the contingent effect of social capital on performance of professional athletes life cycle stages and changes in regulation as moderators motorboat racing is a sport organized as public gambling in japan as well as physical strength and driving technique skills to adjust equipment are critical for racers to win a race based on the contingency theory of social capital this study analysed comprehensive panel data of motorboat racers and revealed that bonding and bridging social capital had different impacts on performance according to life cycle stages of racers and changes in regulation first bonding social capital has a positive impact on performance when racers are less experienced and most need psychological aid stemming from strong ties second bridging social capital has a positive impact on performance when racers are more experienced and have accumulated absorptive capacity to learn efficiently from diverse sources of knowledge third both bonding and bridging social capital lose their explanatory power after the changes in regulation that shifted ownership of propellers from racers to the authority which could mitiga

technological activity and survival of firms abstract the paper presents new evidence on the effect of technological activity on the post entry performance of firms by comparing firm survival across technical and non technical products and over stages of differing technological activity it attempts to resolve two seemingly contradictory hypotheses that uncertainty inherent in high technological activity reduces the probability of survival and that technological activity increases the probability of entrant survival the empirical results in the context of the product life cycle framework show that entering firms enjoy a higher probability of survival in stages of high technological activity and in products that are more technical in nature however the hazard function the probability of failure conditional on age is higher for technical products reflecting the adverse effects of technical uncertainty and obsolescence of incumbent knowledge

productivity in public services abstract this paper discusses issues arising in the measurement of productivity in public services compared to measuring productivity in the private sector difficulties arise because the output of public services is often unpriced and because some public services are consumed collectively a key problem is measuring the full range of outputs and quality improvements delivered by public sector organizations that are valued by society without comprehensive measures of output productivity statistics may be misleading i outline methods used in the measurement of both private and public sector productivity and discuss the measurement of public sector productivity in practice finally i discuss studies that examine factors underlying productivity differences and productivity growth in public and private sector organizations public sector reforms and the use of pilot schemes in public sector organizations present opportunities for research to identify causal effects on productivity

testing gibrat s law for small young and innovating firms this article analyses whether small young and innovating firms have experienced a greater employment growth than other spanish firms over the period 1990 2000 the study draws upon a sample of 1272 manufacturing firms in which only 967 of the firms survived for the entire ten year period the analyses test gibrat s law both by least squares and by utilizing the procedure proposed by heckman in which a probit survival equation is first estimated to correct for sample selection bias two estimators correcting for selection bias are utilized one that incorporates the inverse mill s ratio and the other that employs maximum likelihood methods all the results reject gibrat s law and support the proposition that small firms have grown larger additionally the results show that old firms grow less than young ones and innovating activity both process and product is a strong positive factor in the firm s survival and its employment growth

effect of credit guarantee policy on survival and performance of smes in republic of korea this study evaluates the effect of credit guarantee on smes at the firm level to estimate the effect of credit guarantee we analyze relations between credit guarantee the survival of guaranteed firms and their productive performance the result indicates that credit guarantee frequency enabled guaranteed firms to achieve good performances in general on the contrary the effect of guarantee amounts is ambiguous in that there is difference between the contemporary effect and the lagged effect therefore we conclude that credit guarantee satisfied partially its goal to alleviate smes difficulty in acquiring finance and to stabilize employment

a role based ecology of technological change this article considers what factors determine whether an innovation becomes a foundation for future technological developments rather than a dea end the authors introduce the concept of the technological niche which includes a focal innovation the innovations on which the focal innovations builds the innovations that build upon the focal innovation and the technological ties among the innovations within the niche using patents and patent citations to measure characteristics of innovation niches within the semiconductor industry the authors show that the size of the niche and the status of the actors within the niche have a positive effect on the likelihood that subsequent innovations will build upon the focal innovation competitive intensity within the niche has a negative effect on this likelihood

on the relationship between firm size and export intensity export marketing literature supports the view that firm size is positively related to export intensity although the empirical findings have been mixed a number of theoretical arguments are used to support this proposition i e international marketing economies of scale limited managerial and financial resources of small firms decisionmaker s risk perception based on a large survey of the italian manufacturing industry the article falsifies the proposition and challenges some widely held assumptions in export marketing literature

