does privatization remove restrictive working practices evidence from uk establishments this study investigates the links between privatization and changes in working practices using data from the uk 1990 workplace employees relations survey privatization raises the probability of an establishment of experiencing reduced job demarcation and or increased flexibility in the use of the workforce by managers after exploration no clear association is found between ownership and the level of restrictive working practices

export instability export growth and gdp growth abstract the positive correlation between export instability and export expansion reported by lam in a recent paper is shown to be the result of a bias caused by the manner in which the instability index was calculated and by using data series which end in a year of unusually high exports it is shown that when correction is made for these factors there is no statistically significant correlation between export instability and export expansion or domestic income expansion

commodity price instability and economic goal attainment in developing countries abstract this paper reviews the theoretical and empirical micro and macro foundations for the frequent claims that instabilities in international commodity markets have deleterious effects on goal attainment in primary commodity exporting developing countries this review leads to the conclusion that the available evidence does not support these claims the paper concludes with speculation on why such claims are so strong despite the lack of supporting evidence perhaps it is because of measurement problems and perhaps because of small but articulate groups with vested interests in overstating the problem

the effects of volatility in the terms of trade on output growth new evidence abstract this paper examines the empirical evidence for the hypothesis that there is a negative relationship between terms of trade volatility and output growth it finds a statistically significant link between income terms of trade volatility and lower growth rates when the degree of volatility in the income terms of trade is decomposed into its components fluctuations in real exports are of a magnitude similar to those in the relative price of tradables similarly the volatility in the net barter terms of trade is equally affected by variations in the price of exports and of imports any policies aimed at stabilizing the terms of trade or any of its components need to take account of this

what does export diversification do for growth an econometric analysis it is frequently suggested that export diversification contributes to an acceleration of growth in developing countries horizontal export diversification into completely new export sectors may generate positive externalities on the rest of the economy as export oriented sectors gain from dynamic learning activities due to contacts with foreign purchasers and exposure to international competition vertical diversification out of primary into manufactured exports is also associated with growth since primary export sectors generally do not exhibit strong spillovers yet there have been remarkably few empirical investigations into the link between export diversification and growth this paper attempts to examine the hypothesis that export diversification is linked to economic growth via externalities of learning by doing and learning by exporting fostered by competition in world markets the diversification led growth hypothesis is tested by estimating an augmented cobb douglas production function on the bas

how far down the path to free trade the importance of rice price stabilization in developing asia abstract international trade agreements are pushing the world in the direction of free trade but price stabilization which is inconsistent with completely free trade remains important in developing asia because of the large share of rice in economic output a policy of pure price stabilization for rice without consistent protection either subsidization or taxation can help to create the macroeconomic stability that is essential for sustained rapid economic growth by increasing the quantity and efficiency of investment throughout the economy pure price stabilization can also generate significant equity gains by protecting poor consumers and farmers from sharp fluctuations in prices while domestic commodity price stabilization schemes have a checkered history around the world the experience of asian countries in stabilizing rice prices offers more scope for optimism asian governments have been generally successful in stabilizing rice prices and there are several instances where this has been accomplished without sustained protection of either consumers or farmers however there is room for improved stabilization mechanisms that would lower the costs of intervention

measuring macroeconomic instability a critical survey illustrated with exports series for at least 40 years the analysis of the causes and consequences of macroeconomic instability has greatly deepened our understanding of the handicaps faced by developing countries this concern on economic instability is evidenced by a broad spectrum of indicators based on the deviation of observed values of a given economic aggregate from its reference or trend value in general the choice of this or that indicator is not discussed advocating that the resulting instability indicators are closely correlated focusing on measurements of instability in export revenue data for 134 countries from 1970 to 2005 this paper finds that this assertion may be true for variancebased indicators measuring the average magnitude of deviations from the trend however great discrepancies may arise between different measures of the asymmetry or of the occurrence of extreme deviations around the trend when different trend computation methods are used our purpose is therefore to invite further discussions regarding the use of these indicators and to highlight the different dimensions of instability which have been so far unheeded by the economic literature

