how firms respond to financial restatement ceo successors and external reactions although past studies have paid considerable attention to firms reputations few have investigated the actions that firms take following a reputation damaging event we identify firms involved in financial earnings restatements and examine whether naming a successor ceo with specific qualities serves to signal the seriousness of a firm s efforts to restore its reputation using theories of market signaling we argue that attributes of successor ceos significantly influence the reactions of key external constituencies in particular firms with more severe restatement tend to name successors who have prior ceo or turnaround experience and a more elite education the naming of such successors results in more positive reactions from the stock market financial analysts and mass media we argue that these attributes send messages to stakeholders and the broader public about the ceo s credibility and the firm s efforts

understanding the penalties associated with corporate misconduct an empirical examination of earnings and risk we examine the relationship between allegations of corporate misconduct and changes in profitability and risk of the alleged offender profitability is measured as reported earnings and analysts earnings forecasts risk is measured as stock return volatility and concordance among analysts forecasts decreases in earnings and increases in risk are found to accompany allegations of misconduct and although the results are somewhat sensitive to the earnings and risk metrics used the changes are found to be consistently greater for related party offenses the importance of reputational penalties is underscored by analysis of the association between allegation related changes in firm value and changes in earnings and risk

the translation of corporate governance changes across national cultures the case of germany contrasting systems of corporate governance persist internationally but are subject to regulatory and firm level institutional change such changes may be viewed as organisational innovations often imported from the usa in the face of different national cultures this paper analyses the implications of national culture for the translation of innovations and provides case study illustrations of regulatory and firm level governance changes experienced in germany these illustrations demonstrate that the diffusion of both kinds of change has been subject to substantial translation that is consistent with german national culture

an evolutionary approach to norms iorms provide a powerful mechanism for regulating conflict in groups even when there are more than two people and no central authority this paper investigates the emergence and stability of behavioral norms in the context of a game played by people of limited rationality the dynamics of this new norms game are analyzed with a computer simulation based upon the evolutionary principle that strategies shown to be relatively effective will be used more in the future than less effective strategies the results show the conditions under which norms can evolve and prove stable one interesting possibility is the employment of metanorms the willingness to punish someone who did not enforce a norm many historical examples of domestic and international norms are used to illustrate the wide variety of mechanisms that can support norms including metanorms dominance internalization deterrence social proof membership in groups law and reputation

can socioeconomic heritage produce a lost generation with regard to entrepreneurship a considerable amount of literature deals with the influence of institutions on entrepreneurship but for all that little is known about the interplay between institutions and personal determinants of entrepreneurship in this paper the empirical evidence that older people in transition economies have low engagement in entrepreneurial activity is the starting point for analyzing how institutions moderate the relationship between individual characteristics and entrepreneurial choice the results show that the socioeconomic heritage of being exposed to socialism deters entrepreneurship an effect that is more pronounced for high impact entrepreneurship detailed analyses reveal that the effect is driven by devaluation of socialist work experience and the influence of socialism on mindset

young and no money never mind the material impact of social resources on new venture growth although growth is a desirable outcome for new ventures due to the many advantages of large size most new firms fail to grow largely because of their limited resources and adaptability this paper addresses the question of how new ventures grow despite their limited financial resources i explore the effect of two specific nonfinancial social resources legitimacy and status on new venture growth i propose that new firms can acquire legitimacy by mimicking the structures and ceremonial activities of established firms in their industry and can acquire status by affiliating with high status entities using a unique panel data set on a cohort of advertising agencies founded in new york and chicago between 1977 and 1985 i show that legitimacy and status have favorable impacts on new firms growth in revenues and number of employees the paper makes important contributions to social embeddedness and institutional research by examining the strategic implications of firm level social resources and to the literature on entrepreneurship in general and new venture growth in particular

an equilibrium queuing model of bribery it is sometimes argued that bribery is inefficient because bureaucrats may cause delays for attracting more bribes this hypothesis is examined in the context of a queue where customers having different values of time are ranked by their bribe payments to the queue s server the nash equilibrium strategies of the customers are derived it is shown that the server is unlikely to slow down the allocation process when bribery is allowed the model does not have stringent informational requirements and the equilibrium outcome minimizes the average value of time costs of the queue it also suggests a useful auctioning procedure

regional institutional development political connections and entrepreneurial performance in china s transition economy while previous research emphasizes the role of political connections in facilitating entrepreneurial performance during china s early reform period 1978 1999 this study argues that regional institutions were increasingly conducive to entrepreneurial activities and thus also played a key role in china s entrepreneurial success during that period the purpose of this study is twofold first it aims to demonstrate how regional institutional development facilitated entrepreneurial performance in china second it aims to understand how formal institutional development among chinese regions affected the role of political connections using a two level hierarchical dataset on chinese private enterprises this study finds that not only legal protection of property rights but also the development of market systems mattered for entrepreneurial performance in addition it shows that political connections played a diminishing role during regional institutional development in china

from m p to ma p multinationality alignment and performance rather than searching for a universal optimal level of multinationality for all firms we argue that firm specific attributes should result in firm specific optimal levels of multinationality specifically we draw upon transaction cost and internalization theory to argue that there will be different optimal levels of multinationality for individual firms and if firms internalize foreign operations to an extent less than or greater than their individual optimal levels transaction costs will increase and performance will decrease to test this idea we use transaction cost models in the context of large us law firms during the time period from 1986 through 2008 to estimate firm specific optimal multinationality next we test relationships between alignment with or deviations from firm specific optimal levels of multinationality and performance ma p consistent with the ma p hypothesis insufficient and excessive levels of multinationality are both negatively related to financial performance in addition excessive multinationality is positively associated with downside performance risk one key implication is that an ma p approach may offer greater theoretical validity and clarity than traditional multinationality and performance m p approaches

a note on competitive bribery games abstract within a competitive bribery game in which each player has incomplete information we show that there exists a unique nash equilibrium which is symmetric similar results hold for another bribery game form that prevails in the literature implications for corrupt practices in relation to economic development are also discussed

consumer sovereignty in healthcare fact or fiction we pose the question is consumer sovereignty in the healthcare market fact or fiction consumer sovereignty in healthcare implies that society benefits at large when healthcare organizations compete to develop high quality healthcare products while reducing the cost of doing business reflected in low prices and when consumers choose wisely among healthcare products by purchasing those high quality products at low prices we develop a theoretical model that encourages systematic empirical research to investigate whether consumer sovereignty in healthcare is fact or fiction in doing so we develop a series of theoretical propositions that may demonstrate that consumer sovereignty is more fiction than fact specifically healthcare consumers lack the ability motivation and opportunity to choose healthcare products that are high in quality and low in price similarly healthcare firms lack the ability motivation and opportunity to compete in ways to develop and market higher quality products at lower prices

the dynamics of organizational status this paper examines the growth and decline of organizational status it is argued that an organization s status is determined by two factors past performance outcomes and the status of the organization s affiliates the better the past performance outcomes and the higher the status of the affiliates the greater the organization s growth in status this basic proposition is tested in an examination of status changes among investment banks in the non investment grade market between 1981 and 1987 implications and extensions are discussed in the conclusion copyright 1996 by oxford university press

