ON THE EVOLUTION OF TOTAL FACTOR PRODUCTIVITY IN LATIN AMERICA

Because of several policy distortions, including import‐substitution industrialization, widespread government intervention, and both domestic and international competitive barriers, there has been a general presumption that Latin America has been much less productive than the leading economies in the last decades. In this paper we show, however, that until the late 1970s Latin American countries had high productivity levels relative to the United States. It is only after the late 1970s that we observe a fast decrease of relative total factor productivity (TFP) in Latin America. We also show that the inclusion of human capital in the production function makes a crucial difference in the TFP calculations for Latin America. (JEL O11, O47, O54)     

BANKS,FREE BANKS,AND U.S. ECONOMIC GROWTH

The “Federalist financial revolution” may have jump‐started the U.S. economy into modern growth, but the Free Banking System (1837–1862) did not play a direct role in sustaining it. Despite lowering entry barriers and extending banking into developing regions, we find in county‐level data that free banks had little or no effect on growth. The result is not just a symptom of the era, as state‐chartered banks seem to have strong and positive effects on manufacturing and urbanization. (JEL G21, N21, O43)     

TECHNOLOGICAL ASYMMETRY AMONG FOREIGN INVESTORS AND MODE OF ENTRY

How does the preferred entry mode of foreign investors depend on their technological capability relative to that of their rivals? This article develops a simple model of entry mode choice and evaluates its main testable implication using data on foreign investors in Eastern European countries and the successor states of the Soviet Union. The model considers competition between two asymmetric foreign investors and captures the following trade‐off: while a joint venture (JV) helps a foreign investor secure a better position in the product market vis‐à‐vis its rival, it also requires that profits be shared with the local partner. The model predicts that the efficient foreign investor is less likely to choose a JV and more likely to enter directly relative to the inefficient investor. Our empirical analysis supports this prediction: foreign investors with more sophisticated technologies and marketing skills (relative to other firms in their industry) tend to prefer direct entry to JVs. This empirical finding is robust to controlling for host country–specific effects and other commonly cited determinants of entry mode. (JEL F13, F23, O32)     

Celiac disease in North America: the disabling experience

Diagnosed as having celiac disease during my final year of undergraduate studies at McGill University, in the spring of 2005, my identity and lifestyle have undergone a transformative process. In this article I examine my experience of having celiac disease post-diagnosis, using the social model of disability framework. I examine the barriers that persons having celiac disease experience, both generally and personally. At the general level I explore the parallels between the experience of having celiac disease and the experience of being disabled: culturally, environmentally and financially. At the personal level I recount the emotional experience of being disabled.     

IMPORTED CAPITAL INPUT,ABSORPTIVE CAPACITY,AND FIRM PERFORMANCE: EVIDENCE FROM FIRM‐LEVEL DATA

Importing capital inputs has been recognized as a critical channel for technology transfer across countries. We examine whether and to what extent the productive impact of imported capital varies with firms' abilities to absorb new technologies using ordinary least squares, instrumental variable, and threshold regression estimators. We find that firms with higher absorptive capacity gain significantly more from importing foreign capital. Our results also suggest a threshold for such benefits. Furthermore, the productive contribution of skilled labor is significantly higher in firms that import foreign capital. Developing policies to augment absorptive capacity will help firms in developing countries to realize benefits associated with imported capital. (JEL F14, D24, L24, O33)     

THE HETEROGENEITY OF IMMIGRANTS,HOST COUNTRIES' INCOME AND PRODUCTIVITY: A CHANNEL ACCOUNTING APPROACH

This article exploits changes in the distribution of immigrants across 20 Organization for Economic Co‐operation and Development countries from 1960 to 2005 in order to assess their contribution to income of destination countries. The non‐random sorting of immigrants across countries is addressed by using an instrumental variable strategy. The instrument is built by estimating a bilateral migration model incorporating exogenous origin country determinants of migration. Aggregate results reveal that immigrants have a positive effect on income that works primarily through total factor productivity (TFP). We further construct a novel dataset from censuses and labor force surveys to explore the information on the age of immigrants. Contrasting income effects are found across age groups: a higher share of immigrants among the youth has a negative impact on aggregate income, while a higher share of immigrants among prime‐aged workers has a positive effect. We interpret this disparity as short‐term versus medium‐term effects. Adjustments over time involve changes in TFP but also in the human capital of the native‐born. (JEL F22, J24, J31, O31)     

MULTIPLE EQUILIBRIA AND DETERRENCE IN AIRLINE MARKETS

We use a longitudinal dataset from the U.S. airline industry to estimate three different models for entry games with very general forms of heterogeneity between U.S. carriers in airline markets: a simultaneous game with complete information and two sequential games with or without strategic entry deterrence. In a sequential game with entry deterrence, an incumbent decides whether to incur a cost to deter potential entrants. We show that the model with sequential games with strategic deterrence provides the best fit to the data. We conclude that the results reject the hypothesis of a static model and support the hypothesis of the existence of strategic entry deterrence. (JEL L1)     

Challenges,Speculations, Risks: Differentiating From Israel

What is it like to differentiate from a country, a culture? Is it even possible? This paper describes my struggle to differentiate from Israel. I share both the emotional and intellectual dimensions of my journey. The emotional plane is illustrated with a journal entry, and the intellectual through the meaning that I give to my experiences and the conclusions that I draw from them as a therapist. This paper is not a political statement but it does illustrate, I believe, the close and complicated relationship between what is public and what is personal.     

