Working Papers 1990–1999 (WP256–WP527)

This paper discusses how ICT and emerging electronic commerce in consumer products influence the relative efficiency in production of households and firms, resulting in changes in the division of task…

Bergin and Lipman (1996) show that the refinement effect from the random mutations in the adaptive population dynamics in Kandori, Mailath and Rob (1993) and Young (1993) is due to restrictions on how…

This paper presents a model to explain why both industry leaders and follower firms often invest in R&D and explores the welfare implications of these R&D investment choices. Regardless of ini…

This study uses data on Swedish multinationals to estimate cross elasticities of labour demand in different locations. With a vertical decomposition of the firm's activities, whether there is substitu…

Most previous studies have found evidence at the aggregate level that female entrepreneurs underperform relative to their male counterparts. This study conducts a comprehensive test of this finding. T…

The purpose of this paper is to examine the effects of European integration on the location of investments by Swedish multinational corporations (MNCs). Evidence is presented about the extent to which…

Investigating the robustness of the skill-biased technical change hypothesis, this analysis incorporates two novel features. First, effective labor is modeled as the product of a quantity measure - nu…

This paper studies the interaction between the incentives for predation and mergers. I show that the incentive for predation in an oligopoly is limited by the subsequent competition for the prey. This…

Mergers and acquisitions (M&A) is the dominant form of Foreign Direct Investment (FDI), but has received but scarce attention in the theory literature on trade and investment. This paper highlight…

FDI has received surprisingly little attention in theoretical and empirical work on openness and growth. This paper presents a theoretical growth model where MNCs directly affect the endogenous growth…

This paper analyzes a three-stage optimization problem in which a firm chooses (i) its technology, by deciding on a level of R&D, (ii) whether this technology is to be used in a domestic or in a f…

We demonstrate a "preemptive merger mechanism" which may explain the empirical puzzle why mergers reduce profits, and raise share prices. A merger may confer strong negative externalities on the firms…

In conjunction with its tercentenary celebrations in 1968, Sveriges Riksbank (Bank of Sweden) instituted a new award, "The Central Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel"…

The search for growth-promoting policies is found to demand knowledge of how growth depends upon actions of entrepreneurs and how these actions depend upon the prevailing institutions. While instituti…

This paper considers a small open economy whit an input-output industrial structure that creates vertical linkages multiple equilibria. An imperfect labor market is introduced by assuming unionized la…

Investment in human capital is a central issue in the literature on economic growth. The purpose of this study is to shed light on the economic incentives for investment in university education across…

This paper evaluates the welfare consequences of the failing firm doctrine in the EU and US merger laws. I combine an oligopoly model with an "endogenous valuations" auction model. Thereby, I take int…

A unique database on individual tender documents is used to analyze the relationship between strategical factors and outcomes when technical consultancy firms (TCFs) compete for foreign assignments in…

In the models of Young (1993a,b), boundedly rational individuals are recurrently matched to play a game, and they play myopic best replies to the recent history of play. It could therefore be an advan…

This paper presents a model of R&D-driven growth without scale effects where firms can engage in both horizontal and vertical R&D activities. Unlike in earlier models of R&D-driven growth…

This paper analyses the effect on agglomeration tendencies of allowing firms to become multi-region firms in a standard model of trade and location. More specifically, we introduce horizontal and vert…

Can income equality be combined with high economic efficiency and rapid economic growth? Fortunately, we need not to answer such a general question. Indeed, the question is poorly phrased. The relatio…

A number of cross-country comparisons do not find a robust negative relationship between government size and economic growth. In part this may reflect the prediction in economic theory that a negative…

Bergin and Lipman (1996) show that the refinement effect from the random mutations in the adaptive dynamics in Kandori, Mailath and Rob (1993) and Young (1993) is due to restrictions on how these muta…

This paper proposes an approach for prediction the pattern of mergers when different mergers are feasible. It generalizes the traditional IO approach, employing ideas on coalition-formation from coope…

