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Robust Determinants Of Bilateral Trade, Marianne Baxter, Jonathan Hersh
Robust Determinants Of Bilateral Trade, Marianne Baxter, Jonathan Hersh
Economics Faculty Articles and Research
What are the policies and country-level conditions which best explain bilateral trade flows between countries? As databases expand, an increasing number of possible explanatory variables are proposed that influence bilateral trade without a clear indication of which variables are robustly important across contexts, time periods, and which are not sensitive to inclusion of other control variables. To shed light on this problem, we apply three model selection methods – Lasso reguarlized regression, Bayesian Model Averaging, and Extreme Bound Analysis -- to candidate variables in a gravity models of trade. Using a panel of 198 countries covering the years 1970 to …
Firing Threats: Incentive Effects And Impression Management, Brice Corgnet, Roberto Hérnan-Gonzalez, Stephen J. Rassenti
Firing Threats: Incentive Effects And Impression Management, Brice Corgnet, Roberto Hérnan-Gonzalez, Stephen J. Rassenti
Economics Faculty Articles and Research
We study the effect of firing threats in a virtual workplace that reproduces features of existing organizations. We show that organizations in which bosses can fire up to one third of their workforce produce twice as much as organizations for which firing is not possible. Firing threats sharply decrease on-the-job leisure. Nevertheless, organizations endowed with firing threats underperformed those using individual incentives. In the presence of firing threats, employees engage in impression management activities to be seen as hard-working individuals in line with our model. Finally, production levels dropped substantially when the threat of being fired was removed, whereas on-the-job …