MANAGERIAL MOTIVES, MARKET STRUCTURES AND THE PERFORMANCE OF HOLDING COMPANY BANKS

Since the late 1960's bank holding companies have become a dominant force in U. S. banking; they now account for over 2/3 of the nation's total deposits. This paper tests the hypothesis that the holding company form of organization leads to relatively risk-taking behavior by affiliated banks. A major finding is that holding company banks react to monopolistic market situations by choosing risker portfolios and by leveraging to a greater extent than their independent counterparts. Such a behavioral characteristic has important implications for the allocation of resources in the country's 2600 local banking markets and for the regulation of financial institutions in general.     

IN‐SEASON HEAD‐COACH DISMISSALS AND THE PERFORMANCE OF PROFESSIONAL FOOTBALL TEAMS

This paper studies the causes and consequences of in‐season changes of the head‐coach of association football teams. We exploit data from the highest level of Dutch professional football during 14 successive seasons. An in‐season change of the head‐coach depends on recent match results and the difference between actual results and expectations as measured using bookmaker data. We find that, after the head‐coach has been replaced, teams perform better than before. However, the performance is also better than before for a control group of coach replacements that did not occur. From this we conclude that replacement of head‐coaches does not improve team performance. (JEL J44, L83)     

THE IMPACT OF MANAGERIAL CHANGE ON PERFORMANCE: THE ROLE OF TEAM HETEROGENEITY

When a key responsibility of a manager is to allocate more or less attractive tasks, subordinates have an incentive to work hard and demonstrate their talents. As a new manager is less well informed, management dismissals reinvigorate this tournament competition—but only in sufficiently homogeneous teams. We investigate this hypothesis using a large dataset on dismissals of soccer coaches, whose main task is indeed the selection of players. We find that dismissals enhance performance (only) in homogeneous teams. Moreover, we show that there is typically a negative selection bias when evaluating succession effects, which reconciles previous contradictory findings. (JEL D22, J44, J63)     

LABOR MARKET PERFORMANCE EFFECTS OF DISCRIMINATION AND LOSS OF SKILL

We examine the impact of discrimination on labor market performance when workers are subject to a risk of losing skills during an unemployment experience. Within a search and matching framework, we show that both natives and immigrants are affected by discrimination. Discrimination in one sector has positive spillovers, inducing employment to increase in the other sector and the effect on labor market performance therefore depends on whether discrimination is present in only one sector or in both. Discrimination may induce workers to train more or less than natives after having lost their skills, dependent upon in which sector there is discrimination. Net output tends to be most negatively affected by discrimination among high‐skilled workers. (JEL J15, J31, J61, J64, J71)     

CAREER AND PERSONAL CHARACTERISTICS OF THE MANAGERIAL TECHNOSTRUCTURE IN CANADIAN BUSINESS

Cette étude est basée sur un sondage de 483 directeurs du rang le plus élevé dans 17 compagnies canadiennes de taille grande et moyenne. L‘étude, qui fait parti d'un ouvrage plus grand avec des objets différents, avait recherché des renseignments sur plusiers charactéristiques de fond de ces membres de la “technostructure,” et aussi sur le développement récent de leurs carrières. Les résultats ont indiqué qu'en général les directeurs canadiens sur les échelons les plus élevés sont pour la plupart masculins, et britanniques en nombres disproportionnés. Leur âge varie beaucoup. Leur scolarité varie en fonction de la taille des compagnies. Leur taux de mobilité sont plus bas que durant les années 60 et le début des années 70 et leur carrières se situent surtout dans les fonctions de ligne d'affaires dans les compagnies de taille moyenne. Les déviations de ces résultats étaient reliées à plusieurs variables économiques et technologiques. Les implications de ces résultats sur la mobilité future aux rangs supérieurs de la gestion sont discutées. This study is based on a survey of 483 upper level managers in 17 large and middle sized Canadian companies. The survey, made as a part of a larger study with different objectives, sought information on several background characteristics of these members of the “technostructure” as well as a history of their recent career development. Results indicated that in general Canadian upper managers are predominantly male, disproportionately British, widely varying in age and differentiated on the basis of company size as to their education. Their mobility rate is slowing down compared to the 1960s and early 1970s and their careers have been primarily in the main line functions of business especially in middle-sized companies. Variations in these general results were also found to be related to several economic and technological variables. The implications of these results for future mobility into upper management ranks are discussed.     

TAXONOMY AND THE EFFECTS OF FISCAL AND MONETARY POLICY

This paper reviews the development of monetarist theory and the circumstances under which emphasis shifted to "fiscalism," discusses Bent Hansen's view that the controversy is largely a sham dispute, and suggests two types of research needed to assess, historically and theoretically, the relative practical importance of the two approaches to reduction or elimination of economic instability.     

