Grocery Store Attributes in Recovering Economies: An Empirical Investigation of Their Importance,Using Three-Component Contour Plotting

The authors share results of a study conducted to measure the attributes of grocery stores that are the most important for consumers in a market recovering from war and transitioning to a market economy. Applying a trilinear coordinate plot, the authors develop a model that consists of those attributes. The findings led to conclusions that services and location, rather than the historically favored attribute of price, increasingly are key factors affecting store choice. Managerial implications are discussed and future research directions are suggested.     

The Glass Ceiling Puzzle,Legal Institutions,and the Shadow Economy

ABSTRACT

Scholarly studies in economics, sociology, psychology, and management emphasize the low number of women in management as one of the main indicators of gender discrimination in the labor market. This study investigates the differences in the percentage of women in senior management across forty-five countries. The results of the regression analysis show that women are more represented in senior management in developing countries than in so-called “liberal Western democracies.” Women also participate more in senior management in countries in which prejudice and discrimination against women are greater. The study presents empirical evidence for two economic explanations for these puzzling results: the weak functioning of the legal system and the large size of the shadow economy.     

Free trade versus strategic trade as a choice between two ‘second best’ policies: A symmetric versus asymmetric information analysis

Abstract

We analyse the following policy dilemma: strategic trade policy versus free trade when the domestic government is bound to intervene only after the domestic firm's strategic variable in the form of R&D investment is chosen, and when the information can be either symmetric or asymmetric. The novel feature of our model is that the information asymmetry stems from the assumption that the government may not a priori know the true mode of competition. The intervention in the above set-up allows the domestic firm to manipulate the domestic government and results in a socially inefficient choice of the strategic variable. However, commitment to free trade leads to forgoing the benefits from profit-shifting. Yet, from the social point of view, free trade may be optimal even under the assumption of symmetric information. Due to costly signalling, this result is reinforced in the case of asymmetric information.     

WILL THE “TRUE” LABOR SHARE STAND UP? AN APPLIED SURVEY ON LABOR SHARE MEASURES

Labor's share of income is a key variable in economics. It plays a leading role in analysis of (in)equality, globalization, technical change, growth theories, etc. Notwithstanding this broad application, there are many different definitions of the labor share. Understanding and synthesizing those differences is the purpose of this applied survey. Empirical measures may vary reflecting the allocation of income components that cannot be directly ascribed to capital or labor. We examine the alternative assumptions made in the literature in this regard and quantify and motivate the resulting discrepancies. Focusing (mostly) on US data, we show that different measures can have very distinct properties in terms of the observed stochastic trends, shares of short‐, medium‐, and long‐run variation and volatilities, persistence and mean‐reversion properties, and susceptibility to structural breaks. For instance, while “short‐run” properties of the surveyed labor share measures are relatively consistent across all definitions (and countercyclical), their “medium‐” and “long‐run” trends may diverge substantially (and are procyclical). To substantiate our analysis, we document the implications of discrepancies in the empirical labor share definition for growth accounting, analyzing the effect of technology shocks, and for estimating inflation dynamics.     

Impact of an unexplained component of real exchange rate volatility on FDI: Evidence from transition countries

The aim of this paper is to examine the impact of an unexplained component of real exchange rate volatility on FDI in transition economies. We make an attempt to overcome some problems associated with previous studies; the aggregation problem, inadequate measures of volatility, short-run focus and the endogeneity problem. Using a GARCH specification, we focus on long-run volatility, while we control for the endogeneity problem by applying SYS-GMM estimation. The obtained results show that the impact of the unexplained component of real exchange rate volatility on FDI differs among economic activities since 2000. As part of the re-estimation exercise, we use two alternative measures of volatility to avoid arbitrariness. The obtained results are to a large extent in accordance with the first one.     

The Global Extent of the Great Moderation*

In 2008 the US financial crisis spilled over into a number of other economies causing declines in GDP across the world. Yet the decades preceding the current downturn had been a period of unprecedented stability for the US economy. This article examines annual data for 98 countries over the period 1961–2007 and finds that lower GDP growth volatility in the period preceding the current crisis was not confined to the US. It is detected in a number of developed and developing countries, suggesting that a reduction in volatility in this period was a more general phenomenon.     

Sources of productivity differentials in manufacturing in post-transition urban South-East Europe

The paper analyses the effects of urbanization and localisation economies on manufacturing firms’ productivity across urban landscapes in post-transition South-East European (SEE) countries. Fixed-effects panel data estimations on a large sample of firms show that the factors accounting for productivity advantages of manufacturing firms in urban post-transition SEE are related to the firms and to the environment in which these firms operate. Firms located in diversified cities benefit from a productivity premium generated in this type of agglomeration, while no evidence was found that the relative specialization across industries has any effect on firm productivity levels.     

Book review article In search of an alternative theory: a critique of Dosi et al.'s Technical change and economic theory

In this article the author discusses the main contributions and controversial issues raised in an important bookTechnical change and economic theory. The book represents a cornerstone in theorizing technical change. The main features of the book are summarized and the author discusses a number of controversial issues, such as: the evolutionary perspective; the notion of a technoeconomic paradigm; the analysis of firms' technological behaviour; the notion of institutions; the problem of ‘catching up’ in technology; the treatment of formal modelling and policy implications; and treatment of social aspects of technical change. The author concludes that the book should be treated as a work in progress and not as a fully developed and comprehensive approach. However, the critical mass of findings, gathered in this book, is important reading, and represents an important step forward in the exploration of a new approach to economic theory.     

How Wealthy are the Rich?

Underreporting and undersampling biases in top tail wealth, although widely acknowledged, have not been statistically quantified so far, essentially because they are not readily observable. Here we exploit the functional form of power law-like regimes in top tail wealth to derive analytical expressions for these biases, and use German microdata from a popular survey and rich list to illustrate that tiny differences in non-response rates lead to tail wealth estimates that differ by an order of magnitude, in our case ranging from 1 to 9 trillion euros. Underreporting seriously compounds the problem, and we find that the estimation of totals in scale-free systems oftentimes tends to be spurious. Our findings also suggest that recent debates on the existence of scale- or type-dependence in returns to wealth are ill-posed because the available data cannot discriminate between scale- or type-dependence, on one hand, and statistical biases, on the other hand. Yet both economic theory and mathematical formalism indicate that sampling and reporting biases are more plausible explanations for the observed data than scale- or type-dependence.     

The Effect of Terrorist Incidents on Capital Flows

Previous work has shown that terrorism has significant negative impact on countries' economies. We explore this relationship in more detail. Using an unbalanced panel of more than 160 countries for up to 25 years and the Global Terrorism Database (GTD) we show a decrease in foreign direct investment (FDI) as a consequence of terrorism. We also find evidence that FDI flows are more sensitive to terrorism than either portfolio investments or external debt flows. Finally, we test the hypothesis that terrorism has negative spill‐over effects on FDI flows into neighboring countries and find evidence that cultural, but not geographical, closeness matters.