nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2009‒04‒25
twelve papers chosen by
Fabio Sabatini
University of Siena

  1. Corruption, Institutions and Economic Development By Aidt, T.S.
  2. The Effects of Mobility on Neighbourhood Social Ties By Knies G
  3. Contractually stable networks By Jean-Franois, CAULIER; Ana, MAULEON; Vincent, VANNETELBOSCH
  4. Do More Friends Mean Better Grades?: Student Popularity and Academic Achievement By Kata Mihaly
  5. Reciprocity and Competition: Is There a Connection? By Jonathan C. Rork; Gary A. Wagner
  6. (Un)Happiness in Transition By Guriev, Sergei; Zhuravskaya, Ekaterina
  7. The Ethics of Organizations: A Longitudinal Study of the U.S. Working Population By Kaptein, M.
  8. The Network-Firm as a Single Real Entity: Beyond the Aggregate of Distinct Legal Entities By Virgile Chassagnon
  9. Happiness and Growth the World Over: Time Series Evidence on the Happiness-Income Paradox By Easterlin, Richard A.; Angelescu, Laura
  10. Is Online Trading Gambling with Peanuts? By Anderson, Anders
  11. Polish Households' behavior in the Regular and Informal Economies By François Gardes; Christophe Starzec
  12. Entrepreneurial Entry: Which Institutions Matter? By Aidis, Ruta; Estrin, Saul; Mickiewicz, Tomasz

