Contrasting Two Models of Wealth Redistribution

Philanthropy tries to improve the condition of people. Yet there are different models of philanthropy. American philanthropy tries to improve conditions for different people, without reference to race or language; this evolved from the notion of equality. In contrast, Chinese clans arose in Singapore, as a response to a society segmented along racial and linguistic lines; in a culture that emphasized face, rich entrepreneurs could "buy" prestige and leadership positions, by assisting their poor. This article examines philanthropy as practiced by entrepreneurs in America, and compares this to the Chinese model of wealth redistribution. The latter is centered on clan associations. In the new economy, however, these have been losing importance, as governments take on some roles previously taken care of by such associations; this includes, for instance, education and assistance to start-up entrepreneurs. We conclude that there appears to be a relationship between philanthropy, government and entrepreneurship.     

CEO compensation structure and firm performance

The objectives of our study are to estimate a model of ‘efficient’ compensation structure based on firm characteristics and test the performance consequences of deviation from the efficient compensation structure. Our results are based on 3503 firm years for the period from 1999 to 2005. The results suggest that firms whose CEOs receive compensation inconsistent with their firm characteristics have a lower performance compared to those firms whose CEOs’ compensation is consistent with their firms’ characteristics. Our measure of performance is based on both accounting and market‐based performance measures. Overall, our study provides some important new insights into the links between CEO compensation structure and firm performance.     

Exploring country-level institutional arrangements on the rate and type of entrepreneurial activity

This study introduces a novel multidimensional measure of the entrepreneurial environment that reveals how differences in institutional arrangements influence both the rate and the type of entrepreneurial activity in a country. Drawing from institutional theory, the measure examines the regulatory, normative, and cognitive dimensions of entrepreneurial activity, and introduces a novel conducive dimension that measures a country's capability to support high-impact entrepreneurship. Our findings suggest that differences in institutional arrangements are associated with variance in both the rate and type of entrepreneurial activity across countries. For the formation of innovative, high-growth new ventures, the regulative environment matters very little. For high-impact entrepreneurship an institutional environment filled with new opportunities created by knowledge spillovers and the capital necessary for high-impact entrepreneurship matter most.     

A Perspective on the Accuracy of Economic Observations

In 1950 appeared the first edition of Oskar Morgenstern's Famous book, The Accuracy of Economic Observations. Nearly half a century later it is timely to return to Morgenstern's diagnosis and to contemplate his therapeutic recommendations. Morgenstern's vision can and should inform the consideration of the topic today because of the continued validity of many of his findings. His work still provides stimuli for studying the general problems of measurement, the varying requirements for accuracy, the issues of aggregate macroeconomic measures, and the prospects for economic and social measurement. This is so even if some of the bleaker assessments by Morgenstern, notwithstanding their technical merits, provide little or no practical guidance for statistical activities. In this context it is enlightening to recall the different practical attitudes adopted by Keynes and by some of his contemporaries in Germany regarding theoretical difficulties with aggregate macroeconomic data.     

Institutional Cash Pools and the Triffin Dilemma of the U.S. Banking System

Through the profiling of institutional cash pools, this paper explains the rise of the “shadow” banking system from a demand‐side perspective. Explaining the rise of shadow banking from this angle paints a very different picture than the supply‐side angle that views it as a story of banks’ funding preferences and arbitrage. Institutional cash pools prefer to avoid too much unsecured exposure to banks even through insured deposits. Short‐term government guaranteed securities are the next best choice, but their supply is insufficient. The shadow banking system arose to fill this vacuum. One way to manage the size of the shadow banking system is by adopting the supply management of Treasury bills as a macroprudential tool.     

High Technology Employment,Wages And University R&D Spillovers: Evidence From Us Cities

Using 4 years of data from 36 American cities and 6 high technology groupings we present thc first estimates of University R&D spillover effects on ctnployrnent at this level of disag-gregation, while controlling for wages, prior innovations, state fixed efrccts, and saniple selectivity hias. We find robust evidence that lagged and disaggrcgated university R&D is a significant determinant of city high technology employment and some evidence for employment effects of innovation.     

The knowledge spillover theory of entrepreneurship

Contemporary theories of entrepreneurship generally focus on the recognition of opportunities and the decision to exploit them. Although the entrepreneurship literature treats opportunities as exogenous, the prevailing theory of economic growth suggests they are endogenous. This paper advances the microeconomic foundations of endogenous growth theory by developing a knowledge spillover theory of entrepreneurship. Knowledge created endogenously results in knowledge spillovers, which allow entrepreneurs to identify and exploit opportunities.

An absorptive capacity theory of knowledge spillover entrepreneurship

The knowledge spillover theory of entrepreneurship identifies new knowledge as a source of entrepreneurial opportunities, and suggests that entrepreneurs play an important role in commercializing new knowledge developed in large incumbent firms or research institutions. This paper argues that, knowledge spillover entrepreneurship depends not only on new knowledge but more importantly on entrepreneurial absorptive capacity that allows entrepreneurs to understand new knowledge, recognize its value, and commercialize it by creating a firm. This absorptive capacity theory of knowledge spillover entrepreneurship is tested using data based on U.S. metropolitan areas.