Working Papers 2010–2019 (WP817–WP1312)

Recent theoretical analysis suggests that a reduction in the cost of exporting increases the degree of assortative matching between workers and firms in export-oriented industries. Changes that reduce…

We study the impact of the 1918 influenza pandemic on economic performance in Sweden. The pandemic was one of the severest and deadliest pandemics in human history, but it has hitherto received only s…

In games with continuum strategy sets, we model a player’s uncertainty about another player’s strategy, as an atomless probability distribution over the other player’s strategy set. We call a strategy…

This paper analyzes how institutional differences affect university entrepreneurship. We focus on ownership of faculty inventions, and compare two institutional regimes; the US and Sweden. In the US,…

It is well established within both the economics and power system engineering literature that hydro power can act as a complement to large amounts of intermittent energy. In particular hydro power can…

This paper makes use of individual data for 2004 to 2008 on owners of closely-held businesses in Sweden to estimate the role of both tax and non-tax determinants in the choice to be a closely-held cor…

Private equity firms are often criticized for laying off workers, but the evidence on who loses their jobs and why is scarce. This paper argues that explanations for job polarization also explain layo…

Social and cultural determinants of economic institutions and outcomes have come to the forefront of economic research. We introduce religiosity, measured as the share for which religion is important…

Relying on Forbes Magazine annual rankings for two decades, 1625 billionaires and their countries of birth and residence are identified, most of whom are self-made entrepreneurs. 13 percent of billion…

I generalize the workhorse model of network competition to include income effects in demand. Empirical work has shown income effects to be positive and statistically significant. Income effects delive…

We analyze the rate of formation, the characteristics, and the performance of different types of new firms in Sweden over a decade. Comparisons to Denmark, Brazil, and the U.S. suggest that the enviro…

Over the last twenty years we have seen an increasing use of in-work tax subsidies to encourage labor supply among low-income groups. In Sweden, a non-targeted earned income tax credit was introduced…

We show theoretically that the poor can benefit from price changes induced by higher income inequality. As the number of poor in a society increases, or when the income difference between rich and poo…

We use individual and multi-level data from Zambia on child nutritional health to test the absolute income hypothesis (AIH), the relative income hypothesis (RIH) and the income inequality hypothesis (…

The entry of large (“big-box”) stores and the accompanying drastic decrease in the overall number of stores represent a striking trend in retail. We use a dynamic model to measure the impact of the en…

We survey the literature on venture capital and institutions and present a case study comparing the development of the venture capital market in the US to Sweden. Our literature survey underscores tha…

Many governments promote small businesses for the dual reasons of fostering ‘breakthrough’ innovations and employment growth. In this paper we study the effects of tax and subsidy policies on entrepre…

This paper examines the interaction between intellectual property protection and competition policy on the choice of entrepreneurs with respect to commercialization as well as the rate of innovation.…

This study tests whether individuals who grow up with parents on welfare benefits are themselves more (or less) likely to be welfare recipients as young adults, compared to individuals who grow up in…

Existing studies of entrepreneurship focus on entrepreneurs whose individual contribution to wealth creation is typically trivial: self-employed persons. This paper investigates entrepreneurs whose in…

We propose nuclear capacity auctions as a means to improve the incentives for investing in nuclear power. In particular, capacity auctions open the market for large-scale entry by outside firms. Requi…

The Dispute Settlement (DS) system is a central feature of the World Trade Organization (WTO) Agreement. This compulsory and binding two-level mechanism for the adjudication of disputes between WTO Me…

We compare four approaches to network neutrality and network management regulation in a two-sided market model: (i) no variations in Quality of Service and no price discrimination; (ii) variations in…

High levels of wind power penetration will tend to affect prices in a deregulated electricity market. Much of the analysis in the literature has focused on the effect that wind power has on average el…

This chapter focuses on the role of corporate financial strategies to improve firms’ market valuations, and thus lower their cost of capital. The identification of successful strategies is accomplishe…

I investigate the effect of human capital on entrepreneurship using the National Longitudinal Survey of Youth - 1979. I find that individuals with higher measured intelligence and self-confidence are…

Users of the social networking service Facebook have the possibility to post status updates for their friends to read. In turn, friends may react to these short messages by writing comments or by pres…

This paper attempts to measure the size of South-South FDI in developing East Asia and the trends in it, and the characteristics of the investing countries and the investments themselves. It also summ…

We study the intergenerational transmission of cognitive and non-cognitive abilities between fathers and sons using population-wide enlistment data. Measurement error bias in fathers’ ability measures…

It is well known that communication often serves as a facilitator for cooperation in static games. Yet, communication can serve entirely different purposes in dynamic settings as communication during…

This paper considers the sealed bid and ascending auction, which both identifies the minimum Walrasian equilibrium prices and where truthful preference revelation constitutes an equilibrium. Even thou…

