Crowding Out Informal Care? Evidence from a Field Experiment in Germany*

This article evaluates the effects of a consumer‐directed home care programme (Personal Budgets) compared with the standard home care programmes of the German long‐term care insurance (LTCI). The evaluation makes use of a random assignment into a treatment group receiving personal budgets and a control group receiving either in‐kind benefits (agency care) or cash payments. Compared with agency care, personal budgets extend the support by independent providers, but leave health outcomes unchanged. Compared with cash payments, personal budgets tend to improve health outcomes, but double LTCI spending due to a strong crowding out of informal care by formal care.     

Does the Gender Preference for Competition Affect Job Performance? Evidence from a Real Effort Experiment

Experimental evidence has documented that competition may enhance the performance of male subjects in some tasks when competition is imposed exogenously by the experimenter. This note describes data for a task where a simple agency relationship is established in the laboratory between two groups of agents, managers, and workers. The manager chooses from either the piece rate or tournament payment scheme for the worker. The results show that male performance decreases when the tournament is chosen for them by the manager and also suggests that the gender of the manager may be an important facet of the agency relationship. Copyright © 2012 John Wiley & Sons, Ltd.     

How Does Childbirth Alter Intrahousehold Resource Allocation? Evidence from Japan*

Exploiting unique panel data that include direct measurements of resource allocation within households, we investigated the impact of childbirth on intrahousehold allocation for married Japanese couples. Based on a collective model of the household, we developed reduced‐form and structural‐form estimation equations that allow us to focus on private goods to track the changes in intrahousehold resource allocation. We found one additional child is associated with a reduction in the wife's private expenditure share by at least two percentage points. This may be because she substitutes more say in decisions on the children for her own private expenditure share.     

Does competition prevent industrial pollution? Evidence from a panel threshold model

The objective of this paper is to assess the impact of competition on industrial toxic pollution by using, for the first time, a panel threshold model which allows evaluations of the main drivers of toxic releases under two different market regimes. The empirical analysis is based on a micro‐level panel dataset over the five‐year period 1987–2012. We show that this relationship is statistically significant and robust above and below the threshold, even after accounting for alternative specifications of market concentration. Specifically, we unmask an inverted V‐shaped relationship between market concentration and industrial pollution. We argue that the increasing non‐parametric regression line up to a certain concentration (threshold) level indicates a negative effect on facilities' emissions levels, whereas a decreasing line indicates a positive effect. This relationship provides new insights into environmental policy design towards abatement of industrial releases and sustainability. Finally, our empirical model remains robust under different specifications properly accounted for possible endogeneity.     

Do Higher Costs Spur Process Innovations and Managerial Incentives? Evidence from a Natural Experiment

This paper asks whether firms respond to cost shocks by introducing process innovations and increasing the use of managerial incentives. Using a large panel data set of workplaces in Canada, our identification strategy relies on exogenous variation in costs arising from increased border security along the 49^th parallel following 9/11. Our longitudinal difference‐in‐differences estimates indicate that firms responded to the cost shock by introducing new or improved processes, but did not change their use of managerial incentives. These results suggest that the threat of bankruptcy may provide impetus for improving efficiency.     

What Drives Fraud in a Credence Goods Market? – Evidence from a Field Study

This paper investigates the impact of competition on an expert firm's incentive to defraud its customers in a credence goods market. Controlling for the competence of car repair shops, their financial situation, and reputational concerns, we use and complement the data set from a nationwide field study conducted by the German Automobile Association that regularly checks the reliability of garages in Germany. We find that more intense competition lowers a firm's incentive to defraud its customers.     

Does algorithmic trading harm liquidity? Evidence from Brazil

This paper provides the first evidence of algorithmic trading (AT) reducing liquidity in the Brazilian equities market. Our results are contrary to the majority of work which finds a positive relationship between AT and liquidity. Using the adoption of a new data center for the B3 exchange as an exogenous shock, we report evidence that AT increased realized spreads in both firm fixed-effects and vector autoregression estimates for 26 stocks between 2017 and 2018 using high-frequency data. We also provide evidence that AT increases commonality in liquidity, evidencing correlated transactions between automated traders.     