the credibility of social climbing when does inter firm mobility not influence organizational status this paper examines when inter firm mobility influences organizational status whereas a low status firm can accumulate prestigious affiliations by hiring from a high status firm the status distance between these firms may influence whether the mobility event is perceived as credible if the mobility event lacks credibility meaning that market participants believe that the employee moved for a reason other than the new employer s quality then the hiring firm is less likely to improve its status position we also explore this effect s symmetry and find that a high status firm is less likely to experience status decline when the mobility event lacks credibility we assess these hypotheses in the context of the inter firm mobility of partners of the subsidiary offices of international law firms in hong kong from 1998 to 2008

the social organization of conspiracy illegal networks in the heavy electrical equipment industry we analyze the social organization of three well known price fixing conspiracies in the heavy electrical equipment industry although aspects of collusion have been studied by industrial organization economists and organizational criminologists the organization of conspiracies has remained virtually unexplored using archival data we reconstruct the actual communication networks involved in conspiracies in switchgear transformers and turbines we find that the structure of illegal networks is driven primarily by the need to maximize concealment rather than the need to maximize efficiency however network structure is also contingent on information processing requirements imposed by product and market characteristics our individual level model predicts verdict guilt or innocence sentence and fine as functions of personal centrality in the illegal network network structure management level and company size people of the same trade seldom meet together but the conversation ends in a conspiracy against the public or in some diversion to raise prices

are they efficient in the middle using propensity score estimation for modeling middlemen in indian corporate corruption corrupt regulatory environment encourages firms to deploy middlemen for speedy and assured acquisition of different services from regulatory agencies using a world bank dataset of 2210 indian manufacturing firms this article examines how firms with middlemen deal with corrupt governmental agencies for its operational efficiency our results demonstrate that deployment of middlemen by the firms is often accompanied by a substantial increase in operational delay relatively trigger more consumption of senior management s time on regulatory disentanglement enhance the likelihood tendency to pay bribe and likely to face more court cases as a means of restitution of legal rights as firm specific attributes may contaminate our preliminary results we utilized the propensity score framework to examine relationships among variables of interests our study contributes to the inconspicuous part of the corruption literature by attempting to present a comprehensive but indirect assessment of the functions of middlemen that predominantly remained unattended except some scattered descriptive case based anecdotal presentations

paradoxes and dilemmas for stakeholder responsive firms in the extractive sector lessons from the case of shell and the ogoni this paper examines some of the paradoxes and dilemmas facing firms in the extractive sector when they attempt to take on a more stakeholder responsive orientation towards issues of environmental and social responsibility we describe the case of shell and the ogoni and attempt to draw out some of the lessons of that case for more sustainable operations in the developing world we argue that firms such as shell rio tinto and others may well exhibit increasingly stakeholder responsive behaviours at the corporate strategic level however for reasons of strategy lack of competency or institutional will this increasing level of corporate responsiveness may not be mirrored effectively in dealings between subsidiary business units and their most important direct stakeholders for example local communities and in the developing world we contrast the struggles of shell to replicate its corporate stakeholder responsiveness at the local level in nigeria with the experiences of other firms that seem to have developed managerial capabilities at a somewhat deeper level throughout the firm with consequent benefits both for stakeholders and the business

the politics of shareholder activism in nigeria shareholder activism has become a force for good in the extant corporate governance literature in this article we present a case study of nigeria to show how shareholder activism as a corporate governance mechanism can constitute a space for unhealthy politics and turbulent politicking which is a reflection of the country s brand of politics as a result we point out some translational challenges and suggest more caution in the diffusion of corporate governance practices across different institutional environments we contribute to the literature on corporate governance in africa whilst creating an understanding of the political embeddedness of shareholder activism in different institutional contexts i e a step closer to a political theorising of shareholder activism

the liability of good reputation a study of product recalls in the u s automobile industry in this paper we explore opposing theoretical claims about how organizational reputation affects market reactions to product defects on the one hand good reputation could be a disadvantage because expectations about product quality are more likely to be violated by defects in highly reputed products on the other hand a good reputation could be an advantage because of strong inertial effects on reputation orderings we empirically test these competing hypotheses using data on product recalls in the u s automobile industry from 1975 to 1999 our results support for the idea that reputation can be an organizational liability in that highly reputed firms suffer more market penalty as a result of their product recalls we also propose that the reputational effects are moderated by two important factors substitutability and generalism specialism our results show that having few substitutes with an equivalent level of reputation or a focused product identity stemming from specialism buffers the negative market reactions to product recalls we conclude with a discussion on the implications of these results for institutional reputation and status theories

networks as the pipes and prisms of the market1 this article draws an analytical distinction between two types of market uncertainty egocentric which refers to a focal actor s uncertainty regarding the best way to convert a set of inputs to an output desired by a potential exchange partner and altercentric which denotes the uncertainty confronted by a focal actor s exchange partners regarding the quality of the output that the focal actor brings to the market given this distinction the article considers how the value of structural holes and market status vary with these two types of uncertainty the article proposes that the value of structural holes increases with egocentric uncertainty but not with altercentric uncertainty in contrast the value of status increases with altercentric uncertainty but declines with egocentric uncertainty thus actors with networks rich in structural holes should sort into markets or market segments that are high in egocentric uncertainty high status actors should sort into markets that are low in egocentric

using experiments to evaluate performance standards what do welfare to work demonstrations reveal to welfare reformers this paper examines how experimental demonstrations can be used to inform planners about the efficacy of social programs in light of a performance standard the problem is illustrated by considering the situation faced by state governments attempting to design programs to meet the new federal welfare to work standards data from experimental evaluations alone allow only limited inferences about the labor market outcomes of welfare recipients combined with prior information on the selection process however these data are informative suggesting either that the long run federal requirements cannot be met or that these standards will only be met under special circumstances

private or public school advantage evidence from 40 countries using pisa 2012 mathematics abstractit is known that in most countries private school students outperform students in public schools in international assessments however the empirical literature recognizes that assessing the true effect of private school attendance requires addressing selection and sorting issues on both observabland unobservables the existing empirical evidence on the private school effect mostly covers oecd and latin american countries with little evidence on other parts of the world there is recent emerging country specific evidence doubting the existence of a private school advantage i use pisa 2012 data for mathematics and two different methodologies to derive baseline and bias corrected estimates of the private dependent and independent school effect for 40 countries a robust private school advantage is found only in a handful of countries public schools generally perform as well as private subsidized schools and outperform independent schools accounting for both peer effects and selection is necessa

a test of the law of one price in retail banking this paper investigates the level and the determinants of retail banking interest rate differences among spanish banks in the period 1989 2003 we find that the interest rates of twenty five different bank loan and deposit products adjust rather rapidly to their long term values in response to external shocks as the relative version of the law of one price predicts but the evidence runs contrary to the absolute version of the law credit risk premium part of the marginal cost of the loans granted by a particular bank is an important source of interest rate dispersion across banks and loan products both before and after spain joined the euro zone therefore differences in credit risk policies across banks must be taken into account when forming expectations about european retail banking integration

