farm settlement with imperfect capital markets a life cycle application to upper canada 1826 1851 farm settlement where borrowing is constrained is addressed with a life cycle model because a pioneer farm must be cleared before becoming productive the settler first accumulates in order to purchase supplies and maintain consumption during the initial years implications of the model are explored using data from upper canada 1826 1851 age at settlement is delayed settlers eventually receive higher incomes than those who do not settle rising life expectancy contributes to settlement an immediate income is a prerequisite to settlement such findings conform to the experience of upper canada and other pioneer areas and may also illuminate aspects of migration jel classification n31 j61 colonisation agricole quand les marches du capital sont imparfaits une application du modele du cycle de vie au haut canada 1826 51 l auteur examine le processus de colonisation agricole quand il y a contraintes sur les emprunts a l aide d un modele de cycle de vie parce qu un pionnier doit d abord defricher avant que la ferme ne soit productive le colon doit avoir prealablement accumule un certain pecule afin de pouvoir acheter le materiel necessaire et maintenir sa consommation durant les premieres annees de colonisation on analyse les implications de ce modele en utilisant les donnees pour le haut canada de 1826 a1851 entre autres resultats on note que l ge ou l on s installe est reporte que ceux qui colonisent eventuellement recoivent des revenus beaucoup plus eleves que ceux qui ne le font pas que la croissance de l esperance de vie tend a encourager la colonisation et qu une source immediate de revenus est un prerequis a la colonisation ces resultats et certains autres sont conformes a ce que l on observe dans le haut canada et dans les autres zones de colonisation et il peuvent jeter un peu de lumiere sur certains aspects du processus de migration

perfect equilibria in a trade liberalization game the credibility of temporary protection is examined in a simple infinite horizon perfect information game of timing in which the domestic government uses the threat of future liberalization to induce the domestic firm to invest all pure strategy subgame perfect equilibria are cyclical and surprisingly one of them implements optimal temporary protection however this equilibrium fails to pass another credibility criterion called renegotiation proof the game has a unique stationary subgame perfect equilibrium in mixed strategies copyright 1990 by american economic association

pro competitive effects of trade reform results from a cge model of cameroon abstract how likely is trade liberalization to produce efficiency gains in the presence of imperfect competition scale economies and higher than average wages in the modern sectors all common features in developing economies these features create a potential conflict to the extent that traditional notions of comparative advantage lead us to expect that the modern sectors will be squeezed with liberalization in this paper we investigate this issue by using an applied general equilibrium model calibrated to cameroonian data under perfect competition we find that the welfare effect is a wash since the beneficial consequence of expanded imports is offset by the reduction in employment in the modern high wage sectors under imperfect competition by contrast trade liberalization produces welfare gains of the order of 1 to 2 percent of income the key is the pro competitive effect of liberalization domestic firms in the modern sectors now perceive themselves as facing a higher elasticity of demand which spurs them to increase production

credibility of protection and incentives to innovate in recent trade policy debates it is often argued that temporary protection stimulates innovation this paper shows that the validity of the argument depends on the perceived credibility of protection policy if it is suspected that temporary protection will be removed early should innovation occur before its terminal date the protected firm invests less in r d than it does under free trade if it is expected that protection will be extended should no innovation have occurred by its terminal date investment falls below the free trade level and eventually to zero as the terminal date is approached

imports as competitive discipline the role of the productivity gap abstract this paper addresses the impact of foreign competition on the competitive advantage of domestic firms and the role of trade policy in an endogenous growth framework it shows that the impact of foreign competition on r d and productivity depends on the industry s relative position trade liberalization promotes innovation and enhances welfare in mature industries but hinders growth and leads to market exit in infant industries with a large productivity gap in the latter case temporary protection promotes the survival of the firm and increases welfare at the margin hence we integrate the old argument for the temporary protection of infant industries with the notion that foreign competition fosters innovation and productivity

contributions to canadian economic history the last 30 years the cliometric revolution that transformed economic history in the us in the 1960s was soon embraced by canadian economic historians many of the important issues surrounding canadian development remained the same the role of resources the place of international trade immigration capital accumulation and interactions with native americans among others but beginning in the 1960s and certainly over the last 30 years economic historians of canada have addressed them with the tools of modern economics both theoretical and empirical we highlight the recent work emphasizing not just the methods but also the fundamental ways our understanding of canadian history has been changed

immigrant earnings differentials and birth year effects for men in canada post war 1972 this paper investigates immigrant earnings differentials for males in canada and how these earnings have changed over time leading up to 1972 with workers year of birth the paper uses the 1973 job mobility survey which contains a direct measure of work experience reported independent of age thus using age as a birth year index it is found that cross sectional earnings differentials of immigrant men have widened since the later 1960s relative to those of native born workers summary in fre excerpt

