Empirical Note Research Articles

Industry comparative advantage and support for redistribution: A cross-country cross-industry analysis of the political economy of trade

A fundamental insight of various trade theories is that trade does not have a universally negative effect on different business activities in different countries. Rather, trade’s impact varies concomitantly with the specific country and activity considered. This empirical note expands prior work linking trade to redistribution preferences by using sectoral comparative advantage to incorporate the notion that trade may hurt the prospects of a specific group in one country (e.g. workers in a highly tradeable or offshorable industry) but will simultaneously benefit this same group in another country. We expect that individuals in industries with a weaker (stronger) comparative advantage suffer (benefit) more from trade and are therefore more (less) in favour of redistribution. Empirical results confirm this expected effect of comparative advantage on redistribution preferences. We conclude that considering countries’ comparative (dis)advantage in certain activities provides a deeper and more general understanding of the political consequences of trade.

Post-loss speeding or post-win slowing? An empirical note on the interpretation of decision-making time as a function of previous outcome.

Differences in response time following previous losses relative to previous wins are robust observations in behavioural science, often attributed to an increased (or decreased) degree of cognitive control exerted after negative feedback, hence, post-loss slowing (or post-loss speeding). This presumes that the locus of this effect resides in the specific modulation of decision time following negative outcomes. Across two experiments, I demonstrate how the use of absolute rather than relative processing speeds, and the sensitivity of processing speeds in response to specific experimental manipulations (Experiment 1: win rate, Experiment 2: feedback), provide clarity as to the relative weighting of post-win and post-loss states in determining these behavioural effects. Both experiments show that the speeding or slowing of decision-time is largely due to the flexibility generated by post-win cognitive states. Given that post-loss speeding may actually represent post-win slowing, conclusions regarding the modulation of decision-making time as a function of previous outcomes need to be more carefully considered.

Applying Predator—Prey Model to Companies Practicing—Undergoing Dumping. Theoretical Basis and Empirical Notes

This article explores the potential application of predator-prey theory to understand and model the dynamics of commercially aggressive companies involved in persistent price dumping. Drawing inspiration from ecological systems, where predator-prey interactions govern population dynamics, we adapt the underlying concept to the business realm, specifically focusing on companies engaging in aggressive pricing strategies that negatively impact competitors. Through a formal model inspired by Lotka-Volterra differential equations, we aim to capture the intricate interplay between predatory companies (engaging in not sporadic dumping) and their prey counterparts (those impacted by it). The explorative article concentrates on industries where aggressive pricing strategies, such as dumping, play a pivotal role, i.e. in sectors like steel production, airline services, and e-commerce (alongside insights into industry-specific dynamics and competitive landscapes). It adopts a mixed-methods approach based on a critical analysis of both literature and industry evidence, providing a theoretical and operating model complete with a numerical simulation. The application demonstrates that the dynamic interactions between prey and predator result in oscillating cycles, i.e., a delicate equilibrium and associated fluctuations (depending on the characteristics and assumptions related to aggressiveness and resilience of the two species, the estimation of parameters and growth rates, the institutional response – authorities constraints, intervention, protection, etc.) that arise as prey and predators influence each other’s populations in the shared ecosystem (market). The interdisciplinary nature of the issues provides valuable insights for policymakers, businesses managers, and industry stakeholders when navigating difficult competitive landscapes on the edge of (un)fair play and responsibility. Limitations and future directions of research are provided.

Do fiscal deficits influence private savings in South Africa? An empirical note

Orientation: The neoclassical loanable funds theory predicts that fiscal deficits reduce the pool of available savings in the economy, but heterodox scholarship disputes the claim.Research purpose: The paper sets out to test the relationship between fiscal deficits and private savings.Motivation for the study: Scholars are divided on whether corporate South Africa is building up excess savings, with some arguing that it is not and others arguing that it is because of mistrust of government and uncertainty largely. The trends of net private savings and fiscal deficits suggest that something contrary to the postulation of the neoclassical loanable funds theory could be happening in the South African context.Research approach/design and method: The paper used data for the period 1960–2021 within the Toda-Yamamoto vector autoregressive modelling framework.Main findings: The results show that fiscal deficits increase savings but reduce interest rates in line with the heterodox view that the financial asset creation effect of debt-financed deficits improves savings and reduces interests through the liquidity channel.Managerial/practical implications: The lesson for policy is that fiscal deficits are healthy for the economy. However, the government must manage them at some reasonable level to maintain a constant flow of net financial assets to the private sector, thus bolstering savings. An unhealthy pursuit of fiscal surpluses can shift deficits to households and firms, and breed systemic financial instability.Contribution/value-added: The paper contributed to a nuanced understanding of the role of fiscal deficits in expanding savings, which runs counter to the theoretical underpinnings of fiscal conduct that pursues budget surpluses.