firm growth and liquidity constraints a dynamic analysis using a large unbalanced panel data set of portuguese manufacturing firms surviving over the period from 1990 to 2001 the purpose of this paper is to examine whether liquidity constraints faced by business firms affect firm growth we use a gmm system to estimate a dynamic panel data model of firm growth that incorporates cash flow as a measure of liquidity constraints and persistence of growth the model is estimated for all size classes including micro firms our findings reveal that smaller and younger firms have higher growth cash flow sensitivities than larger and more mature firms this is consistent with the suggestion that financial constraints on firm growth may be relatively more severe for small and young firms nevertheless the same finding can be interpreted in a different way if we consider the more recent literature which interpret the higher investment cash flow sensitivity of younger and smaller firm in absence of financial market imperfection as the outcome of these firms reaction to the fact that realisation of their cash flows reveals them the direction to go in presence of uncertainty of their growth prospect besides firms that were small and young at the beginning of the sample period exhibited more persistent growth than those that were large and old finally these results have significant policy implications

business failure of new firms an empirical analysis using a multiplicative hazards model abstract this paper investigates business failure of new firms using a multiplicative hazards model we estimate the determinants of business failure among new manufacturing firms in tokyo during the period 1986 to 1994 it is found that a new firm without sufficient capital or a sufficient size has a higher risk of business failure it is also found that the new firm tends to have more difficulty surviving in an industry characterized by a high entry rate with respect to the timing of entry the new firm that entered just before or after the collapse of the so called bubble economy has been more likely to fail furthermore we estimate a regression model based not only on age but also on calendar time by using a regression model based on calendar time it is found that the firm s age has been related to business failure

no deep pockets some stylized empirical results on firms financial constraints this paper is a survey of recent empirical work on financial constraints faced by firms it is organized as a series of stylized results which mirror what is generally understood about the severity of financial constraints and the effects that they have upon firms the review of the literature shows that a financial constraints are a widespread key concern for firms hindering their ability to carry out their optimal investment and growth trajectories and b the severity of such constraints depends on institutional and firm specific characteristics as well as on the nature of investment projects

the relationship between firm growth size and age estimates for 100 manufacturing industries this study uses a sample of all firms operating in 100 manufacturing industries to examine some aspects of firm dynamics it finds that firm growth the variability of firm growth and the probability that a firm will fail decrease with firm age it also finds that firm growth decreases at a diminishing rate with firm size even after controlling for the exit of slow growing firms from the sample gibrat s law therefore fails although the severity of the failure decreases with firm size copyright 1987 by blackwell publishing ltd

age size growth and survival uk companies in the 1980s this paper examines growth and survival amongst quoted and unquoted u k companies in the period 1975 85 and compares the results with earlier u k and u s studies an examination of death rates shows that smaller companies had higher death rates but the largest and smallest companies were least vulnerable to takeover careful attention is therefore paid to problems of sample selection bias it is shown that smaller companies grew faster than larger companies that gibrat s law does not hold amongst smaller firms that age is negatively related to growth and that these results are not an artifact of sample selection bias copyright 1994 by blackwell publishing ltd

new ventures and their credit terms using uk bank data for 466 new venture loan applications we explore the determinants of interest margin the sanctioning decision and the amount borrowed when these factors are considered simultaneously collateral levels greatly influence the size of credits to new ventures a finding consistent with existing work on firm foundation rates and assets black et al economic journal 106 60 75 1996 de meza and webb the economic journal 109 153 163 1999 evans and jovanovic journal of political economy 97 4 808 827 1989 holtz eakin et al 1994 consistent with the rand journal of economics 25 334 347 diversionary models of debt firms with larger credits enjoy discounted interest margins even when we have controlled for firm size

