trade openness tax reform and tax revenue in developing countries this article investigates empirically whether the effect of tax reform involving the progressive replacement of trade tax revenue with domestic tax revenue in developing countries tax revenue performance measured by tax revenue to gdp ratio depends on the degree of trade openness of these countries the analysis has used an unbalanced panel data set of 95 developing countries over the period 1981 2015 and the two system gmm approach results suggest that tax reform is positively and significantly associated with tax revenue performance in developing countries with the magnitude of this positive effect increasing as countries experience a higher development level additionally and more importantly countries that further open up their economies to international trade enjoy a higher positive effect of tax reform on tax revenue than countries that experience a lower degree of trade openness therefore these findings should help dissipate the concerns of policymakers in developing countries that greater openness to international trade would further erode their tax revenue including by lowering their international trade tax revenue in fact the implementation of an appropriate tax reform in the context of greater trade openness would generate higher tax revenue while concurrently allowing countries to reap the well known benefits of international trade

labour demand and job to job movement the relationship between labour demand and job to job movement is investigated both theoretically and empirically at the macro level it concentrates on the role of the employment regime hiring do nothing or firing and the hiring and firing costs the exact upper bounds of the marginal hiring costs of an employed worker are derived for which job mobility between two firms yields a positive aggregate relationship between job to job movement and employment the relationship is estimated as a cointegration model for the netherlands it appears that the inclusion of the job to job mobility rate may provide a substantial improvement of the estimated labour demand equation

how robust is the kearney foreign policy globalisation index we argue that the kearney foreign policy kfp index of globalisation is constructed by making some problematic assumptions about the measurement normalisation and weighting of the variables included in the index we propose alternative measurement normalisation and weighting rules and using these rules recalculate the ranking of the fifty countries using the original kfp data specifically we use in various combinations i variables adjusted for geographical characteristics of countries ii statistically optimal weights obtained by principal components analysis iii a normalisation rule that treats different years of observations separately we find that the country rankings change significantly when adjusted variables are used indicating that the original kfp index is partially measuring geographical differences between countries

the highs and lows of the minimum wage effect a time series cross section study of the canadian law we examine the effects of minimum wage legislation in canada over the period 1975 93 for teenagers we find that a 10 increase in the minimum wage is associated with roughly a 2 5 decrease in employment we also find that this result is driven by low frequency variation in the data at high frequencies the elasticity is positive and insignificant the difference in the elasticity across the bandwidth has implications for the interpretation of employment dynamics as a result of minimum wage policy and experimental design in minimum wage studies it also provides a simple reconciliation of the new minimum wage research which reports very small negative or positive elasticities

the costs of hiring skilled workers the shape of adjustment costs in factor demand has been a matter of controversy for quiet some time while some researchers assume quadratic adjustment costs i e that it becomes increasingly expensive to recruit workers in a given time period others believe that there are economies of scale in recruitment surprisingly there is hardly any evidence so far on the shape of hiring costs based on microeconomic data in this paper we estimate the functional form of hiring costs in the theoretical framework of a generalized model of monopsony using both parametric and nonparametric estimation techniques we find strong evidence in favor of diseconomies of scale in recruiting skilled workers our results indicate that the labor market is monopsonistic

performance comparisons and dynamic incentives it is well known that comparative performance information cpi can enhance efficiency in static principal agent relationships by improving the trade off between insurance and incentives in the design of explicit contracts in dynamic settings however there may be implicit as well as explicit incentives for example managerial career concerns and the ratchet effect in regulation we show that the dynamic effects of cpi on implicit incentives can either reinforce or oppose the familiar static insurance effect and in either case can be more important for efficiency the overall welfare effects of cpi are thus ambiguous and can be characterized in terms of the underlying information structure

is trade good or bad for the environment sorting out the causality we seek to contribute to the debate over globalization and the environment by asking what is the effect of trade on a country s environment for a given level of gdp we take specific account of the endogeneity of trade using exogenous geographic determinants of trade as instrumental variables we find that trade tends to reduce three measures of air pollution statistical significance is high for concentrations of so2 moderate for no2 and lacking for particulate matter although results for other environmental measures are not as encouraging there is little evidence that trade has a detrimental effect on the environment

