does ict adoption improve access to credit for small enterprises using data at the bank firm level collected through the 9th unicredit survey conducted in 2012 on a large sample of small businesses we investigate the extent to which a large international bank offers better credit conditions to enterprises that use ict more extensively the results which are robust to selection and endogeneity issues show that banks tend to grant increasing volumes of credit to such enterprises we interpret this evidence as the ceteris paribus effect of ict adoption by small businesses on the quality of information transmitted to banks another possible interpretation is that banks consider ict adoption as a signal of firms willingness to innovate we also discuss implications concerning the key role that technology plays in changing the arm s length versus relationship lending paradigms

a theory of trading volume a theory of trading volume is developed based on assumptions that market agents frequently revise their demand prices and randomly encounter potential trading partners the model describes two distinct ways informational events affect trading volume one is consistent with conjectures made by empirical researchers that investor disagreement leads to increased trading but the observation of abnormal trading volume does not necessarily imply disagreement and volume can increase even if investors interpret the information identically if they also have had divergent prior expectations simulation tests support the model and are used to contrast the random pairing environment with costless market clearing volume is lower in the costly market and volume increases caused by an informational event persist after the event period this is consistent with existing empirical evidence and suggests that markets do not immediately clear all orders or that investors have demands to recontract

measuring heterogeneity in the returns to education using an education reform abstract in this paper we explore the impact of a mandatory education reform as well as pre reform availability of schools above the mandatory level on educational attainment and returns to education in norway we contribute to the existing literature by focusing on the heterogeneity of the impact of reforms our results indicate that increased compulsory education from seven to nine years increased the general level of education beyond the compulsory education we also find that the effect of family background on educational attainment was weaker after the reform the average treatment effect on returns to education is surprisingly high for education of intermediate duration this means that increasing the general level of education potentially generates high returns in the form of wages we also find that the effect of treatment on the treated on the returns to education is 1 4 percentage points higher than the average treatment effect

mobile money remittances and household welfare panel evidence from rural uganda access to financial services is crucial for development as it enhances resource mobilization needed for productive investment and facilitates consumption smoothing with a vast majority of adult ugandans having no access to formal financial services mobile money is expected to bridge this gap especially in rural areas this financial product allows users to make financial transactions using their mobile phones within five years of its inception in uganda since 2009 the mobile money service has been used by over 35 of the adult population and the rate of penetration is rapidly increasing we investigate its impact on household welfare using panel data covering 846 rural households using a combination of household fixed effects instrumental variable and propensity score matching methods we find a positive and significant effect of mobile money access on household welfare measured by real per capita consumption the mechanism of this impact is the facilitation of remittances user households are more likely to receive remittances receive remittances more frequently and the total value received is significantly higher than that of non user households we attribute this impact on the reduction in transaction transport and time costs associated with mobile phone based financial transactions our results are robust to changes in model specifications and alternative explanations

market sidedness insights into motives for trade initiation we infer motives for trade initiation from market sidedness we define trading as more two sided one sided if the correlation between the number of buyer and seller initiated trades increases decreases and assess changes in sidedness relative to a control sample around events that identify trade initiators consistent with asymmetric information trading is more one sided before merger news consistent with belief heterogeneity trading is more two sided before earnings and macro announcements with greater dispersion in analyst forecasts and after news with larger announcement surprises we examine the codeterminacy of sidedness bid ask spread volatility number of trades and order imbalance

school tracking and access to higher education among disadvantaged groups abstract when students are tracked into vocational and academic secondary schools access to higher education is usually restricted to those who complete an academic track postponing such tracking may increase university attendance among disadvantaged students if additional time in school enables them to catch up with their more privileged counterparts however if ability and expectations are fairly well set by an early age postponing tracking during adolescence may not have much effect this paper exploits an educational reform in romania to examine the impact of postponing tracking on the proportion of disadvantaged students graduating from university using a regression discontinuity rd design we show that although students from poor rural areas and with less educated parents were significantly more likely to finish an academic track and become eligible to apply for university after the reform this did not translate into an increase in university completion our findings indicate that simply postponing tracking without increasing the slots available in university is not sufficient to improve access to higher education for disadvantaged groups