loan guarantees costs of default and benefits to small firms abstract governments of most countries seek to encourage small and medium sized enterprise sme growth and the job creation that many believe is fostered by such growth substantive growth usually requires expansion capital it is often perceived that compared with larger firms smes face disproportionately less access to the debt capital they need for start up growth and survival consequently governments and trade associations have often intervened in credit markets by taking on the role of guarantor of loans that financial institutions advance to smes for example the small business administration in the united states provides guarantees of loans made by banks to qualifying small firms similar schemes are in effect in among other countries canada japan the u k korea and germany trade associations take on such roles in france spain and other nations loans that support the expansion of small enterprises may convey significant benefits to the borrowing firms and through job creation and retention to the rest of society however to the extent that some borrowers are unable to meet the repayment obligations of their debt guarantors also face material real costs of honoring their guarantee to the lenders loan guarantee programs are designed in a variety of ways often these programs do not appear to reflect guidance from economic theory or experience this paper draws on empirical evidence to compare costs with benefits in addition it uses the results and economic theory to provide some guidance for the design of loan guarantee programs finally the study shows that loan guarantee programs can be an effective means of supporting start up growth and survival of new and risky enterprises the work finds that substantial total and incremental job creation may be attributed to the canadian loan guarantee program the paper reviews previous attempts to conduct cost benefit analyses of loan guarantee programs it finds wide variation internationally in default rates published data suggests default rates vary from less than 5 germany to more than 40 u k the empirical analysis reported here focuses on the canadian implementation of loan guarantees the small business loans act sbla findings include 1 loan guarantees granted under the terms of the sbla provide an extremely efficient means of job creation with very low estimated costs per job 2 default rates are higher for newer firms increase with the amount of funds borrowed and vary widely by sector borrowers in the retail and accommodation and food and beverage sectors were significantly more likely to default than borrowers in other sectors and 3 the widening eligibility to larger firms and to larger loans may not be well advised and is inconsistent with the goals of the program moreover reducing the loan ceiling would arguably discourage fraudulent applications while servicing those smes most in need of early stage capital in addition analysis of the lenders motives suggests that default rates on the portfolio of guaranteed loans and therefore the costs of honoring guarantees are particularly sensitive to the level of the guarantee small reductions in the level of the guarantee for example guaranteeing 80 of principal and accrued interest instead of 85 could lead to substantial reductions in default rates debate persists in economic theory about whether or not government intervention in the credit market is warranted in spite of the findings that loan guarantees seem to make positive contributions further analysis of these issues is advised

does competition among public schools benefit students and taxpayers tiebout choice among districts is the most powerful market force in american public education naive estimates of its effects are biased by endogenous district formation i derive instruments from the natural boundaries in a metropolitan area my results suggest that metropolitan areas with greater tiebout choice have more productive public schools and less private schooling little of the effect of tiebout choice works through its effect on household sorting this finding may be explained by another finding students are equally segregated by school in metropolitan areas with greater and lesser degrees of tiebout choice among districts

where do financial constraints originate from an empirical analysis of adverse selection and moral hazard in capital markets despite the voluminous and growing literature on financial constraints the origins of the constraints are hardly ever empirically analyzed this paper offers such an analysis we study in particular the empirical prevalence of adverse selection and moral hazard in capital markets using a unique survey data on finnish small and medium sized enterprises smes the survey data suggest that adverse selection is empirically more prevalent than moral hazard in the capital markets that the smes face we also find that of the variables indicating the presence of adverse selection and moral hazard the former has more explanatory power in regressions modeling the availability of external finance to the smes than the latter finally we document that our proxies for adverse selection and moral hazard are inversely related to the age of firms just like peter diamond s 1989 model predicts

information asymmetry in small and medium enterprise credit guarantee schemes evidence from japan in this article we investigate whether there is adverse selection and or moral hazard in credit guarantee schemes for small and medium enterprises smes in japan as credit guarantee corporations

human capital pricing equations with an application to estimating the effect of schooling quality on earnings this paper formulates and estimates alternative models for the pricing of labor services we present economic models that rationalize empirical specifications in the literature and we offer evidence on the validity of those specifications widely used efficiency units models of labor services are inconsistent with evidence from the u s labor market a model of heterogeneous skills provides a more accurate description of earnings data we present evidence that the pursuit of comparative advantage and selective migration are important features of the u s labor market when these features are included in the model the only support for an effect of schooling quality on earnings is through the return to college education three interactions are empirically important in explaining log wage equations a between schooling quality and education b between regional labor market shocks and education and c between region of residence and regionof birth because of this third interaction which can arise from comparative advantage in the labor market no unique quality effect on returns to education can be defined independently of the market in which it is used

r d in smes a paradox this paper has three objectives 1 to survey the relevant literature addressing the apparent paradox of research development investments carried out within small and medium enterprises 2 to provide focused summaries of the articles in this special issue 3 to draw some general conclusions in terms of policy implications