home country networks and foreign expansion evidence from the venture capital industry we propose that home country network advantages shape firms foreign expansion we argue that a social status advantage is transferable from one market to another as a signal of quality but that a

a role based ecology of technological change this article considers what factors determine whether an innovation becomes a foundation for future technological developments rather than a dea end the authors introduce the concept of the technological niche which includes a focal innovation the innovations on which the focal innovations builds the innovations that build upon the focal innovation and the technological ties among the innovations within the niche using patents and patent citations to measure characteristics of innovation niches within the semiconductor industry the authors show that the size of the niche and the status of the actors within the niche have a positive effect on the likelihood that subsequent innovations will build upon the focal innovation competitive intensity within the niche has a negative effect on this likelihood

the invisible hand and the grabbing hand evidence from a survey of 105 shop owners in moscow and warsaw shows that the reliance on private protection as well as the burden of regulation and corruption are much greater in moscow the evidence suggests that the invisible hand model of government better fits the warsaw local government and the grabbing hand model is more appropriate for moscow the evidence implies that the singular focus on the speed of economic reforms to understand the success of transition is misplaced and that the quality of government may be as essential this abstract was borrowed from another version of this item

labor market advantages of organizational status a study of lateral partner hiring by large u s law firms prior research demonstrates product market advantages of organizational status but largely neglects factor market advantages we propose that status is advantageous in labor markets because individuals generally consider employer status a nonpecuniary employment benefit dyadic analyses of lateral partner hiring by large u s law firms demonstrate two status based advantages in employee hiring and retention first high status firms are more likely than low status ones to hire an employee from a more profitable competitor second high status firms are most likely to lose an employee to a lower status competitor when the competitor is atypically more profitable we discuss implications of these findings for individual and organizational status attainment and for the stability of industry status hierarchies

the wto trade effect this paper reexamines the gatt wto membership efiect on bilateral trade ows using nonparametric methods including pair matching permutation tests and a rosenbaum 2002 sensitivity analysis together these methods provide an estimation framework that is robust to misspeciflcation biases allows general forms of heterogeneous treatment efiects and addresses potential hidden selection biases this is in contrast to most conventional parametric studies on this issue our results suggest large gatt wto trade promoting efiects robust to various restricted matching criteria alternative indicators for gatt wto involvement different matching methodologies non random incidence of positive trade ows and inclusion of multilateral resistance terms

what is challenging renewable energy entrepreneurs in developing countries this paper cumulates the findings from a review of the challenges faced by renewable energy entrepreneurs in developing countries to date research that could facilitate the success of renewable energy entrepreneurs in the world s developing regions has been fragmented across two main bodies of literature management specifically entrepreneurship and renewable energy by conducting a qualitative review of the extant literature i propose that the findings from both bodies of research may be distilled to six 6 key challenges inadequate access to institutional finance the price of renewable energy technologies rets the lack of skilled labour underdeveloped physical infrastructure and logistics power dominance of incumbents inadequate government or policy support through this research i not only advance a unified conceptualisation of the challenges faced by renewable energy entrepreneurs in developing countries but also highlight a number of the revealed opportunities for future research

evaluating the econometric evaluations of training programs with experimental data this paper takes the results of an employment and training program thatwas run as a field experiment in which the participants were randomlyassigned into a treatment or a control group and compares these results to the estimates that might have been produced by an econometrician who evaluated the program using the same econometric procedures that have been used in the program evaluation literature this comparison shows that many of these econometric procedures fail toreplicate the experimentally determined results and suggests that researchers should be aware of the potential for specification errorsin other nonexperimental evaluations copyright 1986 by american economic association

corruption perceptions vs corruption reality abstract this paper examines the accuracy of corruption perceptions by comparing indonesian villagers reported perceptions about corruption in a road building project in their village with a more objective measure of missing expenditures in the project i find that villagers reported perceptions do contain real information and that villagers are sophisticated enough to distinguish between corruption in a particular road project and general corruption in the village the magnitude of the reported information however is small in part because officials hide corruption where it is hardest for villagers to detect i also find that there are biases in reported perceptions the findings illustrate the limitations of relying solely on corruption perceptions whether in designing anti corruption policies or in conducting empirical research on corruption

does the law of one price hold in international financial markets evidence from tick data abstract this paper investigates the validity of the law of one price lop in international financial markets by examining the frequency size and duration of inter market price differentials for borrowing and lending services one way arbitrage using a unique data set for three major capital and foreign exchange markets that covers a period of more than seven months at tick frequency we find that the lop holds on average but numerous economically significant violations of the lop arise the duration of these violations is high enough to make it worthwhile searching for one way arbitrage opportunities in order to minimize borrowing costs and or maximize earnings on given funds we also document that such opportunities decline with the pace of the market and increase with market volatility

running for the exit community cohesion and bank panics bank panics attract scholarly interest because they reflect distrust of each bank that experiences a run as a result of diffusion of information rumors about such bank runs trigger additional runs elsewhere however the contagion of bank runs is highly selective for reasons that are unrelated to the financial strength of the individual banks this presents a puzzle that extant theories on institutions and reputations cannot fully explain to solve this puzzle we turn to the characteristics of the community in which the banks operate we develop theory on how communities with diverse affiliation structures and economic inequality have weaker community cohesion and communication making such communities less likely to experience widespread distrust and hence bank runs we test hypotheses on the effects of community ethnic diversity national origin diversity religious diversity and wealth inequality using data from the great bank panic of 1893 and we find strong community effects on bank runs these f

investigating the microstructure of network evolution alliance formation in the mobile communications industry theories of network evolution frequently focus on network endogeneity which stresses predictable path dependent evolution rooted in previous network structure however theories of technological evolution and innovation remind us that networks may undergo significant change as technological discontinuities exert pressures on existing relationships and firms engage in exploratory search how can we incorporate sources of change into our theories of network evolution instead of focusing so squarely on sources of inertia by using recent advances in graph theory we develop a more flexible theory of network evolution by examining two patterns of partner selection that have the potential to change networks shortcut formation between relatively unconnected partner clusters and the entry of new firms into the main component of incumbent partners our findings suggest an important contingency for the endogeneity perspective structural homophily predicts shortcut formation but not alliance formation within clusters furthermore we demonstrate that the pattern of alliance formation between incumbents and new entrants to the alliance network is driven by a combination of endogenous and exogenous mechanisms new entrants attach to more prominent incumbents but they are more likely to attach with an alliance deal that comprises multiple partners we demonstrate these findings in an industry where systemic technology encourages cooperation and where network entry is prevalent the mobile communications industry from 1993 2002

