Subjective well‐being and political participation: Empirical evidence from Ghana

A large, extant literature examines the effect of political factors on individual subjective well‐being. These studies have treated political factors as a cause and subjective well‐being as an effect. A sparse but growing literature now advances the argument that subjective well‐being is a cause and voting or political participation an effect. In this paper we examine whether subjective well‐being influences voting and political participation in Ghana. Using data from Wave 6 of the World Values Survey in Ghana, we find that subjective well‐being influences neither voting nor protest behavior.     

Did political constraints bind during transition?Evidence from Czech elections, 1990–20021

Many theoretical models of transition are driven by the assumption that economic decision making is subject to political constraints. In this paper we test whether the ‘winners’ and ‘losers’ of economic reform influenced voting behaviour in the first five national elections in the Czech Republic. We propose that voters, taking stock of endowments from the planning era, could predict whether they would become winners or losers of transition. Using survey data we measure the degree to which regions were ‘not afraid’ or ‘afraid’ of economic reform in 1990. We define the former as potential ‘winners’ who should vote for pro‐reform parties and the latter as potential ‘losers’ who should support left‐wing parties. Using election results and economic indicators at the regional level, we demonstrate that there is persistence in support for pro‐reform and communist parties which is driven by prospective voting based on initial conditions in 1990. We find that regional unemployment rates in 2002 are good predictors of voting patterns in 1990 and provide empirical evidence that political constraints bind during transition.     

Can income support for part-time workers serve as a stepping-stone to regular jobs? An application to young long-term unemployed women

This article investigates whether income support for low-paid part-time workers in Belgium increases the transition from unemployment to non-subsidised, ‘regular’ employment. Our analysis uses a sample of long-term unemployed young women. Observing their labour market histories from 1998 to 2001, we implement the ‘timing of events’ method to identify the treatment effect. Our results suggest that participation in the policy has a significantly positive effect on the transition to regular employment. Participation reduced the survivor rate in unemployment by 27% points 1 year after the start of the programme. The time spent in the programme did not affect the transition to regular employment.     

Economic transition,gender bias,and the distribution of earnings in China*

Market‐oriented economic reform, which accelerated after 1992, has brought substantial changes to the Chinese economy. This dramatic economic transition was raised two important questions: ‘How are women faring in the transition from a planned economy to a market economy?’ and ‘Are some women faring relatively better than other women’? We use data from the Chinese Household Income Projects for the years 1988 and 1995, a standard earnings equation, and quantile regressions to estimate and decompose the earnings gap. Our findings suggest that while the earnings gap has increased, the fraction of the gap ‘unexplained’ by differences in human capital variables such as education and experience has declined over time. This result is particularly pronounced for low earning women.     

Effect of religious priming in prosocial and destructive behaviour

In this paper, we study the behavioural impact of religious priming by showing participants religious words in a scrambled sentence task before a dictator game and a joy‐of‐destruction game. We also elicited data on individual religiosity and religious affiliation using a questionnaire. Priming religious words significantly increased prosocial behaviour in the dictator game, and the effect was especially striking among those reporting no religion, atheists and agnostics. The religious prime has no significant effect in mitigating destructive behaviour or own expectations of the other's destruction choice, but both destructive behaviour and expectations correlate positively with the multi‐dimensional religiosity measure.     

Revisiting the impact of impure public goods on consumers’ prosocial behavior: A lab experiment in Shanghai

In this study, we implemented a dictator game experiment to examine how the increase of the public characteristic in an impure public good affects individuals’ prosocial behaviour. A within‐subject design was used in the experiment. The dictator game was repeated six times with an impure public good introduced in four of them. We observe that the increase of the public characteristic in an impure public good partly crowds out individuals’ subsequent donations, which could be explained by a seemingly ‘mental accounting’ mental process. In addition, we also find that the selfish behaviour of individuals in dictator games with impure public goods, to some extent, has an inertia influence on their subsequent donations when the impure public good is removed.     

