Working Papers 2000–2009 (WP528–WP816)

Assuming that job search efficiency decreases with distance to jobs, workers' location in a city depends on spatial elements such as commuting costs and land prices and on labour elements such as wage…

We propose a simple investment model which shows that, in the presence of fluctuations in and uncertainty about the opportunity cost of time, marginal individuals may choose to delay their education i…

The dynamics of self-confidence are modelled in an environment where rational individuals optimally choose educations and occupations with the aim to acquire productive skills while learning about abi…

By combining new data on bilateral asset holdings with data on securities regulation in an empirical gravity model, it is found that bilateral differences in securities regulation lead to decreased po…

This paper analyzes corporate restructuring and its role in generating labor productivity growth in a sample of large Swedish manufacturing corporations. It is found that external restructuring, inclu…

This study examines the relation between the internationalization of firms and CEO compensation. Starting from a sample of Norwegian and Swedish listed firms we analyze the effects of internationaliza…

A finite number of heterogeneous firms facing demand-induced price fluctuations imperfectly compete for heterogeneous workers. Because firms must commit to wages and employment before the realization…

We consider a population of heterogenous laborers and landlords who belong to different ethnic groups so that working together implies a cost (because of language and cultural differences). Part of th…

This paper studies privatization policy in an international oligopoly. The argument that equal treatment of foreign investors will be detrimental to domestic welfare by shifting profits from domestic…

A model is considered in which optimal search intensity is a result of a trade off between short run losses due to higher search costs (more interviews, commuting...) and long-run gains due to a highe…

This paper examines the restructuring of state assets in markets deregulated by privatizations and investment liberalizations. We show that the government has a stronger incentive to restructure than…

The aim of this paper is to introduce endogenous housing consumption in an efficiency wage model in which two cases are considered: very high and zero relocation costs. First, in both cases, we are ab…

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…

This paper determines the equilibrium ownership structure in an emerging market deregulated by privatization and investment liberalization. It is shown that bidding competition in the privatization st…

This paper provides a unified explanation for why blacks commit more crime, are located in poorer neighborhoods and receive lower wages than whites. If everybody believes that blacks are more criminal…

We develop a model in which delinquents compete with each other in criminal activities but may benefit from being friends with other criminals by learning and acquiring proper know-how on the crime bu…

We analyze an oligopoly model in which differentiated criminal organizations globally compete on criminal activities and engage in local corruption to avoid punishment. When law enforcers are sufficie…

This paper analyses recruitment practices to Samhall, a state-owned company that provides sheltered employment for individuals with severe work disabilities. Besides providing employment for disabled…

Two-way trade in (almost) homogenous products has ambiguous welfare effects if entry is restricted. We examine Swedish imports of bottled water to investigate whether transport cost losses from trade…

We analyse voter turnout as a function of referendum types. An advisory referendum produces advice that a legislature may or may not take into account when choosing between two alternatives, whereas a…

This paper presents a new approach to the theory of the firm by identifying factor complementarities as central to the determination of the firm's boundaries. The factor complementarities may take a v…

The expansion of welfare-state arrangements is seen as the result of dynamic interaction between market behaviour and political behaviour, often with considerable time lags, sometimes generating eithe…

The regional voting pattern of the Swedish EU-membership referendum is analyzed to determine voters' preferences over two fiscal regimes: an autonomous Sweden, or Sweden as part of the EU. A major dif…

We analyze the development of the Swedish ownership model after World War II. The controlling ownership in Swedish firms is typically concentrated to one or two owners. Often, but not always, the cont…

In Europe, accounting standards prevent larger expenditures on employer-sponsored training from being treated as investments. Using Sweden as example, we discuss two consequences for training. First,…

A "chain of replacement" model is used to examine the effects of automobile taxes and of a scrappage premium on the life length of cars, and on the size of the car fleet. The predictions of the model…

The Knowledge Capital Model (KC-model), described in Markusen (2002), encompasses both market size (horizontal) as well as factor endowment (vertical) explanations to why multinational production occu…

We investigate experimentally how the share of experienced traders in double-auction asset markets affects trading, in particular the occurrence of bubble-crash pricing patterns. In each session, six…

The achievements of social-welfare arrangements in Western Europe are well known: considerable income security, relatively little poverty and, in some countries, ample supply of social services. But t…

The growth effects of international financial liberalization and integration are investigated using the methodology and data developed by Rajan and Zingales (1998). The main result is that industries…

