The Effect of Land Size and Market Distortions on Bolivian Farmers

Access to more land may not lead to income gains for smaller farms in Bolivia. Restrictions on the use of land as collateral cause imperfections in credit and labor markets that lead to lower income as farms reach the institutional threshold for the land’s collateralization.

Sponsors: Oklahoma State University, Oklahoma Department of Human Services

PI/PDs: Lee C. Adkins, Bidisha Lahiri

Oklahoma Department of Human Services, Naneida Lazarte-Alcala

 

Unauthorized Immigration: The Theoretical Effects of a Dual Labor Market

The effects on wages, employment, and output in an economy where unskilled labor is employed solely in labor intensive occupations are explored using a two-sector general equilibrium model.

Sponsor: Oklahoma State University

PI/PD: Lee C. Adkins

 

A Shrinkage Estimator for Endogenous Regressor Models and Weak Instruments. A shrinkage estimator is proposed that takes a convex combination of two-stage least squares and efficient 2-step GMM estimators. Shrinkage is controlled based on FEFF (see Andrews, 2018).

Sponsor: Oklahoma State University

PI/PD: Lee C. Adkins

 

Instructor Gender and Introductory Microeconomics Course Performance:

Do Female Students Benefit from Female Instructors?

We examine the effect of female instructors on male and female students’ introductory microeconomics course performance using a combination of OLS, ordered logit, and instrumental variables regressions. Our results suggest female students who completed introductory microeconomics courses with a female instructor performed significantly better than women who took the course with a male instructor. These results may be promising in the context of trying to close the gender gap in undergraduate economics course achievement and degree completion.

Sponsors: State of Oklahoma, Federal Reserve Bank of Philadelphia

PI/PDs: Laura J. Ahlstrom

Federal Reserve Bank of Philadelphia: Rebecca G. Chambers

 

Does Principles of Macroeconomics Course Performance Affect Student Achievement in Money and Banking?

Money and banking courses are popular in economics departments. This study uses a series of two-step Heckman probit (Heckprobit) selection estimations to assess how performance in a principles of macroeconomics course affects students’ selection into a money and banking course and their likelihood of being successful in the course. Results indicate better performance in a principles of macroeconomics course are positively correlated with selection into a money and banking course as well as a student’s final grade in a money and banking course.

Sponsor: State of Oklahoma

PI/PD: Laura J. Ahlstrom

 

Teaching Methods and Materials in Undergraduate Economics Courses: School, Instructor, and Department Effects

Faculty characteristics and university environments all affect instructors’ selection of teaching methods in undergraduate economics courses. Also, changes in school and departmental policies along with shifts in the composition of faculty members may have unintended effects on instructors’ instructional methods and materials. Using the results from the 2020 administration of the quinquennial national survey of undergraduate economics instructors’ teaching methods and materials, this study examines the effects of school, departmental, and instructor characteristics on teaching methods in undergraduate economics courses. The findings have implications for school and departmental policies that may affect the quality of undergraduate economics course instruction.

Sponsors: State of Oklahoma, University of Delaware, Eastern Kentucky University

PI/PDs: Laura J. Ahlstrom

University of Delaware, Carlos J. Asarta

Eastern Kentucky University, Cynthia Harter

 

Gender and Performance in Intermediate Microeconomics: Does the Format of the Principles of Microeconomics Course Matter?

This study analyzes the effect that completing an introductory microeconomics course online or face-to-face has on student performance in intermediate microeconomics, paying particular attention to the gender question in online education. We find no significant correlation between completing the principles course online and men’s intermediate microeconomics course grades. However, female students who complete principles of microeconomics online perform significantly better in intermediate microeconomics, though the marginal benefit diminishes the higher the principles grade. Additionally, the grades students of both genders receive in face-to-face principles of microeconomics courses have a significant, positive effect on their intermediate microeconomics performance.

Sponsors: State of Oklahoma, St. Cloud State University

PI/PDs: Laura J. Ahlstrom

St. Cloud State University: David Switzer

 

More Bang for Your Buck: The Effects of Flat Rate Tuition on University Course Loads, Performance, and Time to Degree Completion

To maintain student enrollment and revenues, universities have been switching to a flat rate tuition (FRT) pricing system. This study uses data from two large, public universities in Oklahoma to estimate the effects of FRT on students’ attempted credit hours and university performance. We also assess the role of tuition fee differentials in students’ selection of an economics or business major. Results suggest students may attempt higher course loads and have improved performance under FRT compared to students who are charged tuition per credit hour.

Sponsors: State of Oklahoma, University of Oklahoma

PI/PDs: Laura J. Ahlstrom

University of Oklahoma: Brent L. Norwood

 

Factors Contributing to the Use of Diversity, Inclusion, and Gender Examples in Undergraduate Economics Courses: Findings from the National “Chalk-and-Talk” Survey

Using data from the national “chalk and talk” survey on teaching methods in undergraduate economics and a series of probit and linear regressions, we assess how instructor, departmental, and institutional factors contribute to using diversity, inclusion, and gender examples in introductory, intermediate theory, statistics and econometrics, and other upper-level field courses. We find instructor characteristics including gender, native language, and teaching experience are significant determinants of instructor’s use of diverse examples in class. Also, departmental characteristics such as teaching load and class size affect an instructor’s use of diversity, inclusion, and gender examples.