efficiency gains from organizational innovation comparing ordinal and cardinal tournament games in broiler contracts abstract we analyze the contract settlement data of a poultry company who contracts the production of broiler chickens with a group of independent growers the company originally used rank order ordinal tournaments to compensate their contract growers and later switched to cardinal tournaments based on the observed payment mechanism we construct an empirical model of a rank order tournament game and estimate structural parameters of the symmetric nash equilibrium and then simulate growers performance under the observed cardinal tournament contract we found that the model with risk averse agents fits the data better than the model with risk neutral agents and that switching from a rank order tournament to a cardinal tournament while keeping the growers ex ante expected utility constant improved efficiency the principal company gains from the switch whereas some of the agents growers gain and others lose depending on their realized productivity shocks

integrator contracts with many agents and bankruptcy this article analyzes optimal livestock production contracts between an integrator company and many independent growers in three similar industries broiler turkey and swine the analysis provides an explanation for the simultaneous existence of distinct incentive schemes in these industries by examining the effects of bankruptcy the key factors are shown to be the output price volatility and the firm size with large companies dominating the broiler industry a small price volatility facilitates the use of two part piece rate tournaments by contrast given the prevalence of smaller companies in the swine industry a larger price volatility generates a bankruptcy risk which renders the use of tournaments infeasible given the combination of medium size companies in the turkey industry an intermediate price volatility produces a mixed result where tournaments and fixed performance standards exist simultaneously

measuring globalization of international trade theory and evidence summary measuring globalization requires a standard of perfect international integration as a benchmark that a single world space would reach under conditions of geographic neutrality in international trade we define this standard and present indicators for openness connectedness and integration for each specific economy and for the world economy we apply our indicators to data on trade flows for 59 countries for the 1967 2004 period results show that trade integration is higher than what traditional openness indicators suggest several economies find high levels of integration but the low degree of openness in some large economies jeopardizes the progress of globalization

miracles and debacles in defence of trade openness the central theme of this paper is that sustained rapid growth cannot be achieved without rapid growth in trade a review of the experience during the past four decades offers virtually no examples of countries achieving sustained rapid growth called miracles in this paper without simultaneously experiencing sustained rapid growth in trade in the presence of low or high but declining barriers to trade simultaneously the claim that opening to trade leads to sustained income losses is unfounded a review of the experience of the countries that have faced stagnation or declining per capita incomes on a long term basis called debacles in this paper reveals no connection to a sustained surge in imports

openness and inflation a new assessment romer 1993 uses a barro gordon type model to argue that openness puts a check on the government s incentive to engage in unanticipated inflation because of induced exchange rate depreciation 2 therefore in the absence of precommitment in monetary policy more open economies will tend to have lower inflation rates romer finds that empirically over a large sample of countries and over a broad time frame average inflation rates are lower in smaller more open economies this relationship is significant quantitatively large and robust moreover these findings suggest that models in which the absence of precommitment in monetary policy leads to inefficiently high average levels of inflation are essential to understanding inflation in most of the world this comment suggests that the negative link between inflation and openness romer found may be largely driven by the responses of severely indebted countries sics to the debt crisis of the 1980s figures i and ii show the scatterplots of the logarithms of average inflation and openness for the subperiods 1973 to 1981 predebt crisis and 1982 to 1990 the debt crisis period different groups of countries are separated according to their indebtedness level 3 the solid lines in the figures represent the predicted value of inflation obtained from a regression of openness on inflation for the countries in each group as the scatterplots show there is indeed a strong negative relation between openness and inflation among sics during the debt crisis

a reexamination of the role of income for the trade and environment debate recent work on the relationship between international trade and the environment has found small but negative effects of increased openness on measures of pollution for the average country on a panel of 128 countries it is shown that like previous studies the trade intensity effect is negative and significant for the average country for emissions of four localized pollutants so2 nox co and vocs however trade intensity effects are not uniform across countries of different income levels in fact a strong non monotonicity exists in trade intensity elasticities it is found that countries with relative world incomes less than 0 5 or greater than 2 5 tend to have positive trade intensity elasticities while countries with relative world incomes between 0 5 and 2 5 tend to have negative trade intensity elasticities the results imply that both factor abundance and pollution haven effects may be at work but that the dominance of one effect over the other depends on a country s level of development

tournaments and office politics evidence from a real effort experiment in many environments tournaments can elicit more effort from workers except perhaps when workers can sabotage each other because it is hard to separate effort ability and output in many real workplace settings the empirical evidence on the incentive effect of tournaments is thin there is even less evidence on the impact of sabotage because real world acts of sabotage are often subtle manifestations of subjective peer evaluation or office politics we discuss a real effort experiment in which effort quality adjusted output and office politics are compared under piece rates and tournaments our results suggest that tournaments increase effort only in the absence of office politics competitors are more likely to sabotage each other in tournaments and as a result workers actually provide less effort simply because they expect to be the victims of sabotage adjusting output for quality with the rating of an independent auditor shrinks the incentive effect of the tournament even further since output tends to become more slipshod

