afdc and illegitimacy ratios a vector autoregressive model the expansion of the government programme of aid to families of dependent children afdc plays a major role in theoretical explanations of the sharply rising trend in us illegitimacy ratios the proportion of births occurring to unwed mothers to date this role has not been supported by empirical evidence the present study uses a new approach time series data and granger causation a series of tests shows robust causal impacts of afdc on non white illegitimacy ratios a counterfactual simulation reveals that about half the increase in non white illegitimacy ratios over the past two decades can be attributed to an afdc effect

competition cooperation and innovation organizational arrangements for regimes of rapid technological progress abstract discussions of the link between firm size and innovation are outmoded because the boundaries of the firm have become fuzzy in recent decades strategic alliances constellations of bilateral agreements among firms are increasingly necessary to support innovative activities such alliances can facilitate complex coordination beyond what the price system can accomplish while avoiding the dysfunctional properties sometimes associated with hierarchy antitrust law and competition policy need to recognize that these new organizational forms are often the functional antithesis of cartels though they may have certain structural similarities a more complete understanding of bilateral contracts and agreements ought to reveal when and how cooperation can support rather than impede innovation and competition

jumps cojumps and macro announcements we use recently proposed tests to extract jumps and cojumps from three types of assets stock index futures bond futures and exchange rates we then characterize the dynamics of these discontinuities and informally relate them to us macroeconomic releases before using limited dependent variable models to formally model how news surprises explain co jumps nonfarm payroll and federal funds target announcements are the most important news across asset classes trade balance shocks are important for foreign exchange jumps we relate the size frequency and timing of jumps across asset classes to the likely sources of shocks and the relation of asset prices to fundamentals in the respective classes

policy watch the marriage penalty many government programs have implicit penalties or subsidies for marriage for example many couples pay higher income taxes when married than their combined tax liabilities as single filers while many other couples receive a marriage subsidy because their joint taxes fall with marriage likewise most low income couples are eligible for higher welfare benefits if they are separated rather than married this article discusses the marriage penalty with a particular focus on tax and transfer programs why does it exist who faces it to what extent does it affect marriage and labor market behavior what tradeoffs are involved in reducing it

widows waiting to wed re marriage and economic incentives in social security widow benefits in this paper we focus on an age restriction for remarriage in the social security system to determine if individuals respond to economic incentives for marriage aged widow er benefits are paid by the federal government to persons whose deceased spouses worked in social security covered employment a widow er is eligible to receive benefits if she or he is at least age 60 if a widow er remarries before age 60 he or she forfeits the benefit and therefore faces a marriage penalty under current law there is no penalty if the remarriage occurs at 60 years of age or later we investigate whether this rule affects the marriage behavior of widows specifically we examine the rates of remarriage of women around age 60 under current as well as past social security eligibility rules using data from the vital statistics our results provide compelling evidence that this group of women respond to economic incentives when considering the decision to remarry first the 1979 law change that eliminated the marriage penalty for those at least age 60 resulted in a large increase in the marriage rate for widows at

complementarity and external linkages the strategies of the large firms in biotechnology in biotechnology large firms enter into different kinds of linkages with universities and small medium sized research intensive firms we test the hypothesis that the strategies of external linkage of the large firms with other parties are complementary to one another we show that if any two strategies are complementary i e undertaking more of one strategy raises the marginal value of the other then they are positively correlated using data for a sample large us european and japanese chemical and pharmaceutical producers we find that the strategies above are positively correlated even after controlling for firm specific characteristics

social approval values and afdc a re examination of the illegitimacy debate this paper models the fertility decision of individuals who differ in their wage rate and their intensity of preferences for rearing children and whose utility of having a child out of wedlock depends on the level of social approval associated with doing so this social approval in turn is a function of the fraction of individuals in previous generations that chose to have children out of wedlock the model is a straightforward extension of the typical rational choice model that motivates much of the empirical literature a literature that has cast doubt on a strong link between afdc and illegitimacy however the model introduces elements from epidemic models that many have in mind when arguing for such a link as a result the predictions of this extended model are consistent with empirical findings while at the same time linking the rise in illegitimacy solely to government welfare programs specifically a program similar to afdc is introduced into an economy with low illegitimacy rates and a trans

welfare transfers in two parent families labor supply and welfare participation under afdc up this paper examines the effect of cash transfers and food stamp benefits on family labor supply and welfare participation among two parent families the aid to families with dependent children unemployed parent program has provided cash benefits to two parent households since 1961 despite recent expansions little is known about the program s effect on labor supply and welfare participation i develop a model of family labor supply in which hours of work for the husband and wife are chosen to maximize family utility subject to a family budget constraint accounting for afdc up benefits and other tax and transfer programs the husband s and wife s labor supply decisions are restricted to no work part time work and full time work maximum likelihood techniques are used to estimate parameters of the underlying hours of work and welfare participation equations the estimates are used to determine the magnitude of the work disincentive effects of the afdc up program and to simulate the effects of changes in afdc up benefit and eligibility rules on family labor supply and welfare participation the results suggest that labor supply and welfare participation among two parent families are highly responsive to changes in the benefit structure under the afdc up program

the speculative efficiency hypothesis the hypothesis that forward prices are the best unbiased forecast of future spot prices is often presented in the economic and financial analysis of futures markets this paper considers the hypothesis independently of its implications for rational expectations or market efficiency and in order to stress this fact the term speculative efficiency is used to characterize the state envisaged under the hypothesis if a market is subject to efficient speculation the supply of speculative funds is infinitely elastic at the forward price that is equal to the expected future spot price the expected future spot price is a market price determined as the solution to the underlying rational expectations macroeconomic model although the paper is primarily concerned with testing this hypothesis in the foreign exchange market the methodology introduced in the paper is of general application to all futures markets this abstract was borrowed from another version of this item

incentive effects of the u s welfare system a review the author would like to acknowledge support for prior work on this topic from the u s department of health and human services and helpful comments from three anonymous referees rebecca blank howard chernick john fitzgerald irwin garfinkel peter gottschalk edward gramlich david greenberg judith gueron james heckman v joseph hotz robert hutchens michael keane frank levy larry mead michael murray robert plotnick anuradha rangarajan philip robins howard rolston jeffrey smith and daniel weinberg all opinions and errors are those of the author alone

