anticipated discrimination choices and performance experimental evidence abstract this paper studies experimentally whether potential perceived discrimination affects decisions in a labor market setting with different stereotypes participants are assigned to a seven person group and randomly allocated a role as a firm or worker in each group there are five workers and two firms the only information firms have about each worker is a self selected avatar male female or neutral representing a worker s gender each firm then decides which worker to hire female workers react to potential discrimination when they know the task is math related but not otherwise men choose similar avatar patterns regardless of the task men do perform at much higher levels in the math related task but there is no difference in performance in the emotion recognition task where there is a strong female stereotype

experience tenure and wage growth of young black and white men this paper studies the source of differences in wage growth between young black and white workers focusing on terminal high school graduates from the national longitudinal survey of youth we estimate the returns to on the job tenure and general labor market experience using ordinary least squares altonji and shakotko and topel estimators results from all three estimators indicate that returns to general experience for black workers trail those for white workers but that black workers earn equal if not higher returns to tenure than do white workers

racial discrimination in the labor market theory and empirics we review theories of race discrimination in the labor market taste based models can generate wage and unemployment duration differentials when combined with either random or directed search even when strong prejudice is not widespread but no existing model explains the unemployment rate differential models of statistical discrimination based on differential observability of productivity across races can explain the pattern and magnitudes of wage differentials but do not address employment and unemployment at their current state of development models of statistical discrimination based on rational stereotypes have little empirical content it is plausible that models combining elements of the search models with statistical discrimination could fit the data we suggest possible avenues to be pursued and comment briefly on the implication of existing theory for public policy jel j15 j31 j64 j71

racial disparities in job finding and offered wages abstractthe extent to which discrimination can explain racial wage gaps is one of the most divisive issues in the social sciences using a newly available data set this paper develops a simple empirical test that under plausible but not innocuous conditions provides a lower bound on the extent of discrimination in the labor market taken at face value our estimates imply that differential treatment accounts for at least one third of the black white wage gap we argue that the patterns in our data are most naturally rationalized through a search matching model in which employers statistically discriminate on the basis of race when hiring unemployed workers but learn about their marginal product over time

gender differences in training capital and wages this paper constructs an equilibrium job matching model where workers differ in their attachment to the labor force the model predicts that workers with weaker attachment to the labor market will receive lower starting wages and lower post training wages and will be placed in jobs that offer less training and use less capital the implications of the model for gender differences in pay and job assignment are tested with the eopp data set ourfindings suggest that while training intensity during the first three months of employment is similar in positions filled by males and females females are employed in positions that have a shorter duration of on the job training and that use less capital these differences in on the job training and capital in positions filled by men and women as well as a lower market value for women s prior labor market experience account for a substantial part of the gap in wages between males and females

endogenous tariff formation the case of mercosur mercosur appears as an interesting case study for analyzing the determinants of exceptions in regional trade agreements its member countries argentina brazil paraguay and uruguay intended to make mercosur a full customs union by january 1995 this goal turned out to be too ambitious and the protocol of ouro preto and other agreements signed in december 1994 led to a hybrid solution overall out of a total of 9 119 tariff lines around 30 percent are subject in at least one member country to either external deviations from the common external tariff or internal deviations from free trade thus an important set of holes remains under the existing agreement leading some authors to consider mercosur an incomplete customs union this article compares the results of the theoretical literature on endogenous tariff formation with evidence from mercosur the results show that mercosur common external tariff and member countries deviations from it and from internal free trade can be explained by sector or industry lobbying as predicted by the endogenous tariff literature if a viable political economy is a key to success then mercosur is here to stay

counteroffers and efficiency in labor markets with asymmetric information this article considers the effect of offer matching on labor market outcomes when the current employer has better information about his worker s productivity than potential employers previous research found that when current employers have better information than potential employers the latter use job assignment to infer an employed worker s qualifications as a result assignment of workers to jobs is inefficient i find that when current employers can match outside offers the equilibrium outcome may be efficient i analyze the effect of the asymmetric information on investment in human capital made by employers and workers and find these investment levels to be first best

firm size and the nature of innovation within industries the case of process and product r d the effect of firm size on the allocation of r d effort between process and product innovation is examined it is hypothesized that relative to product innovations process innovations are less saleable in disembodied form and spawn less growth this implies that the returns to process r d will depend more on the firm s output at the time it conducts its r d than the returns to product r d incorporating this distinction in a simple model the authors derive and test predictions about how the fraction of r d devoted to process innovation varies with firm size within industries

mommy tracks and public policy on self fulfilling prophecies and gender gaps in hiring and promotion abstract consider a model with two types of jobs the profitability of hiring a worker to a fast track job depends not only on his or her observable talent but also on incontractible effort we investigate whether self fulfilling expectations may lead to higher hiring or promotion standards for women if employers expect women to do more household work than men thereby exerting less effort in their paid job then women must be more talented to make it profitable to hire them specialization in the family will then result in women doing most of the household work such self fulfilling prophecies can be defeated by affirmative action or family policy however it is unlikely that temporary policy can move the economy to a symmetric equilibrium policy must be made permanent anti discrimination policy need not enhance efficiency and from a distribution viewpoint this is a policy with both winners and losers