a primer on cardinal versus ordinal tournaments i introduction the tournament literature has considered primarily two relative performance evaluation schemes that are consistent with what we observe in practice the rationale behind each of these incentive schemes is that relative performance evaluation is useful when agent performance is subject to common shocks in which case individual performance is not a sufficient statistic for individual effort that is the performance of other agents can enhance the inference of the effort exerted by an individual agent one important difference between these schemes is that under rank order or ordinal tournaments the prizes are prespecified and agents compete for rank by contrast under two part piece rate or cardinal tournaments the total prize is fixed and agents compete for a share of the pie 1 each agent receives a base payment and a bonus depending on the difference of his performance from the average performance of his peers 2 average performance provides an informative signal about the value of common shocks inflicted on agents ordinal tournaments are prevalent in contests where rank is more important than individual performance for instance sports contests where contestants compete for medals or fixed prizes or when individual performance data are not readily available for instance promotion contests where the individual contribution of contestants cannot easily be separated from that of their co workers or subordinates by contrast cardinal tournaments are popular in several occupations or industries where cardinal performance data are readily available e g salesmen contracts physician contracts with hmos and agricultural contracts 3 both ordinal and cardinal tournaments are relatively simple to design even though they are only proxies of theoretically optimal schemes 4 prior literature has contrasted the efficiency properties of either ordinal or cardinal tournaments against those of piece rates under piece rates each agent is evaluated according to his absolute performance thus agents receive a base payment and a bonus which is based typically linearly on their individual output 5 piece rates are sometimes expressed as fixed performance standards when an agent s performance is evaluated against a fixed standard instead of the average output obtained lazear and rosen 1981 green and stokey 1983 and nalebuff and stiglitz 1983 have shown that ordinal tournaments are superior to piece rates when agent activities are subject to common shocks that affect performance 6 more recently marinakis and tsoulouhas 2012 2013 investigated and verified this result for cardinal tournaments relative performance evaluation via tournaments constitutes a pareto superior move by removing common uncertainty from the responsibility of agents and by charging a premium for this insurance the principal increases his profit without hurting the agents moreover by providing this type of insurance tournaments enable the principal to implement higher power incentives than under piece rates what is still an open question in the literature above is a comparison of ordinal to cardinal tournaments the consensus among tournament theorists is that even though ordinal tournaments are informationally wasteful as in holmstrom 1982 by ignoring the agents cardinal performance data if available they are however more general because they are less restrictive on the functional form of the contract i e they are step functions with a linear or non linear trend part of the appeal is that the founders of tournament theory focused on ordinal tournaments nevertheless a significant part of the current tournament literature has analyzed cardinal tournaments instead 7 this paper fills in this gap in theory by developing a framework that can be used to analyze both cardinal and ordinal tournaments as well as piece rates and in doing so it provides a primer on tournaments and piece rates

does globalization affect growth evidence from a new index of globalization the study develops an index of globalization covering its three main dimensions economic integration social integration and political integration using panel data for 123 countries in 1970 2000 it is analysed empirically whether the overall index of globalization as well as sub indexes constructed to measure the single dimensions affect economic growth as the results show globalization indeed promotes growth the dimensions most robustly related with growth refer to actual economic flows and restrictions in developed countries although less robustly information flows also promote growth whereas political integration has no effect

contest with pre contest investment abstract in a standard noisy contest more competition more contestants leads to lower individual equilibrium effort we show that when contestants can make pre contest investment to enhance their competency neither equilibrium investment nor individual effort is monotonic in the number of contestants individual effort may increase with the level of participation

tournaments fairness and risk we estimate willingness to pay wtp to operate under two types of contracts tournaments ts and fixed performance standard contracts f our results are consistent with the notion that subjects having social preferences for fairness and care about risk that is when subjects experience greater inequity under tournaments relative to fixed performance contracts or experience greater revenue risk under tournaments the gap between wtp for fixed performance and tournament contracts increases ceteris paribus our results provide an explanation for grower dissatisfaction with tournament compensation schemes independent of possible concerns regarding opportunistic behavior by integrators

trade openness and environmental quality international evidence we examine the relationship between trade openness and the environment in a cross country panel using the emission of particulate matter pm10 as the basic indicator of environmental quality the panel cointegration test results show a long run relationship between particulate matter emissions trade openness and economic growth we find that increased trade openness leads to environmental degradation for the global sample however the results differ according to the income of countries trade openness has a benign effect on the environment in high income countries but a harmful effect in middle and low income countries these results are generally robust to different measures of trade openness and environmental quality interestingly and significantly the results are consistent with the popular notion that rich countries dump their pollution on poor countries finally we find evidence of a feedback effect between trade openness and particulate matter emissions for the global sample as well as different income groups of countries

