Kyklos最新文献

Many articles examine the effect of institutions and education on economic growth in growth models or empirical settings. However, the opposite effect of economic development on institutions and education is less researched. Systematic evidence is scarce when looking at the interplay of education and institutions. Most of the literature focuses on post-war evidence starting in the 1960s only. However, institutions and education, both, only change slowly over time and, thus, should be analysed over a longer period. In this article, we try to close a gap by examining the relationship between all three variables over 138 years. By estimating a vector error correction model for a sample of 20 Organisation for Economic Co-operation and Development (OECD) countries, we are additionally able to differentiate between short- and long-run results. We find positive effects of institutions and education on growth and vice versa. In contrast, institutions and education do not significantly affect each other. Our results are robust to several robustness tests and extensions.

The relationship between corruption and income inequality has been widely studied, but there is no consensus on whether corruption increases or reduces inequality. We conduct an extreme bounds analysis (EBA) to test the robustness of the explanatory variables proposed in the literature. Using a sample of up to 150 countries, with data mostly going back to 1980, we find that corruption does not appear to have a clear positive effect on inequality or may even reduce it. Also, contrary to what is sometimes suggested in the literature, the results do not support an inverted U-shaped effect of corruption on income distribution. A more important role in explaining income distribution seems to be played by the level of financial development, the old-age dependency ratio, the unemployment rate, the capital stock to GDP ratio and the population growth rate. These are often found to be significant drivers of inequality, regardless of the set of control variables and the definition of corruption used.

We investigate the impact of Anglo-Saxon directors on leverage of Swiss listed companies. Higher leverage increases a company's risk profile, and individuals with an Anglo-Saxon cultural background are considered less risk averse than others. Using a sample of 1556 firm-year observations from 2005 to 2015, we find empirical evidence supporting our hypothesis that Anglo-Saxon directors increase leverage. The result is robust to the inclusion of a battery of control variables, fixed effects, and instrumental variable estimation.

This paper examines how climate change has become a polarizing and politicized issue in the United States and assesses the relationship between regional exposure to the green economy and voting in US elections over the course of a decade. After measuring the share of employment related to the green economy at county level, I estimate the impact of county-level exposure to this economy on the share of votes cast for Democrats in elections for the House of Representatives and the Presidency. I find that US counties that have been more exposed to the green economy have increased their share of votes cast for Democrats in Congressional elections since the 2016 elections, based on both county-level and constructed district-level data. This is because Democratic politicians are considerably more likely to adopt pro-green positions, making them an attractive choice for voters seeking representatives who will promote green policies. This paper also finds that a shift toward Democratic candidates has mostly occurred in Republican incumbent districts with a high proportion of green-intensive employment that did not receive any support for green investment from the government after 2016. The results imply that climate change has become an important determinant of voting decisions and that this change in motivation on the part of voters has come about primarily with the aim of punishing Republican incumbents rather than rewarding Democratic incumbents or challengers.

Many studies suggest that employees of social enterprises experience greater job satisfaction than employees of for-profit organizations, although their pay and employment contracts are usually less favorable. Based on linked employer–employee data from a French survey on employment characteristics and industrial relations and using a decomposition method developed by Gelbach (2016), this paper aims to explain this somewhat paradoxical result. Focusing on work organization variables, we show that the specific work organization of social enterprises explains a large part of the observed job satisfaction differential both in general and more specifically, in terms of satisfaction with access to training and working conditions. By detailing the components of work organization, the higher job satisfaction reported by employees in social enterprises stems from their greater autonomy and better access to information. In contrast to earlier studies, however, our results show that these work organization variables do not have more value for social enterprise employees than for for-profit organization employees in the case of overall job satisfaction. This result casts doubt on the widespread hypothesis that social enterprise employees attach more weight to the nonmonetary advantages of their work than their counterparts in for-profit organizations.

