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O - Economic Development, Innovation, Technological Change, and Growth

Economic Development, Innovation, Technological Change, and Growth

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Entrepreneurship, Small Businesses, and Economic Growth in Cities: An Empirical Analysis

Does entrepreneurship cause urban economic growth and if so how large is the impact? Empirical analysis of such question is hampered by endogeneity. This paper uses two different sets of variables – the homestead exemption levels in state bankruptcy laws from 1975 and the share of MSA overlaying aquifers - to instrument for entrepreneurship and examine urban growth between 1993 and 2002. Despite using different sets of instrumental variables, the ranges of 2SLS estimates are similar, further supporting the significant impact of entrepreneurship on urban growth.

Pay by Design: Teacher Performance Pay Design and the Distribution of Student Achievement

We present results of a randomized trial testing alternative approaches of mapping student achievement into rewards for teachers. Teachers in 216 schools in western China were assigned to performance pay schemes where teacher performance was assessed by one of three different methods. We find that teachers offered “pay-for-percentile” incentives (Barlevy and Neal 2012) outperform teachers offered simpler schemes based on class average achievement or average gains over a school year. Moreover, pay-for-percentile incentives produced broad-based gains across students within classes.

Crossing Party Lines: The Effects of Information on Redistributive Politics

Many lament that weak accountability and poor governance impede economic development in Africa. Politicians rely on ethnic allegiances that deliver the vote irrespective of performance, dampening electoral incentives. Giving voters information about candidate competence counters ethnic loyalty and strengthens accountability. I extend a canonical electoral model to show how information provision ‡ows through voter behavior and ultimately impacts the distribution of political spending.

Do Government Guaranteed Small Business Loans Promote Economic Growth and Entrepreneurship?

This paper examines the impact of government guaranteed small business loans on urban economic growth, and compares the growth impacts of government versus market financed entrepreneurship. OLS estimates indicate a significant and positive relation between the Small Business Administration’s guaranteed loans and metropolitan growth between 1993 and 2002. However, first-difference and instrumental variable regressions show no growth impact from government guaranteed loans. In contrast, market entrepreneurship significantly and positively contributes to local economic growth.

Can Bureaucrats Really be Paid Like CEOs? School Administrator Incentives for Anemia Reduction in Rural China

A large literature examines performance pay for managers in the private sector, but little is known about performance pay for managers in public sector bureaucracies. In this paper, we study performance incentives rewarding school administrators for reducing anemia among their students. Randomly assigning 170 schools to three performance incentive levels and two orthogonal sizes of unconditional grants, we analyze performance pay and its complementarity with discretionary resources.

Let's Make Software Patentable...or Maybe Let's Not: Evidence from the Indian Software Industry

This paper analyzes the impact of changes in the availability of patent protection for software in India over the past decade. We nd that a proposed broadening of patent eligible subject matter to include software had a large positive effect on average on companies' stock market returns in India, but little eect on their patenting behavior. An unanticipated reversal of this proposed policy change resulted in substantial negative stock market returns.

Patents, Competition, and Innovation – Evidence from Compulsory Licensing During WWI

This paper examines whether the US decision during World War I to violate enemy owned patents - through compulsory licensing - discouraged invention. Estimates from a new data set of German patents indicate a 28 percent increase in invention. Controls for patent quality suggest that only a small share of the increase was due to lower quality, strategic patents. Firm-level data suggest that compulsory licensing facilitated competitive entry into fields with licensing. Firms whose patents had been licensed began to patent more in research fields with licensing.

Do Patent Pools Encourage Innovation? Evidence from 20 U.S. Industries Under the New Deal

Patent pools, which allow competing firms to combine their patents, have emerged as a prominent mechanism to resolve litigation when multiple firms own patents for the same technology. This paper takes advantage of a window of regulatory tolerance under the New Deal to investigate the effects of pools on innovation within 20 industries. Difference-in-differences regressions imply a 16 percent decline in patenting in response to the creation of a pool.

Copyright and Creativity – Evidence from Italian Operas

This paper exploits variation in the adoption of copyright laws within Italy – as a result of Napoleon’s military campaign - to examine the effects of copyrights on creativity. To measure variation in the quantity and quality of creative output, we have collected detailed data on 2,598 operas that premiered across eight states within Italy between 1770 and 1900. These data indicate that the adoption of copyrights led to a significant increase in the number of new operas premiered per state and year.

Climate and Conflict

Until recently, neither climate nor conflict have been core areas of inquiry within economics, but there has been an explosion of research on both topics in the past decade, with a particularly large body of research emerging at their intersection. In this review, we survey this literature on the interlinkages between climate and conflict, by necessity drawing from both economics and other disciplines given the inherent interdisciplinarity of research in this field.


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