labour demand and the source of adjustment costs to examine the importance of the two sources of costs of adjusting labor demand net costs of adjusting employment and gross costs of hiring and firing the author collects new sets of short monthly time series from a medium size hospital and three manufacturing plants models with quadratic costs and with lumpy costs are developed and yield lower bounds on the fraction of adjustment costs that are gross the estimates demonstrate that both types of costs affect dynamic labor demand but that gross adjustment costs especially and the turnover that generates them deserve much more attention copyright 1995 by royal economic society

introduction to the special issue on tournaments and contests the papers in this special issue represent several of the directions taken by current research on tournaments and contests two surveys provide useful insight into promotion contests and into contest functions other papers analyze the implications of limited liability incomplete information cross shareholding and non binding side payments and two papers investigate dynamic incentives and momentum

are tournaments optimal over piece rates under limited liability for the principal a highly acclaimed result is that tournaments are superior to piece rates when the agents are risk averse and their production activities are subject to a relatively large common shock the reason is that tournaments allow the principal to trade insurance for lower income to the agents our analysis shows that this celebrated result does not carry over to the case when a limited liability bankruptcy constraint limits the payments the principal can make provided that the liquidation value of the firm is sufficiently small this finding has important implications for the vast number of limited liability firms even though limited liability becomes an issue for different ranges of liquidation values under the two schemes tournaments are still superior when the liquidation value of the firm is intermediate or large even though the limited liability constraint is still binding for intermediate values surprisingly uncertainty in the price of output strengthens the need for tournaments by expanding the range of liquidation values over which tournaments are dominant because price uncertainty introduces additional bankruptcy risk these findings provide insight into policy implications in the contracting out of services by state and local governments in procurement in rent seeking contests and in tournaments used by hmos

openness inflation and the phillips curve a puzzle models of open economies with nominal rigidities are often thought to predict a correlation between openness to trade and the slope of the output inflation trade off or phillips curve using a variety of measures of the trade off and a standard measure of openness this paper argues that the direct evidence for a correlation is not strong in turn this calls into question the usual explanation for the negative correlation between openness and inflation that was documented by romer 1993 the paper considers some alternative explanations for the romer evidence

fixed costs and hours constraints hours constraints are typically identified by worker responses to questions asking whether they would prefer a job with more hours and more pay or fewer hours and less pay because jobs with different hours but the same rate of pay may be infeasible when there are fixed costs of employment or mandatory overtime premia the constraint in those cases may be illusory cross section estimates of reported hours constraints are consistent with this model implying that the overall level of hours constraints may exaggerate the extent to which the labor market is characterized by frictions and imperfections

piece rate incentive schemes this paper uses recent results from incentive theory to study heretofore informal critiques of piece rate compensation schemes the informal critiques are based on the history of failed attempts to install piece rate compensation schemes at the turn of the century the formal analysis emphasizes the importance of information and commitment in contracting the main result is as follows in a work environment characterized by hidden information and a hidden action if neither the firm nor the worker can commit to future behavior then no compensation scheme piece rate or otherwise can induce the worker not to restrict output

trade flows a facet of regionalism or globalisation this paper examines the evidence about the extent of globalisation by focusing on some aspects of international trade flows a reinterpretation of the existing evidence based on the analysis of tables and a range of indicators is provided in the first part of the paper the focus is on whether the increase in trade flows has been predominantly a global or regional phenomenon the analysis points to the tentative conclusion that the dominant tendency is the increase in trade within regional blocs north america the eu and the asia japan blocs rather than across them to address the same question a more formal analysis is undertaken in the second part of the paper by focusing on the relative speed of the convergence in openness within and across regions of the world our results indicate that the degree of openness converges faster across the countries of a given region rather than at the global level reinforcing the conclu sions from the first part of the paper the results are consistent with the view that trade integration is more of a regional phenomenon than a global one