Remittances,Dutch Disease,and Manufacturing Growth in Developing Economies

Remittances have grown tremendously in magnitude and economic importance in the past four decades, providing economies with additional disposable incomes and even serving as buffers against economic downturns. It is thus but fitting to ask how remittances have impacted on growth, particularly on manufacturing growth. This note presents a simple model linking remittances and manufacturing growth via a ‘Dutch Disease’ channel. Using Blundell and Bond's (1998) system general method of moments on a panel dataset of 56 developing economies from 1992 to 2016, we verify that remittances adversely affect manufacturing growth in economies that experience high real appreciation rates. This result is robust to alternate specifications, such as the inclusion of financial development indicators, the expansion of the sample to include high‐income economies, and the use of different sample periods.     

Structural change and misallocation: Firm‐level evidence from Poland*

Early transition literature linked a large number of firm failures with the inability to overcome the pre‐transition misallocation of resources, that is, the inadequate capital–labour ratio. We look at the link between misallocation and firm survival using a rich firm‐level dataset of over 1,600 manufacturing plants established in a centrally planned economy after 1945. Our duration models include the standard Olley–Pakes misallocation measures as well as a firm‐level measure of the counterfactual level of capital that takes into account the present‐day market allocation and productivity. We show that while privatization is positively related to firm survival, misallocation (a) was more of a firm‐level than sector‐level phenomenon and, more importantly, (b) it, in general, did not have a sizeable effect on the actual firm survival nor it had an impact on the outcome of privatization.     

Investigating the Balassa‐Samuelson hypothesis in the transition: Do we understand what we see? A panel study

This paper studies the Balassa‐Samuelson (B‐S) effect in the Czech Republic, Hungary, Poland, Slovakia and Slovenia. We use time series and panel cointegration techniques and show that the B‐S effect works reasonably well in the transition economies under study during the period from 1991:Q1 to 2001:Q2. However, we find, that productivity growth does not fully translate into price increases because of the construction of the CPI indexes. We therefore argue that productivity growth will not hinder meeting the Maastricht criterion on inflation in the medium term. In addition, the observed appreciation of the CPI‐deflated real exchange rate is found to be systematically higher compared with the real appreciation the B‐S effect could justify, especially in the cases of the Czech Republic and Slovakia. This can be partly explained by the trend appreciation of the tradable price‐based real exchange rate, increases in non‐tradable prices due to price liberalization and demand‐side pressures and the evolution of the nominal exchange rate determined by the nature of the exchange rate regime and the magnitude of capital inflows. JEL classification: E31, F31, O11, P17,     

What Motivates Members to Participate in Co‐operative and Mutual Businesses?

Abstract *** : This article reports the findings of a project entitled ‘The participation of members in mutual businesses’. A previous project developed a theoretical model of what makes people participate, focusing on the participation of public service users in council housing and social care services. The current project builds on this work, applying the ‘mutual incentives model’ to a population sample of area committee members and a random sample of non‐participant members of a very large UK consumer co‐operative, the Co‐operative Group. Two arguments are presented as to why such research is needed. First, member participation in co‐operative and mutual businesses is becoming an important issue both for this sector and more generally for public policy. Second, a comparison between a public services setting and a co‐operative setting enables us to extend and further test the theoretical model. Two main features of the model are outlined: a ‘mutual incentives theory’ that goes beyond other models to combine individualistic and collectivistic motivations, and the ‘participation chain’, a synthesis of existing knowledge that joins motivations to three ‘links’ that we call ‘resources’, ‘mobilization’ and ‘dynamics’. The article then summarizes the project methodology, and reports the main findings. As in the public services project, on the ‘demand’ side, collectivistic incentives prove to be dominant over individualistic, but with some individual ‘internal’ benefits also being important. On the ‘supply’ side, skills derived from previous experience were important, as were a positive evaluation of opportunities to participate, and recruitment through existing networks. We then compare the findings to those from the public service users and from a regional co‐operative society; Oxford, Swindon and Gloucester Co‐op. Collective motivations are dominant in all three datasets, but are shown to vary in interesting ways that have important implications for member participation strategies.     

