Showing papers on "Negative relationship published in 1997"

Corruption and the rate of temptation : do low wages in the civil service cause corruption?

Abstract: This paper develops and tests two efficiency wage models of corruption in the civil service. Under fair wage models, civil service wages are an important determinant of corruption. Under shirking models, the level of wages is of secondary importance, as potential bribes dwarf wage income. The empirical evidence points to a negative relationship between corruption and wages across developing countries. Tests as to the validity of the two different efficiency wage models are inconclusive.

Is inequality harmful for growth? Comment

Abstract: Endogenous growth models have reignited interest in institutional and path dependencies in the economic growth process One reason for the interest in endogenous growth models is that they may explain why countries consistently grow at different rates In this vein, it has been recently proposed that greater economic inequality reduces future economic growth An important paper in this literature is by Torsten Persson and Guido Tabellini (1994), who will be referred to as PT PT's model shows why it is reasonable to expect a negative relationship between inequality and future economic growth Moreover, their empirical evidence is consistent with their contention If PT's findings are robust to other data sets, there would be important policy implications For example, they imply that policy makers should not only be concerned with the distributional implications of government policies for political and social reasons, but also because income distribution has long-run effects on economic growth This indicates that greater US income inequality since the early 1970's may have resulted in lower subsequent economic growth However, PT's results are somewhat fragile to various specifications, suggesting that they should be replicated with different data sets and over different time periods (PT p 617) With these implications in mind, this study employs data from a panel of US states to further explore the relationship between economic growth and income inequality In what follows, Section I summarizes PT's study and discusses how this comment extends their findings The empirical implementation and results in Section II directly examine the link between overall income inequality and growth Section III expands the analysis to alternative measures of income distribution and government policy One emphasis in Section III is the distinction between how the overall income distribution (especially at the tails) influences economic growth from how the relative well-being of the median voter affects economic growth Section IV provides some concluding discussion

Migrants' Savings, Purchasing Power Parity, and the Optimal Duration of Migration

Abstract: If some of the returns to migration accrue from returnmigration, the optimal duration of migration may be shorter thanthe feasible duration of migration. We develop a model that providesand highlights conditions under which return migration takesplace even though a reversal of the inter-country wage differentialdoes not occur. In particular, we consider the higher purchasingpower of savings (generated from work abroad) at home than abroadas a motive for return migration. Inter alia, our model producesa negative relationship between the optimal duration of migrationand the purchasing power differential and in some (but not all)cases, a negative relationship between the optimal duration ofmigration and the wage abroad. In addition, and contrary to ourprior anticipation, our utility maximization analysis suggeststhat East-West migration will tend to be temporary while inter-EuropeanCommunity (or intra-West European) migration will likely be permanent.

Stock returns and inflation: a macro analysis

Abstract: A negative relationship between stock returns and (expected) inflation is frequently observed in empirical work and is considered a puzzle since it is expected that stocks are a good hedge against inflation, so that their real rate of return (actual or expected) ought to be unaffected by changes in inflation. Various attempts have been made to resolve this puzzle empirically but have tended to use single equations of a partial equilibrium nature which have been ad hoc to a greater or lesser extent. This paper examines the puzzle in the framework of a small empirical macroeconomic model. The negative sign survives the extension to the full model and the source of the puzzle is found in the macroeconomic interactions: a rise in the expected inflation rate raises equilibrium real output which has a negative impact on stock returns.

The effect of trade policy reforms on labour markets: Evidence from India

Abstract: This paper investigates the labour market impact of the 1991 trade reforms in India using a detailed panel data set on firms in five different import competing industries. We have two main results. First, we find only a small and insignificant effect of the reforms on employment - overall and in each of the five import competing industries. Second, we investigate the relationship between labour demand and mark-ups and find that there is a significant negative relationship between mark-ups and the demand for labour - overall and in four of the five industries studied. This provides evidential support for ‘pro-competitive’ effects of trade reforms on labour markets as suggested by the theory: trade liberalization increases the demand elasticity perceived by firms and induces them to reduce mark-ups and increase their output, thus (in direct contradiction to the predictions of competitive models of trade) inducing an increase in the demand for labour which may at least partially offset the reduction in labou...

