Negative Monetary Policy Rates and Systemic Banks' Risk-Taking: Evidence from the Euro Area Securities Register

We show that negative monetary policy rates induce systemic banks to reach-for-yield. For identification, we exploit the introduction of negative deposit rates by the European Central Bank in June 2014 and a novel securities register for the 26 largest euro area banking groups. Banks with more customer deposits are negatively affected by negative rates, as they do not pass negative rates to retail customers, in turn investing more in securities, especially in those yielding higher returns. Effects are stronger for less capitalized banks, private-sector (financial and nonfinancial) securities and dollar-denominated securities. Affected banks also take higher risk in loans.     

Performance of primary education in Burkina Faso: a multi-output stochastic frontier analysis

Primary education plays an important role in the development of human capital in developing countries. Consequently, Burkina Faso has taken steps to ensure both access to, and better quality of, primary education. However, comparisons between the different provinces of Burkina Faso reveal that there is a greater disparity between provinces in terms of access to, and the quality of, education, than there is in the provision of resources. Therefore, the objective of this study is to examine the efficiency of the resources used in providing primary education in Burkina Faso. We apply a stochastic frontier model in order to estimate the efficiency with which the 45 provinces of Burkina Faso provide primary education. The proposed model not only allows two outputs for primary education to be included, but also provides for an assessment of the factors that may affect inefficiency. Our results indicate that, overall, the primary education system in Burkina Faso operates at an efficiency level of approximately 63%. In addition, the living conditions of the population, as well as some factors internal to the education system, appear to have a relationship with the efficiency of primary education in the various provinces of Burkina Faso.     

Do CEOs Matter? Evidence from Hospitalization Events

Using variation in firms’ exposure to their CEOs resulting from hospitalization, we estimate the effect of chief executive officers (CEOs) on firm policies, holding firm-CEO matches constant. We document three main findings. First, CEOs have a significant effect on profitability and investment. Second, CEO effects are larger for younger CEOs, in growing and family-controlled firms, and in human-capital-intensive industries. Third, CEOs are unique: the hospitalization of other senior executives does not have similar effects on the performance. Overall, our findings demonstrate that CEOs are a key driver of firm performance, which suggests that CEO contingency plans are valuable.     

Sacrifice Ratios: Some lessons from EMU countries, 1960-2001

This paper estimates the sacrifice ratios based on the Phillips curve. Using annual data, we estimate individual and common sacrifice ratios for EMU countries. In addition, we test whether the sacrifice ratio is stable for the whole period, which includes years of both high and low inflation rates, such as those observed after the European integration.     

Agency,Firm Growth,and Managerial Turnover

We study managerial incentive provision under moral hazard when growth opportunities arrive stochastically and pursuing them requires a change in management. A trade‐off arises between the benefit of always having the “right” manager and the cost of incentive provision. The prospect of growth‐induced turnover limits the firm's ability to rely on deferred pay, resulting in more front‐loaded compensation. The optimal contract may insulate managers from the risk of growth‐induced dismissal after periods of good performance. The evidence for the United States broadly supports the model's predictions: Firms with better growth prospects experience higher CEO turnover and use more front‐loaded compensation.     

Competition,Loan Rates,and Information Dispersion in Nonprofit and For‐Profit Microcredit Markets

We describe the competitive environment of microcredit markets globally and we study the effects of competition on loan rates of microfinance institutions (MFIs). We use a new database from rating agencies, covering 379 for‐profit and nonprofit MFIs in 67 countries over 2002–2008. Controlling for interest rate ceilings and other country‐specific factors, we first find that nonprofits are relatively insensitive to industry‐wide concentration changes, while for‐profits charge significantly lower rates in less concentrated markets. Second, we find spillover effects between the for‐profit and nonprofit segments. Third, we show that the effects of concentration are consistent with an information dispersion mechanism.     

PRODUCTIVITY GROWTH IN LATIN AMERICA OVER THE LONG RUN

The low pace of Latin American productivity growth in recent decades, despite extensive economic reforms, has yet to be understood in a longer‐run context where factors such as demographic changes, structural shifts, and investment levels can be taken fully into account. The OxLAD database provides comparable sectoral output and workforce series over 1900–2000 for the six leading economies in the region for the first time. Our analysis of this new dataset shows that: intersectoral resource reallocation reduced aggregate productivity growth in all three periods; total factor productivity growth was low throughout the century, and even negative in the closing three decades; and thus factor accumulation—investment in fixed capital and skilled labor—was the main source of productivity growth in Latin America during the twentieth century.