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Articles 1 - 17 of 17
Full-Text Articles in Economic Policy
The Impact Of Research And Development On Economic Growth And Productivity In The Us States, Luisa Blanco, James Prieger, Ji Gu
The Impact Of Research And Development On Economic Growth And Productivity In The Us States, Luisa Blanco, James Prieger, Ji Gu
School of Public Policy Working Papers
We estimate the impact of R&D on TFP and output in the private sector at the state level in the US from 1963 to 2007. R&D has a large effect on both output and TFP at the state level in the long run. The R&D elasticity in a state averages 0.056 to 0.143, implying returns to state GDP from R&D spending of 83% to 213%. There are also positive R&D spillovers, with 77% of the total returns accruing to other states. The R&D elasticities are either stable or increase slightly after 1993. The effects of R&D are dependent on the …
Tax Havens And Fdi Spillovers: Implications For Ldcs, Luisa Blanco, Cynthia Rogers
Tax Havens And Fdi Spillovers: Implications For Ldcs, Luisa Blanco, Cynthia Rogers
School of Public Policy Working Papers
Tax competition and spillover models offer ambiguous predictions concerning the economic impact of tax havens on non-tax havens. The implications of tax havens for less developed countries (LDCs), in particular, are not well understood and are little studied. This paper investigates the impact of tax havens on non-tax haven countries in terms of foreign direct investment (FDI). We investigate the importance of agglomeration effects by accounting for the level of FDI inflows as well as the role of geography by measuring proximity to the nearest tax haven. Our analysis yields several interesting findings. First, using panel data for 142 countries, …
Competition Between Tax Havens: Does Proximity Matter?, Luisa Blanco, Cynthia Rogers
Competition Between Tax Havens: Does Proximity Matter?, Luisa Blanco, Cynthia Rogers
School of Public Policy Working Papers
We study whether proximity to the nearest tax haven affects FDI and the number of American affiliates in a tax haven. Our results show that distance to the nearest tax haven is positively related to FDI inflows and the number of American affiliates in tax havens. These findings suggest that there is a harmful competition between tax havens. We also find evidence of positive spillovers: the number of American affiliates in a tax haven is positively related to the number of in its closest neighboring tax haven. This suggests the presence of agglomeration benefits given there is an affiliate in …
The Finance–Growth Link Revisited And The Role Of Institutions As A Source Of Finance In Latin America, Luisa Blanco
The Finance–Growth Link Revisited And The Role Of Institutions As A Source Of Finance In Latin America, Luisa Blanco
School of Public Policy Working Papers
In a panel framework that includes 18 countries, this paper studies the short and long run effect of financial development on economic growth and the determinants of financial development in Latin America. Financial development shows a positive effect on economic growth in the long run, but a negative effect in the short run for the full sample. When the sample is divided by income levels, this result holds only for the high income group. For the low income group, financial development has no significant effect on economic growth in the short run or in the long run. In the analysis …
Verifiable And Non-Verifiable Anonymous Mechanisms For Regulating A Polluting Monopolist, James Prieger, Nicholas J. Sanders
Verifiable And Non-Verifiable Anonymous Mechanisms For Regulating A Polluting Monopolist, James Prieger, Nicholas J. Sanders
School of Public Policy Working Papers
Optimal regulation of a polluting natural monopolist must correct for both external damages and market power to achieve a social optimum. Existing non-Bayesian regulatory methods require knowledge of the demand function, while Bayesian schemes require knowledge of the underlying cost distribution. We introduce mechanisms adapted to use less information. Our Price-based Subsidy (PS) mechanisms give the firm a transfer that matches or approximates the incremental surplus generated each period. The regulator need not observe the abatement activity or know the demand, cost, or damage functions of the firm. All of the mechanisms induce the firm to price at marginal social …
The (Non) Effect Of Natural Resource Dependence On Capital Accumulation In Latin America, Luisa Blanco, Robin Grier
The (Non) Effect Of Natural Resource Dependence On Capital Accumulation In Latin America, Luisa Blanco, Robin Grier
School of Public Policy Working Papers
In a simultaneous model of human and physical capital accumulation for 17 Latin American countries from 1975 to 2004, we show that overall resource dependence is not significantly related to physical and human capital. Disaggregating the natural resource variable into subcategories, we find that petroleum export dependence is associated with higher physical capital and lower human capital, while agricultural export dependence is often associated with lower levels of physical capital. All of these effects are quantitatively small, however, casting doubt on the idea that natural resource dependence has stifled the accumulation of capital in the region.
