regulatory multiplicity and conflict towards a combined code on corporate governance in nigeria given the multiplicity of codes designed to regulate different stakeholders in terms of promoting good corporate governance this paper examines areas of conflicts among the various codes and the associated implications for corporate governance practices and regulatory compliances by public listed nigerian firms using the conflict signalling theory for developing the conceptual framework this study examines the proliferation of codes in nigeria through a mixed method approach to provide an exploratory account of the implications of corporate governance regulatory multiplicity evidence suggests the presence of conflict among the various codes which contributes to reduced compliance by firms and ineffective enforceability by regulatory agencies which both impede good corporate governance in nigeria the findings advance conflict signalling theory as an important framework for understanding the implications of the conflicts arising from the multiplicity of codes

relative deprivation and internal migration in the united states a comparison of black and white men while the link between geographic and social mobility has long been a cornerstone of sociological approaches to migration recent research has cast doubt on the economic returns to internal u s migration moreover important racial disparities in migration patterns remain poorly understood drawing on data from the 2000 census the author reappraises the link between migration and social mobility by taking relative deprivation into consideration she examines the association between migration disaggregated by region of origin and destination and absolute and relative earnings and occupational prestige separately by race findings lend new insight into the theoretical and stratification implications of growing racial disparities in migration patterns while both blacks and whites who move north south generally average lower absolute incomes than their stationary northern peers they enjoy significantly higher relative social positions moreover the relative gains to migration are substantially large

price indexes inequality and the measurement of world poverty i discuss the measurement of world poverty and inequality with particular attention to the role of purchasing power parity ppp price indexes from the international comparison project global inequality increased with the latest revision of the icp and this reduced the global poverty line relative to the us dollar the recent large increase of nearly half a billion poor people came from an inappropriate updating of the global poverty line not from the icp revisions even so ppp comparisons between widely different countries rest on weak theoretical and empirical foundations i argue for wider use of self reports from international monitoring surveys and for a global poverty line that is truly denominated in us dollars

real options agency conflicts and optimal capital structure abstract we examine the impact of a stockholder bondholder conflict over the timing of the exercise of an investment option on firm value and corporate financial policy we find that an equity maximizing firm exercises the option too early relative to a value maximizing strategy and we show how this problem can be characterized as one of overinvestment in risky investment projects equityholders incentive to overinvest significantly decreases firm value and optimal leverage and significantly increases the credit spread of risky debt numerical solutions illustrate how the agency cost of overinvestment and its effect on corporate financial policy vary with firm and project characteristics

ethnicity neighborhoods and human capital externalities the socioeconomic performance of today s workers depends not only on parental skills but also on the average skills of the ethnic group in the parents generation or ethnic capital this paper investigates the link between the ethnic externality and ethnic neighborhoods the evidence indicates that residential segregation and the external effect of ethnicity are linked partly because ethnic capital summarizes the socioeconomic background of the neighborhood where the children were raised ethnicity has an external effect even among persons who grow up in the same neighborhood when children are exposed frequently to persons who share the same ethnic background copyright 1995 by american economic association

investment policy with time to build abstract most capital projects have an implementation lag we examine the effect of implementation lag on a levered firm s investment decision the main finding is that implementation lag can potentially have a substantial effect on a levered company s investment trigger and this effect can be significantly different from that of an unlevered company the exact relationship between lag and investment trigger depends on the level of debt used by the firm for an optimally levered firm a crucial determinant of the lag investment relationship is the fraction of investment cost that has to be incurred upfront if this fraction is small investment trigger is a decreasing function of implementation lag and the effect can be economically significant if this fraction is large investment trigger can be either increasing or decreasing in lag depending on parameter values but the magnitude of the effect is not large optimally levering a firm makes the implementation lag more investment friendly relative to an unlevered firm thus it is possible that the lag has a negative effect on investment if the firm is unlevered but a positive effect if the same firm is optimally levered for an optimally levered firm implementation lag generally has a non negative effect on investment

time to build and capacity choice abstract this paper studies how demand uncertainty and time to build interact in affecting irreversible investment activity using impulse control methods we find the optimal timing and size of investment for a firm such as an electric utility that considers expanding its capacity in order to meet an uncertain demand when the construction lag is short uncertainty delays investment while increasing its size once it takes place however for comparatively long and realistic times to build the sensitivity to uncertainty is drastically reduced and the results can even be reversed more uncertainty can speed up investment and reduce its size

