Knowledge that Transforms

Using a new data set, this paper gives evidence in support of the intuitive notion that overqualified workers are less satisfied with their jobs and are more likely to quit. However, training time is inversely related to overqualification, which suggests why such seeming mismatches occur and may in fact be optimal. Copyright 1991 by MIT Press.

Several studies of housing price trends recommend combining statistical analysis to repeat sales of residential properties. Recently, price indices derived from these techniques have formed the basis for inferences about the "efficiency" of housing markets. This paper presents an improved methodology which combines inflation on repeat sales of unchanged properties, on repeat sales of improved properties, and on single sales, all in one joint estimation. Empirical evidence, based upon a rich sample of transactions on single family houses in a single neighborhood, indicates the clear advantages of the proposed methodology, at least in one typical application. Copyright 1991 by MIT Press.

Numerous articles have investigated the distribution of share prices, and find that the returns are fat tailed. Nevertheless, there is still controversy about the amount of probability mass in the tails, and hence about the most appropriate distribution to use in modeling returns. This controversy has proven hard to resolve, as the alternatives are non-nested. We employ extreme value theory, focusing exclusively on the larger observations in order to assess the tail shape within a unified framework. We find that at least the first two moments exist. This enables one to generate robust probabilities on large returns, which put the recent stock market swings into historical perspective.

Cletus C. Coughlin, Joseph V. Terza, Vachira Arromdee, State Characteristics and the Location of Foreign Direct Investment within the United States, The Review of Economics and Statistics, Vol. 73, No. 4 (Nov., 1991), pp. 675-683

This article examines the effect of relative technological capabilities on Japanese direct investment into the United States by looking simultaneously at industry conditions in the two markets. A negative binomial regression model is specified to estimate the effects of R & D capability and industry structure on a count measure of Japanese entries across 297 industries. The results indicate that Japanese direct investment in the United States is drawn to industries intensive in R & D expenditures summed across both countries; voluntary restraints on Japanese exports encourage direct investment. When the entries are disaggregated by mode (e.g., new plant or acquisition), there is a significant indication that joint ventures are used for the sourcing and sharing of U.S. technological capabilities. Copyright 1991 by MIT Press.

Three interrelated aspects of U.S. multinational corporation activity are analyzed here: the ability to shift profits from high-tax countries to low-tax countries; the impact of host country taxes and tariffs on the distribution of real capital; and the influence of these policies on international trade patterns of the United States and host countries. The cross-sectional empirical analysis indicates that the observed pattern of reported profits in high and low-tax countries is consistent with income shifting behavior and that real investment responds to host country effective tax rates and tariffs. The United States appears both to import more from and export more to low-tax countries where MNC investment is greater, but this bilateral focus must be amplified to consider multilateral effects if trade benefits are to be projected. Copyright 1991 by MIT Press.

The survival rates of over 11, 000 firms established in 1976 are compared across manufacturing industries. The variation in ten-year survival rates across industries is hypothesized to be the result of differences in the underlying technological regime and industry-specific characteristics, especially the extent of scale economies and capital intensity. Based on 295 four-digit standard industrial classification industries, new-firm survival is found to be promoted by the extent of small-firm innovative activity. The existence of substantial scale economies and a high capital-labor ratio tends to lower the likelihood of firm survival. However, these results apparently vary considerably with the time interval considered. Market concentration is found to promote short-run survival, while it has no impact on long-run survival. Copyright 1991 by MIT Press.

tag=1 data=Alcohol consumption during prohibition. by Jeffrey A. Miron and Jeffrey Zwiebel tag=2 data=Miron, Jeffrey A.%Zwiebel, Jeffrey tag=3 data=The American Economic Review, tag=4 data=81 tag=5 data=2 tag=6 data=May 1991 tag=7 data=242-247. tag=8 data=ALCOHOL%DRUGS tag=10 data=The burgeoning debate over drug legalisation in the United States has drawn renewed attention to the nation's experience with Prohibition. tag=11 data=1991/3/9 tag=12 data=91/0780 tag=13 data=CAB