Economic freedom and one‐way truck rental prices: An empirical note

AbstractThis study examines the one‐way truck rental prices for 378 cities. There are large price differentials in one‐way rental prices between city pairs. The pull of people toward higher economic freedom locales and push away from lower economic freedom locales is found to be an important determinant of the city‐pair price differentials.

Health Inequity in Bangladesh: An Empirical Note

The main objective of this paper is to examine health inequity in Bangladesh based on the Demographic and Health Surveys. It explores several measures of health inequity in selected health indicators. The results are mixed: inequity has declined in some health indicators such as infant mortality and immunization. However, inequity remains pervasive in births assisted by skilled personnel, antenatal care, and births delivered at health facilities.

Homelessness and Property Tax Freedom: An Empirical Note

Homelessness and Property Tax Freedom: An Empirical Note

An Empirical Note on the Effect of Poverty on Economic Complexity

This empirical note aims to complement the works by Gnangnon (2019) on the effect of poverty on export product diversification in developing countries, and Gnangnon (2021) on the effect of economic complexity on poverty in developing countries. It investigates the latter issue the other way around. In other words, it uses a panel dataset of 135 countries over the period of 1998-2019, and the two-step system Generalized Method of Moments estimator to explore the effect of poverty on economic complexity, which is a strong predictor of economic growth and development. The analysis has revealed that higher poverty levels influence negatively economic complexity, and advanced countries tend to bear a higher negative effect of poverty on economic complexity than relatively less advanced economies. These findings underline the need for fostering efforts at both national and international levels to fight poverty. Through a variety of channels, pro-poor policies would ultimately contribute to greater economic complexity, and consequently promote economic growth and development.

An empirical note on tourism and sustainable development nexus.

The goal of this research is to investigate the impact of tourism on sustainable development in the 10 most visited countries. For this purpose, following the STIRPAT model, the impact of urbanization, energy intensity, and tourism on the newly designed sustainable development index is examined for the period 1995–2015. In doing so, tourism is represented by two different indicators, the number of tourists and tourism receipts. In addition, the impact of tourism on economic growth is analyzed to compare the effects of tourism development on economic growth and sustainable development. While doing this, second-generation panel data methods are used to take into account the possible inter-country dependency. According to the findings obtained in the study, tourism, energy intensity, and urbanization have positive effects on economic growth. On the other hand, the effects of all three factors on the sustainable development index are negative and statistically significant. These findings indicate that the harmful effects of tourism on other dimensions of sustainable development are greater than the beneficial effects of tourism on economic growth.

Spillover effect of Economic Policy Uncertainties on Equity Market in India : an empirical note

Spillover effect of Economic Policy Uncertainties on Equity Market in India : an empirical note

Embedded Liberalism and Populism: A Cautionary Empirical Note

Embedded Liberalism and Populism: A Cautionary Empirical Note

Situated rationalities and management control change – an empirical note on key actors, situated rationalities and generalised practices

PurposeThis paper aims to offer an incremental contribution, augmenting the notion of situated rationality as proposed by terBogt and Scapens (2019). Through insights from empirical data, the authors explore the role of situated rationalities of key individual actors in processes of management control change.Design/methodology/approachA qualitative research approach was adopted with qualitative data collected in a single public service organisation through face-to-face interviews, organisation documentation and observations.FindingsThe findings present the important role of key individual actors in bringing about a new situated rationality in a housing department. External austerity forces combined with actors’ experience rationalities acted as a stimulus to change existing management control practices in the management of public services.Originality/valueThe paper conceptualises “experience” rationality, capturing the experiences of a key actor, including elements of leadership style. Drawing on a story of a complex process of management control change, this paper thus reveals interactions between generalised practices and situated rationalities which were not highlighted by the extended framework of terBogt and Scapens.

An Empirical Note on the Long-Run Effects of Public and Private R&D on TFP

Several studies have examined the long-run effects of public and private R&D on TFP with mixed results. A common feature of these studies is that they measure public and private R&D activity using perpetual inventory stocks of public and private R&D capital, constructed under the assumption that the prices of GDP, public R&D, and private R&D move identically. This note argues that the results of these studies may be biased if the assumption of identical price movements is violated. The purpose and main contribution of this note is to estimate the long-run elasticities of TFP with respect to public and private R&D using both the stock of public/private R&D capital and an alternative measure of public/private R&D activity: the number of public/private sector researchers. In addition, this study contributes to the literature by developing a simple theoretical model that formalizes the intuition of how public and private R&D affect TFP, and by using both traditional and more recent panel methods. Contrary to previous studies, it is found—using numbers of researchers in the public and private sector—that there is strong evidence both of a significant positive long-run effect of both public and private R&D on TFP and of a greater effect of public R&D than private R&D. Consistent with the mixed evidence reported in the literature, it is also found that the use of public and private R&D stocks yields mixed results regarding the long-run effects of public and private R&D on TFP.