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

investment under uncertainty with price ceilings in oligopolies abstract we study the impact of price cap regulation on the level and timing of investment in an oligopolistic cournot industry facing stochastic demand we find that a price ceiling affects investment decisions in two mutually competing ways it makes the option to defer investment more valuable but at the same time it reduces the incentive for firms to strategically underinvest in order to raise prices we show that while sensible price cap regulation speeds up investment a low price cap can be a disincentive for investment there exists an optimal price cap independent of market concentration the competitive investment price trigger that maximizes investment incentives and in the long term increases industry installed capacity this optimal price cap becomes less effective and less robust as the market becomes more competitive and as demand volatility increases errors in estimation of the optimal price cap have asymmetric effects underestimation has more dire consequences than overestimation

how important is selection experimental vs non experimental measures of the income gains from migration measuring the gain in income from migration is complicated by non random selection of migrants from the general population making it difficult to obtain an appropriate comparison group of non migrants this paper uses a migrant lottery to overcome this problem providing an experimental measure of the income gains from migration new zealand allows a quota of tongans to immigrate each year with a lottery to choose among the excess number of applicants a unique survey conducted by the authors in these two countries allows experimental estimates of the income gains from migration by comparing the incomes of migrants to those who applied to migrate but whose names were not drawn in the lottery after allowing for the effect of non compliance among some of those whose names were drawn the authors also conducted a survey of individuals who did not apply for the lottery comparing this non applicant group with the migrants enables assessment of the degree to which non experimental methods can provide an unbiased estimate of the income gains from migration they find evidence of migrants being positively selected in terms of both observed and unobserved skills as a result non experimental methods are found to overstate the gains from migration by 9 to 82 percent a good instrumental variable works best while difference in differences and bias adjusted propensity score matching also perform comparatively well

married women s allocation of time to employment and care of elderly parents married women who have been shown in past research to exhibit relatively elastic labor supply constitute a group of particular interest with respect to decisions concerning time spent in parental care and time spent in market work this paper presents estimates of a simultaneousequations model of employment hours of work and the provision of care to an older parent the results provide no evidence of reduced propensities to be employed or of reduced conditional hours of work due to the provision of parent care these findings are consistent with other research on women s allocation of time to competing productive uses

an adverse social welfare effect of a doubly gainful trade abstract acknowledging individuals distaste for low relative income renders trade less appealing when trade is viewed as a technology that integrates economies by merging separate social spheres into one we define a trembling trade as a situation in which gains from trade are overtaken by losses of relative income with the result that global social welfare is reduced a constructive example reveals that a trembling trade can arise even when trade is doubly gainful in that it increases the income of every individual and narrows the income gap between the trading populations

toward a theory of regulation for developing countries following jean jacques laffont s lead the efficient operation and expansion of infrastructures in developing countries is crucial for growth and poverty reduction however recent reforms aimed at improving the performance of these sectors have had limited success evidence suggests that in many instances this was because the traditional regulatory theory relied on by policymakers was not suitable for the institutional context in developing countries this article surveys more recent theoretical work focusing on problems with regulation in these countries at the heart of the survey is the work of jean jacques laffont who in the last decade of his life set about developing a theoretical framework for regulation in developing countries we consider the implications of his work which focused on the key institutional limitations faced in developing countries we then discuss where experience suggests that there are important omissions from this modeling bringing in extensions and alternative approaches pursued by other authors we conclude by summarizing the key ways in which regulatory policy will be different when institutions are weak overall we find that an understanding of the institutional context and its implications are crucial when designing a regulatory framework for developing countries

white discrimination in provision of black education plantations and towns abstract we present a model of public provision of education for blacks in two discriminatory regimes white plantation controlled and white yeoman town controlled we show that the ability to migrate to a non discriminating district constrains the ability of both types of regimes to discriminate the model produces time series of educational outcomes for whites and blacks that mimic the behavior seen in post reconstruction south carolina to the onset of the civil rights act it also fits the post world war ii black white income differentials

productivity gains from geographic concentration of human capital evidence from the cities abstract based on recent theoretical developments the argument is made that the average level of human capital is a local public good cities with higher average levels of human capital should therefore have higher wages and higher land rents after conditioning on the characteristics of individual workers and dwellings this prediction is supported by data for standard metropolitan statistical areas smsas in the united states where the smsa average levels of formal education and work experience are used as proxies for the average level of human capital the alternative explanations of omitted smsa variables and self selection are evaluated an estimate of the effect of an additional year of average education on total factor productivity is computed

moving out but not up economic outcomes in the great migration the migration of millions of southerners out of the south between 1910 and 1970 is largely attributed to economic and social push factors in the south combined with pull factors in other regions o

corporate social responsibility in transnational spaces exploring influences of varieties of capitalism on expressions of corporate codes of conduct in nigeria drawing from the varieties of capitalism theoretical framework the study explores the home country influences of multinational corporations mncs on their corporate social responsibility csr practices when they operate outside their national regional institutional contexts the study focusses on a particular csr practice i e corporate expressions of code of conducts of seven mncs from three varieties of capitalism coordinated 2 mixed 2 and liberal 3 market economies operating in the oil and gas sector of the nigerian economy the study concludes that the corporate codes of conduct of these mncs operating in nigeria to a large extent reflect the characteristics of their home countries model of capitalism respectively albeit with certain degree of modifications the home countries model of capitalism is also found to have implications for the degree of adaptability of these mncs csr practices to the nigerian institutional context with the mixed market economy model of capitalism adapting more flexibly than the liberal and coordinated market economies respectively the findings of this study will contribute to the emerging literature on the institutional embeddedness of csr practices in transnational social spaces understanding of varieties of capitalism and csr in developing economies

