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Wednesday, October 19, 2016

Jobs plan

The Rise and Fall of Unions in the United States

Emin Dinlersoz & Jeremy Greenwood

Journal of Monetary Economics, October 2016, Pages 129-146

Abstract:
Union membership in the United States displayed a ∩-shaped pattern over the 20th century, while income inequality sketched a ∪. A model of unions is developed to analyze these facts. There is a distribution of productivity across firms in the economy. Firms hire capital, plus skilled and unskilled labor. Unionization is a costly process. A union chooses how many firms to organize and the union wage. Simulation of the model establishes that skill-biased technological change, which affects the productivity of skilled labor relative to unskilled labor, can potentially explain the observed paths for union membership and income inequality.

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Bad Credit, No Problem? Credit and Labor Market Consequences of Bad Credit Reports

Will Dobbie et al.

NBER Working Paper, October 2016

Abstract:
Credit reports are used in nearly all consumer lending decisions and, increasingly, in hiring decisions in the labor market, but the impact of a bad credit report is largely unknown. We study the effects of credit reports on financial and labor market outcomes using a difference-in-differences research design that compares changes in outcomes over time for Chapter 13 filers, whose personal bankruptcy flags are removed from credit reports after 7 years, to changes for Chapter 7 filers, whose personal bankruptcy flags are removed from credit reports after 10 years. Using credit bureau data, we show that the removal of a Chapter 13 bankruptcy flag leads to a large increase in credit scores, and an economically significant increase in credit card balances and mortgage borrowing. We study labor market effects using administrative tax records linked to personal bankruptcy records. In sharp contrast to the credit market effects, we estimate a precise zero effect of flag removal on e mployment and earnings outcomes. We conclude that credit reports are important for credit market outcomes, where they are the primary source of information used to screen applicants, but are of limited consequence for labor market outcomes, where employers rely on a much broader set of screening mechanisms.

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The Rise and Nature of Alternative Work Arrangements in the United States, 1995-2015

Lawrence Katz & Alan Krueger

NBER Working Paper, September 2016

Abstract:
To monitor trends in alternative work arrangements, we conducted a version of the Contingent Worker Survey as part of the RAND American Life Panel in late 2015. The findings point to a significant rise in the incidence of alternative work arrangements in the U.S. economy from 2005 to 2015. The percentage of workers engaged in alternative work arrangements - defined as temporary help agency workers, on-call workers, contract workers, and independent contractors or freelancers - rose from 10.7 percent in February 2005 to 15.8 percent in late 2015. The percentage of workers hired out through contract companies showed the largest rise, increasing from 1.4 percent in 2005 to 3.1 percent in 2015. Workers who provide services through online intermediaries, such as Uber or Task Rabbit, accounted for 0.5 percent of all workers in 2015. About twice as many workers selling goods or services directly to customers reported finding customers through offline intermediaries than through online intermediaries.

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Does the United States Have a Productivity Slowdown or a Measurement Problem?

David Byrne, John Fernald & Marshall Reinsdorf

Brookings Papers on Economic Activity, Spring 2016, Pages 109-182

Abstract:
After 2004, measured growth in labor productivity and total factor productivity slowed. We find little evidence that this slowdown arises from growing mismeasurement of the gains from innovation in information technology-related goods and services. First, the mismeasurement of information technology hardware is significant preceding the slowdown. Because the domestic production of these products has fallen, the quantitative effect on productivity was larger in the 1995-2004 period than since then, despite mismeasurement worsening for some types of information technology. Hence, our adjustments make the slowdown in labor productivity worse. The effect on total factor productivity is more muted. Second, many of the tremendous consumer benefits from the “new” economy such as smartphones, Google searches, and Facebook are, conceptually, nonmarket: Consumers are more productive in using their nonmarket time to produce services they value. These benefits raise consume r well-being but do not imply that market sector production functions are shifting out more rapidly than measured. Moreover, estimated gains in nonmarket production are too small to compensate for the loss in overall well-being from slower market sector productivity growth. In addition to information technology, other measurement issues that we can quantify (such as increasing globalization and fracking) are also quantitatively small relative to the slowdown.

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Mismatch Unemployment and the Geography of Job Search

Ioana Marinescu & Roland Rathelot

NBER Working Paper, September 2016

Abstract:
Could we significantly reduce U.S. unemployment by helping job seekers move closer to jobs? Using data from the leading employment board CareerBuilder.com, we show that, indeed, workers dislike applying to distant jobs: job seekers are 35% less likely to apply to a job 10 miles away from their ZIP code of residence. However, because job seekers are close enough to vacancies on average, this distaste for distance is fairly inconsequential: our search and matching model predicts that relocating job seekers to minimize unemployment would decrease unemployment by only 5.3%. Geographic mismatch is thus a minor driver of aggregate unemployment.

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The Consequences of Long Term Unemployment: Evidence from Matched Employer-Employee Data

Katharine Abraham et al.

U.S. Census Bureau Working Paper, September 2016

Abstract:
It is well known that the long-term unemployed fare worse in the labor market than the short term unemployed, but less clear why this is so. One potential explanation is that the long-term unemployed are “bad apples” who had poorer prospects from the outset of their spells (heterogeneity). Another is that their bad outcomes are a consequence of the extended unemployment they have experienced (state dependence). We use Current Population Survey (CPS) data on unemployed individuals linked to wage records for the same people to distinguish between these competing explanations. For each person in our sample, we have wage record data that cover the period from 20 quarters before to 11 quarters after the quarter in which the person is observed in the CPS. This gives us rich information about prior and subsequent work histories not available to previous researchers that we use to control for individual heterogeneity that might be affecting subsequent labor market outco mes. Even with these controls in place, we find that unemployment duration has a strongly negative effect on the likelihood of subsequent employment. This finding is inconsistent with the heterogeneity (“bad apple”) explanation for why the long-term unemployed fare worse than the short-term unemployed. We also find that longer unemployment durations are associated with lower subsequent earnings, though this is mainly attributable to the long-term unemployed having a lower likelihood of subsequent employment rather than to their having lower earnings once a job is found.

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Understanding Declining Fluidity in the U.S. Labor Market

Raven Molloy et al.

Brookings Papers on Economic Activity, Spring 2016, Pages 183-259

Abstract:
In this paper, we first document a clear, downward trend in labor market fluidity that is common across a variety of measures of worker and job turnover. This trend began in the early 1980s, if not somewhat earlier. Next, we present evidence for a variety of hypotheses that might explain this downward trend, which is only partly related to population demographics and is not due to the secular shift in industrial composition. Moreover, this decline in labor market fluidity seems unlikely to have been caused by an improvement in worker-firm matching or by mounting regulatory strictness in the labor or housing markets. Plausible avenues for further exploration include changes in the worker-firm relationship, particularly with regard to compensation adjustment; changes in firm characteristics, such as firm size and age; and a decline in social trust, which may have increased the cost of job searches or made both parties in the hiring process more risk averse.

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Can welfare abuse be welfare improving?

Karol Mazur

Journal of Public Economics, September 2016, Pages 11-28

Abstract:
In this paper, I analyze quantitatively a model of labor search with unemployment insurance (UI), savings, voluntary quits and various labor attachment requirements. In particular, I study welfare consequences of a powerful reform giving UI entitlement to workers quitting their jobs voluntarily in order to search for another one. Results of the model calibrated to the US labor market show that there are significant welfare gains associated with pursuing a generous entitlement policy for quitters as compared to the US status-quo. Moreover, I employ the assumption of monetary search costs and show that it can explain the empirically documented unemployed worker search behavior. Finally, by inducing different unemployment benefit eligibility requirements, the model identifies a concrete policy that could help us understand differences in the unemployment rate, match quality and income inequality between the US and Europe.

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The Effects of Algorithmic Labor Market Recommendations: Evidence from a Field Experiment

John Horton

Journal of Labor Economics, forthcoming

Abstract:
Algorithmically recommending workers to employers for the purpose of recruiting can substantially increase hiring: in an experiment conducted in an online labor market, employers with technical job vacancies that received recruiting recommendations had a 20% higher fill rate compared to the control. There is no evidence that the treatment crowded-out hiring of non-recommended candidates. The experimentally induced recruits were highly positively selected and were statistically indistinguishable from the kinds of workers employers recruit “on their own.” Recommendations were most effective for job openings that were likely to receive a smaller applicant pool.

