Economics Commons^™

Foreign Direct Investment And Sovereign Debt In The European Monetary Union, Joseph Bakke, Ilaria Ossella-Durbal, Faculty Advisor

John Wesley Powell Student Research Conference

Oral presentation abstract.

The Long-Term Economic Impact Of Juvenile Criminal Activity, Eric Hyla, Michael Seeborg, Faculty Advisor

John Wesley Powell Student Research Conference

Oral presentation abstract.

The Effect Of China’S One-Child Policy On Male And Female Chinese Immigrant Earnings: Does It Pay To Be An Only Child?, Stephanie Mcatee, Michael Seeborg, Faculty Advisor

John Wesley Powell Student Research Conference

Oral presentation abstract.

Economic Impact And Audience Patronage Studies Of The Illinois Shakespeare Festival, Tyler Stacey, Diego Mendez-Carbajo, Faculty Advisor

John Wesley Powell Student Research Conference

Oral presentation abstract.

Income Mobility Through Education In The United States, Maxwell Leonard, Robert Leekley, Faculty Advisor

John Wesley Powell Student Research Conference

Poster presentation abstract.

Social Capital, Culture, And Institutions As Determinants Of Entrepreneurship In A Development Context, Daniel Nikolic

Undergraduate Economic Review

Entrepreneurship is still a social term that scholars have difficulty defining, and a lack of consistency in theory in turn leaves researchers without an accurate way to measure entrepreneurial activity. A working definition and theory of the entrepreneur is provided as a way to synthesize the various multi-disciplinary approaches taken towards entrepreneurship in past literature, with emphasis on welfare and judgmental decision-making under uncertainty. Past studies find significant relationships between economic growth and the level of entrepreneurial activity in a country. Little is known, however, on which elements of a society contribute to entrepreneurship and which do not. This study …

The Foreign Corrupt Practices Act And The Price, Volume, And Termination Rate Of Cross-Border Mergers And Acquisitions, Natalie M S Duncombe

Undergraduate Economic Review

Congress enacted the Foreign Corrupt Practices Act (FCPA) in 1977. It has since become an important factor in American firms decision-making in acquiring foreign targets, but its economic impact has gone largely unexamined. I analyze the influence of the risk of an enforcement action under the FCPA on the prices of cross-border mergers and acquisitions (CBMA). In a sample of 13,002 CBMA deals by American acquirers from 1996-2010, I find statistically significant results, suggesting that firms pay on average 3.9 – 5.1% less to acquire targets in countries with higher risk of attention from the FCPA.

Impact Of Exchange Rate Regimes On Economic Growth, Brigitta Jakob

Undergraduate Economic Review

It has been a challenge to identify a direct correlation between exchange rate regimes and economic growth. One of the most important issues left unanswered in international finance is the debates over which type of exchange rate can best stimulate economic growth.

The main hypothesis of this research is that fixed exchange rate regime will have positive correlation with GDP growth due to the stability factor it has to offer. Control variables used in this study include inflation rate, gross capital formation (%GDP), index of government spending, and index of human capital per person. After observing the data from 74 …

The Adoption Of Solar Cells In The Us: A Cross-Section Analysis, Iwnetim I. Abate

Undergraduate Economic Review

The amount of solar energy that falls on the earth’s surface in one minute equals the total annual energy consumption of the entire world’s population. The question is how to harvest the energy efficiently. Photovoltaic or solar cell is one of the few means of to harvest this energy. The main objective of this paper is to identify factors that determine the number of photovoltaic panel installation per a million people in the US and build a regression model to quantify their effect. Ten independent variables were studied and their effect was quantified. In addition, different statistical hypothesis tests were …

Exploring Economic And Social Factors That Increase Economic And Well-Being Measurements Of Developing And Developed Countries, Kofi D. Boadu

Undergraduate Economic Review

The historical growth paths of developed and developing countries reveal the challenges that developing countries face in traveling the road from poverty to prosperity. Based on economic development literature, economic theory, and ordinary least squares (OLS) regression method, this research considers whether or not, and to what extent globalization characteristics, foreign direct investment levels (FDI), secondary school enrollment rates, information communication technology (ICT) as a percentage of trade imports, and happiness levels of 103 developing and developed countries, impact their GDP per capita levels. This paper will also take a look at alternative ways of viewing and measuring economic success.

