The solvency of financial institutions in Spain: lessons from securitization

On analysing a sample of Spanish banks, we find that securitization has a slightly negative impact on the soundness of the issuing entity. An unbalanced dynamic panel model was estimated using the forward orthogonal deviations GMM method and used to analyse 537 traditional securitizations issued by 61 banks between 1998 and 2012. The analysis revealed that the entities’ soundness became weaker immediately prior to the crisis, but this effect became insignificant after 2007. Securitization has facilitated a process of regulatory capital arbitrage leading to lower capital requirements while, at the same time, giving rise to a slight worsening of the quality of the originators’ portfolios. It was found that profitability, liquidity and inflation positively affect solvency, while changes in short-term interest rates affect it negatively.     

The effect of pre-primary education on primary school performance

The theoretical case for universal pre-primary education is strong. However, the empirical foundation is less so. In this paper, we contribute to the empirical case by investigating the effect of a large expansion of universal pre-primary education on subsequent primary school performance in Argentina. We estimate that one year of pre-primary school increases average third grade test scores by 8% of a mean or by 23% of the standard deviation of the distribution of test scores. We also find that pre-primary school attendance positively affects student's self-control in the third grade as measured by behaviors such as attention, effort, class participation, and discipline.     

Pareto optimal chains of reinsurance

Extending Arrow (1963), we show that coinsurance is the optimal insurance scheme if all companies belonging to a chain of reinsurance are risk averse. The extent to which Borch's (1960) theorem and corollary are still valid in this context is investigated.     

The effect of copayments on primary care utilization: results from a quasi-experiment

This article analyses how health-care utilization is affected by copayments in a tax-financed health-care system. The article utilizes a natural experiment in which a health-care region in Sweden changed the price of healthcare in such a way that primary care general physician prices increased by 33%. We use daily visit data in the treatment region and a neighbouring control region where no price change took place and analyse the effect using differences-in-differences as well as differences-in-differences-in-differences models. The results from the preferred models indicate no effect on health-care utilization due to the price change, a result that also holds across different socio-economic subregions in the treatment region.     

Reverse moral hazard of liability insurers: evidence from medical malpractice claims

This study investigates putative differences in the legal defense of medical malpractice claims between liability carriers with distinct ownership forms: doctor-controlled and commercial-stock. The scope of a carrier's legal defense is determined by claim characteristics, such as injury severity and liability, and possibly the doctor's private costs from settling or losing a claim. When a carrier does not internalize the doctor's private costs from losing or settling a claim, then a conflict of interest arises as the carrier provides a lower level of legal defense than preferred by the doctor (i.e., reverse moral hazard). The perception is that doctor-sponsored carriers mitigate such conflicts of interest. If this is the case, we should expect to see differences in the amount spent by the carrier in defense of the doctor and the propensity to settle claims. To test these expectations, we use medical malpractice claims filed in Florida between 1985 and 1990. We indeed find differences in legal defense in terms of amount spent on legal defense and settlement rate between carriers with different ownership. The doctor-sponsored carrier we investigated was less likely to settle out-of-court, and did spend more on a doctor's legal defense than stock carriers.     

The income effect and supplier induced demand. Evidence from primary physician services in Norway

A much debated issue within the health economic literature is whether physicians can induce demand for their services. The relationship between physicians' ‘nonpractice income’ and supply of primary physician services in Norway is examined. It is argued that, if inducement exists, physicians with a low nonpractice income who work in municipalities where competition for patients is high, compensate for lack of patients by inducing demand. This model is adapted to the institutional setting of the Norwegian primary physician services, where there is a fixed fee schedule. The analyses were performed on a large set of data, encompassing all primary care physicians in Norway who are remunerated per item of treatment. Data on output in practice were merged with information about nonpractice income from the tax forms of the physician and her/his spouse. In municipalities with high physician density, nonpractice income had no effect on the number of consultations per physician, or on the number of treatment items per consultation. The results are interpreted as evidence against the inducement hypothesis.     

The effect of size on prices

We present here an analysis of the effects that the firm's size, in the sense of the quantity of its assets, has on the price charged per asset. We show that the larger the firm is, the higher the price it charges. Our argument is not based on the traditional monopoly power associated with size but rather on the ability to bear risk.     

Operational risk management and regulatory investment constraints on portfolio allocation: evidence from property and casualty insurers

Journal of Regulatory Economics - We examine an insurer’s portfolio allocation choice in the context of a regulatory environment where investment in specific asset classes is constrained. We...     

The effect of women's schooling on fertility

A researcher examined the effect of women's schooling on fertility, paying particular attention to whether women's schooling is an exogenous determinant of fertility. The analyzed data were from the US National Opinion Research Center's General Social Survey for the years 1985-91. This survey is a random sample of 1500 English-speaking people, at least 18 years old, who live in noninstitutional settings. Estimates were made of children ever born to women aged 35-44 and 45=54 using ordinary least squares and two-stage least squares (with the latter including the schooling of the respondent's parents as variables). Other variables used besides schooling were age, being Black, region at age 16 (relative to the south), type of residence at age 16 (relative to cities of 250,000). being Catholic, being Mormon, and survey year. Using the Hausman test to regress the variable of schooling on the exogenous variables results in a residual, and a t-test on the coefficient for the residual will test for endogeneity. In each group of women, the t-statistic on the residual was 1.1, suggesting that schooling is not highly endogenous with fertility. Schooling does, however, have a highly negative effect on fertility in both estimates. A 10% increase in schooling is associated with a 10-12% decline in fertility for women aged 35-44 and with a 7-10% decline for women aged 45-54. Therefore, schooling can be used as an independent variable without leading to false acceptance of socioeconomic theories of fertility. Schooling may reduce fertility by increasing a woman's income, thus making child rearing more expensive, or by enhancing a woman's ability to control fertility.     

