Abstract
This article estimates the effect of environmental regulation on firm productivity using a spatial regression discontinuity design implicit in China's water quality monitoring system. ...Because water quality readings are important for political evaluations and the monitoring stations only capture emissions from their upstream regions, local government officials are incentivized to enforce tighter environmental standards on firms immediately upstream of a monitoring station, rather than those immediately downstream. Exploiting this discontinuity in regulation stringency with novel firm-level geocoded emission and production data sets, we find that immediate upstream polluters face a more than 24% reduction in total factor productivity (TFP), and a more than 57% reduction in chemical oxygen demand emissions, as compared with their immediate downstream counterparts. We find that the discontinuity in TFP does not exist in nonpolluting industries, only emerged after the government explicitly linked political promotion to water quality readings, and was predominantly driven by prefectural cities with career-driven leaders. Linking the TFP estimate with the emission estimate, a back-of-the-envelope calculation indicates that China's water regulation efforts between 2000 and 2007 were associated with an economic cost of more than 800 billion Chinese yuan.
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IZUM, KILJ, NUK, PILJ, SAZU, UL, UM, UPUK
This paper studies a quantitative general equilibrium model of housing. The model has two key elements not previously considered in existing quantitative macro studies of housing finance: aggregate ...business cycle risk and a realistic wealth distribution driven in the model by bequest heterogeneity in preferences. These features of the model play a crucial role in the following results. First, a relaxation of financing constraints leads to a large boomin house prices. Second, the boom in house prices is entirely the result of a decline in the housing risk premium. Third, low interest rates cannot explain high home values.
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BFBNIB, CEKLJ, INZLJ, IZUM, KILJ, NMLJ, NUK, PILJ, PNG, SAZU, UL, UM, UPUK, ZRSKP
We analyse if and how the characteristics of grant research panels affect the applicants' likelihood of obtaining funding and, especially, if particular types of panels favour particular types of ...applicants. We use the UK's Engineering and Physical Sciences Research Council (EPSRC) award decisions to test the similar‐to‐me hypothesis for the first time in the grant context. Our main results indicate that panel members tend to favour more (or penalise less) applicants with similar characteristics to them, as the similar‐to‐me hypothesis suggests. We show, for instance, that the quality of the applicants is more critical for panels of high quality than for panels of relatively lower quality, that basic‐oriented panels tend to penalise applied‐oriented applicants, and that panels with fewer female members tend to penalise teams with more female applicants. As a whole, we show that similar‐to‐me effects are simultaneously at work for a wide variety of functional, job‐related research characteristics as well as for more well‐known demographic attributes.
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BFBNIB, FZAB, GIS, IJS, KILJ, NLZOH, NUK, OILJ, SAZU, SBCE, SBMB, UL, UM, UPUK
We investigate the effects of automobile congestion on ambient air pollution and local infant mortality rates using data from California spanning 2002 to 2007. Constructing instrumental variables ...(IV) using the relationship of traffic, weather conditions, and pollutants, we show that particulate matter, even at modern levels, has large marginal effects on weekly infant mortality rates, especially for premature or low birthweight infants. We also find suggestive evidence of large effects for carbon monoxide, though results are imprecise. Finally, we check estimate sensitivity to nonclassical measurement error in local pollution and show that our IV results are robust to such concerns.
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BFBNIB, CEKLJ, INZLJ, IZUM, KILJ, NMLJ, NUK, PILJ, PNG, SAZU, UL, UM, UPUK, ZRSKP
Sizing Up Repo KRISHNAMURTHY, ARVIND; NAGEL, STEFAN; ORLOV, DMITRY
The Journal of finance (New York),
December 2014, Volume:
69, Issue:
6
Journal Article
Peer reviewed
To understand which short-term debt markets experienced "runs" during the financial crisis, we analyze a novel data set of repurchase agreements (repo), that is, loans between nonbank cash lenders ...and dealer banks collateralized with securities. Consistent with a run, repo volume backed by private asset-backed securities falls to near zero in the crisis. However, the reduction is only $182 billion, which is small relative to the stock of private asset-backed securities as well as the contraction in asset-backed commercial paper. While the repo contraction is small in aggregate, it disproportionately affected a few dealer banks.
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BFBNIB, FZAB, GIS, IJS, INZLJ, KILJ, NLZOH, NMLJ, NUK, OILJ, PNG, SAZU, SBCE, SBMB, UL, UM, UPUK, ZRSKP
The stock market participation rate among homeowners is twice as high as among renters. This paper builds a life-cycle portfolio choice model with endogenous housing tenure choice. A stylized form of ...preference heterogeneity generates a substantial difference in participation rates. A majority of households have a large savings motive and choose to be homeowners and participate. A minority of households have a small savings motive and find it less worthwhile to participate. Fewer of these households become homeowners. Difference-in-difference regressions on panel data do not find evidence of a crowdingout effect of homeownership on participation, supporting the message that preference heterogeneity matters.
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BFBNIB, INZLJ, NMLJ, NUK, PNG, SAZU, UL, UM, UPUK, ZRSKP
We examine whether the industry expertise of independent directors affects board monitoring effectiveness. We find that the presence of independent directors with industry experience on a firm’s ...audit committee significantly curtails firms’ earnings management. In addition, a greater representation of independent directors with industry expertise on a firm’s compensation committee reduces chief executive officer (CEO) excess compensation, and a greater presence of such directors on the full board increases the CEO turnover-performance sensitivity and improves acquirer returns from diversifying acquisitions. Overall, the evidence is consistent with the hypothesis that having relevant industry expertise enhances independent directors’ ability to perform their monitoring function.
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BFBNIB, CEKLJ, INZLJ, IZUM, KILJ, NMLJ, NUK, PILJ, PNG, SAZU, UL, UM, UPUK, ZRSKP
The paper analyses technical efficiency of the Japanese banks from 2000 to 2007. The estimation technique is based on the Russell directional distance function that takes into consideration not only ...desirable outputs but also an undesirable output that is represented by non-performing loans (NPLs). The results indicate that NPLs remain a significant burden as for banks' performance. We show that banks' inputs have to be utilised more efficiently, particularly labour and premises. We also argue that a further restructuring process is needed in the segment of Regional Banks. We conclude that the Japanese banking system is still far away from being fully consolidated and restructured.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
10.
The Price of a CEO's Rolodex Engelberg, Joseph; Gao, Pengjie; Parsons, Christopher A.
The Review of financial studies,
01/2013, Volume:
26, Issue:
1
Journal Article
Peer reviewed
CEOs with large networks earn more than those with small networks. An additional connection to an executive or director outside the firm increases compensation by about $17,000 on average, more so ...for "important" members, such as CEOs of big firms. Pay-for-connectivity is unrelated to several measures of corporate governance, evidence in favor of an efficient contracting explanation for CEO pay.
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