National Bureau of Economic Research

About: National Bureau of Economic Research is a nonprofit organization based out in Cambridge, Massachusetts, United States. It is known for research contribution in the topics: Monetary policy & Population. The organization has 2626 authors who have published 34177 publications receiving 2818124 citations. The organization is also known as: NBER & The National Bureau of Economic Research.

The Origins of Technology-Skill Complementarity

Abstract: Current concern with the impact of new technologies on the wage structure motivates this study. We offer evidence that technology-skill and capital-skill (relative) complementarities existed in manufacturing early in this century and were related to the adoption of electric motors and particular production methods. Industries, from 1909 to 1929, with more capital per worker and a greater proportion of motive energy coming from purchased electricity employed relatively more educated blue-collar workers in 1940 and paid their production workers substantially more. We also find a strong positive association between changes in capital intensity and the nonproduction worker wage bill from 1909–1919 implying capital-skill complementarity as large as in recent years.

Do Tests of Capital Structure Theory Mean What They Say

Abstract: In the presence of frictions firms adjust their capital structure only infrequently. As a consequence, in a dynamic economy the leverage of most firms, most of the time, is likely to differ from the optimum leverage at the time of readjustment. This paper explores the empirical implications of this observation. A calibrated dynamic trade-off model with adjustment costs is used to simulate firms' capital structure paths. The results of standard cross-sectional tests on this data are found to be qualitatively - and, in some cases, even quantitatively - consistent with those reported in the empirical literature. In particular, the standard interpretation of some test results would lead to the rejection of the model used to generate the data. The framework can explain a number of observed puzzles related to leverage. In particular, in the simulated cross-sectional samples leverage: (a) is inversely related to profitability; (b) can be largely explained by stock returns; (c) is mean-reverting. The results suggest that, in the presence of infrequent adjustment, cross-sectional properties of economic variables in dynamics may be fundamentally different from those derived assuming that they are always at their target levels. Taken together, the results suggest a rethinking of the way capital structure tests are conducted.

Investor Protection and Corporate Governance

Abstract: Recent research on corporate governance has documented large differences between countries in ownership concentration in publicly traded firms, in the breadth and depth of financial markets, and in the access of firms to external finance. We suggest that there is a common element to the explanations of these differences, namely how well investors, both shareholders and creditors, are protected by law from expropriation by the managers and controlling shareholders of firms. We describe the differences in laws and the effectiveness of their enforcement across countries, summarize the consequences of these differences, and suggest potential strategies of reform of corporate governance. We argue that the legal approach is a more fruitful way to understand corporate governance and its reform than the conventional distinction between bank-centered and market-centered financial systems.

The Economic Geography of the Internet Age

Abstract: This paper combines the perspective of an international economist with that of an economic geographer to reflect on how and to what extent the Internet will affect the location of economic activity. Even after the very substantial transportation and communication improvements during the 20th Century, most exchanges of physical goods continue to take place within geographically-limited 'neighborhoods.' Previous rounds of infrastructure improvement always have had a double effect, permitting dispersion of certain routine activities but also increasing the complexity and time-dependence of productive activity, and thus making agglomeration more important. We argue that the Internet will produce more of the same forces for deagglomeration, but offsetting and possibly stronger tendencies toward agglomeration. Increasingly the economy is dependent on the transmission of complex uncodifiable messages, which require understanding and trust that historically have come from .face-to-face contact. This is not likely to be affected by the Internet, which allows long distance 'conversations' but not 'handshakes.'

Expansion of Markets and the Geographic Distribution of Economic Activities: The Trends in U. S. Regional Manufacturing Structure, 1860–1987

Abstract: This paper presents evidence on the long-run trends in U. S. regional specialization and localization and examines which model of regional specialization is most consistent with the data. Regional specialization in the United States rose substantially between 1860 and the turn of the twentieth century, flattened out during the interwar years, and then fell substantially and continuously since the 1930s. The analysis of the long-run trends in U. S. regional specialization and localization supports explanations based on production scale economies and the Heckscher-Ohlin model but is inconsistent with explanations based on external economies.