Using complex networks analysis to assess the evolution of international economic integration: The cases of East Asia and Latin America

This paper exploits recently-developed indicators based on network analysis to investigate the pattern of international integration followed by East Asian countries and compares it with the Latin American performance. Standard trade openness indicators fall short of portraying the peculiarity of the Asian experience, and of explaining why other emerging markets with similar characteristics have been less successful over the last 25 years. The analysis offers an alternative perspective on the issue regarding international economic integration by taking into account the whole structure of international trade relationships and by determining both the position of countries in the world trade network, and its evolution over time. We find that East Asian countries are more integrated into the world economy, as they have moved from the periphery of the network towards its core. Our results support the idea that the degree of openness matters but it is not enough to characterize economic integration. The number and identity of trade partners, and the specific individual structure of trade for each country, need to be incorporated in order to fully characterize international economic integration. By doing so, it is possible to argue that the integration process of the East Asian countries mirrors their high economic performance, while the lower degree of integration of Latin America can be related to the lack of economic development of the region, even though their degree of openness has increased.     

Training subsidies and the wage returns to continuing vocational training: Evidence from Italian regions

We use the regional and time variation of training grants in Italy to identify the causal effect of (formal continuing vocational) training on earnings. We estimate log-linear earnings regressions with constant marginal returns to training and find that one additional week of training increases monthly net earnings by 1.36%, substantially less than the 3% or more often found in the literature. Estimated returns vary significantly by firm size, and range from 0.40% in firms with more than 100 employees to 2.51% in smaller firms, the bulk of the Italian private sector. A simple back of the envelope comparison of the marginal costs and benefits of training policy suggests that the latter are higher than the former.     

Monetary policy,ownership structure,and risk-taking at financial intermediaries

This paper examines how ownership structure interacts with monetary policy in shaping financial intermediaries' appetite for risk. By constructing a large panel of banks across Western Europe, we provide evidence that differences in bank ownership influence the transmission of monetary policy via the risk-taking channel. While shareholder banks actively adjust the riskiness of their portfolios to changes in interest rates, stakeholder banks appear to be less responsive to such changes. These findings call for greater attention to the nature of bank ownership when setting monetary policy.     

Corporate codes of ethics and cash holdings: International evidence

In the presence of agency costs, managers retain cash for their own benefit at the expense of shareholder wealth. Extending prior literature on the role of corporate governance in mitigating the effects of agency conflicts on corporate cash holdings, we study a governance mechanism that has largely been overlooked, namely, corporate codes of ethics. We find a negative association between code of ethics quality and cash holdings, which suggests that managers hold less cash when the firm has a strong code of ethics in place. The effect is greater when agency costs are elevated due to weaker country-level investor protections. We also find that payouts and the marginal value of cash holdings to investors are increasing in code quality. Overall, our results are consistent with codes of ethics helping to limit opportunistic behaviour from managers when determining the firm's level of cash holdings.     

Effect of grandchildren on the happiness of grandparents: Does the grandparent's child's gender matter?

Using a representative sample from Japan and a difference-in-differences strategy, we investigate whether the effect of having grandchildren on the happiness of grandparents varies with the gender of their (own) single child. In line with our expectations, we find that maternal grandmothers have more to lose or less to gain from having grandchildren than paternal grandmothers. In contrast, grandfathers’ changes in happiness do not depend on their own child's gender. This result is explained by the fact that grandmothers are more likely to be involved in childrearing when their daughter has a child.