Sponsors: State of Oklahoma, University of Delaware, Eastern Kentucky University

PI/PDs: Laura J. Ahlstrom

University of Delaware, Carlos J. Asarta

Eastern Kentucky University, Cynthia Harter

 

Women in the Finance Major: Gender Disparities in Finance Course Completion and Degree Attainment

This study assesses the gender gap in undergraduate students’ finance course persistence, defined as taking an additional finance course after completing an initial course, as well as gender disparities in students’ finance degree selection. The research is guided by the following question: How do student, instructor, and structural (class) characteristics differentially affect gender persistence in taking finance courses and the propensity to earn a finance degree?

Sponsors: State of Oklahoma, University of Delaware

PI/PDs: Laura J. Ahlstrom

University of Delaware, Laura Field

 

Impact of Fuel Switching on Health Outcomes in India

Using two waves of nationally representative panel data, we categorize households in three groups based on their cooking fuel use 1) polluting fuels 2) mixed fuels or fuel stacking and 3) LPG and identify households who switched cooking fuels between 2005 and 2012, and who maintain status quo. We compare change in incidence of health problems of household members for households that switch the cooking fuels to households that did not switch cooking fuels. To address the selection issues in the switch, we use two strategies: 1) individual/household fixed effects strategy and 2) difference-in-differences with multivalued treatment.

Sponsor: Oklahoma State University

PI/PD: Mehtabul Azam

 

Trade Liberalization and Human Capital Accumulation: Evidence from Indian Census

We use the 2011 Indian census data and exploit the exogeneous nature of Indian trade liberalization and cohorts that attended school before and after the reforms to implement a Difference-in-Difference strategy to estimate the impact of trade-liberalization on human capital accumulation. We also construct a district-level panel data that covers 1981-2011 and use a Difference-in-Difference strategy to get an alternative estimate of the impact of Indian trade liberalization on human capital accumulation. We find that no evidence of trade-liberalization on attainment of different stages of schooling.

Sponsor: Oklahoma State University

PI/PD: Mehtabul Azam

 

Microeconomic Determinants of Domestic Tourism Expenditure in India

Using a nationally representative household survey from India, we examine individuals’ domestic tourism participation and trip expenditure decisions together. We use two-part model to allow explanatory variables to have differential effects on each decision. We find that education is an important determinant for both the decisions. Moreover, trip-related characteristics (party size, stay length, accommodation type, travel mode, and destination) are also important determinants of trip expenditure in addition to economic and socio-demographic characteristics. The unconditional quantile regression results show the heterogeneity in the impacts of many variables across the trip expenditure distribution.

Sponsor: Oklahoma State University

PI/PD: Mehtabul Azam

 

The Effect of Trade Liberalization on Marriage and Fertility: Evidence from Indian Districts

We examine the medium-run (1991-2001) and long-run (1991-2011) impacts of the 1991 trade liberalization in India on marriage and fertility rates among young women aged 15-34 years. We exploit the fact that the countrywide tariff reductions varied across industries creating exogenous local labor market shocks based on the initial industrial composition of the district. We find that districts that were more exposed to tariff cuts witnessed a larger increase in the marriage rate, especially in urban areas. On average, the trade reform had no negative impact on the employment of young men and women.

Sponsor: Oklahoma State University

PI/PDs: Mehtabul Azam, Shruti Sengupta

 

Trade Liberalization and its Impact on Social Group Welfare Gap

We examine the causal impact of the 1991 Indian trade liberalization on the evolution of conditional welfare gaps across social groups. We hypothesize that the trade reforms would induce foreign competition and thus, reduce the inherent taste-based employer discrimination in the Indian labor market. While we find medium-run (transitional) effects of trade openness on caste-based labor market discrimination, the impact dies out in the long-run. This indicates the existence of discrimination against the marginalized groups in spite of increased competition.

Sponsor: Oklahoma State University

PI/PDs: Mehtabul Azam, Shruti Sengupta

 

A Decompositional Analysis of Social Group Inequality in India

Using nationally representative household surveys, we examine the welfare gaps across social groups for the entire distribution in 1983, 1993-94, 2004-05, and 2011-12. We use spatially adjusted per capita consumption expenditure as the measure of welfare and show that there exists significant welfare gap between Scheduled Tribes/ Scheduled Castes (STs/SCs) and General Category (GC) households at higher quantiles of the distribution, but the magnitude of the gap has declined over the years for the SC households. Using unconditional quantile regression decomposition, we find that the unexplained effect dominates the endowment/explained effect in explaining the gap in all four years.

