Growth and Survival Determinants of Chinese Private Firms: Fieldwork evidence and econometric estimates

This paper reports on one of the first empirical attempts to investigate small firm growth and survival, and their determinants, in the Peoples’ Republic of China. The work is based on field work evidence gathered from a sample of 83 Chinese private firms (mainly SMEs) collected initially by face-to-face interviews, and subsequently by follow-up telephone interviews a year later. We extend the models of Gibrat (1931) and Jovanovic (1982), which traditionally focus on size and age alone (e.g. Brock and Evans, 1986), to a ‘comprehensive’ growth model with two types of additional explanatory variables: firm-specific (e.g. business planning); and environmental (e.g. choice of location). We estimate two econometric models: a ‘basic’ age-size-growth model; and a ‘comprehensive’ growth model, using Heckman’s two-step regression procedure. Estimation is by log-linear regression on cross-section data, with corrections for sample selection bias and heteroskedasticity. Our results refute a pure Gibrat model (but support a more general variant) and support the learning model, as regards the consequences of size and age for growth; and our extension to a comprehensive model highlights the importance of location choice and customer orientation for the growth of Chinese private firms. In the latter model, growth is explained by variables like planning, R&D orientation, market competition, elasticity of demand etc. as well as by control variables. Our work on small firm growth achieves two things. First, it upholds the validity of ‘basic’ size-age-growth models, and successfully applies them to the Chinese economy. Second, it extends the compass of such models to a ‘comprehensive’ growth model incorporating firm-specific and environmental variables.

Optimal contracting with private information on cost expectation and variability

We study the screening problem that arises in a framework where, initially, the agent is privately informed about both the expected production cost and the cost variability and, at a later stage, he learns privately the cost realization. The speci c set of relevant incentive constraints, and so the characteristics of the optimal mechanism, depend nely upon the curvature of the principal s marginal surplus function as well as the relative importance of the two initial information problems. Pooling of production levels is optimally induced with respect to the cost variability when the principal's knowledge imperfection about the latter is sufficiently less important than that about the expected cost.

A Foundation System and a State System - Private-School Implications on Welfare and Education Expenditure

This paper examines the effects of two different education - financing systems: a foundation system and a state system on the level and distribution of resources devoted to education in the presence of private schools. We use political economy approach where households differ in their level of income, and the central tax rate used to nance education is determined by a majority vote. Our analysis focuses on implications of allowing for a private-school option. To evaluate the importance of private schools we develop a computational model and calibrate it using USA data. The results reveal that the private school option is very important quantitatively in terms of welfare, total resources spent on education and equity.

Growth and Survival Determinants of Chinese Private Firms: Fieldwork evidence and econometric estimates

This paper reports on one of the first empirical attempts to investigate small firm growth and survival, and their determinants, in the Peoples’ Republic of China. The work is based on field work evidence gathered from a sample of 83 Chinese private firms (mainly SMEs) collected initially by face-to-face interviews, and subsequently by follow-up telephone interviews a year later. We extend the models of Gibrat (1931) and Jovanovic (1982), which traditionally focus on size and age alone (e.g. Brock and Evans, 1986), to a ‘comprehensive’ growth model with two types of additional explanatory variables: firm-specific (e.g. business planning); and environmental (e.g. choice of location). We estimate two econometric models: a ‘basic’ age-size-growth model; and a ‘comprehensive’ growth model, using Heckman’s two-step regression procedure. Estimation is by log-linear regression on cross-section data, with corrections for sample selection bias and heteroskedasticity. Our results refute a pure Gibrat model (but support a more general variant) and support the learning model, as regards the consequences of size and age for growth; and our extension to a comprehensive model highlights the importance of location choice and customer orientation for the growth of Chinese private firms. In the latter model, growth is explained by variables like planning, R&D orientation, market competition, elasticity of demand etc. as well as by control variables. Our work on small firm growth achieves two things. First, it upholds the validity of ‘basic’ size-age-growth models, and successfully applies them to the Chinese economy. Second, it extends the compass of such models to a ‘comprehensive’ growth model incorporating firm-specific and environmental variables.

Personal Indebtedness, Spatial Effects and Crime

There is a long and detailed history of attempts to understand what causes crime. One of the most prominent strands of this literature has sought to better understand the relationship between economic conditions and crime. Following Becker (1968), the economic argument is that in an attempt to maintain consumption in the face of unemployment, people may resort to sources of illicit income. In a similar manner, we might expect ex–ante, that increases in the level of personal indebtedness would be likely to provide similar incentives to engage in criminality. In this paper we seek to understand the spatial pattern of property and theft crimes using a range of socioeconomic variables, including data on the level of personal indebtedness.