rare disasters and exchange rates we propose a new model of exchange rates which yields a theory of the forward premium puzzle our explanation combines two ingredients the possibility of rare economic disasters and an asset view of the exchange rate our model is frictionless has complete markets and works for an arbitrary number of countries in the model rare worldwide disasters can occur and affect each country s productivity each country s exposure to disaster risk varies over time according to a mean reverting process ri sky countries command high risk premia they feature a depreciated exchange rate and a high interest rate as their risk premium mean reverts their exchange rate appreciates therefore currencies of high interest rate countries appreciate on average to make the notion of disaster risk more implementable we show how options prices might in principle uncover latent disaster risk and help forecast exchange rate movements we then extend the framework to incorporate two factors a disaster risk factor and a business cycle factor we calibrate the model and obtain quantitatively realistic values for the volatility of the exchange rate the forward premium puzzle regression coefficients and near random walk exchange rate dynamics finally we solve a model of stock markets across countries which yields a series of predictions about the joint behavior of exchange rates bonds options and stocks across countries the evidence from the options market appears to be supportive of the model jel e43 e44 f31 g12 g15

complementarities of innovation activities an empirical analysis of the german manufacturing sector abstract innovation strategies in manufacturing often involve internal rd it is based on data from the german part of the community innovation survey cis 3 the results provide evidence for significant complementarities between internal r d and r d cooperation but cast doubt on the complementarity of internal and contracted r d since a productivity effect on firms patenting probability or sales with new products cannot be found

the impact of jumps on carry trade returns abstract this paper investigates how jump risks are priced in currency markets we find that currencies whose changes are more sensitive to negative market jumps provide significantly higher expected returns the positive risk premium constitutes compensation for the extreme losses during periods of market turmoil using the empirical findings we propose a jump modified carry trade strategy which has approximately two percentage point per annum higher returns than the regular carry trade strategy these findings result from the fact that negative jump betas are significantly related to the riskiness of currencies and business conditions

welfare benefits and female headship in u s time series whether welfare benefits affect marriage and fertility decisions of the low income population has been the subject of much research the substantial bias in the u s welfare system toward female headed families relative to either married couples or single childless individuals provides a clear financial incentive for early nonmarital childbearing postponement of marriage divorce postponement of remarriage and other behaviors that make eligibility for welfare benefits more likely or that avoid the loss of eligibility after it has been achieved the findings in the cross sectional research literature through 1995 summarized in moffitt 1998 exhibit a clear central tendency pointing toward an effect of welfare on some aspects of family structure namely marriage and fertility however there is also agreement that the time series evidence is inconsistent with that from crosssectional data for real benefits have been falling for over 20 years while female headship has been rising moreover bringing other programs such as food stamps and medicaid into the picture helps explain rising female headship increases in the late 1960 s and early 1970 s when those programs were introduced and solidified but does less well in explaining the

state responses to fiscal crises the effects of budgetary institutions and politics this paper explores the dynamics of state taxes and spending during the late 1980s when regional economic downturns and increased expenditure demands led to substantial state budget deficits more restrictive state fiscal institutions such as no deficit carryover rules and tax and expenditure limitations are correlated with more rapid fiscal adjustment to unexpected deficits political factors are also important when a single party controls the state house and the governorship deficit adjustment is much faster than when party control is divided in gubernatorial election years tax increases and spending cuts are both significantly smaller than at other times

slipping into and out of poverty the dynamics of spells this paper examines the dynamics of poverty previous analyses have examined either fluctuations in the male heads earnings or the frequency of poverty periods over a fixed time frame our approach depends on a definition of spells of poverty using this methodology we find that the majority of poor persons at any time are in the midst of a rather long spell of poverty the methodology also allows us to estimate that less than 40 percent of poverty spells begin because of a drop in the heads earnings while 60 percent of the spells end when the heads earnings increase thus researchers must focus on household formation decisions and on the behavior of secondary family members there has been a dramatic resurgence recently of discussion of the underclass the discussion is reminiscent of debates about poverty during the 1960s when the notions of a culture of poverty particularly as popularized by michael harrington s other america 1962 dominated both intellectual and policy thinking the idea of an underclass seems inconsistent however with much of the research on the dynamics of poverty during the 1970s that research using new longitudinal data seemed to show that the bulk of the poor were poor for only a few years the research also showed that the poor were a very heterogeneous group including a small minority of persistently poor the persistence of poverty is of interest both for understanding the phenomenon and for developing policy claims about dependency and separate life styles among the poor rest on assumptions about the long term nature of poverty questions

the impact of modes of entry and resource fit on modes of exit by multibusiness firms this study examines the choices of modes of entry and exit in the process of new business exploration we find that exit mode choices are determined by a different set of factors from those that are important for the entry mode decision and the exit decision per se our study indicates that when the resource profiles of a parent firm and the business unit are more dissimilar and there has been less development of firm specific idiosyncratic assets firms are more likely to sell businesses than dissolve them further the study reports a strong relationship between the mode of exit from a line of business sell off vs dissolution and the original mode of entry acquisition versus internal development copyright 1999 john wiley sons ltd

measuring innovative performance is there an advantage in using multiple indicators abstract the innovative performance of companies has been studied quite extensively and for a long period of time however the results of many studies have not yet led to a generally accepted indicator of innovative performance or a common set of indicators so far the variety in terms of constructs measurements samples industries and countries has been substantial this paper studies the innovative performance of a large international sample of nearly 1200 companies in four high tech industries using a variety of indicators these indicators range from r d inputs patent counts and patent citations to new product announcements the study establishes that a composite construct based on these four indicators clearly catches a latent variable innovative performance however our findings also suggest that the statistical overlap between these indicators is that strong that future research might also consider using any of these indicators to measure the innovative performance of companies in high tech industries

is there complementarity or substitutability between internal and external r d strategies abstract the various strands of extant empirical research are inconclusive about the complementarity or substitutability between different innovation mechanisms such as internal and external r d using a panel sample of 83 incumbent pharmaceutical firms covering the period 1986 2000 our empirical analysis suggests that instead of a clear cut answer to the question of whether internal and external r d are complementary or substitutive innovation activities there appears to be a contingent relationship between internal and external r d strategies in shaping a firm s innovative output the results from our study indicate that the level of in house r d investments which is characterized by decreasing marginal returns is a contingency variable that critically influences the association between internal and external r d strategies in particular internal r d and external r d through either r d alliances or r d acquisitions are complementary innovation activities at higher levels of in house r d investments whereas at lower levels of in house r d efforts internal and external r d turn out to be substitutive strategic options