does relative deprivation induce migration evidence from sub saharan africa this analysis revisits the decades old relative deprivation theory of migration in contrast to the traditional view that migration is driven by absolute income maximization we test whether relative deprivation induces migration in the context of sub saharan africa taking advantage of the internationally comparable longitudinal data from integrated household and agriculture surveys from tanzania ethiopia malawi nigeria and uganda we use panel fixed effects to estimate the effects of relative deprivation on migration decisions using per capita consumption expenditure and multidimensional wealth index as well being measures we find that a household s migration decision is based not only on its absolute well being level but also on the relative position of the household in the well being distribution of the community in which it resides we also discover that the effect of relative deprivation on migration is amplified in rural agricultural and male headed households results are robust to alternative specifications including the use of hausman taylor instrumental variable htiv estimator and pooled data across the five countries results confirm that the migration relative deprivation relationship also holds in the context of sub saharan africa we argue that policies designed to check rural urban migration through rural transformation and poverty reduction programs should use caution because such programs can increase economic inequality which further increases migration flow

the short run dynamics of inter state migration a space time economic adjustment model of in migration to fast growing states ballard k p and clark g l 1981 the short run dynamics of inter state migration a space time economic adjustment model of in migration to fast growing states reg studies 15 213 228 interregional migration is analyzed with respect to its short run responsiveness to economic fluctuations and its efficiency as a spatial labour market allocation mechanism using a space time analytical framework in migration to four fast growing states of the united states is analyzed over the period 1958 1975 it is shown via a time series model employing a koyck distributed lag methodology that short run in migration is in fact responsive to economic fluctuations both employment and turnover variables figure prominently in this regard by a cross sectional analysis it is also shown that in migrants to fast growing states do not necessarily come from depressed or low growth regions thus interregional migration may not be an efficient allocator of labour across the aggregate spatial system in the short or long

outmigration and the depressed area problemt t he post war emergence of full employment and the attendant rise in prosperity levels in most western countries have highlighted the existence of the less fortunate regions the so called depressed areas these depressed areas are characterized by persistently high rates of unemployment or in the case of many rural depressed areas high rates of underemployment furthermore such areas commonly possess in varying degrees one or more of the following characteristics a narrow range of economic activities declining basic industries unskilled or unadaptable labor forces and decayed or inefficient infrastructures depressed areas owe their origins generally to downward structural and or cyclical trends in the national economy as well as to problems associated with their location vis a vis centers of population and growth areas within the country concerned in the absence of any public policy it can be expected that with increasing national economic development the condition of depressed areas will become relatively worse according to various criteria which may be applied growth rates per capita income unemployment differentials the founders of the european economic community recognized this tendency and tried to make provision for it through various supra national agencies among them the european social fund given this trend toward polarization in levels of economic development between areas two broad approaches to the solution of the problems of the depressed area are possible the first involves the encouragement of new economic activity i e the policy of bringing work to the workers the second approach which can be described as a market adjustment involves the movement of workers out

market regulation and multimarket rivalry multimarket contact between duopolists in an x and y market is modelled with a trigger strategy we show that mildly restrictive price cap regulation in the x market decreases y market quantities but restrictive caps in the x market have a positive impact on y market outputs behavior in laboratory markets confirms these propositions regulation that lowers x market prices by a small amount results in a statistically significant reduction in y outputs when the regulated x market price is reduced to the cournot nash level y market outputs rise to a point statistically indistinguishable from the unregulated quantities

investment in technological innovations an option pricing approach abstract this paper develops a model of the optimal investment strategy for a firm confronted with a sequence of technological innovations we incorporate many of the most important characteristics of real world technology markets for example we permit innovations to be stochastic in their arrival times and their profitability we also incorporate learning so that firms adopting current innovations become better able to benefit from future innovations the model yields four distinct investment strategies the model is then used to predict actual firm policy these implications are discussed and compared with observed firm behavior

segregated schools and the mobility hypothesis a model of local government discrimination around the turn of the century southern blacks lost the right to vote and discrimination against them by local government officials intensified this paper argues that in the case of the de jure segregated public schools attended by black children the ability of southern blacks to vote with their feet placed limits on local government discrimination

accumulation of property by southern blacks before world war i comment and further evidence the pace and pattern of wealth accumulation by southern blacks in the period before world war i is of central importance to the historical evolution of black white income differences this paper extends recent work by robert higgs who used data on assessed wealth for georgia to study the temporal and cross sectional variation in black wealth accumulation during the post bellum era using similar data for five additional states i show that one of higgs principal conclusions measured by tax assessments blacks accumulated wealth more rapidly than whites is a general finding but that the cross sectional determinants of black wealth appear to have varied markedly across states issues of assessment ratio bias are also considered and using data for one state i demonstrate that failure to account for intrastate and race differences in assessment ratios may bias the cross sectional findings and significantly overstate the true relative black white growth rate of black wealth this abstract was borrowed from another version of this item

