The Returns to Education: Microeconomics

In this paper we focus on education as a private decision to invest in "human capital" and the estimation of the rate of return to that private investment. While the literature is replete with studies that estimate the rate of return using regression methods where the estimated return is obtained as the coefficient on a years of education variable in a log wage equation that contains controls for work experience and other individual characteristics, the issue is surrounded with difficulties. We outline the theoretical arguments underpinning the empirical developments and show that the evidence on private returns to the individual is compelling. Despite some of these issues surrounding the estimation of the return to schooling, our evidence, based on estimates from a variety of datasets and specifications, is that there is an unambiguously positive effect on the earnings of an individual from participation in education. Moreover, the size of the effect seems large relative to the returns on other investments.     

The external returns to education: UK evidence using repeated cross-sections

Augmenting a Mincerian earnings function with industry level data we estimate the external return to schooling for a repeated cross-section of individuals in the UK over the period 1994–2004. For men age 30–49 we find that a one year increase in the industry average level of schooling is associated with an increase in individual wages of 2.6 to 3.9%, around 2 to 3 fifths of the private return to schooling. We illustrate the sensitivity of external return estimates to industry ICT use and union density, and individuals' own level of schooling.     

The influence of lock-up provisions on IPO initial returns: Evidence from an emerging market

A lock-up agreement ensures that major shareholders retain significant economic interest in the companies following the IPOs. Rationally, these insiders will not adhere to the lock-up agreement unless the benefits of doing so can more than offset the costs. Therefore, in an environment characterized by high information asymmetry, a lock-up agreement can serve as an effective mechanism to signal the risk or quality of firms. This article examines whether the lock-up ratio and lock-up period affect the initial returns, using a sample of 384 IPOs listed on Bursa Malaysia between 2000 and 2012. The results of the cross-sectional multiple regression show that the lock-up period is significantly positive in explaining IPO initial returns, but the lock-up ratio is not. The findings provide new insights for testing the signaling content of lock-up provisions, particularly in a setting characterized by high information asymmetry.     

After, before and during: returns to education in Hungary (1986–1998)

How valuable are the skills acquired under socialism in a market economy? This paper throws light on this question using unique data covering the years before and during transition (1986–1998) for about 3 million Hungarian wage earners. We find that returns to a year of schooling increased by 75% from 6.4% in 1986 to 11.2% in 1998. We also find that the private sector rewards formal education more than the public and, in terms of gender, although in 1986 women had greater returns to schooling than men, by 1998 this difference had been eliminated.     

Interest rate and bank stock returns asymmetry: Evidence from U.S. banks

We use the multivariate extension of Exponential Generalized Autoregressive Conditionally Heteroscedastic (EGARCH) of Nelson, Econometrica, 59: 347–370, 1991 to test for spillover effects and examine the extent of asymmetries between short- and long-term interest rates and portfolios of money center, large, and medium-size banks in the U.S. Our results indicate the existence of price and volatility spillovers from short- and long-term interest rates to the three bank portfolios. We also provide evidence of response asymmetries for the portfolios of money center and large banks, suggesting that money center and large banks are more sensitive to negative than positive short- and long-term interest rate changes.

Misvaluation comovement,market efficiency and the cross-section of stock returns: Evidence from China

In this study, we examine the relation between stock misvaluation and expected returns in China's A-share market. We measure individual stocks’ misvaluation based on their pricing deviation from fundamental values, following Rhodes-Kropf et al. (2005. J. Finan. Econ. 77 (3), 561) and Chang et al. (2013. J. Bank. Finance, forthcoming), and find that the measure has strong and robust return predictive power in the Chinese market. We further form a misvaluation factor and find that misvaluation comovement and systematic misvaluation exist in the Chinese market. A comparison of our results with those of Chang et al. (2013. J. Bank. Finance, forthcoming) reveals that the misvaluation effect is much stronger in the Chinese market than in the U.S market. This evidence is consistent with the notion that the Chinese market is much less efficient than the U.S. market. Finally, we show that the return predictive power of misvaluation has weakened since China launched its split-share structure reform in 2005, which could result from the fact that the reform helps to promote market efficiency.     

Variance-Gamma and Normal-Inverse Gaussian models: Goodness-of-fit to Chinese high-frequency index returns

In this study Variance-Gamma (VG) and Normal-Inverse Gaussian (NIG) distributions are compared with the benchmark of generalized hyperbolic distribution in terms of their fit to the empirical distribution of high-frequency stock market index returns in China. First, we estimate the considered models in a Markov regime switching framework for the identification of different volatility regimes. Second, the goodness-of-fit results are compared at different time scales of log-returns. Third, the goodness-of-fit results are validated through bootstrapping experiments. Our results show that as the time scale of log-returns decrease NIG model outperforms the VG model consistently and the difference between the goodness-of-fit statistics increase. For high-frequency Chinese index returns, NIG model is more robust and provides a better fit to the empirical distributions of returns at different time scales.     