diversification patterns and survival as firms mature we focus on the relationship between age and diversification patterns of german machine tool manufacturers in the post war era we distinguish between minor diversification adding a new product variation within a familiar submarket and major diversification expanding the product portfolio into new submarkets our analysis reveals four main insights first we observe that firms have lower diversification rates as they grow older and that eventually diversification rates even turn negative for old firms on average where negative diversification corresponds to exit from certain product lines second we find that product portfolios of larger firms tend to be more diversified third with respect to consecutive diversification activities quantile autoregression plots show that firms experiencing diversification in one period are unlikely to repeat this behavior in the following year fourth survival estimations reveal that diversification activities reduce the risk of exit in general and to a varying degree at different ages these results are interpreted using penrosean growth theory

a theory of collective reputations with applications to the persistence of corruption and to firm quality the paper is a first attempt at modelling the idea of group reputation as an aggregate of individual reputations a member s current incentives are affected by his past behaviour and because his track record is observed only with noise by the group s past behaviour as well the paper thus studies the joint dynamics of individual and collective reputations and derives the existence of stereotypes from history dependence rather than from a multiplicity of equilibria or from the existence of a common trait as is usually done in the literature it shows that new members of an organization may suffer from an original sin of their elders long after the latter are gone and it derives necessary and sufficient conditions under which group reputations can be rebuilt last the paper applies the theory to analyse when a large firm can maintain a reputation for quality 1 collective reputations collective reputations play an important role in economics and the social sciences countries ethnic racial or religious groups are known to be hard working honest corrupt hospitable or belligerent some firms enjoy substantial rents from their reputations for producing high quality products some departments are reported to treat their faculty or students fairly the paper is a first attempt at modelling the idea of group reputation as an aggregate of individual reputations a member s current incentives are affected by her past behaviour and because her track record is observed only with noise by the group s past behaviour as well the paper studies the joint dynamics of individual and collective reputations in a model in which current generations are progressively replaced by new ones and derives the existence of stereotypes from history dependence rather than from a multiplicity of equilibria or from the existence of a common trait as is usually done in the literature see section 2 for a detailed comparison with the literature it shows that new members of an organization may suffer from an original sin of their elders long after the latter are gone and it derives necessary and sufficient conditions under which group reputations can be rebuilt last the paper applies the theory to analyse when a large firm can maintain a reputation for quality let us spell out the building blocks of our theory in more detail a a group s reputation is only as good as that of its members each member is characterized by individual traits such as talent diligence or honesty past individual behaviour conveys information about these traits and generates individual reputations

an equilibrium search matching model of discrimination abstract a model in which firms have incomplete information about workers at the hiring stage is shown to entail discrimination as the unique stable equilibrium outcome even if no agents have a taste for discrimination and groups are ex ante identical groups which are discriminated against e g blacks women earn lower wages and endure longer unemployment spells

sex discrimination in labor markets the role of statistical evidence reply correlations between statistically measured wage discrimination and confidential survey reports of discrimination are used to estimate the relative importance of statistical evidence in determining womens self assessed discrimination levels statistical evidence is found to be considerably less important than other nonstatistical evidence assuming courts weigh statistical versus other evidence as individuals do the effects of making statistical evidence admissible are calculated young well educated women are predicted to be the main beneficiaries of this policy copyright 1987 by american economic association

cultural transmission and discrimination workers can have good or bad work habits these traits are transmitted from one generation to the next through a learning and imitation process which depends on parents investment in the trait and the social environment where children live if a sufficiently high proportion of employers have taste based prejudices against minority workers we show that their prejudices are always self fulfilled in steady state and minority workers end up having on average worse work habits than majority workers this leads to a ghetto culture affirmative action can improve the welfare of minorities whereas integration can be beneficial to minority workers but detrimental to workers from the majority group

discrimination and the effects of drug testing on black employment abstract a common assumption is that the rise of drug testing among u s employers must have had negative consequences for black employment i use variation in the timing and nature of drug testing regulation to identify the impacts of testing on black hiring i find that adoption of protesting legislation increases black employment in the testing sector by 7 to 30 and relative wages by 1 4 to 13 0 with the largest shifts among low skilled black men the results are consistent with ex ante discrimination and suggest that drug testing may benefit african americans by enabling nonusing blacks to prove their status to employers

economic obstacles to expanding intra african trade abstract the paper extends the gravity model to examine the impact of infrastructure availability economic policy and internal political tensions on intra african trade to highlight specific obstacles hampering such a trade bilateral trade between africa and developed countries is also analyzed the results show that besides traditional gravity variables poor infrastructure economic policy mismanagement and internal political tensions have a negative impact on trade among african countries except for political tensions the identified obstacles are specific to intra african trade since they have no impact on african trade with developed countries

does privatization improve job satisfaction the case of ghana this paper analyzes the impacts of privatization in ghana on the basis of a survey of 300 workers in privatized and state owned enterprises the findings indicate a significant positive relationship between privatization and job satisfaction whereas monthly wage is an important determinant of job satisfaction in state owned enterprises education and the availability of training opportunities are strong determinants in privatized enterprises the study also shows that there exists a variety of instruments to implement a privatization program smoothly