does competition destroy ethical behavior explanations of unethical behavior often neglect the role of competition as opposed to greed in assuring its spread using the examples of child labor corruption excessive executive pay corporate earnings manipulation and commercial activities by universities this paper clarifies the role of competition in promoting censured conduct when unethical behavior cuts costs competition drives down prices and entrepreneurs incomes and thereby reduces their willingness to pay for ethical conduct nonetheless i suggest that competition might be good for ethical behavior in the long run because it promotes growth and raises incomes higher incomes raise the willingness to pay for ethical behavior but may also change what people believe to be ethical for the better this abstract was borrowed from another version of this item

keeping good company a study of corporate governance in five countries this study describes in turn the systems that operate in five leading industrial countries germany japan france the usa and the uk it establishes two basic principles of good corporate governance and shows how they are applied in each country indicating where methods vary and how most countries fall short of the ideal the book concludes by highlighting the uk s strengths and weaknesses and calls for a thorough overhaul of policy

financialization of the global economy the instability of the world financial system starkly revealed in the recent debacle is not the only problem it poses its secularly increasing dominance over the real economy is in itself a phenomenon that needs examining the article traces the source of this increasing dominance not just to the increasingly leveraged and increasingly incomprehensible forms of intermediation between savers and those in the real economy who need credit and insurance but also to the increasingly universal doctrine that maximizing shareholder value is the sole raison d etre of the firm and the promotion by governments of an equity culture some of the social consequences of financialization are exacerbating inequalities greater insecurity misdirection of talent and the erosion of trust copyright 2008 oxford university press

entrepreneurial intentions in the third age the impact of perceived age norms this article investigates the impact of perceived age norms on the formation of entrepreneurial intentions in the third age age norms refer to those social norms that determine whether establishing and running a business are considered appropriate behavior for a mature individual an empirical analysis of finnish individuals finds that norms perceived as permissive of enterprising activity in the third age exert a significant positive influence on entrepreneurial intentions in this segment even when controlling for the general level of entrepreneurship in the municipalities this influence is partially mediated by whether the individual has a positive attitude toward entrepreneurship by how the individual perceives their own ability to start and run a business by the extent of support from their family and friends they perceive and by the importance of that support to them thus if policy aims to increase enterprising activity in the third age segment the portfolio of instruments should include measures that address people s general awareness of third age entrepreneurship as a viable positive and attractive late career option

nonparametric bounds on treatment effects assume that each member of a population is characterized by values for the variables ya yb z x here x is a vector describing a person and z is a binary variable indicating which of two treatments this person receives the treatments are labelled a and b the variables ya and yb are scalar measures of the outcomes of the two treatments for example a cancer patient might be treated by a drug therapy or b surgery the relevant outcome y might be life span following treatment an unemployed worker might be given a vocational training or b job search assistance here the relevant outcome might be labor force status following treatment assume that a random sample is drawn and that one observes the realizations of z x and of the outcome under the treatment received thus ya is observed if treatment a is received but is a latent variable if treatment b is received similarly yb is either observed or latent suppose that one wants to learn the difference in expected outcome if all persons with attributes x were assigned to treatment a or b this treatment effect is

explaining diversity in the worldwide diffusion of codes of good governance extending earlier literature on diffusion of codes of good governance cggs by integrating the effect of national culture this study offers a novel perspective on cross national diversity in the worldwide diffusion of corporate governance best practices we argue that particular cultural dimensions affect the indicators i e total number of codes per country and identity of issuing organizations of such diffusion for a sample of 67 countries our analysis reveals that individualist cultures have a stronger tendency to develop cggs in cultures with a high receptivity to power differences there is a higher probability that the first issuers are the government directors or professional associations whereas with low receptivity the stock exchange and investors groups of issuers are more likely to initiate the first code the effects of culture remain significant even after accounting for differences in legal systems and economic institutions indicating that national culture may serve as a comprehensive indicator of the regulatory stance with respect to good governance indeed the effect size is large enough to give pause e g to a location choice and possibly has relevance for strategic decision making by international companies

the consequences of child soldiering abstract little is known about the impacts of military service on human capital and labor market outcomes due to an absence of data as well as sample selection recruits are self selected screened and selectively survive we examine the case of uganda where rebel recruitment methods provide exogenous variation in conscription economic and educational impacts are widespread and persistent schooling falls by nearly a year skilled employment halves and earnings drop by a third military service seems to be a poor substitute for schooling psychological distress is evident among those exposed to severe war violence and is not limited to ex combatants

on the individual decisions to commit corruption a methodological complement this paper contributes to the analysis of corruption by complementing two different methodologies to determine the behavior of citizens who participate in corruption acts focusing in mexico a quantitative analysis combined with a survey and econometric techniques is used to determine sociodemographic and institutional factors affecting such behavior and complemented by focus groups collecting some knowledge on how informal institutions and norms could promote or block corrupt behavior it is shown that there is a trade off between perceptions social dynamics and individual incentives for corrupt behavior within an institutional framework creating a kind of vicious circle difficult to break up

the hidden transformation the changing role of the state after the collapse of communism in central and eastern europe this article reviews the state s role in the transition economies of central and eastern europe among the countries poland is perceived as the leader because it was the first economy to emerge from the decline following the transition as well the only eu member state to survive the crisis without a recession this success is often attributed to the high quality of government however we show that this popular perception is false and that state malfunctions on numerous fronts may soon impede polish growth prospects in poland the only bright spot is the quality of the financial supervision which should serve as a role model for other countries we attribute the malfunctions to the eu accession period that resulted in an unchecked growth of the government and contributed to the weakening of political and legal institutions copyright 2011 oxford university press

social capital informal governance and post ipo firm performance a study of chinese entrepreneurial firms social capital can serve as informal governance in weak investor protection regimes using hand collected data on entrepreneurs political connections and firm ownership we construct several original measures of social capital and examine their effect on the performance of entrepreneurial firms in china after their initial public offerings political connections or a high percentage of external investors tend to enhance firm performance but intragroup related party transactions commonly lead to performance decline these forms of social capital have a strong influence on the performance of chinese firms whereas formal governance variables such as board size or board independence have little effect although social capital may serve as an informal governance mechanism and effectively substitute for formal governance mechanisms in an emerging market this role of social capital raises several ethical concerns notably the development of rent seeking and crony capitalism

a comparison of bribery and bidding in thin markets abstract this paper compares bribery to competitive bidding in a government purchasing context while competitive bidding is one method of procurement bribery is a common alternative in many third world countries although bribery is often considered to be the ethical antithesis of competitive bidding the analysis shows there is a fundamental isomorphism between bribery and competitive bidding on the supply side of the transaction

fairness spillovers the case of taxation abstract it is standardly assumed that individuals react to perceived unfairness or norm violations in precisely the same area or relationship where the original offense has occurred however grievances over being exposed to injustice may have even broader consequences and also spill over to other contexts causing non compliant behavior there we present evidence that such fairness spillovers can incur large economic costs a belief that there is unfairness in taxation in the sense that the rich do not pay enough taxes is associated with a twenty percent higher level of paid absenteeism from work

