The Labour Market Effects of Vocational Education and Training in Australia

We provide estimates of the effects of completing a Vocational Education and Training (VET) qualification on individual labour market outcomes, particularly on the probability of employment and on earnings. Estimates are provided for 1997, 2001 and 2005. The estimation methodology is based on matched comparisons of persons at each level of VET qualification among Year 12 completers and non‐completers. We find that among Year 12 completers, there is little benefit from obtaining certificate level qualifications, but there are positive employment and earnings outcomes associated with obtaining diploma level qualifications. Among persons who did not complete Year 12, however, there are benefits from obtaining any kind of VET qualification, including the lower level Certificate I and II qualifications.     

FINANCIAL DEVELOPMENT ON GROWTH CONVERGENCE

This paper investigates whether the impacts of financial development on growth convergence vary with the stage of real development. We implement this analysis through the instrumental variable threshold regression approach proposed by Caner and Hansen. Our empirical evidence shows that financial intermediary development leads to long‐run convergence in growth of both economic activity and productivity. Moreover, such convergence‐enhancing effects of financial intermediation are stronger for less‐developed countries than for the more industrialized. In addition, the data reveal that stock market development assists growth convergence only in low‐income countries.     

Debt Stabilizing Fiscal Rules

Unstable government debt dynamics can typically be stabilized around a certain target level of debt by adjustments in various fiscal instruments, like government spending, transfers, or taxes. This paper investigates properties of debt stabilizing rules which link the needed budgetary adjustments to the state of the economy. The paper establishes that the magnitude of the target level of long‐run debt is a key determinant of whether it is possible to find a rule of this type that can be implemented under all available fiscal instruments. Specifically, considering linear feedback rules, the paper demonstrates that there may well exist a critical target level of debt beyond which this is no longer possible. From an applied perspective, this finding is of particular relevance in the context of a monetary union with decentralized fiscal policies. Depending on the target level of debt, there might be a conflict between a common fiscal framework that tracks deficit developments as a function of the state of the economy and the unrestricted choice of fiscal policy instruments at the national level.     

THE IMPACT OF DOMESTIC AND FOREIGN COMPETITION ON SECTORAL GROWTH: A CROSS‐COUNTRY ANALYSIS

This paper examines the impact of competition on the total factor productivity (TFP) of 21 manufacturing sectors in eighteen OECD countries over the period of time 1990–2006. We assume that the source of TFP growth can be either domestic or foreign innovation or technology transfer from the technological frontier. Trade openness, R&D, and human capital can have two effects: a direct effect on TFP (e.g., through innovation) and an indirect effect depending on the productivity gap between a given country and the technological frontier. We find that tougher domestic competition is always associated with higher sectoral productivity. Both import and export penetrations are positively associated with an increase of TFP. However, the channels through which higher TFP is materialized are different: export penetration works through level effect, while import penetration acts mainly when conditional on the level of technological development. The economical magnitude of the effect is not trivial.     

REGULATORY DEALING: TECHNOLOGY ADOPTION VERSUS ENFORCEMENT STRINGENCY OF EMISSION TAXES

We analyze the role of targeted enforcement of emissions taxes when the regulator wants to minimize aggregate emissions via the adoption of new more environmentally friendly technology. The regulator wants to speed up the path of technology adoption generated by a policy of uniform enforcement (that monitors adopters and nonadopters with the same probability) by engaging in a regulatory deal where a reduced monitoring probability is granted in “exchange” for adoption of the new technology. We set up a theoretical model, characterize the circumstances in which such dealing minimizes aggregate emissions, and test our hypothesis using economic laboratory experiments. Our analytical and experimental results suggest that even though such a deal might imply an increased level of violation by adopters, such tolerance is rather an integral part of an overall enforcement strategy that minimizes aggregate emissions when the rate of adoption is endogenous. (JEL L51, Q53, Q55, Q58)     

Women,Muslim Immigrants,and Economic Integration in France

Muslim immigrants to Europe display distinctive attitudes toward women in a wide range of survey data. This study investigates whether this translates into distinctive behavior. Relying on a dictator game in France and an identification strategy that isolates the effect of religion from typical confounds such as race, we compare the donations of matched Christian and Muslim immigrants and rooted French to in‐group and out‐group men vs. women. Our results indicate that Muslim immigrant participants deviate from Christian immigrant and rooted French participants in their behavior toward women: while the latter favor women over men, Muslim immigrants favor men over women.     

Bank ownership type and temporal evolution of long‐term bank funding in the period 2005–2017

This study uses a large panel dataset of Western European banks to examine the determinants of bank funding stability. Banks are divided into three categories by bank ownership type; the ownership types in this study are commercial banks, cooperative banks and savings banks. Three sources of stable bank funding are investigated: customer deposits, equity, and long‐term liabilities. Furthermore, the sum of these funding components is used as a proxy variable for a bank's total available stable funding (ASF). A special focus is on the temporal evolution of these funding types. The regression results show that commercial banks’ funding became much more stable in the period 2005–2017. However, that funding remains, on average, less stable than does cooperative and savings banks’ funding. In addition, funding stability has remained at the pre‐crisis level in cooperative and savings banks, despite a steep dip in cooperative banks’ ASF during the sovereign debt crisis. Furthermore, banks substantially decreased financing from long‐term liabilities after the financial crisis, replacing it with customer deposits and equity.     

Do Institutionalized Traditions Matter During Crisis? Employee Downsizing in Korean Manufacturing Organizations

This study examines the downfall of the permanent employment tradition in South Korean manufacturing organizations in the aftermath of the 1997 East Asian economic crisis. We explore whether organizations abandon their traditional institutionalized practices under discontinuous environmental change or despite the change continue these time‐honoured practices. We examine both the organizational factors that inhibit lay‐offs and performance indicators that trigger organizations to re‐evaluate their lifetime employment practices under drastic environmental upheaval. We test our hypotheses on 574 Korean manufacturing organizations and find that under discontinuous change: (1) economic and institutional factors simultaneously apply opposite forces on organizational actions; (2) organizational factors such as poor performance on productivity and export create a need for headcount reductions while factors such as size, domestic ownership, government support, and unionization create social and institutional pressures that inhibit downsizing; and (3) prior experience with downsizing moderates the relationship between institutional factors and further downsizing.     

Corporate cash holdings and dividend payments: evidence from simultaneous analysis

This study explores the simultaneous relationship between corporate cash holdings and dividend policy using a large sample of around 400 non‐financial firms for the period from 1991 to 2008. The results show that cash holdings are affected by dividends, leverage, growth, size, risk, profitability, and working capital ratio. Dividend policy is affected by cash, leverage, growth, size, risk, and profit. When controlling for simultaneity, dividend payments do not appear to significantly affect cash holdings, nor do cash holdings affect dividend policy. The empirical analysis suggests that simultaneity is crucial in analyzing corporate cash holdings and dividend policy. Copyright © 2011 John Wiley & Sons, Ltd.