A THEORY OF MIGRATION AS A RESPONSE TO OCCUPATIONAL STIGMA*

A theory is developed of labor migration that is prompted by a desire to avoid “social humiliation.” In a general‐equilibrium framework, it is shown that as long as migration can reduce humiliation sufficiently, migration will occur even between two identical economies. Migration increases the number of individuals who choose to perform degrading jobs and consequently, migration lowers the price of the good produced in the sector that is associated with low social status. Moreover, the greater an individual's aversion to performing degrading jobs, the more likely it is that he will experience a welfare gain when the economy opens up.     

The Information Value of Bond Ratings

We test whether bond ratings contain pricing-relevant information by examining security price reactions to Moody's refinement of its rating system, which was not accompanied by any fundamental change in issuers' risks, was not preceded by any announcement, and was carried simultaneously for all bonds. We find that rating information does not affect firm value, but that debt value increases (decreases) and equity value falls (rises) when Moody's announces better- (worse-) than-expected ratings. We also find that when Moody's announces better- (worse-) than-expected ratings, the volatilities implied by prices of options on the fine-rated issuers' shares decline (rise).     

Why Do Firms Announce Open-Market Repurchase Programs?

Empirically, a price increase accompanies the announcement ofan open-market stock repurchase program, even though the announcementis not a commitment. In fact, for many announced programs noshares are ever actually repurchased. This article exploresthis puzzle. In the single-firm-type version of the model, theoption that a firm grants itself by announcing a program doesnot generate announcement returns. In equilibrium, long-rungains from the informed trading that the option creates areoffset by short-run costs from the market's accounting for thisadverse selection. Based on this trade-off, I construct a signaling(two-type) model that can deliver announcement returns. In theseparating equilibrium, good firms do not incur any cost whenthey announce programs. Their gains from informed trading inthe long run offset the cost of announcement incurred in theshort run. Mimicry is costly, because a bad firm's long-rungains from informed trading cannot compensate for the short-runcost of announcing.     

In search of an evolutionary edge: trading with a few, more, or many

Consider a population of farmers who live around a lake. Each farmer engages in trade with his m adjacent neighbors, where m is termed the “span of interaction.” Trade is governed by a prisoner’s dilemma “rule of engagement.” A farmer’s payoff is the sum of the payoffs from the m prisoner’s dilemma games played with his ^m/₂^m/_2 neighbors to the left, and with his ^m/₂^m/_2 neighbors to the right. When a farmer dies, his son takes over. The son who adheres to his father’s span of interaction decides whether to cooperate or defect by considering the actions taken and the payoffs received by the most prosperous member of the group comprising his father and his father’s m trading partners. Under a conventional structure of payoffs, it is shown that a large span of interaction is detrimental to the long-run coexistence of cooperation and defection, and conditions are provided under which the social outcome associated with the expansion of trade when individuals trade with a few is better than that when they trade with many. Under the stipulated conditions it is shown, by means of a static comparative analysis of the steady state configurations of the farmer population, that an expansion of the market can be beneficial in one context, detrimental in another.     

Interest Rates Fluctuations and the Advantage of Long-Term Debt Financing: A Note on the Effect of the Tax-Timing Option

When interest rates fluctuate, issuing long-term debt may implicitly generate a valuable tax-timing option. The holder of long-term debt has an optimal-trading taxtiming option to immediately realize capital losses if an increase in interest rates lowers the price of the bond below the original issue price. In contrast, if interest rates decrease and the bond price is greater than the original issue price, the holder would prefer to defer the realization of capital gains. This tax-timing option confers an advantage for issuing long-term debt. Our formal presentation also highlights how the tax-timing options of long-term debt may increase the debt capacity of the firm.     

Blue, white and steel collar: a case study of robot introduction

This study describes the human and organizational implications of introducing robots into an Israeli plant. Findings point at several gaps between the perceptions of senior management, middle management and rank and file employees.     

Language and market inclusivity for women entrepreneurship: the case of microfinance

Inclusive markets are key to fostering female entrepreneurship, and the microfinance sector has recognized and acted on this. Existing research has studied how institutions and organizational factors facilitate the process by which microfinance and other financial intermediaries tackle gender-based financial exclusion. But while the role of cultural institutions has been recognized as important, little research has systematically integrated culture in the study of gender-based financial exclusion. We posit that language is a cultural institution that influences the extent to which financial intermediaries are successful in outreaching women and supporting female entrepreneurship. Inspired by a performativity approach, we develop a set of hypotheses that delineate how a specific feature of language, gender marking in grammar, moderates the role of institutional (state capacity) and organizational (NGO status and global ties) factors in shaping microfinance outreach to women. Using the ratio of female to male borrowers in 2361 microfinance organizations from 115 countries during the period 1995–2015, we confirm that market inclusion of women depends on organizational and institutional factors, and that gender marking in grammar influences those relationships.