trade conflict and political integration explaining the heterogeneity of regional trade agreements many historians argue that the main goal of european trade integration was the preservation of peace this paper investigates whether this reasoning is relevant for the eu and other regional trade agreements rtas i provide empirical evidence that customs unions and common markets deep rtas do reduce the probability of war between members partial scope and free trade agreements shallow rtas however have no effect on war probabilities accordingly international insecurity has a differential impact on incentives to create rtas deep rtas are signed between countries that are involved in many interstate disputes and that have low trade costs with the rest of the world whereas the opposite is true for shallow rtas

an experimental study of statistical discrimination by employers this article reports findings of an experiment motivated by a dynamic labor market model that considers the problem faced by employers in making hiring decisions between workers of different types the question examined here is how quickly employers learn about the ability of a group of workers through observing representatives of that group if prior opinions are weak the employer will use information from the workplace to quickly update any incorrect group based stereotypes it may have on the other hand if priors are heavily weighted incorrect initial perceptions will result in persistent wage differences our experimental findings are twofold first subjects employers behavior moves quickly toward optimal choices second strong priors are hard to establish these results suggest that it would take a long time for employers to form group based stereotypes and that such stereotypes should go away quickly in response to signals that contradict these stereotypes

are emily and greg more employable than lakisha and jamal a field experiment on labor market discrimination we study race in the labor market by sending fictitious resumes to help wanted ads in boston and chicago newspapers to manipulate perceived race resumes are randomly assigned african american or white sounding names white names receive 50 percent more callbacks for interviews callbacks are also more responsive to resume quality for white names than for african american ones the racial gap is uniform across occupation industry and employer size we also find little evidence that employers are inferring social class from the names differential treatment by race still appears to still be prominent in the u s labor market jel j71 j64

feasible multilateralism and the effects of regionalism recent research has underlined the efficiency of the gatt wto rules from the standpoint of politically motivated governments emphasizing that the current multilateral rules are capable of delivering a politically efficient equilibrium such an equilibrium is however economically inefficient global free trade in particular is generally unattainable even in a fully cooperative world provided that governments have distributive motivations in such a context we show that regional trade agreements can help move the world towards a welfare superior equilibrium the reason is that as members of regional trade agreements lower trade barriers against one another they are induced to reduce their multilateral tariff sa s well once we account for these endogenous changes and only then we find that regionalism can raise world welfare even in a fully cooperative but political world we also find however that members are likely to gain too much from regional integration thereby harming outsiders

innovation and firm growth does firm age play a role this paper explores the relationship between innovation and firm growth for firms of different ages we hypothesize that young firms undertake riskier innovation activities which may have greater performance benefits if successful or greater losses if unsuccessful using an extensive spanish community innovation survey sample for the period 2004 2012 we apply panel quantile regressions to study the effect of r d activities on firm growth i e sales growth productivity growth and employment growth our results show that young firms face larger performance benefits from r d at the upper quantiles of the growth rate distribution but face larger decline at the lower quantiles r d investment by young firms therefore appears to significantly riskier than r d investment by more mature firms which suggests some policy implications

how do different drivers of r d investment in foreign locations affect domestic firm performance an analysis based on swiss panel micro data the aim of this article is to investigate the differences between specific motives of rd 2817 companies shows first that factors related to firm specific knowledge oriented advantages are more important for explaining the likelihood of foreign r d activities than factors reflecting disadvantages related to home location second knowledge oriented motives of foreign r d positively influence the innovation performance of domestic firms whereas market and resource oriented strategies have a positive impact on labor productivity copyright 2011 the author 2011 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

does affirmative action work caste gender college quality and academic success in india public policy in modern india features affirmative action programs intended to reduce inequality that stems from a centuries old caste structure and history of disparate treatment by gender we study the effects of one such affirmative action program an admissions policy that fixes percentage quotas common across more than 200 engineering colleges for disadvantaged castes and for women we show that the program increases college attendance of targeted students particularly at relatively higher quality institutions an important concern is that affirmative action might harm intended beneficiaries by placing them in academic programs for which they are ill prepared we find no evidence of such adverse impacts

r d subsidies and productivity in smes this paper examines the effect of r d subsidies on labour productivity we use firm level data on finnish smes from 2000 to 2012 and apply a combined matching and difference in differences method to control for selection bias we find no significant positive effect on labour productivity over the five year period after a subsidy is granted however the results vary over time and indicate a 2 4 negative effect on smes annual productivity growth one to 2 years after the subsidy year nevertheless subsidies generate a positive employment effect and enhance firm survival additional scrutiny reveals that subsidies positively affect the human capital level of low skill firms

does history matter for the relationship between r d innovation and productivity this paper analyzes the relationship between r d expenditures innovation and productivity growth taking into account the possibility of persistence in firms behaviour we study this relationship for a sample of spanish manufacturing firms between 1990 and 2005 estimating a model with four equations participation in technological activities r d intensity the generation of innovations and the impact of these technological outputs on total factor productivity growth our results reflect the existence of true state dependence both in the decision of r d investment and in the production of innovations the omission of this persistence leads to an overestimation of the current impact of innovations on productivity growth however the presence of persistence in technological inputs and outputs entails current r d activities having long run effects on a firm s productivity