incentives and compensation schemes an experimental study when the performances of agents are correlated because of a common random component contracts that use information on both the relative and absolute performances of agents theoretically outperform rank order tournaments and piece rate schemes although the theoretical advantage of such contracts has long been noticed in the literature the empirical papers that study this question have produced mixed results using a controlled laboratory experiment we shed light on the performance of these contracts we focus on the simplest version of such a contract the relative piece rate rpr and compare its performance with that of the tournament and piece rate schemes we find that when the rprs are imposed on the agents they exert higher effort levels and give the principal weakly higher profits than the tournament and piece rate contracts second we find that agents have little aversion to self select into the rpr scheme when other alternatives are available in our paper we fix the environment agents face and vary only their wage scheme our results support the theoretical predictions and suggest that principals can benefit from using rpr schemes in places where the piece rate and tournament contracts would otherwise be used

behavioral and welfare effects of tournaments and fixed performance contracts some experimental evidence using experimental economics we compare the efficiency and welfare effects of tournaments and fixed performance contracts our subjects agents were generally better off under fixed performance contracts but the advantage of the fixed performance contract disappears if the relative magnitude of the standard deviation of the common shock exceeds a critical value efficiency wise agents tend to exert higher effort under fixed performance contracts on average additionally an increase in the common shock standard deviation appeared to be associated with lower effort under tournaments our results shed light on the potential impact of legislative proposals to ban tournament contracts

are costs really sticky evidence from publicly listed companies in the uae this article measures the degree of adjustment between operating revenues and costs for publicly listed companies in the united arab emirates uae traditional cost models assume that variable costs change proportionally in response to an upward or downward fluctuation in demand however in recent years such an assumption has been questioned by a variety of papers from the economics and accounting fields typically cost stickiness is defined as costs decreasing by less than 1 when sales decrease by 1 while reacting closer to the proportion of change when sales increase this study unlike the vast majority of the literature did not find cost stickiness in the uae after using panel data regression analysis the main explanation is that uae has mostly expatriate labour force that does not have the typical benefits of employment protection legislation epl available in other national jurisdictions epl is a main reason that costs adjustments during decreasing sales is curbed due to the associated co

managerial objectives capital structure and the provision of worker incentives worker incentive schemes are invariably assumed to be administered by an owner entrepreneur who has an incentive to understate worker performance after the event while tournaments can overcome this problem they discourage cooperation between workers we show that a professional manager concerned with equality between workers and with avoiding bankruptcy rather than maximizing shareholder wealth will conduct a tournament that preserves individual effort incentives while promoting cooperation between workers the theory predicts lower debt levels and more compressed pay scales as cooperation becomes more important in the limit this becomes a group bonus scheme supported by blue chip debt

salaries and piece rates compensation can take many forms remuneration can come as pecuniary payments as fringes such as health and pension benefits or as a nonpecuniary reward such as plush office furniture that costs the firm less than it benefits the worker a significant literature has examined the trade offs between pecuniary and nonpecuniary compensation the modern work having been pioneered by rosen 1974 more recently another body of literature has examined the selection of method of total compensation ignoring the distinction between pecuniary and nonpecuniary payment this work has focused on risk and incentive factors it has resulted in comparisons of compensation based on absolute output levels to that based on relative performance it has also led to explorations of the relation of compensation to experience over the work life 2 little attention has been paid to what may be among the most important and obvious distinction in methods of compensation namely the choice between a fixed salary for some period of time that is paying on the basis of input and some workers receive compensation that is specified in advance and not directly contingent on performance instead it depends on an input measure such as hours worked for others compensation is directly related to output this essay is an attempt to predict a firm s choice of compensation method piece rates are defined more rigorously among the more important factors discussed are worker heterogeneity incentives sorting considerations monitoring costs and asymmetric information one result is that salary workers tend to be of lower quality and more homogeneous than are their piece rate counterparts numerous additional results are provided helpful comments by victoria lazear and yoram weiss are gratefully acknowledged support was provided by the department of labor and the national science foundation 1 see lazear and rosen 1981 stiglitz 1981 holmstrom 1982 green and stokey 1983 2 see lazear 1979 1981 and harris and holmstrom in press

the architecture of globalization a network approach to international economic integration we combine data on international trade linkages with network methods to examine the global trading system as an interdependent complex network we map the topology of the international trade network and suggest new network based measures of international economic integration at both a global system wide level and a local country level we develop network based measures that incorporate not only the volume of trade but also the influence that a country has on the international trading system these measures incorporate the structure and function of the network and may provide a more meaningful approach to globalization than current measures based on trade volumes we find that in terms of participation and influence in the network global trade is hierarchical with a core periphery structure at higher levels of trade though integration of smaller countries into the network increased considerably over the 1990s the network is strongly balkanized according to geography of trading partners but not as strongly by income or legal origin using these new measures we find that a country s position in the network has substantial implications for economic growth we therefore suggest that a network approach to international economic integration has potential for useful applications in international business finance and development