the economics of schooling production and efficiency in public schools n recent years public and professional interest in schools has been heightened by a spate of reports many of them critical of current school policy these policy documents have added to persistent and long standing concerns about the cost effectiveness and fairness of the current school structure and have made schooling once again a serious public issue as in the past however any renewed interest in education is likely to be short lived doomed to dissipate as frustration over the inability of policy to improve school practice sets in this frustration about school policy relates directly to knowledge about the educational production process and in turn to underlying research on schools although the educational process has been extensively researched clear policy prescriptions flowing from this research have been difficult to derive 2 there exists however a consistency to the research findings that does have an immediate application to school policy schools differ dramatically in quality

the trade off between child quantity and quality an empirical investigation of trade offs between number of children and their scholastic performance confirms that family size directly affects children s achievement though parents show no favori

understanding the twentieth century growth in u s school spending persistent increases in spending on elementary and secondary schools have gone virtually undocumented real expenditure per student increased 3 percent per year over the period 1890 1990 decomposition of the spending growth shows that it resulted from a combination of falling pupil staff ratios increasing real wages to teachers and rising expenditure outside of the classroom although the expansion of education for the handicapped has had a disproportionate effect on spending most of the growth in expenditure during the 1980s came from other sources significant teacher salary increases particularly for females have failed to keep up with wages in other occupations

the economic impact of the canada small business financing program this paper investigates the economic impact of the canada small business financing program csbfp using the 2004 edition of the survey on financing of small and medium enterprises to avoid the usual self selection problem associated with voluntary participation in such programs the financing behavior of the business and its intention to grow are used as control variables based on this analysis participation in the csbfp would have increased growth in salary employment and revenues by 12 12 and 7 percentage points respectively between 2004 and 2006 furthermore csbfp would have induced around 5 000 jobs approximately 3 8 of those created in that time span by small private businesses

the failure of input based schooling policies in an effort to improve the quality of schools governments around the world have dramatically increased the resources devoted to them by concentrating on inputs and ignoring the incentives within schools the resources have yielded little in the way of general improvement in student achievement this paper provides a review of the us and international evidence on the effectiveness of such input policies it then contrasts the impact of resources with that of variations in teacher quality that are not systematically related to school resources finally alternative performance incentive policies are described

swinging a double edged sword the effect of slack on entrepreneurial management and growth resource slack represents a double edged sword simultaneously fueling and hindering growth drawing on penrose s growth theory and stevenson s entrepreneurial management theory we have developed and tested a conceptual model that provides a more nuanced account of the resource slack growth relationship using a large dataset spanning six years we have found that slack has a positive direct effect on growth but a negative effect on entrepreneurial management and that entrepreneurial management has a positive effect on growth our empirical and conceptual findings are important to the development of firm growth theory and explicate causal mechanisms transforming slack into firm level outcomes

new firm survival industry strategy and location abstract how important is the physical location of a new firm for its chances of survival location of a new firm whether in urban metro or rural vicinities can have important impacts on performance outcomes urban locations often contain a wealth of diverse resources but may also have a greater number of competitors rural locations may lack diversity but can enable the firm to exploit a niche with limited competition we suggest that a simple examination of new firm location will not adequately predict survival chances rather the impact on location of the new firm will be influenced by the industry in which the new firm operates and by the strategy the new firm pursues the industry of the new firm is examined by focusing on where the new firm is located in the value chain we predict that a new firm upstream in the industry value chain will have better chances of survival than new firms downstream in the industry value chain new firms with broadly focused strategies are hypothesized to have greater survival chances than new firms strategically positioned to exploit a narrow market focus and we predict that new firms in urban locations will have greater chances for survival than new firms in rural locations

comparative analysis of firm demographics and survival evidence from micro level sources in oecd countries in this paper we present cross country evidence on firm size distribution firm demographic and post entry performance for 10 oecd countries we use harmonized firm level data drawn from business registers or social security records these data enable international comparisons and the identification of idiosyncratic country effects while average firm size differs across countries due to both sectoral specialization and within sector characteristics we find similar degrees of firm churning across countries in most of them about 20 of firms enter and exit most markets every year and about 20 40 of entering firms fail within the first 2 years of life however post entry growth of successful entrants is much higher in the usa than in europe which may be indicative of barriers to firm growth as opposed to barriers to entry