MAKING FRIENDS TO INFLUENCE OTHERS: ENTRY AND CONTRIBUTION DECISIONS THAT AFFECT SOCIAL CAPITAL IN AN ASSOCIATION

We examine factors affecting entry and contribution to an association that provides different goods using social capital formed by heterogeneous firms that lobby in a political economy environment. We identify how associations attract the most productive firms or the least productive firms in an industry and explain how such associations differ in their intensive and extensive marginal contributions to social capital. We find that the level of regulatory stringency, association products including capital goods for members or lobbying to influence regulation, and government influenceability affect membership and contribution decisions. These results vary with firm productivity. Often, an increase in government influenceability increases social capital in associations composed of highly productive firms because they prefer to influence policy while less productive firms prefer more association‐produced production inputs. (JEL D71, D73)     

I AM IMMORTAL

I suggest a model to forecast life expectancy based on the electrocardiogram signal. I show how the heart electrical activity can be decomposed in the state‐space and that the suggested model has superior out‐of‐sample properties compared to a set of alternatives. When the model is used to forecast my own electrocardiogram, a striking result arises: the n‐step ahead forecast remains bounded and positive even after one googol period. Therefore, my life expectancy tends to infinity implying that I am immortal. (JEL I10, I19)     

Pleasures and Perils in Looking Back Response to Fogel,Grand, Kahane,and Namir

I take up three themes that run through the commentaries on my book, The Pillar of Salt. First, I discuss the nature of remembering, particularly in the light of the lessons that have emerged from the recovered-memory debate. Second, I identify areas where feminism and psychoanalysis may inform one another, particularly at the level of clinical and political practices. A third theme centers on the contemporary revival of discourse on hysteria and problems that emerge in locating sources of misery in the histories of women.     

RENT‐SEEKING AND CAPITAL ACCUMULATION

A general model incorporating rent‐seeking activities in the standard neoclassical model of capital accumulation is presented. The welfare of the representative agent is negatively affected by the efficiency of rent‐seeking activities. Although intuitive, this result is not obvious because long‐run income can be positively affected by more efficient rent‐seeking activities. The model is used to provide explanations for some recent experiences in developing countries, including the relative poor performance of economies that experience a move to a more decentralized system and the observed path of total factor productivity (TFP) in countries like Ireland and Venezuela. (JEL D23, D74, O40, O41, O47)     

PRODUCT COMPATIBILITY HINDERS PRE-EMPTIVE ADVERTISING

This paper considers competition in systems of complementary products and examines how compatibility affects the use of informative advertising by an incumbent to deter entry. Advertising increases demand for a product; customers become price sensitive and competition increases, pre-empting new market entrants. However, compatibility reduces competition, so incumbent advertising becomes less effective at deterring entry and additional, costly advertising would be required to induce deterrence. Moreover, compatibility increases advertising by a potential entrant; with efficient advertising technology, consumers are informed about all products and the incumbent cannot deter entry by using additional advertising. Therefore, product standardization policies that encourage compatibility can support new market entrants by discouraging pre-emptive advertising strategies. (JEL D21, D43, L13, L15)     

AGRICULTURAL TRANSITION AND THE ADOPTION OF PRIMITIVE TECHNOLOGY

This paper tests Jared Diamond's influential theory that an earlier transition from a hunter‐gatherer society to agricultural production induces higher levels of technology adoption. Using a proxy for the geographic diffusion barriers of Neolithic technology and an index of biogeographic endowments to isolate the exogenous component of the timing of agricultural transition, the findings indicate that countries that experienced earlier transitions to agriculture were subsequently more capable of adopting new technologies in 1000 BC, 1 AD, and 1500 AD. These results lend strong support to Diamond's hypothesis. (JEL O30, O40)     

Psychic distance, psychic distance paradox and behavioral economics: Modeling MNC entry behavior in foreign markets

Assuming that MNCs face a much more complex environment that local enterprizes, the paper begins by discussing what economist Beckerman called psychic distance. After a historical discussion of this concept, I also discuss what O’Gardy and Lane called psychic distance paradox. Then, I argue that these two concepts have a great deal of relevance beyond their original intent of international trade-they are also relevant to FDI and all other formas of international production and exchange. Next, I argue, as I have done in several previous papers, that behavioral economics has a great deal of relevance to FDI and international productive activity; I also argue that behavioral economics can be utilized to describe the concepts of psychic distance and psychic distance paradox. Then, I develop a behavioral economics-based model that can explain the concepts of psychic distance and psychic distance paradox, and their relevance to the modes of entry of MNCs in international markets. In doing so, I argue that FDI and MNC behavior in general need not be explained outside of economics, since, in contrast to neo-classical economics, behavioral economics is capable of capturing the complexities of global markets.     