multinationals and corporate social responsibility in host countries does distance matter prior studies have found that foreign affiliates of multinational enterprises mnes suffer from liability of foreignness lof foreign affiliates may be able to improve their social legitimacy and overcome lof by demonstrating social commitment to host country constituents through corporate social responsibility csr if lof is positively related to the distance between the home and host countries and csr activities confer social legitimacy benefits on foreign affiliates we should expect csr activities and distance to be positively related however we argue that despite this potential motivation foreign affiliates from more distant home countries are in fact less likely to engage in host country csr our argument focuses on the ways in which distance affects the mne s willingness and ability to engage in csr abroad we also predict that host country csr reputation negatively moderates this relationship using community reinvestment act data for foreign bank affiliates from 32 countries in the united states over 1990 2007 we find strong support for our hypotheses the paper enriches our understanding of csr practices in mnes and of when and how mnes try to overcome legitimacy issues in host countries

investment crowding out firm level evidence from northern germany michalek j ciaian p and kancs d a investment crowding out firm level evidence from northern germany regional studies the main objective of this paper is to estimate the extent to which firm investment is substituted crowded out by investment support policies granted under the european union rural development programme rdp the empirical analyses employed the difference in difference propensity score matching approach which allows several important sources of bias to be addressed such as selection bias simultaneity bias and functional form misspecification from which many previous studies suffer using panel data of 1333 firms from the schleswig holstein region in germany it is found that the crowding out effect of the rdp is close to 100 implying that firms use public support to substitute for private investments furthermore no evidence was found that due to the rdp programme support firms would have brought forward their investments planned originally for a later period rejecting t

the ethics of consumer sovereignty in an age of high tech we argue that consumer sovereignty in an increasingly high tech world is more of a fiction than a fact we show how the principle of consumer sovereignty that governs the societal impact of economic competition is no longer valid the world of high tech is increasingly responsible for changes in the opportunity ability and motivation of business firms to compete furthermore the world of high tech is increasingly responsible for changes in the opportunity ability and motivation of consumers to engage in rational decision making we conclude that we cannot rely on consumer sovereignty to maintain a thriving economy instead we need to develop performance standards designed to meet the demands of the various stakeholders of the organization

the impact of corruption on entry strategy evidence from telecommunication projects in emerging economies with globalization and the growth in emerging economies multinational enterprises mnes now frequently confront challenges associated with corrupt governments already a growing body of research has demonstrated that corruption significantly reduces a countrys aggregate inflows of foreign direct investment through its effects on firm performance we move the analysis of corruption from aggregate financial flows toward managerial theory and practice by examining how firms adjust their strategy for entering foreign markets in corrupt environments and how different types of corruption affect firms choices building on institutional theory we predict that mnes will respond to pervasive and arbitrary corruption in a host country by selecting particular types of equity and nonequity modes of entry using data on 220 telecommunications development projects in 64 emerging economies we find that firms adapt to the pressures of corruption via short term contracting and entry into joint ventures we also find that the arbitrariness surrounding corrupt transactions has a significant impact on firms decisions in addition to the overall level of corruption in contrast to extant research we show that mnes use nonequity entry modes or partnering as an adaptive strategy to participate in markets despite the presence of corruption

computers skills and wages computer technology is most prominently used by skilled high wage workers this suggests that computer use requires skills to take full advantage of the possibilities which are particularly present among relatively skilled workers this article develops a simple technology adoption model showing that the decision to adopt computer technology depends on i the tasks to be performed ii the level of skill or education and iii the level of wages applying this model to british data it is shown that the effect of wages and particular tasks on computer adoption is larger than the effect of skills on adoption the estimates suggest that in britain computer use is likely to be a matter of cost efficiency and not so much of workers skills

the contingent value of social resources entrepreneurs use of debt financing sources in western china this study shows that entrepreneurs use of debt financing sources is conditioned by the resources embedded in their social networks more business or political contacts increase entrepreneurs probability of using formal financial sources and more urban ties increases their probability of using informal sources however the effects of business and bureaucratic ties are contingent on community level institutional trust and on firms age business ties have greater positive impact on the probability of using formal financial sources for older firms and for those in regions with a higher level of institutional trust while the impact of bureaucratic ties on these firms is weaker

a quantitative content analysis of the characteristics of rapid growth firms and their founders a group of firms that is attracting attention are rapid growth firms these firms are of particular interest because rapid growth is an indication of market acceptance and firm success by studying rapidgrowth firms researchers can help all firms better understand the attributes associated with firm growth despite these positive outcomes however rapid firm growth is difficult to achieve and maintain this study adds to the literature through a quantitative content analysis of the narrative descriptions of 50 rapid growth firms and a comparison group of 50 slow growth companies the purpose of the study was to draw from the narratives a list of empirically grounded growth related attributes that are associated with rapid growth firms the findings of the study resulted in the advancement of a conceptual model of the attributes of rapid growth firms in four areas founder characteristics firm attributes business practices and human resource management hrm practices

obtaining a driver s license in india an experimental approach to studying corruption we conduct two experiments to understand the process of obtaining a driver s license in india in the first experiment we randomly assign license candidates to one of three groups bonus offered a financial reward if they could obtain their license fast lesson offered free driving lessons upfront and control the control group alone illustrates bureaucratic failures 71 of the license getters in that group avoided the mandated driving test and 62 failed a surprise driving test the system responds to private needs there are more license getters in the bonus group but at a social cost there are more license getters who cannot drive in the bonus group the system however also appears to respond to social considerations as there are more license getters in the lesson group large extra legal payments are made by license getters those in the control group pay 2 5 times the official fee more of these extra legal payments take place in the bonus group surprisingly these extra legal payments are not direct bribes to bureaucrats but instead payments to agents in the second experiment we perform an audit study to better understand the role of agents the audit shows that agents can provide licenses to individuals even if they cannot drive but the audit also shows that agents cannot as easily circumvent all other rules we argue that our findings are most consistent with agents being the channel for corruption in this system we also report some suggestive evidence that bureaucrats create red tape possibly to induce more license candidates to use agents

the countervailing effects of competition on public goods provision when bargaining inefficiencies lead to bad outcomes political competition is widely recognized as a mediator of public goods provision through its salutary effect on incumbents electoral incentives we argue that political competition additionally mediates public goods provision by reducing the efficiency of legislative bargaining these countervailing forces may produce a net negative effect in places with weak parties and low transparency typical of many young democracies we provide evidence of a robust negative relationship between political competition and local public goods using panel data from mali tests of mechanisms corroborate our interpretation of this relationship as evidence of legislative bargaining inefficiencies to explore the generalizability of these findings we analyze cross country panel data and show that political competition leads to better worse public goods provision under high low levels of party system institutionalization the paper sheds light on why political competition is only selectively beneficial and underscores the importance of considering both the electoral and legislative arenas

