Bulletin of Economic Research最新文献

This study examines whether managerial overconfidence coupled with self-attribution bias distorts the investment decisions of firms. To this end, we investigate the impact of overconfidence on asymmetric investment cash flow sensitivity (ICS). We find that managerial overconfidence affects ICS in a downward-sticky direction, which is reinforced by overconfidence coupled with managerial self-attribution. The results for both unconstrained and constrained firms are qualitatively consistent with those for the overall sample; however, the constrained subsample provides slightly weaker results. Thus, our findings indicate that managerial overconfidence and self-attribution to recent successes may induce managers to make excessive investment commitments.

This paper investigates the effect of digital transformation on the employment of low-skilled labor. Using a large sample of Chinese listed firms for the 2008–2021 period, we find that digital transformation reduces the employment of low-skilled labor. This result is robust to a battery of sensitivity tests and is attenuated for firms located in regions with higher unemployment rates and for small enterprises. Mechanism tests show that digital transformation affects the employment of low-skilled labor through the wage effect channel and the substitution effect channel. The paper deepens our understanding of the economic effect of digital transformation on the labor market.

This paper examines the environmental, social, and governance (ESG) requirements for an industry in an n-oligopolistic model and investigates the relationship between the degree of industry concentration and the degree of ESG requirements. It is shown that the factors influencing the degree of ESG requirements include the number of firms, the elasticity of market demand, and the market concentration ratio. In the case of linear market demand, the degree of requirements is negatively affected by firm number only, regardless of the elasticity of market demand or market concentration ratio. In addition, the degree of ESG requirements is positively (negatively) related to the industry profit/concentration, when market demand is convex (concave). This paper demonstrates that the degree of ESG requirements is sensitive to firm number, market demand, and market concentration ratio and serves as a pragmatic reference for the government.

This meta-analysis examines the relationship between the Big Five personality traits and earnings. The results reveal that openness to experience, conscientiousness, and extraversion exhibit positive correlations with earnings, whereas agreeableness and neuroticism are inversely correlated with earnings. Overall, personality has a modest-to-small effect on earnings, with variations in results depending on econometric models used. Accounting for publication bias, socioeconomic background, and cognitive ability in models affects effect sizes. The findings also underscore the potential for omitted variable bias in the reported personality effects on earnings when relevant factors are omitted from the earnings equation.

In an industry with homogeneous goods, this note compares the standard incumbent's strategic capacity choice versus the incumbent's pre-emptive payment (profit) transfer (PPT) strategy (i.e., pre-entry acquisition). It is shown that via the transfer option, the incumbent holds its monopoly position “dissuading” the potential competitor entry for a range of fixed costs larger than under strategic capacity. Moreover, in that range, at least one firm is better off under PPT, while the other is indifferent between PPT and capacity choice. That is, in contestable markets, the incumbent can keep its dominant position in an easier way than standard models predict.

This paper provides novel evidence of nonlinearities in the formation of preferences for redistribution by uncovering evidence of multiple regimes consistent with the presence of multiple equilibria and multiple steady states. Using threshold regressions that account for the endogeneity of the threshold variable, countries are classified into three groups that share common characteristics. Finally, our analysis reveals substantial evidence of parameter heterogeneity in the coefficient estimates of threshold regressions.

This study aims to determine and compare the impact of four different types of European Central Bank (ECB) monetary policy communication events on euro area sovereign yields on an intraday basis since 2014. Our paper distinguishes it from similar studies in that we analyze a broad range of ECB communication types. The results reveal that ECB decisions and press conferences have the most substantial intraday impact on normalized sovereign yields while the impact of speeches and accounts appears to be much weaker. Countries with the highest debt levels (such as Italy, Spain, and France) experienced the most robust changes in fiscal costs, while the period encompassing the economic shock induced by the Covid-19 pandemic shows weaker effects.

This study considers an endogenous timing game of R&D decisions with research spillovers and compares the effects of output and research subsidies. We show that the simultaneous-move (sequential-move) game is an equilibrium if the spillover rate is low (high) under an output subsidy while this equilibrium is socially beneficial if the spillover rate is high or low enough. Under a research subsidy, however, the simultaneous-move game is a unique equilibrium regardless of the spillover rate, which is always socially beneficial. We also show that an output subsidy in the simultaneous-move game provides higher (lower) social welfare than a research subsidy if the spillover rate is low (high). Finally, we provide the robustness of our findings and some policy-relevant discussions.

Class size is one of the predominant topics in educational policy debate, as its impact on academic performance has not always yielded consistent findings. Nevertheless, less emphasis was paid to noncognitive outcomes such as well-being and behavioral issues. This study employs rich administrative and survey data to investigate the effects of class size on students’ bullying and violent behavior as well as cognitive abilities tests. The study uses the maximum class size rule to create a regression discontinuity (RD) relation between cohort enrollment size and class size in the public and the United Nations Relief and Works Agency school system in the West Bank. Further, this study provides evidence that there is no violation of the RD assumptions resulting from discontinuities in the relationship between enrollment and students’ household background at cutoff points induced by a maximum class size rule. The findings suggest that class size reduction improves the quality of life for children by mitigating bullying and violent behavior among pupils, which might have long-term adverse effects on academic attainment. Finally, peer relationships and mental health problems are identified as potential mechanisms through which class size influences self-reported levels of bullying and violent behavior among students.

This study investigates the role of money illusion (MI) in a dynamic stochastic general equilibrium model. We introduce MI such that households, in their intertemporal optimization, erroneously recognize nominal variables as real ones. We find that first, our model could exhibit money nonneutrality in the long run; second, the Taylor principle is a sufficient condition for determinacy but not a necessary condition; third, the response to output in monetary policy rule matters for the model not to exhibit money nonneutrality in the long run; and finally, MI could flatten the slope that represents the output-inflation trade-off.