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If I Leave Here Tomorrow: An Option View of Migration When Labor Market Quality Declines

John Gardner & Joshua Hendrickson

University of Mississippi Working Paper, September 2016

Abstract:
In this paper we provide a framework for determining when it is optimal to move when labor market opportunities are declining. We model the decision to migrate as akin to owning a financial option in which the exercise price is the fixed cost of moving. We show that a higher fixed cost associated with moving and a higher standard deviation of the quality of the labor market reduce the incentive to migrate. We then empirically examine whether the standard deviation of indicators of labor market quality reduce the likelihood of migration. Our findings strongly support this hypothesis, and imply that for the relatively mobile population of high-skilled workers, the counterfactual outmigration rates that would obtain if future labor-market quality were known with certainty are more than twice observed rates.

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Worker migration or job creation? Persistent shocks and regional recoveries

R. Greenaway-McGrevy & Kyle Hood

Journal of Urban Economics, November 2016, Pages 1-16

Abstract:
Although a large body of literature has documented the role of household out-migration in the recovery from regional downturns, the role that firms play in the recovery process has remained a neglected topic of research. Firms may choose to locate new jobs in depressed regions, thereby reducing unemployment through the job creation channel. We present a new empirical model of regional adjustment that permits us to decompose recoveries into both household and firm responses to local economic conditions. The model features a set of auxiliary serial dependence parameters that are used to filter out persistency in the identified labor market shocks, so that changes in employment obtained from the fitted model only reflect the endogenous firm response of interest, and not the ongoing exogenous job destruction from the original downturn. We find that the labor demand response is two to three times larger than the labor supply response, meaning that local job creation - and not household out-migration - is the main driver of recoveries in the US. This result is robust to a variety of model specifications, identification strategies, and estimation methods.

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The Effects of Negative House Price Changes on Migration: Evidence across U.S. Housing Downturns

Andrew Foote

Regional Science and Urban Economics, September 2016, Pages 292-299

Abstract:
I estimate the extent to which negative house price changes lower mobility for some homeowners. My identification strategy employs a reduced-form model that uses variation in state-year house price changes, as well as variation in a homeowner's exposure to house price changes, based on pre-existing leverage. I find that house price declines cause migration to decrease for homeowners that have low equity, but that there is no effect for the most leveraged homeowners. Differences in default costs across states do not appear to affect the mobility of homeowners in negative equity. Housing lock-in effects are larger in the most recent recession, affecting both in-state and interstate migration.

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The Lifecycle of Inventors

Alex Bell et al.

Harvard Working Paper, June 2016

Abstract:
We use administrative records on the population of individuals who applied for or were granted a patent between 1996 and 2014 to characterize the lives of more than 1.2 million inventors in the United States. We show that children of low-income parents are much less likely to become inventors than their higher-income counterparts (as are minorities and women). Decompositions using third grade and older test scores indicate that this income-innovation gap can largely be accounted for by differences in human capital acquisition while children are growing up. We establish the importance of "innovation exposure effects" during childhood by showing that growing up in an area with a high innovation rate in a particular technology class is associated with a much higher probability of becoming an inventor specifically in that technology class. Similarly, exposure to innovation from parents or their colleagues in specific fields is also associated with greater future innovation by children in those same technological fields. Inventors' incomes are very skewed and uncertain at the start of their career. While our analysis does not directly identify the causal mechanisms that drive innovation, our descriptive findings shed light on which types of policy tools are likely to be most effective in sparking innovation. Calibrations suggest that "extensive margin" policies drawing more talented children from low-income families into the R&D sector have great potential to improve aggregate innovation rates.

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The recent decline of single quarter jobs

Henry Hyatt & James Spletzer

Labour Economics, forthcoming

Abstract:
Rates of hiring and job separation fell by as much as a third in the U.S. between the late 1990s and the early 2010s. Half of this decline is associated with the declining incidence of jobs that start and end in the same calendar quarter, employment events that we call “single quarter jobs.” We investigate this unique subset of jobs and its decline using matched employer-employee data for the years 1996-2012. We characterize the worker demographics and employer characteristics of single quarter jobs, and demonstrate that changes over time in workforce and employer composition explain little of the decline in these jobs. We find that the decline in these jobs accounts for about a third of the decline in the fraction of the population that holds a job in the private sector that occurred from the mid-2000s to the early 2010s. We also find little evidence that single quarter jobs are stepping stones into longer-term employment. Finally, we show that the inclusion or exclusion of these single quarter jobs creates divergent trends in average earnings and the dispersion of earnings for the years 1996-2012. To the extent that administrative records measure the volatile tail of the employment distribution better than conventional household surveys, these findings show that measurement of short duration jobs matters for economic analysis.

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Insecure times? Workers' perceived job and labor market security in 23 OECD countries

Lena Hipp

Social Science Research, November 2016, Pages 1-14

Abstract:
By examining the association between employees' perceptions of job security and central labor market policies and characteristics, this paper seeks to understand the mechanisms through which institutions generate confidence and positive expectations among individuals regarding their economic future. The analyses distinguish between different facets of perceived job security and different institutional mechanisms. My multilevel analyses of a data set that contains information on 12,431 individuals and 23 countries show that some labor market policies and characteristics are more likely than others to provide workers with subjective security. Unemployment assistance in particular is an effective means of reducing workers' worries about job loss. Dismissal protection, by contrast, only unleashes its psychologically protective effects under certain conditions. The paper's main conclusion is that the effectiveness of policies varies and that different types of labor market institutions serve as complements rather than as substitutes.

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Firing Costs and Capital Structure Decisions

Matthew Serfling

Journal of Finance, October 2016, Pages 2239-2286

Abstract:
I exploit the adoption of state-level labor protection laws as an exogenous increase in employee firing costs to examine how the costs associated with discharging workers affect capital structure decisions. I find that firms reduce debt ratios following the adoption of these laws, with this result stronger for firms that experience larger increases in firing costs. I also document that, following the adoption of these laws, a firm's degree of operating leverage rises, earnings variability increases, and employment becomes more rigid. Overall, these results are consistent with higher firing costs crowding out financial leverage via increasing financial distress costs.

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Impact of Labor Constraints on Firm Investment: Evidence from Right-to-Work Laws

Sudheer Chava, Andras Danis & Alex Hsu

Georgia Institute of Technology Working Paper, September 2016

Abstract:
We analyze the impact of staggered introduction of state level right-to-work (RTW) laws on corporate investment using a difference-in-differences estimation. We find that RTW law passage is associated with a 14.47% higher investment-to-asset ratio for firms headquartered in the state, with the effect being more pronounced for financially unconstrained firms. We ameliorate endogeneity concerns using a geographic regression discontinuity design. Our evidence is consistent with both a wage channel, where RTW laws lead to lower wages, and a debt channel, where they affect the leverage ratio, which then influences investment. Our results highlight how labor market frictions can have spillover effects on corporate policies.

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The Relationships between Economic Freedom and Economics Dynamism

Keith Barnatchez & Robert Lester

Contemporary Economic Policy, forthcoming

Abstract:
We analyze the consequences of economic freedom on economic dynamism across U.S. states and over time. Using data from the Economic Freedom of North America index, we show that states with greater economic freedom have higher rates of gross and net job creation and establishment entry. The results are robust to the inclusion of many different control variables and alternative specifications, suggesting a connection between freedom and dynamism. This evidence supports theories in which government policies may impede business dynamism.

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The Changing Benefits of Early Work Experience

Charles Baum & Christopher Ruhm

Southern Economic Journal, forthcoming

Abstract:
We examine whether the benefits of high school work experience have changed over the last 20 years by comparing effects for the 1979 and 1997 cohorts of the National Longitudinal Survey of Youth. Our main specifications suggest that the future annual earnings benefits of working 20 h per week in the senior year of high school have fallen from 17.4% for the earlier cohort, measured in 1987-1989, to 12.1% for the later cohort, in 2008-2010. The gains have diminished by similar amounts for men and women but much more substantially for those who do not later attend college than for those who do. We further show that most of the differential between cohorts can be attributed to the way that high school employment is related to subsequent adult work experience and occupational attainment.

