DVD-based distance-learning program for university entrance exams -- RCT experiments in rural Bangladesh

In contrast to the remarkable progress in developing countries in improving primary education, access to higher education in many countries remains limited, especially in rural areas where the quality of education is inadequate. We evaluate a DVD-based distance-learning program in rural Bangladesh, targeted at students aiming to take university entrance tests. We conducted two experiments: one to evaluate the effect of the distance-learning program and the second to determine the demand and price sensitivity. Our first experiment shows that the DVD-based distance-learning program has a considerable positive effect on the number of students passing entrance exams. This effect does not depend on cognitive scores, but does depend on non-cognitive attributes, indicating the importance of commitment, which is imposed through our program. In the second experiment, we offered a random subsidy to interested participants. The uptake decision is price-sensitive, although the price sensitivity is not correlated with students' past academic performance or their socio-economic status, suggesting that increasing the price should not disproportionately exclude poor students.

Should energy efficiency be traded off for other product attributes? : an analysis of air-conditioner regulation in Japan

This paper examines the functioning of energy efficiency standards and labeling policies for air conditioners in Japan. The results of our empirical analysis suggest that consumers respond more to label information, which benchmarks the energy efficiency performance of each product to a pre-specified target, than to direct performance measures. This finding provides justification for the setting, and regular updating, of target standards as well as their use in calculating relative performance measures. We also find, through graphical analysis, that air conditioner manufacturers face a tradeoff between energy efficiency and product compactness when they develop their products. This tradeoff, combined with the semi-regular upward revision of minimum energy efficiency standards, has led to the growth in indoor unit size of air conditioners in recent years. In the face of this phenomenon, regulatory rules were revised so that manufacturers could adhere to less stringent standards if the indoor unit size of their product remains below a certain size. Our demand estimates provide no evidence that larger indoor unit size causes disutility to consumers. It is therefore possible that the regulatory change was not warranted from a consumer welfare point of view.

A new institutional approach to Japanese firms' foreign direct investment under free trade agreements

This paper examines the determinants of foreign direct investment (FDI) under free trade agreements (FTAs) from a new institutional perspective. First, the determinants of FDI are theoretically discussed from a new institutional perspective. Then, FDI is statistically analyzed at the aggregate level. Kernel density estimation of firm-size reveals some evidence of "structural changes" after FTAs, as characterized by the investing firms' paid-up capital stock. Statistical tests of the average and variance of the size distribution confirm this in the case of FTAs with Asian partner countries. For FTAs with South American partner countries, the presence of FTAs seems to promote larger-scale FDIs. These results remain correlational instead of causal, and more statistical analyses would be needed to infer causality. Policy implications suggest that participants should consider "institutional" aspects of FTAs, that is, the size matters as a determinant of FDI. Future work along this line is needed to study "firm heterogeneity."

Labor clauses in regional trade agreements and effects on labor conditions : an empirical analysis

An increasing number of bilateral or plurilateral trade agreements (or regional trade agreements: RTAs) include "labor clauses" that require or urge the signatory countries to commit to maintaining a certain level of labor standards. This paper performs an empirical analysis of the impacts of such labor clauses provided in RTAs on working conditions that laborers in the RTA signatory countries actually face, using macro-level data for a wide variety of countries. The paper first examines the texts of labor provisions in more than 220 effective RTAs and (re-)classifies "RTAs with labor clauses" according to two criteria: (i) the agreement urges or expects the signatory countries to harmonize their domestic labor standards with internationally recognized standards, and (ii) the agreement stipulates the procedures for consultations and/or dispute settlement on labor-condition issues between the signatory countries. Based on this labor-clause RTA classification, the paper estimates the impacts of RTA labor clauses on working conditions in countries with two empirical specifications using the sample covering 136 countries or economies and years from 1995 through 2011. The estimation is extended to takes into account possible lags in the labor-condition effects of labor clauses as well as to consider potential difference in the impacts for countries in different income levels. The empirical results for the four measures of labor conditions (mean monthly real earnings, mean weekly work hours per employee, fatal occupational injury rate, and the number of the ILO's Core Conventions ratified) find no evidence for possible pro-labor-condition effects of RTA labor clauses overall, which should be consistent with the view of economics literature that questions the relevance of linking trade policy with issues in the domestic labor standards.