regulation by price adjustment the regulatory price adjustment process originally proposed by vogelsang and finsinger has been shown to be vulnerable to strategic manipulation by the regulated firm this article proposes several modifications to that scheme which improve its performance and broaden its applicability inclusion of a monopoly franchise market and the firm s past prices and earnings in the price adjustment constraints are shown to ensure efficient production by the firm and convergence to ramsey prices regardless of the firm s cost structure

the relationship between education and adult mortality in the united states prior research has uncovered a large and positive correlation between education and health this paper examines whether education has a causal impact on health i follow synthetic cohorts using successive u s censuses to estimate the impact of educational attainment on mortality rates i use compulsory education laws from 1915 to 1939 as instruments for education the results suggest that education has a causal impact on mortality and that this effect is perhaps larger than has been previously estimated in the literature copyright 2005 wiley blackwell

the determinants of mortality mortality rates have fallen dramatically over time starting in a few countries in the 18th century and continuing to fall today in just the past century life expectancy has increased by over 30 years at the same time mortality rates remain much higher in poor countries with a difference in life expectancy between rich and poor countries of also about 30 years this difference persists despite the remarkable progress in health improvement in the last half century at least until the hiv aids pandemic in both the time series and the cross section data there is a strong correlation between income per capita and mortality rates a correlation that also exists within countries where richer better educated people live longer we review the determinants of these patterns over history over countries and across groups within countries while there is no consensus about the causal mechanisms we tentatively identify the application of scientific advance and technical progress some of which is induced by income and facilitated by education as the ultimate determinant of health such an explanation allows a consistent interpretation of the historical cross country and within country evidence we downplay direct causal mechanisms running from income to health

migration with endogenous moving costs we study a dynamic model of labor migration in which moving costs decrease with the number of migrants already settled in the destination this assumption is supported by sociological studies of migrant networks with endogenous moving costs migration occurs gradually over time once it starts it develops momentum and migratory flows may increase even as wage differentials narrow in addition migration tends to follow geographical channels and low moving cost individuals migrate first these patterns are consistent with historical evidence from the great black migration of 1915 1960 in the united states much of which cannot be reconciled with existing migration models excerpt

municipal housekeeping the impact of women s suffrage on public education gains in 20th century real wages and reductions in the black white wage gap have been linked to the midcentury ascent of school quality with a new data set uniquely appropriate to identifying the impact of female voter enfranchisement on education spending we attribute up to one third of the 1920 40 rise in public school expenditures to the nineteenth amendment yet the continued disenfranchisement of black southerners meant white school gains far outpaced those for blacks as a result women s suffrage exacerbated racial inequality in education expenditures and substantially delayed relative gains in black human capital observed later in the century

the pursuit of opportunity explaining selective black migration abstract this paper examines the destination choices of black migrants during the great migration as previous research has shown educated blacks were more likely to relocate to the north in the pre world war ii era this analysis shows that this tendency can be attributed to the better educated migrants ability to finance transportation costs greater responsiveness to intercity wage differentials and stronger distaste for southern disamenities after 1940 the destination choice gap closed largely because migrant responses to wage differentials and valuation of southern disamenities changed these changes are observed both in the population at large and within birth year cohorts

culture meaning and institutions executive rationale in germany and japan this paper contributes rare primary empirical evidence to one of the major research questions in the social sciences today namely the linkage between national cultures and institutional structures of national business systems drawing on the work of redding we explore the thinking or rationale of senior executives of leading german and japanese firms about the ideal structure of the economy we find considerable variation in rationale across the two countries and in comparison with the shape of the business system of the united states our study has implications for our understanding of the meaning of economic activity in different countries and of the evolutionary trajectories of national business systems

migration when social preferences are ordinal steady state population distribution and social welfare this paper adds three dimensions to the received literature it models migration when the individuals preferences regarding their relative incomes are ordinal it works out the resulting spatial steady state distribution of the individuals and it shows that the aggregate of the individuals migration choices in the spatial steady state distribution sums to the social optimum this finding does not apply when the individuals preferences regarding their relative incomes are cardinal we highlight the importance of the assumption about the nature of the individuals social preferences whether ordinal or cardinal to studying and predicting their migration behaviour and to elucidating the consequences of that behaviour for social welfare

price caps and investment long run effects in the electric generation industry abstract this paper utilizes a dynamic framework to determine the long run effects of price caps on electricity generation investment and spot prices the results show that the effects of spot market price caps differ significantly based upon the market structure in a social welfare maximization scenario price caps will not reduce average electricity prices and may actually raise them due to the dynamic affect of price caps on investment in addition price caps may reduce overall investment levels and result in welfare losses if the independent system operator is forced to shed load therefore since social welfare maximization will approximate a competitive outcome the results imply that price caps should be avoided in competitive markets in contrast for the monopoly producer price caps produce an indeterminate effect on overall investment and unequivocally lower average prices which are otherwise unbounded therefore price caps are necessary to prevent unlimited price markups