Sponsor: Oklahoma State University

PI/PDs: Mehtabul Azam, Shruti Sengupta

 

Household Cooking Fuel Choice in India, 2004-2012: A Panel Multinomial Analysis

Using household level panel data, we examine factors driving the cooking fuel choice in urban and rural India, separately. We find that a clean break with the use of traditional fuels is less likely in rural areas, but more probable in urban areas. The household characteristics (e.g., income, education) that are positively correlated with use of clean fuel also increases the probability of fuel stacking for rural households. We also find that access to paved road is an important determinant for rural household adopting clean fuel, and there exists evidence of social spillover effects in rural areas.

Sponsors: Oklahoma State University, Nanjing Audit University

PI/PDs: Mehtabul Azam

Nanjing Audit University, Ying-Min Kuo

 

Relative Income and Happiness: Evidence from Georgia

This paper identifies the effects of relative income on happiness using four waves of Georgia Welfare Monitoring Survey. We treat subjective well-being as a proxy for happiness and use two measures of relative income that capture the effect of self-comparison and social comparison. We find that each relative income positively affects subjective well-being. Moreover, we find the positive correlation between relative income and happiness is stronger for households with higher income than the poorer households. We also find suggestive evidence that a weaker family bond and a higher self-esteem partially explain why social comparison is more important for wealthier households.

Sponsors: Oklahoma State University, Nanjing Audit University

PI/PDs: Mehtabul Azam

Nanjing Audit University, Tuan Ho, Ying-Min Kuo

 

Impacts of Cross-Country Infrastructure on Bilateral Trade: Evidence from New Silk Road Railways

New Silk Road Railways have provided cross-continental rail freight services between China and Eurasian countries since 2011. We examine the impact of being connected to Silk Road railways on 20 destination countries bilateral trade with China before the 2020 Pandemic. To address the issue of endogenous placement of railways, we utilize the generalized synthetic control method. We find that railway connections do not have significant impacts on either gross import or gross export of destination countries. The results are robust to alternative methods, across product categories, and different grouping of destination countries based on whether they share boundary with China.

Sponsors: Oklahoma State University, Nanjing Audit University

PI/PDs: Mehtabul Azam

Nanjing Audit University, Ying-Min Kuo

 

Does access to liquefied petroleum gas (LPG) reduce women household burden?  Evidence from India

Using Indian Time Use Survey, we study whether the use of Liquefied Petroleum Gas (LPG) as cooking fuel affects the time spent in cooking and employment activities for Indian rural women. We instrument use of LPG by a leave-one-out spatial instrument constructed by taking the average level of LPG use in the village. We find no impact of LPG on the probability of women participating in cooking activities. However, use of LPG reduces (increases) time spent in cooking (employment) activities. We also find evidence of rebound effect where use of LPG leads to marginally more cooking events in a day.

Sponsor: Oklahoma State University

PI/PDs: Mehtabul Azam, Su Qinghe  

 

Time Allocation Trend and Inequality in India 

In this paper, we document trends in the allocation of time in six Indian states over two decades. We find a dramatic increase in leisure time lies behind the reduction of time allocated to employment activities for men and women between 1999 and 2019. The leisure time for men increased by three to four hours per week and for women by four to six hours per week. Women decrease their time in employment by about five hours per week, especially women in rural India. We also document a growing inequality in leisure and employment that is related to gender norms.

Sponsor: Oklahoma State University

PI/PDs: Mehtabul Azam, Su Qinghe

 

Fuel Switching and Labor Supply of Rural Women in India

Using two waves of nationally representative panel data, we categorize households in three groups by the cooking fuel: biomass, mixed fuel, and modern fuel. We identify households who switched cooking fuels between 2005 and 2012, and who maintain status quo, and look at the female work participation based on fuel switches. We find that switching from mixed to modern fuel will increase the probability of female work participation in rural India significantly.

Sponsor: Oklahoma State University

PI/PDs: Mehtabul Azam, Su Qinghe 

 

Export and Firm Efficiency in Indian Manufacturing: Evidence from Continuous Treatment Approach

We address the question whether exporting firms are more efficient. We distinguish firms both based on whether they export and what fraction of output they export and use stochastic frontier analysis and generalized propensity score (GPS). We find that firms' export share has a causal effect on growth.

Sponsor: Oklahoma State University

PI/PDs: Mehtabul Azam, Su Qinghe 

 

Tax Increment Financing and Spatial Spillovers: Estimating the Localized Marginal Effects of Proximity to TIF Districts

Tax increment finance (TIF) is a critical component of local economic development policy. In contrast to previous research, we recognize the limitation of a linear spatial specification. Instead, we adopt a Gaussian-process regression specification to estimate the functional form that defines the relationship between a dependent variable and its functional arguments. Our findings suggest that much care should be taken when drawing TIF boundaries, recognizing that a small but potentially important subset of parcels could be relegated to the outside of the development zone and left without access to the public support that similar parcels inside the TIF are afforded. 

