Intra‐firm trade,exporting, importing,and firm performance

Abstract This paper examines firm heterogeneity in terms of size, wages, capital intensity, and productivity between domestic and foreign‐owned firms that engage in intra‐firm trade, firms that export and import, firms that import only, and firms that export only. As previously documented, heterogeneity between different groups of trading firms is substantial. Taking into account intra‐firm trade in addition to exporting and importing yields new insights into the productivity advantage previously established for exporting firms. The results presented here show that this premium accrues only to exporters that also import and to exporters that also engage in intra‐firm trade, but not to firms that export only. Using simultaneous quantile regressions, the paper illustrates that heterogeneity within different groups of trading firm is equally large. Some of this within‐group heterogeneity can be attributed to differences in trading partners.     

Reserve ratios: A proposal for change

The paper addresses the problem of Fed control of the money supply and the inherent instability of a fractional reserve banking system which Friedman covered in A Program for Monetary Stability. While Friedman proposed a 100 percent reserve requirement as a solution, this work suggests a change from imposing legal reserve ratios on specific liabilities to one of imposing them on total bank liabilities. Reserve ratios are compared to tax rates. Friedman's proposal is to increase the tax rate to 100 percent on specific liabilities and pay interest on reserve balances at the Fed. The proposal of this paper is to keep the tax rates (present reserve ratios) but change the tax base. It is shown that the Fed would gain control over the maximum expansion of banks, but would lose direct control over specific liabilities. The Fed would not tax some liabilities and subsidize others. The Fed could concentrate on setting the tone of the money market and allow the public to use whatever set of bank liabilities it desires as money without specific penalty.     

Qualified medical child support orders--California health insurance coverage assignment orders--national medical support notices: what's a plan administrator to do?

Many employer-sponsored health plans and multi-employer health benefit trusts have seen an increase in medical child support orders (MCSOs), and they can anticipate receiving a greater number in the future. Once regulations are final for the national medical support notice (NMSN) required by the Child Support Performance and Incentive Act of 1998, plans should also begin receiving these. In preparation, plan administrators should ensure that they have proper procedures in place for determining whether MCSOs and NMSNs constitute QMCSOs.     

A spatial analysis of R&D: the role of industry proximity

This paper employs individual firm data in order to check the existence of industry-spatial effects alongside other microeconomic determinants of R&D investment. Spatial proximity is defined by a measure of firms’ industry distance based on trade intensity between sectors. The spatial model specified here refers to the combined spatial-autoregressive model with autoregressive disturbances. In modelling the outcome for each location as dependent on a weighted average of the outcomes of other locations, outcomes are determined simultaneously. The results of the spatial estimation suggest that in their R&D decision firms benefit from spillovers originating from neighbouring industries.