community and capital in entrepreneurship and economic growth we argue that social integration in the sense of within community interconnectedness and venture capital have a complementary relationship in fostering innovation entrepreneurship and economic gr

modernizing the business of health pharmaceuticals in britain in comparison with germany and the united states 1890 1940 the pharmaceutical industry adopted technology in markedly different ways in germany the united states and britain during the early 20th century useful knowledge became a commercial asset but british intellectual property and drug regulation laws created neither pressures nor rewards for growth key differences emerged in the ways in which intellectual property was used in the development of testing and standardization and in the links between researchers and industry we show how firms sought to control the new knowledge assets that built the business of health this also helps to explain the choices made in the three countries as to what forms of investments best further industry goals

partial credit guarantees and firm performance evidence from colombia this paper studies the effect of government backed partial credit guarantees on firms performance in colombia these guarantees are automatically granted by the national guarantee fund ngf to firms without enough collateral to lift their credit constraints we put together a panel of firms covering the period 1997 2007 that allows us to control for observed and unobserved firm characteristics potentially affecting both the selection of firms into the program and firms performance we find that firms that gain access to credit backed by the ngf were able to grow in terms of both output and employment however we do not find any effect on productivity wages or investment

is the test score decline responsible for the productivity growth decline the test score decline between 1967 and 1980 was large about 1 25 grade level equivalents and historically unprecedented new estimates of the trends in academic achievement of the effect of academic achievement on productivity and of trends in the quality of the work force are developed the test score decline did not cause the post 1965 productivity growth slowdown but it did contribute to its perpetuation if test scores had continued to grow after 1967 at the rate prevailing in the previous quarter century labor force quality would have been 2 9 percent 86 billion greater in 1987 5 5 percent greater in 2000 and 6 7 percent greater in 2010 copyright 1989 by american economic association

new firm survival new results using a hazard function a limitation of audretsch s 1991 study of new firm survival was the level of aggregation to industries this precluded linking establishment specific characteristics such as organizational structure and size to post entry performance the purpose of this paper is to relate the post entry performance of individual establishments not only to their technological and market structure environments but also to establishment specific characteristics we do this by estimating a hazard duration function for more than 12 000 individual establishments in u s manufacturing started in 1976 by tracking their subsequent performance over a ten year period we conclude that establishment specific characteristics which audretsch was not able to capture in his earlier study play an important role in shaping the exposure to risk confronting new establishments copyright 1995 by mit press

school inputs and educational outcomes in south africa we examine the relationship between educational inputs primarily pupilteacher ratios and school outcomes in south africa immediately before the end of apartheid government black households were severely limited in their residential choice under apartheid and attended schools for which funding decisions were made centrally by white controlled entities over which they had no control the allocations resulted in marked disparities in average class sizes controlling for household background variables we find strong and significant effects of pupilteacher ratios on enrollment on educational achievement and on test scores for numeracy

why do most firms die young a model is developed to explain why most firms die in the first few years of trading a risk averse entrepreneur with initial capital endowment faces a brownian motion in net worth over time to balance return profits growth and risk variance of profits she adopts a portfolio strategy choosing market positioning to achieve an optimal combination of risk and return at each instant given her financial and human capital endowments and attitude towards risk failure occurs when the firm s value falls below the opportunity cost of staying in business the resulting distribution of failure is inverse gaussian implying for specific parameter values a positively skewed failure curve of the type observed in practice in addition the model presents a novel measure of management human capital mhc which implies that high mhc entrepreneurs will have higher absolute and marginal profits growth than low mhc entrepreneurs at given levels of risk

does school quality matter returns to education and the characteristics of public schools in the united states this paper estimates the effects of school quality measured by the pupil teacher ratio average term length and relative teacher pay on the rate of return to education for men born between 1920 and 1949 using earnings data from the 1980 census we find that men who were educated in states with higher quality schools have a higher return to additional years of schooling rates of return are also higher for individuals from states with better educated teachers and with a higher fraction of female teachers holding constant school quality measures however we find no evidence that parental income or education affects average state level rates of return

the marketization of new zealand schools assessing fiske and ladd edward fiske and helen ladd s review of market based educational reforms in new zealand are assessed in light of recent developments we agree that predicted benefits were overstated that there were both losers and winners and that educational nirvana did not result in our view however the main impact was to make schools problems more transparent creating discomforting pressures and attempts to undermine this transparency we examine responses to changes in zoning laws the effects of socioeconomic status on observed outcomes signalling and value added behavior and school accountability we find that educational reforms produce substantial short term changes largely on the demand side

