nep-inv New Economics Papers
on Investment
Issue of 2023‒09‒25
eleven papers chosen by
Daniela Cialfi, Università degli Studi di Teramo

  1. Gender pay gap and Employment choice in Nigeria By Ekpeyong, Paul
  2. Monetary Policy with Racial Inequality By Makoto Nakajima
  3. Economic Effects of R&D Supports By Huseyin Emre Sayici; Mehmet Fatih Ulu
  4. Do Households Where Women Own Land Fare Better for Food Security? Evidence for Tanzania By Burrone, Sara; Giannelli, Gianna Claudia
  5. Monitoring the SDGs in North-West Romania region, Romania By POP Daniel
  6. The Impacts of COVID-19 on Racial Inequality in Business Earnings By Fairlie, Robert W.
  7. Plata y Plomo: How Higher Wages Expose Politicians to Criminal Violence By Massimo Pulejo; Pablo Querubín
  8. Choose as much as you wish: freedom cues in the marketplace help consumers feel more satisfied with what they choose and improve customer experience By Fasolo, Barbara; Misuraca, Raffaella; Reutskaja, Elena
  9. The Effect of Child Endowment on Fertility Choices By Victor Lavy; Yeshaya Nussbaum
  10. Optimal regulation of credit lines By José E. Gutiérrez
  11. Not as good as it used to be: Do streaming platforms penalize quality? By Gambato, Jacopo; Sandrini, Luca

  1. By: Ekpeyong, Paul
    Abstract: This study investigates the intricate interplay between gender pay gap and employment choices, specifically focusing on the distinctions between the private and public sectors. Employing a comprehensive dataset spanning various industries and professions, we employ an array of analytical methods to uncover the nuanced factors contributing to observed wage disparities between men and women, by employing Blinder decomposition analysis, this research reveals the presence of gender-based wage disparities in both private and public sectors. However, when accounting for selection bias inherent in employment choices, the dynamics of the gender wage gap shift, underlining the significance of considering the role of employment decisions. This study delves into the explained and unexplained components of the wage gap. Surprisingly, corrected results showcase women out earning their male counterparts in the private sector. This unexpected finding highlights the importance of analyzing employment choices for a comprehensive understanding of gender-based wage disparities. In addition to Blinder decomposition, we undertake an estimation of the conditional wage gap, shedding light on how the wage gap evolves over different percentiles of the wage distribution. This multifaceted approach provides deeper insights into the complexities of gender pay discrepancies. Moreover, the study employs multinomial Logit regression analysis to explore the influence of various factors on the employment choices between private and public sectors. By considering variables such as education, experience, and industry, we unveil the intricate determinants impacting individuals' decisions, contributing to the overall gender wage gap. The research's robustness is validated through the application of the Ramsey Reset test, confirming the integrity of the regression model. This study's contribution lies in its comprehensive analysis, combining Blinder decomposition, conditional wage gap estimation, and multinomial Logit regression to offer a holistic understanding of gender pay gap dynamics and employment choices. The findings have implications for policy formulation and future research aiming to create a more equitable labor market.
    Keywords: public, private, multinomial, logit, blinder decomposition, private, public
    JEL: J0 J08 J3 J7 J71
    Date: 2023–07–19
  2. By: Makoto Nakajima
    Abstract: I develop a heterogeneous-agent New-Keynesian model featuring racial inequality in income and wealth, and studies interactions between racial inequality and monetary policy. Black and Hispanic workers gain more from accommodative monetary policy than White workers mainly due to higher labor market risks. Their gains are larger also because of a larger proportion of them are hand-to-mouth, while wealthy White workers gain more from asset price appreciation. Monetary and fiscal policies are substitutes in providing insurance against cyclical labor market risks. Racial minorities gain even more from an accommodative monetary policy in the absence of income-dependent fiscal transfers.
    Keywords: monetary policy; racial inequality; labor market; unemployment; wealth distribution; hand-to-mouth; marginal propensity to consume; business cycle; heterogeneous agents
    JEL: E21 E52 J15 J64
    Date: 2023–05–30
  3. By: Huseyin Emre Sayici (Fisher College of Business, Ohio State University); Mehmet Fatih Ulu (College of Administrative Sciences and Economics, Koç University)
    Abstract: This study examines the economic effects of research and development (R&D) supports in the context of a program implemented in Türkiye between 2006-2019. Firms receiving the support differ positively from other firms in key economic indicators. Results indicate a 6% rise in patent registrations, 9% growth in value-added, 26% surge in total wages, 17% increase in per capita wages, 9% expansion in employment, 10% boost in productivity, 11% rise in exported product diversity, and 4% uptick in sales due to the support. Nonetheless, the effects on productivity and sales are statistically weaker than other impacts. The average impact of patents is also modest. Large-scale firms exhibit significant benefits, with a 33% rise in patent numbers and a 13% growth in sales. These firms effectively leverage support to commercialize R&D investments and innovations. Small-sized firms experience stronger productivity effects. Productivity gains grow with scale among SMEs, but large firms do not see positive productivity effects.