It is extraordinarily difficult to determine the extent to which the gender wage gap reflects discriminatory behaviors by employers or differences in productive capacities between men and women. We no…

The analysis provides a new explanation for two widespread problems concerning European unemployment policy: the disappointingly small effect of many past reform measures on employment, and the politi…

Sweden experienced exceptionally fast economic growth during the century-long period 1870-1970. This illustrates that a decentralized market economy, highly open to international transactions, may be…

This paper considers the possibility of letting a pay-go pension system mimic a fully funded pension system. Generically, it turns out to be impossible to make a less than fully funded pension system…

This thesis contains two studies. The first study investigates the income distribution among Namibian households. The second study examines the differences in earnings between males and females in the…

In this paper it is argued that the size distribution of firms may largely be determined by institutional factors. This hypothesis is tested in an exploratory fashion by studying the evolution of the…

This paper takes a step towards formalizing the theoretical interconnections among four post-Industrial Revolution phenomena - the industrialization and growth take-off of rich "northern" nations, mas…

Lam and Schoeni (1993) consider an equation where earnings are explained by schooling and ability. They assume that ability data are lacking and that schooling is measured with error. The estimate obt…

In an analysis of the risk-sharing properties of different types of pension systems, we show that only a fixed-fee pay-as-you-go (PAYG) pension systems can provide intergenerational risk sharing for l…

In a recent review article Jonas Agell, Thomas Lindh and Henry Ohlsson (1997) claim that theoretical and empirical evidence does not allow any conclusion on whether there is a relationship between the…

We compare the relation between foreign affiliate production and parent employment in U.S. manufacturing multinationals with that in Swedish firms. U.S. multinationals appear to have allocated some of…

Evolutionary game theory studies the robustness of strategy profiles and sets of strategy profiles with respect to evolutionary forces in games played repeatedly in large populations of boundedly rati…

The paper demonstrates how trade between developing countries can cause the divergence of long-run growth among these countries. The model describes two symmetric countries trading with each other and…

Evolutionary theorizing has a long tradition in economics. Only recently has this approach been brought into the framework of non-cooperative game theory. Evolutionary game theory studies the robustne…

Demand for less skilled workers decreased dramatically in the US and in other developed countries over the past two decades. We argue that pervasive skill biased technological change rather than incre…

We analyse symmetric coordination games à la Bryant (1983) where a number of players simultaneously choose efforts from a compact interval and the lowest effort determines the output of a publi…

This study investigates changes in the number and the size distribution of firms in Sweden in the period 1968-1993. The number and the size distribution of Swedish firms are compared to the number and…

What factors determine national differences in the size and industry distribution of employment? This study stresses the role of business taxation, employment security laws, credit market policies, wa…

This paper addresses various attempts by so-called new Keynesians, writing mainly in the 1980s and 1990s, to strengthen the analytical basis, in particular the microeconomic foundations, of these asse…

Attention is called to a little explored scarce resource, named 'economic competence', which combines features of human capital and bounded rationality, and can be defined as the non-transferable ('ta…

This paper develops a new analytical approach to the old question whether market conditions may influence the internal efficiency of firms. The basic textbook model of the firm is slightly extended to…

This note elaborates an extension of the paper "Social Norms, the Welfare State, and Voting" by Lindbeck, Nyberg, and Weibull [1]. That paper studies the effects of a social norm against living off ot…

Market exchange is subject to an endogenously-determined level of predation which impedes specialization and gains from trade. Utility-maximizing agents opt between careers in specialized production a…

This paper analyzes the interplay between social norms and economic incentives in the context of work decisions in the modern welfare state. We assume that to live off one's own work is a social norm,…

Post World War II European welfare states experienced several decades of relatively low unemployment, followed by a plague of persistently high unemployment since the 1980's. We impute the higher unem…

This thesis consists of one essay in industrial organization and two essays in non-cooperative game theory.

