PERSISTENCE OF POLITICIANS AND FIRMS' INNOVATION

We empirically investigate whether the persistence of politicians in political institutions affects the innovation activity of firms. We use 12,000 firm‐level observations from three waves of the Italian Observatory over Small and Medium Enterprises, and introduce a measure of political persistence defined as the average length of individual political careers in political institutions of Italian municipalities. Using death of politicians as an exogenous source of variation of political persistence, we find a robust negative relation between political persistence and the probability of process innovation. This finding is consistent with the view that political stability may hinder firms' incentive to innovate to maintain their competitiveness, as long as they can extract rents from long‐term connections with politicians. (JEL D22, D72, O31)     

SCHOOL CHOICE PROGRAMS AND LOCATION CHOICES OF PRIVATE SCHOOLS

This paper studies how the school choice policies that subsidize private school attendance using public funds affect the spatial distribution of private schools in the United States. Private school choice programs enacted between 1997 and 2010 are examined and linked to private school provision 2 years later. The paper finds that school choice policies lead to more private schools where the input to public schools is lower and the pool of students with special needs is larger. Yet the introduction of means‐tested school choice programs does not necessarily lead private schools to locate in low‐income neighborhoods. (JEL I2, H4, R3)     

NEGATIVE PUBLICITY AND CATHOLIC SCHOOLS

Between 1990 and 2007, the number of Catholic schools in the United States decreased by 14% and enrollment diminished by 7%. We generate two measures of publicity of sexual abuse at the diocesan level—public disclosure and news coverage. Dioceses with higher rates of negative publicity had a larger decline in both the number of Catholic schools and overall Catholic school enrollment. We estimate that publicity arising from sexual offenders within the Church explains 5% of the decline in the availability of Catholic schooling. (JEL I21, H52, H44)     

SCHOOLS,SKILLS, AND SYNAPSES

This paper discusses (a) the role of cognitive and noncognitive ability in shaping adult outcomes, (b) the early emergence of differentials in abilities between children of advantaged families and children of disadvantaged families, (c) the role of families in creating these abilities, (d) adverse trends in American families, and (e) the effectiveness of early interventions in offsetting these trends. Practical issues in the design and implementation of early childhood programs are discussed. (JEL A12)     

RESPONDING TO PLAGIARISM IN SCHOOLS OF SOCIAL WORK: CONSIDERATIONS AND RECOMMENDATIONS

Recognizing the challenges of addressing plagiarism within schools of social work and diverse faculty opinion on the issue, our school of social work engaged in several efforts to clarify issues and establish consensus among the faculty. Issues that required clarification included: definitions of plagiarism, steps to take when confronted with suspected plagiarism, the role of the administrative disciplinary committee, and the range of consequences. At a minimum, consensus was needed regarding faculty steps in confronting suspected plagiarism to ensure equitable treatment of students and to fulfill the school's role as a gatekeeper to the profession. This article describes the concerns, steps, and outcomes of the work that was conducted. We offer recommendations and invite further professional discussion about this educational issue.     

HIGH SCHOOLS AND CRIME: A REPLICATION

Using Cleveland data, we replicate Roncek and LoBosco's study of the effect of proximity to San Diego's high schools on crime in their surroundings. We also examine a major alternative hypothesis whether having other non-residential land uses in the schools' surroundings accounts for crime in these areas. Our findings closely parallel theirs. Proximity to public high schools only increases crime on city blocks which are immediately adjacent to the schools. Second, the size of a school's enrollment is not important for explaining crime in its surroundings. The analysis of non-residential effects supports Roncek and LoBosco's claim that crime effects are due solely to the presence of public high schools, although other land uses affect crime near private high schools. While there are differences in the exact magnitudes of the effects, the substance of their findings for San Diego generalizes well to a very different city. More generally, we argue that Wirth's early arguments about the effect of urbanism on impeding social control can be extended to the residential areas within the city.     

INNOVATION: ITS PUBLIC AND PRIVATE ASPECTS AND SOME OF THEIR EMPIRICAL IMPLICATIONS FOR MERGERS

Innovators may have incentives to incur the expense of the search for new knowledge even if others can use the results without contributing to the costs of the search for them. Why? Assume firms choose their actions independently. Assume new knowledge is a free public good: a firm can make the product at lower cost even if it spends nothing on research, if another does the research. The most plausible noncooperative equilibrium in this situation is stochastic: firms will decide what to do on the basis of a random device. The theory determines the probability that the firm spends nothing, or something, on research. In consequence, no firm can be certain that a rival will do the research; no firm can be certain of becoming a free rider. In consequence, there will be no relation on average between returns on research-outlays and size of outlays; but the yield on research always will be positive. Innovation can lead to differences among firms, but these differences should not persist, as firms can gain by eliminating them. In a non-cooperative equilibrium, where firms have different cost conditions, the allocation of output among them is inefficient. Such inefficiency can be eliminated if information about methods of production is sold, say by way of licensing. But royalty receipts are a very small fraction of total revenues, even in research and development intensive industries such as chemicals and scientific instruments. Merger is another avenue of cooperation. The theory which assumes research results are private predicts a positive relation between merger activity and technical change. Empirical evidence for the 1879–1930 inverval supports this prediction.     