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Educational mismatch and retirement

Keith Bender & John Heywood

Education Economics, forthcoming

Abstract:
Using a panel data set of scientists in the US, we examine the hypothesis that workers in jobs poorly matched to their education are more likely to retire. In pooled estimates, we confirm that the mismatched are more likely to retire and that among retirees, the mismatched retire at younger ages. Hazard function estimates also support the hypothesis. Workers with longer accumulated periods of mismatch are significantly more likely to retire in discrete-time duration models that account for both reasonable controls and worker heterogeneity. These findings suggest that educational mismatch and its consequences are concentrated among late-career employees.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, October 18, 2016

Space and time

American individualism rises and falls with the economy: Cross-temporal evidence that individualism declines when the economy falters

Emily Bianchi

Journal of Personality and Social Psychology, October 2016, Pages 567-584

Abstract:
Past work has shown that economic growth often engenders greater individualism. Yet much of this work charts changes in wealth and individualism over long periods of time, making it unclear whether rising individualism is primarily driven by wealth or by the social and generational changes that often accompany large-scale economic transformations. This article explores whether individualism is sensitive to more transient macroeconomic fluctuations, even in the absence of transformative social changes or generational turnover. Six studies found that individualism swelled during prosperous times and fell during recessionary times. In good economic times, Americans were more likely to give newborns uncommon names (Study 1), champion autonomy in children (Study 2), aspire to look different from others (Study 3), and favor music with self-focused language (Study 4). Conversely, when the economy was floundering, Americans were more likely to socialize children to attend to the needs of others (Study 2) and favor music with other-oriented language (Study 4). Subsequent studies found that recessions engendered uncertainty (Study 5) which in turn tempered individualism and fostered interdependence (Study 6).

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Geographical Origins and Economic Consequences of Language Structures

Oded Galor, Ömer Özak & Assaf Sarid

Brown University Working Paper, August 2016

Abstract:
This research explores the economic causes and consequences of language structures. It advances the hypothesis and establishes empirically that variations in pre-industrial geographical characteristics that were conducive to higher return to agricultural investment, larger gender gap in agricultural productivity, and more hierarchical society, are at the root of existing cross-language variations in the presence of the future tense, grammatical gender, and politeness distinctions. Moreover, the research suggests that while language structures have largely reflected the coding of past human experience and in particular the range of ancestral cultural traits in society, they independently affected human behavior and economic outcomes.

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Is There a Culture or Religion of Torture? International Support for Brutal Treatment of Suspected Terrorists

Jeremy Mayer & Naoru Koizumi

Studies in Conflict & Terrorism, forthcoming

Abstract:
Do certain cultures or religions predispose citizens to support the deployment of torture against suspected terrorists? Based on an international survey of 31 different countries, we examine how religion and culture affect respondents' position on torture. We find that at the individual level, the non-religious are resolutely opposed to torture, and that Christians, Buddhists, Hindus, Jews, and other faiths are more supportive. Among world cultures, Muslim/African cultures are most opposed to torture of terrorists, while Confucian, English-speaking, and South Asian cultures are the most supportive of it. We also find that the use of torture has less support in countries that are suffering from terrorism, once religion and culture are considered.

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Securing property rights: A dilemma experiment in Austria, Mexico, Mongolia, South Korea and the United States

T.K. Ahn et al.

Journal of Public Economics, November 2016, Pages 115–124

Abstract:
Secure property rights result from a combination of public enforcement, private protective measures, and voluntary norm-compliance. We conduct a laboratory experiment to study how culture interacts with institutions in shaping individuals' behaviors and group outcomes in a property rights dilemma. The experiment is conducted in five countries: Austria, Mexico, Mongolia, South Korea and the United States. We find that the security of property varies with the experimentally available institutions and country-level indicators such as trust and quality of government. Subjects from countries with higher levels of trust are more likely to abstain initially from theft, devote more resources to production and support funding public protection of property through taxation. Our findings highlight the relevance of cultural and institutional factors, and their interaction, in addressing the collective action problem of safeguarding property rights.

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Migration as a Test of the Happiness Set Point Hypothesis: Evidence from Immigration to Canada

John Helliwell, Aneta Bonikowska & Hugh Shiplett

NBER Working Paper, September 2016

Abstract:
Strong versions of the set point hypothesis argue that subjective well-being measures reflect each individual’s own personality and that deviations from that set point will tend to be short-lived, rendering them poor measures of the quality of life. International migration provides an excellent test of this hypothesis, since life circumstances and average subjective well-being differ greatly among countries. Life satisfaction scores for immigrants to Canada from up to 100 source countries are compared to those in the countries where they were born. With or without various adjustments for selection effects, the average levels and distributions of life satisfaction scores among immigrants mimic those of other Canadians rather than those in their source countries and regions. This supports other evidence that subjective life evaluations, especially when averaged across individuals, are primarily driven by life circumstances, and respond correspondingly when those circumstances change.

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Differences in Empathic Concern and Perspective Taking Across 63 Countries

William Chopik, Ed O’Brien & Sara Konrath

Journal of Cross-Cultural Psychology, forthcoming

Abstract:
Cultural practices socialize people to relate to others in different ways. One critical way in which these interpersonal bonds are formed and maintained is via empathy, our emotional reactivity toward others’ experiences. However, the extent to which individuals from different cultures vary in their dispositional empathy, and the correlates of these differences, are relatively unknown. Thus, the current study explored cultural variation in empathy, and how this variation is related to psychological characteristics and prosocial behavior across cultures. Evidence from an original sample of 104,365 adults across 63 countries reveals that higher empathy countries also have higher levels of collectivism, agreeableness, conscientiousness, self-esteem, emotionality, subjective well-being, and prosocial behavior. These findings reveal that empathy is situated within a broader nomological network of other psychological characteristics, emotional expression and experiences, and prosocial behavior across cultures. The current study expands our understanding about how psychological characteristics vary across cultures and how these characteristics can manifest in broader national indicators of prosocial behavior.

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Cross-Cultural Similarities and Differences in the Experience of Awe

Pooya Razavi et al.

Emotion, forthcoming

Abstract:
Current research on awe is limited to Western cultures. Thus, whether the measurement, frequency, and consequences of awe will replicate across non-Western cultures remains unanswered. To address this gap, we validated the dispositional awe scale (Shiota, Keltner, & John, 2006) in 4 countries (United States, Iran, Malaysia, and Poland; N = 1,173) with extensive variations in cultural values (i.e., power distance) and personality profiles (i.e., extraversion and openness). Multigroup factor analyses demonstrated that, across all cultures, a 3-factor model that treats awe, amusement, and pride as 3 unique emotions is superior to a single-factor model that clusters all 3 emotions together. Structurally, the scales of awe, amusement and pride were invariant across all countries. Furthermore, we found significant country-level differences in dispositional awe, with the largest discrepancy between the United States and Iran (d = 0.79); these differences are not likely due to cultural response biases. Results are discussed in terms of possible explanations for country-level differences and suggestions for future research.

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Intentional Sin and Accidental Virtue? Cultural Differences in Moral Systems Influence Perceived Intentionality

Cory Clark et al.

Social Psychological and Personality Science, forthcoming

Abstract:
Indians and U.S. Americans view harmful actions as morally wrong, but Indians are more likely than U.S. Americans to perceive helping behaviors as moral imperatives. We utilize this cultural variability in moral belief systems to test whether and how moral considerations influence perceptions of intentionality (as suggested by theories of folk psychology). Four experiments found that Indians attribute more intentionality than U.S. Americans for helpful but not harmful (Studies 1–4) or neutral side effects (Studies 2 and 3). Also, cross-cultural differences in intentionality judgments for positive actions reflect stronger praise motives (Study 3), and stronger devotion to religious beliefs and practices among Hindus (Study 4). These results provide the first direct support for the claim that features of moral belief systems influence folk psychology, and further suggest that the influence is not inherently asymmetrical; motivation to either blame or praise can influence judgments of intentionality.

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The fear gasping face as a threat display in a Melanesian society

Carlos Crivelli et al.