The paper examines the implications of an important aspect of the ongoing reorganization of work - the move from occupational specialization toward multi-tasking - for centralized wage bargaining. The…

This paper develops a new analytical approach to the old question whether market conditions may influence the internal efficiency of firms. The basic textbook model of the firm is slightly extended to…

This paper presents a dynamic general equilibrium model of trade between two advanced countries in which both innovation and skilled acquisition rates are endogenously determined. The model offers a N…

For the U.S. and for Norway it has been established that men and women working in the same occupation for the same employer receive more or less the same pay. So-called within-job wage discrimination…

What were the asserted complementarities between the welfare state and full-employment policies, and why do these complementarities look less convincing today?

This paper shows that the liberalisation of foreign direct investment (FDI) tends to make the effect of labour costs on domestic investment and labour demand more negative. Using data from Germany, it…

We use a specific-factor model to examine the conditions under which policy-makers are able to increase aggregate production of high-tech goods by production or R&D-subsidies in the short and long…

How do we explain the poor employment performance in Western Europe since about the-1970s? This question is in fact twofold : What initiated the dramatic rise in employment, and waht mechanisms have m…

This paper contributes to research endogenizing multinational firms in general-equilibrium trade models. We attempt to integrate separate contributions on horizontal multinationals which produce the s…

We propose a simple model to analyze the widespread idea that a necessary condition for firms to make foreign direct investments is that they have firm-specific advantages with respect to host country…

These notes discuss some of the main results and models from the theory of international trade under imperfect competition. They are necessairy both selective and superficial. Multinationals are consp…

This paper presents recent trends in the foreign activities of Swedish multinationals. The focus is on the distribution of production and R&D between the MNCs' domestic and foreign units, and the…

Several recent articles claim that pre-tax income equality promotes growth. Equality is argued to dampen demand for redistributive economic policies that tax returns to growth-enhancing activities suc…

This paper analyzes the utilization of R&D results in the home and foreign plants of Swedish multinational enterprises (MNEs). The empirical findings indicate that the firms' R&D undertaken in…

This paper examines the determinants of overseas R&D by Swedish multinationals. Our empirical results indicate that the location of R&D abroad to a large extent is motivated by the need to ada…

This paper analyzes the simultaneous relationship between R&D and foreign sales in Swedish multinational enterprises in the manufacturing sector. We argue that this two-way relationship should esp…

This paper examines whether Swedish multinational enterprises transfer R&D-generated knowledge to their foreign affiliates. The empirical results suggest that such technology transfer takes place…

A quality-adjusted specification of labor is suggested which allows firm training to affect labor efficiency. To assess the cost and productivity effects, this specification is integrated into a flexi…

This paper analyzes the interplay between economic incentives and social norms in a public finance context. We assume that to live off one's own work is a social norm, and that the larger the populati…

In spite of some cutbacks in entitlements, many welfare states' spending has continuously increased over the past decades, leading to larger tax burdens and often higher marginal tax rates. Proposals…

This paper examines the evolution of a skew distribution of firm sizes from the viewpoint of the 'Bounds' approach to market structure. It confines attention to the role played by non-strategic factor…

The paper shows how prolonged price inertia can arise in a macroeconomic system in which there are temporary price rigidities as well as production lags in the use of intermediate goods. In this conte…

This paper examines equilibrium and stability in symmetric two-player cheap-talk games. In particular, we characterize the set of neutrally stable outcomes in finite cheap-talk 2 x 2 coordination game…

This paper deals with economic incentives and welfare-state arrangements in OECD countries. This paper emphasises what may be called "dynamic" incentive issues, i.e. incentive effects that envolve ove…

The purpose of this papers is confined to illuminating the aspect: Has Sewedish economic growth been slow relative to other industrialised countries in recent decades, i.e. is Sweden lagging behind.

In what follows, we examine the consequences of the development for the reorganization of work, the breack-down of occupational barriers, the transformation of job opportunities, and the implications…

Theoretical studies have shown that capital gains taxes in the housing market may create lock-in effects but so far no empirical evidence has been presented regarding the size of these effects. For a…