how does probability of innovation change with firm age this paper looks at the probability of introducing innovations by manufacturing firms at different stages of their lives once differences related to activity and size are controlled for we examine how the probability of innovation varies over entry post entry ages and advanced ages of mature firms we also measure the association between exit from the market and pre exit innovation results show that the probability of innovating widely varies by activity and that small size per se broadly reduces the probability of innovation but also that entrant firms tend to present the highest probability of innovation while the oldest firms tend to show lower innovative probabilities some sets of firms with intermediate ages also present a high probability of innovation and exiting firms are clearly associated to lower levels of introducing process innovations

are preferential trade agreements with non trade objectives a stumbling block for multilateral liberalization in many preferential trade agreements ptas countries exchange not only reductions in trade barriers but also cooperation in non trade issues such as labor and environmental standards intellectual property etc we provide a model of ptas motivated by cooperation in non trade issues and analyze its implications for global free trade and welfare we find that such ptas increase the cost of multilateral tariff reductions and thus cause a stumbling block to global free trade this occurs because multilateral tariff reductions decrease the threat that can be used in ptas and thus the surplus that can be extracted from them by explicitly modeling the interaction between preferential and multilateral negotiations we derive a testable prediction and provide novel econometric evidence that supports the model s key prediction the welfare analysis shows that the current wto rules allowing this type of ptas may be optimal for economically large countries thus the model can predict the rules we observe we also analyze alternative rules that constitute a pareto improvement

firms choice of method of pay using data from the bls industry wage survey the author tests the theory that firms choose their methods of pay by balancing the gains from more precise links between performance and pay against m

the impact of the london bombings on the well being of adolescent muslims we exploit the timing of the london bombings coinciding with a large scale national survey of adolescents to identify the impact of extremist islamic terror attacks on the well being of adolescent muslims our analysis reveals interesting gender differences we find evidence of a decline in the happiness of muslim teenage girls after the bombings which is also accompanied by a rise in expectations of facing discrimination in the labour market these findings are robust to several falsification tests on the other hand we fail to uncover compelling evidence of any impact of the bombings on muslim teenage boys

breaking free of a stereotype should a domestic brand pretend to be a foreign one consumers in many emerging markets exhibit a pronounced preference for western and global brands while domestic brands are often associated with a cheap but low quality image frustrated with the negative country of origin coo stereotype imposed on them many domestic brands from emerging markets follow a variety of approaches to disguise their coo and pretend to be foreign this paper studies the strategic aspects of this phenomenon we consider an experience good market where consumers learn about each brand s quality using its coo as a prior each firm can invest in product quality or coo dissociation the former generates better quality signals while the latter simply masks the firm s coo identity the analysis reveals a few main insights sharing a reputation leads to a common good problem where firms free ride on each other s quality investments as a high quality firm dissociates itself from the stereotype it ceases to contribute to the coo image but also prevents its low quality peers from free riding on it this incurs a negative direct effect but a positive strategic effect on the group image consequently a country s coo image may actually improve when more high quality brands shun their identities and pretend to be foreign in equilibrium coo image improves monotonically as firms become more efficient in providing quality however the prevalence of coo dissociation may first increase then decrease we discuss the implications of these results for emerging market brands as well as policy makers

alliances preferential trading arrangements and international trade c oncerns about the stability of the international trading system have become widespread in recent years many observers feel that the relatively liberal system forged after world war ii is being undermined by the proliferation of preferential trading arrangements these concerns have spawned a great deal of empirical research much of which has found that such arrangements exert a substantial effect on trade flows yet these studies have neglected the role political military alliances play in shaping patterns of commerce this omission is important because there is ample reason to expect that alliances guide trade flows and preferential trading arrangements often are comprised of allies as a result extant analyses risk confusing the effects of alliances and preferential trading arrangements on commerce and systematically overstating the effects of the latter in this study we analyze the effects of alliances and preferential trading arrangements on bilateral trade flows both factors are likely to promote trade among members but we argue that the interaction between them is central to explaining patterns of commerce the combination of an alliance which creates political incentives for participants to engage in trade and a commercial institution which liberalizes trade among members is expected to provide a considerable impetus to commerce among parties to both 1

information cascades in the laboratory when a series of individuals with private information announce public predictions initial conformity can create an information cascade in which later predictions match the early announcements this paper reports an experiment in which private signals are draws from an unobserved urn subjects make predictions in sequence and are paid if they correctly guess which of two urns was used for the draws if initial decisions coincide then it is rational for subsequent decisionmakers to follow the established pattern regardless of their private information rational cascades formed in most periods in which such an imbalance occurred copyright 1997 by american economic association

a theory of sex discrimination abstract in this paper we put forward a theory that explains the way in which social attitudes towards sex discrimination in the labour market have evolved we suggest that sex discrimination in the labour market can generate both costs and benefits and that a sizeable part of these costs can be ameliorated through marriage the fact that marriage is no longer a pervasive and stable institution has contributed to the awareness that sex discrimination in the labour market is a major social problem

displacement asymmetric information and heterogeneous human capital gibbons and katz s asymmetric information model of the labor market predicts that wage losses following displacement should be larger for layoffs than for plant closings this was borne out in their empirical work in this article we examine how the difference in wage losses across plant closing and layoff varies with race and gender we find that the basic prediction by gibbons and katz holds only for white males we augment their asymmetric information model with heterogeneous human capital and show that this augmented model can match the data