in kind finance a theory of trade credit it is typically less profitable for an opportunistic borrower to divert inputs than to divert cash therefore suppliers may lend more liberally than banks this simple argument is at the core of our contract theoretic model of trade credit in competitive markets the model implies that trade credit and bank credit can be either complements or substitutes among other things the model explains why trade credit has short maturity why trade credit is more prevalent in less developed credit markets and why accounts payable of large unrated firms are more countercyclical than those of small firms

high growth entrepreneurial firms in africa a quantile regression approach this article analyses the growth performance of a large set of entrepreneurial firms in ten manufacturing sectors of 11 sub saharan african countries the focus of the article is on identifying those entrepreneurs attributes and firm characteristics that tend to generate a significant number of high growth firms in these countries to this end we use a quantile regression which provides a more complete estimation of the growth distribution of firms conditional on different attributes the results indicate that firms that engage in product innovation have their own transport means and are connected to the internet through their own website are especially characterized by higher growth rates and also display a distribution of growth rates skewed to the right hosting a higher number of high growth firms the effect of the last two variables which relate to distance bridging modes of infrastructure points to the self reinforcing growth effects they generate in creating wider input and output markets education raises growth opportunities by affecting the lower quantiles but it does not appear to influence the upper quantiles the estimated conditional growth distributions for the technology intensive machinery and electronics sectors show more extreme tails and a lower mean in comparison to the traditional industries indicating the more risky nature of doing business in these industries

economic impacts of new unionization on private sector employers 1984 2001 economic impacts of unionization on employers are difficult to estimate in the absence of large representative data on establishments with union status information estimates are also confounded by selection bias because unions could organize at highly profitable enterprises that are more likely to grow and pay higher wages using multiple establishment level data sets that represent establishments that faced organizing drives in the united states during 1984 1999 this paper uses a regression discontinuity design to estimate the impact of unionization on business survival employment output productivity and wages essentially outcomes for employers where unions barely won the election e g by one vote are compared with those where the unions barely lost the analysis finds small impacts on all outcomes that we examine estimates for wages are close to zero the evidence suggests that at least in recent decades the legal mandate that requires the employer to bargain with a certified union has had little economic impact on employers because unions have been somewhat unsuccessful at securing significant wage gains

law finance and firm growth we investigate how differences in legal and financial systems affect firms use of external financing to fund growth we show that in countries whose legal systems score high on an efficiency index a greater proportion of firms use long term external financing an active though not necessarily large stock market and a large banking sector are also associated with externally financed firm growth the increased reliance on external financing occurs in part because established firms in countries with well functioning institutions have lower profit rates government subsidies to industry do not increase the proportion of firms relying on external financing the corporate finance literature suggests that market imperfections caused by conflicts of interest and informational asymmetries between corporate insiders and investors constrain firms in their ability to fund investment projects the magnitude of these imperfections depends in part on the effectiveness of the legal and financial systems because these systems differ across countries the literature implies that there should exist systematic cross country differences in firms ability to obtain external capital to finance investment in this paper we examine whether the underdevelopment of legal and financial systems does prevent firms in some countries from investing in potentially profitable growth opportunities in particular we focus on the use of long term debt or external equity to fund growth see our earlier work demirgut kunt and maksimovic 1996a which compares firms financial structures in developed and developing countries and finds the greatest difference to be in the provision of long term credit we estimate a financial planning model to obtain the maximum growth rate that each firm in our thirty country sample could attain without access to long term financing we then compare these predicted growth rates to growth rates realized by firms in countries with differing degrees of development in their legal and financial systems our approach enables us to identify specific characteristics of the legal and financial systems that are associated with long term financing of firm growth thus we provide a micro level test of the hypoth

global and local information asymmetries illiquidity and sec rule 144a regulation s the case of indian gdrs abstract between 1992 and 1997 indian firms were the most frequent issuers of equity backed global depositary receipts gdrs governed by the sec s rule 144a and regulation s they also accounted for the highest dollar volume home market stock price responses to these issues are consistent with the hypotheses that gdrs enable firms to resolve two forms of information asymmetry 1 an asymmetry between issuing firms and international investors that results from market segmentation and 2 an asymmetry between indian firms and home market investors that resembles asymmetries that help explain abnormal returns in equity private placements by us firms our evidence suggests that gdr issuance can increase investors recognition of underlying shares even if there are no liquidity enhancements and even if disclosure requirements are not as demanding as those imposed on foreign firms whose depositary receipts trade in public us markets