work and welfare as determinants of female poverty and household headship this paper formulates and estimates a model of the determinants of female household headship headship responds to variations in the levels of well being a woman can expect if she marries or if she heads her own household the authors measure the opportunity cost of female headship and the effects of welfare benefits and womens work in the market on female headship and poverty they find that if welfare benefits were reduced there would be small reductions in the proportion of women heading households for whites and nonwhites but a substantial increase in poverty for nonwhites they also find that wives work in the market reduces poverty and female headship for nonwhites and reduces poverty but increases headship for whites the study is based on 1975 u s data excerpt

a patchwork safety net a survey of cliometric studies of income maintenance programs in the united states in the first half of the twentieth century social welfare programs in the usa are designed to serve as safety nets for people in hard times in contrast with the universal approach found in many other developed western nations in a survey of cliometric studies of social welfare programs in the usa we examine the variation in the safety net in the usa across states in the 20th century the determinants of the variation and its impact on socioeconomic outcomes the usa has always displayed substantial variation in the extent of the safety net because the features of most public social welfare programs have been and currently are determined by local and state governments even after the federal government became involved in the 1930s differences across states persist strongly for typically a decade although the persistence weakens with time and there are some periods when federal intervention led to a re ordering the rankings of state benefits differ from program to program and economic and political factors have different weights in determining benefit levels in panel data estimation of their effects variation in benefits across programs during the early 1900s had significant impact on labour markets economic activity family formation death rates and crime copyright 2010 blackwell publishing ltd

the innovative performance of in house and contracted r d in terms of patents and utility models abstract the standard empirical framework for analysing the r d patents relationship is widened both by examining the different role of in house and contracted r d in the innovative performance of firms and by considering patents and utility models counts as measures of innovation output patents and utility models are considered to approximate for significant and incremental innovations respectively applying count data econometrics to a panel data set of spanish manufacturing firms surveyed in the period 1990 1996 a transcendental production function is estimated which allows for non constant elasticities of the r d inputs the results indicate that significant innovations are mainly gestated in house whereas contracted r d seems more orientated towards innovations of incremental nature

commodity trade and the carry trade a tale of two countries persistent interest rate differentials account for much of the currency carry trade profitability commodity currencies offer high interest rates on average while countries that export finished goods tend to have low interest rates we develop a general equilibrium model of international trade and currency pricing where countries have an advantage in producing either basic inputs or final goods in the model domestic production insulates commodity producing countries from global productivity shocks forcing final good producers to absorb them commodity currency exchange rates and risk premia increase with productivity differentials and trade frictions these predictions are strongly supported in the data this article is protected by copyright all rights reserved

dynamic complementarities in innovation strategies using a panel of irish manufacturing plants over the period 1991 2008 we test for dynamic complementarities in the joint use of internal r d and external knowledge sources we find little evidence either from considering successive cross sectional waves of comparable surveys or in terms of the strategy switch choices of specific plants that there has been a systematic move towards the joint use of internal and external knowledge in innovation we then test formally for the presence of complementarities in the joint use of internal r d and external innovation linkages in static terms we find no evidence of complementarity but in dynamic terms find evidence that strategy switches by individual plants towards a more open strategy are accompanied by increased innovation outputs

the propensity to patent abstract this paper analyzes the relationship between 1974 rd among the exceptions the tendency was toward diminishing returns variables measuring overseas sales federal r d support diversification scope of invention use and invention type had only modest explanatory power there was no significant evidence of disproportionate patent accumulation in the more highly concentrated industries

new jersey s family cap experiment do fertility impacts differ by racial density using experimental design this research examines the impact of the nation s first family cap policy implemented in new jersey on the fertility behavior of welfare recipients we explore whether the change in welfare parameters mandated by the policy induces differential impact among black white and hispanic recipients we examine if impacts are conditioned by racial ethnic group concentration results show that reduced welfare payments have contributed to a decline in births for black women while we find a large response for blacks on average we find no response for blacks who live in geographic areas where they form a racial ethnic majority

a politico economic theory of income redistribution this study integrates models of income redistribution developed by economists who suggest that citizens voluntarily redistribute because of interdependent preferences and rely on the state for implementation owing to the public good nature of redistribution and political scientists who focus on conditions that lead to demands that the state intervene to assist the poor and on the development of institutions that facilitate such demands we propose a testable theory of redistribution and apply it to data from the american states the empirical analysis addresses determinants of the aid to families with dependent children guarantee adjusted for medicaid and food stamps to which a family receiving the guarantee would be entitled we posit significant links between the guarantee and both observable explanatory variables such as per capita income and latent constructs such as liberal party control we specify observable indicators for the latent constructs and use the lisrel method to estimate parameters for the indicators and structural coefficients the findings show that both political and economic variables significantly affect the level of the guarantee

does welfare play any role in female headship decisions abstract previous studies have examined whether the welfare system has contributed to the dramatic increase in single parent families this paper explores why the results in this literature are sensitive to the presence of state fixed effects it considers one natural explanation namely that the composition of the population differs across states in ways that are related to welfare program generosity after controlling for individual effects the results provide no evidence that welfare raises the propensity to form female headed households for either whites or blacks these results illustrate the potential pitfalls of assuming that state factors are fixed over a long period of time they also suggest that previous studies may have overstated the effect of welfare programs on family structure

the estimation of prewar gross national product methodology and new evidence the paper develops new methodology for the estimation of prewar gnp taps previously unused data sources and develops new estimates for the periods 1869 1908 and 1869 1928 primary among the new data sources are direct measures of output in the transportation communications and construction sectors and estimates of the consumer price index new measures of real gnp nominal gnp and the gnp deflator are developed the new estimates of real gnp are as volatile on average over the business cycle as the traditional kuznets kendrick series but dampen the amplitude of some cycles while raising the amplitude of others the new estimates of the gnp deflator are distinctly less volatile than the traditional series and in fact no more volatile than those in the postwar period

from dark to light skin color and wages among african americans this paper develops and tests a theory referred to as preference for whiteness which predicts that the interracial white black and intraracial wage gap widens as the skin shade of the black worker darkens using data drawn from the multi city study of urban inequality and the national survey of black americans we report evidence largely consistent with the theory moreover we decompose the estimated interracial and intraracial wage gaps and find that favorable treatment of lighter skinned workers is a major source of interracial and intraracial wage differences as predicted by the theory

efficient utilization of resources in public schools a case study of new jersey the academic performance of public schools in the united states has been declining for more than two decades now and this is a hotly debated topic since this deterioration in performance has important implications on the quality of labour and on the productivity growth of the nation bishop 1989 moreover the performance among school districts in states varies significantly raising questions about the factors contributing to the large variability in performance one area where the current debate has been focused is the ability and quality of the school management to use the available resources efficiently giving rise to the issues of a voucher system and the private management of the public schools this study measures the efficiency of public schools for the state of new jersey using the data envelopment analysis dea method it also examines the effect of certain socio economic factors on efficiency we find that the average efficiency for all schools is 81 the wealthiest districts have an effi