Violència contra les dones: anàlisi de la situació psicològica personal i interpersonal d'un grup de dones maltractades

Aquest projecte és la continuació d'un estudi pilot finançat per l'Institut Català de les Dones (U/01-6). Es va anar incrementant la grandària de la mostra -avaluant les característiques del maltractament, la simptomatologia, la personalitat i la seva percepció de la relació de parella-, fins que el 2003 -i gràcies a l'ajut del Departament de Benestar i Família-, dins la Fundació Vidal i Barraquer es va crear un servei d'assistència pública especialitzat en atendre dones maltractades (UNADOM); lloc on durant el 2006 hem desenvolupat el treball que ara presentem. L'objectiu general d'aquest estudi transversal consistia en analitzar la situació psicosocial d'un grup de dones maltractades que acudien a la UNADOM, afegint com a element novedós l'avaluació dels estils d'enfrontament que les dones fan servir després de l'experiència abusiva viscuda. Els instruments utilitzats són l'MCMI-II (Millon, 1999), la DAS (Spanier, 1976), el COPE (Carver et al., 1989) i una adaptació de l’Entrevista Semiestructurada sobre Maltractament Domèstic (Echeburúa et al., 1994). Es recull informació d'un total de 50 dones, 17 de les quals han completat la mesura sobre l'enfrontament. Els resultats indiquen que les escales de personalitat que apareixen més alterades són l'esquizoide, la dependent i l'evitativa, i que aquestes són coherents amb les actituds defensives i les estratègies d'enfrontament predominants de les dones de la mostra. A nivell clínic, i segons l’experiència assistencial, es conclou amb la importància de realitzar entrevistes exploratòries acurades ja que això facilita la indicació terapèutica més adient i la focalització de l'ajuda.

Personal Indebtedness, Spatial Effects and Crime

There is a long and detailed history of attempts to understand what causes crime. One of the most prominent strands of this literature has sought to better understand the relationship between economic conditions and crime. Following Becker (1968), the economic argument is that in an attempt to maintain consumption in the face of unemployment, people may resort to sources of illicit income. In a similar manner, we might expect ex–ante, that increases in the level of personal indebtedness would be likely to provide similar incentives to engage in criminality. In this paper we seek to understand the spatial pattern of property and theft crimes using a range of socioeconomic variables, including data on the level of personal indebtedness.

Personal indebtedness, community characteristics and theft crimes

Becker (1968) and Stigler (1970) provide the germinal works for an economic analysis of crime, and their approach has been utilised to consider the response of crime rates to a range of economic, criminal and socioeconomic factors. Until recently however this did not extend to a consideration of the role of personal indebtedness in explaining the observed pattern of crime. This paper uses the Becker (1968) and Stigler (1970) framework, and extends to a fuller consideration of the relationship between economic hardship and theft crimes in an urban setting. The increase in personal debt in the past decade has been significant, which combined with the recent global recession, has led to a spike in personal insolvencies. In the context of the recent recession it is important to understand how increases in personal indebtedness may spillover into increases in social problems like crime. This paper uses data available at the neighbourhood level for London, UK on county court judgments (CCJ's) granted against residents in that neighbourhood, this is our measure of personal indebtedness, and examines the relationship between a range of community characteristics (economic, socio-economic, etc), including the number of CCJ's granted against residents, and the observed pattern of theft crimes for three successive years using spatial econometric methods. Our results confirm that theft crimes in London follow a spatial process, that personal indebtedness is positively associated with theft crimes in London, and that the covariates we have chosen are important in explaining the spatial variation in theft crimes. We identify a number of interesting results, for instance that there is variation in the impact of covariates across crime types, and that the covariates which are important in explaining the pattern of each crime type are largely stable across the three periods considered in this analysis.

How private is private information? The ability to spot deception in an economic game

We provide experimental evidence on the ability to detect deceit in a buyer-seller game with asymmetric information. Sellers have private information about the buyer's valuation of a good and sometimes have incentives to mislead buyers. We examine if buyers can spot deception in face-to-face encounters. We vary (1) whether or not the buyer can interrogate the seller, and (2) the contextual richness of the situation. We find that the buyers' prediction accuracy is above chance levels, and that interrogation and contextual richness are important factors determining the accuracy. These results show that there are circumstances in which part of the information asymmetry is eliminated by people's ability to spot deception.