regulating broiler contracts tournaments versus fixed performance standards grower discontent with tournaments as mechanisms for settling poultry contracts can largely be attributed to the group composition risk that tournaments impose on growers this article focuses on the welfare effects of a widely advocated regulatory proposal to prevent integrator companies from using tournaments and replace them with schemes that compare performance to a fixed standard the analysis shows that the mandatory replacement of tournaments with fixed performance standards absent any rules that regulate the magnitude of the piece rate can decrease grower income insurance without raising welfare however replacing tournaments with fixed performance standards can simultaneously increase income insurance and welfare provided that the magnitude of the piece rate is also regulated

the evidence on globalisation globalisation is blamed for many socioeconomic shortcomings i discuss the consequences of globalisation by surveying the empirical globalisation literature my focus is on the kof indices of globalisation that have been used in more than 100 studies early studies using the kof index reported correlations between globalisation and several outcome variables studies published more recently identify causal effects the evidence shows that globalisation has spurred economic growth promoted gender equality and improved human rights moreover globalisation did not erode welfare state activities did not have any significant effect on labour market interaction and hardly influenced market deregulation it increased however within country income inequality the consequences of globalisation thus turn out to be overall much more favourable than often conjectured in the public discourse

employment changes the structure of adjustment costs and plant size abstract in this paper we analyze the pattern of employment adjustment using a rich panel of norwegian plants the data suggest that the frequency of episodes of zero net employment changes is inversely related to plant size we develop and estimate a simple q model of labor demand allowing for the presence of fixed linear and quadratic components of adjustment costs the econometric evidence supports the existence of purely fixed components unrelated to plant size as a result the range of inaction is wider for smaller plants the quadratic component of costs is also always important in most specifications fixed costs are higher for employment contractions the quadratic component is higher during employment contractions compared to expansions for small plants while this is not true for larger plants

do tournaments solve the two sided moral hazard problem abstract the paper analyzes the optimality of relative performance evaluation via two part piece rate tournaments in incentive contracting with multiple agents and two sided moral hazard if the agents are risk averse it is shown that a tournament is optimal only when the following conditions hold i there is common uncertainty inflicted on the activities of the agents that is not contingent on their actions but can be contingent on the principal s action ii the principal sufficiently saves in transaction costs by employing a tournament iii the number of agents is sufficiently large then the feedback effect of using a tournament to monitor the agents is that the principal s moral hazard problem is relaxed when the principal takes a single action it can also be relaxed when the principal can vary her actions with the agents but there are economies of scale in her activity absent common uncertainty the optimum scheme is shown to be a fixed performance standard rather than a tournament but if the agents are risk neutral a tournament can still be optimal provided that ii and iii hold

global estimates of pro poor growth summary the main objective of the present paper is to present a cross country analysis of pro poor growth in 80 countries in 237 growth spells during the period 1984 2001 to achieve this objective the paper proposes a new measure of pro poor growth that captures gains and losses of growth rates due to changes in the distribution of consumption the gains imply pro poor growth while the losses imply anti poor growth the statistical test carried out in the paper shows that regional location of countries has a significant association with the pro poorness of growth the paper also attempts to test for the association between growth patterns and certain variables that the literature has identified as significant determinants of growth and inequality out of many variables the paper focuses on four namely inflation the share of agriculture in gdp openness to trade and the rule of law

trade openness foreign direct investment and child labor summary the skeptics of globalization argue that increased trade openness and foreign direct investment induce developing countries to keep labor costs low for example by letting children work this article argues that there are good theoretical reasons why globalization might actually have the opposite effect we test this with various measures of child labor and provide the first analysis of foreign investment in addition to trade we present evidence that countries that are more open to trade and or have a higher stock of foreign direct investment also have a lower incidence of child labor this holds for the labor force participation rate of 10 14 year old children the secondary school nonattendance rate and a count measure of economic sectors with child labor incidence as the dependent variables globalization is associated with less not more child labor

mergers and acquisitions trade a global value chain analysis the present paper deals with how the insertion in international trade and global value chains gvcs of countries affects their capacity of attracting foreign mergers and acquisitions m as to this end we combine data for bilateral m as and trade in value added for the period 2001 15 and estimate an augmented gravity equation results indicate that trade openness per se does not favour m as nevertheless bilateral free trade agreements heterogeneity of destinations sources for exports imports of intermediate and final goods and position and participation in global value chains are relevant for explaining bilateral m as moreover their role is significantly different depending on the level of development of the home and host countries

