corruption and growth under weak identification i introduction the purpose of this paper is to revisit mauro 1995 and re examine his results as a consequence of recent research that cautions against making traditional types of inference in the presence of weak instruments early work done by nelson and startz 1990a 1990b demonstrates that the distribution of the two stage least squares 2sls estimator and the t statistic is poorly approximated by the asymptotic representation when instruments are weak more formally staiger and stock 1997 model the coefficients on the instruments in the first stage equation in the n sup 1 2 neighborhood of zero in which they show that the 2sls estimator loses consistency resulting in a nonstandard distribution for the t statistic in fact they show that under the local to zero framework the distribution of the t statistic depends on the level of endogeneity strength and the number of instruments thus the true size of the t statistic can differ substantially from its perceived size when instruments are weak therefore 95 confidence intervals based on asymptotic approximations such as or 1 96se are no longer reliable as a rough rule of thumb staiger and stock 1997 suggest a first stage f stat of 10 on the excluded instruments as an indication of acceptable instruments in terms of point estimation bound jaeger and baker 1995 show that the 2sls estimator is biased in the same direction as the ordinary least squares ols when using irrelevant instruments hahn and hausman 2002 illustrate a detailed expression for the 2sls bias showing that it is monotonically decreasing in the instrument strength while monotonically increasing in the degree of endogeneity cruz and moreira 2005 verify these results through monte carlo simulations also showing that the classic bias corrected 2sls estimator of nagar 1959 provides a poor correction when instruments are very weak given that the theory and techniques mentioned above were discovered and developed after mauro wrote his qje paper we attempt to reproduce his results and analyze them in light of these recent findings from the early work of left 1964 and huntington 1968 corruption in government has been of great interest to economists these studies argue that corruption could be positively correlated with economic performance in the presence of a thick and cumbersome bureaucracy corruption in this view greases the wheels of bureaucracy thus increasing the efficiency in which transactions occur leading to a positive effect on the economic performance of a country on the other hand rose ackerman 1978 murphy shleifer and vishny 1991 1993 and shleifer and vishny 1993 provide theoretical arguments that corruption deteriorates economic growth through the misallocation of talent and other resources mauro 1995 being the first to introduce instrumental variables ivs in the cross country growth literature contributes to this debate by examining empirically the relationship between two measures of corruption and investment and economic growth his results suggest that corruption has a negative impact on investment and economic growth the significance of his results varies with model specifications but the results appear to be robust when correcting for the endogeneity of corruption using the ethnolinguistic fractionalization elf index as an iv he employs 2sls estimation to correct for endogeneity created by the two measures of corruption mauro 1995 s work has been of great value in the corruption literature and has had profound influence on the direction of policy making the paper is one of the most cited papers not just in the literature on corruption but in economics in general 1 given the impact that the paper has undoubtedly had on the direction of research we find it necessary and relevant to revisit the paper in light of the recent developments in the field of econometrics

the wages of bmi bayesian analysis of a skewed treatment response model with nonparametric endogeneity we generalize the specifications used in previous studies of the effect of body mass index bmi on earnings by allowing the potentially endogenous bmi variable to enter the log wage equation nonparametrically we introduce a bayesian posterior simulator for fitting our model that permits a nonparametric treatment of the endogenous bmi variable flexibly accommodates skew in the bmi distribution and whose implementation requires only gibbs steps using data from the 1970 british cohort study our results indicate the presence of nonlinearities in the relationships between bmi and log wages that differ across men and women and also suggest the importance of unobserved confounding for our sample of males copyright 2008 john wiley sons ltd

a literature study for dea applied to energy and environment abstract this study systematically summarizes previous research efforts on data envelopment analysis dea applied to energy and environment in the past four decades including concepts and methodologies on dea environmental assessment industrial developments are very important for all nations in terms of their economic prosperities a problem is that the development produces various pollutions on air water and other types of contaminations all of which are usually associated with our health problems and climate changes thus it is necessary for us to consider how to make a balance between economic success and pollution mitigation to maintain a high level of social sustainability in the world it is widely considered that dea is one of the methodologies to examine the level of sustainability this study examines a recent research trend on dea applications from 1980s to 2010s nowadays many researchers have paid serious attention on how to combat various difficulties in the areas of energy and environment as a result the number of articles on dea applications on energy and environment has dramatically increased particularly after 2000s however it is true that dea has strengths and drawbacks in the applications therefore it is very important for us to carefully use dea for guiding large policy issues and business strategies such as the global warming and climate change an underlying premise of this study is that technology innovation in engineering and natural science may solve various problems by linking it with political and managerial efforts the use of dea provides a methodological linkage among them so enhancing the practicality in mitigating problems due to climate change and environmental pollutions this literature study along with a summary on conceptual and methodological developments provides us with guidelines for our future research works on dea on energy and environment issues

