable factors through the regulation of activities such as smoking and drinking since the work of grossman in the 1970s a significant relationship between health and earnings has been predicted in this present paper the 1995 australian national health survey is used to examine simultaneously the effects of drinking and smoking on wages to model the interaction of smoking with alcohol consumption separate models are fitted for smokers and nonsmokers these models account for potential selectivity bias resulting from the decision to smoke and endogeneity arising from a potential causal relationship between earnings and alcohol consumption

arthritis and the earnings of men an analysis incorporating selection bias abstract arthritis is a chronic and crippling disease which affects the work effort and earnings of more than 14 million working age victims this paper examines the effects of arthritis on the earnings of men aged 18 to 64 arthritis has large and significant effects on earnings most models incorporating selection bias have examined groups with lower labor force participation rates than prime age males but significant selection bias is found here when selection bias is considered the estimated absolute effects of arthritis are increased and the percentage of the gap between arthritic and non arthritic males explained by arthritis as opposed to other factors increases this study is unusual in identifying the effects of a single disease on earnings

alcoholism work and income this article reports on an empirical analysis of the relationships between alcoholism and income and working we show that the relationships between alcoholism and labor market success have important age or life cycle dimensions we present evidence that alcoholism may affect income more by restricting labor market participation than by affecting the wages of workers finally we demonstrate that the effects of alcoholism on earnings depend on the extent to which one controls for other covariates associated with alcoholism as such we suggest that there may be important indirect as well as direct effects of alcoholism on labor market success

how health insurance affects health care demand a structural analysis of behavioral moral hazard and adverse selection individuals with health insurance use more health care one reason is that health care is cheaper for the insured additionally having insurance can encourage unhealthy behavior via moral hazard previous work studying the efiect of health insurance on medical utilization has mostly ignored behavioral changes due to having health insurance and how that in turn afiects medical utilization this paper investigates the structural causal relationships among health insurance status health behavior and medical utilization theoretically and empirically and separates price efiects from behavioral moral hazard efiects also distinguished are the extensive vs intensive margins of insurance efiects on behavior

balancing private and state ownership in emerging markets telecommunications infrastructure country industry and firm influences bargaining between host states and investors over the terms of investment in sensitive sectors of the economy generates political and economic tensions in this study we investigate the factors that contribute to the outcomes of those negotiations as measured by the private vs state owned share of newly consummated telecommunications infrastructure projects we find that private ownership is positively associated with overall economic development and investment liberalization in the host country and with greenfield vs divestiture and joint venture vs wholly owned projects private ownership is negatively associated with existing telecommunications infrastructure higher levels of state ownership of foreign investing firms and the technological sophistication of the projects our analysis also shows a curvilinear inverted u shaped relationship between investment policy hazards and private ownership this finding supports the insight from transaction cost economics that potential gains from internalization are greatest at intermediate levels of uncertainty