Social Behaviour in Work Absence*

By making use of a large‐scale randomized experiment, we test whether social behaviour is important for work absence due to illness. The individuals treated in the experiment were exposed to less monitoring of their eligibility to collect sickness insurance benefits, which sharply increased their non‐monitored work absence. This exogenous variation is exploited in two complementary analyses. In both analyses, we find significant social‐behaviour effects. Using detailed data, we conclude that the social‐behaviour effects most likely stem from fairness concerns.     

Five charges against the precautionary principle

We defend the precautionary principle against five common charges, namely that it is ill-defined, absolutist, and a value judgement, increases risk-taking, and marginalizes science. We argue, first, that the precautionary principle is, in principle, no more vague or ill-defined than other decision principles and like them it can be made precise through elaboration and practice. Second, the precautionary principle need not be absolutist in the way that has been claimed. A way to avoid this is through combining the precautionary principle with a specification of the degree of scientific evidence required to trigger precaution, and/or with some version of the de minimis rule. Third, the precautionary principle does not lead to increased risk-taking, unless the framing is too narrow, and then the same problem applies to other decision rules as well. Fourth, the precautionary principle is indeed value-based, but only to the same extent as other decision rules. Fifth and last, the precautionary principle is not unscientific other than in the weak sense of not being exclusively based on science. In that sense all decision rules are unscientific.     

Finite sample accuracy and choice of sampling frequency in integrated volatility estimation

We consider the properties of three estimation methods for integrated volatility, i.e. realized volatility, Fourier, and wavelet estimation, when a typical sample of high-frequency data is observed. We employ several different generating mechanisms for the instantaneous volatility process, e.g. Ornstein–Uhlenbeck, long memory, and jump processes. The possibility of market microstructure contamination is also entertained using models with bid-ask bounce and price discreteness, in which case alternative estimators with theoretical justification under market microstructure noise are also examined. The estimation methods are compared in a simulation study which reveals a general robustness towards persistence or jumps in the latent stochastic volatility process. However, bid-ask bounce effects render realized volatility and especially the wavelet estimator less useful in practice, whereas the Fourier method remains useful and is superior to the other two estimators in that case. More strikingly, even compared to bias correction methods for microstructure noise, the Fourier method is superior with respect to RMSE while having only slightly higher bias. A brief empirical illustration with high-frequency GE data is also included.     

Entrepreneurial response to interstate regulatory competition: evidence from a behavioral discrete choice experiment

Journal of Regulatory Economics - Despite a developing literature exploring the relationship between regulation, taxation and business startups, few studies have utilized artefactual experimental...     

Revisiting the Relationship between Ethnic Diversity and Preferences for Redistribution: Comment

In this paper, we revisit the question raised in Dahlberg et al. ( 2012 , Journal of Political Economy 120, 41–76) concerning a causal relationship between ethnic diversity and preferences for redistribution. We find that their results are based on (i) an unreliable and potentially invalid measure of preferences for redistribution, (ii) an endogenously selected sample, and (iii) a mismeasurement of the refugee placement program. Correcting for any of these three problems reveals that there is no evidence of any relationship between ethnic diversity and preferences for redistribution. We also discuss what is currently known about the refugee placement program, and to what extent it can be used for estimating causal effects more generally.     

Bricolage as a Path to Innovativeness for Resource‐Constrained New Firms

Evidence suggests that both nascent and young firms (henceforth: “new firms”)—despite typically being small and resource‐constrained—are sometimes able to innovate effectively. Such firms are seldom able to invest in lengthy and expensive development processes, which suggests that they may frequently rely instead on other pathways to generate innovativeness within the firm. In this paper, we develop and test arguments that “bricolage,” defined as making do by applying combinations of the resources at hand to new problems and opportunities, provides an important pathway to achieve innovation for new resource‐constrained firms. Through bricolage, resource‐constrained firms engage in the processes of “recombination” that are core to creating innovative outcomes. Based on a large longitudinal dataset, our results suggest that variations in the degree to which firms engage in bricolage behaviors can provide a broadly applicable explanation of innovativeness under resource constraints by new firms. We find no general support for our competing hypothesis that the positive effects may level off or even turn negative at high levels of bricolage.     

The Extent of Overestimation of Small Firm Job Creation – An Empirical Examination of the Regression Bias

Davis, Haltiwanger and Schuh (1993; 1996a; 1996b) suggested that the belief that small firms are major contributors of new jobs is largely based on methodological flaws. In particular, their reasoning about the "regression fallacy", i.e., that temporary fluctuations in size systematically biases estimates in favor of small firm job creation, has caught on interest among researchers and concern among policy makers. In this article we attempt to estimate empirically the extent of overestimation of small firm job creation due to the "regression fallacy". It is concluded that the effect is very small and that correcting for it does not lead to qualitative change of the results. There may be good reasons to question to what extent small firms can lead economic development, and whether it is good or bad if they do create most new jobs, but concern for the "regression fallacy" does not seem to be an important issue in this context.     

Paul D. Reynolds: Entrepreneurship Research Innovator,Coordinator, and Disseminator

Paul Davidson Reynolds is the 2004 winner of the International Award for Entrepreneurship and Small Business Research. In this article Professor Reynolds’ contributions are summarized in terms of four sets of triplets. The first is as innovator, coordinator and disseminator of novel and important empirical research studies. The second triplet concerns the main areas of his contributions: regional variations in entrepreneurial activity, nascent entrepreneurship and firms in gestation and international comparisons of the prevalence of entrepreneurial activity. The third set of triplets concerns what aspects of the research process he has contributed to: development of new empirical methods to research entrepreneurship; coining of new concepts that now permeate this field of research, and provision of important empirical results. The final set of triplets concerns the audiences to which Reynolds’ research appeal: researchers, policy-makers and business practitioners. It is concluded that although his contributions are many and of different kinds, the single most important one is that his research has made it increasingly unreasonable to theorize and design research as if the economy essentially consisted of a relatively stable core of large, established firms and entry and exit of new firms were relatively infrequent, marginal and insignificant.