Plant Scale and Exchange‐Rate‐Induced Productivity Growth

This paper examines the impact of exchange rate movements on firm‐level productivity through changes in the scale of production. We employ plant‐level data to examine whether, and in what direction, exchange rate movements affect the scale of production, and how these changes in scale influence productivity. The paper finds that a real appreciation of the domestic currency reduces shipments and this negative effect is larger for exporters (both domestic and foreign owned). The paper also finds evidence that the appreciation‐induced reduction of scale negatively affects productivity at the plant level. This scale effect more than offsets any potential gains from the appreciation‐induced reduction in the price of imported inputs.     

Comparing Student Achievement across Experimental and Lecture-Oriented Sections of a Principles of Microeconomics Course

An increasingly popular alternative to the lecture-oriented “chalk-and-talk” approach to teaching principles of microeconomics is the use of classroom experiments. Like other alternatives to traditional teaching methods, there exists little more than anecdotal evidence supporting the effectiveness of the experimental approach. We estimate the effect of participating in classroom experiments on student achievement in a principles of microeconomics course. Nine sections (300 students) participated in the study, two of which (59 students) relied heavily on classroom experiments throughout the semester. The remaining seven sections (241 students) used no experiments. We find that students in the experimental sections experienced significantly higher gains in Test of Understanding in College Economics (TUCE) scores but differed little on other more qualitative outcomes. Additionally, results indicate that certain student characteristics, including gentler, major, and grade point average, can be used to predict a student's likely success when choosing between courses that rely on experiments and those that employ more traditional forms of pedagogy.     

Public Disclosure and Private Decisions: Equity Market Execution Quality and Order Routing

In 2001, the Securities and Exchange Commission (SEC) requiredmarket centers to publish monthly execution-quality reportsin an effort to spur competition for order flow between markets.Using samples of stocks trading on several markets, we investigatewhether past execution quality affects order-routing decisionsand whether the new disclosure requirements influence this relationship.We find that routing decisions are associated with executionquality; markets reporting low execution costs and fast fillssubsequently receive more orders. Moreover, the reports themselvesappear to provide information that was unavailable previously.Our results are consistent with active competition for orderflow that can be influenced by public disclosure. (JEL G24,G28, K22)     

Toward a National Market System for U.S. Exchange–listed Equity Options

In its response to the 1975 Congressional mandate to implement a national market system for financial securities, the Securities and Exchange Commission (SEC) initially exempted the option market. Recent dramatic changes in the structure of the option market prompted the SEC to revisit this issue. We examine a sample of actively traded, multiply listed equity options to ask whether this market's characteristics appear consistent with the goals of producing economically efficient transactions and facilitating “best execution.” We find marked changes between June 2000, when quotes are often ignored, and January 2002, when the market more closely resembles a national market.     

Ethics and Performance: A Simulation Analysis of Team Decision Making

The interrelationships among a number of variables and their effect on ethical decision making was explored. Teams of students and managers participated in a competitive management simulation. Based on prior research, the effects of performance, environmental change, team age, and type of team on the level of ethical behavior were hypothesized. The findings indicate that multiple variables may interact in such a fashion that significance is lost.     

Do small shareholders count?

We hypothesize that age similarity among small shareholders acts as an implicit coordinating device for their actions and, thus, could represent an indirect source of corporate governance in firms with dispersed ownership. We test this hypothesis on a sample of Swedish firms during the 1995-2000 period. Consistent with our hypothesis, we find that compared with shareholders of differing ages, same-age noncontrolling shareholders sell more aggressively following negative firm news; firms with more age-similar small shareholders are more profitable and command higher valuation; and an increase (decline) in a firm's small shareholder age similarity brings a significantly large increase (decline) in its stock price. The last effects are more pronounced in the absence of a controlling shareholder.     

How did a network of marine protected areas impact adjacent fisheries? Evidence from Australia

Marine‐protected areas (MPAs) are an effective means of improving habitat quality and biodiversity in the world’s oceans. While the advantages of MPAs as a mechanism for conservation and biodiversity are well established, the potential improvements to fishery performance resulting from a network of MPAs are still being established. Countries around the world have committed to establishing networks of MPAs within their waters by 2020, in response to the United Nations Convention on Biological Diversity. This, coupled with the increasing global demand for seafood and heavy reliance on fishery resources as a source of economic development for many coastal communities, means that an understanding of how these networks can be expected to impact fishery performance is extremely important. We use a difference‐in‐difference modelling approach to isolate the change in the fishery performance associated with the south‐east marine reserve network in Australia. We find no evidence that the economic performance of adjacent fisheries was negatively impacted by the network. This lack of impact is likely due to a network design explicitly intended to avoid effort displacement in key fisheries, along with fishery management changes intended to remove excess fishing capacity.     

Foreign investment in Russia and China: A long way to go,but reason for optimism

D. LeBaron, with D. Carpenter. 2002. Mao, Marx, and the Market: Capitalist Adventures in Russia and China. New York: John Wiley & Sons, Inc. 303 pages; ISBN: 0‐471‐15315‐X. B. Granville & P. Oppenheimer (Eds.). 2001. Russia's Post‐Communist Economy. Oxford, England: University Press. 538 pages; ISBN 0‐19‐829525‐1. H. Fung & K.H. Zhang (Eds.). 2002. Financial Markets and Foreign Direct Investment in Greater China. New York: M.E. Sharpe, Inc. 302 pages; ISBN: 0‐7656‐0804‐9.