Do networks or performance impact the promotion of Chinese officials? Evidence from prefecture‐level cities

This study examines the effects of connections and economic performance on the promotion of Chinese city mayors. Our study differs from the published literature in four respects. First, this study covers a comprehensive data set, including 1,422 mayors from 284 prefecture‐level cities. The use of a large data set helps resolve mixed results of past studies. Second, we use a broader range of top leaders. Third, we apply a more comprehensive definition of connections than earlier studies. Finally, we examine the effects of the policy shift of the 11th 5‐year plan on promotion of mayors. Our results reveal that the performance of a city mayor assisted his/her promotion to party secretary before 2006 but not afterwards. However, a mayor's connection with five types of top leaders is helpful. Among the four types of connection, colleagueship is the most effective in expediting the promotion of mayors. Graduating from the same university and department is also helpful but to a lesser extent. Township connection is not useful.     

Do Institutions Affect Social Preferences? Evidence from Divided Korea

The division of Korea is a historic social experiment that randomly assigned ex ante identical individuals into two different economic and political institutions. About 70 years after the division, we sample Koreans who were born and raised in the two different parts of Korea to study whether institutions affect social preferences. We find that those from North Korea behave in a less self-interested manner and support the market economy and democracy less than those from South Korea. A follow-up study shows that social preferences did not change considerably in two years. We check robustness against sample selection and potential confounding factors such as income differences. Our findings indicate that preferences are rooted in institutions.     

Do South‐South trade agreements increase trade? Commodity‐level evidence from COMESA

Abstract .  South-South trade agreements are proliferating. Yet the impact of these agreements is largely unknown, as existing North-North and North-South micro-level studies are likely to yield misleading predictions for South-South trade agreements. This paper estimates the impact of COMESA on Uganda's imports between 1994 and 2003. Detailed import and tariff data at the 6-digit Harmonized System level are used for more than 1,000 commodities. Based on a difference-in-difference estimation strategy, the paper finds that – in contrast to evidence from aggregate statistics – COMESA's preferential tariff liberalization has not considerably increased Uganda's trade with member countries, on average, across sectors. The effect, however, is heterogeneous across sectors. Finally, the paper finds no evidence of trade-diversion effects.     

Does fiscal decentralization affect local governments' strategic behaviours? Evidence from South Korea

Local governments tend to show strategic behaviours when making their spending decisions. However, few studies have examined strategic behaviours when promoting fiscal decentralization. Thus, this study empirically examines the presence of strategic interactions in expenditure decisions in South Korea as well as how fiscal decentralization affects those interactions, using a panel data set from 2010 to 2017. The results demonstrate that a local government mimics other governments' spending when those governments' residents share similar age demographics. Moreover, local governments in South Korea engage in strategic interactions as their expenditure side becomes more decentralized. However, local governments tend to demonstrate less isomorphic behaviour in welfare spending decisions when they have higher revenue decentralization. This is because local governments have no motive to emulate other welfare policies, as the central government delegates the provision of social services to local governments by providing grants with strings attached.     

Do the Rich Save More? Evidence from Canada

This paper provides new evidence on the long‐standing question of whether more affluent households save a larger fraction of their income. The major difficulty in empirically assessing the relationship between incomes and saving rates is to construct a credible proxy for long‐run income—purged of transitory fluctuations and measurement error. The Canadian Family Expenditure Survey provides us with both unusually good data on savings rates and potential predictors with which we can construct reliable long‐run income proxies. Our empirical analysis suggests that the estimated relationship between saving rates and long‐run incomes is sensitive to the predictor used to proxy long‐run income. Nevertheless, our preferred estimates indicate that, except for poorest households (who simply do not save), saving rates do not differ substantially across predicted long‐run income groups.     

Do Employers' Responses to Crises Impact Men and Women Differently? Firm‐level Evidence from Indonesia

Do employers' responses to crises impact men and women differently? Using manufacturing census data from Indonesia this paper assesses gender differences in the impact of the East Asian crisis and to what extent these were due to differential treatment of men and women within firms and gender sorting across firms that varied in their exposure to the crisis. On average, women experienced higher job losses than their male colleagues within the same firm. However, the aggregate adverse effect of such differential treatment was more than offset by women being disproportionately employed in firms hit relatively less hard by the crisis. The null hypothesis that there were no gender differences in wage adjustment is not rejected.     

What drives the reversal of the gender education gap? Evidence from Germany

We study the mechanisms that are associated with the gender education gap and its reversal in Germany. We focus on three outcomes, graduation from upper secondary school, any tertiary education and tertiary degree. Neither individual and family background nor labour market characteristics appear to be strongly associated with the gender education gap. There is some evidence that the gender gap in upper secondary education reflects the rising share of single parent households which impacts boys’ attainment more than girls’. The gender education gap in tertiary education is correlated with the development of class sizes and social norms.     

Do Current Account Forecasters Herd? Evidence from the Euro Area and the G7 Countries

Data from the Consensus Economics Forecast Poll is used to analyze how current account forecasters form expectations. The results suggest that forecasts do not satisfy traditional unbiasedness and orthogonality criteria for forecast rationality. In addition, this paper finds anti‐herding behavior among forecasters for the euro area and G7 countries. It also shows that the cross‐sectional heterogeneity with regard to anti‐herding is associated with cross‐sectional heterogeneity in forecast accuracy. More specifically, this paper finds some evidence indicating that forecasters who tend to herd provide more accurate forecasts than their colleagues who follow an anti‐herding strategy.     