instability and the growth of exports abstract this paper points out the methodological weaknesses in n v lam s article and with the employment of appropriate measures demonstrates the tautological nature of lam s findings on the relationship between export growth and instability in addition it provides certain general guidelines regarding the selection of export instability indices

co determination and innovation this paper examines the effect of the german co determination law of 1976 mitbestg on the innovative activity of german firms co determination applies to firms with 2 000 employees or more data from 1971 1976 and 1981 1990 on 148 firms are used to compare the number of patents granted to co determined firms before and after the introduction of the law several control variables are applied and in particular in order to avoid a possible bias from specific effects of firm size we compare the co determined firms with others before and after 1976 the results do not support the view that co determination slows down technological progress and reduces innovativity

export fluctuations and economic growth an empirical analysis abstract the uncertainty associated with trade variability is generally resumed to exert a significant effect on the domestic economy of loss developed countries inadequately equipped to cope with these fluctuations the belief that it has a negative influence on these economies has been for several decades the dominant hypothesis among economists but it has been challenged on both theoretical and empirical growths the present paper proposes to investigate this problem from an empirical point of view cross country analysis is developed to investigate the influence of export instability on the domestic economy of less advanced nations the results show that no clear conclusions for the general case can be provided since they are sensitive to the particular time period considered a negative impact can be expected when price and quantity instability appear to reinforce each other but this is not always the case

union membership and employment dynamics with endogenous union density abstract based upon an intertemporal optimizing model of trade unions this paper proposes a plausible union density function and examines the relative level of employment between the intertemporal model and the conventional static model we find that endogenizing union density provides an incentive for the union that is concerned about its future membership level to hire a lower level of employment this opens the way to obtain the result that employment is lower in the intertemporal model than in the conventional static model we also find that the equilibrium employment level may not display a positive linkage with union membership after endogenizing union density

the cyclical behavior of mark ups in u s manufacturing and trade new empirical evidence based on a model of optimal storage abstract an euler condition for optimal inventory accumulation is used to obtain information on the behavior of mark ups of price over marginal cost in u s manufacturing and trade data at the two digit sic level are used mark ups appear to be procyclical in most of the two digit sic sectors

union status of young men in britain a decade of change previous empirical studies of individual union status in britain have been cross sectional in contrast we use longitudinal data from the national child development study to estimate the determinants of male trade union membership over the period 1981 1991 as suggested by union theories we find that it is important to control for unobserved individual heterogeneity and our preferred model allows for correlation of individual heterogeneity with observable variables our estimates reveal that the observed decline in very large workplaces and the contraction of the public sector explain about one third of the predicted decline in union membership over the period

the codetermined firm in oligopoly abstract a simple duopoly model is considered where firm owners bargain with employees representatives about employment but not about wages as is the case for codetermined firms in germany it turns out that for some range of the bargaining power a prisoner s dilemma exists bargaining is the dominant strategy although joint profits would be maximized with unrestricted profit maximization

unions and workers welfare in chinese firms based on a survey of 1 268 firms in 12 cities this article empirically studies unions effects on worker welfare in china regressions carried out on a rich set of specifications show that unionization is significantly associated with higher hourly wages and larger pension coverage and weakly associated with lower monthly working hours further econometric analysis finds that unions promote individual and collective contracts the effect of collective contracts vanishes when unions are present whereas individual contracts have independent and positive effects in addition unions have effects on workers welfare independent of collective and individual contracts

the macro dimensions of food security economic growth equitable distribution and food price stability abstract rather than asking how to cope with hunger and famine the question might be how to escape their threat altogether important in this regard is recognizing that agriculture and the rural economy are greatly influenced by policies and outcomes in the rest of the economy strategies include economic growth with unchanging income distribution and growth with redistribution the latter encourages balanced growth to create non farm employment opportunities while investing in rural infrastructure

resource intensity institutions and development summary we examine the relationship between resource abundance and several indicators of human welfare consistent with the existing literature on the relationship between resource abundance and economic growth we find that given an initial income level resource intensive countries tend to suffer lower levels of human development while we find only weak support for a direct link between resources and welfare there is an indirect link that operates through institutional quality there are also significant differences in the effects that resources have on different measures of institutional quality these results imply that the resource curse is a more encompassing phenomenon than previously considered and that key differences exist between the effects of different resource types on various aspects of governance and human welfare 2005 elsevier ltd all rights reserved