    Keywords: R&D supports, TEYDEB, innovation, matching.
    JEL: O31 O32 O38
    Date: 2023–09
  4. By: Burrone, Sara (University of Florence); Giannelli, Gianna Claudia (University of Florence)
    Abstract: This paper aims to study the relationship between women's land ownership and household food security in Tanzania, using data from three waves of the Tanzanian National Panel Survey. The analysis focuses on the Household Dietary Diversity Scale (HDDS) as a measure of food security, and we categorize land ownership by gender and whether it is solely or jointly owned. Additionally, we examine the impact of the gendered division of crop cultivation on household food security, distinguishing between cash crops and food crops. We estimate several fixed-effects specifications and perform a heterogeneity analysis to disentangle the effects of women's land ownership across households with varying levels of dependence on home-produced food. The findings reveal that women's land ownership significantly influences household dietary diversity. Specifically, women's sole ownership of food crops and joint ownership of cash crops have positive effects on household food security, especially for households reliant on purchased food. These results underscore the importance of women's ownership of income-generating crops in enhancing food security. Overall, this research provides valuable insights for policymakers, emphasizing the significance of women's land ownership in driving household food security in Tanzania. By uncovering the positive impacts of women's land ownership, the study highlights the importance of gender equity in agricultural systems and the potential for women's empowerment to foster sustainable development and food security.
    Keywords: gender equity, food security, land ownership, Tanzania
    JEL: O12 Q15
    Date: 2023–08
  5. By: POP Daniel
    Abstract: The research work contributes to establishing a relevant and applicable set of indicators for monitoring the achievement of the SDGs at the regional level. The analysis was developed within the “REGIONS2030: project, launched by the Joint Research Centre (JRC) in collaboration with DG REGIO and ESTAT, and supported by the European Parliament. The principal finding of the review is the identification of 47 indicators for which statistical data are readily available for Nord-Vest. This core group of indicators provides insight into the progress made by the region towards achieving 13 SDGs. Complementarily, a group of 28 additional proxy indicators are proposed for the region, which provides further details on the performance of Nord-Vest. Last, 18 indicators falling under 11 SDGs have been identified with readily available NUTS0-level data that could also be reported at the NUTS2 level. The main challenges faced during data collection include scarcity of readily available NUTS2-level data, inconsistencies in data availability and low levels of harmonisation across available data sources. Possible steps to address the existing challenges and gaps include • ensuring that all data are expressed in standardised form across NUTS2-level jurisdictions, • aligning the periods for which statistics are published with the multiannual planning cycles, and • ensuring that administrative data are communicated annually to conduct trend analysis.
    Date: 2023–07
  6. By: Fairlie, Robert W. (University of California, Los Angeles)
    Abstract: Many small businesses closed in the pandemic, but were economic losses disproportionately felt by businesses owned by people of color? This paper provides the first study of the impacts of COVID-19 on racial inequality in business earnings. Pandemic-induced losses to business earnings in 2020 were 16-19 percent for all business owners. Racial inequality increased in the pandemic: Black business owners experienced larger negative impacts on business earnings of 12-14 percent relative to white business owners. Regression estimates for Latinx and Asian business owners reveal negative point estimates but the estimates are not statistically significant. Using Blinder-Oaxaca decompositions and a new pandemic-focused decomposition technique, I find that the industry concentrations of Black, Latinx, and Asian business owners placed each of these groups at a higher risk of experiencing disproportionate business earnings losses in the pandemic. Higher education levels among Asian business owners helped insulate them from larger losses from COVID-19. In the following year of economic recovery, 2021, business earnings rebounded strongly for all groups except for Asian business owners who experienced large relative losses (which were partly due to industry concentrations). State-level variation in policies and disease spread does not explain racial differences in business earnings losses or rebounds.