an economic theory of vertical restraints vertical restraints imposed by manufacturers on the prices locations and sales of retail firms represent a puzzling departure from the simple price mediated exchange of conventional markets in this article we analyze the theoretical basis for these restraints in a setting where retailers inform consumers and are imperfectly competitive and where a manufacturer has some monopoly power we identify three potential externalities affecting retailers decisions these externalities lead to the failure of simple uniform price contracts to coordinate the incentives of retailers with the objective of maximizing combined manufacturer and retailer profits we identify the packages of vertical restraints that are minimally sufficient under various conditions to neutralize the externalities and to achieve the joint profit maximum

beauty and the labor market the authors examine the impact of looks on earnings using interviewers ratings of respondents physical appearance plain people earn less than average looking people who earn less than the good looking the plainness penalty is 5 to 10 percent slightly larger than the beauty premium effects for men are at least as great as for women unattractive women have lower labor force participation rates and marry men with less human capital better looking people sort into occupations where beauty may be more productive but the impact of individuals looks is mostly independent of occupation suggesting the existence of pure employer discrimination copyright 1994 by american economic association

are compact cities environmentally friendly there is a wide consensus among international institutions and national governments in favor of compact i e densely populated cities as a way to improve the ecological performance of the transport system indeed when both the intercity and intra urban distributions of activities are given a higher population density makes cities more environmentally friendly because the average commuting length is reduced however when we account for the possible relocation of activities within and between cities in response to a higher population density the latter may cease to hold indeed an increasing density policy affects prices wages and land rents which in turn incentivizes firms and households to change place this reshapes the urban system in a way that may generate a higher level of pollution thus although an increase in compactness is environmentally desirable when locations are given compactness may not be environmentally friendly when one accounts for the general equilibrium effects generated by such a policy

vertical price controls with uncertain demand a manufacturer distributes output before knowing demand and thus risks making more than its rivalrous independent retailers can sell at the monopoly price if demand is low retailers may therefore resell more than the joint profit maximizing output anticipating this they will not pay as much for the merchandise ex ante as they would if the manufacturer could commit to preventing rivalry the manufacturer has many options including vertical integration chain outlets restricted output buy backs just in time deliveries and minimum resale prices the article discusses each option s advantages and disadvantages and concludes that all roads lead to resale price maintenance the article closes with an alternative to the dealercartel hypothesis for minimum resale prices

facilitating practices the effects of advance notice and best price policies even if firms in a market choose discount prices noncooperatively the use of most favored customer and meet or release contracts enables those firms to adopt quantity choice strategies consequently there can be a range of list prices that are impervious to unilateral nonselective discounts but this range does not include prices above the level determined in a cournot equilibrium the practice of advance public notification of list price increases can facilitate the establishment of such supracompetitive list prices as was argued in the recent ftc ethyl case the possibility of offering discounts selectively results in a much more competitive situation

total factor carbon emission performance of fossil fuel power plants in china a metafrontier non radial malmquist index analysis article i nfo this paper proposes the metafrontier non radial malmquist co2 emission performance index mnmcpi for measuring dynamic changes in total factor co2 emission performance over time the mnmcpi method allows for the incorporation of group heterogeneity and non radial slack into the previously introduced malmquist co2 emission performance index mcpi we derive the mnmcpi by solving several non radial data envelop ment analysis dea models we decompose the mnmcpi into an efficiency change ec index a best practice gap change bpc index and a technology gap change tgc index and based on the proposed indices we examine the dynamic changes in co2 emission performance and its decomposition of fossil fuel power plants in china for the 2005 2010 period the empirical results show a 0 38 increase in total factor co2 emission performance as a whole and a u shaped mnmcpi curve for the sample period because companies owned by the central government lack innovation and technological leadership the results suggest a missing link in the role of the central government in promoting co2 emission performance

the impact of obesity on wages abstract previous studies of the relationship between body weight and wages have found mixed results this paper uses a larger data set and several regres sion strategies in an attempt to generate more consistent estimates of the effect of weight on wages differences across gender race and ethnicity are explored this paperjnds that weight lowers wages for white females ols esti mates indicate that a difference in weight of two standard deviations roughly 65 pounds is associated with a difference in wages of 9 percent in absolute value this is equivalent to the wage effect of roughly one and a half years of education or three years of work experience negative cor relations between weight and wages observed for other gender ethnic groups appear to be due to unobserved heterogeneity i introduction several previous studies have found among females a negative cor relation between body weight and wages there exist three broad categories of ex planations for this finding the first explanation is that obesity lowers wages for example by lowering productivity or because of workplace discrimination the sec ond is that low wages cause obesity this would be true if poorer people consume

