1 May 2015

Social Trust and Differential Reactions of Local and Foreign Investors to Public News

Chunxin Jia, Yaping Wang, and Wei Xiong use the different types of shares issued by some Chinese firms to foreign and Chinese investors to compare reactions of local and foreign investors to the same news. They find that local investors react more strongly to earnings forecasts by local analysts, while foreign investors react more strongly to forecasts of foreign analysts. Social trust could explain this finding.

30 April 2015

The Growing Segmentation of the Charter School Sector in North Carolina

Helen F. Ladd, Charles T. Clotfelter, and John B. Holbein examine the evolution of charter schools in North Carolina between 1999 and 2012 through the lens of a market model, analyzing enrollment trends, racial imbalance, test scores and other factors. They find a rising fraction of white, high-achieving students in charter schools, and a decline in racial balance.

30 April 2015

Government Preference for Heavy Industry Distorting
China's Economy, Macroeconomic Conferees Are Told

Tao Zha of Emory University and the NBER (above) presented research at the 30th Annual NBER Conference on Macroeconomics into changes in the Chinese economy caused by government policies that favor heavy industry and distort business finance. He and his colleagues were among six groups whose work was discussed at the conference, which was held in Cambridge April 17-18. Other presentations focused on Americans’ declining desire to work, public debt crises in the United States and Europe, the Chinese housing boom, and effects of economic shocks on business networks. Full videos of presentations and brief interviews with researchers are posted here.

New NBER Research

29 April 2015

How Fast are Semiconductor Prices Falling?

The U.S. Producer Price Index (PPI) suggests that semiconductor prices have barely fallen in recent years, despite rapid improvement in the performance of microprocessor units (MPUs). David M. Byrne, Stephen D. Oliner, and Daniel E. Sichel suggest that the matched-model methodology that underlies the PPI began to understate price declines in the mid-2000s, and that hedonic indexes show sharper price declines.

28 April 2015

China's "Great Leap Forward" in Science and Engineering

In the past two decades, China leapt from bit player in global science and engineering to the world's largest source of science and engineering graduates and second-largest producer of scientific papers. Findings of Richard B. Freeman and Wei Huang suggest that global mobility of people and ideas allowed China to reach the scientific and technological frontier much faster and more efficiently than would have been possible in earlier times.

27 April 2015

Do Foreign Firm Betas Change During Cross-listing?

The betas of foreign stocks that are cross-listed on U.S. stock exchanges have been shown to change over time. Most of the change arises from greater integration between their home markets and the U.S., not from the event of cross-listing, according to Karen K. Lewis. Among those companies for which this explanation does not apply, the betas change significantly after, not during, the cross-listing event.

24 April 2015

Spatial Variation in Higher Education Financing and the Supply of College Graduates

Exploring differences in state and local subsidies of college education and variations in education levels across the United States, John Kennan finds that generous subsidies have significant effects on college enrollments, especially at community colleges. Effects on the educational level of the local labor force are long-lasting, and are only slightly dissipated through cross-state migration.

23 April 2015

The Effect of Community Traumatic Events on Student Achievement: Evidence from the Beltway Sniper Attacks

Probing the effects of the 2002 “Beltway Sniper” attacks on student achievement in Virginia’s public schools, Seth Gershenson and Erdal Tekin find that the attacks significantly reduced proficiency rates in schools within five miles of an attack. Evidence of a causal effect is most robust for third grade reading and third and fifth grade math proficiency. Supplementary analyses suggest that these deleterious effects faded out in subsequent years.

22 April 2015

Tax-Efficient Asset Management:
Evidence from Equity Mutual Funds

Mutual funds can reduce the tax burdens of their shareholders by investing in securities that are relatively lightly taxed and by avoiding realizing capital gains. Such strategies may constrain investment opportunities and might reduce before-tax performance. But an analysis of U.S. equity funds by Clemens Sialm and Hanjiang Zhang finds that funds which practice tax-efficient management do not underperform other funds.

21 April 2015

Donor Governance and Financial Management in Prominent U.S. Art Museums

“Donor governance” occurs when contributors to non-profit institutions place restrictions on their gifts that limit the discretion of managers. In a study of U.S. art museums, David Yermack finds that, when donor restrictions are strong, museums shift their cost structures away from administration and toward program services. They also exhibit very high savings rates, retaining in their endowments 45 cents of each incremental dollar donated.
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