Key Empirical Finding Research Articles

Cross-Country Differences in Productivity: The Role of Allocation and Selection

This paper combines different strands of the productivity literature to investigate the effect of idiosyncratic (firm-level) policy distortions on aggregate outcomes. On the one hand, a growing body of empirical research has been relating cross-country differences in key economic outcomes, such as productivity or output per capita, to differences in policies and institutions that shape the business environment. On the other hand, a branch of empirical research has attempted to shed light on the determinants of productivity at the firm-level and the evolution of the distribution of productivity across firms within each industry. In this paper, we exploit a rich source of data with harmonized statistics on firm level variation within industries for a number of countries. Our key empirical finding is that there is substantial variation in the within-industry covariance between size and productivity across countries, and this variation is affected by the presence of idiosyncratic distortions. We develop a model in which heterogeneous firms face adjustment frictions (overhead labor and quasi-fixed capital) and idiosyncratic distortions. We show that the model can be readily calibrated to match the observed cross-country patterns of the within-industry covariance between productivity and size and thus help to explain the observed differences in aggregate performance.

An Empirical Analysis of the Determinants of Foreign Aid: A Panel Approach

This paper uses a panel approach to examine the determinants of foreign aid. It examines the extent to which taxes on international trade and the scope of government activities, ethnicity, private credit, and education determine foreign aid. The paper specifies and estimates a model that explains the allocation of foreign aid among 151 countries over the period 1975 to 1998. The key empirical finding suggests that Taxes on Trade increases foreign aid dependency. Moreover, trade, private credit, foreign direct investment, GDP per worker, and government consumption are important determinants of foreign aid. The factors that appear to decrease foreign aid include: Years of schooling, private credit, trade, and GDP per worker. The factors that appear to increase foreign aid include: Taxes on international trade, ethnicity, and government consumption.

Expectations matter: Job prospects and turnover dynamics

This paper presents evidence on the effects of worker expectations on labor turnover, a topic largely ignored in the voluminous literature on labor mobility. Two survey instruments related to expected job duration and chances of promotion in the National Longitudinal Surveys of Youth are used to analyze the role of job prospects in predicting turnover dynamics. The key empirical finding is that workers with favorable job assessments have a lower and flatter tenure-turnover profile—i.e. the well-known negative structural relationship between the turnover rate and job tenure-than their counterparts with less favorable job assessments. This finding is consistent with search-and-matching theories that explicitly incorporate heterogeneity of prior beliefs about match quality.

The Green Solow Model

We demonstrate that a key empirical finding in environmental economics - The Environmental Kuznets Curve - and the core model of modern macroeconomics - the Solow model - are intimately related. Once we amend the Solow model to incorporate technological progress in abatement, the EKC is a necessary by product of convergence to a sustainable growth path. Our amended model, which we dub the Green Solow', generates an EKC relationship between both the flow of pollution emissions and income per capita, and the stock of environmental quality and income per capita. The resulting EKC may be humped shaped or strictly declining. We explain why current methods for estimating an EKC are likely to fail whenever they fail to account for cross-country heterogeneity in either initial conditions or deep parameters. We then develop an alternative empirical method closely related to tests of income convergence employed in the macro literature. Preliminary tests of the model's predictions are investigated using data from OECD countries.

A dual-space model of iteratively deepening exploratory learning

When users of interactive computers must work with new software without formal training, they rely on strategies for “exploratory learning”. These include trial and error, asking for help from other users, and looking for information in printed and on-line documentation. This paper describes a cognitive model of exploratory learning, which covers both trial-and-error and instruction-taking activities. The model, implemented in Soar, is grounded in empirical data of subjects in a task-oriented, trial-and-error exploratory learning situation. A key empirical finding reflected in the model is the repeated scanning of a subset of the available menu items, with increased attention to items on each successive scan. This is explained in terms of dual search spaces, the external interface and the user's internal knowledge, both of which must be tentatively explored with attention to changing costs and benefits. The model implements this dual-space search by alternating between external scanning and internal comprehension, a strategy that gradually shifts its focus to a potentially productive route through an interface. Ways in which interfaces might be designed to capitalize on this behaviour are suggested. The research demonstrates how cognitive modelling can describe behaviour of the kind discussed by theories of “situated cognition”.

The Spotted Owl Fracas: Mixing Academic, Applied, and Political Ecology

Recent intensive field study and modelling of the Spotted Owl foster optimism that scientists can help solve problems in managing threatened species and can cooperate with government agencies to stem the decline of biotic diversity. The effort shows that field biologists can quickly conduct coordinated research on a species whose habits make it difficult to study, and that modellers can quickly use field data to refine questions and to predict effects of potential management strategies. However, the key empirical finding–that the owl's home range typically encompasses huge amounts of old—growth forest–has generated enormous unease among forest industry interests. They do not relish the prospect that the United States Department of Agriculture Forest Service will sequester thousands of acres of forest with timber worth thousands of dollars per acre. The Forest Service, in its tentative plan for managing the Spotted Owl, seems to have taken a middle course. Their preferred alternative includes substantially fewer and smaller sites than are recommended by an advisory panel formed by the major ornithological societies. However, this plan includes much more old growth than the previous one does. Should this plan be enacted, the small chance for long—term survival of the spotted Owl will require increased adherence by individual forests to the spirit as well as the letter of the plan.