Working Papers 2000–2009 (WP528–WP816)

An exemption in the Swedish Employment Security Act (LAS) in 2001 made it possible for employers with a maximum of ten employees to exempt two workers from the seniority rule at times of redundancies.…

We outline a politico-economic growth system centered around the entrepreneur. By defining entrepreneurs in relation to economic rents we are able to develop a more general theory comprising central a…

This paper reviews the literature on economic inequality and trust. Cross-country studies, within-country studies, and experiments all suggest that economic inequality exerts a negative influence on t…

This paper investigates labor productivity growth and the contribution to labor productivity growth in Swedish manufacturing during electrification and the ICT revolution. The paper distinguishes betw…

Billions of dollars are allocated every year to university research. Increased specialization and international integration of research and researchers has sharply raised the need for comparisons of p…

We study the political opinions of Swedish social scientists in seven disciplines. A survey was sent to 4,301 academics at 25 colleges and universities, which makes the coverage of the disciplines inc…

As one of the world’s largest recipients of Foreign Direct Investment (FDI), China is emerging as a key global player in Research and Development (R&D). This rapid increase in R&D investment i…

The growing number of cross-border acquisitions has in many countries raised concerns about labor demand consequences. In this study, we use detailed firm level data to examine how increased internati…

FDI can be an important channel for developing countries’ ability to get access to new technology. The impact of FDI on domestically-owned firms’ technology development is less examined but it is freq…

In this paper entrepreneurs are defined as agents who bring about economic change by combining their own effort with other factors of production in search of economic rents. The institutional setup is…

Cambodia has been growing rapidly over the past few years but still remains one of the poorest countries in East Asia. In particular, poverty is widespread in rural Cambodia. This paper examines rural…

We conduct an extensive robustness analysis of the relationship between trust and growth by investigating a later time period and a bigger sample than in previous studies. In addition to robustness te…

We examine the effects of foreign entry on productive efficiency during the Polish investment liberalization. The performance of foreign acquisitions is compared to foreign firms entering the market t…

We develop a model of vertical pricing in which an original manufacturer sets wholesale prices in two markets integrated at the distributor level by parallel imports (PI). In this context we show that…

The existence of parallel imports (PI) raises a number of interesting policy and strategic questions, which are the subject of this survey article. For example, parallel trade is essentially arbitrage…

This paper studies whether the degree of women’s representation in Swedish local councils affects local public expenditure patterns. Theoretically, the individual preferences of elected representative…

Minimum wages in Sweden are collectively agreed and differ by industry. Within agreements, the rates are also highly differentiated. Minimum wages are higher in Sweden than in any of the countries wit…

The objective of this paper is to study the dynamics of the wealth distribution over the path of economic development. More specifically, we are interested in distinguishing between changes which seem…

A fundamental problem in all political systems is that the people in power may extract rents to the detriment of the general public. In a democracy, electoral competition and information provided by t…

This paper examines how Science and Technology (S&T) contribute to job creation in the Chinese manufacturing sector. The ambition of transforming China into an innovation-oriented nation and the e…

We discuss the prospects for Chinese money market development and transition to market-based monetary policy operations based on a comparative historical analysis of the present Chinese situation and…

Science & Technology (S&T) is high on the Chinese policy agenda but there are large uncertainties on the actual S&T development. For instance, previous studies tend to focus only on large…

In a framework where mergers are mutually excluding, I show that firms pursue anti- rather than (alternative) pro-competitive mergers. Potential outsiders to anti-competitive mergers refrain from purs…

This paper investigates how the entry mode of foreign direct investment (FDI) affects the affiliate R&D activities using unique data on Swedish multinational firms over a long period of time (1970…

This note provides sufficient conditions for immediate agreement in an extensive form model of interdependent bilateral bargaining. The model is suggested by Björnerstedt and Stennek (2006) as a work…

Sports organizations, Hollywood studios and TV channels grant satellite and cable networks exclusive rights to televise their matches, movies and media contents. Exclusive distribution prevents viewer…

According to Schumpeter, the creative process of economic development can be divided into three distinguishable stages of invention, innovation (commercialization) and imitation. We show why there is…

We propose a model of trade agreements in which contracting is costly, and as a consequence the optimal agreement may be incomplete. Inspite of its simplicity, the model yields rich predictions on the…

In this introductory chapter to a collective volume dealing with the political economy of entrepreneurship, we argue, based on a suggested unifying framework, that political economy is a fruitful appr…

Following a severe contraction in the early 1990s, the Swedish economy accumulated a strong record of output growth coupled with a disappointing performance in the labor market. As of 2005, hours work…

A government wanting to promote an efficient allocation of resources as measured by the total surplus, should strategically delegate to its competition authority a welfare standard with a bias in favo…

This paper questions whether competition can replace sector-specific regulation of mobile telecommunications. We show that the monopolistic outcome prevails independently of market concentration when…

This paper surveys the law and economics literature on WTO dispute settlement. As a background, we first briefly lay out main features of the legal framework, and discuss possible roles of a dispute s…