Firm Valuation of Advertising Expense: An Investigation of Scaler Effects

Abstract: Previous research and logic indicate that capital markets generally value spending for advertising and promotion; however, empirical results from these studies are far from consistent While most studies find a positive relationship between a firm's advertising spending and its market value (Hirschey, 1985; Jose, Nichols and Stevens, 1986; Lustgarten and Thomadakis, 1987;Morck, Shleifer and Vishny, 1988; and Morck and Yeung, 1991), others find a negative relationship when control variables are added to the empirical model (Erickson and Jacobson, 1992) Differences in model specification may explain these conflicting results Previous studies have included a variety of control variables such as return on investment, market share, research and development (RD Chauvin and Hirschey, 1993; Hirschey, 1982) when testing the relationship between promotional expenses and market value Different firm characteristics (eg sales, total assets, book value of equity and price) have been selected as scalers for empirical measures of both the dependent and independent variables Although these studies investigated an essentially identical theoretical relationship, variation in model specifications renders interpretations different

The causes of government and the consequences for growth and well-being

Abstract: Using a large cross-country data set, the authors examine the factors that cause governments to grow, and analyze how the size of government affects growth, whether measured as income growth or other measures of well-being, such as infant mortality and life expectancy. They find no robust link between government size and per capita income. The factors they find to be important in explaining government size are relative prices, the age-dependency ratio, how long a country has been independent, relative political freedom, and openness in trade. Their results also partially support the view that governments use consumption to buffer external risk, especially in low-income countries. As for how government size affects growth, they find a robust and significant negative relationship between growth and government size, as measured by consumption. Policy distortions, predictably, also have a negative effect on growth. But the positive effects of well-functioning institutions and high quality in government bureaucracies can offset the negative influence of large government size alone. Finally, they find that social-sector spending can exert a positive influence by reducing infant mortality and raising life expectancy. Better income distribution, higher per capita income, higher per capita income growth, and more political freedom have the same positive effect on those two measures of well-being.

Productivity and trade unions in British manufacturing industry 1973-85

Abstract: This paper uses panel data on british manufacturing industries between 1973 and 1985 to examine the relationship between productivity and labour organization. It is shown that the relationship between unions and productivity levels is sensitive to the econometric specification. The evidence points to there being no relationship in the 1970s when unions were more popular and a negative relationship from 1979 onwards. We also find evidence that industrial concentration is associated with higher levels of productivity and this accounts for more of the productivity recovery after the recession in the early 1980s than the impact of trade unions. The recession itself is shown to have had an impact on subsequent productivity growth. We also suggest that the long run gains in productivity caused by the shakeout of 1980–81 may not have compensated for the loss in output at the time.

Supply response in the northeastern fresh tomato market: cointegration and error correction analysis

Abstract: This paper reexamines supply response in the Northeastern fresh tomato market during the 1949–94 period by employing cointegration and error correction technique. It tests whether there has been a long-run equilibrium relationship between Northeastern production and a set of price and nonprice factors that influence it. Findings suggest that wage rate, imports from competing regions, and urban pressure have had significant negative impacts on regional production. The negative relationship between price and production may have resulted from the strong negative effects exerted by the nonprice factors.

Relationship Satisfaction: Impact and Consequences for Women's Emotional Health and Treatment

Abstract: This study uses feminist theory to examine the variables of relationship length and relationship satisfaction as predicators of both self-esteem and emotional functioning for women. Using a national sample of data gathered from 1,257 female survey respondents this study found significant relationships between emotional functioning, self-esteem, and self-reported relationship satisfaction which was supported by regression testing and path analysis. In addition, a significant negative relationship was noted between a woman's self-esteem and her with-holding of verbalized displeasure or disagreement with her partner. Implications for women in therapy were discussed.

Trickling Down or Fizzling Out? Economic Performance, Transfers, Inequality and Low Income

Abstract: The objectives of this paper are to determine the empirical relationships between economic performance, transfers and low income among Canadian families, and to explore whether these relationships have changed over time. Similar recent studies in the US find a weakening in the relationship between economic growth and low income reduction over the past 25 years. Using data from the Survey of Consumer Finances of Statistics Canada, we find that there is a statistically significant negative relationship between economic performance and the incidence of low income among families in Canada for the period from 1973 to 1995. Government transfers are also found to lift families above the low income threshold. These results are robust across different family types and for three different measures of low income. We also find a weakening in the relationship between improved economic performance and low income reduction for most family types between 1973 and 1995, and for all family types after 1980. This weakening is associated with rising pre-transfer income inequality among families. Increasing inequality has also reduced the negative impact of transfers on low income rates.

The role of ‘race’ in the likelihood of city participation in the United States public and section 8 existing housing programmes

Abstract: Research on US housing and politics provides evidence for persistent racial discrimination, dual housing markets (one for whites and one for blacks in particular) and racial segregation. Research also shows the relationship between government subsidised low‐income housing programmes and continued segregation. This work focuses on an additional aspect of racial discrimination in housing: local officials, capitulating to the housing industry, consider the possible effect government subsidised housing will have on racially segmented markets before entering some programmes. This paper explores the relationship between the size of the black population, as one indicator of the racial composition of a city, and the likelihood of city participation in public housing and Section 8 Existing housing. The quantitative analyses of US cities shows a negative relationship between the size of the black population and the likelihood of city participation in Section 8 Existing housing, a programme that provides pa...