Sponsors: Oklahoma State University; Oklahoma City University

PI/PDs:  Mary N. Gade

Oklahoma City University: Russell Evans

 

A Localized Analysis of Property Tax Incidence Across Space and Time

This paper explores the hypothesis that the incidence of the property tax may vary across jurisdictions. We pool observations from 17 independent school districts in Oklahoma County, Oklahoma across 27 years (1982-2008) and investigate the responsiveness of the tax base to changes in the jurisdiction’s tax rate relative to the county average. Using a Finite Mixture Model approach that allows for estimation of distinct and heterogeneous components, we find evidence that the economic incidence varies across jurisdictions, across time within a jurisdiction, and across specific property tax levies within a jurisdiction.

Sponsors: Oklahoma State University, Oklahoma City University

PI/PDs:  Mary N. Gade

Oklahoma City University: Russell Evans

 

Exposure to Agricultural Technologies and Adoption: The West Africa Agricultural Productivity Program in Ghana, Senegal and Mali

We estimate the effects of increased exposure to agricultural technologies on farmers’ adoption and economic well-being in Ghana, Mali, and Senegal. The program, known as the West Africa Agricultural Productivity Program (WAAPP), aimed at improving agricultural productivity to enhance economic growth, food security and to reduce poverty and ran in two phases. We focus on the second phase, which ran between 2012 and 2019. Using ex-ante matching at the village and household levels to select the estimation sample, we find that the treatment raised technology adoption by 0.32 percentage points and the adoption of improved seeds by 0.20 percentage points.

Sponsors: Oklahoma State University, University of Ouagadougou

PI/PDs: Harounan Kazianga

University of Ouagadougou, Burkina Faso

 

Pathways out of Extreme Poverty: Tackling Psychosocial and Capital Constraints with a Multi-faceted Social Protection Program in Niger

We analyze a four-arm randomized evaluation of a national multi-faceted economic inclusion intervention for female beneficiaries of a national cash transfer program in Niger. All three treatment arms include a core package of group savings promotion, coaching, and entrepreneurship training, in addition to the regular cash transfers from the national program. The first variant also includes a lump-sum cash grant and is similar to a traditional graduation intervention. The second variant substitutes the cash grant with psychosocial interventions. The third variant includes the cash grant and the psychosocial interventions. The control group only receives the transfers from the national program.

Sponsors: Oklahoma State University, Northwestern University, Catholic University of Louvain, Paris School of Economics, The World Bank

PI/PD: Harounan Kazianga

 

Agricultural Transformation and Farmers' Expectations:  Experimental Evidence from Uganda

Why adoption rate of potentially profitable agricultural technologies in Africa remains low is still puzzling. This paper uses a randomized control trial to study Ugandan subsistence smallholders' decisions to adopt cash crops. A unique way of eliciting farmers price and yield expectations allows us to investigate the role of farmers' ex-ante beliefs about crop profitability on adoption decisions. We find that the provision of extension services increases oilseeds adoption by 15%, and farmers who under-estimate oilseeds price at baseline are the most likely to adopt the new crops. The results suggest that changes in expectations drive agricultural technology take-up.

Sponsors: Oklahoma State University; University di Milano--Bicocca, Centro Studi L.d'Agliano,

PI/PD:  Harounan Kazianga

 

Child Marriage and the Role of Brides: Descriptive Evidence from Six West African Countries

Although almost universally banned, child (under the age of 18) remains a pervasive issue throughout the world. In this study, we quantify the importance of the child marriage problem, on which evidence remains surprisingly scarce. To do so, we use data we collected in Burkina Faso, Chad, Côte d’Ivoire, Mali, Mauritania, and Niger – six West African countries where child marriage rates are particularly high. This extensive dataset allows us to compare the characteristics of girls based on their age when they first married.

Sponsors: Oklahoma State University, Paris-Dauphine University, Paris School of Economics, The World Bank

PI/PDs: Harounan Kazianga

Paris-Dauphine University: Olivia Bertelli, Elise Huillery

Paris School of Economics: Bastien Michel

C4ED: Markus Olapade

The World Bank: Estelle Koussoubé, Léa Rouanet

 

The Effects of Old Age Pension Program on African Young Adults’ Labor Force Participation and Schooling

We examine the effects of South Africa’s Old Age Pension (OAP) program on labor force participation and schooling of African young adults aged 15-34 using a regression discontinuity design. The results suggest that OAP Program has a significant secondary effect on African young adults and could help address inter-generational poverty in South Africa.

Sponsors: Oklahoma State University, Ministry of Finance, Liberia

PI/PDs:  Harounan Kazianga

Ministry of Finance, Liberia: Mounir Siaplay

 

A Decade Later: The Long-Term Effects on Education and Young Adults Outcomes of School Infrastructure

We evaluate the long-term effect of a “girl-friendly” primary school program in Burkina Faso, using a regression discontinuity design. The intervention consisted in upgrading existing three-classroom schools to six-classroom schools in order to accommodate more grades.  After 6 years, the program increased enrollment by 15.4 percentage points and increased test scores by 0.29 standard deviations. Students in treatment schools progress farther through the grades, compared to students in non-selected schools. These upgraded schools are effective at getting children into school, at getting children start school on time and at keeping children in school longer.