sensitivity to exogeneity assumptions in program evaluation in many empirical studies of the effect of social programs researchers assume that conditional on a set of observed covariates assignment to the treatment is exogenous or unconfounded aka selection on observables often this assumption is not realistic and researchers are concerned about the robustness of their results to departures from it one approach e g charles manski 1990 is to entirely drop the exogeneity assumption and investigate what can be learned about treatment effects without it with unbounded outcomes and in the absence of alternative identifying assumptions there are no restrictions on the set of possible values for average treatment effects this does not mean however that all evaluations are equally sensitive to departures from the exogeneity assumption in this paper i explore an alternative approach developed by paul rosenbaum and donald rubin 1983 where the assumption of exogeneity is explicitly relaxed by allowing for a limited amount of correlation between treatment and unobserved components of the outcomes the starting point of the sensitivity analysis is the assumption that the exogeneity assumption is satisfied only conditional on an additional unobserved covariate making assumptions about the effect of the unobserved covariate on the outcome and its correlation with the treatment i trace out the set of possible values for the treatment effect of interest by considering a sufficiently large set of possible correlations with outcomes and treatment one can recover the bounds on the treatment effect derived by manski 1990 the approach here in the spirit of rosenbaum and rubin 1983 and rosenbaum 1995 is to allow only a limited amount of correlation and to judge the sensitivity of average treatment effect estimates to such correlations there are two novel features of the proposed analysis first rather than formulate the sensitivity in terms of coefficients on the unobserved covariate the sensitivity results are presented in terms of partial r values which may be easier to interpret second the partial r values of the unobserved covariates are compared to those for the observed covariates in order to facilitate judgments regarding the plausibility of values necessary to substantially change results obtained under exogeneity the proposed sensitivity analysis is conceptually related to the practice of assessing sensitivity of estimates by comparisons with results obtained by discarding one or more observed covariates james heckman and v joseph hotz 1989 rajeev dehejia and sadek wahba 1999 jeffrey smith and petra todd 2001 the attraction of the sensitivity analysis is that it is more directly relevant one is not interested in what would have happened in the absence of covariates actually observed but in biases that are the result from not observing all relevant covariates

can risk averse households make risky investments the role of trust in others in this paper using data from the survey on health ageing and retirement in europe share 2006 and 2013 waves we illustrate the link between individuals attitudes to financial risk combined with their willingness to trust others and their investments in risky assets individuals who display either risk tolerance alone or to a lesser extent risk aversion and trust more frequently decide to buy risky assets the comparison between scandinavian and mediterranean countries indicates that trust plays qualitatively different roles depending on the prevailing combination of risk attitude and trust in the area being studied

personality characteristics of self employed an empirical study this paper is concerned with the personality characteristics of self employed most existing studies on personality characteristics of entrepreneurs concentrate on factors like age educational profile and motivations to become self employed there is a lack of significant empirical findings to claim that entrepreneurs are psychologically different from the general population based on a large sample of 14 846 individuals we compare self employed with the general population and with wage and salary earners we empirically show that entrepreneurs differ from the general population and wage and salary earners in a number of characteristics entrepreneurs are more individually oriented than the rest of the population individual responsibility and effort are distinguishing characteristics when asked about important qualities that children can be encouraged to learn at home entrepreneurs answer that it is important to teach children an ethic of working hard except for the latter characteristic the same holds if we compare self employed with wage and salary earners

informal care and long term labor market outcomes in this paper we estimate long run effects of informal care provision on female caregivers labor market outcomes up to eight years after care provision we compare a static version where average effects of care provision in a certain year on later labor market outcomes are estimated to a partly dynamic version where the effects of up to three consecutive years of care provision are analyzed our results suggest that there are significant initial negative effects of informal care provision on the probability to work full time the reduction in the probability to work full time by 4 percentage points or 2 4 5 0 if we move from point to partial identification is persistent over time short run effects on hourly wages are zero but we find considerable long run wage penalties

the distinctiveness of entrepreneurship in transition economies this paper is concerned with the distinctiveness of entrepreneurship and small business development in countries that are at different stages of transformation to market based economies following a discussion of the potential relevance of selected conceptualisations of entrepreneurship to transition conditions the authors present original empirical data referring to the characteristics of entrepreneurs and their businesses from countries at different stages of market reform distinctive features of entrepreneurial behaviour identified reflect the unstable and hostile nature of the external environment and the scarcity of key resources particularly capital in an unstable and weakly structured environment informal networks often play a key role in helping entrepreneurs to mobilise resources win orders and cope with the constraints imposed by highly bureaucratic structures and often unfriendly officials moreover the social context inherited from the former socialist period appears to affect both the attitudes and behaviour of entrepreneurs and the attitudes of society at large towards entrepreneurship

book review feature public policy in an uncertain world by charles f manski cambridge ma harvard university press 2013 pp 224 39 95 isbn 978 0674066892

green by choice cross national variations in firms responses to ems based environmental regimes environmental management systems emss represent a new generation of voluntary beyond compliance environmental policies that neither set substantive goals nor specify final outcomes as a result many stakeholder groups are lukewarm toward them since 1993 two major supranational emss iso 14001 and the european union s environmental management and audit scheme emas have been introduced firms receive formal accreditation after their ems has been certified by outside verifiers this accreditation can potentially bestow monetary and nonmonetary benefits on these firms firm level ems adoption patterns in the united kingdom germany and the united states vary thereby suggesting that national contexts influence firms responses to them in germany and the u k a significant number of sites have become either iso 14001 or emas certified while the take up of iso 14001 in the u s emas is available only to european sites has been less enthusiastic this article begins with the hypothesis that firms in countries with adversarial economies where regulators and business are on less than friendly terms are less likely to adopt ems based programs this hypothesis explains why iso 14001 take up has been relatively high in the u k and relatively low in the u s however it cannot explain 1 the high rate of take up of both iso 14001 and emas in germany where the stringency of environmental legislation has been a contentious issue between the government and industry and 2 why emas has been more popular in germany than in the u k this article argues that the original hypothesis while largely correct is underspecified to better explain the cross national differences in ems adoption one must take into account the type of adversarial economy adversarial legalism versus prescriptive interventionism and the nature of the policy regime procedural versus substantive

political connections and entrepreneurial investment evidence from china s transition economy abstract recent literature in entrepreneurship suggests that market and legal institutions matter for entrepreneurial investment yet prior studies have focused on the role of formal institutions building on new institutional theory and political connections literature this study aims to evaluate the role of political connections in entrepreneurial reinvestment in less developed and transition economies the purpose of this paper is threefold first it aims to demonstrate systematically how political connections affect entrepreneurial reinvestment second it applies this relationship to a subsample group i e small and medium enterprises smes in order to empirically test whether political connections are more beneficial for large firms or smes third it demonstrates that political connections substitute for rather than complement formal market and legal institutions the empirical test uses a nationally representative sample of entrepreneurial firms from china s transition economy