There is diverging empirical evidence on the competitive effects of horizontal mergers: consumer prices (and thus presumably competitors' profits) often rise while competitors' share prices fall. Our…

This paper applies a systems-oriented, “holistic” approach to China’s radical economic reforms during the last quarter of a century. It characterizes China’s economic reforms in terms of a multidimens…

The policy debate in recent years has increasingly focused on issues concerning size distribution of firms and employment. It is often claimed that we are approaching a new economic era where large en…

I discuss the nature of the economic reforms in China during the last quarter of a century in the context of a typology of economic systems, emphasizing the interaction between economic and social mec…

Recent theoretical models suggest that the costs governments face when defaulting on their domestic and external debt may differ considerably. This paper examines if this proposed cost difference is r…

We use the 1952 Swedish municipal amalgamation reform to study free-riding and the common pool problem in politics. We expect municipalities that were affected by the reform to increase their debt in…

Multinational firms pay relatively high wages. Less is known about the wage structure within multinational and non-multinational firms. We examine the impact of acquisitions on wage dispersion in Swed…

Numerous studies on firm-level data have reported higher average wages in foreign-owned firms than in domestically-owned firms. This, however, does not necessarily imply that the individual worker’s w…

We present new evidence on the influence of income inequality on generalized trust. Using individual panel data from Swedish counties together with an instrumental variable strategy, we find that diff…

The conventional Nordic historiography of World War II states that there were few, if any, in the Nordic countries who perceived a significantly increased threat of war between 1938 and early 1940. At…

Israel M. Kirzner is the 2006 winner of The International Award for Entrepreneurship and Small Business Research. In this essay, we present and evaluate his main contributions to the economics of entr…

The paper studies the role of communication in facilitating collusion. The situation of infinitely repeated Cournot competition in the presence of antitrust enforcement is considered. Firms observe on…

We study the role of beauty in politics. For the first time, focus is put on differences in how women and men evaluate female and male candidates and how different candidate traits relate to success i…

We show that, in the case when innovations are for sale, increased product market competition, captured by reduced product market profits, can increase the incentives for innovations. The reason is th…

We study the interplay between money market development and changes in monetary policy operating procedures in 11 European countries from c. 1980 up to the launch of EMU. Aspects of money market devel…

We analyze producer price developments in the transition from a national exchange rate regime to a monetary union. The focus is on the European Economic and Monetary Union (EMU). Stylized facts witnes…

This study presents new homogenous series of top income shares in Sweden over the period 1903–2004. We find that, starting from levels of inequality approximately equal to those in other Western count…

Investment liberalizing countries are often concerned that cross-border mergers & acquisitions, in contrast to greenfield investments, might have an adverse effect on domestic firms and consumers.…

This study consists of an examination of productivity growth following three major technological breakthroughs: the steam power revolution, electrification and the ICT revolution. The distinction betw…

We find that reduced foreign corporate taxes may lead to inefficient foreign acquisitions if complementarities between foreign and domestic assets are low, and to efficient foreign acquisitions if suc…

External financing is important when inventors and small technology-based firms wish to commercialize their inventions. However, it is likely that problems related to adverse selection and moral hazar…

This paper starts out with a brief discussion of the historical background, the justifications and the political forces behind the built up of the modern welfare state. It also summarizes its major ac…

We study the impact of job proximity on individual employment and earnings. The analysis exploits a Swedish refugee dispersal policy to get exogenous variation in individual locations. Using very deta…

We analyze the consequences for sickness absence of a selective softening of job security legislation for small firms in Sweden in 2001. According to our differences-in-difference estimates, aggregate…

A large literature on ex ante moral hazard in income insurance emphasizes that the individual can affect the probability of an income loss by choice of lifestyle and hence, the degree of risk-taking.…

We investigate if voluntary team formation is gender neutral. To this end, we model team formation as a random matching process influenced by the agents' preferences for team size and gender compositi…

The National Treatment clause (NT) is the first-line defense in the GATT (and in most other trade agreements) against opportunistic exploitation of the inevitable incompleteness of the agreement. This…

We analyze the effects of offshoring of intermediate input production on labor demand in Sweden, distinguishing between workers with different educational attainments. The econometric results using da…

Analyzing a large panel that matches public firms with worker-level data, we find that managerial entrenchment affects workers’ pay. CEOs with more control pay their workers more, but financial incent…

Entrepreneurship is largely ignored or treated in a highly simplified way in endogenous growth theory. Still, it is now widely recognized that the supply of entrepreneurial talent is likely to be impo…

The Todaro Paradox states that policies aimed at reducing urban unemployment are bound to backfire: they will raise rather than reduce urban unemployment. The aim of this paper is to reexamine this pa…

We highlight the role of commuting cost, location and housing market in crime decision. By assuming that all crimes are committed in the central business district and that criminals create both positi…

This article attempts a formal analysis of the connection between property tax and urban sprawl in U.S. cities. We develop a theoretical model that includes households (who are also landlords) and lan…

This paper investigates the effects of horizontal acquisitions on the performance of target firms in the 1990's. Using French manufacturing firm-level data, we examine two main indicators of performan…