timing of investments in oligopoly under uncertainty a framework for numerical analysis abstract we present a modeling framework for the analysis of investments in an oligopoly market for a homogenous commodity the demand evolves stochastically and the firms carry out investment projects in order to adjust their production cost functions or production capacities the model is formulated as a discrete time state space game where the firms use feedback strategies the firms are assumed to move sequentially to ensure a unique markov perfect nash equilibrium once the equilibrium has been solved monte carlo simulation is used to form probability distributions for the firms cash flow patterns and accomplished investments such information can be used to value firms operating in an oligopoly market an example of the model is given in a duopoly market the example illustrates the trade off between the value of flexibility and economies of scale under competitive interaction

striking a balance between rules and principles based approaches for effective governance a risks based approach several recent studies and initiatives have emphasized the importance of a strong ethical organizational dna odna to create and promote an effective corporate governance culture of trust integrity and intellectual honesty this paper highlights the drawbacks of an excessively heavy reliance on rules based approaches that increase the cost of doing business overshadow essential elements of good corporate governance create a culture of dependency and can result in legal absolutism the paper makes the case that the way forward for effective corporate governance is to strike an optimal balance between rules based and principles based approaches the recent corporate scandals have demonstrated that the ethical odna is critical to the driving force and basis of legal and regulatory requirements effective governance means adhering to ethical principles not merely complying with rules and is a crucial guardian of a firm s reputation and integrity it is through an effective corporate governance program that is one that optimally captures and integrates the appropriate aspects of rules based and principles based approaches and identifies and assesses the related risks that an organization can reconfigure its odna for improved performance focusing on the ethical odna as the basis of new governance measures provides an opportunity to develop a competitive advantage as it represents a potential source of differentiation strengthens the relationship with all stakeholders of the organization by building a culture of trust and integrity and re instills investor confidence this paper employs dialectical reasoning that links the odna through principles driven rules in developing a risks based approach a comparison from a risk assessment perspective between rules based and principles based approaches is presented although there have been few applications employing dialectical reasoning in business research this methodology can be extremely useful in isolating ethical issues and integrating them into the business process the risks based approach captures the benefits of both rules based and principles based approaches and incorporates trust based principles such as solidarity subsidiarity and covenantal relationships

irreversible investment under uncertainty in oligopoly abstract an oligopoly is studied where firms facing a stochastic inverse demand curve use capacity as strategic variable capacity may be adjusted continuously over time with linear cost the analysis uses the technique of a fictitious social planner and the theory of irreversible investment under uncertainty examples indicate that qualitatively the price process will be similar in oligopoly and competitive equilibrium when firms are nonidentical e g in initial size and even if they are alike in other respects substantial time may pass until they are all the same size much of that time one firm may dominate the market

residential segregation and socioeconomic outcomes when did ghettos go bad abstract cutler and glaeser 1997 show that urban residential segregation has a strong adverse effect on labor market and social outcomes of young african americans relative to whites we show that this effect is a fairly recent historical phenomenon there is little evidence of such an effect from 1940 to 1970 rather it emerged between 1970 and 1980 and it grew stronger during the 1980s

implementation lag and the investment decision abstract the effect of implementation lag on investment trigger depends on project reversibility and growth rate conventional results that longer lag and greater uncertainty raise investment trigger are overturned if the project is sufficiently reversible and or has a high enough growth rate

the impact of delivery lags on irreversible investment under uncertainty abstract we consider the valuation and rational exercise of irreversible investment opportunities in the presence of revenue uncertainty and delivery lags in order to capture supply side market imperfections in the markets for investment goods we assume that the lag depends on the revenue process faced by the investor we show that such imperfections have a pronounced decelerating impact on rational investment demand as they may increase the value of waiting in excess of the exercise payoff even for projects which otherwise would be perceived as highly remunerative we also consider the comparative static properties of the optimal investment policy and its value and demonstrate that typically increased uncertainty decreases the investment incentives by increasing the value of waiting

neither principles nor rules making corporate governance work in sub saharan africa corporate governance is often split between rule based and principle based approaches to regulation in different institutional contexts this split is often informed by the types of institutional configurations their strengths and the complementarities within them this approach to corporate governance regulation is mostly discussed in the context of developed economies and their regulatory demands however in developing and weak market economies such as in sub saharan africa there is no such explicit split and the debates on such contexts in the comparative corporate governance literature have been meagre nonetheless there are sparks of good corporate governance practices in the region drawing from institutional theory and a case study of a largest economy we explore the appropriateness or suitability of corporate governance regulatory frameworks in sub saharan africa our findings suggest that nigeria needs an integrated system that combines elements of both rule based and principle based regulation supported by a multi stakeholder co regulation strategy this paper departs from the mainstream rule based and principle based categorisations by forging ahead new perspectives on corporate governance regulation especially in weak market economies