Determinants Of Fdi Into Developing Countries, Hang Bich Phung

Mark A. Israel '91 Endowed Summer Research Fund in Economics

Overall, the incentives for foreign direct investment (FDI) vary vastly across time periods and regions. A preliminary analysis suggests that since 1990, investors tend to look for countries which can provide them with advantages in services and knowledge – capital intensive manufacturing industries. These advantages include the human capital stock and market size of the host country. On the other hand, considering a longer period, from 1980 to 2014, the more predominant advantages are natural resources and labor force. In this paper, we study two questions regarding what drives FDI to developing countries. First, what are the determinants that make …

An Economic Study Of The Illinois Shakespeare Festival, Tyler Stacey

Honors Projects

Since 1978, the Illinois Shakespeare Festival, or ISF, has been an important cultural attraction for the Bloomington-Normal community. What once started as small scale performances of classic theatre on the tennis courts of Ewing Manor has grown into a full sized venue with a full sized audience. The festival hosts over 10,000 guests and a large number of seasonal staff over the summer months: 125 were listed in their most recently available annual report (Season Report 2012). The festival also has an extensive summer camp program, community outreach, and a touring company. The Illinois Shakespeare Festival's cultural impact has been …

Second-Generation Immigrants: The Effect Of Parental Nativity Status On Earnings, Karen Silverman

Honors Projects

There has been a significant amount of debate in recent years about the economic performance of immigrants. Understanding the economic contribution of the second-generation is important in order to provide a more comprehensive picture of the total impact of immigrants in the United States. There is strong evidence to suggest that second-generation immigrants have experienced upward income mobility, and human capital theory hypothesizes that the economic performance of the second-generation will match that of their native-born counterparts. It also predicts that having one immigrant parent and one native-born parent as opposed to having two immigrant parents will lead to an …

The Effect Of China's One-Child Policy On Male And Female Immigrant Earnings: Does It Pay To Be An Only Child?, Stephanie Mcatee

Honors Projects

China's one-child policy is one of the most controversial population control measures implemented in modem society. While most literature focuses on the effects this policy has had on China's population size and economic growth, very little research has been dedicated to analyzing how this policy has affected wage differentials between Chinese men and women. Research suggests that the one-child policy redirected more educational resources towards Chinese daughters than in the past. Human capital theory hypothesizes that equalization in educational attainment corresponds to an equalizing in relative earnings. This paper uses data from the American Community Survey to test the hypothesis …

Income Mobility Through Education In The United States, Maxwell Leonard

Honors Projects

This study makes use of the National Longitudinal Survey of Youth (NLSY) in order to examine the relationship between experiencing poverty as a youth and income as an adult. Human capital theory, as well as previous empirical research suggests that as standard of living as a youth increases, future income as an adult should increase as well. This paper attempts to study this effect through both direct and indirect pathways. The indirect pathway that we are interested in is education. We measure this indirect pathway by multiplying the effect on income of having a certain degree by the effect of …

The Effect Of New York City Sports Outcomes On The Stock Market, Nir Levy

Undergraduate Economic Review

This thesis investigates whether sports outcomes for New York City based teams affect the daily returns, volatility or trading volume of major stock indexes in the United States. I research whether events that affect local mood in a major financial center can influence national stock indexes by swaying the sentiment of workers in the financial sector. By performing an event study I found evidence that returns are abnormally high following championships won by New York City professional sports teams. Returns are abnormally low and volume is abnormally high following elimination from a championship round.