Proceedings of the National Academy of Sciences, forthcoming

Abstract:
Theory and research show that humans attribute both emotions and intentions to others on the basis of facial behavior: A gasping face can be seen as showing “fear” and intent to submit. The assumption that such interpretations are pancultural derives largely from Western societies. Here, we report two studies conducted in an indigenous, small-scale Melanesian society with considerable cultural and visual isolation from the West: the Trobrianders of Papua New Guinea. Our multidisciplinary research team spoke the vernacular and had extensive prior fieldwork experience. In study 1, Trobriand adolescents were asked to attribute emotions, social motives, or both to a set of facial displays. Trobrianders showed a mixed and variable attribution pattern, although with much lower agreement than studies of Western samples. Remarkably, the gasping face (traditionally considered a display of fear and submission in the West) was consistently matched to two unpredicted categories: anger and threat. In study 2, adolescents were asked to select the face that was threatening; Trobrianders chose the “fear” gasping face whereas Spaniards chose an “angry” scowling face. Our findings, consistent with functional approaches to animal communication and observations made on threat displays in small-scale societies, challenge the Western assumption that “fear” gasping faces uniformly express fear or signal submission across cultures.

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Cultural immersion alters emotion perception: Neurophysiological evidence from Chinese immigrants to Canada

Pan Liu, Simon Rigoulot & Marc Pell

Social Neuroscience, forthcoming

Abstract:
To explore how cultural immersion modulates emotion processing, this study examined how Chinese immigrants to Canada process multisensory emotional expressions, which were compared to existing data from two groups, Chinese and North Americans. Stroop and Oddball paradigms were employed to examine different stages of emotion processing. The Stroop task presented face–voice pairs expressing congruent/incongruent emotions and participants actively judged the emotion of one modality while ignoring the other. A significant effect of cultural immersion was observed in the immigrants’ behavioral performance, which showed greater interference from to-be-ignored faces, comparable with what was observed in North Americans. However, this effect was absent in their N400 data, which retained the same pattern as the Chinese. In the Oddball task, where immigrants passively viewed facial expressions with/without simultaneous vocal emotions, they exhibited a larger visual MMN for faces accompanied by voices, again mirroring patterns observed in Chinese. Correlation analyses indicated that the immigrants’ living duration in Canada was associated with neural patterns (N400 and visual mismatch negativity) more closely resembling North Americans. Our data suggest that in multisensory emotion processing, adopting to a new culture first leads to behavioral accommodation followed by alterations in brain activities, providing new evidence on human’s neurocognitive plasticity in communication.

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Culture as automatic processes for making meaning: Spontaneous trait inferences

Yuki Shimizu, Hajin Lee & James Uleman

Journal of Experimental Social Psychology, forthcoming

Abstract:
Culture shapes how we interpret behavior, symbols, customs, and more. Its operation is largely implicit, unnoticed until we encounter other cultures. Therefore deep cultural differences should be most evident in automatic processes for interpreting events, including behavior. In two studies, we compared American and Japanese undergraduates' spontaneous (unintended and unconscious) trait inferences (STIs) from behavior descriptions. Both groups made STIs but Japanese made fewer. More important, estimates of the controlled (C) and automatic (A) components of their recall performance showed no differences on C, but A was greater for Americans. Thus westerners' greater reliance on traits, in intentional and spontaneous impressions, may reflect cultural differences in automatic processes for making and recalling meaning. The advantages of locating cultural differences in automatic processes are discussed.

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Do Easterners and Westerners Differ in Visual Cognition? A Preregistered Examination of Three Visual Cognition Tasks

Nicole Hakim et al.

Social Psychological and Personality Science, forthcoming

Abstract:
When performing cognitive tasks, Easterners often process information more holistically and contextually than Westerners. This is often taken as evidence for fundamental differences in basic cognition, including attention and perception. Yet, evidence for such basic cognitive differences is inconsistent, many studies are based on small samples, and few have been replicated. We report a preregistered replication of three prominent findings of cultural differences in visual cognition, testing a substantially larger sample than the original studies. Our comparisons of American and Asian International students living in the United States provided relatively little evidence for robust and consistent cultural differences in global/local biases, relative and absolute length judgments, or change detection performance. Although we observed some differences in change detection performance when comparing Chinese to American students, those differences were inconsistent across measures. We discuss the need for larger scale replications that adequately control for the testing context and demand characteristics.

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Cultural Variations in Reasons for Advice Seeking

Li-Jun Ji et al.

Journal of Behavioral Decision Making, forthcoming

Abstract:
Five studies examined cultural differences in reasons for advice-seeking behaviors. Content analyses in Study 1A and self-ratings in Study 1B consistently revealed that Euro-Canadians were more likely than East Asians (mainly Chinese) to seek advice for informational reasons, whereas East Asians were more likely than Euro-Canadians to seek advice for relational reasons. Study 2A showed that Chinese displayed a higher level of relationship concern than Euro-Canadians in deciding from whom to seek advice in a decision dilemma. Study 2B found that, although Chinese and Euro-Canadians did not differ from each other on willingness to pay for informational advice, Chinese were willing to pay more for building a relationship with the advisor through advice seeking than Euro-Canadians were. Study 3 explored how the advice giver might perceive an advice seeker in terms of their competence and the closeness of their relationship after advice was sought for various reasons. We found that relationally oriented advice seeking increased the perceived competence of the advice seeker among Chinese more than among Euro-Canadians. Information-oriented advice seeking increased the perceived closeness between the advice seeker and advice giver among Chinese more than among Euro-Canadians. Implications for other aspects of advice exchange are discussed.

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Sociocultural Influences on Moral Judgments: East–West, Male–Female, and Young–Old

Karina Arutyunova, Yuri Alexandrov & Marc Hauser

Frontiers in Psychology, September 2016

Abstract:
Gender, age, and culturally specific beliefs are often considered relevant to observed variation in social interactions. At present, however, the scientific literature is mixed with respect to the significance of these factors in guiding moral judgments. In this study, we explore the role of each of these factors in moral judgment by presenting the results of a web-based study of Eastern (i.e., Russia) and Western (i.e., USA, UK, Canada) subjects, male and female, and young and old. Participants (n = 659) responded to hypothetical moral scenarios describing situations where sacrificing one life resulted in saving five others. Though men and women from both types of cultures judged (1) harms caused by action as less permissible than harms caused by omission, (2) means-based harms as less permissible than side-effects, and (3) harms caused by contact as less permissible than by non-contact, men in both cultures delivered more utilitarian judgments (save the five, sacrifice one) than women. Moreover, men from Western cultures were more utilitarian than Russian men, with no differences observed for women. In both cultures, older participants delivered less utilitarian judgments than younger participants. These results suggest that certain core principles may mediate moral judgments across different societies, implying some degree of universality, while also allowing a limited range of variation due to sociocultural factors.

By KEVIN LEWIS | 09:00:00 AM

Monday, October 17, 2016

Corporate control

The Elephant (or Donkey) in the Boardroom: How Board Political Ideology Affects CEO Pay

Abhinav Gupta & Adam Wowak

Administrative Science Quarterly, forthcoming

Abstract:
We examine how directors’ political ideologies, specifically the board-level average of how conservative or liberal directors are, influence boards’ decisions about CEO compensation. Integrating research on corporate governance and political psychology, we theorize that conservative and liberal boards will differ in their prevailing beliefs about the appropriate amounts CEOs should be paid and, relatedly, the extent to which CEOs should be rewarded or penalized for recent firm performance. Using a donation-based index to measure the political ideologies of directors serving on S&P 1500 company boards, we test our ideas on a sample of over 4,000 CEOs from 1998 to 2013. Consistent with our predictions, we show that conservative boards pay CEOs more than liberal boards and that the relationship between recent firm performance and CEO pay is stronger for conservative boards than for liberal boards. We further demonstrate that these relationships are more pronounced when focusing specifically on the directors most heavily involved in designing CEO pay plans — members of compensation committees. By showing that board ideology manifests in CEO pay, we offer an initial demonstration of the potentially wide-ranging implications of political ideology for how corporations are governed.

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Socially responsible firms

Allen Ferrell, Hao Liang & Luc Renneboog

Journal of Financial Economics, forthcoming

Abstract:
In the corporate finance tradition, starting with Berle and Means (1932), corporations should generally be run to maximize shareholder value. The agency view of corporate social responsibility (CSR) considers CSR an agency problem and a waste of corporate resources. Given our identification strategy by means of an instrumental variable approach, we find that well-governed firms that suffer less from agency concerns (less cash abundance, positive pay-for-performance, small control wedge, strong minority protection) engage more in CSR. We also find that a positive relation exists between CSR and value and that CSR attenuates the negative relation between managerial entrenchment and value.