The role of fiscal policies for external imbalances: Evidence from the European Union

We revisit the relation between budget deficits and current account deficits for 28 European Union countries from 1996 to 2019. We find that an increase in budget deficit of 1 pp of GDP results in a deterioration of the current account deficit of 0.318 pp of GDP, which supports the Twin Deficits Hypothesis. On the other hand, dynamic panel estimates partially corroborate the Ricardian Equivalence Hypothesis in the presence of a fiscal rules index. In addition: i) the relation between the two deficits is asymmetric and the negative impact of the recent Eurozone banking and sovereign debt crisis on the current account balance is observed; ii) with right-wing governments, the impact of the budget balance on the current account balance is mitigated; if the government is on the left, the impact of the budget balance on the current account balance is amplified; iii) after 2010, the budget balance positively affects the current account balance; and iv) the positive impact of the budget balance on the current account balance is higher in the cases of non-Eurozone countries, high budget deficit countries, and low exports countries, whereas it is lower in the cases of Eurozone countries, low budget deficit countries, and high exports countries.     

Exploring internal and external supply chain linkages: Evidence from the field

In their pursuit of improved operational performance, organizations in supply chains have sought to develop external information-based linkages with their customers and vendors. Has this course of action been at the expense of developing similar internal information-based linkages? This research explores the specific roles of internal and external information-based linkages in achieving improved operational performance. Based on a single case study that comprises a supply chain containing twenty-four internal and fourteen external linkages this research develops a series of propositions. We find that the individual internal linkages may be useful for extending externally derived visibility, and for addressing to some extent, “structural holes” in the supply chain. Additionally, to extend visibility across the entire supply chain, organizations need to recognize the combining role of internal and external information-based linkages. Finally we offer some thoughts for future research in this area.     

Housing-choice hindrances and urban spatial structure: Evidence from matched location and location-preference data in Chinese cities

In a monocentric city with a well-functioning residential market, Pareto-efficient spatial equilibrium entails the sorting of residents according to their bid–rent gradient in descending order away from city center. Violation of this sorting condition creates opportunities for Pareto-improving trading of locations and can be sustained only if the market is hindered. We propose a simple ordered-location-choice model using matched location and location-preference data of individual households to examine violations of the Pareto-efficient spatial sorting condition. In so doing we are able to identify population groups facing housing-choice hindrances. We find in a sample of Chinese cities undergoing housing market liberalization that poor marketability of the previously state-provided homes, inadequate provision of housing finance, and spatial mismatch between job-market and housing-market opportunities contribute to a Pareto-inefficient spatial structure.     

Economic policy uncertainty,oil price volatility and stock market returns: Evidence from a nonlinear model

This paper investigates the nonlinear relationship between economic policy uncertainty, oil price volatility and stock market returns for 25 countries by applying the panel smooth transition regression model. We find that oil price volatility has a negative effect on stock returns, and this effect increases with economic policy uncertainty. Furthermore, there is pronounced heterogeneity in responses. First, oil-exporting countries whose economies depend more on oil prices respond more strongly to oil price volatility than oil-importing countries. Second, stock returns of developing countries are more susceptible to oil price volatility than that of developed countries. Third, crisis plays a crucial role in the relation between oil price volatility and stock returns.     

走向三方合作的伙伴关系:西方城市更新政策的演变及其对中国的启示

西方城市更新政策经历了从1970年代政府主导、具有福利主义色彩的内城更新,到1980年代市场主导、公私伙伴关系为特色的城市更新,向1990年代以公、私、社区三向伙伴关系为导向的多目标综合性城市更机关报转变.一个内涵更加多元化的城市更新现念,以及一个以多方伙伴关系为取向、更加注重社区参与和社会公平的城市更新管治模式,正代表着城市更新政策的新路向.这对我国制定城市更新政策有重要启示,包括:要提高对城市更机关报多维本质的认知,加强社区民众参与,建立以人为本的城市更新制度,以及强化政府在城市更新中的协调、引导和促进功能,等.     

Distinguishing external from internal scale effects: The case of public infrastructure

The recent applied production theory literature focusing on the economic performance of firms has increasingly recognized the importance of scale effects on costs and therefore efficiency. These scale effects may include short run returns due to fixity of privately demanded inputs (i.e., capital, long run internal returns to scale, and external factors affecting costs. Since these different types of scale effects can be thought of as shifts in and movements along cost curves, the different cost effects of such factors can be identified in a framework which explicitly takes them into account in the definition ofscale.In this article we formalize such a framework, and then use it to measure short run, long run (internal) and external scale effects from fixity of private capital, nonconstant returns to scale and public infrastructure. We then use these measures to identify the impacts of these different scale factors on productivity growth. The focus on public infrastructure as an important external scale factor is motivated by the current theoretical and policy interest in this issue; we show how a structural production theory model provides a rich basis for the analysis of the cost effects of infrastructure investment.     