the effect of prenatal stress on cooperation evidence from violent conflict in uganda abstract are preferences endogenously determined in the womb we play a public goods game with ugandan children born during a conflict characterised by high civilian victimisation children whose caregivers suffer from post traumatic stress disorder are more likely to free ride in the game genetic and environmental factors alone do not explain the relationship but children s 2d 4d digit ratio a marker of fetal hormone exposure associated with epigenetic effects of maternal distress does our findings extend the fetal origins literature to the domain of preferences by reducing next generation s taste for cooperation conflict may have father reaching economic consequences than previously thought

going public and the enrichment of a supportive network some evidence from italian initial public offerings past research on initial public offerings suggests that the reputation of a company positively affects the success of the offering success is usually measured in financial terms as if the essence of the operation lay only in the short term inflow of money in this paper we investigate important albeit often neglected implications of going public by combining evidence from a series of preliminary case studies taken from the results of a survey of 57 italian initial public offerings evidence from our research suggests that besides providing an important inflow of capital going public may actually improve the reputational and social capital of a company by increasing its visibility prestige and perceived trustworthiness therefore going public may be an important way to support entrepreneurial activity as it may expand and reinforce the network of relationships that offer access to external resources complementary skills and investment opportunities

after the big bang obstacles to the emergence of the rule of law in post communist societies when russia launched mass privatization it was widely believed that it would create a powerful constituency for the rule of law that didn t happen we present a dynamic equilibrium model of the political demand for the rule of law and show that beneficiaries of mass privatization may fail to demand the rule of law even if it is the pareto efficient rule of the game the reason is that uncertainty about the legal regime can lead to asset stripping and stripping can give agents an interest in prolonging the absence of the rule of law this abstract was borrowed from another version of this item

building trust evidence from vietnamese entrepreneurs abstract in the context of underdeveloped market institutions entrepreneurs in a transition economy are forced to rely on trust based partnerships in the absence of effective market institutions and sufficient elapsed time these entrepreneurial firms find a great need to actively and intentionally develop trust with their partners the current literature however has virtually overlooked the possibility of trust being intentionally developed in interfirm relationships this study develops a model that links trust development strategies trust and interfirm collaboration and reports an empirical test of that model in vietnam the results support the general thesis that trust can be intentionally developed to facilitate interfirm relationships

european patterns of corporate ownership a twelve country study a number of qualitative studies have shown striking international differences in corporate governance systems this paper presents a quantitative analysis of ownership structures among the hundred largest companies in twelve european countries the existence of a highly significant nation effect is confirmed further statistical analysis indicates that the nation effect is party explained by institutional differences

testing the law of one price in retail banking an analysis for colombia using a pair wise approach abstract we apply a pair wise approach to test the law of one price for deposit lending rates in colombia we find that when banks are of different sizes deposit rates adjust quickly suggesting a competitive environment by contrast lending rates adjust rapidly when banks are of similar sizes supporting market segmentation

reconciling conflicting evidence on the performance of propensity score matching methods there is a long standing debate in the literature over whether social programs can be reliably evaluated without a randomized experiment this paper summarizes results from a larger paper smith and todd 2001 that uses experimental data combined with nonexperimental data to evaluate the performance of alternative nonexperimental estimators the impact estimates based on experimental data provide a benchmark against which to judge the performance of nonexperimental estimators our experimental data come from the national supported work nsw demonstration and the nonexperimental data from the current population survey cps and the panel study of income dynamics psid these same data were used in influential papers by robert lalonde 1986 james heckman and joseph hotz 1989 and rajeev dehejia and sadek wahba 1998 1999 we focus on a class of estimators called propensity score matching estimators which were introduced in the statistics literature by paul rosenbaum and donald rubin 1983 traditional propensity score matching methods pair each program participant with a single nonparticipant where pairs are chosen based on the degree of similarity in the estimated probabilities of participating in the program the propensity scores more recently developed nonparametric matching estimators described in heckman et al 1997 1998a b use weighted averages over multiple observations to construct matches we apply both kinds of estimators in this paper heckman et al 1997 1998a b evaluate the performance of matching estimators using experimental data from the u s national job training partnership act jtpa study combined with comparison group samples drawn from three sources they show that data quality is a crucial ingredient to any reliable estimation strategy specifically the estimators they examine are only found to perform well in replicating the results of the experiment when they are applied to comparison group data satisfying the following criteria i the same data sources i e the same surveys or the same type of administrative data or both are used for participants and nonparticipants so that earnings and other characteristics are measured in an analogous way ii participants and nonparticipants reside in the same local labor markets and iii the data contain a rich set of variables relevant to modeling the program participation decision if the comparison group data fails to satisfy these criteria the performance of the estimators diminishes greatly more recently dehejia and wahba 1998 1999 have used the nsw data also used by lalonde to evaluate the performance of propensity score matching methods including pairwise matching and caliper matching they find that these simple matching estimators succeed in closely replicating the experimental nsw results even though the comparison group data do not satisfy any of the criteria found to be important in heckman et al 1997 1998a from this evidence they conclude that matching approaches are generally more reliable than traditional econometric estimators in this paper we reanalyze the nsw data in an attempt to reconcile the conflicting findings smith department of economics university of western ontario social science centre london on n6a 5c2 canada and nber todd department of economics university of pennsylvania 3718 locust walk philadelphia pa 19104 and nber versions of the paper that is the source for this paper have been presented at a 2000 meeting of the institute for research on poverty in madison wisconsin at the western research network on employment and training summer workshop august 2000 at the canadian international labour network meetings september 2000 and at the university of north carolina we thank james heckman for comments on this paper and we thank robert lalonde for comments and for providing us with the data from his 1986 study we thank rajeev dehejia for providing us with information helpful in reconstructing the samples used in the dehejia and wahba 1998 1999 studies jingjing hsee and miana plesca provided excellent research assistance

a time to grow and a time to die growth and mortality of credit unions in new york city 1914 1990 one vision of organizational evolution suggests that old and large organizations become increasingly dominant over their environment a second suggests that as organizations age they become less able to respond to new challenges in this article the authors investigate which of these visions best characterizes the evolution of state chartered credit unions in new york city from 1914 through 1990 by analyzing the effects of organizational age size and population density on rates of organizational failure and growth the authors find evidence that old and small institutions are more likely to fail while young and small organizations have the highest growth rates

corruption in tax administration abstract we extend the game theoretic model of graetz reinganum and wilde 1986 to allow for corruption in tax administration in the presence of corruption audit rates are generally higher than in its absence in fact in the presence of corruption it is possible to sustain equilibria in which all returns are audited moreover when some auditors accept bribes it is possible for increases in the fine rate or the tax rate to reduce expected government revenue

stock market structure and volatility the procedure for opening stocks on the nyse appears to affect price volatility an analytical framework for assessing the magnitude of the structurally induced volatility is presented the ratio of variance of open to open returns to closeto close returns is shown to be consistently greater than one for nyse common stocks during the period 1982 through 1986 tbe greater volatility at the open is not attributable to the way in which public information is released since both the opento open return and the close to close return span the same period of time instead the greater volatility appears to be attributable to private information revealed in trading and to temporaryprice deviations induced by specialist and other traders the implied cost of immediacy at the open is significantly higher than at the close other empirical evidence in this article documents the volume of trading at the open the time delays between the exchange opening and the first transaction in a stock the difference in daytime volatility versus overnight volatility and the extent to which volatility is related to trading volume