the performance of immigrants in the canadian labor market in this article we examine the economic assimilation of immigrants to canada we provide new evidence on immigrants who arrived in the 1970s and document an increase in the dispersion of labor market outcomes across immigrants of different vintages over time our results confirm u s evidence of permanent differences across immigrant cohorts what distinguishes the canadian experience is small or negative rates of assimilation for most cohorts over the sample period finally we test the overidentification of the assimilation process specified in previous studies and fail to reject the usual cohort fixed effect specification

endogeneity and the dynamics of internal corporate governance abstract we use a well developed dynamic panel generalized method of moments gmm estimator to alleviate endogeneity concerns in two aspects of corporate governance research the effect of board structure on firm performance and the determinants of board structure the estimator incorporates the dynamic nature of internal governance choices to provide valid and powerful instruments that address unobserved heterogeneity and simultaneity we re examine the relation between board structure and performance using the gmm estimator in a panel of 6 000 firms over a period from 1991 to 2003 and find no causal relation between board structure and current firm performance we illustrate why other commonly used estimators that ignore the dynamic relationship between current governance and past firm performance may be biased we discuss where it may be appropriate to consider the dynamic panel gmm estimator in corporate governance research as well as caveats to its use

why company specific risk changes over time company specific risk climbed steadily between 1962 and 1999 in the u s market but fell sharply between 2000 and 2003 this article explores the hypothesis that three factors are primarily responsible for observed changes in company specific risk changes in the market weights of riskier industries changes in the relative role of small capitalization stocks in the market and measurement error associated with changes in within industry concentration empirical tests reveal that each factor contributes to changes in company specific risk over time and that combined these three factors largely explain changes in company specific risk over the past 40 years

international migration with capital constraints interpreting migration from the netherlands to canada in the 1920s an inability to borrow affected migration from europe to north america this capital constraint is formalized with a life cycle model where agents jointly choose how much to save the optimal period to finance migration and whether to migrate using a life cycle model we show that preference for the home country the period of adjustment after arrival and the direct cost of migration affect the savings of migrants age at migration and who migrates these results are discussed in light of wages in canada and the netherlands and the characteristics of dutch immigrants drawn from ship passenger manifests capital constraints delayed migration and help explain the large wage gap between the netherlands and canada jel classification j61 n32 n34 une incapacitea emprunter a affecte la migration de l europe vers l amerique du nord cette contrainte sur l acces au capital est formalisee a l aide d un modele de cycle de vie ou les agents choisissent conjointement combien epargner la periode optimale pour financer la migration et le choix de migrer ou non a l aide d un modele de cycle de vie on montre que la preference pour le pays d origine la periode d ajustement apres l arrivee et le cout direct de la migration affectent l epargne des emigrants l ge auquel ils migrent et qui emigre ces resultats sont discutes a la lumiere des salaires au canada et au pays bas et des caracteristiques des immigrants hollandais tirees de listes de passagers de bateaux les contraintes sur l acces au capital ont retarde la migration et aident a expliquer le grand ecart entre les salaires en hollande et au canada

qualitative similarity and stock price comovement abstract i introduce a method for gauging the qualitative similarity of firm specific information based on linguistic commonality in newswire text i show that this new qualitative similarity measure predicts future cross firm return correlation even after accounting for the pair s contemporaneous price comovement common exposures to systematic risk firm liquidity price index membership text volume headquarters location product similarity shared mutual fund or institutional ownership common analyst following and newswire co mentions i also demonstrate that content produced solely by journalists cannot predict an economically meaningful portion of future comovement out of sample tests confirm that knowledge of qualitative similarity can also reduce portfolio risk

idiosyncratic return volatility cash flows and product market competition over the past 40 years the volatility of the average stock return has drastically outpaced total market volatility thus idiosyncratic return volatility has dramatically increased we estimate this increase to be 6 per year consistent with an efficient market this result is mirrored by an increase in the idiosyncratic volatility of fundamental cash flows we argue that these findings are attributable to the more intense economy wide competition various cross sectional and time series tests support this idea economic competitiveness facilitates reinterpretation of the results from the cross country r2 literature as well as the us idiosyncratic risk literature jel g12 g14