Sponsors: Oklahoma Stata University, University Texas, Mathematics Policy Research

PI/PDs: Harounan Kazianga

University of Texas: Leigh Linden

Mathematics Policy Research: Nicholas Ingwersen, Arif Mamun, Ali Protik, Matt Sloan

 

Evidence from a Randomized Evaluation of the Household Welfare Impacts of Conditional and Unconditional Cash Transfers Given to Mothers or Fathers.

We conducted a randomized control trial in rural Burkina Faso to estimate the impact of alternative cash transfer delivery mechanisms on education, health, and household welfare outcomes. The two-year pilot program randomly distributed cash transfers that were either conditional or unconditional and were given to either mothers or fathers. Conditionality it was linked to older children enrolling in school who were attending regularly and younger children receiving preventive health check-ups. Compared to the control group, cash transfers improve children’s education and health and household socioeconomic conditions. For school enrollment and most health outcomes, conditional cash transfers outperform unconditional cash transfers.

Sponsors: Oklahoma Stata University, The University of Illinois at Urbana Champaign, The World Bank

PI/PDs: Harounan Kazianga

University of Illinois at UC: Richard Akresh

The World Bank: Damien de Walque

 

Uncertainty Shocks, Asymmetric Dynamics, and Inflation Targeting: Nonlinear

Approach

This study investigates the impact of uncertainty shocks on macroeconomic activity in developed and emerging economies.  A Smooth Transition VAR model is employed to document the state-dependent dynamics of two distinct types of uncertainty shocks, financial market based and news-based.  When nonlinearity is allowed to play a role in our model, quantitatively very different asymmetric dynamics are observed.  Following inflation targeting, the responses tend to be smoother and less pronounced.  Our empirical results support the view that the link between uncertainty and macroeconomic activity is clear over both recessions and expansions.

Sponsors:  Oklahoma State University, Bank of Ozark, AR

PI/PDs:  J.B. Kim

Bank of Ozark: Kevin Larcher

 

Oil Price Shocks and Macroeconomic Dynamics: A Nonlinear Approach

We study the business cycle-dependent nonlinear effects of global oil price shocks on US aggregate economy.  For this purpose, we decompose the oil price changes into supply and demand shocks and assess the state-dependent dynamics of structural shocks on U.S. industrial production, employment, and inflation using a Smooth Transition VAR model.  We find evidence that declines in employment and industrial production conditional on recessions are shown to have quantitatively larger and more persistent.  Headline inflation is found to display substantially greater reactions during economic contractions. 

Sponsors: Oklahoma State University, National Assembly Research Service

PI/PDs:  J.B. Kim

National Assembly Research Service: Inwook Hwang

 

FDI, Economic Growth and Convergence Clubs: A Nonlinear Approach

To study the relationship between FDI and growth with more homogeneous countries we employ an array of convergence tests designed to capture nonlinear transitional dynamics with 62 countries spanning the period of 1987-2016.  Our new empirical evidence therefore suggests that there is a potential maximum financial development threshold beyond which the positive effect of FDI on economic growth becomes negligible, suggesting that more finance is not necessarily better for the nexus in each convergence club.  The nonlinearity and homogeneity in the convergence club may actually reflect the kick in effect at the beginning and the vanishing effect in the end.

Sponsors:  Oklahoma State University, Millikin University

PI/PDs:  J.B. Kim

Millikin University: Michael Osei

 

Financial Development, Innovation, and Market Structure: Evidence from Industry Level Data

We study the nonlinear effects of financial development on innovation as well as the potential mechanism, using a unique Research Quotient database. Our findings can be summarized as follows. 1) Significant inverted-U effects of financial development on innovation. 2) The effects of both markets are sector specific. Specifically, the nonlinear effect of the equity market works by influencing the high technology industries, while that of the credit market mainly affects the non-high technology industries. 3) We find that the nonlinear effect of financial development on market competition serves as a potential channel through which finance affects innovation nonlinearly.

Sponsors: Oklahoma State University, Wichita State University

PI/PDs:  J.B. Kim

Wichita State University: Xiaoyang Zhu

 

Does the Belt and Road Initiative Boost Chinese Automobile Exports?

We examine whether China’s ambitious Belt and Road Initiative has assisted its automobile exports, which has been a challenging market for the Chinese economy. We use the staggered Diff-in-Diff approach within the Gravity framework. Our estimates find that the BRI initiative increases automobile exports by 22%. Placebo tests confirm the parallel trend assumption. Robustness tests controlling for potential BRI selection bias using IVs find the effects to be somewhat stronger but similar in pattern. Sub-sample analyses indicate that the positive effect is driven by China’s export to high-income partners.