the dynamic implications of search discrimination abstract blacks have both lower employment rates and lower earnings than whites further the earnings gap increases as workers age this paper focuses on explaining differences in black white earnings profiles and how government interventions work in a dynamic environment three contributions are made firstly multiple equilibria may exist solely because of a coordination failure by firms even without taste discrimination blacks may play no role in their poor labor market outcomes secondly search discrimination leads to economic discrimination against the non discriminated group reverse discrimination finally in response to a quota program whites may find it optimal to subsidize black investment

does job testing harm minority workers evidence from retail establishments because minorities typically fare poorly on standardized tests job testing is thought to pose an equality efficiency trade off testing improves selection but reduces minority hiring we develop a conceptual framework to assess when this trade off is likely to apply and evaluate the evidence for such a trade off using hiring and productivity data from a national retail firm whose 1 363 stores switched from informal to test based worker screening over the course of one year we document that testing yielded more productive hires at this firm raising mean and median tenure by 10 or more consistent with prior research minorities performed worse on the test yet testing had no measurable impact on minority hiring and productivity gains were uniformly large among minority and nonminority hires these results suggest that job testing raised the precision of screening without introducing additional negative information about minority applicants most plausibly because both the job test and the informal screen that preceded it were unbiased

discrimination in the labor market the curse of competition between workers in an experiment we identify a crucial factor that determines whether employers engage in statistical discrimination of ex ante equal groups in the standard no competition setup of coate and loury 1993 we do not nd systematic evidence for statistical discrimination when we introduce competition between workers of dierent groups for the same job the non discrimination equilibrium ceases to be stable in line with this theoretical observation we nd systematic discrimination in the experimental treatment with competition nevertheless a substantial minority of the employers refuses to discriminate even when it is in their best interest to do so

discrimination bayesian updating of employer beliefs and human capital accumulation i introduction can labor market discrimination persist over time how do employer beliefs influence minority groups and their choices previous theoretical models of discrimination can be grouped into two distinct categories based upon the source of the discrimination the most common method of modelling discrimination follows the work of becker 1972 in which the employer manager or other employees receive disutility from associating with members of a particular group in a second class of models referred to as statistical discrimination initially proposed by phelps 1972 discrimination results from differences in the groups ability to signal output or capabilities this result can be reproduced as a special case of the model presented here this paper proposes an alternative model in which discrimination results initially from differences in the employer s prior opinion of average group ability using a bayesian updating model we analyze the dynamic effects of this prior belief on human capital acquisition and the potential for continued discrimination previous research provides an abundance of evidence that society s initial perceptions about numerous characteristics including those affecting productivity differ by group for example smith 1990 summarizes the results of the general social survey which asked individuals to rank ethnic groups on a scale of one to seven in various categories 1 the survey found a significant portion of those surveyed believed that african americans hispanics and white southerners lagged behind the rest of society in intelligence and work effort in fact 53 2 percent of those surveyed ranked african americans below whites in intelligence unless employers differ systematically from the rest of society this evidence implies that the initial or prior employer assessment of ability will be lower for members of these groups in addition to strong evidence that such general priors exist numerous studies find that prior beliefs influence the evaluation of employee ability the urban institute recently conducted a study comparing the evaluation of black and hispanic workers to that of equally qualified white workers 2 given equal resumes the black and hispanic job candidates trailed white candidates at every stage in the job seeking process from receiving fewer initial interviews to a lower number of job offers similar biases have been found in experiments in which identical resumes were evaluated differently simply due to the race or gender of the applicant 3 furthermore even if worker output is unambiguously observed and evaluated in an unbiased setting studies find that success of males is attributed to ability while that of females is more likely to be attributed to luck 4 this adherence to initial perceptions suggests that agents believe strongly in their initial beliefs and hence would require substantial evidence to alter their perceptions our model incorporates the strength of the prior beliefs through a variance parameter surrounding the initial belief of mean ability level a lower variance implies a decreased willingness to admit error in one s prior beliefs and update accordingly discrimination in our model results from the entrepreneur s sincere although perhaps incorrect beliefs concerning the distribution of ability levels of a particular group although empirical results provide strong evidence of labor market discrimination persisting over many years cain 1986 most existing theoretical models of discrimination are static designs used to explain only within period discrimination we propose a dynamic model in which a bayesian employer learns about an employee s ability over time based on output observed up to a stochastic error term thus updating prior beliefs concerning both the individual and the group in each period viewing output as a signal of ability it is clear that traditional statistical discrimination models are embedded within ours the special case in which one group s signal is less reliable than another s can produce the statistical discrimination results

long run versus short run decisions r d and market structure in spanish firms abstract i present new econometric evidence on the relation between market structure and r d using data on spanish firms i adopt a different approach from previous studies by distinguishing between long run and short run decisions of firms regarding r d i assume that the long run or strategic decision is whether to conduct r d or not and the short run choice is how much to invest once the firm decides to be innovative i argue that market structure affects long run r d decisions but does not affect short run ones a heckman type selection model is used to test such a relation the results are robust to several specifications and measures of monopoly power

