Expropriation and direct investment

The paper considers a model in which private foreign investors make direct long-lived capital investments in a small developing country that is subject to stochastic shocks to production. Depending upon the preferences of the host country, we find that expropriation can occur because of either 'desperation or ‘opportunism’. We show that under reasonable assumptions increased investment makes expropriation less likely to occur, and that the level of investment chosen by atomistic foreign investors may be non-optimal.     

Bank Growth Choices and Changes in Market Performance

Changes in bank market performance are compared for banks that choose not to grow, to branch, bank acquire, product expand, or some combination. Using the change in market value‐to‐book value ratios, banks that include acquiring other banks as part of their growth strategy have significant positive changes in performance. Positive performance by bank acquirers is in contrast to many studies, but prior research has not reviewed other growth activities in a single model, nor used market‐based measures to review performance over longer time periods following bank expansion.     

Seemingly altruistic behavior: selfish genes or cooperative organisms?

A largely unrecognized agency problem is embedded in Dawkins’s selfish gene theory, which treats an organism as an agent of its genes; the economic view of this problem is brought to bear on the theory and is used to offer an explanation of the correlation between altruistic behavior and biological closeness of interacting organisms that differs from that given by selfish gene theory. The essay also discusses differences between empirical implications of selfish gene theory and those of a reciprocity theory of seemingly altruistic behavior.