sicken thy neighbour the initial trade policy response to covid 19 since the onset of the covid 19 pandemic many governments have limited exports of medical supplies and medicines pre pandemic barriers to imports of medical supplies and soap remain largely in place having characterised trade policy stance towards covid 19 related goods this study critically assesses the resort to export curbs and import taxes elements of an alternative positive trade policy contribution to surmount this pandemic are presented

the environmental consequences of trade evidence from subnational trade flows abstract the debate over the environmental consequences of free trade is not only quite heated but also entails significant policy ramifications recently cross sectional analysis at the country level has made use of exogenous determinants of trade to identify the causal effect of trade on the environment finding moderate evidence of a beneficial impact of expanded trade on environmental quality given the stakes involved we revisit this finding using subnational data on trade flows across us states and several measures of pollution not only does the analysis shed further light on the debate at the international level but also addresses a heretofore unexamined question does greater inter regional commerce at the subnational level harm the environment our findings are striking providing further evidence against a negative environmental impact of trade for the majority of measures analyzed however several sources of heterogeneity arise that are noteworthy

international financial integration and economic growth abstract this paper uses new data and new econometric techniques to investigate the impact of international financial integration on economic growth and also to assess whether this relationship depends on the level of economic development financial development legal system development government corruption and macroeconomic policies using a wide array of measures of international financial integration for 57 countries and an assortment of statistical methodologies we are unable to reject the null hypothesis that international financial integration does not accelerate economic growth even when controlling for particular economic financial institutional and policy characteristics

cash holdings and labor heterogeneity the role of skilled labor firms differ in their dependence on skilled labor and face labor adjustment costs that increase with their workers skill level we show that firms with a higher share of skilled workers and thus less flexibility to adjust their labor demand in response to cash flow shocks hold more precautionary cash the effect of labor skills on cash holdings is more pronounced for financially constrained firms and varies with exogenous differences in firing and hiring costs we address endogeneity concerns by using subsamples of firms with reasonably similar characteristics propensity score matching and a quasi experimental shock to labor markets

contests with stochastic abilities we consider the properties of perfectly discriminating contests in which players abilities are stochastic but become common knowledge before efforts are expended players whose expected ability is lower than that of their rivals may still earn a positive expected payoff from participating in the contest which may explain why they participate we also show that an increase in the dispersion of a player s own ability generally benefits this player it may benefit or harm his rival but cannot benefit the rival more than it benefits himself we also explore the role of stochastic ability for sequential contests with the same opponent multibattle contests and with varying opponents elimination tournaments and show that it reduces the strong discouragement effects and holdup problems that may otherwise emerge in such games high own ability dispersion selects such players into the contest and favors them in elimination contests jel d72 d74 i introduction manytournamentsarecharacterizedbymultiple rounds with or without the elimination of some candidates in earlier stages of the process of determining a final winner in the political context electionprocessesthatdetermineparty leadersorpoliticalleadersmoregenerallyconsist ofmultipleconteststages intheracefortheu s presidency severalcompetitionstagesgradually narrowdownthenumberofcompetitors 1 inter

a new measure of trade openness trade openness popularly measured as x m gdp in the hundreds of studies published to date consistently considers the world s biggest trading countries such as the usa the uk japan and germany to be closed economies irrespective of the data set used this study suggests a composite trade share measure that more completely reflects reality by combining two important dimensions of trade openness trade share and the relative importance of a country s trade level to total world trade robustness tests support the new proposed measure in lieu of the conventional measure of openness and suggest that the latter may not only be incomplete but may also overstate the impact of trade on such things as income and the environment

trade reform with quotas partial rent retention and tariffs quotas are the predominant means of protection in developed countries with quota rents commonly shared between exporter and importer this paper derives shadow prices appropriate to evaluating trade reform under these circumstances and provides a number of useful sufficient conditions for welfare improving piecemeal reform in doing so the authors apply the distorted quantity constrained expenditure function and use implicit separability to derive more powerful results than have previously been available

are college graduates more responsive to distant labor market opportunities abstract are highly educated workers better at locating in areas with high labor demand to answer this question i use three decades of u s census data to estimate a mcfadden style model of residential location choice i test for education differentials in the likelihood that young workers reside in states experiencing positive labor demand shocks at the time these workers entered the labor market i find effects of changes in state labor demand on college graduate location choice that are several times greater than for high school graduates nevertheless medium run wage effects of entry labor market conditions for college graduates equal or exceed those of less educated workers