the timing of and incentives for annual earnings forecasts near interim earnings announcements abstract security analysts anticipate and respond to interim earnings announcements when they revise their annual earnings forecasts analysts avoid revising for two weeks before an interim announcement and more frequently revise immediately after an announcement as expected revision activity after an interim announcement is greater if absolute unexpected interim earnings are larger if there are more competing analysts and if unexpected interim earnings are negative unexpectedly analysts are reluctant to revise their forecasts early in the fiscal year these findings carry implications for research designs that use analyst forecasts

differential interpretation of public signals and trade in speculative markets most models of trade in speculative markets assume that agents interpret public information identically we provide empirical evidence on the relation between the volume of trade and stock returns around public announcements and we argue that the evidence is inconsistent with this assumption we then develop a model of trade around public announcements that incorporates differential interpretations and is consistent with the observed volume return relation then we test the standard model of belief revision underlying most models of trade using stock brokerage research analysts earnings forecasts the hypthesis of identical interpretations seems inconsistent with the forecast revisions in these data

measuring investors opinion divergence numerous proxies for divergence of investors opinions have been suggested in the empirical accounting and finance literatures i offer a new proxy constructed from proprietary limit order and market order data this allows me to capture additional information on investors private valuations proxies from the extant literature based on publicly available data do not contain such information given my new measure i ask which of the extant proxies correlates best with it in my regression analysis unexplained volume is the best proxy for opinion divergence conditioning on various firm specific and order specific characteristics generally does not change this conclusion the main exception is the sample of firms without ibes forecast dispersion data for which bid ask spread is the best proxy for opinion divergence factor analysis also suggests that unexplained volume is the preferred proxy for opinion divergence

cohort crowding how resources affect collegiate attainment abstract analyses of college attainment typically focus on factors affecting enrollment demand including the financial attractiveness of a college education and the availability of financial aid while implicitly assuming that resources available per student on the supply side of the market are elastically supplied the higher education market in the united states is dominated by public and non profit production and colleges and universities receive considerable subsidies from state federal and private sources because consumers pay only a fraction of the cost of production changes in demand are unlikely to be accommodated fully by colleges and universities without commensurate increases in non tuition revenue for this reason public investment in higher education plays a crucial role in determining the degrees produced and the supply of college educated workers to the labor market using data covering the last half of the twentieth century we find strong evidence that large cohorts within states have relatively low undergraduate degree attainment reflecting less than perfect elasticity of supply in the higher education market that large cohorts receive lower public subsidies per student in higher education explains this result indicating that resources have large effects on degree production our results suggest that reduced resources per student following from rising cohort size and lower state expenditures are likely to have significant negative effects on the supply of college educated workers entering the labor market

the relation between price changes and trading volume a survey this paper reviews previous and current research on the relation between price changes and trading volume in financial markets and makes four contributions first two empiri cal relations are established volume is positively related to the magnitude of the price change and in equity markets to the price change per se second previous theoretical research on the price volume relation is summarized and critiqued and major insights are emphasized third a simple model ofthe price volume relation is proposed that is consis tent with several seemingly unrelated or contradictory observations and fourth several directions for future research are identified

determinants of the informativeness of analyst research abstract we examine cross sectional determinants of the informativeness of analyst research i e their effect on security prices controlling for endogeneity among the factors affecting informativeness analyst reports are more informative when the potential brokerage profits are higher e g high trading volume high volatility and high institutional ownership and lower when information processing costs e g more business segments are high we also find that the informativeness of analyst research and informativeness of financial statements are complements

the long run effects of reducing early school tracking abstract this paper studies the effects of a french detracking reform on individuals long run education and labor market outcomes the reform delayed the age at which students were separated into vocational and general education by two years from age 11 to 13 the assignment of students to different types of education at age 11 was instead replaced by ability grouping whereby students followed a common general education curriculum but were divided into different classrooms based on their academic achievement using a regression discontinuity design i find that the reform raised individuals level of education and increased their wages by 6 at ages 40 to 45 these effects are concentrated among men and individuals from low socioeconomic backgrounds however the reform solely benefited individuals whose parents were born in france as it did not significantly affect children of immigrants educational and labor market outcomes

