The impact of Universal Service Obligations and International Cross-subsidies on the dispersion of telephone services in developing countries

This paper re-evaluates the telecommunication policies often applied to create regional dispersion of services in developing countries. We observe that failure to consider the complexities of the regional telecommunication systems in creating policies and investment strategies has increased the telecom gap between urban and rural regions worldwide. In particular, the teledensities of rural telecommunications in developing countries have remained very low in spite of support through universal service obligation fees and cross-subsidization from international services. As traditional methods for economic analysis and modeling have failed to identify mechanisms that improve telephone dispersion in these countries, we use a system dynamics modeling approach to deal with complexities of the situation in order to evaluate how Universal Service Obligations (USOs) and International Cross-Subsidy (ICS) policies affect telephone densities. We demonstrate that these policies may be counterproductive due to the structure of the telecom system itself. We also show that, when market-clearing pricing is combined with USOs once the urban telephone density reaches a minimum threshold, the dispersion of rural telecommunications can be considerably improved.     

CO2 emissions in Australia: economic and non-economic drivers in the long-run

Australia has sustained a relatively high economic growth rate since the 1980s compared to other developed countries. Per capita CO₂ emissions tend to be highest amongst OECD countries, creating new challenges to cut back emissions towards international standards. This research explores the long-run dynamics of CO₂ emissions, economic and population growth along with the effects of globalization tested as contributing factors. We find economic growth is not emission-intensive in Australia, while energy consumption is emissions intensive. Second, in an environment of increasing population, our findings suggest Australia needs to be energy efficient at the household level, creating appropriate infrastructure for sustainable population growth. High population growth and open migration policy can be detrimental in reducing CO₂ emissions. Finally, we establish globalized environment has been conducive in combating emissions. In this respect, we establish the beneficial effect of economic globalization compared to social and political dimensions of globalization in curbing emissions.     

Backtesting expected shortfall: evidence from European securitized real estate

Events such as the European sovereign debt crisis, terrorism and Brexit cause more uncertainty and volatility in capital markets. This encourages us to use both conditional and unconditional forecasts (backtests) for expected shortfall (ES) in 8 indices of listed European real estate securities and Real estate investment trusts (REITs). Using the method proposed by Du and Escanciano, we find that ES is generally superior to Value-at-Risk in describing and capturing risk during extreme events such as the financial crisis. Our results are important to regulators, risk managers and investors.     

Use it or lose it

We examine the optimality of budget policies imposed by a funding authority on a bureaucrat who operates under a fixed budget. In particular, we study a “use‐it‐or‐lose‐it” (UILI) policy under which the bureaucrat has to return any unspent budget without being able to “roll over” any part to the next period. Instead of returning the unspent budget, the bureaucrat can go on a spending spree and engage in policy drift, which is inversely related to his motivation. The bureaucrat's motivation represents how well matched he is with the bureaucracy's mission. We show that a UILI policy is complementary to motivation as it has stronger ex ante positive incentive effects on more motivated bureaucrats. Such ex ante positive effects can overcome the ex post inefficiency of the policy and make a UILI policy optimal when the bureaucrat is well matched with the bureaucracy's mission or when its budget is large.     

Bribery versus extortion: allowing the lesser of two evils

Both bribery and extortion weaken the power of incentives, but there is a trade‐off in fighting the two because rewards to prevent supervisors from accepting bribes create incentives for extortion. Which is the worse evil? A fear of inducing extortion may make it optimal to tolerate bribery, but extortion is never allowed. Extortion discourages “good behavior” because the agent suffers from it even though he has done the right thing, whereas a bribe acts as a penalty for “bad behavior.” Our analysis provides lessons to fight corruption and explanations why developed countries may have an advantage in dealing with extortion.     

Democratic transitions can attract foreign direct investment: Effect,trajectories, and the role of political risk

Using a difference-in-differences method on a panel of 115 developing countries from 1970 to 2014, we find that democratic transitions do not affect foreign direct investment (FDI) inflows, on average. However, consolidated democratic transitions, i.e. transitions that do not go into reverse for at least five years, increase FDI inflows, with the bulk of the improvement appearing 10 years after the transition. Furthermore, when controlling for political risk, the effect of consolidated democratic transitions appears immediately after they have occurred, suggesting that higher political risk in the early years of the new regime offsets their positive intrinsic effect on FDI.     

A zonal level safety investigation of pedestrian crashes in Riyadh,Saudi Arabia

In the recent decade, walking has been encouraged as an active mode of transportation, which could reduce congestion and air pollution and also improve community health. However, pedestrians are more vulnerable to traffic crashes compared with other road users, especially in developing countries such as Saudi Arabia. This paper examines the association among traffic volume, land-use, socio-demographic and roadway characteristics factors, and the frequency of pedestrian crashes based on macro-level safety analysis using data from Riyadh, the Capital of Saudi Arabia. Two Bayesian spatial Poisson-lognormal models for total and severe pedestrian crashes are developed in this study. The results show that the factors that affect total pedestrian crash occurrence are different from those affecting severe pedestrian crash. Several implications for pedestrian safety policies in Riyadh are suggested based on the results.     

Monday Effect in the RMW and the Short‐Term Reversal Factors

We document that the positive (opposite) Monday or early‐in‐the‐week effect in Fama–French's robust‐minus‐weak (RMW) factor, first reported by Ülkü (2017), is pervasive across international markets, ruling out data‐snooping. As in the United States, the pattern has strengthened over time. Monday effect in RMW is linked to a combination of institutional investor trading pattern and the weekend sound‐mind effect. We devise a test of the external validity of the weekend sound‐mind effect hypothesis: the short‐term reversal factor, which is profitable within its holding period but leads to larger losses subsequently, exhibits a significant negative Monday effect, as predicted by this hypothesis. Mondays buck fads.     

Violators versus non-violators of information security measures in organizations—A study of distinguishing factors

The present study analyzes the elements that differentiate violators from non-violators of information security measures. Various elements are derived from established theories and models such as general deterrence theory, theory of planned behavior, theory of reasoned action, protection motivation theory, and social cognitive theory. To examine these factors, the data are gathered through an online study conducted in a Midwestern University, USA. The data are collected using questionnaires, and after scrutiny, 195 questionnaires are selected for final analysis. This data are analyzed using second-level statistical techniques, such as chi-square analysis and ANOVA. Results reveal that violators and non-violators of information security measures differ significantly with respect to many factors. These factors include perceived privacy, subjective norms, perceived information security policy (ISP) scope, perceived severity of penalty, perceived celerity of penalty, management support, organizational security culture, and perceived organizational IT capability. The non-significant factors are trust and work load. Implications for practitioners and researchers are provided.     

Efficiency Gains from Liberalizing Labor Mobility

In this paper, we quantify the effect of a complete liberalization of cross‐border migration on the world GDP and its distribution across regions. We build a general equilibrium model, endogenizing bilateral migration and income disparities between and within countries. Our calibration strategy uses data on effective and potential migration to identify total migration costs and visa costs by education level. Data on potential migration reveal that the number of people in the world who have a desire to migrate is around 400 million. This number is much smaller than that predicted in previous studies, and reflects the existence of high “incompressible” migration costs. In our benchmark framework, liberalizing migration increases the world GDP by 11.5–12.5 percent in the medium term. Our robustness analysis reveals that the gains are always limited, in the range of 7.0 percent (with schooling externalities) to 17.9 percent (if network effects are accounted for).