Evidence on the incentive optimality of share contracts

Ever since Adam Smith, economists have argued that share contracts do not provide proper incentives. This paper uses tenancy data from India to assess the existence of missing incentives in this classical example of moral hazard. Sharecroppers are found to be less productive than owners, but as productive as fixed-rent tenants. Also, the productivity gap between owners and both types of tenants is driven by sample-selection issues. An endogenous selection rule matches tenancy contracts with less-skilled farmers and lower-quality lands. Due to complementarity, such a matching affects tenants’ input choices. Controlling for that, the contract form has no effect on the expected output. Next, I explicitly model farmer’s optimal decisions to test the existence of non-contractible inputs being misused. No evidence of missing incentives is found.

Regional subsidies and industrial prospects of lagging regions

Large and sustained differences in economic performance across regions of developing countries have long provided motivation for fiscal incentives designed to encourage firm entry in lagging areas. Empirical evidence in support of these policies has, however, been weak at best. This paper undertakes a direct evaluation of the most prominent fiscal incentive policy in Brazil, the Fundos Constitucionais de Financiamento (Constitutional Funds). In doing so, we exploit valuable features of the Brazilian Ministry of Labor's RAIS data set to address two important elements of firm location decisions that have the potential to bias an assessment of the Funds: (i) firm “family structure” (in particular, proximity to headquarters for vertically integrated firms), and (ii) unobserved spatial heterogeneity (with the potential to confound the effects of the Funds). We find that the pull of firm headquarters is very strong relative to the Constitutional Funds for vertically integrated firms, but that, with non-parametric controls for time invariant spatial heterogeneity, the Funds provide statistically and economically significant incentives for firms in many of the targeted industries.

Workplace diversity and incentive contracts : theory and evidence

This paper presents a simple theory of the provision of incentives in firms in which the principal optimally chooses both compensation contracts and the composition of the work force. Assuming that individuals display group loyalty, a less diverse (more homogeneous) work force will be more cooperative. Simple comparative statics provide some testable implications relating risk, diversity and incentive pay. I also analyze the case in which workers’ characteristics cannot be readily observed ex ante. The theory then predicts that firms are more likely to prevent workers from interacting with each other when workers are expected to have similar characteristics. This shows a surprising effect of diversity in the workplace: more diverse firms will promote more interactions between workers of different types, i.e. they will be less segregated. I test the main predictions of the model using a cross-sectional sample of corporate boards. I use the proportion of women on boards as a measure of diversity. There are three main empirical findings: (1) a significant negative correlation between firm risk and diversity, (2) a significant positive relationship between performance-based compensation and diversity and (3) a significant positive correlation between the number of board meetings (a measure of interactions among directors) and diversity. The evidence is broadly consistent with the implications of the theory.

Motivation of german entrepreneurs to seek equity via crowdfunding: an exploratory study

Equity crowdfunding, ou financiamento de um projeto ou empreendimento através de diversos pequenos investimentos ou um grande grupo de investidores, tem recebido uma crescente atenção da mídia e acadêmicos. A discussão questiona se crowdfunding pode de uma forma geral transformar a maneira como as pessoas captam capital para os seus negócios. Enquanto que pesquisas tem até então focado em explorar porque crowdinvestors têm motivação em financiar empreitadas, este estudo foca em revelar o que motiva empreendedores a procurar soluções de crowdfund. Para isso, o estudo investigou a motivação de 11 empreendedores que usaram plataformas alemãs de crowdfunding. Como estudos existentes sobre a motivação de empreendedores são na sua grande maioria superficiais, este estudo utiliza uma nova abordagem de pesquisa na área de financiamento de projetos, a abordagem de means-end. Sob essa abordagem a forma de pensar dos empreendedores em relação ao uso de equity crowdfunding foi estudada de forma holística, revelando todo o processo de raciocínio até a decisão final de optar por uma estratégia de crowdfunding. Uma das descobertas é que empreendedores usam equity crowdfunding para arrecadar fundos de crowdinvestors consideravelmente não-racionais (emocionais) para financiar o crescimento futuro de seus negócios e também sinalizar viabilidade de investimento para futuros investidores. Além disso, empreendedores esperam que crowdinvestors sejam engajados e ajudem tanto a promover o negócio como a dar feedback. Crowdfunding também possibilita que empreendedores mantenham o poder de decisão sobre a empresa mais facilmente se comparado a outras fontes tradicionais de financiamento. As descobertas indicam que crowdfunding atrai empreendedores que não conseguiriam arrecadar investimentos a partir de outras fontes de capital assim como empreendedores que entendem os benefícios adicionais que esta oferece em relação à outras fontes.

The risk-incentive trade-off in competitive search

Usando a abordagem de competitive search, modelo um mercado de trabalho com trabalhadores heterogêneos no qual há um problema de risco moral na relação entre firmas e trabalhadores. Nesse contexto, consigo prever como contratos reagem a mudanças nos parâmetros do mercado (em particular, o risco de produção), assim como a variação da probabilidade dos trabalhadores serem contratados. Minha contribuição principal é ver que, no nível individual, existe uma relação negativa entre risco e incentivos, mas efeitos de equilíbrio geral implicam que essa relação pode ser positiva no nível agregado. Esse resultado ajuda a esclarecer resultados empíricos contraditórios sobre a relação entre risco e incentivos.