International Trade In Telecommunication Services: A Cross Sectional Gravity Regression, Justin C. Doty

Undergraduate Economic Review

The gravity model has been successful in measuring the effects of institutions, trade barriers, and other characteristics on trade in goods. Kimura and Lee [2004] find the gravity model is also suitable for measuring trade in services. The Organization for Economic Co-Development [2009a] develop gravity models for pilot service sectors such as construction, computer, professional, and telecommunication services. The purpose of this paper is to extend the findings of the OECD paper for telecommunication services. The paper finds that a 10 percent increase in distance between countries will decrease imports by 11.77 percent. Imports of telecommunication services are influenced by …

Art Arbitrage - Violations Of The Law Of One Price Created By Fine Art Auctions, Amy Liu

Undergraduate Economic Review

Although fine art is becoming increasingly popular as investment, its price determination is relatively opaque. This paper expands upon the work of Pesando (1993) and Pesando and Shum (2007) concerning the law of one price in the art auction industry. By examining the sale history of silkscreen prints from Andy Warhol’s 1970 series Flowers, this paper controls for the physical characteristics of particular artwork and seeks to determine the likelihood of sale and price differentials created by specific auction environments. This paper further examines the extent to which auction houses take into account these auction environments when setting presale …

Cost - Benefit Analysis Of The German High Speed Rail Network, Martin Dorciak

Undergraduate Economic Review

This study undertakes a cost-benefit analysis of the German railway market looking specifically at the effects of high-speed rail development on railway passenger subsidies. Using OLS regression analysis, I estimate a demand curve for the German railway network at the route level; this is combined with cost curve estimates to yield a required subsidy for rail development assuming a natural monopoly market structure. I find that an increase in demand as a result of the introduction of high-speed rail technology causes a 23.9% decrease in required rail subsidies.

Is All Foreign Aid The Same? : An Empirical Comparison Of The Effect Of Multilateral And Bilateral Aid On Growth, Scott B. Jeffrey

Undergraduate Economic Review

Despite decades of research on foreign aid, there is little to no consensus on foreign aid’s effect on growth. While most in the field study recipient country characteristics, such as institutional quality, this paper also breaks down foreign aid by donor characteristics, specifically by bilateral and multilateral donors. Since about 75% of foreign aid is bilateral, my bilateral findings are in line with previous literature that finds high institutional quality key (Burnside and Dollar 2000; 2004), but I find that multilateral aid works best in low-income countries with poor policy environments, due, perhaps, to lacking political goals of donor countries.

Education And Women In The Informal Sector: A Cross-Country Analysis, Linh T. Nguyen

Undergraduate Economic Review

This study investigates the effects of education on the participation of women in the informal sector of 40 developing countries using OLS linear regression. Through some econometric adjustments, the final model suggests that education, represented by years of schooling, is correlated with a 2.74% increase in women’s chances of being employed in this sub-sector of the economy. This means that the better educated still end up doing the jobs that do not require such knowledge. An implication of the result is that the current way which schooling is delivered to the poor might not be the most efficient way.

The Determinants Of Gasoline And Diesel Fuel Excise Tax Rates, Nicholas R. Jenkins

Undergraduate Economic Review

As Goel and Nelson (1999) show, fluctuations in fuel prices prompt politicians to alter fuel taxation policies. The goal of this paper was to examine the determinants of both gasoline and diesel fuel excise taxes. The diesel model builds on the work of Decker and Wohar (2006) and is extended to construct a model for gasoline fuel excise taxes. In addition to replicating results of prior research, the results suggest that states with colder weather have higher fuel tax rates. Additionally, findings demonstrated that increased funding from the Highway Trust Fund is associated with lower fuel tax rates.

Compensated Cadaver Organ Donation: Will A Small Fee Waiver Work?, Daniel Truesdale

Honors Projects

This article analyzes the use of monetary incentives to increase the supply of cadaver organs. The research focuses on whether a waiver of a driver's license fee can increase the proportion of society declaring to be a cadaver organ donor. In addition, the dynamics of organ donation are addressed using a bivariate regression to test if being a college student, religion, age, gender, income, and overall knowledge of donation has a significant impact on whether one chooses to be cadaver organ donor. Finally, the concern that a monetary and altruistic market can coexist is addressed in this research. Utilizing sample …

Recent Periods Of Financial Turbulence On The Russian Stock Market And Their Effect On Price Correlation And Value At Risk, Alexander Logoveev, Gregory Cherinko

Undergraduate Economic Review

The aim of this article is to observe and analyze the recent periods of financial turbulence on the Russian stock market and determine their influence on the correlation coefficients between asset prices and the Value at Risk measure for a portfolio. Our task was to describe the previously observed phenomenon of correlation enlargement during times of financial crises deemed in our research as separate Black Swans. Based on up-to-date financial data analysis we determined correlation trends that can be useful in risk management and applied the Value at Risk method.