Are Economics Conferences Gender-Neutral? Evidence from Ireland*

We study gender inequality in conference acceptance using data from the Irish Economic Association annual conference from 2016 to 2022, exploiting the introduction of anonymized submission in 2021 to study the effect of blinding. While no gender gap is observed in organizers' acceptance decisions, there is an indication of gender difference favouring the in-group at the reviewer stage. In particular, male reviewers persistently give higher scores to papers with an increasing share of male authors. Evidence suggests that the difference stems from unconscious stereotyping against lesser known female authors. Anonymization eliminates the gender gap of male reviewers, but introduces a gender gap in favour of male authors for female reviewers. We explore differential selection as an alternative explanation, finding that reviewer experience postblinding could potentially account for our results.     

Does the labor-income process contain a unit root? Evidence from individual-specific time series

Calibrations of models related to life-cycle behavior of consumption and saving often invoke the important assumption of a unit root in individuals׳ labor-income process. We for the first time test this assumption using methods for univariate time series. Based on longitudinal register data from 1968 to 2005, we first estimate an autoregressive model for each individual using a method for approximately median-unbiased estimation. We then exploit the resulting distribution of the individual-specific estimates to draw inference about the presence of a unit root. Results indicate that earnings for the representative worker are governed by a process where shocks to earnings have moderate persistence and are both economically and statistically significantly different from having permanent effects. These results question the heavy use of unit-root processes for earnings.     

Does mutual fund disclosure at banks matter? Evidence from a survey of investors

This paper examines the responses from a survey of investors who purchased mutual funds from banks and elsewhere. We find that bank-channel investors are less financially literate than those investors purchasing funds through other distribution channels. Using a treatment-effects econometric model, however, we also find that purchasing only through banks actually raised the knowledge level of these investors. This result suggests that the increased focus on disclosure at banks has had a positive effect on investor financial literacy, and that disclosure requirements in the Gramm-Leach-Bliley Act of 1999 are likely to be beneficial. However, investor financial literacy still needs improvement.     

Does easy availability of cash affect corruption? Evidence from a panel of countries

Using annual panel data of 54 countries for the period 2005-14, we examine whether currency in circulation, both aggregate and in large denominations, affects the level of corruption in a country. Standard panel data models suggest that the ratios of (i) aggregate currency in circulation to M1 and, (ii) large denomination banknotes to M1 are both statistically significant determinants of corruption. Tests for reverse causality within a panel Granger framework reveal a uni-directional causality of corruption with the first variable, but a bi-directional one with the second. These findings suggest that a limitation in the supply of high-denomination banknotes, inter alia, could be a tool to fight corruption, and bring to the fore the important role of payment systems, extending an earlier study by Goel and Mehrotra (2012). The results also highlight that, along with the government, the central bank of an economy can also play an important role in the fight against corruption.     

Does faith move stock markets? Evidence from Saudi Arabia

This paper investigates the effects of religious beliefs on stock prices. Our findings support the viewpoint that the religious tenets have important bearing on portfolio choices of investors. It is found that Shariah-compliant stocks have higher return and volatility than their non-Shariah compliant counterparts.     

Does aging influence structural change? Evidence from panel data

Our study represents a first attempt to single out the effects of aging on the entire structure of the economy that is approximated by employment shares in different sectors. We find that even after controlling for the effects of other relevant factors - e.g., income per capita, share of trade in GDP, government consumption share in GDP, population size - aging does have a statistically significant differentiated impact on the employment shares. In particular, we find that an increase in aging exerts a statistically significant adverse effect on the employment shares in agriculture, manufacturing, construction, and mining and quarrying industries. At the same time, an increasing share of the elderly (decreasing share of the youth) in society positively affects employment shares in community, social, and personal services as well as in the financial sector.     

Does high-speed railway promote urban innovation? Evidence from China

Empirical discussion in the existing literature on the relationship between transportation infrastructure and innovation remains limited. As one of the most important transport infrastructures, China's high-speed railway (HSR) has greatly compressed the space-time distance and strengthened the linkages between cities, which may contribute to innovation activities. Using the panel data of 285 Chinese prefecture-level and above cities and employing the difference-in-differences (DID) model, this paper examines the impact of HSR opening and HSR service intensity on the urban innovation. Propensity score matching (PSM) together with DID (PSM-DID) method is utilized to address the potential estimation biases. The empirical results demonstrate that HSR has significantly improved the level of urban innovation. Heterogeneity analysis finds that the promotion effects of HSR on innovation are more remarkable in peripheral and small cities. Moreover, the effects of HSR on cities far away from the central and large cities are with higher significance and greater magnitude than cities close to central and large cities. For cities near central and large cities, the service intensity of HSR is more likely to improve their innovation level. In addition, we further find that service industries and private enterprises benefit more from the effect of HSR in promoting innovation. This study can provide robust evidence for the effect of HSR on promoting urban innovation, as well as policy enlightenment for innovation growth and sustainable economic development.     

