Testing the lawyer-induced litigation hypothesis in Europe

Utilizing a European panel dataset, we contribute to the scant empirical literature on the lawyer-induced litigation hypothesis. To address endogeneity problems that arise when estimating the effect of the number of lawyers on civil litigation rates, we use two strategies. We first estimate our model by means of the 2SLS procedure. Second, we exploit the instrumental variable approach based on the linear GMM estimator of Arellano and Bond. The estimations result in a positive and significant effect of lawyers that is robust across the different model specifications and estimation methods in which we address endogeneity. In criminal litigation, where lawyers cannot induce demand, we find no such positive relation between lawyers and litigation.     

Revisiting the beauty is beastly effect: examining when and why sex and attractiveness impact hiring judgments

We contribute to the body of literature on the what is beautiful is good heuristic (Dion, Berscheid, & Walster, 1972, Journal of Personality and Social Psychology, 24, 285–290), the beauty is beastly effect (Heilman & Saruwatari, 1979, Organizational Behavior and Human Performance, 23, 360–372) and lack of fit theory (Heilman, 1983, Research in Organizational Behavior, 5, 269–298) by reconciling previous discrepancies in the literature and by examining the circumstances in which attractiveness may and may not be detrimental for female job applicants. First, we perform a review of studies which have previously tested the beauty is beastly effect, and we provide and test explanations for previous discrepancies in the literature. Next, we conduct two new studies on the beauty is beastly effect using corporate types of jobs, and empirically test Heilman's lack of fit theory (1983) as an explanation for the effect. We find support for the effect in a general population sample, and partial support for the effect in a sample of human resource professionals. We also provide support for a mediated moderation model showing that applicant sex is related to job suitability for a male-typed job through the indirect effect of perceived agency, which is moderated by applicant attractiveness.     

Privatizations around the world: economic or political determinants?

The article examines economic, political, and institutional determinants of privatization using a panel of 50 countries over the period of 1988–2006. Our sample includes developed, developing, and transition economies. Privatization activity is measured by the number of privatization deals as well as the revenue raised and analyzed using the negative binomial regression and Tobit regression respectively. Although more privatization activity is usually taking place in countries displaying satisfactory economic performance in some respect, the role of economic factors turns out to be limited. The results identify a number of political and institutional determinants but some effects are specific to a particular type of economy. For example, in developing countries, right‐wing governments are associated with privatizations while new, not necessarily right‐wing governments, are behind privatization in Eastern Europe. The role of financial development is also varied, with sound financial institutions related to successful privatization in developed and developing countries but not in transition economies.     

Independent but Not Indifferent: Partisan Bias in Monetary Policy at the Fed

Independent central banks are thought to be effective inflation hawks because they are run by technocrats with conservative monetary policy preferences. However, central bankers can only protect their independence by compromising with the elected officials who grant them their independence. Policy, therefore, is likely to be a weighted average of the preferences of the central bank and the government. Consequently, central bankers may be eager to help right‐wing governments stay in power and oppose the election of left‐wing governments. We show evidence from the United States that interest rates (a) decline as elections approach when Republicans control the White House, but rise when Democrats do; and (b) are sensitive to the inflation rate (output gap) when Democrats (Republicans) are in the White House. Thus, the Federal Reserve is a conditional inflation hawk. Since the Fed became operationally independent in 1951, the Republicans have exhibited a decided electoral advantage in presidential politics.     

Renegotiation of financial contracts: Evidence from private credit agreements

Using a large sample of private credit agreements between U.S. publicly traded firms and financial institutions, we show that over 90% of long-term debt contracts are renegotiated prior to their stated maturity. Renegotiations result in large changes to the amount, maturity, and pricing of the contract, occur relatively early in the life of the contract, and are rarely a consequence of distress or default. The accrual of new information concerning the credit quality, investment opportunities, and collateral of the borrower, as well as macroeconomic fluctuations in credit and equity market conditions, are the primary determinants of renegotiation and its outcomes. The terms of the initial contract (e.g., contingencies) also play an important role in renegotiations; by altering the structure of the contract in a state contingent manner, renegotiation is partially controlled by the contractual assignment of bargaining power.     

Asian Economic Problems and Prospects for Foreign Direct Investment: Local Evidence from the UK

This paper explores the implications of the Asian crises and economic problems in the Japanese economy on a UK region with a high dependence on employment in Asian manufacturing transplants. The paper examines the development of the Asian transplant sector in the case region (Wales), and maps out the economic significance of the sector on the local economy. Following a review of the potential impacts of economic problems in Asia on the local transplant sector, the paper uses local case evidence to explore recent changes in the Asian manufacturing base in Wales. Recent reversals in the transplant sector have largely been caused more by local manufacturing conditions. The paper concludes with a discussion of factors that are most likely to affect the trajectory of the Asian transplant sector in the case region in the new millennium.     

GOVERNMENT BOND YIELDS AT THE EFFECTIVE LOWER BOUND: INTERNATIONAL EVIDENCE

Empirical evidence on the potential impact of central bank policies on government bond yields at the effective lower bound (ELB) is presented for nine economies. We quantify the content of central bank communications and consider international policy spillovers. Yields at the medium‐to‐longer end of the yield curve remain responsive to news for a few years after the ELB is reached. Yields become more sensitive to the content central bank communication at the ELB. Our results provide further evidence that central bank communication is an important element of monetary policy making when the interest rate tool loses efficacy. (JEL E52, E58, G12, F42)     

Agricultural Payments and Land Concentration: A Semiparametric Spatial Regression Analysis

Over the last twenty years, both crop production and agricultural payments have shifted toward larger operations. This study examines whether payments from federal farm programs contributed to increased concentration of cropland and farmland. Using zip code–level data constructed from the microfiles of the 1987–2002 agriculture censuses we examine the association between government payments per acre and subsequent growth in land concentration. A semiparametric generalized additive model (GAM) controls for location and historical concentration, sales per acre, and ratio of cropland area to zip code area. Findings indicate, both with and without nonparametric controls, government payments are strongly associated with subsequent concentration growth.     

Privatization in PolandWhat was the government trying to achieve?1

This article uses the sequencing of privatization to infer the objective pursued by the Polish government in the privatization of its large manufacturing firms in the second half of the 1990s. We construct a model of mixed oligopoly and use it to evaluate the privatization process; our analysis is based on the assumption that firms which furthered the government's objective function the most would be chosen to be privatized first. Based on the features of the firms that were chosen for early privatization, our empirical analysis suggests that welfare maximization was more important than the desire to maximize the revenues from privatization and the government's budget or to minimize employment losses.