Comparative Trade Policy

Current research has found ambiguous theoretical and empirical results with respect to the effects of the type of electoral regime on trade policy. The present paper aims to reconcile the different views within a theoretical model. It is shown that the equilibrium level of trade protection can be relatively higher, as well as lower, under a majoritarian electoral rule compared with proportional representation. Trade policy is more (less) protectionist under proportional electoral regimes, as compared with majoritarian institutions, if swing districts are populated by relatively more (less) factor owners with stakes in the exporting sector. It is also shown that politicians optimally apply a lower (higher) level of rent seeking under the majoritarian electoral rule if there are relatively more factor owners in the swing districts with stakes in the exporting (import‐competing) sector.     

Expert relevance and the use of context-driven heuristic processes in risk perception

The effectiveness of a medical treatment should not predict its risk (highly effective treatments can be either safe or risky), however, people’s use of heuristic shortcuts may lead them to judge a link between effectiveness and risk, typically a negative correlation. A particular concern is that experts might use such a strategy and that this is unlikely to provide an accurate judgement. This large-scale field-based experiment compares expert-relevant and non-expert-relevant contexts, for both expert and public judgements of risk and effectiveness in the context of blood transfusion medicine. Postal questionnaires were distributed to anaesthetists (experts, N?=?123) and a general public (non-expert) comparison group (N?=?1153); half of the participants were cued with accompanying general information about genetically-modified (GM) biotechnology and half received specific information about blood product technologies. The blood-focussed information served to emphasise the medical relevance of the questionnaire to the expert group. Regression analyses showed that generally perceived effectiveness predicted perceived risk for both experts and non-experts, which suggests heuristic processing. However, although experts appeared to engage in heuristic processing for risk perceptions in certain circumstances, this processing is strongly affected by context. Experts who received the medically relevant context rated perceptions of effectiveness independently of perceptions of risk, unlike those who received the GM context. This indicates a reduced reliance on a low-effort heuristic for experts given an expertise-relevant context. The results are considered in light of dual-process (rational-associative) accounts of reasoning.     

Explaining National Differences in the Size and Industry Distribution Employment

What forces determine national differences in the size and industry distribution of employment? We stress the role of the economic policy environment as determined by business taxes, employment security laws, credit market regulations, the national pension system, wage-setting institutions and the size of the public sector. We characterize these aspects of the economic environment in Sweden prior to 1990–91 and compare them to the situation in other European countries and the United States. Our characterization and international comparisons show that Swedish policies and institutions strongly disfavored less capital-intensive firms, smaller firms, entry by new firms, and individual and family ownership of business.

We also compile evidence that these forces affect outcomes. Taking the U.S. industry distribution as a benchmark that reflects a comparatively neutral set of policies and institutions, Sweden's employment distribution in the mid-1980s is sharply tilted away from low-wage industries and industries with greater employment shares for smaller firms and establishments. Compared to other European countries, Sweden has an unusually high share of employment in large firms. Furthermore, the Swedish rate of self- employment in the 1970s and 1980s is the lowest among all OECD countries.

The institutional and policy factors emphasized by our study differ greatly across countries. This fact suggests that our approach can be fruitfully applied to other studies of national differences in industry and size structures and their evolution over time. As an example, the tax reform wave of the 1980s – which largely evened out cross-country differences in corporate taxation among OECD countries – offers some basis for projecting a movement towards greater similarity among wealthy countries in the size and industry distribution of employment.

     

Pleasure and the Control of Food Intake: An Embodied Cognition Approach to Consumer Self‐Regulation

Consumers try to avoid temptation when exposed to appetizing foods by diverting their attention away from their senses (e.g., sight, smell, mouthfeel) and bodily states (e.g., state of arousal, salivation) in order to focus on their longer term goals (e.g., eating healthily, achieving an ideal body weight). However, when not including sensations in their decision‐making processes, consumers risk depleting their self‐regulatory resources, potentially leading to unhealthy food choices. Conversely, based on the concept of “embodied self‐regulation,” the suggestion is made that considering bodily states may help consumers regulate their food choices more effectively. A new model is proposed that facilitates understanding observed consumer behavior and the success or failure of self‐control in food intake. It is argued that bodily states and sensory information should be considered when modeling consumer behavior and developing health‐related advocacy and communication campaigns. The model proposed here leads to new perspectives on consumer consumption behavior and health policy research and strategies.     

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.     

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.     

Accounting for Net Entry into Greek Manufacturing by Establishments of Varying Size

Adopting the view that size matters in understanding entry (exit) patterns, this research explores the nature and causes of net entry patterns of various size-defined groups of establishments in the case of a less industrialised country – Greece. The hypothesis to be tested is that the determinants of entry are not independent of firm size. Throughout this paper the analysis has had to confront difficulties arising from the use of net entry rates defined at the size class level. The degree of size disaggregation used in this paper is considerably finer than used before. Five employment-defined size classes have been used instead of sliding cut-off points discriminating between small and large firms. Unlike other research using pooled models to explain variation in entry (exit) rates across industries, the data used here are characterised by the absence of significant industry-specific systematic variation. Overall, the results obtained in this paper indicate that there is a gradation in the responses of different size classes to stimuli defined at the industry level. Evidence is offered that small firms are different in that they manage to overcome entry barriers, perhaps adopting different survival strategies, and that large firms are well aware of market conditions and are in an advantageous position to overcome many of the problems imposed by entry barriers. Size classes in the middle of the size class distribution offer a rather mixed result due to size-related advantages and disadvantages.     

International Strategy Formation in Small Canadian High-Technology Companies– A Case Study Approach

For some companies, especially in the high technology sector, internationalisation is no longer a matter of choice, but of necessity. This paper explores the strategy development patterns of internationalising small high-technology companies in an environment where windows of opportunity close quickly. Findings from in-depth interviews suggest that emergent strategies within or outside established networks are likely to trigger small high-technology companies' initial internationalisation. Further overseas expansion is constrained by resource availability. This study demonstrates that internationalisation is an iterative process that happens in a holistic way much more than a systematic one. Rather than trying to fit small and medium enterprises' (SMEs') internationalisation patterns into a stage model, managers and policy-makers should recognise the importance of networks. Training and programs could, therefore, help identify strategic networks of importance for the companies and assist them in both contributing and taking advantage of these.     

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...     

Inter-generational Determinants of Migration Decisions: The Case of International Labour Migration from Nepal

The article explores the deep determinants of migration decisions, with a focus on what appears to be a particularly profitable pathway out of poverty: overseas labour migration. To what extent is this choice constrained by access to economic resources, in contrast to variations in preferences or perceived costs of migration? We use previous migration choices as an indicator of preferences for migration. We find that households of early in-migrants to the frontier area we study in Nepal are more likely to have international labour migrants today than late in-migrants. This indicates that in-migrants need a generation, or more, to settle in the new location before sending household members to work overseas. Present migration decisions are also restricted by the household's land ownership, which in turn is a function of the land owned by the previous generation.