Sponsor: Oklahoma State University

PI/PDs: Qinghe Su, Bidisha Lahiri

 

Entrepreneurial Effect of Income Program in India

We examine the impact of on an ambitious employment and income guarantee program for the poor in India, on family entrepreneurial activities. We find that participation in this program affects family entrepreneurship both at the extensive and intensive margins, and the effect is heterogenous across the scale of the family business endeavor.

Sponsor: Oklahoma State University

PI/PDs: Bidisha Lahiri, Richard Daramola

 

Effect of ICT on Product Quality

Product quality, which is an important dimension of research in economics, is combined with the consideration of firm level access to information and communication technology. Using a recent econometric technique, we find that even for firms without market power, firms with ICT capabilities produce products with higher unit values, compared to otherwise similar firms within the same industries. This supports the hypothesis that ICT facilitates product quality. These results are robust to alternate specifications and estimation methods.

Sponsors: Oklahoma State University, Temple University

PI/PDs: Bidisha Lahiri

MSIS: Ramesh Sharda

Temple University: Taha Havakhor

 

Horizontal and Vertical Foreign Direct Investment Linkages, Absorptive Capacity, and Domestic Investment: Evidence from Indonesian Plant-Level Data

This paper examines the domestic capital deepening impact of both horizontal and vertical foreign direct investment (FDI) using 2000-2015 plant-level manufacturing data and IO-tables from Indonesia. Using a number of specifications and estimators, we find that both horizontal and forward linkages have significantly positive impact on the capital deepening of the domestic plants. The effect of backward FDI linkages, however, is more pronounced for domestic plants with relatively higher share of unskilled labor. We also show that absorptive capacity of plants plays a significant role in the relationship between capital deepening and both horizontal and vertical linkages.

Sponsors: Oklahoma State University, University of Texas at Arlington

PI/PDs: Bidisha Lahiri

University of Texas at Arlington: Mahmut Yasar

 

Effect of Prenatal Care visits on Antenatal Outcomes: A Survival Model Analysis

The number of weeks of pregnancy at which antenatal care was first received, the number times of antenatal care was received and whether antenatal care was received in the last three months of pregnancy are three important, but similar indicators of antenatal care received during a given pregnancy. We examine the impact of each of these variables on several outcomes such as whether the delivery was at home or medical institution, the presence of skilled birth attendant during delivery, birth weight of the baby and use of postnatal care.

Sponsors: Oklahoma State University, University of Kalyani, India

PI/PDs: Bidisha Lahiri

University of Kalyani, India, Prasenjit Sarkhel,

 

Low level equilibrium trap for women

Women are less likely to pursue a job if the cost of child-care exceeds the salary earned. While this might seem optimum in the short run, there are long run costs in terms of experience forfeited. Women who start at a lower wage job are more likely to get stuck in the equilibrium described above, while women who start at higher paid jobs circumvent the above situation. This widens the experience gap and in turn the income gap. This child-care-cost driven 2-equilibrium phenomenon should be expected to be weaker (more likely absent) for men.

Sponsor: Oklahoma State University

PI/PD: Bidisha Lahiri

 

The Multi-Headed Effects of Corruption on SMEs

We examine how informal payments to government officials reduce tax and fees payment, and number of inspections for small and medium sized firms, while at the same time relax credit constraints and make access to technology easier. While payment of bribes is also often considered necessary for the survival of firms, few studies have explored this. We take a unique empirical approach and find strong evidence of higher rate of firm deaths among firms that do not or cannot pay bribes.

Sponsor: Oklahoma State University

PI/PD: Bidisha Lahiri

 

Effect of Country level ICT Capabilities in Tempering the Educational Setbacks Due to COVID

Almost all countries in the world have/had suspended their in-person educational lessons at some point in the pandemic, to varying extents. Countries with the capability of doing so have taken measures to move their education online, both for higher education and for K-12. While this is temporary, it is not insignificant.  Using current cross-country data, I examine if country level ICT capability is having an impact on the educational outcomes of the kids currently in school, compared to earlier cohorts.

Sponsor: Oklahoma State University

PI/PD: Bidisha Lahiri

 

FDI Linkages and Export Performance of Firms: Evidence from Indonesian Plant-Level Data

FDI inflows may have spillover effects for firms and industries that are not the target recipients of the FDI, but in related firms and industries. These spillovers might affect export participation of firms through the competition and the information channels. Using the Semykina, & Wooldridge (2010) method for Heckman-type selection with panel data, we examine for the effect of FDI linkages on export shares while controlling for export participation, and accounting for the absorptive capacities of firms that reflect the ability of firms to benefit from the FDI spillover effects.