Postmodern Research,Postmodern Practice: Studying the Barriers to Cyberliteracy Among Mentally Disabled Women

The conversation about the postmodern challenge to sociological practice is just beginning. Harding advocates a positive tension between the postmodern vision of an antiessentialist, antiepistemological future and the postmodern vision of successor science projects grounded in the epistemologies of marginalized communities. In this paper, I describe my study of barriers to cyberliteracy among mentally disabled women and how it has been informed by these two contrasting postmodern visions represented, respectively, by the work of Newman and Holzman (The End of Knowing: A New Developmental Way of Learning, Routledge, London, 1997) and Smith (Decolonizing Methodologies: Research and Indigenous Peoples, Zed Books, London, 1999).     

HOW IMPORTANT ARE CAPITAL AND TOTAL FACTOR PRODUCTIVITY FOR ECONOMIC GROWTH?

We examine the relative importance of the growth of physical and human capital and the growth of total factor productivity (TFP) using newly organized data on 145 countries that spans more than 100 years for 23 of these countries. For all countries, only 14% of average output growth per worker is associated with TFP growth. We use priors from theories to construct estimates of the relative importance of the variances of aggregate input growth and TFP growth across countries. Much of the importance of the variance of TFP growth across countries is associated with negative TFP growth. (JEL O47 , O50 , O57 , O30 , N10 )     

Freedom Works! The Vision and Broken Heart of Jack D. Douglas

It gives me particular pleasure to publish this review of a major but neglected figure in the recent history of symbolic interactionism. I only heard Jack Douglas speak once, when he gave a plenary address to the British Sociological Association annual conference in Lancaster in the mid‐1980s. The audience treated him quite disgracefully on that occasion. Douglas made two subtle points about the need for sociologists to take contemporary research in primate ethology more seriously and to reconsider spontaneous order theories in social science. His listeners assumed that he was talking about the crasser forms of sociobiology and praising the laissez‐faire ideologies of Thatcherism, and booed him off the stage. I declined to renew my membership to the BSA for about ten years after this episode. I only rejoined when I became a department chair and it was important to be engaged with the professional association, whatever my personal views. John Johnson's paper reminds us of Douglas's important and challenging legacy of ideas, and of the support and inspiration that he gave to a whole generation of outstanding scholars. Robert Dingwall Jack Douglas published 26 books and many articles between 1967 and 1989, and by his intellectual charisma influenced a productive cohort of young scholars who have produced over 70 books and 700 articles and chapters since the 1970s. He combined phenomenology, existentialism, and naturalistic field work to create an approach he termed Existential Sociology, also the title of a 1977 anthology. His thinking has undergone significant changes during the course of a long intellectual career. Following his 1992 retirement, the development of the internet and new technologies of communication afforded Jack a “second life” with a transdisciplinary intellectual community outside of the university environment. This paper briefly summarizes a small part of his life and intellectual project.     

DYNASTIC MANAGEMENT

The most striking difference in corporate‐governance arrangements between rich and poor countries is that the latter rely much more heavily on the dynastic family firm, where ownership and control are passed on from one generation to the other. We argue that if the heir to the family firm has no talent for managerial decision making, dynastic management is a failure of meritocracy that reduces a firm's total factor productivity (TFP). We present a simple model that studies the macroeconomic causes and consequences of dynastic management. In our model, the incidence of dynastic management depends, among other factors, on the imperfections of contractual enforcement. A plausible calibration suggests that, via dynastic management, poor contract enforcement may be a substantial contributor to observed cross‐country differences in aggregate TFP. (JEL O43, O47, G32)     

Ethnography and anxiety: Field work and reflexivity in the vortex of U.S.-Cuban relations

This paper explores the ways in which geo-political forces can shape doing, interpreting, and representing ethnographic field work. Using my field work in a law collective in Havana, Cuba between 1989 and 1994 as a starting point, I consider how macro-social relationship—in this case 30 years of political hostility between the U.S. and Cuban governments—can inscribe themselves on the micro-social relations between ethnographers and informants in the field, and ethnographers and their audiences at home. The combination of geo-political tensions and reflexive attempts to discern the impact of these tensions on my field work generated, what I term, disciplinary anxietyand discursive anxiety.I consider how anxieties became part of my reflexive routines in the field, shaped my interactions with Cubans, colored my attempts to interpret those interactions, and affected my framing of those interpretations for audiences at home. I suggest that reflexivity in fieldwork must be sensitive, not only to the standpoints imbedded in the field worker's biography, but also to the way in which macro-political processes enter into the biographies of field workers, their informants, and their audiences, and influence the interactions among them.