change agents networks and institutions a contingency theory of organizational change we develop a contingency theory for how structural closure in a network defined as terms of the extent to which an actor s network contacts are connected to one another affects the initiation and

structure learning and the speed of innovating a two phase model of collective innovation using agent based modeling continual increase in the complexity of technologies and innovations has resulted in actors i e individuals or organizations becoming more dependent on other actor s knowledge and skills to complement their own skills in the innovation process as a result networks have become more and more prominent in affecting the innovation process conceptualizing innovation as a search and learning process that results in a successful product we introduce a two phase model of collective innovation that accounts for the deliberateness of the innovation process using agent based modeling we explore how interaction structure among a group of actors affects the speed at which the group can collectively innovate in addition we present results from counterfactual simulations to highlight the importance of deliberate search and changing realized connections in modeling collective innovation process moreover we discuss the effects of the structure under different mechanisms of learning and different levels of actor s learning capabilities copyright 2010 the author 2010 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

embeddedness in the making of financial capital how social relations and networks benefit firms seeking financing i investigate how social embeddedness affects an organization s acquisition and cost of financial capital in middle market banking a lucrative but understudied financial sector using existing theory and original fieldwork i develop a framework to explain how embeddedness can influence which firms get capital and at what cost i then statistically examine my claims using national data on small business lending at the level of dyadic ties i find that firms that embed their commercial transactions with their lender in social attachments receive lower interest rates on loans at the network level firms are more likely to get loans and to receive lower interest rates on loans if their network of bank ties has a mix of embedded ties and arm s length ties these network effects arise because embedded ties motivate network partners to share private resources while arm s length ties facilitate access to public information on market prices and loan opportunities so that the benefits of different types of ties are optimized within one network i conclude with a discussion of how the value produced by a network is at a premium when it creates a bridge that links the public information of markets with the private resources of relationships

strong ties weak ties and islands structural and cultural predictors of organizational innovation how does the tendency of entrepreneurs to engage in innovation relate to their structural and cultural embeddedness using micro data on entrepreneurial teams and the organizational innovations they attempt to develop this article presents a predictive model of creative action to address this question capacity for creative action is seen to be a function of the ability of entrepreneurs to i obtain non redundant information from their social networks ii avoid pressures for conformity and iii sustain trust in developing novel and potentially profitable innovations probit analyses of over 700 organizational startups suggest that these mechanisms exercise effects on innovation via the network ties and enculturation of entrepreneurs

updating a credit scoring model based on new attributes without realization of actual data abstract funding small and medium sized enterprises smes to support technological innovation is critical for national competitiveness technology credit scoring models are required for the selection of appropriate funding beneficiaries typically a technology credit scoring model consists of several attributes and new models must be derived every time these attributes are updated however it is not feasible to develop new models until sufficient historical evaluation data based on these new attributes will have accumulated in order to resolve this limitation we suggest the framework to update the technology credit scoring model this framework consists of ways to construct new technology credit scoring model by comparing alternative scenarios for various relationships between existing and new attributes based on explanatory factor analysis analysis of variance and logistic regression our approach can contribute to find the optimal scenario for updating a scoring model

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

is subsidizing entry an optimal policy public subsidies in support of new firm foundation are among the most frequently used instruments of industrial policy in the euro zone this paper analyses their effectiveness and efficiency vis a vis some features of the overall process of industry dynamics in italian manufacturing to this end the survival and growth patterns of new small firms are investigated using a unique dataset on electrical and electronic engineering in italy as regards survival our results confirm the findings of other studies namely that the hazard rates are particularly high in the early stages of firm s life cycle as far as growth is concerned the study s main finding is that gibrat s law fails to hold in the years immediately following start up when smaller firms must rush in order to achieve a size large enough to enhance their likelihood of survival conversely in later stages of firm s life cycle the law cannot be rejected these results radically question the use of subsidies as an optimal policy for the support of new entries since the subsidy brings about a major bias in the process of market selection including substitution and deadweight effects and hampers the post entry scale adjustment of newborn firms

