2008


781. Multinational Firms and Job Tasks

Katariina Nilsson Hakkala, Fredrik Heyman and Fredrik Sjöholm

We use Swedish matched employer-employee data to analyze the impact of multinational activity and foreign acquisitions on the relative demand for different job tasks. We contribute to the literature by using a conceptualization from the recent literature…


780. Corporate Distress and Restructuring with Macroeconomic Fluctuations: The Cases of GM and Ford

Lars Oxelheim and Clas Wihlborg

Traditional methods for evaluating corporate credit risk rarely consider the impact of the macro economy on corporate value and performance. We argue that lenders and management can obtain valuable information about the need for and approach to…


779. One Size Fits All? The Effects of Teacher Cognitive and Non-cognitive Abilities on Student

Erik Grönqvist and Jonas Vlachos

Teachers are increasingly being drawn from the lower parts of the general ability distribution, but it is not clear how this affects student achievement. We track the position of entering teachers in population-wide cognitive and non-cognitive ability…


778. Is the Elephant Stepping on its Trunk? The Problem of India's Unbalanced Growth

Robin Douhan and Anders Nordberg

It is often assumed that recent success in the high-technology software industry will lead India's development. However, evidence suggest that basic manufacturing industry is stagnant. This paper proposes a mechanism that ties these two trends together. A…


777. Getting a Better Price: Strategic Behavior before Changes in Ownership of Corporate Assets

Richard Friberg, Pehr-Johan Norbäck and Lars Persson

We propose a model of investments prior to corporate ownership changes. We derive conditions under which the selling of a firm triggers overinvestment by both the seller and the buyer prior to the asset transfer. In a setting with Cournot competition, we…


776. Venture Capitalists, Asymmetric Information, and Ownership in the Innovation Process

Simona Fabrizi, Steffen Lippert, Pehr-Johan Norbäck and Lars Persson

In this paper we construct a model in which entrepreneurial innovations are sold into oligopolistic industries and where adverse selection problems between entrepreneurs, venture capitalists and incumbents are present. We show that as exacerbated…


775. Intergenerational Top Income Mobility in Sweden – Capitalist Dynasties in the Land of Equal Opportunity?

Anders Björklund, Jesper Roine and Daniel Waldenström

This paper presents new evidence on intergenerational mobility in the top of the income and earnings distribution. Using a large dataset of matched father-son pairs in Sweden, we find that intergenerational transmission is very strong in the top, more so…


774. Sweden: A Minimum Wage Model in Need of Modification?

Per Skedinger

Swedish minimum wages are not regulated by law, but subject to bargaining between employers and trade unions and form part of collective agreements. This paper provides an overview of the Swedish minimum wage system, its characteristics and effects on…


773. Market Power in the Nordic Wholesale Electricity Market: A Survey of the Empirical Evidence

Sven-Olof Fridolfsson and Thomas Tangerås

We review the recent empirical research concerning market power on the Nordic wholesale market for electricity, Nord Pool. There is no evidence of blatant and systematic exploitation of system level market power on Nord Pool. However, generation companies…


772. Should R&D Champions be Protected from Foreign Takeovers?

Olivier Bertrand, Katariina Nilsson Hakkala, Pehr-Johan Norbäck and Lars Persson

We analyze how the entry mode of Foreign Direct Investments (FDI) affects affiliate R&D activities. Using unique affiliate level data for Swedish multinational firms, we first present empirical evidence that acquired affiliates have a higher level of…


771. The Global Award for Entrepreneurship Research

Magnus Henrekson and Anders Lundström

The International Award for Entrepreneurship and Small Business Research was instituted in 1996, and it is now firmly established as the leading Prize for outstanding research contributions in the area. Thanks to a generous donation from the Swedish…


770. Selfish and Prospective: Theory and Evidence of Pocketbook Voting

Mikael Elinder, Henrik Jordahl and Panu Poutvaara

We present and test a theory of prospective and retrospective pocketbook voting. Focusing on two large reforms in Sweden, we establish a causal chain from policies to sizeable individual gains and losses and then to voting. The Social Democrats proposed…


769. Winners and Losers in the Panel Stage of the WTO Dispute Settlement System

Bernard Hoekman, Henrik Horn and Petros C. Mavroidis

A significant body of research has sought to examine claims that developing countries are under-represented as complainants, and/or over-represented as respondents in the WTO dispute settlement system. Most of this literature has focused on their…