statistical discrimination and efficiency this paper asks whether statistical discrimination is a market failure i consider the problem for a utilitarian social planner who operates in an environment that can generate statistical discrimination as an equilibriumphenomenon it is found that there are potential efficiency gains from discrimination in terms of reduced mismatch between workers and jobs whether the solution to the planning problem involves discrimination depends on the trade off between the informational gains of specialization and the losses in terms of increased investment costs

technological spillovers from multinational firms this paper aims to identify genuine technological spillovers from multinational firms mnes to this end we use data on r d from mnes to measure spillovers while most of the existing literature uses output to measure the foreign presence in an industry what we call output based spillovers in line with the existing literature we distinguish between horizontal spillovers i e intra industry linkages and vertical spillovers i e backward or downstream and forward or upstream inter industry linkages our results show that the three types of technological spillovers from mnes are positive with the horizontal spillovers the larger ones followed by backward spillovers the effect of forward spillovers is much smaller in magnitude moreover we find that not controlling for industry size i e technological spillovers from all firms in an industry leads to underestimating both horizontal and backward spillovers from mnes and to overestimating forward spillovers from mnes finally we find that the distinction between technological and output based spillovers is of great relevance the size of backward technological spillovers is approximately 44 of the size of output based backward spillovers while for horizontal spillovers both types of spillovers are quite similar importantly output based forward spillovers are negative while technological forward spillovers are positive

does average size matter court enforcement business demography and firm growth previous literature finds that the quality of judicial enforcement has a positive impact on average firm size but it has not disentangled its effect on the growth of incumbent firms from that on business demography this distinction is crucial as entrants are generally smaller than incumbents but both high entry rates and high firm growth are associated with better economic performance this paper fills this gap finding that judicial efficacy fosters the growth of incumbents and promotes entry in spain the paper also shows for the first time that the specific type of judicial procedure that companies face in case of a conflict rather than the overall functioning of courts is the relevant matter specifically judicial efficacy at the declaratory stage when a debt is verified by a judge has a positive impact on both firm growth and entry while it has no impact at the execution stage when the judge requires its payment

the impact of competitors firm power divergence on chinese smes environmental and financial performance competitor pressure is one of the major reasons that a sme engages in environmentally friendly or damaging activities extant research has argued that environmental strengths and concerns have mirror opposite relationships with stakeholder antecedents as well as with performance outcomes we suggest this argument does not reflect the reality building on stakeholder management and red queen theories we hypothesize that environmental strengths and concerns have differential relationships with competitors firm power exchange and financial performance for chinese smes results of ten interviews a pretest and a large scale field study indicate that competitors firm power divergence has a positive relationship with environmental strengths yet the link between this divergence and environmental concerns does not exist further environmental strengths mediate the relationship between competitors firm power divergence and financial performance of chinese smes

a general equilibrium model of statistical discrimination we study a general equilibrium model with endogenous human capital formation in which ex ante identical groups may be treated asymmetrically in equilibrium the interaction between an informational externality and general equilibrium effects creates incentives for groups to specialize discrimination may arise even if the corresponding model with a single group has a unique equilibrium the dominant group gains from discrimination rationalizing why a majority may be reluctant to eliminate discrimination the model is also consistent with reverse discrimination as a remedy against discrimination since it may be necessary to decrease the welfare of the dominant group to achieve parity

wages employment and statistical discrimination evidence from the laboratory i introduction while taste based discrimination becker 1957 is driven by prejudice research on statistical discrimination attempts to explain differential treatment of individuals unrelated to prejudice in essence statistical discrimination results when the actual or assumed statistical properties of a group are applied to anyone belonging to that group differential treatment based on lower average outcomes of one s group e g minorities females was considered a starting point for modeling of statistical discrimination see phelps 1972 however labor market researchers then considered that statistical discrimination could result from measures other than the average outcomes of one s group see aigner and cain 1977 lundberg and startz 1983 theoretical models have explored various reasons why statistical discrimination might arise in varied contexts most notable are the models based on differential screening or communication costs cornell and welch 1996 lang 1986 noisier productivity signals see discussion in aigner and cain 1977 or incomplete information lundberg and startz 1983 1 field studies some of which involve experimental manipulations have uncovered evidence of statistical discrimination in mortgage lending ladd 1998 auto sales ayers and siegelman 1995 goldberg 1996 harless and hoffer 2002 sports card price negotiations list 2004 law enforcement decisions applebaum 1996 exam grading hanna and linden 2012 taxi fare negotiations castillo et al 2013 and vehicle repair estimates gneezy and list 2006 in labor markets some discrimination may be due to factors other than productivity characteristics neumark 1999 but the evidence for statistical discrimination based on race has been elusive see altonji and pierret 2001 identifying statistical discrimination from field data is complicated by the fact that it may arise as first moment or second moment statistical discrimination and they are difficult to disentangle empirically more controlled laboratory studies have also examined statistical discrimination anderson and haupert 1999 castillo and petrie 2010 davis 1987 dickinson and oaxaca 2009 fershtman and gneezy 2001 masclet peterle and larribeau 2012 2 findings from these laboratory studies indicate that statistical discrimination may result from aversion to risk mistaken stereotypes biased probability assessments or incomplete information the benefit of the laboratory approach is our ability to control and cleanly identify the source of the discrimination if it exists whether taste based or statistical discrimination is most always measured along a single dimension such as vehicle pricing labor market wages group choice or job assignments 3 however in many instances multiple avenues for discrimination exist simultaneously and to focus on only one may produce a systematically biased view of the prevalence of statistically based discrimination 4 in this paper we examine statistical discrimination in a controlled experimental environment statistical discrimination in our study can only be based on productivity distribution risk attached to worker groups we not only cleanly separate taste based from statistical discrimination but we also cleanly isolate second moment statistical discrimination in a way not possible from field data building on dickinson and oaxaca 2009 our key contribution is to examine an environment in which discrimination may be exercised simultaneously along the dimensions of both wages and employment rates this more closely approximates the field environments we hope to study where discrimination may exist in terms of labor market wages and or hiring practices auto sales prices and or sales rates mortgage rates and or home sales as in dickinson and oaxaca 2009 subjects negotiate in a simulated labor market where worker subjects are given an induced common knowledge productivity distribution

