Journal of Comparative Economics最新文献

Do the human costs of Russia’s war in Ukraine undermine the popular support for the Russian government? Although there is little evidence that the poor performance of the Russian military forces in Ukraine erodes domestic support for the government, region-specific war casualties may help fuel anti-war sentiment. The paper hypothesizes that publicly announced military deaths and obituaries published in the local news and social media groups can incite anti-war sentiment because they bring the human cost of the war into peoples’ homes. To evaluate this hypothesis, we use a hand-collected dataset of obituaries, published on the most popular social network in Russia, and analyze statistical connections between the announcements of war casualties and instances of various forms of political protests. The data support the casualties-protest connection, but find that obituaries of military servicemembers with non-Russian-sounding names are uncorrelated with protests even in their home regions, while the opposite is true for similar announcements with Slavic names. We speculate that the observed differences might reflect the intentional government policy of capitalizing on ethno-nationalist sentiment that has been cultivated for the support of Putin’s regime.

China is experiencing a surge in medical malpractice lawsuits. Using administrative hospital panel data, this paper investigates both short- and long-run impacts of medical malpractice lawsuits on patient medical spending and hospital operations. We find that after the occurrence of an additional malpractice lawsuit in a hospital, total medical spending per patient visit increases by 2.8% in the current year and by as much as 8.8% in the long run. This increase is mainly driven by spending on prescription drugs and diagnostic tests. In response, hospitals invest more in medical devices and procure more drugs. We find little evidence of changes in patient outcomes. Our findings show that the surge of medical malpractice lawsuits leads to defensive medicine and fuels the secular growth of medical spending in China.

We explore the determinants and consequences of U.S. corporations limiting their business operations in Russia in the immediate aftermath of the 2022 Russian invasion of Ukraine. Firms with Russian exposure experience slightly worse stock market returns when the invasion begins on February 24, 2022. Russia-exposed firms with worse stock-price reactions to the war and greater share of operations in Russia are more likely to subsequently remain in Russia, while firms with milder ex ante exposure are more likely to withdraw or suspend their Russian operations. When U.S. firms announce exits from Russia in the aftermath of the invasion, there are no adverse announcement effects on their returns. Instead, exit announcements are preceded by a negative trend in abnormal returns that ends immediately on the day of the announcement. In regression analyses, immediately preceding negative stock returns are the strongest predictor of firms’ decisions to exit Russia, after size and industry. These results are consistent with firms choosing to limit their Russian presence in response to operational impact and reputational pressure, and the damage to stock returns stops immediately after the exit announcements.

Although international sanctions are a widely used instrument of coercion, their economic effects are still not well-understood. This study uses a novel dataset and an event study approach to evaluate the economic consequences of international sanctions, thereby visualizing pre-treatment and treatment dynamics in countries subject to sanctions. Our analysis focuses on the effects of sanctions on GDP growth as well as on various transmission channels through which sanctions suppress economic activity. We document a significant negative effect of sanctions on the growth rate of GDP and its components (consumption and investment) as well as on trade and foreign direct investment. Given that sanctions exert their adverse effect over the first years of a sanction episode and that sanctioned countries fail to recover during or immediately after the episode, we demonstrate the usefulness of sanctions as a political instrument of coercion. Long-lasting sanctions regimes, however, may not provide the political incentives needed to force additional concessions.

This paper studies extortion of firms operating in legal sectors by a profit-maximizing criminal organization. We develop a simple taxation model under asymmetric information to find the Mafia optimal extortion as a function of firms’ observable characteristics, namely size and sector. We test the predictions of the model on a unique dataset on extortion in Sicily, the Italian region where the Sicilian Mafia, one of the most ancient criminal organizations, operates. In line with our theoretical model, our empirical findings show that extortion is strongly concave with respect to firm size and highly regressive. The percentage of profits appropriated by the Mafia ranges from 40% for small firms to 2% for large enterprises. We derive some implications of these findings for market structure and economic development.

How much has Russia’s war in Ukraine damaged the collateral of Ukrainian firms, and how much damage has that caused the Ukrainian financial system? We address this question using unusually rich high-frequency supervisory data of Ukrainian banks combined with a survey of banks on the location and condition of corporate borrowers’ collateral between February and November 2022. Exploiting plausibly exogenous variation in collateral value resulting from damage to collateral, we find that a 10-percent reduction in the collateral-loan ratio lowers the probability of getting any new loan by nearly eight percentage points; new lending falls by over two percentage points. Our results additionally imply that the same reduction in collateral value raises default rates and banks’ assessment of firms’ probability of default by approximately eight and four percentage points, respectively. The results imply that, in the absence of sufficient aid to repair the damage, Ukraine may experience reduced investment and lower economic growth in the future.

We analyze the impact of a politician’s childhood experience on their policy choices. By exploiting exogenous variations in exposure to China’s Great Famine, we find that a provincial leader’s childhood experience of the famine significantly increases the share of government expenditure allocated to health care during his term. This effect is observed only for those who were aged under five during the famine and is not found among older cohorts. The impact is substantial: our back-of-the-envelope calculation indicates that an increase of one standard deviation in exposure to the famine can lead to an increase of roughly 7.84 billion RMB (equivalent to about 1.19 billion US Dollars) in annual provincial health care expenditure for a province with average government spending in 2017. We provide evidence suggesting that this effect may be driven by a politician’s personal experience of negative health outcomes due to the famine. Furthermore, we observe that China’s political promotion system, which favors economic growth, incentivizes provincial leaders to counterbalance increased health care spending by reducing funding for less visible public services, particularly cultural activities. Such strategic allocations ensure the continuity of other policy areas that are more influential in their political career.

Strong institutions attract talent to productive activities, whereas weak ones raise the appeal of rent seeking. We propose a theory that describes the impact of institutions on occupational choices over a range of abilities, and predicts that the sensitivity of such choices to the quality of institutions rises in talent when the latter increases from low to intermediate levels, and declines thereafter. To test these predictions empirically, we use a unique micro data set describing the choices of fields of studies by newly enrolled university students in Russian regions in 2011–2014. We show that the popularity of sciences and engineering, on one hand, and law and public administration, on the other, are linked to the quality of regional investment climate and another measure of institutional quality in a manner predicted by our theory.

We use Chinese firm-level data from 2001 to 2007 to estimate the (dis)connection between firms’ R&D and productivity and find that the productivity effect of R&D investment is very low. We conjecture that firms conduct/report unproductive R&D in order to obtain policy benefits. To explore this plausible misconduct, we investigate the effects of China's 2003 R&D tax reform on firms’ R&D investment. The reform generates exogenous treatment variations across firm ownerships for causal identification. We find that the reform has statistically significant and positive effects on firms’ R&D investments. Quantitatively, the reform raises firms’ R&D investments by 6.68 % and the estimated R&D elasticity of tax deduction for private firms is 0.9147, which is comparable to other countries. However, our further empirical results indicate that the policy-induced R&D is less efficient in promoting firms’ productivity than the spontaneous R&D. We provide evidence of firms’ relabeling non-R&D expenses to R&D expenses, which partly explains the inefficiency of R&D investment.

This paper studies the effects of export expansions between 2000 and 2015 on China's local labor markets, focusing on the heterogeneous effects for people with different Hukou statuses. We find that rising local exports increased manufacturing and service-sector employment shares but decreased agricultural employment share for non-local-urban-Hukou residents, including local-rural-Hukou people and cross-prefecture migrants. On the other hand, trade expansions decreased the likelihood of employment and service-sector employment for local-urban-Hukou people. We provide evidence on the substitution and wealth effects for the “crowding-out” of local-urban-Hukou people out of employment.