What influences entrepreneurship among skilled immigrants in the USA? Evidence from micro-data

Business Economics - Self-employment among immigrants is a key source for income and social assimilation with natives. Rate of self-employment is significantly higher for immigrants than for...     

Proportional distribution schemes

An amount of income can be obtained jointly by m agents, the ith agent's share of income being θ_i. The income and the utilities of each agent are functions of the state of nature. Each agent has a probability measure over the states of nature. An efficient proportional distribution is one which is (1) Pareto optimal and for which (2) the expected proportion of income agent i recieves divided by θ_i is independent of i. It is shown that if the attitudes are strictly concave then there exists exactly one proportional distribution scheme. Furthermore, in special cases, each agent expects to recieve an income that exceeds his share.     

OPTIMUM CORPORATE LEVERAGE WITH RISKY DEBT: A DEMAND APPROACH

Traditional models of corporate interior optimum leverage rely on institutional schemes such as taxes, bankruptcy, and agency costs. Theories of leverage indifference in the presence of risky debt depend on various features of perfect and complete markets and on the assumption that all investors hold a uniform portfolio. In the model developed here, corporate interior optimum leverage is obtained as a result of a fundamental risk-return trade-off for investors who hold nonuniform portfolios of risky equity and debt claims in the absence of market mechanisms, forcing leverage indifference. The dynamic optimization solution accommodates bankruptcy costs and specialized institutional factors but does not rely on their presence.     

Evolutionary Stability in Games of Communication

This paper identifies evolutionarily stable outcomes in games in which one player has private information and the other takes a payoff-relevant action. The informed player can communicate at little cost. Outcomes satisfying a set-valued evolutionary stability condition must exist and be efficient in common-interest games. When there is a small cost associated with using each message the outcome preferred by the informed player is stable. The paper introduces a nonequilibrium, set-valued stability notion of entry resistant sets. For games with partial common interest, the no-communication outcome is never an element of an entry resistant set. Journal of Economic Literature Classification Numbers: C72,D82.     

HOW EFFECTIVE ARE EXPERT TV HOSTS AT SAVING FAILING BUSINESSES?

The profit and loss system is an integral part of a dynamic market economy. Losses eliminate businesses that are inefficiently managed or whose products no longer provide sufficient value. Almost a dozen popular television shows feature entertaining expert hosts claiming to “save” failing businesses with injections of physical and human capital. We undertake the first comprehensive analysis of these shows, calculating the failure rates of the businesses and analyzing the incentive structure facing the shows, networks, hosts, and participants. In general, we find that these shows are largely unsuccessful in saving failing businesses. (JEL L26, L82)     

A theorem on the additivity of the quasi-concave closure of an additive convex function

In this paper a necessary and sufficient condition for the additivity of the quasi-concave closure of an additive convex function is given.     

State institutions, risk, and lending in global capital markets

This paper examines one component of the expansion of global capitalism, the lending of capital across national borders and the affect of national political institutions and arrangements upon that lending. Global capital markets expanded rapidly during the latter part of the twentieth century, prompting discussions about the role of mobile capital. This contribution makes three key points to the understanding of globalization, its impacts, its causes, and its relationship to the nation-state, business and development. First, globalization is an uneven, bifurcated, phenomenon. Only a select group access these global capital markets, while many watch from the sidelines. Second, national political arrangements help us understand systematic disparities in access to global capital. National and local public policies, national political institutions, and other local activities prove instrumental in affecting access to global capital. Democracy and regulatory stability matter as they provide information to international investors about the risk to investments from local arenas. Third, the data presents a methodological obstacle in understanding how politics affects access to global capital. The structure of the data’s distribution can hide real relationships and pervert substantive interpretations if not managed. Without addressing the statistical concerns presented by the data the results would at worst be little more than garbage in, garbage out, and at best misleading.