  1. By: Aidt, T.S.
    Abstract: Many scholarly articles on corruption give the impression that the world is populated by two types of people: the "sanders" and the "greasers". The "sanders" believe that corruption is an obstacle to development, while the "greasers" believe that corruption can (in some cases) foster development. This paper takes a critical look at these positions. It concludes that the evidence supporting the "greasing the wheels hypothesis" is very weak and shows that there is no correlation between a new measure of managers.actual experience with corruption and GDP growth. Instead, the paper uncovers a strong negative correlation between growth in genuine wealth per capita - a direct measure of sustainable development - and corruption. While corruption may have little average effect on the growth rate of GDP per capita, it is a likely source of unsustainable development.
    Keywords: Corruption, Growth, Sustainable Development.
    JEL: D78 D82
    Date: 2009–04–14
  2. By: Knies G (Institute for Social and Economic Research)
    Abstract: This research examines the strength of peopleÂ’s ties with close neighbours and the sensitivity thereof to changes in residential mobility, access to modes of public and private transport, and changes in the availability of modern communications technologies using the German Socio-economic Panel Study (SOEP). All forms of mobility have increased over time and are negatively associated with visiting neighbours. With further increases in mobility, close neighbours may become less relevant. Nevertheless, presently the incidence of visits with neighbours is sizeable; in contrast to the frequent assertion in the literature that the neighbourhood is of no importance.
    Date: 2009–04–17
  3. By: Jean-Franois, CAULIER; Ana, MAULEON; Vincent, VANNETELBOSCH (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics)
    Abstract: We develop a theoretical framework that allows us to study which bilateral links and coalition structures are going to emerge at equilibrium. We define the notion of coalitional network to represent a network and a coalition structure, whre the network specifies the natyure of the relationship each individual has with his coalition members and with individuals outside his coalition. To predict the coalitional networks that are going to emerge at equiibrium we propose the concept of contractual stability which requires that any change made to the coalitional network needs the consent of both the deviating players and their original coalition partners. We show that there always exists a contractually stable coalitional network under the simple majority decision rule and the component-wise egalitarian or majoritarian allocation rules. Moreover, requiring the consent of group members may help to reconcile stability and efficiency
    Keywords: Networks; coaliation structures; contractual stability; allocation rules
    JEL: A14 C70
    Date: 2008–11–02
  4. By: Kata Mihaly
    Abstract: Peer interactions have been argued to play a major role in student academic achievement. Recent work has focused on measuring the structure of peer interactions with the location of the student in their social network and has found a positive relationship between student popularity and academic achievement. Here the author ascertains the robustness of previous findings to controls for endogenous friendship formation. The results indicate that popularity influences academic achievement positively in the baseline model, a finding which is consistent with the literature. However, controlling for endogenous friendship formation results in a large drop in the effect of popularity, with a significantly negative coefficient in all of the specifications. These results point to a negative short term effect of social capital accumulation, lending support to the theory that social interactions crowd out activities that improve academic performance.
    JEL: I21
    Date: 2009–03
  5. By: Jonathan C. Rork (Andrew Young School of Policy Studies - Georgia State University); Gary A. Wagner (University of Arkansas at Little Rock)
    Abstract: One challenge states face in designing an income tax system is deciding how to treat non-resident earners. Numerous states have entered into reciprocity agreements with other states that exclude non-residents’ income from the tax base. These agreements provide a unique opportunity to explore the nature of state tax competition. We demonstrate that not only do reciprocity agreements dampen competition over income taxes, but the states that enact agreements also exhibit decreased levels of competition over other tax bases. This suggests that reciprocity agreements are a credible vehicle for states to act cooperatively and avoid a potential race to the bottom.
    Keywords: Spatial econometrics, interjurisdictional competition, state taxation, reciprocity.
    JEL: H7 R5
    Date: 2009
  6. By: Guriev, Sergei; Zhuravskaya, Ekaterina
    Abstract: Despite strong growth performance in transition economies in the last decade, residents of transition countries report abnormally low levels of life satisfaction. Using data from the World Values Survey and other sources, we study various explanations of this phenomenon. First, we document that the disparity in life satisfaction between residents of transition and non-transition countries is much larger among the elderly. Second, we find that deterioration in public goods provision, an increase in macroeconomic volatility, and a mismatch of human capital of residents educated before transition which disproportionately affected the aged population explain a great deal of the difference in life satisfaction between transition countries and other countries with similar income and other macroeconomic conditions. The rest of the gap is explained by the difference in the quality of the samples. As in other countries, life satisfaction in transition countries is strongly related to income; but, due to a higher non-response of high-income individuals in transition countries, the survey-data estimates of the recent increase in life satisfaction, driven by 10-year sustained economic growth in transition region, are biased downwards. The evidence suggests that if the region keeps growing at current rates, life satisfaction in transition countries will catch up with the "normal" level in the near future.
    Keywords: happiness; satisfaction; transition; unhappiness
    JEL: A13 I21 P36
    Date: 2009–04
  7. By: Kaptein, M. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: The ethics of organizations has received much attention in recent years. This raises the question whether the ethics of organizations has also improved. In 1999, 2004 and 2008, a survey was conducted of 12,196 U.S. managers and employees. The results show that the ethical culture of organizations only improved in the period between 1999 and 2004. Unethical behavior and its consequences, however, declined between 2004 and 2008, while the scope of ethics programs expanded in that period. The paper concludes with a discussion of the implications of these findings for further research and practice.
    Keywords: ethical culture;ethics program;unethical behavior;ethical reputation;ethics management;virtue theory;stakeholder theory
    Date: 2009–04–01
  8. By: Virgile Chassagnon (LEFI - Laboratoire d'Economie de la Firme et des Institutions - Université Lumière - Lyon II)
    Abstract: This paper intends to depart from a critique of the nexus of contracts theory of the firm endowed with its moral personification to propose some theoretical foundations of the firm as a real entity. Some old legal views of the corporation are mobilized to complete the conceptual vacuity of economic theories. This provides crucial insights for modern complex organizations such as the network-firm. The integrating and unifying role of intra-network power relationships is then emphasized and some law and economics of the network-firm are ultimately proposed to clarify the argument that the network-firm − as the firm stricto sensu − is a singular real entity composed from distinct legal entities.
    Keywords: Law and economics, contract theory of the firm, network-firm, legal fiction, real entity
    Date: 2008–06
  9. By: Easterlin, Richard A. (University of Southern California); Angelescu, Laura (University of Southern California)
    Abstract: There is no significant relationship between the improvement in happiness and the long term rate of growth of GDP per capita. This is true for three groups of countries analyzed separately − 17 developed, 9 developing, and 11 transition − and also for the 37 countries taken together. Time series studies reporting a positive relationship confuse a short-term positive association between the growth of happiness and income, arising from fluctuations in macroeconomic conditions, with the long-term relationship, which is nil.
    Keywords: happiness, economic growth, developing countries, transition countries, developed countries
    JEL: I31 D60 O10 P27
    Date: 2009–03
  10. By: Anderson, Anders (Stockholm University)
    Abstract: If individuals derive a small utility from gambling, we should observe high turnover in stock portfolios that are of only marginal importance to them. By the use of detailed individual financial data, as weIl as trades from a Swedish online broker, we measure the frequency and cost of online trading in the cross-section and reject this hypothesis. Investors who have online portfolios that constitute a large share of risky assets are more likely to trade, trade more aggressively when they do trade, have lower trading performance, and less wealth. Trading losses are therefore mainly carried by those who can afford to carry them the least.
    Keywords: Investor behavior; gambling; online trading; overconfidence
    JEL: C24 D14 G11
    Date: 2008–05–15
  11. By: François Gardes (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Christophe Starzec (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: This paper analyzes characteristics of the informal economy in Poland in the context of transition, using a specific survey carried out in the framework of the classic Labour Force Survey, conducted by the Polish National Statistical office (GUS), in 1995. The participation probabilities of three types of informal activities (working, buying and hiring) are discussed. Their interdependencies are analyzed in the light of the hypothesis of network or neighborhood effects. The impact of a household's participation in informal markets on its regular consumption is estimated by imputing the probability of its informal activity in the consumption surveys and panels. Such participation does significantly influence more than half of household's expenditure on goods and services. Moreover, the participants of the informal economy distinguish themselves by higher individual full prices (integrating both monetary and non-monetary constraints and resources).
    Keywords: Informal economy ; consumer behavior ; cross-section-panel estimation
    Date: 2009–03
  12. By: Aidis, Ruta (University College London); Estrin, Saul (London School of Economics); Mickiewicz, Tomasz (University College London)
    Abstract: In this paper we explore the relationship between the individual decision to become an entrepreneur and the institutional context. We pinpoint the critical roles of property rights and the size of the state sector for entrepreneurial activity and test the relationships empirically by combining country-level institutional indicators for 44 countries with working age population survey data taken from the Global Enterprise Monitor. A methodological contribution is the use of factor analysis to reduce the statistical problems with the array of highly collinear institutional indicators. We find that the key institutional features that enhance entrepreneurial activity are indeed the rule of law and limits to the state sector. However, these results are sensitive to the level of development.
    Keywords: entrepreneurship, property rights, access to finance
    JEL: L26 P14 P51 P37
    Date: 2009–04

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