assimilation or contrast status inequality judgment of product quality and product choices in markets much of organizational status research has been conducted at the micro level by examining the effect of individual status positions to answer calls for more status research at the macro level this study extends psychological research on assimilation and contrast effects to examine how status inequality as a distributional property influences product choices in markets in the context of u s college bowls a specific type of organization within u s collegiate athletics this study analyzes how the status inequality among bowls influences bowls stadium attendance which reflects the judgment of bowls by football fans as the key buyers the analyses yield evidence consistent with assimilation and contrast effects below the middle level of status inequality the relationship between status inequality and stadium attendance is positive for low status bowls but negative for high status bowls above the middle level of status inequality the relationships are reversed the effect of status inequality is a

getting known by the company you keep publicizing the qualifications and former associations of skilled employees when product quality cannot be ascertained in advance of purchase producers must convince relevant audiences that they are worthy of consideration as quality players we propose that quality oriented producers will selectively publicize information about their skilled employees in anticipation of signaling benefits which include the accrual of visibility and the projection of quality based identities we validate our perspective on publicizing affiliation information by analyzing how a sample of australian wine producers publicized specific career information about their skilled employees i e their winemakers including the names of certain former employers of these individuals copyright 2009 oxford university press

disaster aid and preferences the long run impact of the tsunami on giving in sri lanka summary do natural disasters produce effects on preferences of victims in the long run we test the impact of the tsunami shock on generosity of a sample of sri lankan affected unaffected microfinance borrowers seven years after the event specifically we test the effect of the shock at the extensive margin by comparing damaged with non damaged individuals in terms of giving and expected giving in a dictator game moreover at the intensive margin we compare the participants based on the amount of damage experienced and recovery aid received the advantage of this last comparison is that differences in observables between the groups are minimized we reduce further identification problems by selecting a random sample of damaged and non damaged borrowers belonging to the same microfinance organization who are therefore likely to share some important common traits that are usually unobservable to researchers we complete our identification strategy with weighted least squares instrumental variable estimates and a sensitivity analysis on the exogeneity assumption the main findings of the paper support the hypothesis that the shock affects participants preferences in the long run first the tsunami negatively affects generosity at the extensive margin as those who suffered at least one damage give and expect less than those who did not second while large recovery assistance does not directly affect giving and expected giving it increases especially the latter indirectly i e when interacted with the number of damages our results reconcile that part of the literature showing evidence of natural shocks having a detrimental effect on social preferences fleming chong alberto bejarano 2011 cassar grosjean whitt 2013 with that supporting instead a positive link solnit 2009 whitt wilson 2007 cassar healy von kessler 2011 furthermore since our study focuses on the long run impact of a natural disaster previous results on short run effects are not necessarily inconsistent with ours

financial asset holdings and political attitudes evidence from revolutionary england the english parliament s struggle for supremacy against monarchical dictatorship during the civil war 1642 1648 was crucial for the establishment of representative government yet its lessons continue to be debated i exploit novel data on individual mps drawn from 1 842 biographies to show that the conflict was over overseas interests and other factors over which the executive enjoyed broad constitutional discretion rather than over domestic property rights i further exploit the coincidence of individual mps ability to sign legally binding share contracts with novel share offerings by overseas companies to measure the effect of overseas share investment on their political attitudes i show that overseas shareholding pushed moderates lacking prior mercantile interests to support reform i interpret the effect of financial assetholding as allowing new investors to exploit emerging economic opportunities overseas aligning their interests with traders by consolidating a broad parliamentary majority that favored reform the introduction of financial assets also broadened support for the institutionalization of parliamentary supremacy over dictatorial rule jel codes o10 g11 f10 k00 n23 p10

measuring european financial integration in this paper we present a set of specific measures to quantify the state and evolution of financial integration in the euro area five key markets are considered namely the money corporate bond government bond credit and equity markets building upon the law of one price we have developed two types of indicators that can be broadly categorized as price based and news based measures we have complemented these measures by a number of quantity based indicators mainly related to the evolution of the home bias results indicate that the unsecured money market is fully integrated while integration is reasonably high in the government and corporate bond markets as well as in the equity markets the credit market is among the least integrated especially in the short term segment

promoting entrepreneurship in eastern europe the past decade has seen a revival of entrepreneurship in the modern industrial economies characterized by a wave of enterprise restructuring and of new developments in business and technology in this paper we argue that market transitions of the post socialist economies of eastern europe cannot be successful without similar entrepreneurial restructuring to address the massive structural distortions that still plague the post reform economies the governments of the region must promote entrepreneurship through policies that 1 make use of all possible sources of entrepreneurship including in particular the former state and social sectors and 2 establish a macroeconomic environment and property rights framework conducive to entrepreneurship a successful promotion strategy will need to operate on several fronts by 1 redirecting entrepreneurial activities into legal productive activities 2 increasing the supply and effectiveness of entrepreneurs 3 developing markets for complementary inputs and 4 increasing the demand for entrepreneurship an unsuccessful approach we argue will be one that regards the pre reform small private sector as the only source of entrepreneurship and as the only arena for its productive use

organizing contests for status the matthew effect vs the mark effect what is the best way to design tournaments for status in which individuals labor primarily for the esteem of their peers what process in other words should organizers of status based contests impose upon those who covet peer recognition we propose a formal model of status based competition that contrasts two competing alternatives the first following merton is the matthew effect according to which a tournament s architect directs slack resources to elite actors and thus widens the distribution of rewards by favoring cumulative advantage the second is the mark effect under which a tournament s designer instead pushes slack resources to marginal actors and thus tightens the distribution of rewards our results suggest that although the mark effect is better for the social welfare of most tournaments the matthew effect is preferable in two distinct contexts in small tournaments where variation in underlying ability translates into acute advantages for the most capable contestants and in large tournaments whose contestants face constant rather than rising marginal costs a condition we relate to contestants perception of their work as intrinsically valuable our contributions are twofold we find counter to the thrust of merton s work that cumulative advantage is not invariably optimal for the functioning of status contests and we identify circumstances in which the production of superstars is likely to make contests for status better off in aggregate implications for future research on status and management are discussed this paper was accepted by olav sorenson organizations and social networks

the market for public office why the indian state is not better at development abstract how and why officials are transferred from one post to another can in india does have far reaching consequences for the effectiveness of public service organizations such as irrigation agriculture forestry and soil conservation departments the transfer mechanism used in many departments of indian states involves a kind of internal labor market a truer market than in the way that term is often used by labor market economists it allows pressures for corrupt behavior to bear down on the incumbents of certain posts and itself amplifies those pressures frequently the pressures on officials to be corrupt cause them to behave in ways contrary to the ostensible objectives of their departments why is the indian state not better at promoting development to an important degree because of the corruption transfer mechanism and its effects on bureaucratic initiatives