Competition between Employed and Unemployed Job Applicants: Swedish Evidence*

We use the Swedish Applicant Database to investigate empirically whether being unemployed per se reduces the probability of getting contacted by a firm. All searchers looking for a new job are invited to submit their personal details to this database over the internet. Since we have access to exactly the same information as the firms, we can minimize the problems associated with unobserved heterogeneity. Our results show that an unemployed applicant faces a lower contact probability than an otherwise identical employed applicant, thus supporting the notion that firms view employment status as a signal of productivity.     

Modes of innovation,resources and their influence on product innovation: Empirical evidence from R&D active firms in Norway

Evolutionary theory of the firm argues that firms follow different approaches to innovation with implications for their performance. Consistent with evolutionary theory, this paper develops a taxonomy of innovation modes which capture the variation in firms' approaches to product innovation. The taxonomy is based on the open/closed innovation and exploration/exploitation literatures and identifies the following modes: “Open exploration”, “closed exploration” “open exploitation”, and “closed exploitation”. The paper theorizes that the identified innovation modes influence product innovation through their effect on the firms' technological and market resources. Using survey data from over 1000 R&D active firms in Norway analyzed with structural equation modelling it is shown how four modes of innovation are related to actual product innovation.     

Multidimensional social capital as a boost or a bar to innovativeness

Innovation does not only demand new ideas, financial resources and knowledge of supplier and user systems, but is also influenced by social capital which has an impact on the innovativeness in business networks. However, social capital is often vague, at times described as a “catch-all notion”. In this paper definitions of social capital are suggested to support the management of innovation in networks. Three dimensions of social capital are applied in a case study of a regional strategic network – the socio-economic, the structural and the actor-oriented dimensions – while focusing on the last one. Data were collected at two points in time, at the start of the regional strategic network in 2004 and at the end of the project in 2010. The application of the concepts and the comparison between these two points in time highlight the influence of social capital and how it can hinder or be used to promote innovation processes.     

Job Security and Risk‐Taking: Theory and Evidence From Professional Football

This article investigates how job security impacts risky decision making. In a theoretical model, we show how risk‐taking can be affected by job security. Agents with moderate job security become more risk averse as their job security increases. Conversely, agents with very high (or low) job security act in a more risk neutral manner. We test these predictions using data on head coaching decisions from the National Football League, finding that job security has a negative and statistically significant effect on risk‐taking.     

Detecting discrimination in the hiring process: evidence from an Internet-based search channel

This article uses data from an Internet-based CV database to study how job searchers?? ethnicity, employment status, age, and gender affect how often they are contacted by firms. Since we know which types of information that are available to the recruiting firms, we can handle some of the problems with unobserved heterogeneity better than many existing discrimination studies. We find that searchers who have non-Nordic names, are unemployed or old get significantly fewer firm contacts. Moreover, this matters for the hiring outcome: searchers who get more contacts have a higher probability of getting hired.     

Optimal use of forecasts in economic policy decisions: An empirical test

A criterion for optimal use of forecasts of exogenous variables in a linear policy model with quadratic preferences is given, based on Johansen (1972). By calculating regressions of observed values with respect to raw forecast values used in the observation period, equations are established which can be used to transform raw forecasts into ‘certainty equivalents’. The method is applied to data from national budgeting and corresponding national accounts in Norway 1948–-1971. Especially the forecasts for the volume of exports, but also for import prices, could be considerably improved, for policy purposes in the context of the model of the type mentioned, by the transformation described. Some of the forecasts, when optimally transformed, should be permitted to fluctuate more strongly and thereby influence policy more strongly. Some tentative results for Sweden and the Netherlands are briefly mentioned and compared with the evidence for Norway.     

Credit Risk Versus Capital Requirements under Basel II: Are SME Loans and Retail Credit Really Different?

Under Basel II, retail and SME credit (R&SME) receive special treatment because of a supposedly smaller exposure to systemic risk. Most research on this issue has been based on parameterized credit risk models. We present new evidence by applying Carey's (Carey, Mark. “Credit Risk in Private Debt Portfolios.” Journal of Finance 53, no. 4 (1998), 1363–1387.) nonparametric Monte-Carlo resampling method to two banks' complete loan portfolios. By exploiting that a sub-sample of all borrowers has been assigned an internal rating by both banks, we can compare the credit loss distributions for the three credit types, and compute both economic and regulatory capital under Basel II. We also test if our conclusions are sensitive to the definitions of R&SME credit. Our findings show that R&SME portfolios are usually riskier than corporate credit. Special treatment under Basel II is thus not justified. JEL classification: C14, C15, G21, G28, G33.     

Examining world-wide purchasing power parity

We examine long-run PPP between Germany, Great Britain, Japan and the United States over the period 1930–1996 using multivariate cointegration techniques. Bilateral PPP between the four countries is examined in one system (as opposed to e.g. series of trivariate systems). In all of the statistical analysis, asymptotic tests are augmented by parametric bootstrap analogues, whereby we reduce, if not eliminate, the size distortion typically present in small-sample studies. The cointegration analysis provides support for the necessary conditions for PPP (i.e. cointegrating relations are found) but not for the sufficient conditions (i.e., the coefficients in the cointegrating relations are far from what PPP predicts). These results are at odds with results from other studies that also analyze long-horizon data sets.First version received: November 2000/Final version received: February 2003Comments by Stefan Norrbin, Lee Ohanian, Anders Vredin, seminar-participants at Sveriges Riksbank (the central bank of Sweden) and at the Econometric Society European Meeting in Santiago de Compostela are gratefully acknowledged.     

Workers’ participation in regional economic change following establishment closure

This article analyses if and when workers affected by economic destruction in the form of establishment closures move to more productive or newly started establishments in the region, become self-employed, leave the region or become displaced. Results from multinominal probit models show that the majority of these workers face destructive employment outcomes from a Schumpeterian point of view compared to a matched sample of workers not subject to a closure. However, we do find indications of a creative destruction as a small, albeit significant, share become employed in young establishments. Different types of human capital influence the likelihood of triggering positive or negative regional outcomes. While higher education significantly decreases the risk for unemployment, high-income earners more often become engaged in creative outcomes. Firm tenure increases the likelihood of becoming employed in younger establishments. There are significant spatial differences where metropolitan regions excel as loci of creative change, whereas smaller and peripheral regions face far less creative outcomes of economic transformation.