768. Globalization, Transparency and Economic Growth: The Vulnerability of Chinese Firms to Macroeconomic Shocks

Lars Oxelheim

The process of globalization encompasses economic and financial integration. Abolition of capital controls and dismantling of barriers of different kinds are important ingredients of the process that will entirely change the exposure of previously…


767. Finance-specific Factors as Drivers of Cross-border Investment – An OLI Perspective

Jens Forssbaeck and Lars Oxelheim

In this paper we empirically test the role of firm-specific financial characteristics as drivers of international investment and production. We hypothesize that financial strength generates advantages that can be exploited through cross-border investment…


766. Entrepreneurship and Second-best Institutions: Going Beyond Baumol’s Typology

Robin Douhan and Magnus Henrekson

This paper reconsiders the predominant typology pioneered by Baumol (1990) among productive, unproductive and destructive entrepreneurship. It is shown that the foundation of Baumol’s classificatory scheme is the restrictive concept of first-best…


765. Is Financial Risk-taking Behavior Genetically Transmitted?

David Cesarini, Magnus Johannesson, Paul Lichtenstein, Örjan Sandewall and Björn Wallace

In this paper, we use a sample of almost 30,000 Swedish mono- and dizygotic twins to study the heritability of financial risk-taking. Following a major pension reform in the year 2000, virtually all Swedish adults had to simultaneously make a finnancial…


764. The Effects of Displacement on Self-employment Survival

Jenny Nykvist

A large literature has studied the effect of displacement on labor market outcomes in general, but none has evaluated how the displaced manage as self-employed. This paper studies how the survival of the business is affected by displacement in connection…


763. A Continuous Model of Income Insurance

Assar Lindbeck and Mats Persson

We develop a simple yet realistic model of income insurance, where the individual’s ability and willingness to work is treated as a continuous variable. In this framework, income insurance not only provides income smoothing, it also relieves the…


762. Comment on Education Returns of Wage Earners and Self-employed Workers

Henrik Jordahl, Panu Poutvaara and Juha Tuomala

In a recent paper, García-Mainar and Montuenga-Gómez (2005) apply the generalized IV model of Hausman and Taylor to estimate education returns of wage earners and the self-employed in Portugal and in Spain. Our examination reveals several problems which…


761. Productive and Destructive Entrepreneurship in a Political Economy Framework

Robin Douhan and Magnus Henrekson

Recent research has highlighted the role of institutions in channeling entrepreneurs into activities with positive or negative effects on overall productivity. Embedding central elements from these theories into a political economy framework reveals the…


760. The Alert and Creative Entrepreneur: A Clarification

Israel M. Kirzner

Israel M. Kirzner is the 2006 winner of The International Award for Entrepreneurship and Small Business Research (the FSF-Nutek Award). In this Prize Lecture he argues that a number of those who have commented on his work have misunderstood certain…


759. Renewal of Patents and Government Financing

Roger Svensson

I apply a survival model to a detailed dataset of Swedish patents to estimate how different factors affect the likelihood of patent renewal. Since the owners know more about the patents than potential external financiers, there is a problem of asymmetric…


758. Colonial Heritage and Economic Development

Andrea Asoni

While the importance of institutions for explaining cross-country income differences is widely recognized, comparatively little is known about the origins of economic institutions. One strand of the literature emphasizes cultural differences while another…


757. Competencies and Institutions Fostering High-growth Firms

Magnus Henrekson and Dan Johansson

High-growth firms (HGFs) are critical for net job creation and economic growth. We analyze HGFs using the theory of competence blocs, linking firm growth to property rights and the interaction of complementary expertise. Specifically, we discuss how the…


756. Game-theoretical, Strategic Forward Contracting in the Electricity Market

Pär Holmberg

Forward sales is a credible commitment to aggressive spot market bidding, and it mitigates producers’ market power in electricity markets. Still it can be profitable for a producer to make such a commitment if it results in a soft response from…


755. Social Interactions and Labor Market Outcomes in Cities

Yves Zenou

We develop a model where information about jobs is essentially obtained through friends and relatives, i.e. strong and weak ties. Workers commute to a business center to work and to interact with other people. We find that housing prices increase with the…


754. How Differences in Property Taxes within Cities Affect Urban Sprawl?

Yan Song and Yves Zenou

This article attempts a formal analysis of the connection between the differentiated property tax rates within urban areas and urban spatial pattern in U.S. cities. We first develop a duocentric-city model where the Central Business District (CBD) is…