HUMAN CAPITAL MEASUREMENT: A SURVEY

Abstract After a short history of the concept of human capital (henceforth HC) in economic thought ( Section 1 ), this study presents the two main methods for estimating the value of the stock of HC – the retrospective and prospective one – with a review of the models proposed ( Section 2 ). These methods are linked both to the theory of HC investment as a rational choice ( Section 3 ), the literature analysing the contribution of HC investment to economic growth and the HC estimating method through educational attainment ( Section 4 ). The more recent literature on HC as a latent variable is also assessed ( Section 5 ) and a new method of estimation where HC is seen both as an unknown function of formative indicators and as a ‘latent effect’ underlying earned income is proposed ( Section 6 ). Section 7 concludes.     

The Effects of Auditor Social and Human Capital on Auditor Compensation: Evidence from the Italian Small Audit Firm Market

Abstract

This study examines whether social and human capital influence the compensation of individual auditors in the small audit firm market. We employ a sample of Italian auditors and use measures from the network and auditing literatures to capture their professional connections, representing social capital, and their industry expertise, representing human capital. Our findings show a positive and economically meaningful association between these individual attributes and auditor compensation. We run several tests to address potential endogeneity issues in our research design. Our results suggest that, in the small audit market, clients perceive as valuable those auditors with higher social and human capital, and as a result, are willing to pay a premium for these specific auditor attributes.     

城市居民住房支付能力研究——基于2000-2008我国10城市的经验数据

根据我国10个城市的中房指数推算各城市2000年-2008年期间的房价,利用国家城调队的城镇居民家庭收入和消费数据,计算各城市的房价收入比、住房可支付性指数、月供收入比,提出月供消费结余作为辅助判断指标,在此基础上分析各城市居民的住房支付能力,结果发现所有样本城市的房价收入比普遍较高,其中南京、武汉、深圳、成都和重庆五城市居民的住房支付能力比其他5个城市强,最后提出了相应的政策建议.     

The effects of higher education policy on the location decision of individuals: Evidence from Florida's Bright Futures Scholarship Program

Over the past two decades, numerous states have adopted merit-based aid programs to subsidize higher education for in-state students. One of the main objectives of these programs is to increase the stock of educated labor in the state by retaining those whose education is subsidized. This study provides evidence on the extent to which such a program in Florida has affected the location decision of college-educated Florida natives. The analysis utilizes a difference-in-difference approach and data from the Census and American Community Survey (ACS). The results indicate that those eligible for the program are significantly more likely to locate in Florida after completing their education than those who were not eligible. These results are robust to a number of alternative specifications, including a comparison with neighboring states.     

Time-frequency causality and dependence structure between crude oil,EPU and Chinese industry stock: Evidence from multiscale quantile perspectives

This article investigates the time-frequency causality and dependence structure of Chinese industry stock returns on crude oil shocks and China's economic policy uncertainty (EPU) across quantiles over the period from January 2001 to June 2021. We use wavelet-based decomposition series to establish a multiscale causality-in-quantiles test and a quantile-on-quantile regression approach to reveal the complicated relationships involving crude oil, EPU and stock returns. Our empirical results are as follows: First, the predictability of crude oil and EPU on industry stock returns is significantly strong under extreme market conditions. Second, the explanatory ability of EPU on industry stock returns in the long term is stronger than EPU’s ability to explain short term returns. Third, the impacts of crude oil and EPU on industry stock returns remain remarkably asymmetric across quantile levels. Finally, nonenergy-intensive industries are also affected by crude oil shocks, but less than energy-intensive industries. Overall, these empirical findings can provide implications for policymakers to stabilize stock markets and investors to hedge the potential risks from crude oil and EPU.     

公司治理与现金股利分配倾向——来自中国上市公司的经验证据

本文以2002～2008年沪深A股765家上市公司为样本,实证检验公司治理结构对现金股利分配倾向的影响.结果发现:股权集中、国有控股、董事会规模大、高管薪酬高和选择四大会计师事务所的上市公司倾向分配现金股利,流通股比例高和独立董事规模大的公司不倾向分配现金股利,董事会领导权结构的影响不显著.同时,公司治理好的公司发放现金股利的倾向大,而公司治理差的公司的倾向小.进一步发现,中国上市公司具备发放现金股利的能力,却"不想"派现.