We present a growth model where agents divide time between rent seeking in the form of resource competition; and working in a human capital sector, interpreted as trade or manufacturing. Rent seeking…

The paper serves as a documentation of the survey IUI has conducted on Swedish multinational firms (MNEs) in 2004. It describes recent trends in the operations of Swedish multinational firms participa…

We develop a model in which non-white individuals are defined with respect to their social environment (family, friends, neighbors) and their attachments to their culture of origin (religion, language…

The paper discusses a number of threats to the financial sustainability of social spending: increased internationalization of national economies, gradually higher relative costs of producing a number…

This paper studies whether structural properties of friendship networks affect individual outcomes in education and crime. We first develop a model that shows that, at the Nash equilibrium, the outcom…

Investment liberalizing countries are often concerned that cross-border mergers & acquisitions, in contrast to greenfield investments, might have an adverse effect on domestic firms and consumers.…

The issue considered in this study is whether objective, official reports on disability status are reliable. While there is a rather large literature on the reliability of self-reported disability, ev…

We analyze the evolution of cultural traits when parents purposefully invest resources in order to socialize their children to the cultural traits that maximize child lifetime utility. We assume that…

We examine the effect of corruption on foreign direct investments (FDI). Starting out from the theory of FDI, we show that corruption can have different effects on horizontal investments, which are pr…

In this paper, we empirically address the hypothesis that there is a relationship between the supply of human capital and the rate and direction of skill-biased technical change (SBTC). Using country-…

We develop a model of vertical pricing in which an original manufacturer sets wholesale prices in two markets that are integrated at the distributor level by parallel imports (PI). The manufacturing f…

This paper examines if international trade can reduce total welfare in an international oligopoly with differentiated goods. We show that welfare is a U-shaped function in the transport cost as long a…

We investigate monetary-policy autonomy under different exchange-rate regimes in small, open European economies during the 1980s and 1990s. We find no systematic link between ex post monetary-policy a…

In this paper we derive an exposure-based measure of Cash-Flow-at-Risk (CFaR). Existing approaches to calculating CFaR either only focus on cash flow conditional on market changes or neglect market-ri…

This paper contributes to the study of tacit collusion by analyzing infinitely repeated multiunit uniform price auctions in a symmetric oligopoly with capacity constrained firms. Under both the Market…

Theoretically, cross ownership may mitigate mergers, i.e. market concentrations. Holding a share in a competing firm before the acquisition of another firm, outsider-toehold, is more profitable in som…

We analyze motivations for, and possible alternatives to, the Stability and Growth Pact (SGP). With regard to the former, we identify domestic policy failures and various cross-country spillover effec…

Some high tax countries concerned about outward flight of capital have reacted by imposing so called dual income tax systems. The idea is to keep high taxes on labour while holding low tax rates on ca…

Using cultural transmission, we develop a model that gives some microfoundation to the impact of residential neighborhood on children's educational attainment and then test it using the UK National Ch…

This paper evaluates partial acquisition strategies. The model allows for buying a share of a firm before the actual acquisition takes place. Holding a share in a competing firm before the acquisition…

The aim of this paper is to study the impact of the size and the quality of social networks on the probability to find a job. We first develop a theoretical model in which individuals are embedded wit…

This paper examines the job finding methods of different ethnic groups in the UK. The theoretical framework shows that less assimilated ethnic unemployed workers are more likely to use their friends a…

Exit of venture-backed firms often takes place through sales to incumbents. We show that in such an environment, venture-backed firms have stronger incentive to develop basic innovations into commerci…

Recent theoretical work has examined the spatial distribution of unemployment using the efficiency wage model as the mechanism by which unemployment arises in the urban economy. This paper extends the…

Previous research has been inconclusive as regards the effect of outward foreign direct investment (FDI) on domestic investments. In this article we show that this inconclusiveness can be explained at…

Using a unique database on individual Swedish patents, a survival model estimates how different factors influence the time it takes until commercialization starts. To the best of my knowledge, such an…

We consider policy issues regarding parallel imports (PIs) of brand-name pharmaceuticals in the European Union, where such trade is permitted. We develop a simple model in which an original manufactur…

We examine coordinated effects of mergers in the Swedish retail market for gasoline during the period 1986-2002. Despite significant changes in market concentration and many factors conductive to coor…

We consider a search-matching model in which black workers are discriminated against and the job arrival rates of all workers depend on social networks as well as distance to jobs. Location choices ar…

The major strand of finance literature understands market efficiency through the market’s ability to process information into prices. Another strand of literature refers to the economists’ usual sense…

We analyze the effect of deadlines on timing of effort when agents are occasionaly distracted. We show that agents get started early when completion of the task is uncertain, but rather likely. Agents…

This paper presents evidence that, in Europe, production of high-tech goods is attracted to large markets, while R&D activities tend to be located away from them. In order to explain this phenomen…

Criminals are embedded in a network of relationships. Social ties among criminals are modeled by means of a graph where criminals compete for a booty and benefit from local interactions with their nei…