union membership and wage bargaining when membership is not compulsory this paper provides a formal model of union wage and membership determination where the union is recognized for bargaining purposes where membership of the union is not compulsory and where the union faces a budget constraint in its organization activities this simultaneous equation model is then used as the basis for estimation of manual wages and union density for the private sector using the 1990 workplace industrial relations survey copyright 1995 by royal economic society

export instability and economic growth in sub saharan africa empirical research on the relationship between export instability and economic growth in less developed countries ldcs has yielded mixed results while some researchers find a negative relationship between export instability and economic growth others find a positive relationship a third group of researchers finds no significant relationship between export instability and economic growth in ldcs 1 those who find a negative relationship between export instability and economic growth in ldcs stress the negative effect export instability has on the supply of output through the generation of uncertainty in long term planning as well as due to shortages of inputs at critical times during the production process those who find a positive relationship between export instability and economic growth argue that ldcs respond to export instability by reducing consumption this process if repeated over a period of time increases savings and hence the rate of investment those who find no significant relationship between export instability and economic growth argue that ldcs are able to anticipate the fluctuations in export earnings and plan for such fluctuations hence instability in export earnings has no appreciable effect on economic growth c moran investigates the relationships between domestic savings rate and economic growth rate on the one hand and export instability on the other in a sample of ldcs 2 he finds that export instability has no significant long run impact on either domestic savings rate or economic growth rate however over relatively short periods of time export instability has a negative and significant effect on both savings and economic growth rate the negative effect occurs when the negative effects of price and of quantity fluctuations reinforce each other on the other hand when the negative effect of price fluctuations is counterbalanced by the effects of quantity fluctuations export instabil

business cycles and the relationship between concentration and price cost margins using a newly constructed panel data base we examine changes in price cost margins in 284 manufacturing industries between 1958 and 1981 a key finding is a dramatic narrowing of the spread between the margins of concentrated and unconcentrated industries over this period we provide evidence that this narrowing is a result of the greater sensitivity of price cost margins in more concentrated industries to demand fluctuations this finding is robust to the inclusion of other industry variables and to measures of import competition the results indicate that cross sectional estimates of the concentration margins relationship are likely to be both biased and misleading

the union membership wage premium puzzle is there a free rider problem economists have long suggested that labor unions suffer a free rider problem the argument is that since union set wages are available to all workers covered by unions irrespective of their union status and union membership entails costs workers will only join if they are coerced or are offered non wage goods that they value above membership costs yet u s and british empirical research has found a substantial union membership wage premium among private sector union covered workers implying that there is no free rider problem the authors of this study hypothesize that these findings arise due to selectivity problems associated with identifying the union membership effect their analysis which uses rich data from a new linked employer employee survey for britain and exploits the within establishment variation in wages as a function of individual union membership status demonstrates that the apparent wage premium for members is illusory hence a potential free rider problem remains author s abstract free full text download available at http digitalcommons ilr cornell edu ilrreview

what will take the con out of econometrics the paper begins with the question of whether leamer s extreme bounds analysis eba really does take the con out of econometrics by analytically demonstrating that the extreme bounds are simply functions of the f statistic for the deletion of variables from a regression we conclude that the information provided by eba represents no advance over that available from traditional methods furthermore there is a degree of arbitrariness in eba which exactly parallels the selective reporting of regressions it was designed to supplant the last part of the paper attempts a positive response to its title by following a well defined series of modelling steps we maintain that cooley and le roy s eba derived conclusions concerning the interest elasticity of money demand owe more to a faulty methodology than to the data this abstract was borrowed from another version of this item

on the costs of food price fluctuations in low income countries abstract conventional welfare measures of the costs of food price fluctuations in low income countries are extended to allow for both economic growth and food security effects the analysis reveals that growth and food security effects may dominate more conventional welfare costs of food price fluctuations although estimating the empirical magnitude of the effects is hampered by the lack of consensus on the extent to which food price fluctuations actually reduce economic growth and food security even if the welfare costs of food price fluctuations are high there are many challenges to the design and successful implementation of price stabilization schemes

