THE IMPACT OF TERRORISM AND CONFLICTS ON GROWTH IN ASIA

This paper quantifies the impact of terrorism and conflicts on income per capita growth in Asia for 1970–2004. Our panel estimations show that transnational terrorist attacks had a significant growth-limiting effect. An additional terrorist incident per million persons reduces gross domestic product per capita growth by about 1.5%. In populous countries, many additional attacks are needed to achieve such a large impact. Transnational terrorism reduces growth by crowding-in government expenditures. Unlike developing countries, developed countries are able to absorb terrorism without displaying adverse economic consequences. An internal conflict has the greatest growth concern, more than twice that of transnational terrorism. Conflict variables are associated with smaller investment shares and increased government spending, with the crowding-in of government spending being the dominant influence.     

Why Are Quit Rates Lower Among Defense Contractors?

This paper presents empirical evidence of lower quit rates at small manufacturers with defense contracts and examines whether this is associated with differences in their human resource policies and organizational practices and strategies. We take advantage of an original data set to compare labor quits, workforce skills, and occupational structure between defense‐contracting and noncontracting small manufacturers in eastern Pennsylvania. We find that the remarkably large defense contractor advantage in quit rates—7 percentage points—is almost totally explained by differences in skills, operational strategies, and workforce management and training practices, suggesting a mediation effect through these HR practices. Defense‐contracting status emerges as an important overlooked variable in HRM studies.     

Do Firms Adjust Their Timely Loss Recognition in Response to Changes in the Banking Industry?

This paper investigates the impact of changes in the banking sector on firms’ timely recognition of economic losses. In particular, we focus on the entry of foreign banks into India during the 1990s, which likely causes an exogenous increase in lender demand for timely loss recognition. Analyzing variation in both the timing and the location of the new foreign banks’ entries, we find that foreign bank entry is associated with more timely loss recognition and this increase is positively related to a firm's subsequent debt levels. The change appears driven by a shift in firms’ incentives to supply additional information to lenders and lenders seem to value this information. The increase in timely loss recognition is also concentrated among firms more dependent on external financing: private firms, smaller firms, and nongroup firms. Overall, our evidence suggests that a firm's accounting choices respond to changes in the banking industry.     

Power‐Sharing in Monetary Policy Committees: Evidence from the United Kingdom and Sweden

Committees may make better monetary policy decisions than individuals; however, the benefits of group decision making could be lost if committee members cede power to a chairman. We develop an econometric model to describe intracommittee power‐sharing across members. Estimation of the model permits us to classify monetary policy committees into the typology developed by Blinder ( 2004 , 2007 ). We estimate our model for the United Kingdom's Bank of England (BOE) and Sweden's Riksbank. Results for the BOE suggest that the Governor has little influence over other committee members, while those for the Riksbank indicate that the Governor is highly influential.     

A New Model of Inflation,Trend Inflation,and Long‐Run Inflation Expectations

This paper develops a bivariate model of inflation and a survey‐based long‐run forecast of inflation that allows for the estimation of the link between trend inflation and the long‐run forecast. Thus, our model allows for the possibilities that long‐run forecasts taken from surveys can be equated with trend inflation, that the two are completely unrelated, or anything in between. Using a variety of inflation measures and survey‐based forecasts for several countries, we find that long‐run forecasts can provide substantial help in refining estimates and fitting and forecasting inflation. It is less helpful to simply equate trend inflation with the long‐run forecasts.     

A HIERARCHICAL THEORY OF THE FIRM*

This paper provides a mathematically coherent and concise formulation of the Williamson market-failure approach and, hence, develops models for single-level and multilevel firms and organizations. These models optimally determine the extent of integration for each viable link on every hierarchical level, When the models are reformulated in terms of four operational parameters that determine integration, applied benefit-cost methods can be utilized, in practice, to model a firm. Both static and dynamiclmodels-are presented.     

THE IMPACT OF PROVIDER AVAILABILITY ON ABORTION DEMAND

Variations in the availability of abortion providers may impact the demand for abortions since greater provider availability reduces the travel cost associated with acquiring an abortion. This paper applies a fertility-control model to estimate the responsiveness of abortion demand to travel-cost variations using county-level data on the state of Texas. Abortion rates as well as pregnancy rates appear to be sensitive to availability-induced variations in the travel cost of abortion services. In particular, the results suggest that residents in counties with longer travel distances to the nearest abortion provider have lower abortion rates and lower pregnancy rates.     

Metropolitan Wage Levels of Less‐Educated Workers: 1986 to 1999

This work investigates determinants of metropolitan wage levels for workers with a high school education or less. It estimates their wage levels as a function of four factors: labor demand, industry mix, unionization, and the minimum wage. Labor demand and union strength influence wage levels most. The minimum wage and industry mix play smaller roles, although the minimum wage is the second most influential factor for men and women who did not complete high school. From 1990 to 1999, metropolitan wage levels exhibit considerable persistence, though persistence declines over this period.     

Determinants of Vertical Integration: Financial Development and Contracting Costs

We study the determinants of vertical integration in a new data set of over 750,000 firms from 93 countries. We present a number of theoretical predictions on the interactions between financial development, contracting costs, and the extent of vertical integration. Consistent with these predictions, contracting costs and financial development by themselves appear to have no effect on vertical integration. However, we find greater vertical integration in countries that have both greater contracting costs and greater financial development. We also show that countries with greater contracting costs are more vertically integrated in more capital-intensive industries.