The Social Origins of Inventors
Philippe Aghion, Ufuk Akcigit, Ari Hyytinen, Otto Toivanen
NBER Working Paper,
Nr. 24110,
2017
Abstract
In this paper we merge three datasets - individual income data, patenting data, and IQ data - to analyze the determinants of an individual's probability of inventing. We find that: (i) parental income matters even after controlling for other background variables and for IQ, yet the estimated impact of parental income is greatly diminished once parental education and the individual's IQ are controlled for; (ii) IQ has both a direct effect on the probability of inventing an indirect impact through education. The effect of IQ is larger for inventors than for medical doctors or lawyers. The impact of IQ is robust to controlling for unobserved family characteristics by focusing on potential inventors with brothers close in age. We also provide evidence on the importance of social family interactions, by looking at biological versus non-biological parents. Finally, we find a positive and significant interaction effect between IQ and father income, which suggests a misallocation of talents to innovation.
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14.12.2017 • 39/2017
Aufschwung in Deutschland und in der Welt
Zur Jahreswende ist die deutsche Konjunktur nach wie vor kräftig. Das Bruttoinlandsprodukt dürfte im Jahr 2017 um 2,2% zunehmen, und weil in diesem Jahr deutlich weniger Arbeitstage anfielen als zuvor, beträgt die Zuwachsrate kalenderbereinigt sogar 2,5%. „Der Aufschwung ist breit aufgestellt“, so Oliver Holtemöller, Leiter der Abteilung Makroökonomik und Vizepräsident des Leibniz-Instituts für Wirtschaftsforschung Halle (IWH). „Schon länger treibt die deutliche Zunahme der Beschäftigung die privaten Einkommen, den Konsum und den Wohnungsbau, der außerdem weiterhin von den sehr niedrigen Zinsen Rückenwind erhält.“ Zudem profitieren die deutschen Exporte zurzeit von der schwungvollen internationalen Konjunktur. Auch weil die Geldpolitik im Euroraum vorerst expansiv bleibt, ist damit zu rechnen, dass sich der Aufschwung im Jahr 2018 fortsetzt; die Produktion dürfte dann erneut um 2,2% zunehmen. Die Verbraucher-preisinflation dürfte auch im Jahr 2018 mit 1,7% moderat bleiben.
Oliver Holtemöller
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Economic Growth: The Past, the Present, and the Future
Ufuk Akcigit
Journal of Political Economy,
Nr. 6,
2017
Abstract
“Is there some action a government of India could take that would lead the Indian economy to grow like Indonesia’s or Egypt’s? If so, what, exactly? If not, what is it about the ‘nature of India’ that makes it so? The consequences for human welfare involved in questions like these are simply staggering: Once one starts to think about them, it is hard to think about anything else. (Lucas 1988, 5)”
These words by the Nobel laureate Chicago economist Robert Lucas Jr. summarize why so many great scholars found it hard to “think about anything else” and spent their careers trying to understand the process of economic growth. Economies are complex systems resulting from the actions of many actors. This complexity makes it challenging, but also infinitely interesting, to understand the determinants of economic growth. What are the roles of human capital, fertility, ideas, basic science, and public policy for growth? These are just some of the important questions that were posed by many highly influential studies featured in the issues of the Journal of Political Economy over the years. Indeed, this journal has been the platform to diffuse many of the brilliant ideas and start important debates in the field of economic growth. In this short paper, my goal is to revisit some of those seminal papers, briefly describe some of the more recent contributions, and end with some thoughts about the future direction of the field. The reader should note in advance that the list of work covered here is by no means exhaustive and mostly targets work that has been featured in issues of the JPE.
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Why is there Resistance to Works Councils in Germany? An Economic Perspective
Steffen Müller, Jens Stegmaier
Abstract
Recent empirical research generally finds evidence of positive economic effects of works councils, for example with regard to productivity and – with some limitations – to profits. This makes it necessary to explain why employers’ associations have reservations against works councils. On the basis of an in-depth literature analysis, we show that beyond the generally positive findings, there are important heterogeneities in the impact of works councils. We argue that those groups of employers that tend to benefit little from employee participation in terms of productivity and profits may well be important enough to shape the agenda of their employers’ organisation and even gained in importance within their organisations in recent years. We also discuss the role of deviations from profit-maximising behaviour like risk aversion, short-term profit maximisation, and other non-pecuniary motives, as possible reasons for employer resistance.