option exercise games an application to the equilibrium investment strategies of firms under the standard real options approach to investment under uncertainty agents formulate optimal exercise strategies in isolation and ignore competitive interactions however in many real world asset markets exercise strategies cannot be determined separately but must be formed as part of a strategic equilibrium this article provides a tractable approach for deriving equilibrium investment strategies in a continuous time cournot nash framework the impact of competition on exercise strategies is dramatic for example while standard real options models emphasize that a valuable option to wait leads firms to invest only at large positive net present values the impact of competition drastically erodes the value of the option to wait and leads to investment at very near the zero net present value threshold copyright 2002 oxford university press

investment in competitive equilibrium the optimality of myopic behavior there is an extensive literature on the optimal irreversible investment strategy of a solitary firm facing an exogenous price process this paper shows that the investment strategies that this literature derives may be optimal in competitive equilibrium even though the price process is now endogenous this provides a simple means for computing equilibrium investment strategies

real options and preemption under incomplete information abstract this paper introduces incomplete information and preemption into an equilibrium model of firms facing real investment decisions the optimal investment strategy may lie anywhere between the zero npv trigger level and the optimal strategy of a monopolist depending on the distribution of competitors costs and the implied fear of preemption our model implies that the equity returns of firms which hold real options and are subject to preemption will contain jumps and positive skewness

separate and unequal in the labor market human capital and the jim crow wage gap competing explanations for the long standing gap between black and white earnings attribute different weight to wage discrimination and human capital differences using new data on local school quality we find that human capital played a predominant role in determining 1940 wage and occupational status gaps in the south despite entrenched racial discrimination in civic life and the lack of federal employment protections the resulting wage gap coincides with the higher end of the range of estimates from the post civil rights era we estimate that truly separate but equal schools would have reduced wage inequality by 29 48

optimal capital structure bargaining and the supplier market structure abstract this paper studies the relationship between firm leverage and supplier market structure we find that firm leverage decreases with the degree of competition between suppliers specifically leverage decreases with the elasticity of substitution between suppliers leverage also decreases with the number of suppliers when the elasticity of substitution is high and increases with the number of suppliers when the elasticity is low we also provide empirical evidence that is consistent with the model predictions

price cap versus rate of return regulation in a stochastic cost model a stochastic cost model is used to show that both price cap and rate of return regulation lead to overinvestment in capital and to excessive managerial slack however they differ in stochastic versus fixed intervals between hearings and in the use of test year costs versus average costs since the previous hearing a numerical example illustrates that fixed intervals between hearings improve welfare if hearings are not held too frequently but most gains go to the firm more significantly the use of average cost data combined with fixed intervals results in dramatic welfare improvements with most gains going to consumers

optimal priority structure capital structure and investment we study the interaction between financing and investment decisions in a dynamic model where the firm has multiple debt issues and equityholders choose the timing of investment jointly optimal capital and priority structures can virtually eliminate investment distortions because debt priority serves as a dynamically optimal contract examining the relative efficiency of priority rules observed in practice we develop several predictions about how firms adjust their priority structure in response to changes in leverage credit conditions and firm fundamentals notably financially unconstrained firms with few growth opportunities prefer senior debt while financially constrained firms with or without growth opportunities prefer junior debt moreover lower rated firms are predicted to spread priority across debt classes finally our analysis has a number of important implications for empirical capital structure research including the relations between market leverage book leverage and credit spreads and tobin s q the influence of firm fundamentals on the agency cost of debt and the conservative debt policy puzzle the author 2011 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oup com oxford university press

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

the long reach of cotton in the us south tenant farming mechanization and low skill manufacturing abstract this paper examines the long run impact of cotton agriculture on local development in the us south focusing on a novel aspect of structural change exploiting climate based variation in cotton production i show that cotton specialization in the late 19th century had a negative impact on local development that lasts through 2010 this negative relationship however only became evident in the second half of the 20th century i argue that the change was caused by the mechanization of cotton production which began in the 1950s after the mechanization local manufacturing absorbed displaced cotton tenants with low human capital in response to the inflow of cotton tenants labor productivity in manufacturing began to decline and the effects persisted in the long run the persistent decline in manufacturing productivity is explained by directed technical change that reduced demand for skills in manufacturing these results indicate that depending on the agricultural background structural change can negatively affect the evolution of technology and productivity in the industrial sector

when the levee breaks black migration and economic development in the american south abstract in the american south postbellum economic development may have been restricted in part by white landowners access to low wage black labor this paper examines the impact of the great mississippi flood of 1927 on black out migration and subsequent agricultural development flooded counties experienced an immediate and persistent out migration of black population over time landowners in flooded counties modernized agricultural production and increased its capital intensity relative to landowners in nearby similar non flooded counties landowners resisted black out migration however benefiting from the status quo system of labor intensive agricultural production jel j15 j43 n32 n52 n92 q54 r23

arbitraging a discriminatory labor market black workers at the ford motor company 1918 1947 the 1918 47 employee records of the ford motor company provide a rare opportunity to study a firm willing to hire black workers when similar firms would not the evidence suggests that ford did profit from discrimination elsewhere but not by paying blacks less than whites an apparent wage equity constraint prevailed resulting in virtually no racial variation in wages inside ford an implication was that blacks quit ford jobs less often than whites holding working conditions constant arbitrage profit came from exploiting this nonwage margin as ford placed blacks in hot dangerous foundry jobs where quit rates were generally high