pricing and depletion of an exhaustible resource when there is anticipation of trade disruption this paper considers pricing and depletion of an exhaustible nonrenewable resource in an economy wherein domestic consumption is provided for by supplementing extraction from the economy s own resource stock with imports the future supply of which is not assured the socially optimal response to threat of trade disruption is a more conservationist depletion program for the domestic resource stock than would be called for if import supplies were assured to persist competitive domestic firms adopt the socially optimal conversationist program however firms anticipating domestic market power after the disruption of import supplies are revealed to overextract the domestic resource stock 33 references 2 figures

regionalism and conflict peace creation and peace diversion abstract we investigate the implications of preferential trade agreements ptas for interstate conflict we set up a two stage game with three competing importers where first two of the countries decide on whether to initiate war against each other and subsequently all three countries select their import tariffs we show that ptas produce both a peace creation effect and a peace diversion effect whereby they reduce the likelihood of conflict between member countries peace creation but render the eruption of war between member and non member countries more likely peace diversion this paper is the first to identify and explicitly model the peace diversion effect of ptas and is also the only one in this literature to endogenize countries terms of trade we use data from the correlates of war project to empirically test these predictions and after controlling for endogeneity we find robust evidence of both peace creation and peace diversion in relation to pta establishment

the effect of technological knowledge assets on performance the innovative choice in spanish firms abstract the aim of this article is to examine the relationship between technological knowledge assets tkas and performance in the light of making the innovative choice that involves short term costs of acquiring or generating the assets but aims at longer term benefits through innovation to that end a study of 1267 industrial firms in spain was carried out over a period of 5 years 1998 2002 the results show that tkas have a positive indirect effect on financial performance mediated through innovation they also reveal that tkas have a negative direct effect on performance except licences thus the combined effect of tkas on performance urges the need for innovation to obtain a positive payoff

statistical discrimination productivity and the height of immigrants building on the economic research that demonstrates a positive relationship between height and worker ability the author compares wage returns to height for immigrants and for natives to explore possible explanations for the positive wage height gradient using multiple data sets the article presents a robust empirical finding that the wage gains associated with height are almost twice as large for immigrants as for native born individuals this wage relationship occurs because the productivity gap between tall and short immigrants is greater than the productivity gap between tall and short native born workers the author next tests for the possibility that in the relative absence of other sources of information about immigrants employers place more importance on height for immigrants than for native born individuals the evidence does not support the hypothesis of statistical discrimination based on height

regional integration as diplomacy regional integration agreements rias are examples of second best and have an ambiguous impact on welfare contend the authors they build a model in which rias unambiguously raise welfare by correcting for externalities it assumes that trade between neighboring countries increases trust between them and reduces the likelihood of conflict the optimum intervention in that case is a subsidy on imports from the neighbor the authors show that an equivalent solution is for the neighboring countries to tax imports from the rest of the world that is to form an ria together with imposing some domestic taxes in fact security threats have moved neighboring countries to form rias examples include the creation of the european coal and steel community 1951 and the european economic community 1957 to reduce the threat of war in europe as well as various rias among developing countries the authors show among other things that 1 the optimum tariffs on imports from the rest of the world are likely to decline over time 2 deep integration implies lower optimum external tariffs if it is exogenous 3 but if deep integration is endogenous it implies higher optimum external tariffs before it occurs and lower ones thereafter and 4 enlargement of a bloc in terms of symmetric countries has an ambiguous impact on external tariffs but improves welfare and some form of domino effect exists in the sense that enlargement increases the incentive for nonmembers to seek accession although externalities associated with security matters imply that an ria may maximize welfare this model suggests that the ria is a transitory arrangement in the sense that optimum trade preferences are highest at the time the ria is formed when security is low and tend to decline over time in other words the ria s external trade policy becomes increasingly open over time as well as following deep integration

affirmative action in a competitive economy abstract we consider a model of endogenous human capital formation with competitively determined wages discrimination is sustainable in equilibrium in the presence of two distinguishable but ex ante identical groups of workers an affirmative action policy consisting of a quota may fail in the sense that there still may be equilibria where groups are treated differently however the incentives to invest for agents in the discriminated group are improved by affirmative action if the initial equilibrium is the most discriminatory equilibrium in the model without the policy the welfare effects are ambiguous it is possible that the policy makes the intended beneficiaries worse off even if the starting point is the most discriminatory equilibrium the expected payoff may decrease for all agents in the target group