The Impact Of Spatial Interdependence On Fdi In Latin America, Luisa Blanco
The Impact Of Spatial Interdependence On Fdi In Latin America, Luisa Blanco
School of Public Policy Working Papers
This analysis considers whether spatial interdependence is an important determinant of foreign direct investment (FDI) in Latin America. Two types of spatial interdependence are explored: 1) surrounding market potential and 2) spatial autocorrelation of FDI. Using a sample of 17 Latin American countries, with observations from 1986 to 2006, we find that spatial interdependence matters for world net FDI in the region. Surrounding market potential has a positive effect on FDI of significant magnitude, but there is no evidence that FDI is spatially autocorrelated. Other contributors to FDI in this analysis include governance, specifically control of corruption, and exports of …
The Broadcasters’ Transition Date Roulette: Strategic Aspects Of The Dtv Transition, James Prieger, James Miller
The Broadcasters’ Transition Date Roulette: Strategic Aspects Of The Dtv Transition, James Prieger, James Miller
School of Public Policy Working Papers
The analog to digital "DTV transition" completed in June 2009 was a technological event unprecedented in scale in the broadcast television industry. The final analog cutoff for TV stations culminated more than ten years of complex regulatory decisions. Facing concerns that costs and revenue could change dramatically, stations chose when to transition in response to both market and regulatory forces. The history of broadcasting reveals a continual interplay between consumer demand, technological change, and regulation. This article describes the various forces that influenced the DTV transition, and empirically examines the stations’ decisions regarding when to switch. The economic and strategic …
Applications Barriers To Entry And Exclusive Vertical Contracts In Platform Markets, James Prieger, Wei-Min Hu
Applications Barriers To Entry And Exclusive Vertical Contracts In Platform Markets, James Prieger, Wei-Min Hu
School of Public Policy Working Papers
Our study extends the empirical literature on whether vertical restraints are anticompetitive. We focus on exclusive contracting in platform markets, which feature indirect network effects and thus are susceptible to applications barriers to entry. Exclusive contracts in vertical relationships between the platform provider and software supplier can heighten entry barriers. We test these theories in the home video game market. We find that indirect network effects from software on hardware demand are present, and that exclusivity takes market share from rivals, but only when most games are non-exclusive. The marginal exclusive game contributes virtually nothing to console demand. Thus, allowing …
The Microeconomic Impacts Of E-Business On The Economy, James Prieger, Daniel Heil
The Microeconomic Impacts Of E-Business On The Economy, James Prieger, Daniel Heil
School of Public Policy Working Papers
The adoption of e-business at the microeconomic level of retail, wholesale, and labor market transactions has an enormous impact on the performance of firms and the economic welfare of consumers and workers. This article reviews, in broad outlines, the economics of e-business, focusing on empirical research. The fundamental notion that e-business and adoption of ICT lowers the cost of transferring, storing, and processing in-formation is used to organize the examination. E-business spheres of impact covered include B2C and B2B e-commerce, the labor market, and the productivity of firms. This article covers both the predicted impacts of e-business on the economy …
The Macroeconomic Impacts Of E-Business On The Economy, James Prieger, Daniel Heil
The Macroeconomic Impacts Of E-Business On The Economy, James Prieger, Daniel Heil
School of Public Policy Working Papers
The growing use of information and communications technology (ICT) by business—e-business—profoundly affects the economy. This article covers some of the macroeconomic impacts of e-business. Evidence from empirical studies examining the impact that greater use of ICT by business has on productivity and national economic growth is presented, along with discussion of how e-business changes the volatility and complicates measurement of growth. E-business can bring down inflation, but also exacerbates some monetary and fiscal policy challenges, and raises new ones. While e-payments and e-money can complicate monetary policy and may alter its goals, little effect has been seen to date. Sales …
Life Is Unfair In Latin America, But Does It Matter For Growth?, Luisa Blanco
Life Is Unfair In Latin America, But Does It Matter For Growth?, Luisa Blanco
School of Public Policy Working Papers
I analyze the effect of inequality on economic growth in Latin America, where inequality is measured as the area of family farms as a percentage of the total area of agricultural holdings. Using data from 18 Latin American countries between 1960 and 2004, I find that inequality has a nonlinear effect on economic growth. Overall, for the countries included in this analysis, the share of family farms has a positive significant effect on economic growth. These findings are robust to controlling for several factors, using a different indicator of inequality (land Gini), and addressing for endogeneity.
