Do Household Wealth Shocks Affect Productivity? Evidence from Innovative Workers During the Great Recession

We investigate how the deterioration of household balance sheets affects worker productivity, and in turn economic downturns. Specifically, we compare the output of innovative workers who experienced differential declines in housing wealth during the financial crisis but were employed at the same firm and lived in the same metropolitan area. We find that, following a negative wealth shock, innovative workers become less productive and generate lower economic value for their firms. The reduction in innovative output is not driven by workers switching to less innovative firms or positions. These effects are more pronounced among workers at greater risk of financial distress.     

SAVING ENERGY THROUGH BETTER INFORMATION: A NEW ENERGY PARADIGM?

For the past 40 years, governments, utilities, and private companies have developed increasingly efficient appliances for household use and governments have initiated policies to encourage the deployment of these technologies. To the credit of these activities, we have improved the efficiency of electricity use in the United States, but it has not been enough to overcome the increasing demand from proliferation of electricity‐using devices. In addition, penetration rates for some types of efficient equipment have remained relatively low in certain regions. U.S. electricity demand thus continues to grow. In this paper, we argue that to achieve significantly greater efficiency improvements needed to meet future demand for energy services, we should provide more information to consumers about their energy use and give them more control over this use. While more studies are needed to assess just how far these types of measures can take us, there is enough evidence to show that with better information, consumers often make choices that reduce energy use.     

Does Going Public Affect Innovation?

This paper investigates the effects of going public on innovation by comparing the innovation activity of firms that go public with firms that withdraw their initial public offering (IPO) filing and remain private. NASDAQ fluctuations during the book‐building phase are used as an instrument for IPO completion. Using patent‐based metrics, I find that the quality of internal innovation declines following the IPO, and firms experience both an exodus of skilled inventors and a decline in the productivity of the remaining inventors. However, public firms attract new human capital and acquire external innovation. The analysis reveals that going public changes firms' strategies in pursuing innovation.     

The Boys from Bothaville, or the Rise and Fall of King Maize: A South African Story

This paper tells the story, for the first time, of a maverick maize farmers' association in South Africa during the period of apartheid. NAMPO (National Maize Producers' Organization), that grew out of SAMPI (South African Maize Producers' Institute), ultimately achieved a unique, if short-lived, breach in the normal operations of 'organized agriculture': a set of relations and practices that bound together white farmers, the National Party and the state. The paper provides an account of SAMPI/NAMPO's project of 'King Maize' and an explanation of its fall after a brief period of victory from 1981 to 1985. This explanation draws on broader patterns of agrarian change in contemporary capitalism combined with the fracturing of the original agrarian bloc of apartheid in the 1980s, marking the end of a 'second moment' of South Africa's version of a Prussian path of capitalist development.     

Asset Allocation in Bankruptcy

This paper investigates the consequences of liquidation and reorganization on the allocation and subsequent utilization of assets in bankruptcy. Using the random assignment of judges to bankruptcy cases as a natural experiment that forces some firms into liquidation, we find that the long‐run utilization of assets of liquidated firms is lower relative to assets of reorganized firms. These effects are concentrated in thin markets with few potential users and in areas with low access to finance. These findings suggest that when search frictions are large, liquidation can lead to inefficient allocation of assets in bankruptcy.     

Attracting Early‐Stage Investors: Evidence from a Randomized Field Experiment

This paper uses a randomized field experiment to identify which start‐up characteristics are most important to investors in early‐stage firms. The experiment randomizes investors’ information sets of fund‐raising start‐ups. The average investor responds strongly to information about the founding team, but not to firm traction or existing lead investors. We provide evidence that the team is not merely a signal of quality, and that investing based on team information is a rational strategy. Together, our results indicate that information about human assets is causally important for the funding of early‐stage firms and hence for entrepreneurial success.     

Book Reviews

Books reviewed:
E. Wayne Nafziger and Juha Auvinen, Economic Development, Inequality, and War: Humanitarian Emergencies in Developing Countries.
Steve Striffler and Mark Moberg (eds), Banana Wars. Power, Production and History in the Americas.
Stefano Ponte, Farmers and Markets in Tanzania: How Policy Reforms Affect Rural Livelihoods in Africa.
Catherine Boone, Political Topographies of the African State: Territorial Authority and Institutional Choice.     

Commodity Studies and Commodity Fetishism II: ‘Profits with Principles’?

The two edited collections and the monograph reviewed here provide the means to consider an extended range of commodities, locations, commodity/value chains, and issues of theory and method in political economy, beyond those presented by Gibbon and Ponte (2005) that we considered in the first part of this essay. Our discussion here touches on issues concerning how 'global' global commodity/value chains are; the symbolic attributes of commodities and commodity fetishism; the politics of consumption (or simply politics of selling and buying); the strengths and weaknesses of the economic sociology of commodity/value chains; and how the 'slices' extracted from larger organisms in studies of particular commodities may be reinserted, as it were, as part of the understanding of contemporary capitalism and of issues of development in the economies of the 'South'.