Country asymmetry,trade agreements,and transfers

Using a standard 2 × 2 trade agreement model, I show that the welfare effects of a free trade agreement (FTA) depend on the asymmetry on supply and demand functions. When countries are sufficiently asymmetric with respect to the size or the demand functions, the small country tends to be better off, while the large country is worse off. Thus, the small country must compensate the large country for the FTA to be incentive‐compatible. However, in the presence of sufficient asymmetry in the supply functions, the small country is worse off, while the bigger is better off. In this case, the transfer must flow from the large to the small country. This last finding helps explain why some FTAs between rich and poor countries provide for adjustment transfers to the latter.     

HOW CAN PUBLIC SPENDING HELP YOU GROW? AN EMPIRICAL ANALYSIS FOR DEVELOPING COUNTRIES

Although many studies indicate that both the level and composition of public spending are significant for economic growth, the results in the empirical literature are mixed. This paper suggests that the country sample selection and expenditure classification are important in explaining these conflicting results. The empirical analysis shows that the link between growth and public spending, especially its core component, is strong only for countries with macroeconomic stability and fast GDP per capita growth dynamics, which are also capable of using public funds for productive purposes.     

Women,Muslim Immigrants,and Economic Integration in France

Muslim immigrants to Europe display distinctive attitudes toward women in a wide range of survey data. This study investigates whether this translates into distinctive behavior. Relying on a dictator game in France and an identification strategy that isolates the effect of religion from typical confounds such as race, we compare the donations of matched Christian and Muslim immigrants and rooted French to in‐group and out‐group men vs. women. Our results indicate that Muslim immigrant participants deviate from Christian immigrant and rooted French participants in their behavior toward women: while the latter favor women over men, Muslim immigrants favor men over women.     

Price Discrimination with Private and Imperfect Information

In this paper, I investigate the competitive and welfare effects of the improvements in information accuracy in markets where firms can price discriminate after observing a private and noisy signal about a consumer's brand preference. I show that when firms believe that consumers have a brand preference for them, then they charge more to these consumers, and this price has an inverse U‐shaped relationship with the signal's accuracy. In contrast, the price charged after a disloyal signal has been observed falls as the signal's accuracy rises. While industry profit and overall welfare fall monotonically when price discrimination is based on increasingly more accurate information, the reverse happens to consumer surplus.     

The tortoise and the hare: the impact of employment instability on firm performance

The main objective of this study is to assess the influence of employment instability on firm performance in a sample of publicly traded firms. Competing theoretical arguments are considered with regard to likely outcomes associated with employment instability. A large sample of cross‐sectional time‐series data is then analysed using generalised estimating equations (GEE) regression techniques. Results indicate that employment instability is negatively associated with firm performance, although the relationship is also demonstrated to be quadratic (an inverse U‐shaped relationship). This suggests that the main relationship varies depending upon the level of employment instability. Industry characteristics are also examined as moderators of this main effect. The results suggest a disordinal interaction effect for industry differentiation, where employment instability is negatively associated with firm performance for firms in highly differentiated industries and positively associated in less differentiated industries.     

REGULATORY DEALING: TECHNOLOGY ADOPTION VERSUS ENFORCEMENT STRINGENCY OF EMISSION TAXES

We analyze the role of targeted enforcement of emissions taxes when the regulator wants to minimize aggregate emissions via the adoption of new more environmentally friendly technology. The regulator wants to speed up the path of technology adoption generated by a policy of uniform enforcement (that monitors adopters and nonadopters with the same probability) by engaging in a regulatory deal where a reduced monitoring probability is granted in “exchange” for adoption of the new technology. We set up a theoretical model, characterize the circumstances in which such dealing minimizes aggregate emissions, and test our hypothesis using economic laboratory experiments. Our analytical and experimental results suggest that even though such a deal might imply an increased level of violation by adopters, such tolerance is rather an integral part of an overall enforcement strategy that minimizes aggregate emissions when the rate of adoption is endogenous. (JEL L51, Q53, Q55, Q58)     

ASSESSING THE EFFECT OF PUBLIC SUBSIDIES ON FIRM R&D INVESTMENT: A SURVEY

This survey examines the empirical literature on the relationship between public R&D subsidies and private R&D investment over the past five decades. The survey reveals a considerable heterogeneity of empirical results that cannot be explained fully by methodological issues. We aim to provide further explanations of the possible causes of that heterogeneity. In particular, we emphasise a set of issues that, in our view, are critical to understanding the potential effect of public R&D subsidies on private R&D spending. Special attention is paid to the dynamic aspects and composition of firm R&D, the constraints faced by the firm (such as financial constraints), and the amount and source of public subsidies. None of these issues have been investigated in depth. We formulate a set of research assumptions to guide future empirical research in this field.     

Robust influence diagnostics for generalized linear models with continuous responses

This article introduces two parametric robust diagnostic methods for detecting influential observations in the setting of generalized linear models with continuous responses. The legitimacy of the two proposed methods requires no knowledge of the true underlying distributions so long as their second moments exist. The performance of the two proposed influence diagnostic tools is investigated through limited simulation studies and the analyses of an illustration.