    Keywords: entrepreneurship, COVID-19, racial inequality, business earnings, pandemic
    JEL: L26 J15
    Date: 2023–08
  7. By: Massimo Pulejo; Pablo Querubín
    Abstract: Adequate wages are an important tool to shield public officials from special interests and corruption. But what is the equilibrium effect of higher wages in the presence of criminal pressure groups, who use both bribes and violence? By means of a regression discontinuity design, we show that an increase in the remuneration of Italian municipal cabinets triggers a sizable and significant increase in criminal attacks against their members. We argue that this is triggered by higher-paid officials' lower likelihood of catering to criminal interests. In particular, we show that better-paid politicians are significantly more likely to prevent corruption in public procurement, a key area of illicit interactions between the state and criminal organizations. Additional analyses reveal that the disciplining effect of wages is driven by a change in incumbents' behavior rather than improved selection. These findings reveal how -- in the presence of criminal groups -- higher wages may limit corruption, but also foster the use of violence as an alternative tool to influence policymaking.
    JEL: D72 D74 H72
    Date: 2023–08
  8. By: Fasolo, Barbara; Misuraca, Raffaella; Reutskaja, Elena
    Abstract: Consumer satisfaction and customer experience are key predictors of an organization’s future market growth, long-term customer loyalty, and profitability but are hard to maintain in marketplaces with abundance of choice. Building on self-determination theory, we experimentally test a novel intervention that leverages consumer need for autonomy. The intervention is a message called a “freedom cue” (FC) which makes it salient that consumers can “choose as much as they wish.” A 4-week field experiment in a sporting gear store establishes that FCs lead to greater consumer satisfaction compared to when the store displays no FC. A large (N = 669) preregistered process-tracing experiment run with a consumer panel and a global e-commerce company shows that FCs at point-of-sale improve consumer satisfaction and customer experience compared to an equivalent message that does not make freedom to choose any amount salient. Perceived freedom mediates the effect. FCs do not change the time spent or clicks on the website overall but do change the focus of the choice process. FCs lead to greater focus on what is chosen than on what is not chosen. We discuss practical implications for organizations and future research in consumer choice. (PsycInfo Database Record (c) 2023 APA, all rights reserved)
    Keywords: freedom cue; customer experience; consumer satisfaction; field study; process tracing; IESE Business School; American Psychological Association deal
    JEL: J50
    Date: 2023–07–27
  9. By: Victor Lavy; Yeshaya Nussbaum
    Abstract: Does the intellectual endowment of children affect parents’ fertility choices? The quantity-quality model of fertility predicts that a positive (negative) shock to child endowment increases (decreases) parental demand for children. We test these predictions using Israeli data on intellectually gifted and intellectually disabled children. Because families with an exceptional-endowment child differ from those without, we propose quasi-experiments that exploit differences in the child’s birth order to estimate the effect of her birth on further fertility. We find that the birth of a gifted child increases family size. However, parents must recognize the endowment’s exceptionality for it to have an effect. Similarly, the birth of an intellectually disabled child negatively affects family size, but only when the child is of high birth order. Our results point to child endowment as an important factor in determining fertility choices.
    JEL: I0 J10
    Date: 2023–08
  10. By: José E. Gutiérrez (Banco de España)
    Abstract: This paper presents a contract-theoretic model in which banks choose pre-arranged and ex post funding to finance firms’ liquidity needs through credit lines. When liquidity needs are high, pre-arranged funding is key to sustaining lending and reducing the number of firms going into liquidation. Yet, in the presence of a pecuniary externality on firms’ liquidation values, competitive banks choose insufficient pre-funding compared with a constrained social planner. Constrained efficiency can be restored using regulatory liquidity ratios. The optimal regulatory ratio depends on the frequency of high liquidity need conditions, the value lost after a firm’s liquidation, and the premium on pre-funding.
    Keywords: credit lines, bank liquidity risk regulation, LCR, NSFR, Basel III
    JEL: G01 G21 G28 G32
    Date: 2023–08
  11. By: Gambato, Jacopo; Sandrini, Luca
    Abstract: We study the incentives of a streaming platform to bias consumption when products are vertically differentiated. The platform offers mixed bundles of content to monetize consumers' interest in variety and pays royalties to sellers based on the effective consumption of the content they produce. When products are not vertically differentiated, the platform has no incentive to bias consumption in equilibrium: the platform being active represents a Pareto-improvement compared to the case in which she is not. With vertical differentiation, royalties can differ; the platform always biases recommendations in favor of the cheapest content, which hurts consumers and the high-quality seller. Biased recommendation always diminishes the incentives of a seller to increase the quality of her content for a given demand. If a significant share of the users is ex-ante unaware of the existence of the sellers the platform can bias recommendations more freely, but joining the platform encourages investment in quality. The bias, however, can lead to inefficient allocation of R&D efforts. From a policy perspective, we propose this as a novel rationale for regulating algorithmic recommendations in streaming platforms.
    Keywords: platform economics, media economics, recommendation bias, innovation
    JEL: D4 L1 L5
    Date: 2023

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