753. Are Shirking and Leisure Substitutable? An Empirical Test of Efficiency Wages Based on Urban Economic Theory

Stephen L. Ross and Yves Zenou

Recent theoretical work has examined the spatial distribution of unemployment using the efficiency wage model as the mechanism by which unemployment arises in the urban economy. This paper extends the standard efficiency wage model in order to allow for…


752. Endogenous Job Destruction and Job Matching in Cities

Yves Zenou

We propose a spatial search-matching model where both job creation and job destruction are endogenous. Workers are ex ante identical but not ex post since their job can be hit by a technological shock, which decreases their productivity. They reside in a…


751. Democracy, Autocracy and the Likelihood of International Conflict

Thomas Tangerås

This is a game-theoretic analysis of the link between regime type and international conflict. The democratic electorate can credibly punish the leader for bad conflict outcomes, whereas the autocratic selectorate cannot. For the fear of being thrown out…


750. Privatization of Credence Goods: Theory and an Application to Residential Youth Care

Erik Lindqvist

A wide range of services provided by the public sector are credence goods, i.e., services for which the producer has private information whether a certain treatment is needed or not. This paper studies how ownership affects the incentives for producers to…


749. Political Polarization and the Size of Government

Erik Lindqvist and Robert Östling

We study the effect of political polarization on government spending and redistribution using the dispersion of self-reported political preferences as our measure of polarization. Politically polarized countries have lower levels of redistribution and…


748. Efficiency and the Provision of Open Platforms

Joacim Tåg

Private firms may not have efficient incentives to allow third-party producers to access their platform or develop extensions for their products. Based on a two-sided market model, I discuss two reasons for why. First, a private firm may not be able to…


747. Open Versus Closed Platforms

Joacim Tåg

This paper studies an industry in which firms can choose to provide open or closed platforms. Open platforms, as opposed to closed, are extendable so third-party producers can develop extensions for them. Building on a two-sided market model, I show that…


746. Executive Compensation and Macroeconomic Fluctuations

Lars Oxelheim, Clas Wihlborg and Jianhua Zhang

Macroeconomic fluctuations affect corporations’ performance through demand and cost conditions. Incentive effects of performance-based compensation schemes for management may be weakened or biased by macroeconomic influences if management is unable to…


745. EU – China and the Non-transparent Race for Inward FDI

Lars Oxelheim and Pervez Ghauri

In this paper it is argued that the restructuring following the stiffer competition stemming from increased global integration will trigger a race between countries to attract inward foreign direct investment (FDI). It is further argued that this race…


744. Privatization, Investment and Ownership Efficiency

Richard Friberg, Pehr-Johan Norbäck and Lars Persson

We provide a model that explains the following empirical observations: i) private ownership is more efficient than public ownership, ii) privatizations are associated with increases in efficiency and iii) the increase in efficiency predates the…


743. Cross-Border Mergers & Acquisitions Policy in Service Markets

Pehr-Johan Norbäck and Lars Persson

We provide facts showing that in service markets: (i) restrictions on foreign direct investment (FDI) are under reform, (ii) cross-border Mergers & Acquisitions dominate as the entry mode of FDI, and (iii) there is often a high market concentration.…


742. Does Hedonic Price Indexing Change Our Interpretation of Economic History? Evidence from Swedish Electrification

Harald Edquist

Rapid price decreases for ICT-products in the 1990s have been largely attributed to the introduction of hedonic price indexes. Would hedonic price indexing also have large effects on measured price and productivity during other technological…


741. Financial Determinants of Foreign Direct Investment

Jens Forssbæck and Lars Oxelheim

We argue that mainstream FDI theory underplays financial motivations for interna-tional investment, and suggest several possible channels for a distinct cost-of-capital effect on FDI. Using a sample of European firms’ cross-border acquisitions, and…


740. The WTO Dispute Settlement System 1995–2006: Some Descriptive Statistics

Henrik Horn and Petros C. Mavroidis

The purpose of this paper is to report some initial findings based on the WTO Dispute Settlement Data Set (Ver. 2.0) that the authors have compiled for the World Bank. The data set contains approximately 28 000 observations on the workings of the Dispute…


739. The Permissible Reach of National Environmental Policies

Henrik Horn and Petros C. Mavroidis

Trading nations exchange tariff concessions in the context of trade liberalizing rounds. Tariffs, nonetheless, are not the only instrument affecting the value of a concession. Domestic instruments affect it as well, but public order is not negotiable,…


738. Fines, Leniency and Rewards in Antitrust

Maria Bigoni, Sven-Olof Fridolfsson, Chloé Le Coq and Giancarlo Spagnolo

This paper reports results from an experiment studying how fines, leniency programs and reward schemes for whistleblowers affect cartel formation and prices. Antitrust without leniency reduces cartel formation, but increases cartel prices: subjects use…


