Religion and International Trade: Does the Sharing of a Religious Culture Facilitate the Formation of Trade Networks?

A bstract .   Despite interest in the influence of religion on economic activity by early economists like Adam Smith, modern economists have done little research on the subject. In light of the apparent religious fervor in many parts of the global economy, economists' seeming lack of interest in studying how religious cultures enhance or retard the globalization of economic activity is especially surprising. This article makes a contribution toward filling this void by examining how religion affects international trade. Specifically, we examine whether the sharing of religious cultures enables the formation of exchange networks that can overcome the failure or nonexistence of other social and economic institutions necessary for completing complex international transactions. We apply an expanded gravity model of international trade to control for a variety of factors that determine trade, and we use two recently developed regression methods, scaled OLS and nonlinear least squares, to exploit the model to its fullest. We find that the sharing of Buddhist, Confucian, Hindu, Eastern Orthodox Catholic, and Protestant cultures by people in different countries has a significantly positive influence on bilateral trade, all other things equal. The sharing of Roman Catholic culture has a significantly negative influence on bilateral trade, and the sharing of Islamic and Judaic cultures neither promotes nor discourages international exchange. These results suggest that some religious cultures are more conducive than others for forming international trade networks.     

Toward a Typology of Family Firm Corporate Entrepreneurship

Family involvement in business creates idiosyncrasies in firm behavior that promote long‐term, often transgenerational, strategic logics that ostensibly align with the motivations and outcomes of corporate entrepreneurship. Interestingly, extant research provides only minimal insight into the heterogeneous nature of corporate entrepreneurship orientations pursued by family firms. To better understand this heterogeneity, we develop a typology of corporate entrepreneurship in family firms providing a reconciliatory approach to this literary diversity and suggest that the varied corporate entrepreneurship orientations of family firms are impacted by the duality of a family's distinct intention to pursue transgenerational succession and capabilities to acquire external knowledge.     

Do export status and export intensity increase firm performance?

This study examines the effects of export status and export intensity on the performance of firms in Ghana. Our measures of performance include productivity and profitability. Using the Regional Project on Enterprise Development (RPED) dataset covering the period 1991–2002, the results of this study indicate that export status and export intensity have positive effects on productivity, confirming the learning‐by‐exporting hypothesis. Competition on the international market exposes exporting firms to new technologies, and this has the potential of increasing their productivity. Thus, economic policy initiatives should be directed at encouraging firms to enter the export market. Existing exporters should also be motivated to intensify their exporting efforts by exporting more of their output to foreign markets. © 2011 Wiley Periodicals, Inc.     

Carbon Offset Provision with Guilt‐Ridden Consumers

Carbon offsets allow consumers to mitigate their guilt associated with their carbon footprint. On the one hand, when offsets are purchased in an industry unrelated to the consumption activity, offsets are complements to consumption and the introduction of an offset market causes consumption to rise. On the other hand, when offsets are purchased in a related industry, consumption and offsets are substitutes and consumption falls. In general, however, net emissions decline. We find two exceptions to this rule. First, when offsets are purchased in an unrelated market, if there is no latent demand for offsets in their absence, the introduction of offsets can potentially cause a rise in net emissions when producers of “dirty” consumption goods have market power. Second, when offsets are purchased to fund green energy, emissions can rise if “dirty” producers can engage in pre‐emptive strategic commitments and the price of offsets is chosen endogenously.     

Moving average stochastic volatility models with application to inflation forecast

We introduce a new class of models that has both stochastic volatility and moving average errors, where the conditional mean has a state space representation. Having a moving average component, however, means that the errors in the measurement equation are no longer serially independent, and estimation becomes more difficult. We develop a posterior simulator that builds upon recent advances in precision-based algorithms for estimating these new models. In an empirical application involving US inflation we find that these moving average stochastic volatility models provide better in-sample fitness and out-of-sample forecast performance than the standard variants with only stochastic volatility.     

Racial Fractionalization and School Performance

The literature on racial “peer effects” suggests that diversity improves at least some students' school performance. However, a literature in economic development posits that diversity may negatively affect school performance by undermining the efficient provision of education. This article empirically tests this claim, which we call the “public goods channel,” by examining the relationship between racial diversity and student performance in Ohio's school districts. We find that moving from a completely homogenous school district to one in which two racial groups have equal population shares is associated with a 7–17.5 percentage point decline in the passage rate on the state math exam, holding per pupil spending across districts constant. These results suggest that racial diversity is negatively associated with school performance but that the public goods channel is not responsible for this relationship.     