Assortative matching of exporters and importers

This paper uses the opening of the US textile/apparel market for China at the end of the Multifibre Arrangement in 2005 as a natural experiment to provide evidence for positive assortative matching of Mexican exporting firms and US importing firms by their capability. We identify three findings for liberalized products by comparing them to other textile/apparel products: (1) US importers switched their Mexican partners to those making greater preshock exports, whereas Mexican exporters switched their US partners to those making fewer preshock imports; (2) for firms who switched partners, trade volume of the old partners and the new partners are positively correlated; (3) small Mexican exporters stop exporting. We develop a model combining Becker-type matching of final producers and suppliers with the standard Melitz-type model to show that these findings are consistent with positive assortative matching but not with negative assortative matching or purely random matching. The model indicates that the findings are evidence for a new mechanism of gain from trade.

Preferential trade agreements and antidumping actions against members and nonmembers

In a three-country oligopoly model, this paper analyzes a country's decisions concerning antidumping (AD) action against two foreign countries and the relationship between those decisions and regional trade agreements (RTAs). An RTA intensifies product-market competition in the markets of member countries and lowers product prices, while it raises export prices of goods subject to tariff reductions. This effect widens the dumping margin of the non-member firm and narrows the dumping margin of the member firm. If the government is more concerned with domestic firm profit in its AD decision, the RTA may invoke the member's AD action against the nonmember. If the governments attach a sufficiently high value on social welfare, however, the RTA may promote the AD action against the member. If the governments' weight on the domestic firm's profit is neither high nor low, an RTA may block the AD actions against both countries.

The return to schooling: Estimates from a sample of young Australian twins

This study uses a sample of young Australian twins to examine whether the findings reported in [Ashenfelter, Orley and Krueger, Alan, (1994). 'Estimates of the Economic Return to Schooling from a New Sample of Twins', American Economic Review, Vol. 84, No. 5, pp.1157-73] and [Miller, P.W., Mulvey, C and Martin, N., (1994). 'What Do Twins Studies Tell Us About the Economic Returns to Education?: A Comparison of Australian and US Findings', Western Australian Labour Market Research Centre Discussion Paper 94/4] are robust to choice of sample and dependent variable. The economic return to schooling in Australia is between 5 and 7 percent when account is taken of genetic and family effects using either fixed-effects models or the selection effects model of Ashenfelter and Krueger. Given the similarity of the findings in this and in related studies, it would appear that the models applied by [Ashenfelter, Orley and Krueger, Alan, (1994). 'Estimates of the Economic Return to Schooling from a New Sample of Twins', American Economic Review, Vol. 84, No. 5, pp. 1157-73] are robust. Moreover, viewing the OLS and IV estimators as lower and upper bounds in the manner of [Black, Dan A., Berger, Mark C., and Scott, Frank C., (2000). 'Bounding Parameter Estimates with Nonclassical Measurement Error', Journal of the American Statistical Association, Vol. 95, No.451, pp.739-748], it is shown that the bounds on the return to schooling in Australia are much tighter than in [Ashenfelter, Orley and Krueger, Alan, (1994). 'Estimates of the Economic Return to Schooling from a New Sample of Twins', American Economic Review, Vol. 84, No. 5, pp. 1157-73], and the return is bounded at a much lower level than in the US. (c) 2005 Elsevier B.V. All rights reserved.

Excess leverage and productivity growth in emerging economies:is there a threshold effect?

This paper studies the relationship between leverage and growth, focusing on a large sample of firms in emerging economies of central and eastern Europe (CEE). Contrary to the general wisdom, we find that deviation from optimal leverage, especially, excess leverage is common among firms in many CEE countries. Using firm-level panel data from a group of transition countries, the paper provides support to the hypothesis that leverage positively affects productivity growth but only below an endogenously determined threshold level.

Does institutional quality affect firm performance? Insights from a semiparametric approach

Using a novel modeling approach, and cross-country firm level data for the textiles industry, we examine the impact of institutional quality on firm performance. Our methodology allows us to estimate the marginal impact of institutional quality on productivity of each firm. Our results bring into question conventional wisdom about the desirable characteristics of market institutions, which is based on empirical evidence about the impact of institutional quality on the average firm. We demonstrate, for example, that once both the direct impact of a change in institutional quality on total factor productivity and the indirect impact through changes in efficiency of use of factor inputs are taken into account, an increase in labor market rigidity may have a positive impact on firm output, at least for some firms. We also demonstrate that there are significant intra-country variations in the marginal impact of institutional quality, such that the characteristics of “winners” and “losers” will have to be taken into account before policy is introduced to change institutional quality in any direction.