assessing the economic vulnerability of small island developing states and the least developed countries macro vulnerability of the small island developing states sids as well as of least developed countries ldcs has been an increasing concern for the international community this has led to the design of an economic vulnerability index evi to assess the structural economic vulnerability resulting from natural or external shocks we first explain how vulnerability affects growth development and poverty reduction particularly in small developing countries we then examine how the evi has been designed and how it can be used to compare sids and ldcs we argue that evi is a relevant tool not only for identification of ldcs but also for geographical aid allocation to favour vulnerable countries including ldcs and sids even though not all sids qualify as ldcs

economic fluctuations market power and returns to scale evidence from firm level data recent research on aggregate fluctuations coupled with ongoing work in industrial organization has renewed interest in the existence magnitude and cyclical pattern of market power and the extent of increasing returns to scale by exploiting restrictions from dynamic theory and information from financial markets we present a framework for generating quantitative evidence on market power and returns to scale tailoring the econometric model to firm level panel data we calculate the percentage differential between price and marginal cost the lerner index in terms of the parameters from the econometric system results for firms in eleven industries indicate that there is a great deal of heterogeneity in the extent of market power industries with significantly positive lerner indices tend to have substantial increasing returns in the production technology we find that there is only a modest relation between our estimated lerner indices and traditional measures of market power and that when market power varies temporally it is usually procyclical thus variations in the markup of price over marginal cost may help dampen aggregate economic fluctuations

aid and performance a reassessment two visions of aid effectiveness and allocation are compared the first corresponding to the new aid paradigm argues that aid is only effective if domestic policies are appropriate the second in contrast argues that aid effectiveness depends on the external and climatic environment the worse this environment or the more vulnerable the recipient countries the greater the effectiveness of aid cross sectional econometric tests related to gdp growth on two 12 year pooled periods clearly favour the second view the two views can be reconciled through the principle of performance based aid allocation where performance is defined as outcomes adjusted for the impact of environmental factors performance can then be measured in several manners which are subject to comparison one approach would lead one to allocate more aid the worse the external environment is for a given policy and the better the policy is for a given environment

the cyclical behavior of marginal cost and price the author examines the cyclical behavior of price marginal cost margins for u s manufac turing after 1956 short run marginal cost is markedly procyclical this is primarily due to procyclical overtime payments incurred beca use employment is not perfectly flexible in most industries output price fails to respond to the cyclical movement in marginal cost so price marginal cost margins are markedly countercyclical the res ults contradict business cycle theories that explain low production i n a recession by a high real cost of producing they support theories that explain low production in a recession by the inability of firms to sell their output copyright 1987 by american economic association

a new look at the benefits of diversification lessons from central america recent trends of export diversification in central america may lower foreign exchange earnings instability there four countries costa rica el salvador honduras and guatemala are analysed across a twenty year period the paper uses united nations commodity trade statistics to explain why costa rica and honduras have enjoyed greater earnings stability in recent years despite the fact that honduras has not greatly diversified its export products and markets despite the growth of new agricultural and manufacturing goods traditional primary products still dominate the countries export portfolios specific products within each of the four broad product category groups contribute to the varied country outcomes summary statistics from the united nations panel data suggest newer agricultural exports have not stabilized guatemalan and salvadoran export earnings while honduras has enjoyed relatively stable banana export revenues and costa rica has benefited from the smooth flow of microelectronic product

risk aversion and trade union membership if trade unions provide only their members with insurance against income variations as a private good this insurance will provide a stronger incentive for more risk averse employees to become union members using data from the german socio economic panel soep and various direct measures of individual risk attitudes we find robust evidence of a positive relationship between risk aversion and the likelihood of union membership for full time employees this association is particularly strong for males and in west germany

a new look at the effects of export instability on investment and growth abstract this paper is concerned with the effects of export instability on investment and growth it is shown that past cross sectional empirical studies on the effects of export instability either in prices or in value terms used an incorrect measure of instability that does not properly take account of the share of exports in gdp using a new instability index and a broad set of conditioning variables it is shown that export instability was positively associated with investment but negatively associated with growth in a large sample of countries during the period from the early 1970s to the mid 1980s