the american welfare system and family structure an historical perspective cross sectional studies find a positive relationship between a state s welfare benefits and single motherhood but is this evidence of a welfare effect or rather of cross state differences in social attitudes that influence both policy and behavior this paper demonstrates that the spatial variation in welfare policy long preceded the spatial correlation of policy and behavior undermining the social norm hypothesis but the findings also raise doubts about the role that welfare policy played in the changes in family structure over the century the correlation between welfare benefits and family structure only appears in 1970 and then only for whites

understanding young women s marriage decisions the role of labor and marriage market conditions using the 1970 1980 1990 censuses the authors investigate the impact of labor and marriage market conditions on the incidence of marriage of young women age 16 24 they first estimate the effects on marriage of personal characteristics and metropolitan statistical area msa indicators separately by race and education group they then regress the first stage msa effects on msa level labor and marriage market conditions and welfare benefits taking account of fixed effects and time trends specific to each msa better female labor markets worse female marriage markets worse male labor markets are found to lower marriage rates fr whites in all education groups results for these variables for blacks are sensitive to estimation technique although stronger results are obtained for an older age group 25 34 while welfare benefits have a negative effect in cross sectional analyses the association becomes considerably weaker in fixed effects specifications

external technology sourcing through alliances or acquisitions an analysis of the application specific integrated circuits industry in today s turbulent business environment innovation is the result of the interplay between two distinct but related factors endogenous r d efforts and quasi external acquisition of technology and know how given the increasing importance of innovation it is vital to understand more about the alternative mechanisms such as alliances and acquisitions that can be used to enhance the innovative performance of companies most of the literature has dealt with these alternatives as isolated issues companies however are constantly challenged to choose between acquisitions and strategic alliances given the limited resources that can be spent on research and development this paper contributes to the literature because it focuses on the choice between innovation related alliances and acquisitions we focus on the question of how the trade off between strategic alliances and acquisitions is influenced by previous direct and indirect ties between firms in an industry network of interfirm alliances we formulate hypotheses pertaining to the number of direct ties between two companies their proximity in the overall alliance network and their centrality in that network in so doing we distinguish between ties that connect firms from the same and from different industry segments and those that connect firms from the same or from different world regions these hypotheses are tested on a sample of strategic alliances and acquisitions in the application specific integrated circuits asic industry the findings show that a series of strategic alliances between two partners increases the probability that one will ultimately acquire the other whereas previous direct contacts tend to lead to an acquisition this is not true of previous indirect contacts which increase the probability that a link between the companies once it is forged takes the form of a strategic alliance in the case of acquisitions firms that are more centrally located in the network of interfirm alliances tend to be acquirers and firms with a less central position tend to become acquired these findings underscore the importance of taking previously formed interfirm linkages into account when explaining the choice between strategic alliances and acquisitions as these existing links influence the transaction costs associated with both alternatives

the demand for welfare generosity this paper estimates economic models of the determinants of state benefit levels in the aid to families with dependent children afdc program using 1969 1992 data these models have been extensively researched however the existing literature has produced an unacceptably wide range of estimates using alternative econometric procedures this paper systematically examines both the specification assumptions underlying previous analyses as well as several additional specification issues it is therefore able to replicate and reconcile estimates from previous studies and to provide updated consensus estimates of the demand for welfare generosity it finds that changes in the average level of income within states have small but statistically significant positive effects on benefits with the confidence bounds on the elasticity extending from 0 11 to 0 82 changes in the effective price of redistribution are found to have at most weak negative effects with elasticities in the range of 0 14 to 0 02 these results are used to evaluate the effects of block grant provisions in the recently enacted welfare reform legislation

federalizing benefits the introduction of supplemental security income and the size of the safety net abstract in 1974 supplemental security income ssi federalized cash welfare programs for the elderly blind and individuals with disabilities imposing a national minimum benefit and differentially raising payment levels in states that paid below its benefit floor we show that this increased disability participation but shrank non disability cash transfer programs for every four new ssi recipients three came from other welfare programs each dollar of per capita ssi income increased total per capita transfer income by just over 50 cents federalizing part of a patchwork safety net need not increase redistribution by as much as traditional models of fiscal federalism suggest

more on marriage fertility and the distribution of income according to pareto 1896 the distribution of income depends on the nature of the people comprising a society on the organization of the latter and also in part on chance in the model developed here the nature of the people is captured by attitudes toward marriage divorce fertility and children singles search for mates in a marriage market married agents bargain about work and the quantity and quality of children they can divorce social policies such as child support requirements reflect the organization of the society finally chance is modeled by randomness in income marriage opportunities and marital bliss

patents r d and technological spillovers at the firm level some evidence from econometric count models for panel data this paper analyses the relationship between the main determinants of technological activity and patent applications to this end an original panel of 181 international manufacturing firms investing substantial amounts in r d during the late 1980s has been constructed the number of patent applications by firms is explained by current and lagged levels of r d expenditures and technological spillovers technological and geographical opportunities are also taken into account as additional determinants in order to examine this relationship several econometric models for count panel data are estimated these models deal with the discrete nature of patents and firm specific unobservables arising from the panel data context the main findings of the paper are first a high sensitivity of results to the specification of patent distribution second the estimates of the preferred gmm panel data method suggest decreasing returns to scale in technological activity and finally a positive impact of technological spillovers on firm s own innovation 1997 john wiley sons ltd

estimating the value of an in kind transfer the case of food stamps the value of one in kind transfer food stamps is estimated by evaluating the experience of an actual conversion from stamps to cash in puerto rico in 1982 the evidence indicates that the cashout of the stamps had no detectable influence on food expenditures the explanation partly lies in the distribution of expenditures for the stamps were inframarginal for most recipients however some evidence indicates that trafficking in stamps was widespread as well including indirect evidence from estimation of the piecewise linear constraint model copyright 1989 by the econometric society

female headship feminization of poverty and welfare female headed households are at greater risk of slipping into poverty than male headed households indeed sex and marital status of the head of household are the most important determinants of a familys poverty status in the us divorce separation death of a husband and out of wedlock births can lead to female headship transfer payments especially the aid to families with dependent children program are blamed for contributing to increased marital instability and out of wedlock births the authors examined the role of welfare benefits in influencing female headship preliminary results using standard estimation procedures indicate that transfers do not significantly influence female headship standard estimation procedures are however erroneous because they ignore differences in propensities to establish mother only households therefore adjusting for differences in propensities to establish female headed households the level of welfare benefits is indeed an important factor in explaining the variation in the changes in the birth rates to unmarried women the use of a weighted measure suggests that welfare benefits by increasing female headship of women who otherwise have low propensities to be female heads have played a significant role in the feminization of poverty