Do ethnic networks influence circular migration? Evidence from the UK

This article identifies ethnic network effects among temporary migrants in the UK. Using microdata from Understanding Society and the UK Census, the empirical results show that ethnic networks change the individual probability for circular migration. These effects are strong and significant only for some ethnicities, when controlling for a set of socio-economic characteristics and when adding spatial variability     

Do countries belonging to the same region suggest the same growth enhancing variables? Evidence from selected South Asian countries

We investigate the growth enhancing variables in a group of countries belonging to the same geographical area namely, India, Sri Lanka, Pakistan and Bangladesh over the period 1960–2010. We find that this “homogeneity” does not necessarily imply that countries have the same growth enhancing variables due mainly to differences in institutions and policies. Our result suggests that time-series econometrics are preferable to identify the growth drivers for a country accurately.     

Do community-driven development projects enhance social capital? Evidence from the Philippines

We explore the social capital impacts of a community-driven development project in the Philippines in which communities competed for block grants for infrastructure investment. The analysis uses a unique panel data set of about 2100 households, aggregated at the village-level, collected in 66 treatment and 69 comparison communities. We provide both difference-in-differences and propensity score matching estimates. We find that the project increased participation in village assemblies and the frequency with which local officials meet with residents and had a negative impact on collective action. There is also more limited evidence of a positive impact of the project on bridging (i.e., generalized) trust and of a negative impact on group membership.     

What makes a successful export? Evidence from firm‐product‐ level data

Abstract We analyse a very rich and unique panel database that provides information on exports at the firm‐product level. Motivated by the recent theory of multi‐product firms, we investigate what determines the survival of products in the export mix to find that, in export dynamics, characteristics of the product as well as that of the firm matter. In particular, firm productivity as well as product scale and tenure are associated with a higher export survival rate. This suggests, in line with theory, that there are firm‐ as well as firm‐product‐specific competencies that are important for shaping firms’ export mix.     

Do political determinants affect revenue collection? Evidence from the Indian states

In a recent study, Dash and Raja (2013) have shown that the size and composition of public expenditure of Indian states are systematically linked with political determinants such as the extent of government fragmentation, strength of opposition, electoral years, and ideology. This study extends the questions to whether there are similar links to revenue collections by the governments that rule the different states in India. Using the same time period of the previous study, four revenue measures related to tax collection and internal debt are considered and four different sets of hypotheses are developed by linking the political determinants with each of the revenue measures. The overall findings of the study suggest that the government-specific political determinants are significant and robust determinants of revenue collections of the Indian states.     

Does the exchange rate matter to bilateral trade between Korea and Japan? Evidence from commodity trade data

This study examines the short- and long-run effects of exchange rate changes on trade flows in the context of disaggregating industry data of bilateral trade between Korea and Japan. For this purpose, an autoregressive distributed lag (ARDL) approach is used. Results show that Korea's exports and imports are relatively sensitive to the bilateral exchange rate in the short-run, but less responsive in the long-run. It is also found that income in the two countries has significant impacts on the bilateral trade flows in both the short- and long-run. Finally, exchange rate uncertainty and Japanese FDI to Korea are found to have little impacts on Korea's trade with Japan in the short- and long-run.     

Is Crowdfunding Different? Evidence on the Relation between Gender and Funding Success from a German Peer‐to‐Peer Lending Platform

According to the literature on traditional banking, lenders often discriminate against female borrowers. However, studies of Peer‐to‐Peer lending in the United States find that female borrowers have better chances of obtaining funds than do males. We provide evidence on the success of female borrowers at a large German peer‐to‐peer lending platform. Our results show that there is no effect of gender on the individual borrower's chance to receive funds on this platform, ceteris paribus. Several robustness checks confirm this finding. Hence, female discrimination seems to be eased by the ‘wisdom of the lending crowd’.     

Who values the family‐friendly aspects of a job? Evidence from the Japanese labour market

Women with family responsibilities such as child‐rearing generally prefer jobs with flexible working conditions. According to the theory of compensating wage differentials, women working in such family‐friendly jobs are paid less than those working in family‐unfriendly jobs. The present paper investigates whose wages are more greatly affected by the family‐(un)friendly aspects of their jobs. Based on a longitudinal survey of Japanese women, we found that among several family‐(un)friendly attributes of a job, only commuting time requires a wage premium, and most of the premium is associated with job changes made by part‐time‐working married women.     

Do Urban Neighborhoods Benefit from Homeowners? Evidence from Housing Prices

Homeownership is heavily subsidized in most countries. The adverse effects of this policy on economic efficiency and income distribution are well documented in the economics literature. The main argument in favor of subsidizing homeownership is that it creates positive externalities that offset these adverse effects. In this paper, we test whether homeowners create positive externalities that capitalize into housing prices in multi‐storey buildings. Using semi‐parametric hedonic regressions with and without instrumental variables, we find no evidence of positive externalities, although the results with instrumental variables are somewhat imprecise. This result is robust to several sensitivity checks and to a relaxation of the identification assumptions of our instrument using set identification.     

Do interest rate controls work? Evidence from Kenya

This paper reviews the impact of interest rate controls in Kenya, introduced in September 2016. The intent of the controls was to reduce the cost of borrowing, expand access to credit, and increase the return on savings. However, we find that the law on interest rate controls has had the opposite effect of what was intended. Specifically, it has led to a collapse of credit to micro‐, small‐, and medium‐sized enterprises; shrinking of the loan book of the small banks; and reduced financial intermediation. Because of their adverse effects on bank lending, we estimate that the interest rate controls have reduced economic growth by ¼–¾ percentage points on an annual basis. We also show that interest rate caps reduced the signaling effects of monetary policy. These suggest that (1) the adverse effects could largely be avoided if the ceiling was high enough to facilitate lending to higher‐risk borrowers and (2) alternative policies could be preferable to address concerns about the high cost of credit.