the impact of the great migration on mortality of african americans evidence from the deep south the great migration the massive migration of african americans out of the rural south to largely urban locations in the north midwest and west was a landmark event in u s our paper shows that this migration increased mortality of african americans born in the early twentieth century south this inference comes from an analysis that uses proximity of birthplace to railroad lines as an instrument for migration

irreversible investment real options and competition evidence from real estate development abstract we examine the extent to which uncertainty delays investment and the effect of competition on this relationship using a sample of 1214 condominium developments in vancouver canada built from 1979 1998 we find that increases in both idiosyncratic and systematic risk lead developers to delay new real estate investments empirically a one standard deviation increase in the return volatility reduces the probability of investment by 13 percent equivalent to a 9 percent decline in real prices increases in the number of potential competitors located near a project negate the negative relationship between idiosyncratic risk and development these results support models in which competition erodes option values and provide clear evidence for the real options framework over alternatives such as simple risk aversion

the regulation of privatized monopolies in the united kingdom this article examines the experience in the united kingdom with the regulation of privatized monopolies its conclusions are 1 that there are significant differences between rpi x or price cap and u s rate of return regulation which provides greater scope for bargaining in the former system 2 that u k regulators have taken seriously their duty to promote competition but that the existing economic literature is of limited help in this task 3 that price regulation is likely to be more effective where technology is changing slowly and or where technology is changing rapidly and 4 that the case for rpi x price cap rather than rate of return regulation is strongest in telecommunications gas supply and electricity supply and least strong in gas and electricity transmission grids

sharecropping and the interlinking of agrarian markets one of the often noted features of less developed agrarian economies is the existence of interlinkages among the land labor credit and product markets the landlord is often the supplier of credit he frequently purchases and markets the output of the tenant farmers and often sells raw materials and even consumption goods to his tenant farmers how can this phenomenon be explained what are the welfare consequences of attempts to restrict these practices which often seem to constitute restraints on free trade these are the questions to which this paper is addressed a general set of arguments applicable to both competitive and noncompetitive environments are presented to situations where all the terms of the contract are determined in an optimal way as well as to situations where many of the terms are specified institutionally section i examines interlinked credit and tenancy contracts section ii examines interlinked marketing and tenancy contracts section iii points out the possible interlinking between labor contracts and consumption goods markets and section iv presents the different equilibrium frameworks discussed in the paper such as monopoly monopsony competition and equilibria with surplus labor

explaining black white wage convergence 1940 1950 during the 1940s racial differences in wages narrowed at an unusually rapid pace using a decomposition technique different from that of previous studies the author shows that wage compression be

investment under uncertainty does competition matter abstract empirical applications of real options models in competitive environments implicitly exploit the optimality of myopic planning in a seminal paper leahy j v 1993 investment in competitive equilibrium the optimality of myopic behavior quarterly journal of economics 108 1105 1133 shows that the optimal investment strategy of a myopic planner who ignores market entries and exits of competitors as well as the resulting price effects constitutes a market equilibrium under rather general conditions as a result the calculation of optimal investment strategies is simplified considerably because competition does not have to be taken into account in this paper however we demonstrate by using simulation experiments that myopic planning may lead to non optimal investment strategies this is due to the fact that it is difficult or even impossible to specify the correct or equivalent price process for the myopic investor using real world data we quantify the degree of suboptimality and propose measures to reduce the error

dynamics of price regulation we study the dynamics of price regulation for an industry adjusting to exogenous technological progress first we characterize the optimal capacity path and replacement cycles in a neoclassical investment model second we show that naive rate ofreturn regulation which ignores components of economic depreciation eventually results in a deficient level of capacity due to excessively high retail prices burdened by the need to recover the underdepreciated costs of historical investments third we explain how price cap regulation leads to more efficient capital replacement decisions compared to naive rate of return regulation and we show how finite price cap horizons distort capital replacement finally we interpret recent regulatory reforms in telecommunications markets

irreversible investment with price ceilings a model of irreversible investment in a competitive industry under demand uncertainty is developed in the absence of restrictions investment by itself will keep the price from rising above a natural ceiling that exceeds the long run average cost by an option value factor when a lower ceiling is imposed investment is triggered only by the observation of an even higher shadow price as the imposed ceiling is reduced to the long run average cost this shadow price goes to infinity and investment ceases completely because investment is depressed a tighter price ceiling generally leads to a higher long run average price

empirical studies in institutional change paternalism in agricultural labor contracts in the u s south implications for the growth of the welfare state the authors examine paternalism as an implicit contract in which workers trade faithful service for nonmarket goods paternalism reduced monitoring and turnover costs in cotton cultivation in the u s south until the mechanization of the cotton harvest in the 1950s until then the effectiveness of paternalism was threatened by government programs that could have substituted for paternalism but large southern landowners had the political power to prevent the appearance of such programs in the south with mechanization the economic incentive to provide paternalism disappeared and southern congressmen allowed welfare programs to expand in ways consistent with their interests copyright 1993 by american economic association