the effects of work conditioned transfers on marriage and child well being a review transfer payments to poor families are increasingly conditioned on work although the effects of such programmes on employment are fairly well understood relatively little is known about their effects on marriage or child well being we review a few studies that provide such information here we sketch a theoretical model that draws from the efficient household literature the model is consistent with the wide range of effects that we observe and suggests an explanation for some of the observed differences our theoretical framework likewise explains the observed variation in the effects of such programmes on children social insurance payments increasingly take the form of conditional cash transfers requiring certain types of behaviour from recipients in order to qualify for aid in developed countries the conditions generally take the form of work requirements the american temporary aid to needy families tanf programme requires most recipients to work at least part time benefits from the american earned income tax credit eitc are available only to consumers who work the british working tax credit wtc is available only to consumers who work at least 16 hours per week and the canadian self sufficiency programme ssp which ran during the 1990s provided an earnings supplement to welfare recipients who were willing to leave the dole and take a full time job

the knowledge production of r and d many studies investigate the relationship between r d expenditures as an input and patents as an intermediate product or output of a knowledge production function we suggest that the productivity of research in patent production functions has been underestimated in the literature as scholars typically use information about r d i e the sum of research expenditure and development expenditure due to data availability however in most industries only applied research will lead to patentable knowledge and development happens after the initial research phase that may have led to a patent instead of using data on r d we separate the knowledge creating process into r and d this data stems from r d surveys of belgian firms it turns out that only the r part of r d expenditure has a significant effect on patents and that development expenditure are insignificant thus previous literature relying on r d expenditure suffers from a measurement error such that the coefficient of r d is biased towards zero as r d includes a large fraction of irrelevant expenditure i e development expenditure with respect to patenting

a comparison of choice based multinomial and nested logit models the family structure and welfare use decisions of divorced or separated women home based work differs from other employment because the work site is the home itself this difference means that the fixed costs of working at home are less than the fixed costs of working on site and that home based workers may engage in joint market

technological networking and innovation implementation this paper presents a theory of innovation which presumes that new technologies emerge from a firm s accumulated stock of skills among these we distinguish technological and networking skills we examine two aspects of innovating firms their inclination to adopt a technological innovation and their propensity to implement innovation alone or with other firms historical conditions pertaining to organizational skills are examined to account for these aspects among the most important are a firm s cumulative stream of technological projects that have some affinity to the new technology a second important antecedent can be inferred from a firm s history of technological networking networking includes licensing joint ventures and long term contracts and can be formed for technological reasons or for reasons having to do with the delivery of products and services networking is deemed important for facilitating access to strands of technology that are alien to a firm linkages are also conducive for con

learning and protection of proprietary assets in strategic alliances building relational capital one of the main reasons that firms participate in alliances is to learn know how and capabilities from their alliance partners at the same time firms want to protect themselves from the opportunistic behavior of their partner to retain their own core proprietary assets most research has generally viewed the achievement of these objectives as mutually exclusive in contrast we provide empirical evidence using large sample survey data to show that when firms build relational capital in conjunction with an integrative approach to managing conflict they are able to achieve both objectives simultaneously relational capital based on mutual trust and interaction at the individual level between alliance partners creates a basis for learning and know how transfer across the exchange interface at the same time it curbs opportunistic behavior of alliance partners thus preventing the leakage of critical know how between them copyright 2000 john wiley sons ltd

taxes and transfers their effects on the decision to end a marriage abstract the transfer system typically has large marriage disincentives while the income tax system is likely to subsidize marriage for many low income families in other words the tax system may offset an increase in transfer benefits associated with marital separation the interaction of the transfer system with the income tax system has largely been overlooked the income tax system has become more relevant for low income families with the recent expansion of the earned income tax credit which filers may be eligible for even if their tax liability is zero this paper uses family level measures of the change in transfer benefits and tax liability associated with a change in family structure to consider the effect of these financial incentives on separation decisions

welfare effects on female headship with area effects the existing literature on welfare effects on female headship in the united states shows significant positive correlations in cross section possibly increasing over time however when geographic or area effects are permitted in the estimation these correlations either disappear or reverse in sign the results have implications for the study of welfare effects in other countries including canada where benefits vary considerably across provinces and localities within them

what causes public assistance caseloads to grow this paper uses state panel data to investigate changes in public assistance caseloads through the end of the afdc program in 1996 with particular attention to the rapid increase in caseloads between 1990 and 1994 previous research has focused on total caseloads with attention to economic and policy variables and does a relatively poor job of explaining this caseload increase this paper utilizes a much richer set of control variables to investigate the causes of caseload change it separates afdc caseloads into three subcomponent programs separately investigating changes within the afdc up program afdc child only cases and the remaining core afdc cases with benefits paid to single mothers and their children and it explores whether this caseload rise was driven by changes in takeup rates versus in eligibility the results indicate a large unexplained rise in total afdc caseloads even with a very rich specification a good share of this is due to sharp increases in child only cases driven by program and demographic shifts to a lesser extent this rise was caused by the expansion of afdc up to all states these two factors explain half of the overall rise and all of the unexplained rise in afdc caseloads the remaining increase in core afdc cases benefits received by single mothers and their children is well explained within the model and is the result of economic demographic political and policy changes these variables appear to have increased eligibility among the core afdc population in the early 1990s during the economic slowdown takeup rates also increased during this time period but not by a large amount

why research partnerships really matter innovation theory institutional arrangements and implications for developing new technology for the poor abstract this paper explores the conceptual basis for existing and emergent institutional patterns in the context of partnership approaches to technology development drawing examples from recent studies of private enterprise activity in india smallholder horticulture it suggests that agricultural innovation as a process involves a wider range of organizational types than the conventional policy focus on public sector research organizations would tend to suggest it uses the concept of a national innovation system to argue that a partnership approach is adopted as a core methodology for engaging science and technology development with the livelihood demands of the poor

the outsourcing of r d through acquisitions in the pharmaceutical industry abstract we examine the performance of 160 pharmaceutical acquisitions from 1994 to 2001 and find evidence that on average acquirers realize significant positive returns these returns are positively correlated with prior acquirer access to information about the research and development activities at target firms and a superior negotiating position a unique desperation index is employed to determine the current status of a firm s internal productivity we find that firms experiencing declines in internal productivity or which are more desperate are more likely to engage in an outsourcing type acquisition in an effort to replenish their research pipelines