Job creation and temporary emigration: the Albanian experience1

This paper focuses on job flows and unemployment in Albania during the transition from a closed, communist system to an open, free-market economy, and examines the role of emigration in the restructuring of the country. Our theoretical model indicates that in Albania, temporary emigration may have a significant positive effect on hiring in the private sector, reducing unemployment. Using sectoral data on employment, we illustrate the importance of emigration as an alternative for the Albanian labour force, and we measure the extent to which job ‘destruction’ in some sectors of the economy has been compensated for by job ‘creation’ in others. On these grounds, we compare the progress of Albania with other former socialist countries in Europe.     

Determinants of cross‐border bank acquisitions in transition economies1

We analyse the microeconomic determinants of cross‐border bank acquisitions in 11 transition economies over the period 1992–2006. We find that foreign banks target relatively large and efficient banks when they enter transition economies with weak institutions. This evidence provides support for the ‘market power’ hypothesis. However, when foreign banks enter more developed transition economies that have made progress in economic reform, they acquire less efficient banks. This result is in line with the efficiency hypothesis. We use a multilevel mixed effects logit model that allows us to explicitly incorporate the macroeconomic and institutional heterogeneity of the transition economies into our analysis.     

Agglomeration economies and location choice: Foreign direct investment in Hungary1

Since the beginning of the transition process, Hungary has attracted a significant amount of foreign direct investment (FDI), although this is unevenly distributed among the twenty Hungarian counties. This paper examines the determinants of FDI at a regional level in Hungary and more particularly assesses the importance of agglomeration effects among determinants. A panel model of the location determinants of FDI in Hungary is developed and estimated. Empirical testing suggests that counties with higher labour availability, greater industrial demand and higher manufacturing density attract more FDI. Surprisingly, higher unit labour costs attract FDI. In addition, inter‐industrial agglomeration economies and infrastructure availability are found to be important.     

Unemployment Duration and Inflows onto the Disability Support Pension Program: Evidence from FaCS LDS Data

From the administrative data of the Australian Department of Family and Community Services it is found that a large proportion of Disability Support Pension (DSP) recipients transferred from unemployment benefits. Among those who transferred to DSP from unemployment benefits, a large proportion experienced multiple spells of income support receipt prior to the transition and a majority had more than a half‐year pre‐transition unemployment duration, with the average pre‐transition unemployment duration being more than one year. These findings suggest that the unemployment benefit is not simply a‘hold‐on’ benefit for those who experienced the unemployment—DSP transition. This article further examines what factors are associated with the transition. It is found that, among other things, the probability of transition to DSP from unemployment increases with duration on unemployment benefits.     

Does individual investors’ attention influence underwriters’ IPO pricing?

ABSTRACT

Using a unique Chinese IPO bidding dataset and a particular social media dataset, we examine the impact of individual investors’ attention on underwriters’ offer price adjustment, offer price revision, IPO initial returns, and long-term performance. We find that when a company receives more attention from individual investors before the underwriter finalizes the offer price, the underwriter will adjust the offer price higher. Moreover, we find that the IPO initial returns are significantly positively related to individual investors’ attention. These findings suggest that individual investors will influence underwriters’ pricing behaviour from a new perspective, – –investors’ attention. Finally, we do not find a significant relationship between individual investors’ attention and IPO long-run performance.     

