Labor productivity growth: disentangling technology and capital accumulation

How much of the convergence in labor productivity that we observe in manufacturing is due to convergence in technology versus convergence in capital-labor ratios? To shed light on this question, we introduce a nonparametric counterfactual decomposition of labor productivity growth into growth of the capital-labor ratio (K/L), technological productivity (TEP) and total factor productivity (TFP). Our nonparametric specification enables us to model technology allowing for heterogeneity across all relevant dimensions (i.e. countries, sectors and time). Using data spanning from the 1960s to the 2000s, covering 42 OECD and non OECD countries across 11 manufacturing sectors, we find TEP and TFP to account for roughly 46 and ?6% of labor productivity growth respectively, on average. While technological growth at the world level is driven primarily by the US and a handful of other OECD countries, we find strong evidence of convergence in both technology and capital-labor ratios. Interestingly, very few of the usual growth determinants are found to enhance the process of technological catching-up.     

Free trade agreements and world obesity

We study the causal link between trade openness via free trade agreements (FTAs) and obesity rates. When applying a difference-in-differences approach by exploiting the year a country entered a free trade agreement with the United States during the period 1990–2016. We find a positive and causal impact of FTAs on obesity rates, which are statistically and economically significant. We show that our findings are robust to placebo tests, the use of synthetic control methods, and a maximized sample. Furthermore, we show that when using an event studies approach the equal trends assumption holds.     

Asymmetry and leverage in GARCH models: a News Impact Curve perspective

Models for conditional heteroskedasticity belonging to the GARCH class are now common tools in many economics and finance applications. Among the many possible competing univariate GARCH models, one of the most interesting groups allows for the presence of the so-called asymmetry or leverage effect. In our view, asymmetry and leverage are two distinct phenomena, both inspired by the seminal work of Black in 1976. We propose definitions of leverage and asymmetry that build on the News Impact Curve, allowing to easily and coherently verify if they are both present. We show that several GARCH models are asymmetric but none is allowing for a proper leverage effect. Finally, we extend the leverage definition to a local leverage effect and show that the AGARCH model is coherent with the presence of local leverage. An empirical analysis completes the paper.     

Are all non-GAAP disclosures created equal?

Publicly traded companies in the U.S. must prepare financial statements in accordance with the requirements of U.S. Generally Accepted Accounting Principles (U.S. GAAP). However, many companies also report non-GAAP measures—those calculated outside the requirements of U.S. GAAP—in their earnings announcements, annual reports, and SEC filings. The SEC began regulating the release of non-GAAP measures in 2003 and has expressed ongoing concern regarding firms’ disclosure of the same, but the use of non-GAAP measures continued to increase nonetheless. A 2018 Audit Analytics report found that in 2006, 76% of SEC filers included non-GAAP measures, but in 2017 that percentage rose to 96%. This installment of Accounting Matters provides an overview of the SEC regulations regarding non-GAAP measures, examines how investors react to non-GAAP disclosures, and provides guidance regarding how companies can avoid receiving a non-GAAP disclosure comment letter from the SEC.     

Does vertical specialisation increase productivity?

This paper investigates the impact of global value chain (GVC) participation on productivity. It uses data on trade in value‐added from the World Input‐Output Database. The results based on a panel estimation covering 13 sectors in 40 countries over 15 years suggest that participation in GVCs is a significant driver of labour productivity. Backward participation in GVCs, that is, the use of imported inputs to produce for exports, emerges as particularly important. An increase by 10% in the level of GVC participation increased average productivity by close to 1.6%.     

Weird Exoskeletons: Propositional Politics and the Making of Home in Underground Bucharest

The article explores the politics of life underground in Bucharest, Romania. It focuses on a tunnel passing under Bucharest's central train station, where a community of drug users and so‐called ‘homeless’ have made a long‐standing home, using a space that many others considered uninhabitable. Relying on extensive ethnographic observations and interviews undertaken within the tunnels, the article traces and illustrates the socio‐material entanglements characterizing life underground. It frames this assemblage of bodies, veins, syringes, substances and various relationships of power and affect, as a ‘propositional politics’ of home and life at the margins. Such a politics speaks of drug addiction and extreme marginalization, but also of a sense of belonging, reciprocal trust and care. In tracing such a politics, the article does not aim to romanticize the status of home in the underground or to treat it as the marginal antithesis of normative homeliness, but to reveal the ways in which an affirmative, self‐grounding politics of home emerges from the immanence of tunnel life within the fabric of the city. As such, the article contributes to debates around homing practices in conditions of uninhabitability and proposes a radical approach to the politics of life at the margins in the contemporary urban.     

Self-Construal and Unethical Behavior

We suggest that understanding unethical behavior in organizations involves understanding how people view themselves and their relationships with others, a concept known as self-construal. Across multiple studies, employing both field and laboratory settings, we examine the impact of three dimensions of self-construal (independent, relational, and collective) on unethical behavior. Our results show that higher levels of relational self-construal relate negatively to unethical behavior. We also find that differences in levels of relational self for men and women mediate gender differences in unethical behavior. We discuss both the theoretical and practical implications of these findings.     

The bright side and dark side of trust: The mediating effect of franchisor trust on performance

Previous literature has not examined the dual role of trust in franchise relationships. We extend the franchise and relational governance literature by showing that trust has both a “bright side” and a “dark side” in franchisor–franchisee relationships. Based on transaction cost and knowledge-based reasoning, we argue that intangible knowledge assets and environmental uncertainty have an indirect effect on performance via trust, due to its relational risk and knowledge exchange effect. Using data from the franchise sector in Germany, we show that trust positively mediates the impact of intangible knowledge assets and negatively mediates the impact of environmental uncertainty on franchisor performance. The first effect refers to the “bright side” of trust showing that intangible brand name assets increase trust which, in turn, has a positive effect on performance. Conversely, the second effect refers to the “dark side” of trust highlighting that environmental uncertainty diminishes trust resulting in a negative effect on performance.     

Small sample properties of ML estimator in Vasicek and CIR models: a simulation experiment

Decisions in Economics and Finance - In this paper we analyze small sample properties of the ML estimation procedure in Vasicek and CIR models. In particular, we consider short time series, with a...