transactions costs technological choice and endogenous growth abstract hicks a theory of economic history clarendon press oxford 1969 argues that an important aspect of industrial development is the adoption of technologies requiring highly illiquid capital investments the adoption of such technologies becomes economically viable in the presence of low cost financial markets that provide liquidity to investors this observation provides a mechanism by which the costs of transacting in financial markets affect the equilibrium choice of technology productive efficiency and by implication growth we analyze how the costs of financial market transactions affect the set of technologies in use and the equilibrium growth rate transactions cost reductions may depending on the capital structure enhance or reduce growth journal of economic literature classification numbers d90 e13 g14

does mobile money use increase firms investment evidence from enterprise surveys in kenya uganda and tanzania private investment can be an important engine of economic growth in east african countries which despite recent growth rates are still plagued with adverse economic conditions against this backdrop there has been substantial penetration of mobile money moving beyond simple person to person exchanges toward adoption by private firms this study explores whether there is a relationship between firm adoption of mobile money and firm investment using firm level data that are nationally representative of the private sector in three east african countries kenya tanzania and uganda a positive relationship is found between mobile money use and the probability of a firm s purchase of fixed assets this relationship is attributed to reduced transaction costs increased liquidity and increased credit worthiness associated with the use of mobile phone financial services

general education versus vocational training evidence from an economy in transition abstract this paper examines the relative benefits of general education and vocational training during romania s transition to a market economy we examine a 1973 educational reform that shifted a large proportion of students from vocational training to general education using census and household survey data we analyze the effect of this policy with a regression discontinuity design we find that men affected by the policy are significantly less likely to work in manual or craft related occupations but have similar levels of labor market participation and earnings compared to their counterparts unaffected by the policy we conclude that differences in labor market returns between graduates of vocational and general schools are largely driven by selection

stock market volatility in a heterogeneous information economy the informational role of prices contributes positively to their variability in a noisy rational expectations equilibrium traders rationally respond to price changes by revising their estimates of other traders private signals and hence their own expectations of future dividends the resultant shifts in traders demands amplify any supply shock induced price changes we develop an infinite horizon noisy rational expectations model and calibrate simulate and test it using u s stock market data the price variability in a heterogeneous information economy is shown to be 20 to 46 higher than in an otherwise equivalent economy in which all signals are publicly announced i introduction a common theme of the rational expectations literature is the ability of prices to convey information a question is the extent to which this informational role induces additional variability in prices grundy and mcnichols 1989 present a rational expectations model with multiple rounds of trade preceding a final consumption date they show that the revelation of existing private information through price changes can be the sole cause of the price variability equilibrium prices can change even in the absence of any change in supply or the arrival of any new information beyond the observation that the price itself has changed we examine the link between the informational role of prices and price variability in a multi period model with heterogeneous information arriving and consumption taking place at each trading date our goal is to obtain a comparison of price variability in a world of heterogeneous information with variability in an otherwise equivalent homogeneous information economy in which in effect all private signals are publicly announced and

differential interpretations and trading volume this study provides evidence that differential interpretations are an important stimulus for speculative trading we measure differential interpretations using data on analysts revisions of forecasts of annual earnings after the announcement of quarterly earnings that are components of those annual earnings numbers we find two conditions under which differential interpretations play a significant role in explaining trading first we present empirical evidence supporting kandel and pearson s 1995 argument that trading coincident with small price changes reflects investors differential interpretations of information this evidence is important because it is inconsistent with conventional models of trade that assume homogeneous interpretations second we also find that differential interpre tations explain a significant amount of the trading occurring in a sample where trading volume is higher than the firm specific non announcement period average this result is consistent with informed traders acting on their differential interpretations when there is enough liquidity trading to help camouflage their own information based trades in sum the study s results confirm bachelier s 1900 intuition that differential interpretations are an important stimulus for trading

educational reform ability and family background in this paper we evaluate the impact of a major school reform that took place in the 1950s in sweden on educational attainment and earnings the reform which has many common elements with reforms in other european countries including the uk consisted of increasing compulsor schooling imposing a national curriculum and abolishing selection by ability into academic and non academic streams at the age of 12 comprehensive school reform our data combines survey data with administrative sources we find that the reform increased both the educational attainment and the earnings of children whose fathers had just compulsory education however the earnings of those with educated parents declined possibly because of a dilution of quality at the top end of the education levels the overall effect of the reform was however positive