The paper analyses the interaction between economic incentives and work norms in the context of social insurance. If the work norm is endogenous in the sense that it is weaker when the population shar…

This paper considers the effects of union-bargained minimum wages on transitions into and out of employment in the hotels and catering industry over the period 1979–99. This industry is characterised…

In this paper, I analyze the commercialization of patents in the Swedish medicine & hygiene sector. A unique database makes it possible to use a new method, where I follow the commercialization pr…

We construct a model in which a number of equally powerful ethnic groups compete for power by engaging in civil war. In non-redistributive equilibrium, ethnically homogeneous and ethnically diverse co…

A people's culture, norms and habits are important determinants not just of the quality of social life but of economic progress and growth. In this paper we take the view that while the importance of…

Developing countries, in particular the least developed ones, probably have more to learn from social policies in Europe during the early 20th century than from the elaborate welfare-state arrangement…

We characterize pension systems along three dimensions: 1) actuarial vs. non-actuarial, 2) funded vs. pay-as-you-go, 3) defined-contribution vs. defined-benefit. Increasing the degree of actuarial fai…

An important issue in the debate on voucher systems and school choice is what effects competition from independent schools will have on public schools. Sweden has made a radical reform of its system f…

This study explores how relative skilled-wage premia affect FDI. Contrary to previous studies based on factor endowment differences, we find strong support for vertical FDI, in the sense that more FDI…

Dynamic decision-making without commitment is usually modelled as a game between the current and future selves of the decision maker. It has been observed that if the time-horizon is infinite, then su…

Real exchange and interest rates may still fluctuate inside the EMU and give rise to changes in competitiveness. We find, in contrast to what is generally expected, no convergence in these variables a…

Is discounting of future instantaneous utilities consistent with altruism towards future selves? More precisely, can temporal preferences, expressed as a sum of discounted instantaneous utilities, be…

Value Based Management (VBM) has become a common tool for ex ante and ex post evaluation of corporate strategies and projects from the perspective of shareholder value maximization (SVM). VBM-framewor…

This paper analyses simultaneous regulation of cost and quality when firms have private, correlated information about productivity and the regulator receives a signal about quality. It is shown that m…

We investigate whether temporal preferences expressed as a sum of discounted consumption utilities can be derived from a welfare representation in the form of a sum of discounted total utilities. We f…

Increased integration and growing macroeconomic fluctuations require more attention to be paid to the link between the ”noise” that these fluctuations represent and the company’s own development. For…

We investigate the interaction between cross-border acquisitions and greenfield entry in a multi-firm setting. It is shown that the net profits of the acquirer may decrease when the acquisition gives…

Investment liberalizing countries are often concerned that cross-border mergers & acquisitions might have an adverse effect on domestic firms and benefit multinational enterprises (MNEs). However,…

This study examines the effect of foreign (Anglo-American) board membership on corporate performance measured in terms of firm value (Tobin’s Q). On a basis of firms with headquarters in Norway or Swe…

This paper studies a model of how political parties use resources for campaigning to inform voters. Each party has a predetermined ideology drawn from some distribution. Parties choose a platform and…

We investigate the dramatic transformation of ownership policies and ownership structure in Sweden during the postwar period. After WWII, Swedish ownership policies were guided by a socialist vision w…

This paper deals with the interplay between economic incentives and social norms in firms. We outline a simple model of team production and provide preliminary results on linear incentive schemes in t…

We provide a cultural explanation to the phenomenon of corruption in the framework of an overlapping generations model with intergenerational transmission of values. We show that the economy has two s…

This paper tests the insiders' dilemma hypothesis in a laboratory experiment. The insiders' dilemma means that a profitable merger does not occur, because it is even more profitable for each firm to u…

This paper provides a simple explanation for why some minority groups are economically successful, despite being subject to government-mandated discriminatory policies. We study an economy with privat…

Government firms and authorities often sell services in the free market via affiliated consulting firms (CFs). In this study, I analyze whether these agents have an unfair competitive edge compared to…

The competitive effect of international market integration in industries with imperfect competition is of great policy interest. This paper focuses on the link between monopolization and market segmen…

What is the impact of the increasing dominance of conventional firms in e-commerce? We use a simple model to show that retailers who only sell through Internet have lower on-line prices than retailers…

Markets with imperfect competition do not induce a cost-minimizing allocation of production between firms. The market's ability to rationalize production is even more limited if costs are private info…

This report studies the importance of efficiency gains from horizontal mergers. A general theme throughout this report is that efficiency gains, and their pass-on to consumers, may vary substantially…