Engineering education for the 21st century:scholarship, synergy and student success

Starting with the question “How can University level Engineering Education be developed in such a way so as to enhance the quality of the student learning experience?”, this discussion paper proposes an approach to engineering education developed by a senior engineering educator working alongside a pedagogical researcher in an attempt to engage colleagues in contemporary debates about the issues currently faced across the Sector. Such issues include difficulties with recruiting students onto programmes as well as high levels of student attrition and failure. Underpinned by three distinctive concepts: Synergy, Variety & Relationships (S+V+R), the approach brings together pedagogic and engineering epistemologies in an empirically grounded framework in such a way so as to provide an accessible and relevant learning approach that, if followed, engenders student success [S2]. Specifically developed with the intention of increasing retention and positively impacting student success [S2], the S+V+R=S2 approach provides a scholarly and Synergetic (S) approach to engineering education that is both innovative and exciting. Building on the argument that Variety (V) in education is pivotal to promoting originality and creativity in learning and teaching, this paper shows how, by purposefully developing a range of learning and teaching approaches, student engagement and thus success can be increased. It also considers the importance of Relationships (R) in higher education, arguing that belonging and relationships are crucial factors impacting student experiences. When taken together (Synergy, Variety and Relationships) and applied within an Engineering Education context, students are provided with a unique learning environment – one that both promotes individual success and improves organisational effectiveness. The uniqueness of the approach is in the synthesis of these three concepts within an Engineering Education epistemology.

Does human capital endowment of FDI recipient countries really matter? Evidence from cross-country firm level data

The stylized literature on foreign direct investment suggests that developing countries should invest in the human capital of their labour force in order to attract foreign direct investment. However, if educational quality in developing country is uncertain such that formal education is a noisy signal of human capital, it might be rational for multinational enterprises to focus more on job-specific training than on formal education of the labour force. Using cross-country data from the textiles and garments industry, we demonstrate that training indeed has greater impact on firm efficiency in developing countries than formal education of the work force.

Shadow economy and entrepreneurial entry

We analyze theoretically and empirically the impact of the shadow economy on entrepreneurial entry, utilising 1998-2005 individual-level Global Entrepreneurship Monitor data merged with macro level variables. A simple correlation coefficient suggests a positive linear link between the size of the shadow economy and entrepreneurial entry. However, this masks more complex relationships. With appropriate controls and instrumenting for potential endogeneity where required, the impact of the shadow economy on entry is found to be negative, based on a linear specification. Moreover, there is also evidence of nonlinearity: entrepreneurial entry is least likely when the shadow economy is of medium size. We attribute the negative effects of shadow economy on entry to perceived strong competition faced by new entrants when the shadow economy is widespread. At the individual level, an extensive shadow economy has a more negative impact on respondents who are risk averse. In addition, in the economies where property rights are strong, the negative impact of the shadow economy is weaker.

Better means more:property rights and high-growth aspiration entrepreneurship

This paper contrasts the determinants of entrepreneurial entry and high-growth aspiration entrepreneurship. Using the Global Entrepreneurship Monitor (GEM) surveys for 42 countries over the period 1998-2005, we analyse how institutional environment and entrepreneurial characteristics affect individual decisions to become entrepreneurs and aspirations to set up high-growth ventures. We find that institutions exert different effects on entrepreneurial entry and on the individual choice to launch high-growth aspiration projects. In particular, a strong property rights system is important for high-growth aspiration entrepreneurship, but has less pronounced effects for entrepreneurial entry. The availability of finance and the fiscal burden matter for both.

Which institutions encourage entrepreneurs to create larger firms

We develop entrepreneurship and institutional theory to explain variation in different types of entrepreneurship across individuals and institutional contexts. Our framework generates hypotheses about the negative impact of higher levels of corruption, weaker property rights and especially intellectual property rights, and a larger state on entrepreneurs who plan to grow faster. We test these hypotheses using the Global Entrepreneurship Monitor surveys in 55 countries for 2001-2006, applying a multilevel estimation framework. We confirm our main hypotheses but we find no significant impact from intellectual property rights.