Substitutes for legal protection: corporate governance and dividends in Victorian Britain1

Companies in Victorian Britain operated in a laissez‐faire legal environment from the perspective of outside investors, implying that such investors were not protected by the legal system. This article seeks to identify the alternative mechanisms that outside shareholders used to protect themselves by examining the dividend policy and governance of over 800 publicly traded companies at the beginning of the 1880s. We assess the importance of these mechanisms by estimating their impact on Tobin's Q. Our evidence suggests that dividends and well‐structured and incentivized boards of directors may have played a role in protecting the interests of outside investors.     

WHITHER GERMANY AND THE EMU IN A CHALLENGING ENVIRONMENT?*

While the German economy may currently be a bright spot in Europe, it has faced substantial challenges in recent years. Moreover, tensions are rising regarding Germany's responsibilities and opportunities as a member of the European Monetary Union. Other studies have documented the difficulties that Germany has encountered as a result of the unification and further integration of Europe. This paper adds to that literature by using an aggregate translog cost function approach to examine the relationships among inputs of domestic capital and labour and imports. Our findings indicate that the input pairs of capital‐labour and labour‐imports are substitutes. The substitutes relationship between labour and imports, which has become stronger over time, suggests that increasing globalisation will add to Germany's unemployment woes. Capital and imports appear to be weak complements, but that relationship is not statistically significant. The results also suggest that imports are playing an increasingly important role in Germany's aggregate production, accentuating the role of the international environment.     

Project Labor Agreements' Effect on School Construction Costs in Massachusetts

This paper investigates the impact of Project Labor Agreements (PLAs) on school construction cost in Massachusetts. Although simple models exhibit a large positive effect of PLAs on construction costs, such effects are absent from more completely specified models. Further investigation finds sufficient dissimilarity in schools built with and without PLAs that it is difficult to distinguish the cost effects of PLAs from the cost effects of factors that underlie the use of PLAs.     

Announcement or Contribution? The Relative Efficiency of Manipulated Lindahl Mechanisms

The private provision mechanism is individually incentive compatible but inefficient. The Lindahl mechanism is efficient but not incentive compatible. We analyze the outcome of the manipulated Lindahl mechanism. When the demand announcements of participants are unrestricted the Lindahl mechanism suffers from multiple equilibria. If the government removes the multiplicity by restricting the functional form of announcements the resulting Lindahl equilibrium can be made approximately efficient. Approximate efficiency is achieved by announcements that are one-dimensional regardless of the number of participants in the mechanism. This is in contrast to mechanisms that achieve exact efficiency but require announcements whose dimensionality increases at the same rate as the number of participants. The mechanism we describe benefits from simplicity at the cost of approximate efficiency. We demonstrate that mechanisms in which a linear demand function is announced are supermodular so play will converge to the Nash equilibrium for a range of learning dynamics.     

MAQUILADORA RESPONSE TO U.S. AND ASIAN RELATIVE WAGE RATE CHANGES

ThiS paper investigates whether the output of the Mexican maquiladoras is an alternative to production in the Pacific Rim. The analysis involves estimating supply functions for Mexican maquiladora output using relative wage data for Mexico, Singapore, and the United States. It also involves estimating the impact of relative wage rates on maquiladora output in five industries as well as on more aggregated levels. Results indicate that production in Mexico and in the Pacific Rim are substitutes, although this relationship is stronger for some industries than for others.     

Changes in Union Wage Effects by Industry: A Fresh Look at the Evidence

Unions suffered a modest decline in their capacity to increase wages over nonunion levels between the late 1970s and the middle 1990s according to evidence presented here. The decline in relative wages was significant in only 13 (of 78) industries examined; in 11 industries the differential increased significantly. The industrially disaggregated econometric evidence is broadly consistent with institutional evidence about developments in particular industries; however, more industry-grounded research is clearly warranted.     

Public Wage Differentials and the Public Administration "Industry"

The public sector consists of two broad sub samples, administrators and no administrators. The two groups have very different occupational compositions and contrasting patterns of compensation. Inconsistent treatment of these sub samples has led to past government differentials, which are not comparable. While administrators remain overpaid relative to their private sector counterparts, no administrators are underpaid relative to their counterparts. Moreover, public wage differentials way substantially in sign and magnitude from industry to industry. Such results demonstrate that no simple, homogeneous government differential exists.     

Schooling and the Intergenerational Transmission of Values

We present a model of the evolution of identity via dynamic interaction between the choice of education and the transmission of values in a community from parents to children, when parents care about the preservation of their traditional community values, different from the values of the host society. We compare the educational and socioeconomic outcomes in different scenarios (melting pot versus multiculturalism). If schooling shifts children's identity away from their parents' values, parents may choose lower levels of education for their children, at the cost of reducing their future earnings. We show how this effect can be attenuated and reversed when the school or, indeed, the host society are willing to accommodate the values of the community and/or to adjust to these values; otherwise the community gradually becomes alienated. This approach may be applied to the analysis of temporal changes in values and attitudes in a community of immigrants, as well as ethnic, religious, or other minority groups.