The Optimal Degree of Monetary-Discretion in a New Keynesian Model with Private Information

This paper considers the optimal degree of discretion in monetary policy when the central bank conducts policy based on its private information about the state of the economy and is unable to commit. Society seeks to maximize social welfare by imposing restrictions on the central bank's actions over time, and the central bank takes these restrictions and the New Keynesian Phillips curve as constraints. By solving a dynamic mechanism design problem we find that it is optimal to grant "constrained discretion" to the central bank by imposing both upper and lower bounds on permissible inflation, and that these bounds must be set in a history-dependent way. The optimal degree of discretion varies over time with the severity of the time-inconsistency problem, and, although no discretion is optimal when the time-inconsistency problem is very severe, our numerical experiment suggests that no-discretion is a transient phenomenon, and that some discretion is granted eventually.

Private Governance of Financial Markets: the US Regulatory Regime on Hedge Funds

The article investigates the private governance of financial markets by looking at the evolution of the regulatory debate on hedge funds in the US market. It starts from the premise that the privatization of regulation is always the result of a political decision and analyzes how this decision came about and was implemented in the case of hedge funds. The starting point is the failure of two initiatives on hedge funds that US regulators launched between 1999 an 2004, which the analysis explains by elaborating the concept of self-capture. Facing a trade off between the need to tackle publicly demonized issues and the difficulty of monitoring increasingly sophisticated and powerful private markets, regulators purposefully designed initiatives that were not meant to succeed, that is, they “self-captured” their own activity. By formulating initiatives that were inherently flawed, regulators saved their public role and at the same time paved the way for the privatization of hedge fund regulation. This explanation identifies a link between the failure of public initiatives and the success of private ones. It illustrates a specific case of formation of private authority in financial markets that points to a more general practice emerging in the regulation of finance.

La participation des consommateurs à la construction de l'autorité des normes internationales : vers une économie politique internationale de la traduction

Cette thèse explore les implications politiques de la montée en puissance des normes internationales sur nos sociétés contemporaines et pose la problématique des dynamiques participatives des représentants des consommateurs au sein des formes de pouvoir non étatique à l'aide du cas de l'Organisation internationale de normalisation (ISO). Le renforcement du pouvoir des normes internationales et autres spécifications techniques soulève d'importants enjeux démocratiques qui portent aussi bien sur la représentativité des acteurs qui les élaborent, sur l'articulation des prérogatives publiques et privées dans la gouvernance de la mondialisation, que sur le rôle de l'expertise dans la reconnaissance de ces nouvelles formes de pouvoir. La participation du monde associatif intervient sur ces différents enjeux de manière complexe. Cette recherche s'inscrit à la suite des études en relations internationales/économie politique internationale sur les formes d'autorité non étatique et s'inspire du concept de traduction issu de la sociologie des sciences et techniques pour mettre en lumière le rôle des spécifications techniques dans la construction d'une société de consommation centrée sur la liberté de choix et la façon dont les associations de consommateurs se saisissent des arènes de normalisation pour y faire valoir des préoccupations collectives, leur expertise et leur identité. Cette thèse défend l'idée que les consommateurs participent à la construction de l'autorité des normes internationales par leur rôle dans la traduction qui permet de relier les spécifications techniques au fonctionnement des marchés, au cadre réglementaire de la loi et aux préoccupations sociétales. L'analyse repose sur une observation ethnographique des délibérations d'un comité technique de l'ISO, une recherche-­‐action, la réalisation d'entretiens et la consultation de documents d'archives de l'ISO. -- This thesis explores the political significance of the rise of international standards on contemporary societies and questions the participatory dynamics of consumers' representatives within nonstate forms of power, using the case of the International organization for standardization (ISO). The power granted to international standards and other technical specifications raises important democratic issues regarding the representativity of standard-­‐ writers, the public-­‐private relationships involved in this form of governance or the expertise sustaining the recognition of such new forms of power. The participation of civil society associations affect such issues in complex ways. This research relies on international relations/international political economy approaches of nonstate authority and takes inspiration from the concept of translation developed by science and technology studies to highlight the crucial role played by technical specifications in building a consumer society based on the freedom of choice as well as how consumers' associations take stock of standardization arenas to promote collective issues and claim their expertise and identity. This thesis argues that consumers contribute to the construction of the authority of international standards through their role in the translation that links international standards to the market society, the regulatory state as well as to societal preoccupation. The analysis is based on an ethnographic observation of deliberations within an ISO technical committee, a research-­‐action, interviews as well as on the consultation of ISO archives.