carbon emission reduction potentials under different polices in chinese cities a scenario based analysis abstract city is the core for carbon emission reduction this paper examines co 2 emission efficiency and productivity in 286 chinese cities under different production scenarios using a non radial directional distance function approach the examination is conducted via three scenarios namely co 2 emission reduction er emission reduction and energy conservation erec and emission reduction energy conservation and economic growth ereceg the results show substantial differences in total factor emission efficiency and productivity across the three scenarios we also found that total factor emission efficiency varies considerably across regional and different sized city groups however the distribution dynamics analysis provides strong evidence for the convergence of total factor emission efficiency across chinese cities in the long run efficiency change contributes of the majority of cross city variation in productivity growth for the sample period however low average total factor emission efficiency and large disparity in emission efficiency indicate great potential for future co 2 reduction regional development programs tend to drive economic activities into low co 2 emission performance regions our empirical findings provide valuable policy implications for achieving the joint targets of economic growth and co 2 emission reduction

demand uncertainty inventories and resale price maintenance we show that a manufacturer facing uncertain demand and selling through a competitive retail market may wish to support adequate retail inventories by preventing the emergence of discount retailers in our model discounters offer low prices made possible by low probability of being saddled with unsold inventories in the event of slack demand full price retailers are compensated for a higher probability of unsold inventories by a higher retail price when they sell we show that preventing discounting increases the manufacturer s wholesale demand and profits and we delineate demand conditions under which equilibrium inventory holding and consumer welfare increase

the effects of market practices in oligopolistic markets an experimental examination of the ethyl case this study reports on the performance of experimental markets characterized by industrial structure and practices similar to those at issue in the ethyl case the central question is whether price competition is affected by the practices of advanced notification of price changes and most favored nation contracts or is determined by industrial organization and concentration alone

the right to return this article studies the allocation of responsibility for unsold inventory provision for which is made in practically every distribution contract the two extreme cases are the consignment contract which allocates all the burden to the manufacturer and the no return contract in which retailers purchase the merchandise outright and assume responsibility for unsold inventory contract choices are shown to vary across countries industries products and types of transactions the article identifies six main factors affecting this choice optimal inventory policy in a stochastic retail demand environment relative advantage in disposing of the unsold inventory optimal risk allocation incentives to invest in promotions and provide services to increase consumer demand information asymmetry and costs associated with the consignment contract per se several testable implications are presented and the choice of contracts in the publishing industry is shown to be consistent with the predictions of the model

trends in road freight transportation carbon dioxide emissions and policies in china we adopted the simple average divisia index approach to explore the impacts of factors on the carbon dioxide co2 emissions from road freight transportation in china from 1985 to 2007 co2 emissions were investigated using the following as influencing factors the emission coefficient vehicle fuel intensity working vehicle stock per freight transport operator market concentration level freight transportation distance market share of road freight transportation ton kilometer per value added of industry industrialization level and economic growth building on the results we suggest that economic growth is the most important factor in increasing co2 emissions whereas the ton kilometer per value added of industry and the market concentration level contribute significantly to decreasing co2 emissions we also discussed some recent important policies concerning factors contained in the decomposition model

a continuous state space approach to convergence by parts abstract using a continuous state space approach this note extends feyrer s feyrer j 2003 convergence by parts manuscript dartmouth college available at http www dartmouth edu jfeyrer parts pdf study of the proximate determinants of the shape of the long run distribution of income per capita contrary to feyrer s finding of the primacy of total factor productivity tfp the results here imply that traps in both tfp growth and capital accumulation may matter

bilateral most favored customer pricing and collusion in a two period differentiated products duopoly model most favored customer mfc pricing policies allow firms to commit to prices above the bertrand prices it is shown here however that unless a restrictive and unappealing assumption is made about demand there is no equilibrium in which both firms adopt mfc policies the restrictive assumption is that at least one firm s demand is more responsive to changes in its opponent s price than to changes in its own price otherwise firms have an incentive to deviate from a greater than bertrand price in the first period

weight discrimination in the german labour market abstractwe explore the effects of higher body mass index bmi or obesity on different labour market outcomes we extend the present literature by investigating the effect of obesity on i promotion likelihood and ii unemployment duration in addition to the effect on iii wages and iv probability of being employed we find an obesity penalty on wages employment likelihood promotion likelihood and unemployment duration among females in germany taking into account of endogeneity of bmi and sample selection we are also able to identify an unexplained effect of obesity on wages employment and promotion likelihood for females using decomposition techniques that can be attributed to weight discrimination