AN EXPERIMENT ON INNOVATION AND COLLUSION

This paper examines the relationship between product innovation and the success of price collusion using novel laboratory experiments. Average market prices in low innovation (LO) experiments are significantly higher than those in high innovation, but otherwise identical experiments. This price difference is attributed to LO experimental subjects' greater common market experience. The data illustrate how collusion can be perceived as the “only way to make it” in LO markets where product innovation is not a viable strategy for increasing profits. They suggest that product homogeneity can be a proximate cause, and product innovation an ultimate cause, of collusion. (JEL L41, L10, C92)     

ASSET PRICE BUBBLES AND TECHNOLOGICAL INNOVATION

We introduce borrowing constraints into a two‐sector Schumpeterian growth model and examine the impact of asset price bubbles on innovation. In this environment, rational bubbles arise when the intermediate good producing R&D sector is faced with adverse productivity shocks. Importantly, these bubbles help alleviate credit constraints and facilitate innovation in the stagnant economy. On the policy front, we make a case for debt financed credit to the R&D sector. Further, we establish that a constant credit growth rule (akin to the Friedman rule) outperforms the often prescribed counter‐cyclical “lean against the wind” credit policy. (JEL E32, E44, O40)     

INTELLECTUAL PROPERTY PROTECTION AND THE INDUSTRIAL COMPOSITION OF MULTINATIONAL ACTIVITY

In a North‐South model with endogenous foreign direct investment (FDI), we examine the impact of Southern intellectual property rights (IPR) protection on the mode and industrial composition of international technology transfer. A novel feature of the model is that, due to technological reasons, industries differ with respect to their susceptibility to imitation. In equilibrium, licensing occurs in industries where the risk of imitation is low and FDI where it is of intermediate magnitude. Stronger IPRs in the South (1) alter the industrial composition of multinational activity toward licensing at the expense of FDI; (2) reduce local imitation; and (3) increase licensing and, to a lesser extent, FDI. (JEL F10, O34)     

CATHOLIC SCHOOLS, DROPOUT RATES AND EDUCATIONAL ATTAINMENT

This paper examines the effect of Catholic schooling on high-school dropout rates and educational attainment. Particular attention is given to the effect of selection into the Catholic school sector. After adjusting for self-selection, we find that sophomores in the Catholic schools are still substantially more likely to graduate with their class. It is also shown that seniors in the Catholic schools are not more likely to acquire more schooling than other seniors if selection is taken into account.     

REPUTATIONS,RANKINGS, AND REALITIES OF SOCIAL WORK SCHOOLS: CHALLENGES FOR FUTURE RESEARCH

This study examines the publications in refereed professional journals that ranked American schools of social work for a 13-year period. The trends are contrasted with those reported in the most widely disseminated rankings of social work schools, namely, U.S. News and World Report. Substantial differences emerge when findings from the 2 data sources are contrasted. The analysis indicates major limitations in extant research that ranks social work schools and ultimately shapes their respective reputations. It is suggested that a wide array of approaches be used to measure the ways schools can be ranked differentially and, perhaps, be regarded as "best" in one way or another.     

SPECULATIVE PROFITS,INNOVATION, AND GROWTH

When technological change affects the prices of tradeable assets, innovators can obtain speculative profits by exploiting their inside information as to the occurrence of innovations. We propose a tractable model of endogenous growth that formalizes this argument, originally due to Hirshleifer (1971). We then use the model to assess two claims advanced by Hirshleifer, namely, that speculative profits can generate excessive investment in R&D when they add to monopoly rents guaranteed by patent protection, or else even in a perfectly competitive economy. The analysis confirms the first claim, but casts doubts on the second one. (JEL O30, O40)     

THE LAGGED IMPACT OF STATE AND LOCAL TAXES ON ECONOMIC ACTIVITY AND POLITICAL BEHAVIOR

Politicians are frequently characterized as making fiscal decisions based on a shorter time horizon than is required for full taxpayer adjustment, thus generating near term benefits and relatively high tax rates. This argument requires a negative impact of taxes on economic activity distributed over a relatively long time period. Considerable empirical evidence suggests that state and local taxes do not significantly impact the geographic distribution of economic activity; this analysis, however, finds a significant negative distributed lag impact of such taxes on capital formation. The approach emphasizes interstate tax competition in formulating the cross-section time-series estimating equation.     

RACE AND CHARITABLE CHURCH ACTIVITY

The availability of public funding for charitable church activity has increased dramatically in recent years. A key dispute over this increase is whether congregations’ propensity to provide charitable services depends upon the local community’s racial composition. Using three congregation‐level data sets, this article investigates how race affects charitable church activity. Each data set indicates that all‐white congregations become less charitably active as the share of black residents in the community grows. This response is found only for charitable activities and not for other activities. Additionally, all‐white congregations favorably disposed toward receiving government funding respond no differently to black residents than do not‐all‐white congregations. (JEL H41, J15, Z12)     

SERVICES OUTSOURCING AND INNOVATION: AN EMPIRICAL INVESTIGATION

We provide a comprehensive empirical analysis of the links between international services outsourcing, domestic outsourcing, profits, and innovation using plant‐level data. We find a positive effect of international outsourcing of services on innovative activity at the plant level. Such a positive effect can also be observed for domestic outsourcing, but the magnitude is smaller. We also find that international services outsourcing has a positive effect on profitability, as predicted by theory, whereas this is not true for domestic sourcing. The results are robust to various specifications and an instrumental variables analysis. (JEL F19, O31)