changes in college skills and the rise in the college wage premium the college wage premium for new labor market entrants rose sharply during the 1980s we ask how much of this change arose from changes in the skill level of the typical college graduate we find that skills attained prior to college as measured by standardized test scores and high school grades had no effect on the change in the college wage premium for men in contrast the returns to math ability rose considerably for women failing to account for math skills thus substantially overstates the growth in the female college wage premium skills acquired in college as reflected in the distribution of students across majors had important effects on the relative wages of men the trend away from low skill subjects such as education and toward high skill subjects such as engineering accounts for one fourth of the rise in the male college wage premium

the role of human capital in earnings differences between black and white men d uring the past 50 years the earnings of black men have increased substantially both in absolute terms and relative to those of white men as shown in figure 1 in 1940 the black white weekly earnings ratio among men ages 25 34 was 49 percent by 1980 it had increased to 79 percent during the 1980s however the overall black white earnings gap did not narrow and at younger ages the gap actually widened although the 1980s is not the first decade since 1940 in which black men made little or no gains in relative earnings the 1950s was another the lack of progress in the 1980s is nevertheless puzzling and a source of concern this article examines the factors underlying the differential in earnings between black men and white men with a focus on the role of human capital since 1940 successive generations of black men entering the labor force have been increasingly more educated relative to white men both in terms of years of school completed and in the quality of schooling obtained as the education and income levels of black parents increased racial differences in the transmission of human capital in the home were also likely to have narrowed this convergence in educational differences combined with the migration of blacks out of the south contributed to the narrowing in the racial gap in earnings over the 1940 80 period particularly in the first half of the period but human capital factors education and migration were not the only source of convergence in black white differences in earnings the patterns of change in the earnings gap support the contention that declining labor market discrimination against blacks has also contributed to the rise in the black white earnings ratio moreover the acquisition of human capital itself has been strongly affected by societal and governmental discrimination since blacks were long provided with greatly inferior schooling resources

the survival of new plants start up conditions and post entry evolution abstract this paper examines the longevity of entrants we find size to be an important determinant of the chances of survival this being particularly relevant to de novo entrants as compared with entry by established firms current size is also found to be a better predictor of failure than initial size moreover our findings indicate that after controlling for size differences past growth matters for survival suggesting a partial adjustment process for firm size in the post entry period finally new plants are more likely to live longer if they enter growing industries or industries with little entry activity

the decline of schooling productivity in oecd countries based on baumol s cost disease model we develop two alternative measures of the change in the productivity of schooling both productivity measures are based on changes in the relative price of schooling we find that in most oecd countries the price of schooling has increased faster in 1970 94 than would be compatible with constant schooling productivity in addition we show that the average performance of pupils has remained constant at best in most oecd countries our results imply a larger decline in the productivity of schooling in many oecd countries than in the united states

the effects of class size on student achievement new evidence from population variation abstract i identify the effects of class size on student achievement using longitudinal variation in the population associated with each grade in 649 elementary schools i use variation in class size driven by idiosyncratic variation in the population i also use discrete jumps in class size that occur when a small change in enrollment triggers a maximum or minimum class size rule the estimates indicate that class size does not have a statistically significant effect on student achievement i rule out even modest effects 2 to 4 percent of a standard deviation in scores for a 10 percent reduction in class size

technological regimes and sectoral patterns of innovative activities this paper focuses on the relationships between observed patterns of innovative activities within a sector and the related context and underlying microeconomic processes that might account for them it claims that there are some invariant features with respect to relative prices and incentives mechanisms of learning and knowledge accumulation that greatly affect the rate and structure of innovative activity these features are different across sectors the paper proposes that the specific pattern of innovative activity of a sector can be explained as the outcome of different technological regimes that are implied by the nature of technology and knowledge the notion of technological regime provides a synthetic representation of some of the most important economic properties of technologies and of the characteristics of the learning processes that are involved in innovative activities copyright 1997 by oxford university press