trade unions v statistical discrimination theory and application to post apartheid south africa a simple model of statistical discrimination is analyzed which captures some stylized facts of the south african labor market it shows that this type of discrimination disappears when the wage rates are determined by efficient bargaining between a representative firm and a union with endogenous membership this may explain why the wage gap between black and white workers in post apartheid south africa is smaller among unionized workers than among non unionized ones

manufacturing exports mining exports and growth cointegration and causality analysis for chile 1960 2001 this study examines the export led growth hypothesis using annual time series data from chile in a production function framework it addresses the problem of specification bias under which previous studies have suffered and focuses on the impact of manufactured and mining exports on productivity growth in order to investigate if and how manufactured and mining exports affect economic growth via increases in productivity the study uses johansen cointegration technique the estimation results can be interpreted as evidence of productivity enhancing effects of manufactured exports and of productivity limiting effects of mining exports

codetermination as a strategic advantage abstract a theoretical model of codetermination is considered where consistent with german institutions firm owners bargain with employees representatives about employment but not about wages a duopoly and a more general oligopolistic situation are analyzed for some range of bargaining power a prisoner s dilemma exists codetermination leads to increased profits if the other firm is a traditional profit maximizer bargaining is the dominant strategy although joint profits would be maximized with unrestricted profit maximization the theory is tested with data from 22 german firms who operate in the same markets over 23 years codetermined firms actually show a different behavior than other companies

production and inventory control at the general motors corporation during the 1920 s and 1930 s this paper analyzes dynamics of production and inventories at the general motors corporation during the 1920s and 1930s the authors begin by examining anecdotal evidence on the nature of the production control system in force during that period motivated by that evidence they then extend the conventional linear quadratic model of production behavior to take account of annual shutdown finally the authors apply the modified model to newly available data on monthly unit production sales and inventories during 1924 40 general motors appears to have been aiming to maintain a targeted level of inventory relative to expected sales and secondarily to smooth production copyright 1993 by american economic association

open shop unions and product market competition in this paper we analyse the impact of changes in product market competition on wage outcomes in the presence of an open shop union with less than full union membership product market competition is shown to aect not only a unionised rm s pro ts but also its payoin the event of a dispute in contrast to the pre diction of the standard model increases in product market competition may now increase wage levels the model is therefore able to accommodate the mixed empir ical ndings regarding the impact of product market competition on union wages

productive and financial performance in u s manufacturing industries an integrated structural approach in the last few years macroeconomists and industrial organization researchers have reexamined relationships among scale economies markups economic profitability and productivity growth paul romer 14 has emphasized the importance of increasing returns for productivity growth at the aggregate industry or economy level empirical evidence supporting this at the industry level has been presented by robert hall 4 5 who reported both significant increasing returns and markups of price over marginal cost in various u s manufacturing sectors related evidence on the cyclical nature of markups in these industries suggesting some procyclicality of markup behavior has been presented by domowitz hubbard and petersen 3 analysis of the cyclical characteristics of robert solow s 16 productivity residual provided the basis for these empirical studies the resulting framework is limited however by its dependence on a number of restrictive assumptions which severely hamper analysis of interactions among these characteristics the purpose of this paper is to extend this type of analysis to consider profit maximizing markups economic profitability scale economies capacity utilization and productivity growth within an integrated theoretical structural model and to assess their interactions empirically for two digit u s manufacturing data more specifically using the new industrial economics approach outlined by timothy bresnahan 2 in which marginal cost and therefore markups are unobserved but estimated econometrically i specify an integrated cost and demand structure for each industry the structure is quite general in that i markups and returns to scale are permitted to vary over time they are not constant parameters ii shortand long run impacts are distinguished by explicit recognition of adjustment costs iii quasi fixity of both capital and labor is incorporated to accommodate labor hoarding as well as slow adjustment of capital iv input substitution is not constrained a priori a generalized leontief restricted cost function based on gross output is employed v nonstatic expectations are allowed for through an instrumental variable estimation procedure and vi the effects of cost and demand shocks are directly represented by specifying and estimating industry specific cost output demand and input demand functions