This paper finds robust evidence that economic freedom improves the quality of education. This is probably mainly because economic freedom incentivizes parents to invest in high-quality education for their children and helps them to do so. It also incentivizes and helps both governments and private providers to deliver high-quality education. The paper uses two different indicators of educational quality: PISA scores and the World Bank's harmonized test scores. The magnitudes of the estimated effects of economic freedom on both indicators are substantial. They are even larger once the indirect impact of economic freedom via GDP per capita and, to a lesser extent, once the indirect impact via government education expenditure is taken into account. The paper uses data on up to 49 countries for PISA scores and up to 137 countries for World Bank scores. It accounts for the endogeneity of economic freedom and controls for all major determinants of educational quality.

The decoy effect is a well-documented source of violation of elements of demand theory. We experimentally demonstrate that the decoy effect only works when the number of options is limited (specifically not more than five). This is because, with more and more options, it may get difficult for consumers to spot the decoy (against which a Pareto dominant option is made to look more attractive), rendering the decoy effect ineffective. Identifying that the decoy effect works because it facilitates easier choice-making, we observe that the difficulty in choice-making with or without the decoy is statistically the same when the number of options to choose from is six or more.

The impact of competition from informal or unregistered firms on the likelihood of research and development (R&D) activity by formal manufacturing small and medium enterprises (SMEs) in 90 developing and emerging countries is estimated. A positive impact is found with a one standard deviation increase in informal competition resulting in a 3.1–3.6 percentage point increase in the probability of R&D activity. Given that only 15.7% of SMEs are engaged in R&D activity, this is a large effect. Consistent with the “legalist” view of informality, the positive impact of informal competition on the likelihood of R&D activity is bigger in countries where the business environment is less favorable to formal versus informal firms due to factors such as weaker rule of law, a higher tax rate on commercial profits, and a greater regulatory burden on the formal firms. We provide several layers of defense against omitted variable bias, reverse causality, and measurement errors. As expected, informal competition has no statistically significant impact on the likelihood of large firms engaging in R&D activity.

Various shocks, including the Gulf War, the US recession, the 9/11 attacks, financial credit crunch, and domestic political shocks like coups, and revolutions, have contributed to the persistence of high uncertainty. This uncertainty has direct implications for economic activity, affecting both business investment and household consumption decisions. This article explores the mediating role of the quality of pro-market institutions in the relationship between economic performance and changes in the uncertainty. It also investigates whether reforming pro-market institutions during a period of uncertainty can mitigate the negative effects of the uncertainty on economic performance, while analyzing the channels through which the mediating effect of reforms during uncertainty manifests. Using a sample of 61 developing countries over the period 1990–2014, our results, robust to various tests, indicate that higher quality of pro-market institutions significantly reduces the negative effects of uncertainty on economic performance. Indeed, the reduction in GDP growth due to a change in uncertainty decreases by 93 percentage points with higher levels of pro-market institutional quality, and this variation depends on the nature of the pro-market institutions considered. Furthermore, implementing pro-market institutional liberalization reforms during a period of uncertainty could not only alleviate the negative effects of uncertainty but also contribute to medium-term economic growth. The analysis of channels suggests that this effect is mediated by the impact of reforms on household consumption and business investment. These results highlight how pro-market institutions and reforms in these institutions can enhance the resilience of economies facing high uncertainty or unexpected and substantial economic shocks.

The study explores the effects of data transparency on economic growth for developing economies over a unique time period - at the onset of the 2007–2009 global financial crisis and thereafter. Data transparency is defined as the timely production of credible statistics as measured by the statistical capacity indicator. The paper finds that data transparency has a positive effect on real gross domestic product per capita during a period of considerable uncertainty. The estimates indicate an elasticity of the magnitude of 0.03 percent per year, which is much larger than the elasticity of trade openness and schooling in the estimation sample. The empirics employ a variety of econometric estimators, including dynamic panel and cross-sectional instrumental variables estimators, with the latter approach yielding a higher estimated elasticity. The findings are robust to the inclusion of several factors in addition to political institutions and exogenous commodity-price and external debt-financing shocks.