Diversification strategies and firm performance in Vietnam

This paper is based upon the assumption that a firm's profitability is determined by its degree of diversification which is, in turn, strongly related to the antecedent decision to carry out diversification activities. This calls for an empirical approach that permits the joint analysis of the three interrelated and consecutive stages of the overall diversification process: diversification decision, degree of diversification and outcome of diversification. We apply parametric and semi‐parametric approaches to control for sample selection and the endogeneity of the diversification decision in both static and dynamic models. For the analysis, we use the census dataset on the whole firm population in Vietnam, as a representative of transition countries. After controlling for industry fixed‐effects, the empirical evidence from the firm‐level data shows that diversification has a curvilinear effect on profitability: it improves firms’ profit up to a point, after which a further increase in diversification is associated with declining performance. This implies that firms should consider optimal levels of product diversification when they expand their product offerings beyond their core business. Other noteworthy findings include the following: (i) the factors that stimulate firms to diversify do not necessarily encourage them to extend their diversification strategy; (ii) firms that are endowed with highly technological resources and innovation investment are likely to successfully exploit diversification as an engine of growth; and (iii) while industry performance does not have a strong influence on the profitability of firms, it impacts their diversification decision as well as the degree of diversification.     

Politics and privatization in Central and Eastern Europe

This article examines how government ideology influenced privatization efforts in Central and Eastern Europe after the transition from socialism. We analyse a dataset of privatization indicators covering small‐ and large‐scale industries in 19 transition countries over the period 1990–2007 and introduce a government ideology index. The results suggest that market‐oriented governments promoted the privatization of small‐scale industries more than that of large‐scale ones. In the rapid transition process in the early 1990s, leftist governments stuck to public ownership more strongly than in the following period from the mid‐1990s to 2007. The remarkable differences between leftist and right‐wing governments concerning both the role of government in the economy and the basic elements of political order are in line with developments in OECD countries, and may also hold further implications for transition and democratizing countries outside Central and Eastern Europe.     

Investors’ fear and herding in the stock market

ABSTRACT

In this article, we examine herding in three developed stock markets testing for the impact of investors’ ‘fear’ on herding estimations. To this end, we employ daily data of all listed stocks from USA, UK and Germany from January 2004 to July 2014. We examine herd behaviour applying the cross-sectional dispersion approach. Moreover, we investigate the asymmetric herding behaviour under different market states and sub-periods. The stock markets under examination provide comparable implied volatility indices which are used as a proxy for fear. As a result, apart from the standard herding estimations within and across markets, we also augment the benchmark model with the fear indicator. Our empirical results document the statistically significant impact of fear on herding estimations. Moreover, there is evidence of cross market herding as well as evidence of herding in the UK during specific sub-periods.     

Cooperation,Trust and Economic Development: An Experimental Study in China

Many previous empirical studies have suggested that cooperation and trust affect economic growth. However, the precise relationship between trust and cooperation (i.e. whether trust leads to cooperation or cooperation leads to trust) remains unclear and it is not known how the level of economic development affects the level of cooperation and trust. Using a combination of public goods, gambling game and trust game experiments, we investigate the links among cooperation, trust and economic development in four regions of China. Our results suggest that, first, there is a U‐shaped or V‐shaped relationship between cooperation and economic development. Second, on the one hand, cooperation leads to trust, and on the other hand, more cooperative behaviour may be created by rewarding trusting behaviour. Third, men are more cooperative and trusting than women. Furthermore, we find that the widely used ‘GSS trust’ question from the General Social Survey (GSS) does not predict either cooperation or trust, whereas the questions ‘GSS fair’ and ‘GSS help’ have weak predictive power for trusting behaviour but not for cooperative behaviour.     

THE IMPACT OF MANUFACTURING FIRMS’ USE OF ACADEMIC WORKERS ON THEIR PRODUCTIVITY LEVEL

We examine how firms’ productivity level, measured by the total factor productivity (TFP), is affected by their use of academic workers. A panel dataset of Norwegian manufacturing firms is used. Firms’ production level is shown to be negatively affected by their share of academic workers, but we find no clear relationship between this share and the TFP. If we account for the fact that there is an interaction between the share of academic workers and the capital stock, we find that this share has a non‐significant effect on the production level.