Testing the Stability of a Production Function with Urbanization as a Shift Factor

Urban economists have long sought to explain the relationship between urbanization levels and output. In this paper we revisit this question and test the long-run stability of a production function including urbanization using non-stationary panel data techniques. Our results show that a long-run relationship between urbanization, output per worker and capital per worker cannot be rejected for either our sample of 30 developing countries or our sample of 22 developed countries. We do find, however, that the sign and magnitude of the impact of urbanization varies considerably across the countries. In addition, we estimate the long-run average effects on GDPW of urbanization and capital. These results offer new insights and potential for dynamic urban models rather than the simple cross-section approach.     

Publicly Provided Goods and Intrafamily Resource Allocation: Female Child Survival in India

The paper examines the problem of excess mortality of females in India. The determinants of gender–specific child survival are investigated through the traditional household production model pioneered by Becker, which is extended to include publicly provided goods as fixed inputs in production decisions. The introduction of government–provided goods provides an avenue for investigating the influence of the state on household decisions. Gender–specific child survival equations are estimated using a robust "seemingly unrelated regression" method. Results using 1981 Indian Census data indicate that increases in female literacy and female labor force participation increase female child survival in rural India. Furthermore, higher ratios of female to male medical technicians are associated with higher female child survival relative to males. This paper demonstrates that a large and effective role exists for government to address excess female morality.     

Auditor specialization, perceived audit quality, and audit fees in the local government audit market

Prior governmental research implies a positive relation between auditor specialization and audit quality, but the effect of specialization on audit fees is mixed. However, no single governmental study investigates the effect of auditor specialization on both audit quality and audit fees. Also, prior studies focus on either large- or small audit firms and often employ indirect proxies for audit quality. We study the effects of auditor specialization on perceived audit quality and audit fees. Our data represent both Big 5 and smaller audit firms and include three market-based measures of specialization. We survey 241 Florida local government finance directors and find that specialization is positively associated with perceived audit quality but not with audit fees. We also find that Big 5 auditors, often used as a proxy for higher audit quality in prior research, are not uniformly associated with increased perceived audit quality but consistently charge higher audit fees. Our results confirm a relation between measures of audit firm specialization and audit quality and raise questions regarding audit firm size and audit quality in the municipal sector. Our findings suggest that engaging specialized auditors may be good policy for many local governments.     

Consumption externalities, rental markets and purchase clubs

Summary. A premise of general equilibrium theory is that private goods are rival. Nevertheless, many private goods are shared, e.g., through borrowing, through co-ownership, or simply because one persons consumption affects another persons wellbeing. I analyze consumption externalities from the perspective of club theory, and argue that, provided consumption externalities are limited in scope, they can be internalized through membership fees to groups. Two important applications are to rental markets and purchase clubs, in which members share the goods that they have individually purchased.Received: 2 June 2003, Revised: 8 March 2004, JEL Classification Numbers: D11, D62.This paper was supported by the U.C., Berkeley Committee on Research, and the Institute of Economics, University of Copenhagen. I am grateful to Birgit Grodal for her collaboration on the theory that underlies this paper, and for her helpful and motivating comments about these particular extensions. I also thank Hal Varian, Doug Lichtman, Steve Goldman, Karl Vind, anonymous referees, and members of the Berkeley Microeconomics Seminar for discussion.     

Corporate Governance and Human Resource Management

This paper investigates the effect of different forms of corporate governance on the structure and nature of stakeholder relationships within organizations and the consequent impact on human resource management (HRM) policy and outcomes. The analysis shows that while performance advantages can be derived from commitment‐based HRM systems, a corporate governance regime that privileges remote stakeholders may operate as a constraint on such systems. The empirical analysis is based on the UK Workplace Employee Relations Survey (WERS98).     

Balanced development: Maoist conception and Chinese practice

This paper explores the economic reality behind the balanced development aspect of the Chinese development strategy more thoroughly than has been done previously. Firstly, it introduces material from the Wan-sui volumes to shed more light on its economic ideology, but mainly it uses the recently available macroeconomic information about the Chinese economy to examine how empirically the policy was put into effect, what its implications were for the intersectoral allocation of investment, choice of technologies, etc., and what its effects were in terms of incomes and employment. A final section compares the strategy with the ‘balanced growth’ policies of Western economic literature and the ‘harmonic growth’ advocated by Kornai.     

The Influence of Stock Market Listing on Human Resource Management: Evidence for France and Britain

We use data from the Relations Professionnelles et Négociations d'Entreprise survey of 2004 and the Workplace Employment Relations Survey of 2004 to analyse how far approaches to human resource management differ according to whether an establishment is part of a company with a stock exchange listing. In both countries we find that listing is positively associated with teamworking and performance‐related pay, while in France, but not in Britain, it is also linked to worker autonomy and training. Our findings are inconsistent with the claim that shareholder pressure operates as a constraint on the adoption of high‐performance workplace practices. The pattern is similar in the two countries, but with a slightly stronger tendency for listing to be associated with high‐performance workplace practices in France.