Blackleg or blackmail? Economics of the Canada–China canola trade dispute

The Chinese government's recent decision to suspend the export licenses of two Canadian grain firms has garnered international attention. The dispute has been portrayed by some as a diplomatic dispute between two countries, and by others as a concern about plant health. We analyze the economics of the dispute, including a simple economic model of international trade in which a large-country importer imposes a targeted import ban on one large-country exporter. The model provides a framework for understanding the economic effects of a trade ban under various market conditions. We also discuss the legal framework and dispute settlement process that would be encountered if the disagreement proceeds to a formal dispute in the World Trade Organization.     

The allure of the post-modern – A response to Robert Shepherd

In this paper the authors offer a response to the critique of Robert Shepherd that argued that the original paper that offered an analysis of the 4th Buddhist Festival at Wutaishan, Shanxi Province, China, was both self indulgent and anti-empirical.     

Expected economic growth and investment in corporate tax planning

Review of Accounting Studies - This study investigates whether expected economic growth is associated with investment in corporate tax planning. We predict that higher expected economic growth...     

State ownership of Chinese firms and their outward foreign direct investment: Political and economic contingencies

The extant literature offers inconsistent predictions and conflicting evidence regarding the relationship between state ownership and the internationalization of emerging market firms (EMFs). Drawing on institutional theory, we examine the moderating roles of political and economic institutions at the subnational and national levels in the link between state ownership and EMFs’ outward foreign direct investment (OFDI). Based on a sample of 1421 OFDI projects involving 286 Chinese listed firms in 115 host countries between 2003 and 2016, we find that state ownership can scale up OFDI when Chinese firms are headquartered in subnational regions with high institutional development or low economic development, or when political relationships between home and host countries are amicable or market growth in a host country is slow; otherwise, state ownership hinders OFDI. These findings offer new insights into the relationship between state ownership and the internationalization of EMFs.

     

Economic freedom at metropolitan statistical area borders

This paper applies a variation on differences-in-differences to the effects of economic freedom in matched bordering metropolitan statistical areas using the Metropolitan Economic Freedom Index. While a great deal of research has explored the relationship between economic freedom and economic performance, less has been done at the local level. We find that economic freedom has a positive effect on several measures of economic performance, but no effect on population.     

Combat,casualties, and compensation: Evidence from Iraq and Afghanistan

Our research examines the effect of combat deployments to Iraq and Afghanistan on casualties and combat exposure compensation policy. We use restricted data from the Defense Manpower Data Center (DMDC) and Social Security Administration (SSA) to construct a panel of all US Active Duty service members having served at some point during the years 2001–2012. Casualties disproportionately occur at higher rates among (i) young, white, males, (ii) enlisted personnel, (iii) less educated personnel, and (iv) those in combat job types. Our estimates indicate that overall US military personnel who deployed in an individual year to Iraq or Afghanistan had a 45 per 100,000 higher probability of death than non-deployed military personnel who remained stateside. The increased fatal injury risk of deployed US military personnel is 15 times higher than the national average civilian workplace fatality rate, but roughly equal to the fatal injury risk faced in some of the most dangerous civilian occupations. Our estimates suggest a compensating wage differential equal to $861 per month would be appropriate in comparison to the current average of $1238 per month in danger pay provided to US military personnel deployed into combat zones. We recommend a revenue-neutral approach in adjusting the pay structure for military members. For example, the military should consider increasing bonuses or base pay while simultaneously decreasing danger pay by an equivalent amount. Furthermore, it may be beneficial to adjust danger pay by service or job type to reflect fatality risk more accurately.     

Decomposing coordination failure in stag hunt games

Experimental Economics - Many situations involve trading-off what is safe for the individual and what is beneficial for the group. This tension is extensively studied as the “Stag Hunt”...     

The organization of volunteer battalions in Ukraine

When war broke out in Eastern Ukraine in 2014, the government of Ukraine failed to provide adequate defense to maintain its territorial integrity. In the wake of this government failure, several private volunteer efforts arose to meet popular demand for military action against Russian-backed Separatists. These volunteer battalions had to find alternative methods of aligning their incentives with the population wishing to be defended, and alternative methods of aligning the incentives of their leadership and their recruits. The success of these battalions depended on the potential for political careers and favors, the strength of reputation mechanisms in small communities, and the potential for loot and spoils. These factors shaped the size, characteristics, and activities of the volunteer battalions.