The Feldstein–Horioka puzzle in groupings of OECD members: A panel approach

This paper investigates the relationship between investment and savings in 26 OECD countries and demonstrates that the relationship changes when the countries under consideration in the selected panel vary. Accordingly, panel estimations using annual data for the period from 1970 to 2008 have been made for various groupings of developed countries, specifically the OECD as a whole, the EU15, NAFTA and the G7. Additionally, the paper examines changes in investment savings relationships when the presence of structural shifts in developed countries – where such exist – are taken into account. Recently developed panel techniques are employed to examine the investment savings relationship and estimate saving-retention coefficients. The empirical findings reveal that the Feldstein–Horioka puzzle exists only in the panel of G7 countries, wherein the saving-retention coefficient is estimated as 0.754 and 0.864 (for the full sample of G7 countries and for stable G7 countries, respectively). The estimated saving-retention coefficient for unstable G7 countries is 0.482, which indicates a higher level of capital mobility in unstable countries with respect to stable ones. This conclusion is further supported by the estimations for OECD countries and the EU15.     

Low-Wage Labor Markets and the Power of Suggestion

The paper argues that a non-binding minimum wage may serve as a focal point which facilities tacit collusion by low-wage employers, effectively pulling down wages of the lowest-paid workers. This can explain the puzzle as to why the minimum wage does not reduce employment, as predicted by the traditional economic theory. A simple game-theoretic argument explains when collusion emerges. The hypothesis is tested using the 1990–2002 CPS data on service occupation workers. The results suggest that during this period, on average 19.3%, and as much as 31% of service occupation workers, who earned minimum wage or less, could had been affected by collusive wage-setting.     

Manias,Panics and Crashes in Emerging Markets: An Empirical Investigation of the Post-2008 Crisis Period

ABSTRACT

Because of their economic importance, international bond markets are thought to be the likely location for the operation of financial market pressures on emerging market (EM) government policy. An important but unresolved debate that runs through the literature is the relative importance of domestic factors specific to the country receiving the capital flows (pull factors), versus push factors exogenous to the receiving country, in driving portfolio flows to EMs. Through extensive interviews with financial market participants, and analysis of the financial press between January 2008 and 2013, this paper argues that not only were market participants fully aware of the importance of push factors over the cycle, but that their perceptions of the domestic fundamentals themselves were influenced by these push factors. The paper provides evidence on the micro-foundations of investment decision making that make investors susceptible to influence by the push factors, and adds to a growing body of evidence that financial market borrowing costs are even less in the control of emerging market governments than previously assumed, because even when investors pay attention to domestic fundamentals, their assessments can be divorced from reality. This means that government efforts to attract foreign capital through implementing investors' preferred policies may be ultimately futile.     

Candidate Ambition and Advancement under Term Limits

In this paper, I present a model of candidate entry into a two-tiered hierarchy of political positions with the objective of exploring the extent to which term limits at lower level political positions alter the average skill of office-seekers for higher level political positions. In addition, this paper analyzes whether the increase in political skill in upper level office holders comes at the expense of lower level political positions. The results suggest that under certain conditions term limits on lower level elected offices may reduce the expected political skill of officeholders at the lower level without guaranteeing an increase in skill at the upper level.     

The Incidence of Smartphone Usage among Tourists

We explore smartphone utilization by tourists from 24 countries visiting either Rome, Italy or Athens, Greece. By extending a standard technology acceptance model, we identify common travel uses for smartphones, which include taking photos, social networking, viewing maps, finding transportation and searching for shops and restaurants. Younger cohorts utilize their phones more than older cohorts, but there is no difference in utilization between females and males. The most important factors affecting behaviour are how often the tourist normally utilizes their smartphone when at home, and whether or not the tourist has non‐WiFi data access. We conclude with recommendations for future research. Copyright © 2016 John Wiley & Sons, Ltd.     

Network positioning and R&D activity: a study of Italian groups

Traditionally, R&D studies focus on organisational characteristics and internal context factor effects on a firm's R&D activities. This paper extends previous research by analysing firm–level R&D expenditures in the wider context of inter–organisational networks. Using sample of 2002 manufacturing firms in Italy, it provides evidence that R&D intensity is linked to a firm's positioning within an industrial group's hierarchy. Further tests on the antecedents of R&D expenditures are carried out in relation to the effects of firm characteristics and industry factors. Important findings include a significant and positive association between R&D intensity and the firm's size, performance, intangible assets and industry concentration. These findings suggest that, in addition to firm–level factors and its market environment, network resources and organisation may play an important role in driving the intensity of the firm's R&D expenditures.     

Restless worlds of work,health and migration: domestic workers in Johannesburg

The lives of migrant women have generally received far less attention than those of their male counterparts. Similarly, male migrants have been the focus of research on the relationship between migration and HIV/AIDS. Little attention has been paid to the vulnerability of female migrants themselves to HIV infection and their access to health care and treatment. Domestic work is the second largest sector of employment for black women in South Africa, and the largest for black women in Johannesburg and, as this article shows, most of these workers are migrants. Based on a survey of 1100 domestic workers in Johannesburg, the article explores the lives of domestic workers, focusing on their experience as migrants, their working conditions, use of health-care services and knowledge of and possible vulnerability to HIV/AIDS.     

Foreign direct investment and governance quality in Russia

This paper studies the effect of poor governance quality on foreign direct investment in Russia. Using a survey of businesses across forty administrative districts, we find that higher frequency of using illegal payments and higher pressure from regulatory agencies, enforcement authorities, and criminals, negatively affect foreign direct investment. Our identification strategy builds on the exogenous cross-regional variation in worker strikes during 1895–1914, the period before the October Revolution. We find that moving from the average to the top governance quality across Russian regions more than doubles the FDI stock.