marital status and fertility in the united states welfare and labor market effects the incidence of marriage and the proportion of childbearing that occurs within marriage have decreased sharply in the united states in the last several decades this paper examines whether the probability that a woman is currently married and the number of children she has borne as reported in the 1980 u s census are related to two identifiable factors the variation in welfare programs across states specifically afdc and medicaid benefits and afdc up expenditures or the variation in the market wage opportunities available to women and to their potential husbands afdc and medicaid benefit levels are associated with fewer women being currently married medicaid benefits are related to lower fertility levels for both black and white women whereas afdc benefits in cash and food are associated with lower fertility among white women ages 15 24 those states that extend afdc benefits to families with unemployed parents in other words fathers in intact poor families do not have significantly more women married or higher fertility rates contrary to what might be expected from economic incentives men s market wages are associated with more frequent marriage and higher fertility whereas higher market wage opportunities for women have substantial effects in the opposite direction all of which are consistent with standard models of gender specialization and the demand for marriage and fertility

dynamic capabilities what are they this paper focuses on dynamic capabilities and more generally the resource based view of the firm we argue that dynamic capabilities are a set of specific and identifiable processes such as product development strategic decision making and alliancing they are neither vague nor tautological although dynamic capabilities are idiosyncratic in their details and path dependent in their emergence they have significant commonalities across firms popularly termed best practice this suggests that they are more homogeneous fungible equifinal and substitutable than is usually assumed in moderately dynamic markets dynamic capabilities resemble the traditional conception of routines they are detailed analytic stable processes with predictable outcomes in contrast in high velocity markets they are simple highly experiential and fragile processes with unpredictable outcomes finally well known learning mechanisms guide the evolution of dynamic capabilities in moderately dynamic markets the evolutionary emphasis is on variation in high velocity markets it is on selection at the level of rbv we conclude that traditional rbv misidentifies the locus of long term competitive advantage in dynamic markets overemphasizes the strategic logic of leverage and reaches a boundary condition in high velocity markets copyright 2000 john wiley sons ltd

good volatility bad volatility signed jumps and the persistence of volatility abstract using estimators of the variation of positive and negative returns realized semivariances and high frequency data for the s p 500 index and 105 individual stocks this paper sheds new light on the predictability of equity price volatility we showthat future volatility is more strongly related to the volatility of past negative returns than to that of positive returns and that the impact of a price jump on volatility depends on the sign of the jump with negative positive jumps leading to higher lower future volatility we show that models exploiting these findings lead to significantly better out of sample forecast performance

rational choice culture of poverty and the intergenerational transmission of welfare dependency it has now become evident that contrary to the expectations of the proponents of the great society a significant number of recipients of transfer benefits have welfare careers that last for many years prolonged reliance on welfare has generated a wide range of issues related to the process and patterns of welfare dependency and has raised questions about how best to reform welfare policy for example it has been suggested that welfare use is addictive creating a welfare culture that is transmitted across generations glicken 7 31 states that most recipients of afdc benefits are those people whose parents were recipients people who have been socialized into the welfare system as children duncan hill and hoffman 5 469 on the other hand investigate the patterns of welfare dependence among afdc recipients and conclude that t he stereotype of heavy welfare dependence being routinely passed from mother to child is contradicted other studies 2 24 have suggested that there are significant racial differences in the duration of time on welfare pointing to a race based dependency pattern rank 24 for example finds that black women remain on welfare for significantly longer periods than white women specifically he finds the median number of months on welfare to be 21 6 months for white women and 45 2 for black women 2 other studies have suggested that long time welfare use

in search of complementarity in innovation strategy internal r d and external knowledge acquisition empirical research on complementarity between organizational design decisions has traditionally focused on the question of existence of complementarity in this paper we take a broader approach to the issue combining a productivity and an adoption approach while including a search for contextual variables in the firms strategy that affects complementarity analysis of contextual variables is not only interesting per se but also improves the productivity test for the existence of complementarity we use our empirical methodology to analyze complementarity between innovation activities internal research and development r d and external knowledge acquisition our results suggest that internal r d and external knowledge acquisition are complementary innovation activities but that the degree of complementarity is sensitive to other elements of the firms strategic environment we identify reliance on basic r dthe importance of universities and research centers as an information source for the innovation processas an important contextual variable affecting complementarity between internal and external innovation activities

the role of economic incentives in teenage nonmarital childbearing choices abstract in this paper we explore whether behaviors of youths that are likely to result in a teen nonmarital birth event are influenced by their expectations of the net economic benefits or costs associated with the occurrence of such a birth we posit and find that an increase in the perceived costs associated with the occurrence of a nonmarital birth would lead to a reduction in these risky behaviors and to a lower probability of a nonmarital birth event we represent these economic incentives by the income expectations of young women conditional on either giving birth as an unmarried teen or forgoing childbearing while unmarried and an adolescent we also measure the effects of an extensive list of other factors including the characteristics of the girl s family and its choices the social and economic environment in which she lives including policy related factors such as expenditures by states on family planning programs and the generosity of aid to families with dependent children and her own prior choices

a penny for your quotes patent citations and the value of innovations the use ofpatents in economic research has been seriously hindered by the fact that patents vary enormously in their importance or value and hence simple patent counts cannot be informative about innovative output the purpose of this article is to put forward patent counts weighted by citations as indicators of the value of innovations thereby overcoming the limitations of simple counts the empirical analysis of a particular innovation computed tomography scanners indeed shows a close association between citation based patent indices and independent measures of the social value of innovations in that field moreover the weighting scheme appears to be nonlinear increasing in the number of citations implying that the informational content of citations rises at the margin as in previous studies simple patent counts are found to be highly correlated with contemporaneous rd however here the association is within afield over time rather than cross sectional

the socioeconomic consequences of in work benefit reform for british lone mothers in october 1999 the british government enacted the working families tax credit which aimed at encouraging work among low income families with children this paper uses panel data collected between 1991 and 2001 to evaluate the effect of this reform on single mothers we find that the reform led to a substantial increase in their employment rate of about five percentage points which was driven by both a higher rate at which lone mothers remained in the labor force and a higher rate at which they entered it women s responses were highly heterogeneous with effects double this size for mothers with one preschool aged child and virtually no effect for mothers with multiple older children the employment increase was accompanied by significant increases in paid childcare utilization and our analysis in fact suggests that the generous childcare credit component of the reform played a key role in explaining the estimated employment and childcare usage responses we also find that the increase in labor market participation was accompanied by reductions in single mothers subsequent fertility and in the rate at which they married behavioral responses which in turn are likely to influence the reform s overall impact on child poverty and welfare