Sponsors: Oklahoma State University, University of Texas at Arlington

PI/PDs: Bidisha Lahiri

University of Texas at Arlington, Mahmut Yasar

 

Supercomputers and Economic Development

Scientific advances and technology drive development especially in diversified modern economies. One representation of technological capabilities are Supercomputers -advanced computing machines designed and operated for scientific research. The US has dominated the list with more than 200 entries, while China has rapidly climbed the list both in numbers and speed of the computers. The large region lacking any supercomputers is the territory acquired by the US in the Louisiana Purchase in 1803, potentially due to the geographical terrain, sparse population and therefore slow economic development. We examine the possible bidirectional causality as technology and economic development drive each other.

Sponsor: Oklahoma State University

PI/PDs: Bidisha Lahiri

OSU High-Performance Computing Center: Pratul K. Agarwal

 

International Linkages and Female Share of Total Employment

Our research examines if international linkages of firms encourage them to employ a larger share of female employees. Our study contributes to the literature in several ways. First, although there have been a number of empirical studies that examine the effect of exporting and importing on female employment and wage gap issues, to the best of our knowledge, there have been no empirical studies that examine the effect of FDIs on female employment share using firm-level data. Second, our study is unique in the sense that we investigate two international linkages channels exporting and FDIs simultaneously.

Sponsor: Oklahoma State University, University of Texas at Arlington

PI/PDs: Bidisha Lahiri

University of Texas at Arlington, Mahmut Yasar

 

Increasing Learning Effectiveness of Economics Education

Study develops, implements, and evaluates new economics teaching pedagogy based on U.S. Army’s approach to training model.  Using the approach, tasks are identified that compose task domain for Principles of Microeconomics course.  From 130 identified tasks, 73 are used by Economics of Socials Issues classes for evaluation phase.  Each task is expanded to include task conditions, standard, performance steps, and performance measures.  The developed document is the teaching, learning, and evaluation outline (TLEO).  The same process identifies 53 tasks used in unit 3 of Money and Banking classes. Experiment is done to assess impact using TLEO documents to enhance learning.

Sponsor: State of Oklahoma

Pl/PD: William McLean

 

Estimating the Economic Effects of US State and Local Fiscal Policy: A Synthetic Control Method Matched Regression Approach

In this paper, we attempt to address the limitations of previous research to provide further guidance on US state and local fiscal policymaking. We implement the synthetic control method (SCM) to create pairwise matches for states in subsequent regression analysis. Several economic indicators and principal component analyses are used to construct broader narratives of state economic performance. We compare the results with those obtained from using neighbors as matches and from standard growth regressions. The SCM-based analysis produces several useful findings for policy, though the evidence remains insufficient to provide universal policy recommendations.

Sponsor: Oklahoma State University

PI/PDs: Dan Rickman, Hongbo Wang

 

Industry Aggregation and Assessment of State Economic Development from Motion Picture and Television Production Incentives

Studies of state fiscal incentives for the motion picture and television industry use differing levels of industry aggregation. This study unpacks aggregate sector multipliers for 48 states and shows how the use of aggregated measures for the motion picture and television industry may lead to inaccurate input-output multipliers. We conclude that the Motion Picture and Video Production sector most corresponds to incentivized activity in the industry. A hypothetical case study demonstrates practical alternatives to modifying regional input-output models to obtain more accurate economic impact multipliers, relying on an approach supported by difference-in-difference estimation.

Sponsor: Oklahoma State University

PI/PDs: Dan Rickman, Hongbo Wang

 

Creating and Maintaining Film Clusters: Synthetic Control Method Analysis of the Enactment and Repeal of US State Film Incentives

The widespread proliferation of US state incentives for film production led to numerous studies of whether the incentives affected production location, including case studies of a few key early adopting incentive states. The overall evidence on the efficacy of incentives is mixed. Using the synthetic control method, we carry out additional case studies for a wide range of states. A unique contribution of the paper is an examination of both the adoption and repeal of incentives. We also assess whether incentives have spillover effects from interdependencies between production and other activities within the film industry.

Sponsor: Oklahoma State University

PI/PDs: Dan Rickman, Hongbo Wang

 

Quiet Restaurants Near Political Power Centers: How Has the Anti-Corruption Campaign Changed a Consumer City?

China's 2012 “Eight-point Regulation” imposed harsh austerity measures on the spending of government officials. The effect of the regulation remains an open question. Using data from a large online review platform for retail stores, we take a spatial difference-in-differences approach to investigate the impact of the regulation on restaurant consumer spending in Beijing. Establishment-level regressions document a substantial post-regulation decline in the consumer spending of the restaurants close to power centers. Importantly, we demonstrate that the intra-city spatial distribution of restaurant consumer expenditures has shifted towards a relatively more market-based one since the regulation.

Sponsors: Oklahoma State University, Central University of Finance and Economics, Chinese Academy of Sciences, Massachusetts Institute of Technology

PI/PDs:  Rui Du

Central University of Finance and Economics: Weizeng Sun

Chinese Academy of Sciences: Jianghao Wang

Massachusetts Institute of Technology: Siqi Zheng

 

High-Stakes Examinations and Educational Inequality: Evidence from Transitory Exposure to Air Pollution

Using a unique individual-level panel dataset, we study the impact of transitory random disturbances to student cognitive performance and a minimum-passing-score policy on access to graduate education. Exploiting thermal inversions as an IV and individual fixed effects, we document significant adverse cognitive effects of transitory exposure to air pollution during the exam. These harmful cognitive effects vary considerably and permanently reduce students’ chances of getting into graduate school. Marginal students who scored just below the cutoff would be less affected by random disturbances and have more equal access to graduate education had such an exam policy not been adopted.