Children who can count on support from altruistic parents may not try hard to succeed in the labor market. Moreover, parental altruism makes withdrawal of such support non-credible. To promote work ef…

In intermediate goods markets, both buyers and sellers normally have market power, and sales are based on bilaterally negotiated contracts specifying both price and quantity. In our model, pairs of bu…

This article argues that the body of foreign direct investment (FDI) literature in general and the ownership, location, and internalization (OLI) paradigm in particular would be enriched if finance-sp…

Multinational enterprises (MNEs) are important in transmitting technology across national borders. Not only do they allow for transfer of technology within the firm, but it is also believed that they…

The poorest nations of the world suffer from extreme disease burdens, which go largely untreated because weak incomes and the prevailing system of intellectual property rights fail to provide sufficie…

Recent developments in society have generated misalignment between the welfare state and socio-economic conditions and preferences. This paper emphasis developments in the labor market and the structu…

Unlike previous analyses, we consider (i) that IT may affect productivity growth both directly and indirectly, through human capital interactions, and (ii) possible externalities in the use of IT. Exa…

The paper discusses the consequences for the functioning of different pension systems of various types of socioeconomic changes, mainly demographic developments, variations in productivity growth and…

Standards and technical regulations which govern the admissibility of imported goods into an economy raise costs of exporters entering new markets, and may have a particularly high impact on firms see…

imports is unlimited, the manufacturer chooses deterrence and international prices converge. Second, with endogenously limited arbitrage the manufacturing firm accommodates and the price in the home m…

We derive a family of probabilistic choice models including the multinomial logit model, from a microeconomic model in which the decision maker has to make some effort in order to avoid mistakes when…

The purpose of this report is to contribute to the analysis of two questions. Should a merger control system take into account efficiency gains from horizontal mergers, and balance these gains against…

In this paper, a model of product innovation is developed that endogenizes the degree of cooperation. Two opposing forces affect firm profit in an R&D joint venture. Cooperation increases the qual…

Anticompetitive mergers increase competitors' profits, since they reduce competition. Using a model of endogenous mergers, we show that such mergers nevertheless may reduce the competitors' share-pric…

Anticompetitive mergers benefit competitors more than the merging firms. We show that such externalities reduce firms' incentives to merge (a holdup mechanism). Firms delay merger proposals, thereby f…

This paper presents the results of a survey of Swedish multinationals conducted in 1999. The survey was carried out in order to update an existing database on Swedish manufacturing firms with producin…

A model of occupational choice and human capital investment is developed and tested. The model allows family background to influence occupational choice via access to economic resources, differences i…

This paper analyses the effects of price and market size variables on the investment propensities in the pulp and paper industry. A panel of 15 European countries in the time period 1984 - 1997 is use…

Decentralisation of decision-making in active labour market policy makes it possible to use local information to the fullest, but may also impinge on the fulfilment of national objectives, as suggeste…

This paper determines the equilibrium market structure in a mixed international oligopoly, where the state assets are sold at an auction. The model suggests that low greenfield costs and low trade cos…

This paper presents a unified analytical framework for the analysis of social security reform. It discusses reform along two dimensions: Pay-As-You-Go versus fully funded on the one hand, and actuaria…

This paper provides deterministic approximation results for stochastic processes that arise when finite populations recurrently play finite games. The deterministic approximation is defined in continu…

The classical Roy-model of selection on the labor market is extended in order to analyze intergenerational mobility. This is done by linking ability uncertainty to family background. I derive implicat…

In Capitalism, Socialism and Democracy Joseph A. Schumpeter concluded that socialism would eventually displace capitalism in Western democracies. This would come about as a result of the superior perf…

Consulting firms (CFs) sell services on a project basis to many clients and must therefore continuously tender for new contracts. One frequently used strategy by CFs is to visit the clients in connect…

This paper determines the equilibrium market structure in an international oligopoly which is opened up by a privatization. Market power is shown to be an important determinant of the equilibrium mark…

The recent 'scientification' of commercial technology has brought the interface between universities and industry into sharp focus. In particular, academic entrepreneurship, i.e., the variety of ways…

Centralized wage-setting institutions compress relative wages. Motivated by this fact, we investigate the effects of centralized wage setting on the industry distribution of employment. We examine Swe…

Most econometric studies of equity market integration suggest that national markets are increasingly becoming part of a global equity market. As regards the extent of this integration, however, the re…

The paper examines the determinants of the division of labor within firms. It provides an explanation of the pervasive observed changes in work organization away from the traditional functional depart…