Business reform outcomes: Why so different?

Post-crisis policy making increasingly focuses on doing business reforms. We argue that the effects of those reforms will be different across countries. To understand the reasons for the reform outcome divergence, we advance a novel firm-size distribution (FSDs) argument. At the center of the argument is the fact that FSDs are different across countries and stable over time. Then, if a given doing business reform induces firms of different size to grow differently, this will produce a variety of reform outcomes across countries. To advance the argument, we set up a tractable general equilibrium (GE) model and study how firms of different size grow after a doing business reform. The model predicts that larger firms will grow faster than smaller firms after the reform. The model predictions are tested on the Enterprise Surveys (ES) data, merged with the Doing Business indicators. We confirm that firms of different size grow differently after a Doing Business reform. Thus, based on the notable differences of firm size distributions across countries, identical reforms to start, operate and close a business will produce a variety of reform outcomes across countries.     

Financing Innovation Development in the Context of Foreign Experience and Domestic Practice

The importance of innovation development is determined by the strategic role that true innovations play in the development of the state and the formation of a healthy, competitive economy. The organization of massive industrial production—which applies advanced technological achievements and science-intensive knowledge to form an infrastructure for innovation—should be a key component of the government’s strategic policy to develop the national economy. In Russia, the infrastructure for innovation is less developed than other industrialized countries. This article considers the consequences of this underdevelopment, and proposes several ways of financing basic and applied research on the basis of foreign precedent and domestic practice.     

Assisting the High Administrative Court in Restricting Too Broad a Concept of Academic Judgment

I have received substantial monetary compensation and a formal apology from my first doctoral school, and a Ph.D. from another university. This essay describes my personal view on discussing the boundaries of academic judgment and research supervision with the ombudsman agency for higher education, and at the High Administrative Court of England and Wales. The Court’s judicial doctrine addresses substantial research accountability matters. It clarifies that although the Court and ombudsman agency must not interfere with academic judgment, not everything done by an academic can be considered as academic judgment. A Ph.D. supervisor can seriously fail to perform his/her duties.     

Goal attainability and performance: Evidence from Boston marathon qualifying standards

In this paper we test if performance improves once goals become more attainable. Goal-setting literature suggests that workers respond to challenging but achievable goals with increased performance. Empirical evidence supports the notion of goals increasing performance; however the evidence on how attainability of goals affects performance is mixed. This paper tests whether efforts increase, improving performance as the goals become more attainable. We are employing a unique set of publicly available marathon data from 1970 to 2015 to directly analyze the effect of goal attainability on performance. With the probable goal of qualifying for the Boston Marathon, we test if runners increase their effort, and consequently improve their performance if they enter a new age group and as a result have a more attainable goal. We find that runners who enter a new age group perform better than the runners whose qualifying time did not change. This effect is seen with runners in younger age groups, but not found in the results of runners in more advanced years.     

Lawrence R. Klein 1920–2013: Notes on the early years

Klein can well be said to have created the field of macroeconometric modeling almost singlehandedly. His international influence started at an early stage. The article offers scattered archive observations on Klein's early years from undergraduate study to the University of Pennsylvania in 1958. Klein was in 1944 recruited by the Cowles Commission in Chicago to construct the first macroeconomic model in the USA, drawing on the experiences of the interwar modeling work of Jan Tinbergen and the new path-breaking econometric methods developed by Trygve Haavelmo. The first Klein model was taken into use at the end of 1945 to shed light on the prospects for the US economy in the transition from war to peace. After two-three years in Chicago Chicago, Klein traveled for a year in Europe and initiated macroeconometric modeling work in Canada, at the University of Michigan, and at Oxford University. This was only the beginning of the lifelong influence exerted on modelers around the globe. The article pays attention to Klein's relation to Paul Samuelson, Jacob Marschak, Trygve Haavelmo, Ragnar Frisch, and others.     

Probability weighting in different domains: The role of affect,fungibility, and stakes

This paper reports the results of a laboratory experiment in which probability weighting functions for risky gains were elicited non-parametrically in over 500 incentivized subjects. I compared probability weights for monetary rewards to two less fungible domains involving vouchers for different types of consumption, inducing stronger or weaker (positive) emotions. The level of stakes was also manipulated. I found that the probability to win monetary rewards was weighted almost linearly in the high stakes condition, the probability to win vouchers associated with stronger positive affect was underweighted and the probability to win affect-poor vouchers was strongly underweighted. Substantial underweighting also prevailed in all three domains in the low stakes condition.     

Do changes in patent policy influence firms’ technology strategy? Evidence from manufacturing in India

India made patent policy changes to comply with TRIPs agreement that increased the rights of patent owners. Considering that such policy changes influence both in-house research and development investments and technology licensing from external sources, the firms have to accordingly devise their technology strategy. This study employs a simple and fixed effects multinomial logit regression models to study the impact of policy changes on the technology strategy of 402 firms operating in Indian manufacturing sector from 1999 to 2014. The results show that changes in patent policy have a significant impact on technology strategy of firms.     

Credit access,macroprudential rules and policy interventions: Lessons for potential first time buyers

Given the increased popularity of macroprudential measures in the aftermath of the great financial crisis (GFC), a key policy question to arise in certain mortgage markets is whether a significant access to credit issue exists amongst prospective homeowners because of these new policies. In this paper we assess whether such a problem arises in the context of the Irish mortgage market – a market particularly adversely impacted by the GFC. We use a microsimulation model to estimate the level of latent credit demand that could be serviced by the market given prudent credit risk assessment and the current macroprudential regulations. We then compare this demand to current market provision to explore whether a credit gap exists. Finally, we simulate how a public mortgage credit scheme or equity “help-to-buy” type instrument may help credit access. We find both instruments to be effective but would lead to somewhat higher house prices.     

Fiscal transparency and tax ethics: does better information lead to greater compliance?

By relying on WVS data and using multilevel mixed modeling, the paper tests the hypothesis that access to larger flows of information about government fiscal accounts and financial transactions increases citizens’ willingness to pay taxes. By supporting such an hypothesis, our analysis suggests that in the presence of more information, the implicit contract between the government and taxpayers displays less stringent incentives and participation constraints and causes part of the contract, namely tax morale, to be enhanced. This finding supports the implementation of fiscal transparency policies, whose possible design is discussed.