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Friends in the right places: The effect of political connections on corporate merger activity

Stephen Ferris, Reza Houston & David Javakhadze

Journal of Corporate Finance, December 2016, Pages 81–102

Abstract:
This study examines how the appointment of former politicians and regulators to boards of directors or management teams influences corporate acquisition activity and performance. We find that bidders with political connections are more likely to acquire targets and avoid regulatory delay or denial. The merger premium paid increases with political connectedness. The announcement period returns show that investors recognize that bids by politically connected acquirers are more likely to create firm value. Connected bidders make more bids and bid on larger targets. Connected acquirers also enjoy superior post-merger financial and operating performance.

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Distracted Shareholders and Corporate Actions

Elisabeth Kempf, Alberto Manconi & Oliver Spalt

Review of Financial Studies, forthcoming

Abstract:
Investor attention matters for corporate actions. Our new identification approach constructs firm-level shareholder “distraction” measures, by exploiting exogenous shocks to unrelated parts of institutional shareholders’ portfolios. Firms with “distracted” shareholders are more likely to announce diversifying, value-destroying, acquisitions. They are also more likely to grant opportunistically timed CEO stock options, more likely to cut dividends, and less likely to fire their CEO for bad performance. Firms with distracted shareholders have abnormally low stock returns. Combined, these patterns are consistent with a model in which the unrelated shock shifts investor attention, leading to a temporary loosening of monitoring constraints.

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The impact of firm prestige on executive compensation

Florens Focke, Ernst Maug & Alexandra Niessen-Ruenzi

Journal of Financial Economics, forthcoming

Abstract:
We show that chief executive officers (CEOs) of prestigious firms earn less. Total compensation is on average 8% lower for firms listed in Fortune’s ranking of America’s most admired companies. We suggest that CEOs are willing to trade off status and career benefits from working for a publicly admired company against additional monetary compensation. Our identification strategy is based on matched sample analyses, difference-in-differences regressions, and a regression discontinuity design. We perform several robustness checks and exclude many alternative explanations, including that firm prestige just proxies for better corporate governance or for increased exposure of the pay-setting process to media attention.

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Credit derivatives as a commitment device: Evidence from the cost of corporate debt

Gi Kim

Journal of Banking & Finance, December 2016, Pages 67–83

Abstract:
When a firm writes incomplete debt contracts, its limited ability to commit to not strategically default and renegotiate its debt requires the firm to pay higher yields to its creditors. Hedged by credit derivatives, creditors have stronger bargaining power in the case of debt renegotiation, which ex-ante demotivates the firm to default strategically. In this paper, I aim to investigate theoretically and empirically whether credit derivatives could help reduce the cost of debt contracting stemming from the possibility of strategic default. I find that firms with a priori high strategic default incentives experience a relatively large reduction in their corporate bond spreads after the introduction of credit default swaps (CDS) written on their debt. This result is robust to controlling for the endogeneity of CDS introduction. My finding is consistent with the presence of CDS reducing the strategic default-related cost of corporate debt, suggesting the beneficial role of credit derivatives as a commitment device for the borrower to repay the lender.

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Growth opportunities, short-term market pressure, and dual-class share structure

Bradford Jordan, Soohyung Kim & Mark Liu

Journal of Corporate Finance, forthcoming

Abstract:
We test the hypothesis that dual-class shares can help managers focus on the implementation of long-term projects while avoiding short-term market pressure. Consistent with this idea, we find that dual-class firms face lower short-term market pressure (fewer transient or short-term institutional holdings, a lower probability of being taken over, and lower analyst coverage) than propensity-matched single-class firms. Dual-class firms also tend to have more growth opportunities (higher sales growth and R&D intensity). The dual-class share structure increases the market valuation of high growth firms, in contrast to the finding in the literature that dual-class firms trade at lower valuations. To address endogeneity concerns, we evaluate a sample of dual-class share unifications and find that growth opportunities decline while short-term market pressure increases after share unifications.

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Good Monitoring, Bad Monitoring

Yaniv Grinstein & Stefano Rossi

Review of Finance, August 2016, Pages 1719-1768

Abstract:
Are courts effective monitors of corporate decisions? In a controversial landmark case, the Delaware Supreme Court held directors personally liable for breaching their fiduciary duties, signaling a sharp increase in Delaware’s scrutiny over corporate decisions. In our event study, low-growth Delaware firms outperformed matched non-Delaware firms by 1% in the three day event window. In contrast, high-growth Delaware firms under-performed by 1%. Contrary to previous literature, we conclude that court decisions can have large, significant and heterogeneous effects on firm value, and that rules insulating directors from court scrutiny benefit the fastest growing sectors of the economy.

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Incentives, termination payments, and CEO contracting

Stuart Gillan & Nga Nguyen

Journal of Corporate Finance, forthcoming

Abstract:
Many executives have compensation that is potentially forfeit conditioned on the circumstances surrounding their departure from the firm. We study firms' endogenous decisions to use such compensation “holdbacks” as a bonding device and find that firms with higher executive replacement costs, greater information asymmetry, more certain operating environments, and recent accounting concerns are more likely to have holdbacks. Additionally, holdbacks are negatively associated with incentive-based compensation, consistent with theoretical predictions that termination incentives can substitute for incentive pay. Further, holdbacks are positively associated with abnormal compensation, consistent with arguments that managers demand a premium to accept risky pay.

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The Value of International Income Shifting Opportunities to U.S. Multinational Firms

Paul Demere & Jeffrey Gramlich

University of Illinois Working Paper, August 2016

Abstract:
We examine the value of firms’ opportunities to reduce their corporate tax burden by shifting income from high- to low-tax jurisdictions. Prior literature shows that firms do engage in tax-motivated cross-jurisdictional income shifting; however, the contribution of such shifting to firm value has not been examined or quantified. We develop and validate a new measure of U.S. multinational firms’ tax-motivated income shifting opportunities. Using this measure, we find that income shifting opportunities are associated with a discount on firm value of 2.2 to 3.7 percent for a standard deviation increase in income shifting opportunities. We also find a positive association between changes in income shifting and returns that reverses in future periods, consistent with investors not immediately understanding the value consequences of income shifting. These negative value consequences are greater for firms with more intangible asset generating activities, consistent with tax-motivated income shifting opportunities facilitating managerial rent extraction, creating myopic investment behavior, or subjecting firms to significant compliance, regulatory, or reputational costs. Ultimately, we find evidence supporting the view that income shifting opportunities reduce firm value by increasing myopic investment behavior.

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The second wave of hedge fund activism: The importance of reputation, clout, and expertise

C.N.V. Krishnan, Frank Partnoy & Randall Thomas

Journal of Corporate Finance, October 2016, Pages 296–314

Abstract:
Using a large dataset of hand-collected information on activist interventions from 2008 to 2014, we examine why certain hedge funds succeed in the face of competition. We document that the top hedge funds succeed, not merely because of how they select targets, but because they acquire a reputation for what we label “clout and expertise.” These hedge funds do not intervene more frequently; to the contrary, activists with more interventions are associated with lower returns. Instead, top activists have a demonstrated ability to succeed in difficult interventions by targeting large firms, launching successful proxy fights, filing and winning lawsuits, pressuring target boards through the media, overcoming anti-takeover defenses, and replacing board members. These activists' successes appear to result more from board representation, improved performance, and monitoring management than from capital structure or dividend policy changes.

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Standing on the Shoulders of Giants: The Effect of Passive Investors on Activism

Ian Appel, Todd Gormley & Donald Keim

NBER Working Paper, September 2016

Abstract:
We analyze whether the growing importance of passive investors has influenced the campaigns, tactics, and successes of activists. We find activists are more likely to pursue changes to corporate control or influence (e.g., via board representation) and to forego more incremental changes to corporate policies when a larger share of the target company’s stock is held by passively managed mutual funds. Furthermore, higher passive ownership is associated with increased use of proxy fights and a higher likelihood the activist obtains board representation or the sale of the targeted company. Overall, our findings suggest that the increasingly large ownership stakes of passive institutional investors mitigate free-rider problems associated with certain forms of intervention and ultimately increase the likelihood of success by activists.

