The dominant borrower syndrome

The financing channel of a fiscal stimulus matters for the size and the sign of the fiscal multiplier. We develop a general equilibrium model where a fiscal stimulus is partially bank-funded and the government becomes the dominant borrower from banks relative to entrepreneurs. This leads to a negative impact on credit spreads, investment and a contraction in output. We support our story with a structural vector autoregression for a sample of developing countries featuring the dominant borrower syndrome.     

Early Smoking,Education, and Labor Market Performance

This study investigates the effects of early smoking on educational attainment and labor market performance by using mixed ordered and mixed proportional hazard models. The results show that early smoking adversely affects educational attainment and initial labor market performance, but only for males. The probability to finish a scientific degree is 4%-point lower for an early smoker. The effect of early smoking on initial labor market performance is indirect through educational attainment. Once the indirect effect is controlled for there is no direct effect. Moreover, for males only, early smoking has a negative effect on current labor market performance even after conditioning on educational attainment. The probability to have an academic job is 4%-point lower for an early smoker. For females neither education nor labor market performance is affected by early smoking.     

Property rights in a very poor country: tenure insecurity and investment in Ethiopia

This article provides evidence from one of the poorest countries in the world that the institutions of property rights matter for efficiency, investment, and growth. With all land state‐owned, the threat of land redistribution never appears far off the agenda. Land rental and leasing have been made legal, but transfer rights remain restricted and the perception of continuing tenure insecurity remains quite strong. Using a unique panel data set, this study investigates whether transfer rights and implied tenure insecurity affect household investment decisions, focusing on trees and shrubs. The panel data estimates suggest that limited perceived transfer rights negatively affects the long‐term investment in Ethiopian agriculture, contributing to the low returns from land and perpetuating low growth and poverty.     

Supply-side effects of exchange rates, exchange rate expectations and induced currency depreciation

Within the context of a small open economy model, this paper examines the repercussions of induced currency depreciation. The results presented in this paper are based on a model with firm microeconomic foundations and which takes into account both the supply and demand-side effects of exchange rate variations. The distinguishing feature of the model is the role of exchange rate expectations. We consider three kinds of expectations; adaptive, extrapolative, and regressive expectations. We also perform several sensitivity tests based on these expectations. Our simulation exercise shows that the effect of induced currency depreciation depends largely on supply-side effects. In most cases, we find that currency depreciation results in (i) a fall in output, (ii) an increase in prices and (iii) an improvement in the balance of trade. In the absence of weak supply-side effects of exchange rates, we find that, if the Marshall-Lerner conditions hold, then depreciation of the home currency has a favorable effect on output but its effect on the balance of trade is negative.     

Spatial patterns and economic contributions of mining and tourism in biodiversity hotspots: A case study in China

Mining activities and tourism are both growing fast in biodiversity intense areas globally. However, the dynamic and interactions between mining and tourism when they both occur in biodiversity hotspots, and how they together may impact the economy and environment in these biodiversity rich areas, remain unclear. This paper examined how the two industries interact in terms of their economic contributions and spatial patterns in a biodiversity hotspot, Yunnan, China. We used correlation analyses to measure the relationships between mining activities, tourism visits and local gross domestic productions. We also employed a distance-based technique to investigate the nature of any dependency between mining and tourism sites. Results showed that mining activities tend to be in relatively fluent areas while tourism tends to occur in less developed areas. Our results showed that the location of tourism and mining sites are likely to be close to one another but the two industries usually perform better economically when they are apart from each other. These findings can provide insights on how mining and tourism together may impact the economy and environment in biodiversity rich areas, and provide important information for managers and planners on balancing mining and tourism development in these areas.     

The Impact of Work–Family Programs on the Relationship between Gender Diversity and Performance

Work–family programs signal an employer's perspective on gender diversity to employees, and can influence whether the effects of diversity on performance are positive or negative. This article tests the interactive effects of nonmanagement gender diversity and work–family programs on productivity, and management gender diversity and work–family programs on financial performance. The predictions were tested in 198 Australian publicly listed organizations using primary (survey) and secondary (publicly available) data based on a two‐year time lag between diversity and performance. The findings indicate that nonmanagement gender diversity leads to higher productivity in organizations with many work–family programs, and management gender diversity leads to lower financial performance in organizations with few work–family programs. The results suggest different business cases at nonmanagement and management levels for the adoption of work–family programs in gender‐diverse organizations. © 2014 Wiley Periodicals, Inc.     

Clustering as an organizational response to capital market inefficiency: evidence from microenterprises in Ethiopia

Absence of a well-developed capital market has been listed as a key obstacle to industrialization in developing countries in the development literature. In this paper, we show that industrial clusters, through specialization and division of labor, can ease the financial constraints of microenterprises even in the absence of a well-functioning capital market. By using data from more than 17,000 microenterprises in four sectors and four regions of Ethiopia, we find that clustering lowers capital entry barrier by reducing the initial investment required to start a business. This effect is found to be significantly larger for microenterprises investing in districts with high capital market inefficiency, indicating the importance of clustering as an organizational response to a credit constrained environment. The findings highlight the importance of cluster-based industrial activities as an alternative method of propagating industrialization when local conditions do not allow easy access to credit.     

Are maximizers blind to the future? When today’s best does not make for a better tomorrow

A number of studies have demonstrated that a maximizer’s tendency to settle for only the best choice option leads them to discard the past and feel dissatisfied in the present. The current study, however, investigates whether maximizers’ quests for perfection blinds them toward the future. A study of 522 respondents drawn from a probabilistic sample of the US population examines a series of hypotheses related to how a maximizer views the future. Consistent with the resource slack theory (i.e., the overestimation of the amount of time that will be available in the future), maximization tendencies diminish the consumer’s ability to look ahead to the future, both directly and indirectly, through the intervening roles of both regret and polychronicity (i.e., multitasking). Maximizers do not estimate future task demand accurately as they associate strong feelings of regret with their previous choices and dismiss them as poor decisions. Additionally, low polychronicity hinders their capacity to set aside sufficient time resources to be devoted to future tasks when engrossed in a current task. Implications for managers and researchers are discussed before concluding with further research avenues and limitations.     

The interplay between organizational and national cultures: a comparison of organizational practices in Canada and South Korea using the Competing Values Framework

This paper examines the concept of organizational culture using the Competing Values Framework (CVF) in organizations from six different industries in Canada and South Korea. The Competing Values Framework (Quinn and Rohrbaugh, 1983; Quinn, 1988) is used to compare organizational cultures of similar firms and their HRM in the two countries. The data reported are from thirty-nine Canadian and forty Korean organizations. The findings show that, even though some aspects of organizational culture are related and can be attributed to the differences between the national cultures (Korean versus Canada), industry and contextual variables do contribute to a significant extent to the perception of organizational culture. In addition, the analysis reported here shows that other organizational aspects that are closely related to organizational culture (organizational climate and leadership) have significant associations with national cultures as well as industry and contextual factors. The aspects of organizational context under study included size, age and ownership of the firms, uncertainty and unpredictability of the environment, organizational support for training and unionization. Implications of the study for cross-national research, and for the use of competing Values Framework are discussed.