The effect of FDI on child labor

This paper examines the effect of FDI on child labor. Using 1995 data for 145 countries, we find that, contrary to common fears, FDI is negatively correlated with child labor. This effect disappears when controlling for per capita income. After doing so, we find no robust effect of either FDI or international trade on child labor. This result is robust to corrections for the endogeneity of FDI, trade, and income. Furthermore, this result is confirmed using data from earlier years. This suggests that the impact of FDI and trade on child labor, if any, is the increases in income they generate.     

The effect of corruption on capital accumulation

This paper examines the effect of corruption in infrastructure development as well as in capital and labor markets, on capital accumulation and output in an overlapping generations model. Corruption affects income redistribution, government expenditures on infrastructure, firms’ incentive to invest, and workers’ incentive to supply labor. An increase in corruption in infrastructure development decreases capital accumulation and output if the decrease in the savings of ordinary workers is sufficiently large. An increase in corruption in the capital market decreases capital accumulation and output. An increase in corruption in labor market decreases capital accumulation and output when labor supply is completely inelastic. Simulation results based on plausible parameter values indicate that an increase in corruption in the labor market will also reduce labor supply, capital accumulation and output.      

The effect of pay-for-performance contracts on wages

I investigate the role played by learning and self-selection according to comparative advantage in the often reported result that piece rate workers (including commissions) earn more on average compared to other workers. With comparative advantage, the returns to skills differ across pay methods. I find that comparative advantage along with learning about worker skills seem to play a role for workers who are either at an early stage in their career or who are observed for the first time in a given job-match. For older workers, the return to skills is basically the same across pay methods.     

The effect of workforce issues on patient safety

The workforce of any health care organization is vital to its continued survival, but a highly competent and committed workforce is vital to its success. The evidence is clear: employees influence not only the financial performance of the organization, but also the safety and quality of the clinical care provided to patients. Health care organizations must understand these important linkages and have in place corporate strategies to manage workforce issues with a systems focus that ensures excellent leadership and operational processes, a healthy culture, and optimum patient outcomes. New levels of knowledge, resources, and implementation are needed to move health care in the United States to the next level of quality performance. Staff satisfaction and retention should be at the heart of the clinical improvement strategies. Such an approach will allow organizations to cope and thrive in an environment of workforce shortages and increasing consumer demand for quality. To quote Robert Waller, MD, of the Mayo Clinic, "The goal is the best care for every patient, every day. Our patients deserve nothing less.     

The effect of FOMC statements on asset prices

Given their increased importance during recent years, FOMC (Federal Open Market Committee) statements can have a significant impact on asset prices. To capture the effect of FOMC statements on asset prices, an indicator variable is created that takes into account the information content of policy statements. Results show that both ‘interest rate surprises’ and ‘FOMC statements’ affect the mean and the volatility of asset prices. The volatility impact is tent-shaped, jumping within the policy announcement interval and declining before and after the release. FOMC statements have a much more pronounced impact on stock returns, intermediate and long-term yields, while short-term rates are largely driven by target rate decisions. We also find that the evolution of the language of the FOMC statements does matter to market participants and, in particular, the ‘forward-looking’ language adopted in mid-2003 has reduced market volatility associated with ‘interest rate surprises’ on announcement days.     

The effect of ESCOs on carbon dioxide emissions

Proponents of energy service companies (ESCOs) argue that these firms provide a crucial instrument for delivering improved energy efficiency in public and private sectors, thus contributing to carbon dioxide (CO₂) emission reduction around the world. Do ESCOs reduce CO₂ emissions? To answer this question, we develop an estimating equation, which approximates the IPAT model, from a simple model of production. We estimate a dynamic panel of 129 countries over the period 1980–2007 to show that the ESCOs effectively reduce CO₂ emissions and that this effect increases over time. These findings also prove robust to the inclusion of a set of control variables, different dates of the first ESCO and the Kyoto Protocol. Finally, we discuss energy policy implications.     

日本中世禅宗对文学审美的影响

日本禅宗起源于中国,中国禅宗传到日本后,在中世纪迎来了日本禅宗的鼎盛。它的兴起给这一时期的文化带来了巨大的影响,这种影响又和中国禅对中国文化的影响模式相类似。在中国,随着士大夫们加入禅僧队伍,文学上开始出现了富有禅意和禅趣的作品。在日本同样的条件下,也产生了同样的结果,形成了日本中世的新的文学审美观。     

我国企业境外上市再融资效果的实证研究

本文以在香港联交所主板境外上市的企业为样本,对我国企业在境外证券市场的权益资本再融资情况进行了实证研究。研究结果表明,我国企业在境外证券市场没有获得理想的再融资效果。     

The effect of leniency programs on endogenous collusion

The objective of a leniency program is to reduce sanctions against collusion if a participant voluntarily confesses his behavior or cooperates with the public authority’s investigation. Constructing a model in which the detection probability varies over time, Harrington (2008) pointed out that there are three channels through which the leniency program can affect the collusion amount; furthermore, he presented a sufficient condition under which the maximum leniency is optimal. After extending the model by endogenizing the degree of collusion as well as equilibrium selection in the self-reporting stage, we revealed that the Race to the Courthouse effect disappears and that the maximum reduction is always optimal.