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Market Valuation of Anticipated Governance Changes: Evidence from Contentious Shareholder Meetings

Francois Brochet, Fabrizio Ferri & Gregory Miller

Columbia University Working Paper, July 2016

Abstract:
We define annual shareholder meetings as contentious if one or more ballot items are likely to obtain sufficient shareholder votes to induce a firm to implement governance changes. Using a sample of almost 28,000 meetings between 2003 and 2012, we find that abnormal stock returns over the 40-day period prior to contentious meetings are significantly positive and higher than prior to non-contentious meetings. These higher abnormal returns persist after controlling for firm-specific news and proxies for risk factors and are more pronounced in firms with poor past performance. Our results are consistent with investors viewing an increase in the probability of shareholder vote-induced governance changes as value creating, on average.

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Can Staggered Boards Improve Value? Evidence from the Massachusetts Natural Experiment

Robert Daines, Shelley Xin Li & Charles Wang

Harvard Working Paper, September 2016

Abstract:
We study the effect of staggered boards on long-run firm value, using a natural experiment: a 1990 law that imposed a staggered board on all firms incorporated in Massachusetts. We find a significant and positive average increase in Tobin's Q among the Massachusetts treated firms, suggesting that staggered boards can be beneficial for early-life-cycle firms, which exhibit greater information asymmetries between insiders and investors. These results are validated using a larger sample of firms from the Investor Responsibility Research Center. In exploring possible channels for these effects, we find that the effects are stronger among innovating Massachusetts firms, particularly those facing greater Wall Street scrutiny. The evidence is consistent with staggered boards improving managers' incentives to make long-term investments.

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Actual Share Repurchases, Price Efficiency, and the Information Content of Stock Prices

Pascal Busch & Stefan Obernberger

Review of Financial Studies, forthcoming

Abstract:
We examine the impact of actual share repurchases on stock prices using several measures of price efficiency and manually collected data on U.S. repurchases. We find that share repurchases make prices more efficient and reduce idiosyncratic risk. Further analyses reveal that the effects are primarily driven by repurchases in down markets. We conclude that share repurchases help to maintain accurate stock prices by providing price support at fundamental values. We find no evidence that managers use share repurchases to manipulate stock prices when selling their equity holdings or exercising stock options.

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Analyst coverage and corporate tax aggressiveness

Arthur Allen et al.

Journal of Banking & Finance, December 2016, Pages 84–98

Abstract:
We examine the impact of analyst coverage on corporate tax aggressiveness. To address endogeneity concerns, we perform a difference-in-differences analysis using a setting which causes exogenous decreases in analyst coverage. Our tests identify a negative causal effect of analyst coverage on tax aggressiveness, suggesting that higher analyst coverage constrains corporate tax aggressiveness. Further cross-sectional variation tests find that this constraining effect on tax aggressiveness is more pronounced in firms with lower investor recognition and firms with more opaque information environments. Our results are consistent with the notion that higher analyst coverage increases the visibility of aggressive tax planning behavior as well as heightens analysts’ demand for more transparent information, which in turn reduces tax aggressiveness.

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Causal effect of analyst following on corporate social responsibility

Binay Adhikari

Journal of Corporate Finance, December 2016, Pages 201–216

Abstract:
I examine the influence of sell-side financial analysts on corporate social responsibility (CSR), and find that firms with greater analyst coverage tend to be less socially responsible. To establish causality, I employ a difference-in-differences (DiD) technique, using brokerage closures and mergers as exogenous shocks to analyst coverage, as well as an instrumental variables approach. Both identification strategies suggest that analyst coverage has a negative causal effect on CSR. My findings are consistent with the view that spending on CSR is a manifestation of an agency problem, and that financial analysts curb such discretionary spending by disciplining managers.

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Are Activist Investors Good or Bad for Business? Evidence from Capital Market Prices, Informed Traders, and Firm Fundamentals

Edward Swanson & Glen Young

Texas A&M University Working Paper, August 2016

Abstract:
We provide new evidence on the important and contentious question of whether interventions by activist investors add value to the targeted companies. Our large sample covers two decades and includes interventions in which the five-percent-ownership threshold for filing SEC Schedule 13D requires too much capital. We find that short-window returns around the public announcement are significantly positive and do not reverse in the post-intervention period; analyst recommendations decline prior to the intervention but increase significantly afterward; and short interest declines significantly in the post-intervention period. These favorable reactions are supported by significant improvements in target firms’ accounting fundamentals. Finally, ownership by long-term (“dedicated”) institutional investors increases after the intervention, and ownership by short-term (“transient”) investors decreases. Taken together, actions by informed market participants and accounting fundamentals provide consistent, strong evidence that investor activism strengthens the prospects of target firms.

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Say Pays! Shareholder Voice and Firm Performance

Vicente Cuñat, Mireia Giné & Maria Guadalupe

Review of Finance, August 2016, Pages 1799-1834

Abstract:
This article estimates the effects of Say-on-Pay (SoP), a policy that increases shareholder “voice” by providing shareholders with a regular vote on executive pay. We apply a regression discontinuity design to the votes on shareholder-sponsored SoP proposals. Adopting SoP leads to large increases in market value (5%) and to improvements in long-term profitability. In contrast, it has limited effects on pay levels and structure. Taken together our results suggest that SoP can be seen as a repeated regular vote of confidence on the CEO and that it serves as a disciplining device.

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CEO Pay Disparity: Efficient Contracting or Managerial Power?

Jean Canil

Journal of Corporate Finance, forthcoming

Abstract:
This paper investigates whether CEO pay disparity reflects efficient contracting or managerial power by exploiting a quasi-natural experiment which mandated option expensing, FASB ASC 718. We find supportive evidence for the managerial power hypothesis. Relative to low pay disparity firms, firms characterized by high pay disparity exhibit a significantly larger decline in options pre- versus post-expensing. Further, high pay disparity firms are found to replenish their compensation with cash-based rather than other equity-based pay. Our findings suggest CEOs in high pay disparity firms exploited the free accounting cost of options to inflate their pay rather than for their incentive properties.

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Managerial Response to Constitutional Constraints on Shareholder Power

Brian Connelly, Wei Shi & Jinyong Zyung

Strategic Management Journal, forthcoming

Abstract:
We examine whether top managers engage in misconduct, such as illegal insider trading, illegal stock option backdating, bribery, and financial manipulation, in response to the presence, or absence, of governance provisions that impose constitutional constraints on shareholder power. Within the agency framework, shareholders typically oppose governance provisions that limit their power because those provisions could undermine shareholder influence and increase agency costs. However, when shareholders support provisions that constrain their power, managers could respond positively by refraining from self-interested behavior in the form of managerial misconduct. We find this to be especially true in industries where these governance provisions are particularly relevant to managers and in scenarios where CEOs do not also serve as board chair.

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Playing it safe? Managerial preferences, risk, and agency conflicts

Todd Gormley & David Matsa

Journal of Financial Economics, forthcoming

Abstract:
This article examines managers’ incentive to play it safe. We find that, after managers are insulated by the adoption of an antitakeover law, they take value-destroying actions that reduce their firms’ stock volatility and risk of distress. To illustrate one such action, we show that managers undertake diversifying acquisitions that target firms likely to reduce risk, have negative announcement returns, and are concentrated among firms with managers who gain the most from reducing risk. Our findings suggest that instruments typically used to motivate managers, such as greater financial leverage and larger ownership stakes, exacerbate risk-related agency challenges.

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The Role of Proxy Advisory Firms: Evidence from a Regression-Discontinuity Design

Nadya Malenko & Yao Shen

Review of Financial Studies, forthcoming

Abstract:
Proxy advisory firms have become important players in corporate governance, but the extent of their influence over shareholder votes is debated. We estimate the effect of Institutional Shareholder Services (ISS) recommendations on voting outcomes by exploiting exogenous variation in ISS recommendations generated by a cutoff rule in ISS voting guidelines. Using a regression discontinuity design, we find that from 2010 to 2011, a negative ISS recommendation on a say-on-pay proposal leads to a 25 percentage point reduction in say-on-pay voting support, suggesting a strong influence over shareholder votes. We also use our setting to examine the informational role of ISS recommendations.

