The impact of shadow banking on the implementation of Chinese monetary policy

This paper empirically analyses the relationship between the shadow banking system and implementation of monetary policy in China using the VECM methodology. We show that an increase in the size of shadow banking sector increases the independence of bank lending from the policies of the People Bank of China. We also find that Shadow Banking works in an asymmetric fashion in that it amplifies increases in the money supply but weakens the effects of restrictive interest rate-based monetary policy decisions.     

Calling circles: network competition with nonuniform calling patterns

We introduce a flexible model of telecommunications network competition with nonuniform calling patterns, accounting for the fact that customers tend to make most calls to a small set of similar people. Equilibrium call prices are distorted away from marginal cost, and competitive intensity is affected by the concentration of calling patterns. Contrary to previous predictions, jointly profit‐maximizing access charges are set above termination cost in order to dampen competition if calling patterns are sufficiently concentrated. We discuss implications for regulating access charges as well as on‐ and off‐net price discrimination.     

Offshoring and the Skill‐premium: Evidence from Individual Workers’ Data

During the 1980s the United States has experienced an increase in both international trade and the skill‐premium. The association between these two phenomena has proven elusive in the early empirical literature on the subject. Indeed, the consensus among labour economists seems to be that trade has not been the main cause of such increase in the skill‐premium. This view has been challenged by Feenstra and Hanson (1999, Quarterly Journal of Economics, 114, 3, 907) who find that offshoring sizably affects the skill‐premium. I revisit this debate using individual workers’ data from the March Current Population Survey combined with industry‐level trade data. This strategy improves upon the work of Feenstra and Hanson who do not control for the demographic characteristics of the labour force. In my results, offshoring can explain between 9 and 30 per cent of the increase in the college wage premium, relative to high‐school workers. In addition, I find that offshoring can explain 21 per cent of the increase in the relative employment of skilled labour. These results suggest that offshoring may play an important role in the increase in the relative demand of skilled workers.     

The Italian <Emphasis Type="Italic">Economia Aziendale</Emphasis> and Catholic Social Teaching: How to Apply the Common Good Principle at the Managerial Level

The ongoing global economic and financial crisis has exposed the risks of considering market and business organizations only as instruments for creating economic wealth while paying little heed to their role in ethics and values. Catholic Social Teaching (CST) could provide a useful contribution in rethinking the role of values in business organizations and markets because CST puts forward an anthropological view that involves thinking of the marketplace as a community of persons with the aim of participating in the Common Good (CG) of society. In the light of the CST tradition, and in particular Caritas in Veritate, this article investigates the thinking of some of the historical scholars of the Italian Economia Aziendale (EA), by focusing on the concept of azienda, in order to reinterpret in a more humanistic way the role of business organizations in society. By linking CST and EA, the dichotomy between for-profit and not-for-profit organizations and the stereotype of the so-called business amorality that has, for a long time, driven business managers can be transcended. The conclusions imply a forward-looking application of the ethical concepts embedded in the Italian science of EA.     

Parents’ performance in entrepreneurship as a “double-edged sword” for the intergenerational transmission of entrepreneurship

We investigate how perceived parents’ performance in entrepreneurship (PPE) affects the entrepreneurial career intentions of offspring. We argue that while perceived PPE enhances offspring’s perceived entrepreneurial desirability and feasibility because of exposure mechanisms, it inhibits the translation of both desirability and feasibility perceptions into entrepreneurial career intentions due to upward social comparison mechanisms. Thus, perceived PPE acts as a double-edged sword for the intergenerational transmission of entrepreneurship. Our predictions are tested and confirmed on a sample of 21,895 individuals from 33 countries. This study advances the literature on intergenerational transmission of entrepreneurship by providing a foundation for understanding the social psychological conditions necessary for such transmission to occur.     

The Family's Financial Support as a “Poisoned Gift”: A Family Embeddedness Perspective on Entrepreneurial Intentions

We argue that greater availability of financial support by the family for creating a new venture entails stronger financial and non‐financial obligations. Cognizant of these obligations, potential founders anticipate negative performance implications for the planned firm and threats to the family system in the case of their non‐fulfillment. We thus postulate that the formation of actual entrepreneurial intentions is less likely the greater the available financial support. We confirm this by studying a sample of 23,304 respondents from 19 countries and find the negative relationship to be dependent on family cohesion and on individual entrepreneurial self‐efficacy.     

Economies in Transition: How Important Is Trade Openness for Growth?*

We investigate the effect of trade openness on economic growth in transition countries using a transparent statistical methodology that leads to data‐driven case studies. In particular, we employ synthetic control methods in a panel of transition economies and compare GDP growth in treated (that is, open) countries with growth in a convex combination of similar but untreated (that is, closed) countries. We find that trade liberalization tends to have a positive effect on the pattern of real GDP per capita. One of our most robust results shows that making the transition without opening up to trade considerably hampers growth.     

Assessing the Fiscal Costs and Benefits of A8 Migration to the UK*

This paper assesses the fiscal consequences of migration to the UK from the Central and Eastern European countries that joined the European Union in May 2004 (A8 countries). We show that A8 immigrants who arrived after EU enlargement in 2004 and who have at least one year of residence, and are therefore legally eligible to claim benefits, are 59 per cent less likely than natives to receive state benefits or tax credits and 57 per cent less likely to live in social housing. Furthermore, even if A8 immigrants had the same demographic characteristics as natives, they would still be 13 per cent less likely to receive benefits and 29 per cent less likely to live in social housing. We go on to compare the net fiscal contribution of A8 immigrants with that of individuals born in the UK, and find that in each fiscal year since enlargement in 2004, irrespective of the way that the net fiscal contribution is defined, A8 immigrants made a positive contribution to the public finances despite the fact that the UK has been running a budget deficit over the last few years. This is because they have a higher labour force participation rate, pay proportionately more in indirect taxes and make much less use of benefits and public services.