Local Bank Financial Constraints and Firm Access to External Finance

I exploit the exogenous component of a formula‐based allocation of government funds across banks in Argentina to test for financial constraints and underinvestment by local banks. Banks are found to expand lending by $0.66 in response to an additional dollar of external financing. Using novel data to measure risk and return on marginal lending, I show that the profitability of lending does not decline and total borrower debt increases during lending expansions, holding investment opportunities constant. Overall, financial shocks to constrained banks are found to have a quick, persistent, and amplified effect on the aggregate supply of credit.     

Information and Incentives Inside the Firm: Evidence from Loan Officer Rotation

We present evidence that reassigning tasks among agents can alleviate moral hazard in communication. A rotation policy that routinely reassigns loan officers to borrowers of a commercial bank affects the officers' reporting behavior. When an officer anticipates rotation, reports are more accurate and contain more bad news about the borrower's repayment prospects. As a result, the rotation policy makes bank lending decisions more sensitive to officer reports. The threat of rotation improves communication because self‐reporting bad news has a smaller negative effect on an officer's career prospects than bad news exposed by a successor.     

Public Inputs in the Transportation Service Decision-Making Process

This paper presents an empirical investigation of willingness to participate in public meetings to provide consumer inputs for designing public transportation services. The low levels of interest in participation among elderly, low-income consumers and high levels of interest among consumers of specific transportation modes were critically evaluated.     

Does the Lack of a Profit Motive Affect Hiring in Academe? Evidence from the Market for Lawyers

The comparative performance of academic and economic markets continues to be debated. One factor potentially distinguishing academic markets is the profit motive. Profit and competition have been shown to curb discrimination in markets, and the absence of profit discipline could result in myriad forms of prejudice in academic hiring. We explore the role of the profit motive in the performance of academic markets by comparing the pedigree of employees of top law schools and top law firms. Top law schools are much more likely to employ graduates of top ranked law schools than elite law firms, and the difference exists at both the junior and senior levels. We find no evidence that the graduates of top 5 law schools outperform grads of less prestigious schools in publications or citations. In the absence of a profit motive, academic hiring appears more likely to indulge a preference for pedigree, and by implication, this may explain other scholarly prejudices in the academy.     

United States Trade in Consumer Products

The United States has experienced a large trade deficit in consumer products. This paper argues that the deficit is due in part to the institutional and behavioral frameworks in which consumer products are marketed. The existence of an effective mass distribution system, a large market relative to promotion expenditures and the change-orientation of the consumer can influence greatly the ability of nations to expand markets and stimulate sales of consumer products. These factors prevalent in the American economy have attracted imports. In contrast, their absence in the economies of our trading partners has limited our access to foreign markets. Policy implications of this situation and areas for further research are identified and discussed.