Effects of prevailing wage laws on municipal government wages

A number of authors have suggested that prevailing wage laws tend to raise the wages of covered employees. Yet, no one has previously tested this hypothesis directly. In OLS regressions the prevailing wage law is found to have a negative effect that is not statistically significant. In a two-stage procedure the effect is found to be positive and statistically significant in the preferred formulation. Further tests provide additional evidence that the existence of prevailing wage laws is responsive to economic conditions.     

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Comparative Value Relevance Studies: Country Differences Versus Specification Effects

This paper sheds light on the sensitivity of findings in comparative international value relevance studies regarding two fundamental methodological choices. We hypothesize and find that, first, using the regression vs. the portfolio returns specification and, second, the choice of the return window, is not arbitrary. Both choices will have an impact on country rankings and the significance of cross-country differences in comparative designs. This makes us conclude that findings in previous comparative international value relevance studies are partly driven by differences in market characteristics across countries. Extending the findings of Francis and Schipper (1999) and Collins and Kothari (1989), our results suggest that previous comparative studies might thus have overstated value relevance differences and institutional variables' power to explain these differences across countries. Findings are based on a treatment sample of 56,000 firm-year observations from 12 countries and from 12 matched U.S. control samples, with observations from 1988 to 2007.     

An inverse relationship between efficiency and profitability according to size of (Upper-)Austrian firms? Some further tentative results

This paper examines the relationships between profitability and firm size, and efficiency and firm size, based on firms in Upper Austria. There is considerable evidence suggesting that the average profitability of small enterprises exceeds that of large firms. However, productivity tends to be positively related to firm size. These empirical findings present something of a paradox.An earlier version was presented at the ICSB 36th World Conference on Small Business and Partnership, June 24–26, 1991, Vienna, Austria. The authors gratefully acknowledge the most helpful comments on and suggested improvements of this paper by Professor Robert E. Kuenne (Princeton University) and the participants of the ICSB World Conference.     

Active labour market policies in Germany: do regional labour markets benefit?

This article examines on a regional level whether active labour market policies (ALMP) improve the matching process. To take the fact of heterogeneous search effectiveness during programme participation into account, we distinguish between current and former programme participants. Our findings based on a regional augmented matching function show that higher search effectiveness due to ALMP is not outweighed by indirect effects on nonparticipants. The total number of matches in a region increases with a higher share of former programme participants among the jobseekers. However, these effects largely differ between programme types.

Abbreviation OECD (Organisation for Economic Co-operation and Development)ALMP (active labour market policy)     

Small firms in the SSBF

This paper uses Survey of Small Business Finance data to better understand how the owners of small firms use decisions about legal organization, firm size, capital structure, and owner investment in the firm to manage firm risk. The main findings are: Firms with unlimited liability are smaller, both when measured by assets and number of employees, and tend to be less leveraged than those whose owners limit personal exposure to firm liabilities. Entrepreneurs tend to hold largely undiversified positions by investing heavily in their firms, and this does not differ appreciably by legal organization. The percentage of firms with limited liability has remained virtually constant through time, although within this group there is a trend toward hybrid legal organizations with beneficial tax treatment. We estimate return on assets and find that entrepreneurship is a very risky undertaking, with high upside gain. The possibility of high future returns helps explain the coexistence of a large percentage of firms with negative equity and low default rates. The shape of the return distribution and limited liability interact; the option to declare bankruptcy shields owners from personal loss in the lower tail of the distribution while preserving the potential for significant firm returns in the upper tail.     

The distribution of power within the EU: perspectives on a Ukrainian accession and a Turkish accession

International Economics and Economic Policy - On February 28th, 2022, Ukraine submitted an application concerning accession to the European Union. As Ukraine is already linked to the European Union...     

The macroeconomic effects of import tariffs in a model with multinational firms and foreign direct investment

International Economics and Economic Policy - Recent (de-)globalization tendencies and rising protectionist measures has created new interest in studying the effects of unilateral and world-wide...