Sponsors: Oklahoma State University, Tsinghua University, Central University of Finance and Economics, Beijing Jiaotong University

PI/PDs:  Rui Du

Tsinghua University: Hui Deng

Central University of Finance and Economics: Dongmei Guo, Weizeng Sun

Beijing Jiaotong University: Yuhuan Xia

 

Who Benefits from Water Quality Control? Environmental Regulation, Housing Wealth, and Consumption Inequality

This paper examines the effect of water quality regulations on housing wealth and household consumption. We check for structural breaks in water quality improvements from 2007 to 2018 and find that water quality improvements lead to significant house price appreciation for the properties near water areas. Using a nationally representative household survey, we show that water quality improvements drive up homeowners’ wealth accumulation and consumption, giving rise to household consumption inequality within cities. We argue that elastic housing supply has important policy implications for promoting more equally shared dividends from environmental regulations through promoting social multiplier effects. 

Sponsors: Oklahoma State University, Central University of Finance and Economics

PI/PDs:  Rui Du

Central University of Finance and Economics: Weizeng Sun, Hao Suo

 

Mapping Evolving Population Geography in China: Spatial Redistribution, Regional Disparity, and Urban Sprawl

China’s demographic changes have important global economic and geopolitical implications. Yet, our understanding of such transitions at the micro-spatial scale remains limited due to spatial inconsistency of the census data caused by administrative boundary adjustments. To fill this gap, we manually collected and built a population census panel from 2010 to 2020 at both the county and prefectural-city levels. We show that the massive internal migration drives China’s increasing population concentration and regional disparity, resulting in severe population aging in shrinking cities and increasing gender imbalance in growing cities. 

Sponsors: Oklahoma State University, Peking University

PI/PDs:  Rui Du

Peking University: Lei Dong, Yu Liu

 

Transboundary Wildfire Smoke and Expressed Sentiment: Evidence from Twitter

This paper exploits the exogenous variation in wind directions to identify the causal effect of transboundary wildfire smoke on the real-time sentiment of Twitter users in Southeast Asia. We find that a one-standard-deviation increase in the difference between upwind and downwind fires reduces sentiment by roughly 2 percent of a standard deviation, mainly through the channel of transboundary plumes. The adverse sentiment effects vary substantially across countries and increase in size with average income, average sentiment level, proximity to fires, adaptability, and daily temperature. Our findings have important implications for cross-boundary externalities and psychosocial costs from rising wildfire risks. 

Sponsors: Oklahoma State University, Maastricht University, Chinese Academy of Sciences, Massachusetts Institute of Technology

PI/PDs:  Rui Du

Maastricht University: Ajkel Mino

Chinese Academy of Sciences: Jianghao Wang

Massachusetts Institute of Technology: Siqi Zheng

 

Uncertain Policy Regime and Government Spending Effects

The literature generally suggests that money-financed government spending has much bigger multipliers than debt-financed spending. Most analyses assume that policy regimes are fixed. Using a fully nonlinear New Keynesian model with endogenous policy regime uncertainty, we show that inflation-driven expectations about switching to the debt-financing regime reduce money-financed spending multipliers. When interacting with high government debt, policy regime uncertainty decreases money-financed multipliers below one. This conclusion holds at the zero lower bound and with a large spending increase.  Policy regime uncertainty similarly decreases multipliers under active fiscal and passive monetary policies, in which seigniorage is used to finance government spending.

Sponsors: Oklahoma State University, Grinnell College, Institute of Economics, Academia Sinica

PI/PDs: Wenyi Shen

Grinnell College: Ruoyun Mao

Institute of Economics, Academia Sinica: Shu-Chun Yang

 

Can Passive Monetary Policy Create Fiscal Space?

Under passive monetary policy (regime F), uncertain timing of switching to the conventional active monetary policy (regime M) can reduce fiscal space. Agents’ expectations of switching to active monetary policy dampens inflation surge and its debt revaluation effect. Regime uncertainty generates smaller real interest rate decline than under fixed regime, leading to smaller decrease in debt servicing costs. Consequently, government spending increases, rather than decreases, debt as found in fixed regime F. These effects are more pronounced under negative supply shocks, high initial government debt, and expectations of higher capital taxes to stabilize debt, all relevant to post-COVID U.S. economy.

Sponsor: Oklahoma State University, Grinnell College, Institute of Economics, Academia Sinica

PI/PDs: Wenyi Shen

Grinnell College: Ruoyun Mao

Institute of Economics, Academia Sinica: Shu-Chun Yang