how firms innovate through r d internationalization an s curve hypothesis abstract this article examines the effects of r d internationalization and organizational slack on innovation performance we suggest that there is an s shaped relationship between r d internationalization and innovation performance innovation performance increases in the decentralization stage decreases in the transition stage and increases again in the recentralization stage in addition organizational slack is hypothesized to have a negative moderating effect on the s shaped relationship longitudinal data on 210 taiwanese firms in the information technology sector during a 10 year period is collected to test the hypotheses the findings support our prediction managerial implications and future research directions are discussed

trade blocs trade flows and international conflict the relationship between foreign trade and political conflict has been a persistent source of controversy among scholars of international relations existing empirical studies of this topic have focused on the effects of trade flows on conflict but they have largely ignored the institutional context in which trade is conducted in this article we present some initial quantitative results pertaining to the influence on military disputes of preferential trading arrangements ptas a broad class of commercial institutions that includes free trade areas common markets and customs unions we argue that parties to the same pta are less prone to disputes than other states and that hostilities between pta members are less likely to occur as trade flows rise between them moreover we maintain that heightened commerce is more likely to inhibit conflict between states that belong to the same preferential grouping than between states that do not our results accord with this argument based on an analysis of the period since world war ii we find that trade flows have relatively little effect on the likelihood of disputes between states that do not participate in the same pta within ptas however there is a strong inverse relationship between commerce and conflict parties to such an arrangement are less likely to engage in hostilities than other states and the likelihood of a military dispute dips markedly as trade increases between them

school quality and black white relative earnings a direct assessment the wage differential between black and white men fell from 40 percent in 1960 to 25 percent in 1980 it has been argued that this convergence reflects improvements in the relative quality of black schools to test this hypothesis we assembled data on pupil teacher ratios annual teacher pay and term length for black and white schools in the eighteen segregated states from 1915 to 1966 these data are linked to estimated returns to education for southern born men from different cohorts and states in 1960 1970 and 1980 improvements in the relative quality of black schools explain 20 percent of the narrowing of the black white earnings gap between 1960 and 1980

firms age process innovation and productivity growth abstract this paper looks directly at the impact of firms age and process innovations on productivity growth a model that specifies productivity growth as an unknown function of these variables is devised and estimated using semiparametric methods results show that firms enter the market experiencing high productivity growth and that above average growth rates tend to last for many years but also that productivity growth of surviving firms converges process innovations at some point then lead to extra productivity growth which also tends to persist somewhat attenuated for a number of years

the labor market impact of state level anti discrimination laws 1940 1960 by the time congress passed the 1964 civil rights act 98 of non southern blacks 40 of all blacks already resided in states with fair employment laws prohibiting labor market discrimination using census data from the integrated public use microdata series the author assesses the impact of fair employment legislation on black workers relative income unemployment labor force participation migration and occupational and industrial distributions in general the fair employment laws adopted in the 1940s appear to have had larger effects than those adopted in the 1950s and the laws had considerably smaller effects on the labor market outcomes of black men than on those of black women

r d determinants accounting for the differences between research and development the determinants of r d are an important topic of innovation studies the classical schumpeterian hypotheses about the influence of size and market power have been complemented with the role played by industry determinants such as demand pull technological opportunity and appropriability in determining r d investments however r d has always been considered as a whole even though research and development activities differ in many aspects we take advantage of a new panel database of innovative spanish firms pitec to distinguish between research and development efforts of firms we analyze the differentiated role played by traditional r d determinants in driving research and development results show that demand pull and appropriability have a higher effect on development while technological opportunity is more influential for research differences are statistically significant important in magnitude and robust to the use of different indicators for demand pull technological opportunity and appropriability and to several robustness checks

experience tenure and the perceptions of employers this paper examines how group based assessments concerning employee ability impact employee compensation the employer learns about worker ability through bayesian updating creating an additional channel for wage growth that is not available to those workers with only general labor market experience consistent with the model s predictions results from national longitudinal survey of youth nlsy indicate that black workers fare much better relative to white workers in returns to tenure than in returns to experience finally parameter estimates in the structural model suggest that employers initially undervalue black males but that their wages rise with learning by employers over time on average black males earn lower wages than white males just as average wages differ across many groups this paper examines one explanation for this wage gap the possibility that employers underestimate the ability of workers in one or more groups in particular this paper proposes a model that provides explicit predictions about the affect of employer s perceptions on workers returns to general experience and tenure on the job we then examine the wage growth of young males to see whether patterns are consistent with the model economic theory provides many other explanations for differences in wages across groups

expanding international trade beyond the rta border the case of asean s economic diplomacy abstract we examine the roles of regional trade agreements rtas not only in regionalization processes but also in globalization of trade results from various specifications of the gravity equation model confirm that a country can noticeably increase directional trade through diplomatic relations as well as through membership

an optimal banking structure from the perspective of enterprise technological innovation empirical evidence from chinese industrial enterprises this paper applies the incomplete contracts model to study an optimal banking structure corresponding to different levels of technological development from the perspective of technological innovati