Homelessness and Property Tax Freedom: An Empirical Note

Homelessness and Property Tax Freedom: An Empirical Note

Is corporate social responsibility an agency problem? An empirical note from takeovers

We rely on the agency motives of the takeover premium to empirically examine whether and how the acquirer's corporate social responsibility (CSR) performance influences the premiums paid in takeovers. Using a large sample of US takeovers that took place over the period from 1992 to 2014, our results mainly reveal that higher CSR performance at the acquirer level is associated with higher takeover premium which is consistent with the shareholder expense view. Our results continue to hold after a battery of additional analyses.

Labour Market Reactions to Lockdown Measures during the Covid-19 Pandemic in Malaysia: An Empirical Note

Labour Market Reactions to Lockdown Measures during the Covid-19 Pandemic in Malaysia: An Empirical Note

Market power evolution and convergence in European banking: An empirical note

AbstractThis paper undertakes an up‐to‐date assessment of evolution and convergence in market power over 2013 and 2018 in the Eurozone banking markets in view of the progress towards completing the banking union. The results show that average market power measured by the Lerner index displays an upward trend up until 2016 declining thereafter. Further findings by employing the panel convergence methodology of Philips and Sul (2007) fail to support the hypothesis of integration in the Eurozone banking markets through market power convergence. Furthermore, club clustering tests reveal presence of three sub‐clusters of countries with different speeds of convergence.

Dynamics among banking penetration, transport infrastructure, and regional growth: an empirical note from Indian states

This study examines the dynamics among banking penetration, transport infrastructure and regional growth for 23 Indian states within panel vector error correction framework over the period 2001 to 2017. Findings confirm the presence of long run equilibrium relationship between banking penetration, transport infrastructure and income for the panel. Panel FMOLS and DOLS results suggest that 1% increase in transport (roadways) infrastructure stocks and banking penetration increases the regional growth by 0.0620% to 0.06784% and 0.1836% to 0.1935%, respectively. Further, panel VECM-based causality results suggest that bidirectional causality between the regional growth and roadways infrastructure, banking penetration and regional growth, and banking penetration and roadways infrastructure respectively in long run. However, there is bidirectional causality between regional growth to roadways infrastructure, and banking outreach to roadways infrastructure, and unidirectional causality running from banking outreach to regional growth in the short run. Therefore, improving transport (roadways) infrastructure would be the right step towards regional growth in short run and long run as well.

Dynamics among Banking Penetration, Transport Infrastructure, and Regional Growth: An Empirical Note from Indian states

This study examines the dynamics among banking penetration, transport infrastructure and regional growth for 23 Indian states within panel vector error correction framework over the period 2001 to 2017. Findings confirm the presence of long run equilibrium relationship between banking penetration, transport infrastructure and income for the panel. Panel FMOLS and DOLS results suggest that 1% increase in transport (roadways) infrastructure stocks and banking penetration increases the regional growth by 0.0620% to 0.06784% and 0.1836% to 0.1935%, respectively. Further, panel VECM-based causality results suggest that bidirectional causality between the regional growth and roadways infrastructure, banking penetration and regional growth, and banking penetration and roadways infrastructure respectively in long run. However, there is bidirectional causality between regional growth to roadways infrastructure, and banking outreach to roadways infrastructure, and unidirectional causality running from banking outreach to regional growth in the short run. Therefore, improving transport (roadways) infrastructure would be the right step towards regional growth in short run and long run as well.

COVID-19-related jock tax revenue losses in US states

ABSTRACT The rise of the COVID-19 novel coronavirus led to the postponement, and possible cancellation, of the remainder of the National Basketball Association's (NBA) 2019–20 season. Major League Baseball's (MLB) (2020 season) and the National Football League's (NFL) (2020–21) seasons may be cancelled too. This empirical note estimates the loss of jock tax revenue to US states and the District of Columbia as a result of the potential cancellations of the remainder of the NBA and the entire MLB and NFL seasons, respectively. It finds that US states (along with the District of Columbia) stand to lose a combined nearly US$307 million in jock tax collections if the MLB and NFL seasons are cancelled and the suspended NBA regular season games are not made up due to the COVID-19 crisis. To our knowledge, this study provides the first state-by-state calculation of jock tax collections at the state/non-federal jurisdictional level.