the world is not flat this paper reviews different proposals for the measurement of globalisation arguing that available composite indicators although going beyond a purely economic definition of international integration fail to perform their task adequately for a variety of conceptual and methodological reasons the most important problem is that globalisation indicators often do not take the spatial aspects of international interactions adequately into account the scope of international integration is not necessarily global as cross border interactions among human societies are often limited in their geographical reach the author explores a number of ways through which space and distance affect the construction of globalisation indicators

adjustment cost and supply response in a fishery a dynamic revenue function in industries where firms can adjust product mix in response to price changes the process can be delayed by adjustment costs an example is fishermen who change fishing grounds to target different species if adjustment costs are sufficiently large this may hamper the fishermen s response so that regulatory tools that are not efficient in the long run are useful in the short run moreover adjustment costs can influence the choice of species targeted in this paper dynamic supply equations are specified using a revenue function approach different hypotheses about the dynamics of the supply equations are tested for norwegian trawlers

aggregation and linearity in the provision of intertemporal incentives we consider the problem of providing incentives over time for an agent with constant absolute risk aversion the optimal compensation scheme is found to be a linear function of a vector of n accounts which count the number of times that each of the n kinds of observable events occurs the number n is independent of the number of time periods so the accounts may entail substantial aggregation in a continuous time version of the problem the agent controls the drift rate of a vector of accounts that is subject to frequent small random fluctuations the solution is as if the problem were the static one in which the agent controls only the mean of a multivariate normal distribution and the principal is constrained to use a linear compensation rule if the principal can observe only coarser linear aggregates such as revenues costs or profits the optimal compensation scheme is then a linear function of those aggregates the combination of exponential utility normal distributions and linear compensation schemes makes computations and comparative statics easy to do as we illustrate we interpret our linearity results as deriving in part from the richness of the agent s strategy space which makes it possible for the agent to undermine and exploit complicated nonlinear functions of the accounting aggregates

trade liberalization in a multinational dominated industry abstract existing theoretical models in the trade industrial organization literature assume almost exclusively that firms are national enterprises so that there is no international coordination by multinational firms we develop a model in which multinationals compete among themselves but coordinate production pricing and sales decisions across multiple plants and markets free entry and exit is assumed and cases in which the multinationals can and cannot segment markets are considered the model is simulated using data from the north american auto industry results are compared with a counter factual model calibrated to the same data which assumes national ownership of firms

the agent agents problem payment by relative output this paper begins an investigation into the incentive problems at a firm when the effort of the employer and the employees combines to determine final output the major conclusion is that optimal reward functions in this circumstance will in general value the performance of a worker relative to that of his peers the paper thus joins a growing literature associated with the work of lazear and rosen on rank order tournaments

incentive systems in a real effort experiment in the reported experiment different payment schemes are examined on their incentive effects payments based on individual team and relative performance are compared subjects conducted computerized tasks that required substantial effort the results show that individual and team payment induced the same effort levels in team production free riding occurred but it was compensated by many subjects providing more effort than in case of individual pay effort was higher but more variable in tournaments while in case of varying abilities workers with relatively low ability worked very hard and drove up effort of the others finally attitudes towards work and other workers differed strongly between conditions

the league composition effect in tournaments with heterogeneous players an empirical analysis of broiler contracts we compare welfare effects of tournaments and piece rates in contracts with heterogeneous ability agents and demonstrate that tournaments that mix players of unequal abilities create a league composition effect when leagues are fixed and the time horizon sufficiently long piece rates improve welfare over tournaments using contract production data for broiler chickens we estimate the variances of growers abilities common production shock and grower s idiosyncratic shock growers abilities are heterogeneous and common production shocks are significant leagues in broiler tournaments disintegrate rapidly over time suggesting that tournament contracts offer more welfare than piece rates

a time frequency analysis of trade openness and co2 emissions in france abstract the paper explores the comovement between trade openness and carbon dioxide co2 emissions in france over the period 1960 2013 by using the wavelet tool the investigation offers detailed information about this interaction for different sub periods of time and frequencies it also reveals the lead lag nexus between variables under cyclical and anti cyclical shocks the main findings reveal no comovement at high frequency between trade openness and gas emissions confirming the neutral hypothesis on short term the co2 emissions positively drive the trade openness at medium frequency hence on medium term the inexistence of strong environmental rules stimulate the international trade especially the exports obtained based on pollutant capacities curiously the trade openness positively runs the gas emissions at low frequency herein on long term the interaction between trade and co2 emissions is driven by the business cycle

external recruitment versus internal promotion this article analyzes the choice between internal promotion and external recruitment within the framework of an economic contest opening up the competition for a position to external candidates re