earnings schooling ability and cognitive skills conventional estimates now available for a large number of countries generally indicate that the social returns to education are positive large and competitive with returns to investment in physical capital that such estimates are good guides for public resource allocation has however been questioned the heart of the problem lies in the interpretation of the positive relationship between the education and the earnings of workers whether as the conventional estimates assume the coefficient of the education variable in the earnings function measures the effect on the productivity of workers of human capital acquired in school it has been hypothesized that education in part or instead represents screening for native ability and motivation or credentialism and that as a consequence conventional measures of the social benefit of education are substantially upward biased 2 in this paper we attempt to distinguish the influence on earnings of cognitive achievement native ability and years of education as a means of adjudicating the human capital screening and credentialist hypotheses our econometric analysis is based on two rigorously comparable micro data sets from kenya and tanzania generated by surveys of the urban wage labor force specifically for this study these data sets contain the usual variables found in earnings function estimates of the benefits of schooling individual earnings years of education and years of employment experience in addition they contain two variables measures of the worker s cognitive skills and of his or her reasoning ability not previously found in studies of developing countries and only rarely found in studies of the education earnings relationship in developed countries 3 with these variables we can estimate the direct effects on earnings of cognitive skills ability and years of schooling by using them to estimate educational production functions and educational attainment functions and linking these functions with the earnings function in a recursive framework we can also assess the various indirect effects on earnings of ability and years of schooling having data sets from two countries very similar with respect to size resource endowments structure of production and employment and level of development means that not only can we subject our results to the usual statistical tests but we can also assess their replicability both kenya and tanzania have nearly achieved the objective of universal primary education while university enrollments remain at less than 1 percent of the relevant age group the important policy issues re boissiere development research department the world bank 1818 h street washington d c 20433 knight institute of economics and statistics oxford university sabot williams college williamstown ma 01267 we are grateful to the educational testing service of princeton for the design of tests used in this study and to j armitage j behrman j hausman d hendry d jamison and an anonymous referee for their insights and advice helpful comments were also received from participants in seminars at oxford and yale universities the views presented here are our own they should not be interpreted as reflecting those of the world bank george psacharopoulos 1973 1981 contains a listing of 44 countries in which rate of return studies had been conducted and of the estimates obtained 2for instance kenneth arrow 1973 mark blaug 1976 samuel bowles and herbert gintis 1976 john riley 1979 michael spence 1976 and lester thurow 1975 3for attempts to control for ability and or for cognitive achievement in studies for the united states see jere behrman et al 1980 gary chamberlain and zvi griliches 1977 griliches and william mason 1972 michael olneck 1977 paul taubman and terence wales 1974 taubman 1975 and david wise 1975 see also the survey articles by griliches 1977 1979 in most instances the data refer to special subgroups in the population and clear distinction cannot be made between natural ability and cognitive skills acquired in school

causal effect of credit guarantees for small and medium sized enterprises evidence from italy we evaluate the effectiveness of a partial credit guarantee program implemented in a large italian region that aimed to improve the access to credit of small and medium enterprises using unique microdata from a broad set of firms we show that the policy increased the long term loans for beneficiary firms while the total volume of bank loans was unaffected furthermore targeted firms benefited from a substantial decrease in interest rates however there is some evidence that firms are more likely to default as a consequence of the treatment conversely the results do not point to any significant effect on investments

returns to investment in education a global update the author updates compilations of rate of return estimates to investment in education published since 1985 and discusses methodological issues surrounding those estimates some key patterns among the three main levels of education primary education continues to exhibit the highest social profitability in all world regions private returns are considerably higher than social returns because of the public subsidization of education the degree of public subsidy increases with the level of education which is regressive social and private returns at all levels generally decline by the level of a country s per capita income overall the returns to female education are higher than those to male education but at individual levels of education the pattern is more mixed the returns to the academic secondary school track are higher than the vocational track since unit cost of vocational education is much higher and the returns for those who work in the private competitive sector of the economy are higher than in the public noncompetitive sector and the returns in the self employment unregulated sector of the economy are higher than in the dependent employment sector controversies in the literature are discussed in the light of the new evidence the undisputable and universal positive correlation between education and earnings can be interpreted in many ways the causation issue on whether education really affects earnings can be answered only with experimental data generated by randomly exposing different people to various amounts of education given the fact that moral and pragmatic considerations prevent the generation of such pure data researchers have to make do with indirect inferences or natural experiments some have been attempted the author looks at the research on overeducation or surplus schooling the conclusions reinforce earlier patterns they confirm that primary education continues to be the number one investment priority in developing countries they also show that educating females is marginally more profitable than educating males that the academic secondary school curriculum is a better investment than the technical vocational tract and that the returns to education obey the same rules as investment in conventional capital that is they decline as investment is expanded