The current political turmoil in the Arab world has contributed to renewed interest in the Barcelona Process. This paper explores whether deeper integration in the form of trade facilitation – i.e. im…

Aiming to explore how the survival of trade flows has evolved over time, we analyze a rich data set of detailed imports to individual EU15 countries from 140 non-EU exporters, covering the period 1962…

The theory of the firm suggests that firms can respond to poor contract enforcement by vertically integrating their production process. The purpose of this paper is to examine whether firms' integrati…

Recent empirical evidence suggests that prices for some goods and services are higher in larger markets. This paper provides a demand-side explanation for this phenomenon when firms can choose how muc…

There are several theoretical accounts of public sector outsourcing. We note that leading theories give different predictions of the influence of political variables and test the predictions on a Swed…

We analyse a reform of notice periods for employer-initiated separations in Sweden, which reduced the notice periods for newly hired older workers substantially but implied minor or no changes in the…

We survey the literature on the effects of public sector outsourcing. Guided by theory, we systematically arrange services according to the type and magnitude of their contractibility problems. Taken…

We use a Swedish sickness insurance reform to show that among married couples a partner’s benefit level affects spousal labour supply. The spousal elasticity of sick days with respect to the partner’s…

This paper discusses a number of questions with regard to Sweden’s economic and political development:• How did Sweden become rich?• What explains Sweden’s high level of income equality?• What were th…

This paper develops an improved test of economic convergence or divergence using time series methods. The usefulness of the method is illustrated in an analysis of the growth pattern between Chinese r…

This paper studies how cognitive and social skills in childhood are related to the duration of unemployment in adolescence and early adulthood. I estimate a flexible proportional hazard rate model for…

Realized capital gains are typically disregarded in the study of income inequality. We show that in the case of Sweden this severely underestimates the actual increase in inequality and, in particular…

This paper examines the effects of collectively agreed increases in real minimum wages on employment transitions and hours among manual workers in the Swedish retail sector over the period 2001–05. Th…

In this paper we outline an evolutionary framework of entrepreneurial processes where by firms are started, grow, and exit from the market. We explain the important of such a framework in explaining b…

In industries with network effects, incumbents’ installed bases create barriers to entry that discourage entrepreneurs from developing new innovations. Yet, entry is not the only commercialization rou…

The objective of this paper is to study when and how much labor supply and savings of heirs respond to inheritances. We estimate fixed effects models following direct heirs, inheriting in 2004, during…

This article surveys the literature and adds to the evidence on the impact of employment protection legislation on employment. While stringent employment protection contributes to less turnover and jo…

In a recent paper, Colombier (2009) uses a robust estimation technique and claims to find empirical evidence that government size has not been detrimental to growth for OECD countries during the 1970…

Since the mid 1990s labor productivity growth in Sweden has been high compared to Japan, the US and the western EU-countries. While productivity growth has been rapid in manufacturing, it has been muc…

Using panel data from more than 100 countries around the world from 1988 through 2007, this paper examines the relationship between economic and social globalization and absolute income poverty ex pos…

One of the major reasons why inventors are awarded patents by governments is they encourage R&D investments and commercialization of inventions. If the patent holder commercializes his invention,…

In recent decades immigration of workers and refugees to Europe has increased substantially, and the composition of the population in many countries has consequently become much more heterogeneous in…

This paper presents results from a laboratory experiment studying the channels through which different law enforcement strategies deter cartel formation. With leniency policies offering immunity to th…

The literature on the relationship between the size of government and economic growth is full of seemingly contradictory findings. This conflict is largely explained by variations in definitions and t…

This paper explores the effects of deregulation and globalization on the dominant mode of corporate governance in Swedish public firms. The effects are multidimensional—the direction of change in corp…

This paper focuses on the ability of the labor market to correctly match heterogeneous workers to jobs within a given industry and the role that globalization plays in that process. Using matched work…

Political candidates on the right are more beautiful or are seen as more competent than candidates on the left in Australia, Finland, France, and the United States. This appearance gap gives candidate…

This paper investigates the effects of illegal file sharing (piracy) on music and movie sales. The Swedish implementation of the European Union directive IPRED on April 1, 2009 suddenly increased the…

In this introductory chapter to a collective volume, we build on Baumol’s (1990) framework to categorize, catalogue, and classify the budding research field that explores the interplay between institu…

Foreign direct investment has been important in the economic growth and global economic integration of developing countries over the last decades. Both Northeast and Southeast Asia, especially the lat…

This paper builds a theory of the shape of the distribution of total-factor productivity (TFP) across countries. The data on productivity suggests vast differences across countries, and arguably even…

Private equity buyouts have become a common element in the industrial development process. I survey the literature on the real economic effect of buyouts: employment, wages, productivity, and long-run…