By KEVIN LEWIS | 09:00:00 AM

Sunday, October 16, 2016

Just like the old days

Going south of the river: A multidisciplinary analysis of ancestry, mobility and diet in a population from Roman Southwark, London

Rebecca Redfern et al.

Journal of Archaeological Science, October 2016, Pages 11–22

Abstract:
This study investigated the ancestry, childhood residency and diet of 22 individuals buried at an A.D. 2nd and 4th century cemetery at Lant Street, in the southern burial area of Roman London. The possible presence of migrants was investigated using macromorphoscopics to assess ancestry, carbon and nitrogen isotopes to study diet, and oxygen isotopes to examine migration. Diets were found to be primarily C3-based with limited input of aquatic resources, in contrast to some other populations in Roman Britain and proximity to the River Thames. The skeletal morphology showed the likely African ancestry of four individuals, and Asian ancestry of two individuals, with oxygen isotopes indicating a circum-Mediterranean origin for five individuals. Our data suggests that the population of the southern suburb had an ongoing connection with immigrants, especially those from the southern Mediterranean.

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Resource scarcity drives lethal aggression among prehistoric hunter-gatherers in central California

Mark Allen et al.

Proceedings of the National Academy of Sciences, forthcoming

Abstract:
The origin of human violence and warfare is controversial, and some scholars contend that intergroup conflict was rare until the emergence of sedentary foraging and complex sociopolitical organization, whereas others assert that violence was common and of considerable antiquity among small-scale societies. Here we consider two alternative explanations for the evolution of human violence: (i) individuals resort to violence when benefits outweigh potential costs, which is likely in resource poor environments, or (ii) participation in violence increases when there is coercion from leaders in complex societies leading to group level benefits. To test these hypotheses, we evaluate the relative importance of resource scarcity vs. sociopolitical complexity by evaluating spatial variation in three macro datasets from central California: (i) an extensive bioarchaeological record dating from 1,530 to 230 cal BP recording rates of blunt and sharp force skeletal trauma on thousands of burials, (ii) quantitative scores of sociopolitical complexity recorded ethnographically, and (iii) mean net primary productivity (NPP) from a remotely sensed global dataset. Results reveal that sharp force trauma, the most common form of violence in the record, is better predicted by resource scarcity than relative sociopolitical complexity. Blunt force cranial trauma shows no correlation with NPP or political complexity and may reflect a different form of close contact violence. This study provides no support for the position that violence originated with the development of more complex hunter-gatherer adaptations in the fairly recent past. Instead, findings show that individuals are prone to violence in times and places of resource scarcity.

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The phylogenetic roots of human lethal violence

José María Gómez et al.

Nature, 13 October 2016, Pages 233–237

Abstract:
The psychological, sociological and evolutionary roots of conspecific violence in humans are still debated, despite attracting the attention of intellectuals for over two millennia. Here we propose a conceptual approach towards understanding these roots based on the assumption that aggression in mammals, including humans, has a significant phylogenetic component. By compiling sources of mortality from a comprehensive sample of mammals, we assessed the percentage of deaths due to conspecifics and, using phylogenetic comparative tools, predicted this value for humans. The proportion of human deaths phylogenetically predicted to be caused by interpersonal violence stood at 2%. This value was similar to the one phylogenetically inferred for the evolutionary ancestor of primates and apes, indicating that a certain level of lethal violence arises owing to our position within the phylogeny of mammals. It was also similar to the percentage seen in prehistoric bands and tribes, indicating that we were as lethally violent then as common mammalian evolutionary history would predict. However, the level of lethal violence has changed through human history and can be associated with changes in the socio-political organization of human populations. Our study provides a detailed phylogenetic and historical context against which to compare levels of lethal violence observed throughout our history.

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Late Pleistocene climate drivers of early human migration

Axel Timmermann & Tobias Friedrich

Nature, 6 October 2016, Pages 92–95

Abstract:
On the basis of fossil and archaeological data it has been hypothesized that the exodus of Homo sapiens out of Africa and into Eurasia between ~50–120 thousand years ago occurred in several orbitally paced migration episodes. Crossing vegetated pluvial corridors from northeastern Africa into the Arabian Peninsula and the Levant and expanding further into Eurasia, Australia and the Americas, early H. sapiens experienced massive time-varying climate and sea level conditions on a variety of timescales. Hitherto it has remained difficult to quantify the effect of glacial- and millennial-scale climate variability on early human dispersal and evolution. Here we present results from a numerical human dispersal model, which is forced by spatiotemporal estimates of climate and sea level changes over the past 125 thousand years. The model simulates the overall dispersal of H. sapiens in close agreement with archaeological and fossil data and features prominent glacial migration waves across the Arabian Peninsula and the Levant region around 106–94, 89–73, 59–47 and 45–29 thousand years ago. The findings document that orbital-scale global climate swings played a key role in shaping Late Pleistocene global population distributions, whereas millennial-scale abrupt climate changes, associated with Dansgaard–Oeschger events, had a more limited regional effect.

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Perimortem fractures in Lucy suggest mortality from fall out of tall tree

John Kappelman et al.

Nature, 22 September 2016, Pages 503–507

Abstract:
The Pliocene fossil ‘Lucy’ (Australopithecus afarensis) was discovered in the Afar region of Ethiopia in 1974 and is among the oldest and most complete fossil hominin skeletons discovered. Here we propose, on the basis of close study of her skeleton, that her cause of death was a vertical deceleration event or impact following a fall from considerable height that produced compressive and hinge (greenstick) fractures in multiple skeletal elements. Impacts that are so severe as to cause concomitant fractures usually also damage internal organs; together, these injuries are hypothesized to have caused her death. Lucy has been at the centre of a vigorous debate about the role, if any, of arboreal locomotion in early human evolution. It is therefore ironic that her death can be attributed to injuries resulting from a fall, probably out of a tall tree, thus offering unusual evidence for the presence of arborealism in this species.

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Detection of human adaptation during the past 2000 years

Yair Field et al.

Science, forthcoming

Abstract:
Detection of recent natural selection is a challenging problem in population genetics. Here we introduce the Singleton Density Score (SDS), a method to infer very recent changes in allele frequencies from contemporary genome sequences. Applied to data from the UK10K Project, SDS reflects allele frequency changes in the ancestors of modern Britons during the past ~2,000-3,000 years. We see strong signals of selection at lactase and the MHC, and in favor of blond hair and blue eyes. For polygenic adaptation we find that recent selection for increased height has driven allele frequency shifts across most of the genome. Moreover, we identify shifts associated with other complex traits, suggesting that polygenic adaptation has played a pervasive role in shaping genotypic and phenotypic variation in modern humans.

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A genomic history of Aboriginal Australia

Anna-Sapfo Malaspinas et al.

Nature, 13 October 2016, Pages 207–214

Abstract:
The population history of Aboriginal Australians remains largely uncharacterized. Here we generate high-coverage genomes for 83 Aboriginal Australians (speakers of Pama–Nyungan languages) and 25 Papuans from the New Guinea Highlands. We find that Papuan and Aboriginal Australian ancestors diversified 25–40 thousand years ago (kya), suggesting pre-Holocene population structure in the ancient continent of Sahul (Australia, New Guinea and Tasmania). However, all of the studied Aboriginal Australians descend from a single founding population that differentiated ~10–32 kya. We infer a population expansion in northeast Australia during the Holocene epoch (past 10,000 years) associated with limited gene flow from this region to the rest of Australia, consistent with the spread of the Pama–Nyungan languages. We estimate that Aboriginal Australians and Papuans diverged from Eurasians 51–72 kya, following a single out-of-Africa dispersal, and subsequently admixed with archaic populations. Finally, we report evidence of selection in Aboriginal Australians potentially associated with living in the desert.

By KEVIN LEWIS | 09:00:00 AM

Saturday, October 15, 2016

Something's off

How inferred contagion biases dispositional judgments of others

Sean Hingston, Justin McManus & Theodore Noseworthy

Journal of Consumer Psychology, forthcoming

Abstract:
Drawing on recent evidence suggesting that beliefs about contagion underlie the market for celebrity-contaminated objects, the current work investigates how people can make biased dispositional judgments about consumers who own such objects. Results from four experiments indicate that when a consumer comes in contact with a celebrity-contaminated object and behaves in a manner that is inconsistent with the traits associated with that celebrity, people tend to make more extreme judgments of them. For instance, if the celebrity excels at a particular task, but the target who has come into contact with the celebrity-contaminated object performs poorly, people reflect more harshly on the target. This occurs because observers implicitly expect that a consumer will behave in a way that is consistent with the traits associated with the source of contamination. Consistent with the law of contagion, these expectations only emerge when contact occurs. Our findings suggest that owning celebrity-contaminated objects signals information about how one might behave in the future, which consequently has social implications for consumers who own such objects.