A Different Approach To Jensen’S Alpha And Its Relationship With Returning Ranking, Tingyu Du Ms.

Undergraduate Economic Review

Based on Michael C. Jensen’s CAPM model (1968), this paper refines it with dummy variables included. It examines if fund manager’s skill is contributing to fund’s performance within a five-year span from June 2009 to June 2014, and if high total return ranking is related to outstanding Jensen’s Alpha. The findings coincide with Jensen’s research results.

Economic Analysis Of The Labor Market Experience Of African Immigrants In The U.S., Ene Ikpebe

Honors Projects

Because African immigrants have become a significant presence in the United States in the past few decades, understanding the dynamics of their immigrant labor market has become increasingly important. In this paper, I follow a cohort of immigrants from 2001-2012 to see whether African immigrants assimilate with natives. I also investigate the effects of immigrant specific variables such as education, time of arrival in the U.S., and English-speaking abilities, on their wages in the U.S. labor market. Using a cohort over time and cross sectional data sets, respectively, from the American Community Survey, this study employs OLS regression analysis to …

Intra-Regional Currency Linkages And The Evolution Of Exchange Rate Regime Of The Asean Region, Tung Nguyen

Honors Projects

This paper investigates the intra-regional currency linkages and evolution of exchange rate regimes of the Association of South East Asian Nations (A SEAN) region. Do nations follow regimes they are classified into? Have exchange rate regimes of ASEAN nations become more flexible and less dependent on the US dollar? Are the intra-regional currency linkages strong enough for ASEAN nations to form a monetary union? Answers to these are important as the official regimes announced by ASEAN countries may not reflect their actual behaviors. Using monthly exchange rates per unit SDR and foreign exchange reserves data spanning the entire post-Bretton Woods …

The Effect Of Terminating Enforcement Actions On The Nation's Problem Banks, Benjamin Doehr

Undergraduate Economic Review

This paper examines whether the Federal Deposit Insurance Corporation's supervisory actions promote improved performance at problem banks. I show that during the three-year period following the termination of a supervisory action, return on assets rises by 10 to 20 basis points. The reaction of capital markets to the termination results in a 1.7 basis point increase in return on assets, while management actions post-termination result in a 1.6 basis point decrease in return on assets.

Analyzing Options Market Toxicity And The Black-Scholes Formula In The Presence Of Jump Diffusion As Simulated With Agent-Based Modeling, William D. Elliott

Undergraduate Economic Review

This paper presents new and significant research on the Black-Scholes Formula using the agent-based modeling software NetLogo. The software was used to simulate an options market subject to jump diffusion. Since the widely-used Black-Scholes Formula has at times proven unreliable, this research sought to understand circumstances that render the formula ineffective. It was hypothesized that markets would become difficult to trade in or “toxic” at low price volatility but high jump volatility. Further, it was predicted that kurtosis would alert the presence of toxic markets by accurately and consistently conveying whether jump diffusion was present.

The Savings Behavior Of Baby Boomers And Echo Boomers, Richard N. Fischer

Undergraduate Economic Review

Much has been written on the Baby Boomers and Echo Boomers following the Great Recession. This paper examines the savings behavior of these two groups and gives possible reasons as to why they make such decisions. Using data from a Times Union/Siena College poll to 751 residents in 51 upstate New York counties, I attempt to illustrate why people’s perceptions differ from reality. A chi-square analysis is used due to the categorical nature of the data. The findings show that people make economic decisions based on the life-cycle hypothesis and less on the economic recovery.