in search of complementary assets the determinants of alliance formation of high tech start ups abstract why do new technology based firms ntbfs cooperate starting from teece s teece d j 1986 profiting from technological innovation implications for integration collaboration licensing and public policy research policy 15 285 305 conceptual framework and taking advantage of subsequent literature on alliance formation in the resource and competence based tradition and in the social structure perspective we derive an empirical model that aims at highlighting the inducements and obstacles that these firms face in alliance formation according to firm specific characteristics and the nature of the alliance in particular a distinction is made between exploitative commercial alliances and explorative technological alliances the econometric estimates based on a large sample of italian young high tech firms that are observed from 1994 to 2003 provide strong evidence supporting two key intuitions of teece s work first the combination of specialized complementary assets appears to be a key driver of the formation of exploitative commercial alliances by ntbfs more specifically patent holding affects positively the likelihood to establish commercial alliances but this propensity is found to rapidly decrease with firm size suggesting that as long as ntbfs become larger and possess specialized commercial assets their urge for commercial alliances diminishes second following the parallelism set forth by teece between search for alliance partners and access to external financing the analysis indicates that potentially beneficial alliances may not take place because of the high transaction costs faced by smaller ntbfs in this respect our results clearly support the view that sponsor institutions as public research organizations venture and corporate venture capitalists may sensibly reduce these costs and that their role crucially depends on both the identity of the sponsor and the type of alliance

does means testing welfare discourage saving evidence from a change in afdc policy in the united states abstract this paper provides empirical evidence on the impact of a welfare program s asset test on the saving behavior of its target population the approach exploits a policy experiment the essential federalization of the afdc program s asset testing policy in 1981 data on female headed households from the national longitudinal survey young women are used to test the hypothesis that likely afdc users adjusted their asset stocks in response to this change the findings indicate additional saving between 1978 and 1983 of about 25 cents for each additional 1 increase in the limit in most states

unraveling the process of creative destruction complementary assets and incumbent survival in the typesetter industry when radical technological change transforms an industry established firms sometimes fail drastically and are displaced by new entrants yet other times survive and prosper drawing upon an unusually rich data set that covers the technological and competitive history of the typesetter industry from 1886 to 1990 this paper uses a combination of quantitative and qualitative analysis to unravel this process of creative destruction it argues that the ultimate commercial performance of incumbents vs new entrants is driven by the balance and interaction of three factors investment technical capabilities and appropriability through specialized complementary assets in this industry specialized complementary assets played a crucial role in buffering incumbents from the effects of competence destruction and an analysis that examined investment or technical capabilities in isolation would have led to misleading results this work thus highlights the importance of considering multiple perspectives when examining the competitive implications of technological change 1997 by john wiley sons ltd

employment opportunities of young men and family formation major shifts in family patterns have limited progress toward reducing poverty and narrowing black white income differences much of the recent rise in female headship results from the rising number of never married mothers despite a decline in the proportion of unmarried young women having babies the drop in marriage rate has been so great that a rising proportion of children are under the care of never married mothers the absence of a parent dramatically increases current poverty of children and as sara mclanahan 1988 shows growing up in a poor family and in a mother headed family holding constant for income increases the chances that a child will become poor as an adult a long literature links the creation of mother headed families with the inadequate financial resources of men in 1965 the moynihan report attributed the then high rates of marital disruption among black families to the joblessness of black men but warned that family dissolution might have reached a self perpetuating stage unrelated to employment opportunities did the dramatic increases in one parent families after 1965 reflect such a new self generating pattern or were the job market problems of men the primary cause of the continuing decline in stable intact american families the most forceful recent proponent of the male job opportunity hypothesis hereafter mjo is sociologist william j wilson wilson 1987 argues that the declining number of employed black men relative to black women best explains the increasing proportions of black female headed families clifford johnson and andrew sum 1987 contend that declining real earnings of all young men was a major cause of their declining marriage rates this paper examines the mjo hypothesis with respect to young men and family formation marriage and becoming parents i begin by viewing the mjo hypothesis from the perspective of the economics of the family i then consider evidence from empirical studies of the mjo hypothesis the conclusion notes future policy and research direc

internal r d expenditures and external technology sourcing abstract the paper examines the two way relationship between external r d activities and internal r d expenditures on a cross section of flemish r d active companies the analysis extends the classical explanatory variables like size diversification ownership structure and technological opportunities to include the impact of various external sourcing strategies r d cooperation and to a lesser extent r d contracted out are found to have a significant positive effect on internal r d but only if the companies have absorptive capacity in the form of a full time staffed r d department at the same time firms are found to be more frequently engaged in r d cooperation the more they spend on internal r d

public support for innovation and the openness of firms innovation activities this study explores empirically the relationship between publicly funded schemes to support innovation and the openness of firms innovation practices using survey data from more than 5000 firms in 29 european countries we find that support policies for innovation both monetary and non monetary are related to an increase in the degree of openness of individual firms both in terms of the number of external partners with whom they collaborate and the number of open innovation activities they perform however the relationship between support and openness seems to be negatively moderated by the existence of previous innovative activity within the firm public support has more impact on less innovative firms and less influence when the firm is already innovative which could potentially indicate the existence of crowding out effects additionally our results suggest that non financial support is more strongly linked to openness than financial support for policy makers facing salient budgetary constraints this implies that institutions and government policies could potentially play a more important role than money in fostering open innovation this article contributes to the open innovation literature by tapping into the underexplored question of the role of public policies and has crucial implications for academics and policy makers

country size currency unions and international asset returns differences in real interest rates across developed economies are puzzlingly large and persistent i propose a simple explanation bonds issued in the currencies of larger economies are expensive because they insure against shocks that affect a larger fraction of the world economy i show that indeed differences in the size of economies explain a large fraction of the cross sectional variation in currency returns the data also support additional implications of the model the introduction of a currency union lowers interest rates in participating countries and stocks in the nontraded sector of larger economies pay lower expected returns

jumps in financial markets a new nonparametric test and jump dynamics this paper introduces a new nonparametric test to detect jump arrival times and realized jump sizes in asset prices up to the intra day level we demonstrate that the likelihood of misclassiflcation of jumps becomes negligible when we use high frequency returns using our test we examine jump dynamics and their distributions in the u s equity markets the results show that individual stock jumps are associated with prescheduled earnings announcements and other company speciflc news events additionally s p 500 index jumps are associated with general market news announcements this suggests difierent pricing models for individual equity options versus index op