The Finance–Growth Link In Latin America, Luisa Blanco
The Finance–Growth Link In Latin America, Luisa Blanco
School of Public Policy Working Papers
This paper analyzes the relationship between financial development and economic growth in Latin America with a Granger causality test and impulse response functions in a panel vector autoregression model. Using annual observations from a sample of 18 countries from 1962 to 2005, it is shown that while economic growth causes financial development, financial development does not cause economic growth. This finding is robust to different model specifications and different financial indicators. Interestingly, when the sample is divided according to different income levels and institutional quality, there is two way causality between financial development and economic growth only for the middle …
Long Live Democracy: The Determinants Of Political Instability In Latin America, Luisa Blanco, Robin Grier
Long Live Democracy: The Determinants Of Political Instability In Latin America, Luisa Blanco, Robin Grier
School of Public Policy Working Papers
In this paper, we investigate the determinants of political instability in Latin America. In a panel of 18 Latin American countries from 1971 to 2000, we find that democratic countries experience less average instability in the region, indicating that the move to increased democracy in the last couple decades may alleviate the persistent problem of instability in the area. We also find that income inequality and ethnic fractionalization are important determinants of instability. Countries with low levels of inequality also suffer less instability on average, while ethnic diversity has a non-linear effect on instability. Many macroeconomic variables commonly thought to …
The Empirics Of The Digital Divide: Can Duration Analysis Help?, James Prieger, Wei-Min Hu
The Empirics Of The Digital Divide: Can Duration Analysis Help?, James Prieger, Wei-Min Hu
School of Public Policy Working Papers
Accurate measurement of digital divides is important for policy purposes. Empirical studies on broadband subscription gaps have largely used cross-sectional data, which cannot speak to the timing of technological adoption. Yet, the dynamics of a digital divide are important and deserve study. With the goal of improving our understanding of appropriate techniques for analyzing digital divides, we review competing econometric methodology and propose the use of duration analysis. We compare the performance of alternative estimation methods using a large dataset on DSL subscription in the U.S., paying particular attention to whether women, blacks, and Hispanics catch up to others in …
The Rules Of The Road Or Roadblocks On The Information Highway? Regulation And Innovation In Telecommunications, James Prieger, Daniel Heil
The Rules Of The Road Or Roadblocks On The Information Highway? Regulation And Innovation In Telecommunications, James Prieger, Daniel Heil
School of Public Policy Working Papers
Regulatory policy in telecommunications must balance short-term efficiency (low prices) against the firms’ incentives to innovate, which have longer reaching impacts on economic welfare. Historically, policy tended to sacrifice dynamic efficiency for the sake of competitive prices and static efficiency. In the last few decades, economists and other researchers have begun to document the large welfare costs of ignoring dynamic efficiency. We analyze the impact regulation has on innovation in a simple theoretical framework. We then turn to the empirical evidence that regulation dampens firms’ incentive to innovate in the telecommunications industry in general and the market for broadband Internet …
The Broadband Digital Divide And The Nexus Of Race, Competition, And Quality, James Prieger, Wei-Min Hu
The Broadband Digital Divide And The Nexus Of Race, Competition, And Quality, James Prieger, Wei-Min Hu
School of Public Policy Working Papers
We examine the gap in broadband access to the Internet between minority groups and white households with geographically fine data on DSL subscription. In addition to income and demographics, we also examine quality of service and competition as components of the Digital Divide. The gaps in DSL demand for blacks and Hispanics do not disappear when income, education, and other demographic variables are accounted for. However, lack of competition is an important driver of the Digital Divide for blacks. Service quality is an important determinant of demand, and ignoring it masks the true size of the DSL gap for Hispanics.