The objective of this paper is twofold. First, against the background of existing empirical literature on the duration of trade which has found that international trade is often of strikingly short du…

A main component of custom unions is a common trade policy on imports from non-member countries. Trade policy covers both tariff and non-tariff barriers like trade procedures. We argue that since trad…

In this chapter we examine the role of the CFO in setting risk management strategy with respect to macroeconomic risk in particular, and we consider the information requirements for setting a strategy…

We investigate to what extent tolerance, as measured by attitudes toward different types of neighbors, affects economic growth. Data from the World Values Survey enables us to investigate tolerance–gr…

How should the world economy adapt to the increased demand for exhaustible resources from countries like China and India? To address that issue, this paper presents a dynamic model of the world econom…

Research on entrepreneurship has received an increased amount of interest in recent years, with self-employment being used as the most common proxy for “entrepreneurship” in empirical studies. However…

A strategically minded CFO will realize that strategic corporate risk management is about finding the right balance between risk prevention and proactive value generation. Efficient risk and performan…

Incentive effects of performance-based compensation schemes for management may be weakened or biased by macroeconomic influences on remuneration. These influences can be seen as reflecting luck from t…

The tax laws of most developed countries are debt biased since firms can deduct interest on debt but not on equity. This bias is known to distort investment decisions. However, less is known about how…

In this paper we treat an individual’s health as a continuous variable, in contrast to the traditional literature on income insurance, where it is regularly treated as a binary variable. This is not a…

Swedish elementary school children stopped receiving written end of year report cards following a grading reform in 1982. Gradual implementation of the reform creates an opportunity to investigate the…

The capacity of the transmission network determines the extent of integration of a multinational energy market. Cross-border externalities render coordination of network maintenance and investments ac…

In this paper we present survey evidence suggesting that there exists a sizeable fiscal illusion amongst the general public in Sweden. Respondents in a nation-wide and representative survey systematic…

North Korea is perceived by many as one of the most totalitarian societies of modern time. But in the wake of the economic collapse of the 1990s, North Korean totalitarianism has grappled with new con…

This paper studies the relationship between height and leadership. Using data from a representative sample of Swedish men, I document that tall men are significantly more likely to attain managerial p…

A recurring theme in evaluations of Swedish residential youth care is that treatment is often unplanned. In this paper, I show that planned treatment is strongly positively associated with treatment o…

This paper uses affiliate level data from Swedish multinationals to examine the impact of tax treaties on both overall affiliate sales and the composition of those sales. In line with previous results…

In this paper, I investigate whether instead of strengthening home-based production, government R&D-subsidies can induce R&D-intensive firms to locate production abroad. Investigating firm-lev…

Many developing countries would like to increase the share of modern or formal sectors in their employment. One way to accomplish this goal may be to encourage the entrance of foreign firms. They are…

Previous research, notably Baumol (1990), has highlighted the role of insti-tutions in channeling entrepreneurial supply into productive, unproductive or destructive activities. However, entrepreneurs…

The recent literature on the duration of trade has predominantly analyzed the determinants of trade flow durations using Cox proportional hazards models. The purpose of this paper is to show why it is…

The literature on trade facilitation has mostly focused on implications for trade volumes. However, recent theoretical contributions have emphasized that trade costs – such as transaction costs relate…

This study compares average earnings and productivities for men and women employed in roughly 200,000 Chinese industrial enterprises. Women’s average wages lag behind men’s wages by 11%, and this resu…

Public policy affects the prevalence and performance of both productive and high-impact entrepreneurship. High-impact entrepreneurship prospers when knowledge is successfully generated and exploited i…

In contrast to previous efforts to model the individual’s movement from wage work into entrepreneurship, we consider that individuals might transition incrementally by retaining their wage job while e…

This article consists of three parts. The first part deals with theory. We evaluate the pros and cons of government involvement in urban housing and of renting versus ownership. In the second part, we…

This study examines how globalization of corporate governance practices influences the risk of European CEOs being dismissed. We argue that the harsh monitoring of the American corporate governance sy…

I construct a model of public policy development, and use the model to explain why the United States has a comparatively small public sector, but instead a large "private welfare state" with employmen…

This essay argues that the economic contribution of certain firms – be they small, young or rapidly growing – has to be understood in a broader context of creative destruction. Growth of some firms re…

This paper presents a detailed analysis of voters’ responses to municipality and regional-level unemployment and economic growth, using panel data on 284 municipalities and 9 regions and covering Swed…

This study examines the determinants of citation success among authors who recently published their work in economic history journals. We find that full professors, authors from non-economic history d…

This paper carries out a critical reappraisal of the two contending theories purporting to explain long-run government spending: Wagner’s Law and different variants of the ratchet effect. We analyze d…

Private equity firms are an important part of the industrial restructuring process. We argue that the key is temporary ownership. Buying to sell induces aggressive restructuring since the equilibrium…