Trickling Down or Fizzling Out? Economic Performance, Transfers, Inequality and Low Income

Abstract: The objectives of this paper are to determine the empirical relationships between economic performance, transfers and low income among Canadian families, and to explore whether these relationships have changed over time. Similar recent studies in the US find a weakening in the relationship between economic growth and low income reduction over the past 25 years. Using data from the Survey of Consumer Finances of Statistics Canada, we find that there is a statistically significant negative relationship between economic performance and the incidence of low income among families in Canada for the period from 1973 to 1995. Government transfers are also found to lift families above the low income threshold. These results are robust across different family types and for three different measures of low income. We also find a weakening in the relationship between improved economic performance and low income reduction for most family types between 1973 and 1995, and for all family types after 1980. This weakening is associated with rising pre-transfer income inequality among families. Increasing inequality has also reduced the negative impact of transfers on low income rates.

Effects of Management Compensation Schemes on Corporate Investment Decisions

Abstract: This paper examines the effects of management compensation schemes on corporate investment decisions. This is a significant study because it helps to understand such a relationship and to design the optimal management compensation scheme which induces the manager to act towards the goals and best interests of the company. Assuming that compensation schemes consist of flat salary, bonus payment, and stock options, I first examine the effects of alternative compensation schemes on corporate investment decisions under all‐equity financing, then examine the issue in a setting where a firm relies on debt financing. I find that managers tend to underinvest when they have a higher shareholding and a larger profit sharing percentage. This result is independent of the level of debt financing. I also find that the underinvestment problem can be alleviated by increasing financial leverage. These results and findings provide testable hypothesis for future research. I expect a negative relationship between corporate performance and each of compensation scheme of management shareholdings, stock options and profit sharing percentage, but a positive relationship with financial leverage.

Supervisor Support for the Permanent Replacement of Economic Strikers

Abstract: Sixty-one supervisors were surveyed to examine the importance of organization commitment, union approval, and quality of union-management relationship in explaining supervisor support for hiring permanent replacements in short and long strike situations. Organization commitment and union approval exhibited a unique negative relationship with support for hiring replacements in a short strike, and union approval exhibited a unique negative relationship with support for hiring replacements in a long strike situation.

An evaluation of global conservation effort: constraints and contrasts

Abstract: SUMMARY Measures of conservation effort can be expected to be partly dependent on available economic resources. The present study evaluates the relationships between conservation effort and resource availability. The uneven distribution of biodiversity and economic resources, as well as Conservation capacities between developed and developing nations, is also quantified. The absence of a relationship between indicators of conservation capacity and available economic resources suggests a lack of explicit national policy goals and conservation budgets, particularly with regard to the development of a biodiversity-related scientific capacity. A negative relationship between the biodiversity scientific capacity within developing nations and the amount of development aid received may be interpreted as either aid not being effectively channelled into building scientific capacity in the developing world, or it may reflect a lag period between investment and development. The variables reflecting available economi...

The Determinants of Management Expenses

Abstract: This paper develops a model which explains the determinants of the management expenses charged by U.S. equity funds. The study shows that for high quality managers, an increase in quality is associated with higher fees. In contrast, as the quality of the lower quality managers deteriorates, their fees increase. A non-linear negative relationship is found between the size of a fund and its management expenses. Economies of scope are also shown to exist between the number of funds within a mutual fund complex and the management expenses charged investors. Finally, while 12b-1 fees have been thought of as a substitute for load charges, this paper suggests that they are complements.

Labour Mobility and Unemployment : Some Evidence from Labour Force Survey

Abstract: The rise and persistence of unemployment emerged as a serious macroeconomics problem during the 1980s. This highlighted the possibility of imperfect labour mobility as significant factor. Thus, understanding the relationship between labour mobility and unemployment is important in analyzing the unemployment during the 1980s. Using Labour Force Survey (LFS) data from 1975 to 1990 inclusively, this dissertation analyzes this relationship at both aggregate and disaggregate levels. At the aggregate level, the relationship appears to be negative with no evidence that labour mobility drives aggregate unemployment. This negative relationship also emerges at industry and regional level. These results point against sectoral shock explanations for the rise in joblessness. However, both high unemployment industries and regions have higher mobility. This suggests that the unemployment can affect mobility differently at two levels. First, at the aggregate level, it may reduce mobility through its effects on job offer arrival probabilities, and the potential cost of changing industry. At the industry and regional level, it may raise mobility. Since the unemployment differences across industries and regions represent varying employment opportunities and prospects, high differences may encourage mobility towards low unemployment industries and regions. The data also suggests a role for individual heterogeneity. Among the selected high unemployment demographic groups, old workers, male workers, and nonwhite workers have low mobility. However, high unemployment young and manual workers, they have high labour mobility. Thus, low mobility as symptom of high unemployment only applied to certain groups. Policies constructed to reduce unemployment by raising mobility must target the appropriate groups.