The Culture of entrepreneurship: a study of the entrepreneurial motivation and attitudes towards business creation in the UAE in comparison to the US and Brazil

This study demonstrates the cultural dimension and the surrounding environment of different entrepreneurs selected from three countries, the United States of America, the Federative Republic of Brazil, and the United Arab Emirates. The general objective is to understand the difference in the entrepreneurial motives and spirit towards venture creation from the three different countries. After conducting field research and collecting the required data, a deep analysis was conducted to draw a comparison between the three cultures from an individual’s point of view, to help shape a set of proposed recommendations, which could be used to improve the current culture of entrepreneurship in the UAE.

Incentive-driven inattention

Fundação Getulio Vargas. Escola de Pós-Graduação em Economia

A educação em saúde pública na práqtica cotidiana: atuação dos cirurgiões-dentistas do PSF de Natal-RN

Considering education a support to health promotion, care integration and citizenship formation,the purpose of this research was to analyze the perception of the oral surgeons from the Family Health Program of Natal-RN over education in health as well as their performance as educators based on their activities on the program. A qualitative study was accomplished by a semi-structured interview and a Free Association of Words Test with 80 oral surgeons from the Family Health Program of Natal-RN. The instruments were analyzed through the meaning analysis and the Central Nucleus of Vergès Theory. The results showed a lack of planning in health actions so there is no standardization on the educative practices done by the oral surgeons which mostly are focused on scholars. There was an agreement among the group according to the oral surgeons´ perception about education in health that education is related to its function of recall prevention ideas to the population. Most part of the context units analyzed by the professionals´ speech show the knowledge of education in health as an inadequate behavior change instrument of the individuals. An interesting point was a quotation cited by some professionals that included actual themes such as citizenship, motivation and life quality, put inside the speech of education in health. To the oral surgeons the biggest difficulties on the development of the educative actions are due to the lack of incentive by the Municipal Health Bureau and to the detachment and lack of valorization of the themes by the population. The oral surgeons consider themselves co-responsible for the formation of a population which is able to request its health. They also mention the knowledge about the need of the community participation on the planning of the Family Health Program actions. Finally, it is notable the need for more encouragement so the oral surgeons can be more capable and have more interest in applying education in health on the perspective of a new model in health, because once capable and stimulated they can awake the population to education importance as a great transformation instrument for people searching for a fair, equalitarian and citizeness society

Motivation and frustration in cardiology trial participation: The patient perspective

OBJECTIVE: The participation of humans in clinical cardiology trials remains essential, but little is known regarding participant perceptions of such studies. We examined the factors that motivated participation in such studies, as well as those that led to participant frustration.METHODS: Patients who had participated in hypertension and coronary arterial disease (phases II, III, and IV) clinical trials were invited to answer a questionnaire. They were divided into two groups: Group I, which included participants in placebo-controlled clinical trials after randomization, and Group II, which included participants in clinical trials in which the tested treatment was compared to another drug after randomization and in which a placebo was used in the washout period.RESULTS: Eighty patients (47 patients in Group I and 33 patients in Group II) with different socio-demographic characteristics were interviewed. Approximately 60% of the patients were motivated to participate in the trial with the expectation of personal benefit. Nine participants (11.2%) expressed the desire to withdraw, which was due to their perception of risk during the testing in the clinical trial (Group I) and to the necessity of repeated returns to the institution (Group II). However, the patients did not withdraw due to fear of termination of hospital treatment.CONCLUSIONS: Although this study had a small patient sample, the possibility of receiving a benefit from the new tested treatment was consistently reported as a motivation to participate in the trials.

Effect of oral hygiene education and motivation on removable partial denture wearers: longitudinal study

The purpose of this study was to determine the effect of two different preventive oral hygiene education and motivation programmes on the plaque and gingival index, as well as denture hygiene of patients provided with removable partial denture (RPD) during a 12-month follow-up.A total of 53 partially edentulous patients were recruited for this study. The presence or absence of plaque and gingival bleeding by gentle probing was scored on all tooth surfaces at the preliminary visit. The plaque and gingival indexes were measured using the Loe index. Following treatment, the patients were randomly divided into three groups. In Control Group I, subjects were instructed to continue their personal oral hygiene routine. In Group II, participants were given verbal instructions and a self-educational manual on oral hygiene without illustrations. In Group III, oral hygiene guidance was delivered using a combination of verbal instructions and a self-teaching manual. To evaluate the effect of the different modes of instruction, the presence or absence of plaque and gingival bleeding was scored on all tooth surfaces (day zero examination) and re-examined 7, 15 and 30 days, 3, 6 and 12 months following RPD placement. The state of denture hygiene was evaluated 7, 15 and 30 days and 3, 6 and 12 months following rehabilitation. Parametric statistics was applied to dental plaque and gingival indexes. For accumulation of plaque and calculus on the RPD, non-parametric statistic was applied.The frequency of plaque found during the preliminary visit was higher than that found in the other periods. With regard to gingival index, significant difference was found between the preliminary visit examination and other periods. There was a significant difference in the plaque accumulation on the denture surface between groups I and III.The different methods of oral hygiene instruction used in this study indicate that the type of education was not of significant importance.

Theoretical motivation for studying superstrings

I try to explain why many high-energy theoretical physicists are studying superstrings.