corporate governance in nigeria in recent years international economic pressures have induced nigeria to adopt a program of economic liberalization and deregulation advocates of the reforms tout their potential not only for generating greater economic growth but also for contributing to more responsible corporate governance sceptics abound this paper provides an account of the nature of corporate governance in nigeria and investigates the prospects for recent reforms contributing to more responsible governance and development

career migration self selection and the earnings of married men and women in the netherlands 1981 93 the relationship between career migration and earnings is studied for married men and women in the netherlands the hourly wages of married men and women who made a recent long distance move are found to be higher than those of married men and women who did not move or who moved only over a small distance this earning difference between migrants and non migrants seems to be due completely to the fact that the migrants are a favorable self selected group both with regard to their measured characteristics and with regard to their unmeasured characteristics if this favorable self selection is taken into account the male and female migrants turn out to earn significantly less than their non migrating counterparts for the males this finding suggests that before the move they were in relatively unfavorable labor market situations compared with the non migrants with the same measured and unmeasured characteristics for the females the negative effect of migration merely indicates that most long distance moves are still made for the career of their husband authors

fertility transitions along the extensive and intensive margins this paper examines the fertility transition through a new lens the extensive margin parents with high levels of children might substitute quality for quantity as the constraints on quality relax or those on quantity tighten however along the extensive margin the quantity quality trade off cannot operate at low levels of fertility we expect quality and quantity to be essential complements we apply these insights to a large school construction program in the american south during the early 20th century the rosenwald rural schools initiative we find that increased schooling opportunities lead to reductions in fertility among women with high fertility levels while at the same time inducing higher levels of fertility among women with low levels of fertility the magnitude of the fertility changes induced in the parent generation is however small compared to the changes in fertility induced by the rosenwald intervention among women that were themselves treated by the intervention the evidence from the rosenwald intervention therefore suggests that changes in female opportunity costs induced by increased educational attainment might be among the most important driving forces of the fertility transition

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

self selection and internal migration in the united states abstract within the conceptual framework of the roy model this paper provides an empirical analysis of internal migration flows using data from the national longitudinal survey of youth the theoretical approach highlights regional differences in the returns to skills regions that pay higher returns to skills attract more skilled workers than regions that pay lower returns our empirical results suggest that interstate differences in the returns to skills are a major determinant of both the size and skill composition of internal migration flows persons whose skills are most mismatched with the reward structure offered by their current state of residence are the persons most likely to leave that state and these persons tend to relocate in states which offer higher rewards for their particular skills

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

presidential address institutions and culture how and why does distant political and economic history shape the functioning of current institutions this paper argues that individual values and convictions about the scope of application of norms of good conduct provide the missing link evidence from a variety of sources points to two main findings first individual values consistent with generalized as opposed to limited morality are widespread in societies that were ruled by non despotic political institutions in the distant past second well functioning institutions are often observed in countries or regions where individual values are consistent with generalized morality and under different identifying assumptions this suggests a causal effect from values to institutional outcomes the paper ends with a discussion of the implications for future research jel a10 d7 e00

the heckman correction for sample selection and its critique this paper gives a short overview of monte carlo studies on the usefulness of heckman s 1976 1979 two step estimator for estimating selection models such models occur frequently in empirical work especially in microeconometrics when estimating wage equations or consumer expenditures it is shown that exploratory work to check for collinearity problems is strongly recommended before deciding on which estimator to apply in the absence of collinearity problems the full information maximum likelihood estimator is preferable to the limited information two step method of heckman although the latter also gives reasonable results if however collinearity problems prevail subsample ols or the two part model is the most robust amongst the simple to calculate estimators

development of corporate governance regulations the case of an emerging economy this paper investigates the development of corporate governance regulations in emerging economies using the case of bangladesh in particular the paper considers three issues what type of corporate governance model may be suitable for an emerging economy such as bangladesh what type of model has bangladesh adopted in reality and what has prompted such adoption by analysing the corporate environment and corporate governance regulations the paper finds that like many other developing nations bangladesh has also adopted the anglo american shareholder model of corporate governance analysis of behaviours of principal actors in the bangladeshi corporate governance scenario using new institutionalism as a theoretical foundation then reveals that such adoption may be prompted by exposure to legitimacy threats rather than efficiency reasons

migration incentives migration types the role of relative deprivation the authors explore the role of relative deprivation versus absolute income as an incentive for migration in developing countries in section i of this paper we outline the relative deprivation model of migration and present an illustration of the divergent policy implications of a relative deprivation model versus an absolute income model an attempt is made to identify distinct empirical implications of relative and absolute income motives for migrating in section ii a migration decision model is estimated and is used to explore absolute and relative income motives for internal and international migration in a sample of rural mexican households as well as to test the extent to which discontinuity in labour markets shapes the choice of migrant destination in section iii we present our conclusions excerpt