Exit Deterrence

This paper is the first to provide a general context whereby potential entry can lead incumbent firms to permanently reduce the intensity of competition in a market. All previous results found that potential entry would lead to lower prices and greater competition. Examining markets where entry occurs by the acquisition of access rights from an existing incumbent, we demonstrate that, where competitive choices are strategic complements, a more efficient entrant may be unable to acquire those rights from a less efficient incumbent due to the unilateral accommodating behavior of the efficient incumbent. Similarly, such accommodating behavior may deter efficient investment by an incumbent. These results have implications as to how economists view potential entry and its benefits.     

From Experience: The Corporate Black Hole

There is a lot of creative potential lying dormant in corporations because too many managers fail to see innovation as a process to be deliberately managed. C. Joshua Abend sees innovation connected to virtually everything that happens—or doesn't happen—in an organization. He offers in this article ideas that managers can use to remove the impediments to increased innovation and productivity.     

On the tradeoff between wage indexation and foreign exchange intervention

Zusammenfassung Zum “trade-off” zwischen Lohnindexierung und Intervention auf dem Devisenmarkt. - In diesem Aufsatz analysieren die Verfasser die Beziehung zwischen dem optimalen MaΒ für Lohnindexierung und dem für Wechselkursinterventionen. Die optimalen Gr?Βen für diese beiden wirtschaftspolitischen Instrumente werden mit Hilfe einer gemeinsamen Optimierung unter Berücksichtigung ihrer wechselseitigen Interdependenz ermittelt. Das bei der Untersuchung verwendete Modell wird gepr?gt durch die Charakteristika der stochastischen Schocks, die die Volkswirtschaft beeinflussen, und durch das Informations-bündel, das die Wirtschaftssubjekte annahmegem?Β besitzen. In der Analyse wird sowohl geprüft, wie der optimale Lohnindexierungsgrad mit dem gesamten Spektrum m?glicher Wechselkurssysteme zusammenh?ngt, als auch untersucht, wie das optimale AusmaΒ der Wechselkursinterventionen von dem gesamten Spektrum m?glicher Lohnindexierungsgrade abh?ngt. Eines der Hauptergebnisse ist, daΒ es keine monotone Beziehung zwischen den optimalen Werten der beiden wirtschaftspolitischen Instrumente gibt. Worin der “trade-off” zwischen ihnen genau besteht, wird in der Untersuchung im einzelnen dargelegt.

---

Résumé Le ?trade-off? entre l’indexation salariale et l’intervention en taux de change. — Dans cet article les auteurs analysent la relation entre les degrés optimum de l’indexation salariale et l’intervention en taux de change. Les valeurs optimum des deux instruments de politique sont obtenues par une ?optimisation? jointe considérant leur interdépendance mutuelle. Le modéle utilisé est déterminé par les caractéristiques des chocs stochastiques qui affectent l’économie et par les informations des individus. L’ analyse examine la dépendance du degré optimum de l’indexation salariale du spectre total des régimes possibles de taux de change et, vice-versa, la dépendance du degré optimum de l’intervention du spectre total des degrés possibles de l’indexation salariale. Un des résultats principaux est l’absence d’une relation monotone entre les valeurs optimum des deux instruments de politique. De plus, l’analyse détermine la nature précise du ?trade-off? entre eux.

---

Resumen Sobre el ?trade-off? entre la indexaci?n de salarios y la intervenci?n en el mercado de cambios. - En este trabajo los autores estudian la relaci?n entre grados óptimos de indexaci?n de salarios y de intervenci?n en el mercado de cambios. Mediante una optimizaci?n simultánea, que toma en cuenta la interdependencia de estas medidas, se obtienen valores óptimos para ambos instrumentos de politica económica. El modelo utilizado incorpora las caracterfsticas de los shocks estocásticos que afectan a la economfa y el conjunto de informaciones a disposici?n de los individuos. El análisis examina la dependencia del nivel ?ptimo de indexaci?n de salarios de todo el espectro de polfticas cambiarias posibles, como también la dependencia del nivel ?ptimo de intervenci?n en el mercado de cambios de todo el espectro de grados de indexaci?n de salarios posibles. Uno de los resultados centrales es la ausencia de una relaci?n monot?nica entre los valores óptimos de ambos instrumentos; en el análisis se détermina la naturaleza exacta del ?trade-off? que existe entre ellos.