Personality characteristics and the decisions to become and stay self-employed

Based on a large, representative German household panel, we investigate to what extent the personality of individuals influences the entry decision into and the exit decision from self-employment. We reveal that some traits, such as openness to experience, extraversion, and risk tolerance affect entry, but different ones, such as agreeableness or different parameter values of risk tolerance, affect exit from self-employment. Only locus of control has a similar influence on the entry and exit decisions. The explanatory power of all observed traits among all observable variables amounts to 30 %, with risk tolerance, locus of control, and openness having the highest explanatory power.     

The Integration of Mortgage and Capital Markets in Emerging Economies—Evidence from South Africa

Integration of the capital and mortgage markets is an important step in moving emerging countries toward full economic development. With data from South Africa, this research examines the incremental contribution of deregulation and the secondary mortgage market to the integration between the mortgage and capital markets. With deregulation occurring in the early 1980s, the results indicate that the two markets were fully integrated prior to 2001 when a secondary mortgage market was introduced in South Africa. However, we also find that the introduction of the secondary mortgage market has significantly reduced constraints on the supply of mortgage credit.     

Henry George's Theory of State's Agenda: The Origins of His Ideas on Economic Policy in Adam Smith's Moral Theory

Abstract . The tension between Henry George's reformism and his laissezfaire liberalism was resolved through a system of natural liberty George derived from the relation between Adam Smith's ethics and economics. Crucial for George's nonutilitarian philosophy of government was the interdependence between the moral sense (sympathy) and the prevailing socioeconomic order. In the appropriate institutional environment, the role of the government was diminished since the pervasive moral sense insured justice by monitoring the individual's pursuit of economic self-interest. In contrast, a defective socio economic order required government intervention. For example, land monopoly and the maldistribution of income undermined the role of sympathy, promoted excessive self interest and the breakdown of the system of natural liberty. Government action through the single tax eliminated the “fear of want,” restored an operative moral sense and guaranteed justice in society. Under these conditions, government can provide additional services for a growing society without being susceptible to “corrupt and tyrannous” behavior.     

Offshoring Professional Services: Institutions and Professional Control

We examine the reasons why one might expect it to be more difficult to offshore professional work than manufacturing work in a globalized world. We then provide data on the variations in a specific case — the offshoring of diagnostic radiology from the USA, UK and Singapore. We show that existing theories on the ‘offshorability’ of jobs have not captured how national institutions and occupational regulations continue to define professional work. We then review the question of supply from India's perspective and report that both macro‐institutional and organizational contexts make it complicated for Indian doctors to supply much of this service.     

Communicating a company's positive impact on society—Can plausible explanations secure authenticity?

Organizations could prosper by delivering products and services that make society a better place. However, they face the challenge of successfully communicating what they contribute to society, especially if their contributions are closely related to their core business activities. The thin line between genuine societal engagement and the pursuit of profitability may feed society's increasing skepticism about the genuineness of organizations' care for societal issues. This study addresses the question of how a for-profit organization can successfully communicate what it intends to contribute to society while still coming across as authentic. If customers can explain the organization's envisaged societal contributions in terms of characteristics of the organization, they can see more clearly how its contributions fit the organization and will perceive the organization as more authentic. Perceived authenticity, in turn, increases customer loyalty and perceived fit enhances stakeholders' attitudes toward the organization's societal engagement.     

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Ohne Zusammenfassung     

Improving the performance of random coefficients demand models: The role of optimal instruments

We shed new light on the performance of Berry, Levinsohn and Pakes’ (1995) GMM estimator of the aggregate random coefficient logit model. Based on an extensive Monte Carlo study, we show that the use of Chamberlain’s (1987) optimal instruments overcomes many problems that have recently been documented with standard, non-optimal instruments. Optimal instruments reduce small sample bias, but they prove even more powerful in increasing the estimator’s efficiency and stability. We consider a wide variety of data-generating processes and an empirical application to the automobile market. We also consider the gains of other recent methodological advances when combined with optimal instruments.     

The Economics of Farm Fragmentation: Evidence from Ghana and Rwanda

Farm fragmentation, in which a household operates more thanone separate parcel of land, is a common phenomenon in Sub-SaharanAfrica. Concerned by the perceived costs of fragmented as opposedto consolidated holdings, several countries have implementedland consolidation programs. But these interventions overlookthe benefits that land fragmentation can offer farmers in managingrisk, in overcoming seasonal labor bottlenecks, and in bettermatching soil types with necessary food crops. This articleuses household data from Ghana and Rwanda to discuss the incidenceand causes of fragmentation. It then formally tests the relationbetween fragmentation and land productivity and risk reduction.The conclusion is that consolidation programs are unlikely tolead to significant increases in land productivity and may actuallymake farmers worse off. Policymakers should focus instead onreducing the root causes of fragmentation: inefficiencies inland, labor, credit, and food markets.