Senior Fellows/Fellows

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Senior Fellows/Fellows

Deviations in real exchange rate levels in the OECD countries and their structural determinants

Martin BERKA, Daan STEENKAMP
We establish the validity of an augmented Balassa-Samuelson theory in a panel of real exchange rate levels between 18 OECD countries accounting for nearly two-thirds of the world GDP between 1970 and 2012 using a unique dataset of levels of total factor productivity (TFP) by sector. Real exchange ra...
Keywords: Real exchange rate, OECD countries, Structural determinants
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Senior Fellows/Fellows

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Senior Fellows/Fellows

Potential for Inward Foreign Direct Investment in Japan

Takeo HOSHI, Kozo KIYOTA
Promotion of inward foreign direct investment (FDI) into Japan has been an important policy in the Abenomics growth strategy.  This paper examines if we observe positive impacts of the policy in the data.  We first estimate a gravity model of bilateral FDIs using data for 35 OECD countries as dest...
Keywords: Inward foreign direct investment, Gravity model, Abenomics
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Senior Fellows/Fellows

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Senior Fellows/Fellows

Do Innovation Subsidies Make Chinese Firms More Innovative? Evidence from the China Employer Employee Survey

Takeo HOSHI, Hong CHENG, Dezhuang HU
The Chinese government has been using various subsidies to encourage innovations by Chinese firms.  This paper examines the allocation and impacts of innovation subsidies, using the data from the China Employer Employee Survey (CEES). We find that the innovation subsidies are preferentially allocat...
Keywords: Innovation subsidies, state owned enterprises, political connection, patents, China Employer Employee Survey
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Senior Fellows/Fellows

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Senior Fellows/Fellows

Dynamism Diminished: The Role of Housing Markets and Credit Conditions

Steven J. DAVIS, John HALTIWANGER
The Great Recession and its aftermath saw the worst relative performance of young firms in at least 35 years. More broadly, as we show, young-firm activity shares move strongly with local economic conditions and local house price growth. In this light, we assess the effects of housing prices and cre...
Keywords: Young firms, business dynamism, housing market boom and bust, credit supply shifts, Great Recession, employment fluctuations
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Senior Fellows/Fellows

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Senior Fellows/Fellows

Social Transmission Bias and Investor Behavior

David HIRSHLEIFER, Bing HAN, Johan WALDEN
We offer a new social approach to investment decision making and asset prices. Investors discuss their strategies and convert others to their strategies with a probabil-ity that increases in investment returns. The conversion rate is shown to be convex in realized returns. Unconditionally, active s...
Keywords: capital markets, behavioral finance, active investing, social networks, thought contagion, transmission bias
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