The Journal of Business Inquiry

Empirical Investigation of the Impact of Multilateral Trade on Income Convergence Across Countries

Lei Zhou, Basudeb Biswas, Chris Fawson, Peter J. Saunders — Mon, 28 Jan 2019 00:00:00 +0000

This paper investigates empirically the effects of established country-to-country trade on income convergence across countries. Using the Î²-convergence criterion we demonstrate that poorer economies grow faster than richer economies with international trade. Consequently, we find empirical evidence of a convergence in per capita income among richer and poorer countries. Monte Carlo models are estimated to simulate the characterization of Î²-convergence in randomly created trading groups of 8 to 23 member countriesâ€™ economies. Our results indicate that income convergence is less likely to occur in our randomly created trading partnerships than in those that are formed as part of existing trade relationships. This result reaffirms the argument that countries that have established trade relationships are more likely to experience income convergence than countries that lack such trade relationships. Additionally, our research provides new empirical evidence on the impact of international trade on economic growth in general. This information is particularly valuable for the current analyses of the costs and benefits of restricting international trade in the U.S. and elsewhere.

Intangibles and the Market Value of Biopharmaceutical Startups

Rosa Morales, Fatos Radoniqi — Mon, 28 Jan 2019 00:00:00 +0000

This paper investigates the relationship between various measures of intangible capital and the market valuation of young biopharmaceutical firms. We employ a non-linear model to measure the impact of R&D, patents, alliances, organizational capital, and mergers on the value of 349 newly-incorporated firms between 1980 and 2006. We find that, with the exception of mergers, our measures of intangible capital have positive and significant effects on market values; the impact of R&D declines as firms mature; and the omission of either alliances or organizational capital leads to a significant overstatement of the influence of R&D.

Relationships Between Entrepreneurial Attitudes and Intentions in an Experiential Education

Vance Gough — Mon, 28 Jan 2019 00:00:00 +0000

The aim of entrepreneurship education is to promote entrepreneurial behavior. Governments encourage universities to teach entrepreneurship to promote entrepreneurial behavior to launch new ventures, to create jobs, and to promote economic growth. Entrepreneurial attitude, intention, and behavior are different entities. While oneâ€™s intention may be followed by a behavior, oneâ€™s behavior more predictably follows oneâ€™s attitude. This paper seeks to demonstrate the relationship between entrepreneurial attitude and entrepreneurial intent to better predict oneâ€™s entrepreneurial behavior. These findings have potential implications for Entrepreneurship Education, particularly in the design and implementation of androgogy with regards to outcomes-based learning.

Performance Efficiency Evaluation of U.S. Credit Unions Around the 2009 Global Recession: A Data Envelopment Analysis Approach

Lijuan Sun, Xu Sun, Monika K. Rabarison — Wed, 30 Jan 2019 00:00:00 +0000

This paper examines the impact of the latest economic recession on performance efficiency of U.S. credit unions using Data Envelopment Analysis (DEA), a non-parametric method. We find that larger credit unions and credit unions with lower loss loan provisions tend to have higher efficiency. Our results reveal that, compared to the pre-recession period, the recession and the post-recession periods affected the efficiency of Federal Credit Unions (FCUs) and Federally Insured State-Chartered Credit Unions (FISCUs) differently. FISCUs have significantly higher efficiency than FCUs before the recession but FCUs exhibit higher efficiency during the recession and post-recession periods.

Top Management Team Pay and Company Performance Before and After Say-on-Pay

Christine M. Newman, Joseph Newman — Wed, 30 Jan 2019 00:00:00 +0000

Top management team pay rose enough to cause an outcry that resulted in companies having to offer shareholders nonbinding say-on-pay votes to approve or disapprove pay beginning in 2011. The votes were supposed to reduce excessive pay, but tests of their efficacy have not yet appeared. This paper tests the efficacy of the votes by examining top management team pay before and after the say-on-pay mandate. Our model explains top management team pay with company characteristics using fixed effects regression and robustness checks. Results from a sample of large U.S. companies suggest that both nominal and real pay fell in the five years before say-on-pay, but do not suggest that pay either fell or rose in the five years after say-on-pay.

Flat Versus Graduated Tax Regimes: Economics-Based vs. Psychology-Based Explanations for Individual Preferences

Sarah C. Lyon, Thomas M. Dalton, Kenneth C. Dalton — Wed, 30 Jan 2019 00:00:00 +0000

This study examines preference for a method of taxation under two competing theories; standard economic theory and optimism bias. Specifically, we focus on the contradiction between the tax rate structure taxpayers claim to favor when their decision does not involve self-interest, and the tax rate structure they actually choose when the decision does involve self-interest. We find that participants favor a flat tax rate over graduated tax rates in significantly higher proportions when the choice involves self-interest as opposed to a setting without self-interest.