737. Protection of Property Rights and Growth as Political Equilibria

Andrea Asoni

This paper presents a survey of the literature on property rights and economic growth. It discusses different theoretical mechanisms that relate property rights to economic development. Lack of protection of property rights can result in slow economic…


736. Will Privatization Reduce Costs?

Erik Lindqvist

I develop a model of public sector contracting based on the multitask framework by Holmström and Milgrom (1991). In this model, an agent can put effort into increasing the quality of a service or reducing costs. Being residual claimants, private owners…


735. Identity and Redistribution

Erik Lindqvist and Robert Östling

This paper models the interaction between individuals' identity choices and redistribution. Both redistributive polices and identity choices are endogenous, and there might be multiple equilibria. The model is applied to ethnicity and social class. In…


734. Competition, Takeovers and Gender Discrimination

Fredrik Heyman, Helena Svaleryd and Jonas Vlachos

Theories of taste-based discrimination predict that competitive pressures will drive discriminatory behavior out of the market. Using detailed matched employer-employee data, we analyze how firm takeovers and product market competition affect firms’…


733. Gazelles as Job Creators – A Survey and Interpretation of the Evidence

Magnus Henrekson and Dan Johansson

It is often claimed that small and young firms account for a disproportionately large share of net employment growth. We conduct a meta analysis of the empirical evidence regarding whether net employment growth rather is generated by a few rapidly growing…


732. Entrepreneurship and the Theory of Taxation

Magnus Henrekson and Tino Sanandaji

Taxation theory rarely takes entrepreneurship into consideration. We discuss how this omission affects conclusions derived from standard models of capital taxation when applied to entrepreneurial income. Some of the defining features of entrepreneurship…


731. Prospects for the Welfare State

Assar Lindbeck

It is useful to distinguish between exogenous and endogenous factors behind contemporary and expected future problems for the welfare state. This paper tries to identify major problems of both types and to indicate alternative reform possibilities to deal…


730. Trading Profiles and Developing Country Participation in the WTO Dispute Settlement System

Joseph Francois, Henrik Horn and Niklas Kaunitz

It has been alleged since its inception that the WTO Dispute Settlement (DS) mechanism is biased against developing countries, as manifested in e.g. allegedly too low rates of dispute initiation. To shed light on this issue, this study analyses the…


729. How Wage Compression Affects Job Turnover

Fredrik Heyman

I use Swedish establishment-level panel data to test Bertola and Rogerson’s (1997) hypothesis of a positive relation between the degree of wage compression and job reallocation. Results indicate that the effect of wage compression on job turnover is…


728. Lady and the Trump: Status and Wealth in the Marriage Market

Johan Almenberg and Anna Dreber

We examine a relatively neglected aspect of intergenerational transmission of economic standing, namely culturally determined status markers and their valuation in the marriage market. We take nobility to be such a status marker. Using data on Swedish…


727. Network Neutrality on the Internet: A Two-sided Market Analysis

Nicholas Economides and Joacim Tåg

We discuss network neutrality regulation of the Internet in the context of a two-sided market model. Platforms sell broadband Internet access services to residential consumers and may set fees to content and application providers on the Internet. When…


726. Intellectual Property Rights and Competition Policy

Mattias Ganslandt

Intellectual property rights and competition policy are intimately related. In this paper I survey the economic literature analyzing the interaction between intellectual property law and competition law and how the boundary between these two policies is…

An Agenda for Europe

Institutional Reform for Innovation and Entrepreneurship

Omslag 2017 Institutional Reform for Innovation and Entrepreneurship.jpg

The authors of this book, Niklas Elert, Magnus Henrekson and Mikael Stenkula, advise the economies of the European Union to become more entrepreneurial in promoting innovation and economic growth. The authors propose a reform strategy with respect to several aspects to achieve this goal.

Events

Seminars organized by IFN

 

To present ongoing research informal brown-bag seminars are held on Mondays at 11:30 am. This is an opportunity for IFN researchers to test ideas and results.

Academically oriented seminars are most of the time held on Wednesdays at 10 am. At these events researchers from IFN and other institutions present their research.

In addition, IFN organizes seminars open to the public. Topics for these are derived from the IFN research.

Research Institute of Industrial Economics, Grevgatan 34 - 2 fl, Box 55665, SE-102 15 Stockholm, Sweden | Phone: +46-(0)8-665 45 00 | info@ifn.se