the effect of the u s welfare system on marital status abstract an issue of long standing importance in the u s welfare system has been its lack of neutrality with respect to family composition which generally provides payments only to female headed families that is families with no able bodied male present using data from 1969 to 1985 to examine the issue this study finds that 1 the simple cross sectional correlations between marital status and welfare benefits are almost always in the expected direction but are generally weak in significance 2 that the magnitude and significance of the correlations have nevertheless grown over time and 3 that the correlations for men are no weaker and usually stronger especially for blacks than those for women

stochastic risk premiums stochastic skewness in currency options and stochastic discount factors in international economies abstract we develop models of stochastic discount factors in international economies that produce stochastic risk premiums and stochastic skewness in currency options we estimate the models using time series returns and option prices on three currency pairs that form a triangular relation estimation shows that the average risk premium in japan is larger than that in the us or the uk the global risk premium is more persistent and volatile than the country specific risk premiums and investors respond differently to different shocks we also identify high frequency jumps in each economy but find that only downside jumps are priced finally our analysis shows that the risk premiums are economically compatible with movements in stock and bond market fundamentals

will extending medicaid to two parent families encourage marriage several welfare programs in the united states restrict eligibility to single parent families this paper asks whether eliminating this restriction for medicaid encourages marriage i identify medicaid s effect through a series of health insurance reforms that were passed in the 1980s and 1990s targeting young children these reforms were associated with an increase in the probability of marriage of 1 7 percentage points while the expansions offered some incentives to become married they also created other incentives to become divorced known as the independence effect after controlling for the outflows from marriage due to the independence effect the estimated effect increases by 10 percent

towards an economic theory of the multiproduct firm this paper outlines a theory of the multiproduct firm important building blocks include excess capacity and its creation market imperfections and the peculiarities of organizational knowledge including its fungible and taut character a framework is adopted in which profit seeking firms are seen to diversify in order to avoid the high transactions costs associated with using various markets to trade the services of various specialized assets neoclassical explanations of the multiproduct firm are shown to be seriously deficient

marriage divorce and social safety net policy i study the effects of the earned income tax credit eitc and welfare reforms of the 1990s on flows into and out of marriage i use test scores to predict who is most likely to be affected by the policy changes and employ a flexible functional form to estimate heterogeneous effects i find that lower earning married women are more likely to divorce as the eitc expands but i find no effect of eitc generosity on marriage i find little effect of welfare generosity on marriage or divorce flows for any group my results suggest that there are nonsymmetric responses to policy on flows into and out of marriages

estimating the innovation function from patent numbers gmm on count panel data the purpose of this paper is to estimate the patent equation an empirical counterpart to the knowledge production function innovation output is measured through the number of european patent applications and the input by research capital in a panel of french manufacturing firms estimating the innovation function raises specific issues related to count data using the framework of models with multiplicative errors we explore and test for various specifications correlated fixed effects serial correlations and weak exogeneity we also present a first extension to lagged dependent variables 1997 john wiley sons ltd

welfare effects on the marital decisions of never married mothers the economic theory of marriage suggests that more generous welfare benefits should serve to reduce the probability of marriage among mothers who have given birth out of wedlock this relationship is explored using data on never married mothers in the national longitudinal survey of youth only very limited evidence indicates that higher welfare payments lower the probability of marriage for nonblack never married mothers for black never married mothers the results suggest that higher benefits are associated with higher marriage rates

the married widow marriage penalties matter marriage penalties are a controversial feature of many government policies empirical evidence of their behavioral effects is quite mixed which is surprising because economic theory predicts that they should have an impact on the headship decision we investigate the removal of marriage penalties from the surviving spouse pensions of the canadian public pension system in the 1980s these reforms provide a simple and transparent source of identification our results indicate that marriage penalties can have large and persistent effects on marriage decisions we also present evidence suggesting that it is individuals with characteristics correlated with greater wealth who respond to the penalties jel j1 h2

welfare programs in the rent seeking society over the past fifteen years the interest group theory of government behavior has shown itself to be an empirically rich and powerful explanatory tool applications have included environmental regulation 14 17 federal trucking regulation 15 the output of state legislatures 12 and numerous other government programs and activities but one important subset of government programs has been consistently neglected in the literature meanstested transfer programs as a group the poor are not well organized for political lobbying they are dispersed and consequently face high organization costs further as a potential lobbying group the poor face potentially overwhelming free rider problems i e all of the poor stand to benefit from poverty programs that some subset of the poor achieve via lobbying for this reason the interest group theory of government seems to offer meagre explanatory power in the case of poverty programs many who otherwise typically interpret governmental activity from the perspective of rent seeking analysis make an exception when it comes to welfare programs and argue that here ideology mostly egalitarian ideology has for some unexplained reason dominated the political process there is sometimes a reference to the imperialism of the welfare bureaucracy which benefits indirectly from any expansion of the poverty program system and admittedly this seems to be a plausible partial explanation for the rapid recent growth of welfare spending finally tullock 19 has adopted a radical reinterpretation arguing that the welfare state does not really transfer net wealth to the poor at all but actually represents a thinly disguised system of net transfers to better organized middle class interest groups the tullock hypothesis is designed mainly to explain major patterns of government transfer spending it represents an attempt to reinterpret the net effect of transfer spending on the wealth positions of different income groups and does not attempt to explain specific welfare programs from an interest group perspective while this approach has merit an interest group analysis of specific welfare programs must concern itself with the functional consequences of particular programs and the interest groups which benefit from them both directly and indirectly but such an analysis should not necessarily presuppose that the poor themselves are the most important politically relevant interest group involved in the lobbying process or even that they play a major role very substantial transfers to the poor or to any other recipient group may ultimately be the result of interest group pressure in the

technological cooperative agreements and firm s r d intensity a note on causality relations abstract in this paper we apply a recently proposed model of vector autoregression for panel data to analyse the granger causality relationship between a firm s intramural r d intensity and technological cooperative agreements the analysis relies on a sample composed of 95 major us european and japanese firms in the semiconductor data processing and telecommunications industries observed during the period 1980 1986 decisions on interfirm technological collaborations are shown to cause a la granger decisions on internal r d investments and vice versa we thus suggest that in contrast with the methodological approaches followed by previous empirical works firms decisions concerning both intramural innovative effort and technological cooperation are endogenous and have to be jointly studied through a simultaneous two equation structural model