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Journal Article
Do primary energy resources influence industry location?
By choosing to locate in a particular place, firms create employment opportunities for workers living there. And the wages they pay increase demand for local goods and services, creating additional job opportunities and further increasing the tax base. Consequently, state and local governments go to great lengths to encourage firms to locate within their boundaries.> In recent years, volatility in energy markets due to deregulation and events in the Middle East have increased the role that energy resource endowments may play in firm location. Thus, economic development agencies in energy ...
Journal Article
Do only big cities innovate? : technological maturity and the location of innovation
Innovation enhances economic performance. High rates of innovation are associated with high rates of productivity growth, and faster productivity growth leads to higher real wages and improvements in standards of living. Consequently, many local policymakers are eager to encourage higher rates of innovation in their areas. Theoretical and empirical studies of the geography of innovation find that relatively populous regions are the most conducive to innovative activity. Large and densely populated places offer more developed markets for the specialized inputs used in innovation. Populous ...
Report
Payment networks in a search model of money
In a simple search model of money, we study a special kind of memory that gives rise to an arrangement resembling a payment network. Specifically, we assume that agents can pay a cost to access a central database that tracks payments made and received. Incentives must be provided to agents to access the central database and to produce when they participate in this arrangement. We also study policies that can loosen these incentive constraints. In particular, we show that a "no-surcharge" rule has good incentive properties. Finally, we compare our model with that of Cavalcanti and Wallace.
Working Paper
Barriers to network-specific innovation
We consider an environment in which participants make payments over a network and can invest in a technology that reduces the marginal cost of using the network. A network effect results in multiple equilibria; either all agents invest and usage of the network is high or no agents invest and usage of the network is low. The high-usage equilibrium can be implemented through introduction of a coordinator. Under monopoly network ownership, however, fixed costs associated with use of the network-specific technology result in a hold-up problem that implements the low-investment equilibrium. And ...
Working Paper
Measuring R & D spillovers : on the importance of geographic and technological proximity
Evidence is presented which suggest that an important measure of the apparent geographic localization of R&D spillovers may be an artifact of industrial agglomeration. A production function framework is used to examine the role of geographic and technological proximity for inter-firm spillovers from R&D. The largest spillovers are found to flow between firms in the same industry. However, spillovers within narrowly defined technological groups do not appear to be attenuated by distance. Geographic proximity does appear to attenuate spillovers that cross narrowly defined technological ...
Working Paper
On the importance of geographic and technological proximity for R&D spillovers : an empirical investigation
Empirical studies of the external effects of R&D suggest that both geographic and technological distance attenuate inter-firm spillovers from innovative activity. The results presented here indicate that the tendency for R&D spillovers to localize economic activity is conditional on the technological relation between spillover generating and receiving firms. The production function framework is generalized to control for correlation between measures of geographic and technological proximity. Coefficient estimates confirm that R&D spillovers are largest among technological neighbors. However, ...
Report
Barriers to network-specific innovation
We examine incentives for network-specific investment and the implications for network governance. We model an environment in which participants that make payments over a network can invest in a technology that reduces the marginal cost of using the network. A network effect results in multiple equilibria; either all agents invest and network usage is high or no agents invest and network usage is low. When commitment is feasible, the high-use equilibrium can be implemented; however, when commitment is infeasible, fixed costs associated with use of the network-specific technology result in a ...
Working Paper
Is auditor independence endogenous: evidence and implications for public policy
This paper examines the extent to which firm-specific levels of auditor-independence are codetermined with alternative inputs to governance production. We identify a number of governance-producing mechanisms that are causally or simultaneously related to auditor independence. These results are shown to be robust to omitted variable bias. Consequently, prescriptive regulation of auditor independence will be at least partly offset by firm adjustments on alternative governance-producing margins. ; Original title: Optimization in production of corporate governance - evidence from auditor ...