Important overlooked IVs in spatial models

Spatial models often contain additional endogenous variables as regressors. The complete system determining these variables is typically not known to the researcher, and so maximum likelihood or Bayesian estimation methods are precluded. This leaves instrumental variable estimation. In all likelihood, the system may contain certain forms of nonlinearities. These nonlinearities might arise because of endogenous weighting matrices, functional form differences in the endogenous variables, etc. The existence of such nonlinearities strongly suggests the use of nonlinear forms of the instruments. Issues of this sort were pointed out in Kelejian and Piras (Spatial econometrics, Elsevier, Amsterdam, 2017) and Kelejian (Lett Spat Resour Sci 9(1):113–136, 2016). However, thus far Monte Carlo results relating to efficiencies gained by the use of nonlinear instrumental variables are not available. This is unfortunate because these efficiencies can be quite extensive. The purpose of this paper is to fill this void.     

The formal sector wage premium and firm size

We show theoretically that when larger firms pay higher wages and are more likely to be caught defaulting on labor taxes, then large-high wage firms will be in the formal and small-low wage firms will be in the informal sector. The formal sector wage premium is thus just a firm size wage differential. Using data from Ecuador we illustrate that firm size is indeed the key variable determining whether a formal sector premium exists.     

European integration and the pay policies of British multinationals

European economic integration has generated intense interest in the prospect of a European labour market. This article brings new evidence to bear on the issue of employer responses to European integration and concludes that British owned multinational companies have, as yet, only made partial moves towards the Europeanisation of their pay determination arrangements.     

New Tools in Comparative Political Economy: The Database of Political Institutions

This article introduces a large new cross-country database,the Database of Political Institutions. It covers 177 countriesover 21 years, 1975–95. The article presents the intuition,construction, and definitions of the different variables. Amongthe novel variables introduced are several measures of checksand balances, tenure and stability, identification of partyaffiliation with government or opposition, and fragmentationof opposition and government parties in the legislature.     

POLLUTION AND RESOURCE ALLOCATION*

Our economic perspective of the pollution problem characterizes that problem as involving a conflict between the consumption of two broad classes of goods–physical (or produced) commodities and the direct consumption of 'clean environment'. After considering the relative merits of market and political decision-making processes used to achieve appropriate social choices between the consumption of physical goods and 'clean environment', we focus on the alternative policy options for pollution control. The main conclusion we reach is that, in general, fiscal instruments (taxes and subsidies) are a more efficient means of controlling pollution than the widespread use of regulations or other legal instruments.     

Internalization v. Decentralization: An Analysis of Recent Developments in Pay Bargaining

It is commonly assumed, particularly within the human resource management literature, that decentralized bargaining, performance-related pay and individualized wage-setting arrangements represent a further extension of the internal labour market and a source of efficiency gains in production. Drawing on new data on company pay policies, this paper advances an alternative interpretation of recent innovations in pay and bargaining. It is argued that moves to fragment bargaining and reward systems threaten to undermine the organizational principles of internal labour markets and may, therefore, raise the costs of managing the employment relationship.     

Cost - effectiveness analysis in practice: A case study of domestic water supplies in an African country

British aid policy calls for a large proportion of the programme to go to the poorest people in the poorest countries. This case study illustrates ways in which project selection and appraisal can aid this aim for projects whose output is non-tradeable and non-marketed but which may often be important to a poverty-focused programme. It attempts to demonstrate a framework by which such projects can consistently be examined paying particular attention to their objectives, the nature of their beneficiaries, and the recurrent budgetary implications for the host Government.     

Crossing the chasm with beacon products in the portable music player industry

Firms competing in new product categories face great technical and market uncertainty as they try to move from early adopters to mainstream markets (83, 93 and 111). While the management literature identified several factors that may contribute to adoption, the role of specific product models has been understudied. To address this gap, we studied portable digital music players (MP3 players) from 1987–2006 and tested the role of specific product models in market takeoff, convergence and product category evolution. We introduced the concept of beacon product, defined as a specific product model that has great appeal to customers and sends a strong signal about what they want.