market microstructure and securities values evidence from the tel aviv stock exchange abstract this paper examines the value effects of improvements in the trading mechanism selected stocks on the tel aviv stock exchange were transferred gradually from a daily call auction to a mechanism where the call auction was followed by iterated continuous trading sessions this event was associated with a positive and permanent price appreciation the cumulative average market adjusted return over a period that started five days prior to the announcement and ended 30 days after the stocks started trading by the new method was approximately 5 5 in addition we find positive liquidity externalities spillovers across related stocks and improvements in the value discovery process due to the improved trading method finally there was a positive association between liquidity gains and price appreciation

on the persistence of leadership or leapfrogging in international trade when two countries starting from different quality levels reflecting different conditions on domestic market demands open to trade two possible equilibria arise in the first the quality leader maintains its position in the second leapfrogging occurs however the latter is possible only if the initial quality gap is not too wide further when the risk dominance criterion is used only the former equilibrium is selected these results suggest that initial conditions such as domestic market size or home demand preferences are important factors in determining relative competitiveness of firms in international markets

price based return comovement abstract similarly priced stocks move together stocks that undergo splits experience an increase in comovement with low priced stocks and a decrease in their comovement with high priced stocks price based comovement is not explained by economic fundamentals firm size or changes in liquidity or information diffusion the shift in comovement following splits is greater for large stocks high priced stocks and when investor sentiment is high in the full cross section price based portfolios explain variation in stock level returns after controlling for movements in the market and industry portfolios as well as portfolios based on size book to market transaction costs and return momentum the results suggest that investors categorize stocks based on price

self selection and the earnings of immigrants this paper analyzes the way in which the earnings of the immigrant population may be expected to differ from the earnings of the native population because of the endogeneity of the decision to migrate the empirical study shows that differences in the u s earnings of immigrants with the same measured skills but from different home countries are attributable to variations in political and economic conditions in the countries of origin at the time of migration excerpt

quantitative restrictions market power and productivity growth abstract this paper shows that when compared to tariffs quantitative restrictions qrs have a negative effect on innovation and productivity growth first qrs lead to stagnation in the steady state in the absence of domestic competition while tariffs allow for positive steady state growth second the replacement of a qr by a tariff equivalent leads to an increase in the short run incentives to innovation

the sensitivity of strategic and corrective r d policy in oligopolistic industries abstract we evaluate the case for r d subsidies in export sectors when the outcome of r d is uncertain and the product market is oligopolistic when r d reduces expected costs in the particular sense of first order stochastic dominance a national strategic basis for r d subsidies exists whether firms choose prices or quantities this must be balanced against a corrective incentive to tax r d whenever the number of domestic firms exceeds one however when r d increases the riskiness of the cost distribution as well the results may switch there emerges a strategic incentive to tax and a corrective incentive to subsidize r d

the dartboard column second hand information and price pressure this study analyzes the effect of second hand information on the behavior of security prices and volume using analysts recommendations published in the monthly dartboard column of the wall street journal for the two days following the publication of the recommendations average positive abnormal returns of 4 percent nearly twice the level of abnormal returns documented in previous research on analyst recommendations and average volume double normal volume levels on the two days following publication of the recommendations are documented the positive abnormal return on announcement is partially reversed within 25 trading days the authors conclude that the positive abnormal return on announcement of the recommendations is a result of naive buying pressure as well as the information content of the analysts recommendations

investment opportunities in the source country and temporary migration this paper examines how attractive investment opportunities available to temporary migrants in their country of origin aect their saving behavior and the optimal duration of stay abroad the model predicts an inverse u shaped relationship between migration duration and the expected rate of return on repatriated savings a higher rate provides an incentive to go back earlier and consume less abroad while it can also trigger emigration aimed at generating the savings required for investment after return at a more general level the paper illustrates how the behavior of temporary migrants re ects the interaction between their preferences and the opportunities available in the labor and capital markets of both countries

sunk costs market structure and growth the author presents a model of endogenous innovation where firms undertake in house research and development r d the concentration of sales and r d resources determines the scale and efficiency of r d operations and rate of productivity growth in zero profit equilibrium r d expenditure is one component of total fixed costs and determines the number of active firms this feedback generates interdependent pricing investment and entry exit decisions the jointly determined rate of growth and number of firms supported in general equilibrium define the economy s balanced growth path multiple equilibria exist and firms expectations about rivalry determine the economy s performance copyright 1996 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

international r d rivalry and industrial strategy this paper presents a theory of government intervention which provides an explanation for industrial strategy policies such as r d or export subsidies in imperfectly competitive international markets domestic net welfare is improved by the capture of a greater share of the output of rent earning industries although the subsidy ridden noncooperative international equilibrium is jointly suboptimal behaviour of governments and firms is modelled as a three stage subgame perfect nash equilibrium the assumption that the government is the first player in this game allows it to influence equilibrium outcomes by altering the set of credible actions open to firms