Latina entrepreneurship

We utilize individual panel data from the 1996 and 2001 Survey of Income and Program Participation (SIPP) to analyze the relative success of self-employed female Hispanics. To allow for a meaningful comparison of earnings between self-employed and wage/salary women, we generate different earnings measures addressing the role of business equity. We compare earnings of Hispanic female entrepreneurs to both Latina wage/salary workers and to self-employed female non-Hispanic whites. Latina entrepreneurs are observed to have lower mean earnings than both white female entrepreneurs and Latina employees. However, our findings indicate that Latina entrepreneurs often do well, once differences in mean observable characteristics, such as education, are taken into account. Self-employed Latinas are estimated to earn more than observationally similar non-minority white female entrepreneurs and slightly less than observationally similar wage/salary-employed Latinas.     

Managing policy lapse risk in Sweden’s life insurance market between 1915 and 1947

Abstract

We examine the challenges that Swedish life insurers faced in managing the lapse risk of policies written on the lives of the industrial urban working class between 1915 and 1947. We observe that with the threat of State socialisation of insurance in the 1930s, industrial life insurers modified their business practices to better control policy lapses. Using firm-level data, we also analyse the effect of socio-economic changes, such as rising real wages, interest rate fluctuations and unemployment on life insurance policy lapses. Our results support contemporary tests of the emergency fund and interest rate explanations for the voluntary premature termination of life insurance policies.     

Stochastic frontier models with correlated effects

Journal of Productivity Analysis - In this paper we provide several new specifications within the true random effects model as well as stochastic frontiers models estimated with GLS and MLE that...     

National Culture and Takeover Contest Outcomes

We examine the effects of cultural differences on the outcome of takeover contests. Our main focus is on individuality, which we posit to have an effect on firm behavior in international takeover contests. In a sample of international acquisitions with bidders from multiple countries, we find that individuality positively relates to the probability of placing the winning bid. We further find that takeover contest winners with high individuality scores experience lower announcement returns. Our results are consistent with the literature that links individuality to overconfidence. Our evidence suggests that firms should control culture‐related behavioral biases in their mergers and acquisitions activity.     

WEIGHTED‐AVERAGE LEAST SQUARES (WALS): A SURVEY

Model averaging has become a popular method of estimation, following increasing evidence that model selection and estimation should be treated as one joint procedure. Weighted‐average least squares (WALS) is a recent model‐average approach, which takes an intermediate position between frequentist and Bayesian methods, allows a credible treatment of ignorance, and is extremely fast to compute. We review the theory of WALS and discuss extensions and applications.     

Gazelles as job creators: a survey and interpretation of the evidence

It is often claimed that small and young firms account for a disproportionately large share of net employment growth. We conduct a meta-analysis of the empirical evidence regarding whether net employment growth rather is generated by a few rapidly growing firms—so-called Gazelles—that are not necessarily small and young. Gazelles are found to be outstanding job creators. They create all or a large share of new net jobs. On average, Gazelles are younger and smaller than other firms, but it is young age more than small size that is associated with rapid growth. Gazelles exist in all industries. They seem not to be overrepresented in high-technology industries, but there is some evidence that they are overrepresented in services.     

Migration and servicification: Do immigrant employees spur firm exports of services?

Services play an increasingly important role in production, employment and international trade but are subject to substantially higher trade costs relative to manufactured goods. Knowledge of how these trade costs can be mitigated is important for facilitating trade of services. In this paper, we analyse the role of immigrant employees as facilitators of firm exports of services, a role that remains largely unexamined. We bridge the gap in existing research by drawing on new data for nearly 30,000 Swedish firms during the period 1998–2007 within a heterogeneous firm framework. The results have important policy implications. As the multilateral approach to facilitating trade is challenged and more countries are imposing measures to restrict the cross‐country mobility of people, policymakers may need to find new ways to promote exports of services. Our results indicate that immigrant employees spur firms' export of services activities: hiring one additional foreign‐born worker can increase services exports by approximately 2.5 per cent, on average, with a stronger effect found for skilled and newly arrived immigrants. Therefore, policymakers could leverage the findings of this study to implement initiatives that utilise high‐skilled immigrants to promote services exports.     

Credit supply,post-acquisition performance and financial constraints

We study the effect of credit supply on the acquisition behaviour of financially constrained (FC) and financially unconstrained (UC) firms. FC firms are likely to conduct acquisitions when credit supply is greater while UC firms can conduct acquisitions whenever a good opportunity arises. We argue that the flexibility unconstrained firms have is valuable. Our empirical results indicate that UC firms outperform FC firms up to 36 months after the acquisition. We also find that increased credit supply increases the probability of conducting mergers and acquisitions (M&As) for FC firms while it has less impact on M&A behaviour of UC firms.     

A plausible model of yield curve dynamics

We present a simple model of yield curve dynamics which satisfies key criteria of plausibility. Specifically, yields are non-negative and the Sharpe ratio of a mean-variance optimal bond portfolio has a reasonable magnitude. The model matches stylized data features, in particular long-run moments of yields and excess returns.