school tracking and intergenerational income mobility evidence from the finnish comprehensive school reform abstract this paper estimates the effect of a major education reform on intergenerational income mobility the finnish comprehensive school reform of 1972 1977 replaced the old two track school system with a uniform nine year comprehensive school and shifted the selection of students to vocational and academic tracks from age 11 to age 16 we estimate the effect of this reform on the intergenerational income elasticity using a representative sample of males born between 1960 and 1966 the identification strategy relies on a differences in differences approach and exploits the fact that the reform was implemented gradually across the country during a six year period the results indicate that the reform reduced the intergenerational income elasticity by 23 from the pre reform elasticity of 0 30 to post reform elasticity of 0 23

differences of opinion and international equity markets we develop an international financial market model in which domestic and foreign residents differ in their beliefs about the information content in public signals we determine how informational advantages of domestic investors in the interpretation of home public signals affect equity markets we evaluate the ability of our model to generate four international finance anomalies i the co movement of returns and capital flows ii home equity preference iii the dependence of firm returns on home and foreign factors and iv abnormal returns around foreign firm cross listing in the home market their relationships with empirical differences of opinion proxies are consistent with the model received january 15 2011 editorial decision may 16 2016 by editor geert bekaert

the impact of cash flows and firm size on investment the international evidence abstract this paper examines the degree to which cash flow availability influences firm investment in six oecd countries in particular we are interested in the extent to which the reliance on internal funds is affected by firm size since there is general agreement that smaller firms have less access to external capital markets and thus should be more affected by the availability of internal funds earlier work has concluded that the documented positive relationship between cash flow and investment is evidence of the existence of financial constraints we first examine all firms regardless of size in each country and we find that the amount of corporate investment is affected by internal resources in all six countries that is internal financing affects firm investment we then repeat the analysis segmenting the sample using three measures of firm size contrary to our a priori expectations we find that the cash flow investment sensitivity is generally highest in the large firm size group and smallest in the small firm size group we deduce that the explanations for these findings are grounded in managerial agency considerations and in the greater flexibility enjoyed by large firms in timing their investments thus we conclude that the degree of sensitivity of a firm s investments to its cash flows cannot be interpreted as an accurate measure of its access to capital markets as do kaplan s zingales l 1997 the quarterly journal of economics 169 215 since small firms are known to have less access to external markets

the impact of nearly universal insurance coverage on health care utilization evidence from medicare the onset of medicare eligibility at age 65 leads to sharp changes in the health insurance coverage of the u s population these changes lead to increases in the use of medical services with a pattern of gains across socioeconomic groups that varies by type of service while routine doctor visits increase more for groups that previously lacked insurance hospital admissions for relatively expensive procedures like bypass surgery and joint replacement increase more for previously insured groups that are more likely to have supplementary coverage after 65 reflecting the relative generosity of their combined insurance package under medicare

risk sharing and transactions costs evidence from kenya s mobile money revolution we explore the impact of reduced transaction costs on risk sharing by estimating the effects of a mobile money innovation on consumption in our panel sample adoption of the innovation increased from 43 to 70 percent we find that while shocks reduce consumption by 7 percent for nonusers the consumption of user households is unaffected the mechanisms underlying these consumption effects are increases in remittances received and the diversity of senders we report robustness checks supporting these results and use the four fold expansion of the mobile money agent network as a source of exogenous variation in access to the innovation jel e42 g22 o16 o17 z13 in developing countries informal networks provide an important means by which individuals and households share risk though the insurance they provide is often incomplete economists have proposed a number of reasons for this incompleteness including information asymmetries which manifest in problems of moral hazard and limited commitment both of which induce positive correlations between realized income and consumption in this article we emphasize a complementary source of incompleteness transaction costs literally the costs of transferring resources between individuals we test the impact of transaction costs on risk sharing by analyzing data from a large panel household survey that we designed and administered in kenya over a three year period to capture the expansion of mobile money this financial innovation has allowed individuals to transfer purchasing power by simple short messaging service sms technology and has dramatically reduced the cost of sending money across large distances mobile money is a recent innovation in developing economies one of the first and most successful examples to date is kenya s m pesa 1 in just four years after its