MORAL HAZARD AND THE EFFECTS OF THE DESIGNATED HITTER RULE REVISITED

New evidence seems to cast doubt on the hypothesis that the American League's adoption of the designated hitter (DH) rule in 1973 created a moral hazard problem for pitchers. In particular, the substitution of hard-hitting DHs for weak-hitting pitchers in the American League supposedly explains the lion's share of inter-league differences in hit batsmen. However, theoretical and empirical questions about the explanatory power of this alternative hypothesis lead us to the conclusion that moral hazard remains the most plausible reason why more AL than NL batters have been hit by pitches in 22 of the past 25 seasons. ( JEL D81, J28)     

ELASTIC CAPITAL SUPPLY AND THE EFFECTS OF FISCAL POLICY

Existing analyses of the effects of fiscal policy in general equilibrium models have typically been conducted under the assumption that the long-run supply of capital is perfectly elastic at a fixed rate of time preference. These analyses have shown that the long-run response of the capital stock to changes in fiscal policy is crucial to generating the potential for “multiplier” effects in these models. In this paper we ask, what are the implications of relaxing the assumption of perfectly elastic capital supply for the analysis of fiscal policy? We show that with less than perfectly elastic capital supply, the potential for multipliers is actually enhanced. (JEL E62, D90)     

UNCERTAIN EFFECTS OF MONEY AND THE LINK BETWEEN THE INFLATION RATE AND INFLATION UNCERTAINTY

In the postwar period high rates of inflation are associated with high levels of inflation uncertainty. In this paper I argue that the inflation rate and inflation uncertainty are linked by forecasters' uncertainty about the impact of money growth on the price level, and I present evidence indicating that this has been the case. As long as the impact of money growth on the price level remains unpredictable, then even predictable money growth will cause inflation uncertainty with its accompanying adverse effects on employment and output.     

A MACROECONOMIC MODEL ON THE QUALITY OF GOVERNMENT AND ECONOMIC PERFORMANCE

We determine the relative rewards to producers, private rent‐seekers, and bureaucrats and allocation of talent between them in a general equilibrium model. Unproductive activity creates a negative externality on the relative rewards to producers. If the size of bureaucracy is exogenously given, among the multiple equilibria, the one with fewer private rent‐seekers yields higher welfare. By choosing a small size of bureaucracy, the government can establish the superior equilibrium as the unique outcome, which also achieves the constrained optimum. If the population of bureaucrats is endogenously determined, however, a larger bureaucracy enhances production and welfare. The size of government and economic performance are jointly determined, and their relationship depends on the quality of government. Our result supports the view that the size of government may not matter much; what is important is the quality of government. (JEL E60, E61, H00)     

THE TECHNOLOGY FACTOR AND THE EXPORT PERFORMANCE OF U.S. MANUFACTURING INDUSTRIES

The paper examines two central theories advanced to explain the revealed comparative advantage of U.S. industries. The neo-technological account centers on the process of innovation among industries and is represented in the regression analysis by an R&D intensity variable. The neofactor theory advances both human and "physical" capital as important variables in determining countries' comparative advantage. Foreign protection is postulated to affect the export performance of U.S. industries. Generally the results suggest that U.S. revealed comparative advantage is most pronounced in R&D intensive industries that give the U.S. a temporary technological lead in world markets.     

THE VALUE OF THE VOTE: A MODEL AND TEST OF THE EFFECTS OF TURNOUT ON DISTRIBUTIVE POLICY

This article demonstrates important effects of voter participation. A model shows why, for some types of distributive policy, incumbents are more likely to be reelected if high-turnout regions receive more funds than do low-turnout regions. The model predicts, therefore, greater allocations to high-turnout regions. This prediction is tested with county-level data from the New Deal's Federal Emergency Relief Administration (FERA). The estimates suggest that by voting rather than not voting, an individual increased by about $30 the expected FERA allocation for the individual's county. The size of the estimated effect differs across states. ( JEL D72, N42)     

THE EFFECTS OF FINANCIAL AND RECOGNITION INCENTIVES ACROSS WORK CONTEXTS: THE ROLE OF MEANING

We manipulate workers' perceived meaning of a job in a field experiment and interact meaning of work with both financial and recognition incentives. Results show that workers exert more effort when meaning is high. Money has a positive effect on performance that is independent of meaning. In contrast, meaning and recognition interact negatively. Our results provide new insights into the stability of incentive effects across important work contexts. They also suggest that meaning and worker recognition may operate via the same motivational channel. (JEL C93, J33, M12, M52)