Does financial development stimulate environmental sustainability? Evidence from a panel study of 115 countries

This paper investigates the moderation effect of financial development (FD) on the environmental Kuznets curve (EKC). Using comprehensive panel data of 115 countries spanning the 1990–2016 period and dividing the countries into different income groups, the researcher found systematic differences in the relationship between significant indicators of environmental degradation and economic growth. More specifically, the interaction effect of FD on the relationship between gross domestic product (GDP) growth and CO₂ emissions are positive; nevertheless, the interaction effect of FD on the relationship between GDP squared and CO₂ emissions become negative for all income groups and therefore supports the EKC. Moreover, the interaction effect of FD is negative on the relationship of GDP with both CH₄ and PM_2.5 emissions in the middle‐income groups, whereas the interaction effect of FD on the relationship between GDP squared and PM_2.5 emissions are negative for the high‐income group. Our results suggest that FD can reduce environmental degradation without adversely impacting on growth.     

Does organisational capital influence environmental strategies? Evidence from environmental innovation

As a result of increasing consumer awareness and stakeholder demands about environmental management, firms face stricter challenges surrounding the impact of business operations on the environment. In this regards, environmental innovation is one of the important ways of acting in harmony with the environment. Thus, the purpose of this study is to examine the impact of organisational capital on environmental innovation measured as the process innovation and product innovation. Using environmental innovation data from ASSET4 for the US listed firms between 2002 and 2018, our empirical results reveal a significant positive association between organisational capital and both the process innovation and product innovation. Furthermore, the relationship is stronger in high-profitability and sensitive industries subsamples. These results are robust to additional control variables and endogeneity tests. This study, while endorsing the resource-based view (RBV), provides important implications for the top management teams that organisational capital could be an important channel through which managers can boost environmental innovation.     

Does transaction activity predict Bitcoin returns? Evidence from quantile-on-quantile analysis

This paper uses the quantile-on-quantile regression to examine the predictive power of transaction activity for Bitcoin returns over the period from January 2013 to December 2018. We measure the Bitcoin transaction activity using trading volumes, the number of unique Bitcoin transactions, and the number of unique Bitcoin addresses. Considering the onset of structural breaks, we identify considerable effects of the heterogeneity concerning the quantiles of transaction activity, which cannot be depicted fully by the traditional quantile regression method. The empirical results show that higher transaction activity tends to predict higher/lower Bitcoin returns when the market is in a bullish/bearish state. We find that the nexus is asymmetric across quantiles, depending on the sign and size of the transaction activity, and the predictive relationship intensifies in the upper or lower quantiles of the conditional distribution. In addition, this empirical evidence is in line with the volume-return association in the equity market due to private informative and noninformative trading actions. Overall, our findings suggest that transaction activity-based strategies should be made with respect to Bitcoin market performance, specifically during extreme conditions.     

Does employment protection help immigrants? Evidence from European labor markets

High levels of employment protection reduce hiring and firing and have a theoretically ambiguous effect on the employment level. Immigrants, being new to the labor market, may be less aware of employment protection regulations and less likely to claim their rights, which may create a gap between the costs for employers of hiring a native relative to hiring an immigrant. This paper tests that hypothesis drawing on evidence for the EU and on two natural experiments for Spain and Italy. The results suggest that strict employment protection legislation (EPL) gives immigrants a comparative advantage relative to natives. Stricter EPL is found to reduce employment and reduce hiring and firing rates for natives. By contrast, stricter EPL has a much smaller effect on immigrants.     

Do rental agents discriminate against minority customers? Evidence from the 2000 Housing Discrimination Study

This study examines the incidence and causes of housing discrimination in qualitative treatment by rental agents, using national audit data from the 2000 Housing Discrimination Study. Using the fixed-effects logit method described by [Review of Economic Studies 47(1) (1980) 225–238], we control for unobservable factors that are shared by audit teammates and conduct hypothesis tests for the incidence and causes of discrimination. We find evidence that rental housing discrimination has declined since 1989 but continues to exist in several important types of housing agent behavior. We also find evidence that this discrimination is caused by agents’ own prejudice and by their response to the prejudice of white clients.