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Relationship Banking and SME Financing: The Case of Wales
Kent Matthews, Hans Degryse, Tianshu Zhao
International Journal of Banking, Accounting and Finance,
Nr. 1,
2017
Abstract
Regional disparities in credit availability across the UK have been highlighted in a series of studies as a factor affecting both new firm starts and small firm growth prospects. This paper suggests that relationship banking might be an important means of attenuating differences in credit availability. The paper focuses on the value of relationship banking to SMEs in Wales in the period following the global banking crisis. The results show that SMEs that had developed a customer-loan relationship with their banks had a lower probability of experiencing a worsened credit outcome than those that did not. The implications of the findings for regional development and financial provision are discussed.
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Criminal Network Formation and Optimal Detection Policy: The Role of Cascade of Detection
Liuchun Deng, Yufeng Sun
Journal of Economic Behavior and Organization,
September
2017
Abstract
This paper investigates the effect of cascade of detection, how detection of a criminal triggers detection of his network neighbors, on criminal network formation. We develop a model in which criminals choose both links and actions. We show that the degree of cascade of detection plays an important role in shaping equilibrium criminal networks. Surprisingly, greater cascade of detection could reduce ex ante social welfare. In particular, we prove that full cascade of detection yields a weakly denser criminal network than that under partial cascade of detection. We further characterize the optimal allocation of the detection resource and demonstrate that it should be highly asymmetric among ex ante identical agents.
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Direct and Indirect Risk-taking Incentives of Inside Debt
Stefano Colonnello, Giuliano Curatola, Ngoc Giang Hoang
Journal of Corporate Finance,
August
2017
Abstract
We develop a model of compensation structure and asset risk choice, where a risk-averse manager is compensated with salary, equity and inside debt. We seek to understand the joint implications of this compensation package for managerial risk-taking incentives and credit spreads. We show that the size and seniority of inside debt not only are crucial for the relation between inside debt and credit spreads but also play an important role in shaping the relation between equity compensation and credit spreads. Using a sample of U.S. public firms with traded credit default swap contracts, we provide evidence supportive of the model's predictions.
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Managerial Stability and the Pricing of New Equity Issuances: The Effects of State Enforcement of Noncompetition Agreements
Yin-chi Liao, Bill Francis, Iftekhar Hasan, Haizhi Wang
International Review of Entrepreneurship,
Nr. 2,
2017
Abstract
In this paper, we empirically investigate the relationship between managerial stability induced by the legal enforcement of noncompetition agreements and the pricing of new equity issuances. Making use of the variation in the enforceability of noncompetition contracts across states in the U.S., we find that managerial stability is negatively related to underpricing and price revision for our sample of new equity issuing firms. Our results demonstrate that the stability of management is important for an issuing firm to convey its intrinsic value credibly to the market.
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Do Local Banking Market Structures Matter for SME Financing and Performance? New Evidence from an Emerging Economy
Iftekhar Hasan, Krzysztof Jackowicz, Oskar Kowalewski, Łukasz Kozłowski
Journal of Banking and Finance,
2017
Abstract
This paper investigates the relationship between local banking structures and SMEs’ access to debt and performance. Using a unique dataset on bank branch locations in Poland and firm-, county-, and bank-level data, we conclude that a strong position for local cooperative banks facilitates access to bank financing, lowers financial costs, boosts investments, and favours growth for SMEs. Moreover, counties in which cooperative banks hold a strong position are characterized by a more rapid pace of new firm creation. The opposite effects appear in the majority of cases for local banking markets dominated by foreign-owned banks. Consequently, our findings are important from a policy perspective because they show that foreign bank entry and industry consolidation may raise valid concerns for SME prospects in emerging economies.
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