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Does Reading a Single Passage of Literary Fiction Really Improve Theory of Mind? An Attempt at Replication

Maria Eugenia Panero et al.

Journal of Personality and Social Psychology, forthcoming

Abstract:
Fiction simulates the social world and invites us into the minds of characters. This has led various researchers to suggest that reading fiction improves our understanding of others’ cognitive and emotional states. Kidd and Castano (2013) received a great deal of attention by providing support for this claim. Their article reported that reading segments of literary fiction (but not popular fiction or nonfiction) immediately and significantly improved performance on the Reading the Mind in the Eyes Test (RMET), an advanced theory-of-mind test. Here we report a replication attempt by 3 independent research groups, with 792 participants randomly assigned to 1 of 4 conditions (literary fiction, popular fiction, nonfiction, and no reading). In contrast to Kidd and Castano (2013), we found no significant advantage in RMET scores for literary fiction compared to any of the other conditions. However, as in Kidd and Castano and previous research, the Author Recognition Test, a measure of lifetime exposure to fiction, consistently predicted RMET scores across conditions. We conclude that the most plausible link between reading fiction and theory of mind is either that individuals with strong theory of mind are drawn to fiction and/or that a lifetime of reading gradually strengthens theory of mind, but other variables, such as verbal ability, may also be at play.

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The effect of enclothed cognition on empathic responses and helping behavior

Belén López-Pérez et al.

Social Psychology, July/August 2016, Pages 223-231

Abstract:
Based on the enclothed cognition framework, we tested whether the physical experience of wearing a tunic and identifying it with a nursing scrub may enhance empathic and helping responding, compared to the solely physical experience of wearing the scrub or associating with its symbolic meaning. Results of Study 1 (United Kingdom; n = 150) showed that participants who wore a tunic and identified it with a nursing scrub reported higher empathic concern and helped more in a punctual scenario, compared to the other two conditions. Results of Study 2 (Spain; n = 100) supported findings from Study 1 and showed that participants who wore a tunic and identified it with a nursing scrub volunteered more hours and showed higher response latency for altruistic motivation relevant words. Thus, the current research supports the enclothed cognition framework and shows that it also affects vicarious emotions and prosocial behavior.

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Homelike thermoregulation: How physical coldness makes an advertised house a home

Bram Van Acker et al.

Journal of Experimental Social Psychology, November 2016, Pages 20–27

Abstract:
House brokers typically intuit that any type of warmth causes people to buy houses more frequently. Is this empirical reality? The authors investigated this through people's attachment towards advertised houses. A wealth of research has now linked thermoregulation to relationships (cf. IJzerman et al., 2015), and here the authors purport that this extends to people's relationships with house as a more novel solution to an ancient problem: shielding from the cold. The present package tests a preregistered idea that colder temperatures increase people's need to affiliate and, in turn, increase people's estimations of how homely a house is (measured through communality). The hypotheses of the first two studies were partly right: the authors only found that actual lower temperatures (not motivation and through a cup and outside temperature) induced people to find a house more communal, predicted by their need to affiliate. Importantly, this even predicts whether people find the house more attractive, and increases their willingness to pay for the house (Studies 1 and 2). The third study did not pan out as predicted, but still affected people's need to affiliate. The authors reason that this was caused by a methodological shortcoming (namely not as strongly being affected by temperature). The present work provides novel insights into how a house becomes a home.

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Knowing your heart and your mind: The relationships between metamemory and interoception

Elizabeth Chua & Eliza Bliss-Moreau

Consciousness and Cognition, October 2016, Pages 146–158

Abstract:
Humans experience a unified self that integrates our mental lives and physical bodies, but many studies focus on isolated domains of self-knowledge. We tested the hypothesis that knowledge of one’s mind and body are related by examining metamemory and interoception. We evaluated two dimensions of metamemory and interoception: subjective beliefs and the accuracy of those beliefs compared to objective criteria. We first demonstrated, in two studies, that metamemory beliefs were positively correlated with interoceptive beliefs, and this was not due to domain-general confidence. Finally, we showed that individuals with better metamemory accuracy also had better interoceptive accuracy. Taken together, these findings suggest a common mechanism subserving knowledge of our cognitive and bodily states.

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What’s in a Face? How Face Gender and Current Affect Influence Perceived Emotion

Daniel Harris, Sarah Hayes-Skelton & Vivian Ciaramitaro

Frontiers in Psychology, September 2016

Abstract:
Faces drive our social interactions. A vast literature suggests an interaction between gender and emotional face perception, with studies using different methodologies demonstrating that the gender of a face can affect how emotions are processed. However, how different is our perception of affective male and female faces? Furthermore, how does our current affective state when viewing faces influence our perceptual biases? We presented participants with a series of faces morphed along an emotional continuum from happy to angry. Participants judged each face morph as either happy or angry. We determined each participant’s unique emotional ‘neutral’ point, defined as the face morph judged to be perceived equally happy and angry, separately for male and female faces. We also assessed how current state affect influenced these perceptual neutral points. Our results indicate that, for both male and female participants, the emotional neutral point for male faces is perceptually biased to be happier than for female faces. This bias suggests that more happiness is required to perceive a male face as emotionally neutral, i.e., we are biased to perceive a male face as more negative. Interestingly, we also find that perceptual biases in perceiving female faces are correlated with current mood, such that positive state affect correlates with perceiving female faces as happier, while we find no significant correlation between negative state affect and the perception of facial emotion. Furthermore, we find reaction time biases, with slower responses for angry male faces compared to angry female faces.

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Anticipated Ambiguity Prolongs the Present: Evidence of a Return Trip Effect

Sam Maglio & Cherrie Kwok

Journal of Experimental Psychology: General, forthcoming

Abstract:
Every event that can occupy a span of time can also warp how long that duration feels. No shortage of factors configures such duration estimates, yet they remain largely confined to events experienced in the present moment. Might future events similarly impact duration? The present investigation leverages a phenomenological return trip effect, which documents subjectively longer outbound journeys relative to identical inbound journeys, to inform this question. Through this lens, the focal event (that which will transpire at the destination) can be decoupled from the focal duration (the span of time between the present moment and arrival at that destination). Four studies document a consistent effect in which ambiguity awaiting at a future event (occurring at the destination) expands the subjective magnitude of present durations (the travel time to the destination). Duration judgments thus appear sensitive to an increasingly broad scope of factors, informing models of temporal cognition.

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Passport Checks: Interactions Between Matching Faces and Biographical Details

Jennifer McCaffery & Mike Burton

Applied Cognitive Psychology, forthcoming

Abstract:
Matching unfamiliar faces is known to be a difficult task. However, most research has tested viewers' ability to match pairs of faces presented in isolation. In real settings, professionals are commonly required to examine photo ID that contains other biographical information too. In three experiments, we present faces embedded in passport frames and ask viewers to make face matching decisions and to check biographical information. We find that the inclusion of a passport frame reduces viewers' ability to detect a face mismatch. Furthermore, the nature of the face match influences biographical data checking — true matches lead to fewer detections of invalid data. In general, viewers were poor at spotting errors in biographical information. This pattern suggests that detection of fraudulent photo ID is even harder than current experimental studies suggest. Possible mechanisms for these effects are discussed.

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Oxytocin Modulates Semantic Integration in Speech Comprehension

Zheng Ye et al.

Journal of Cognitive Neuroscience, forthcoming

Abstract:
Listeners interpret utterances by integrating information from multiple sources including word level semantics and world knowledge. When the semantics of an expression is inconsistent with his or her knowledge about the world, the listener may have to search through the conceptual space for alternative possible world scenarios that can make the expression more acceptable. Such cognitive exploration requires considerable computational resources and might depend on motivational factors. This study explores whether and how oxytocin, a neuropeptide known to influence social motivation by reducing social anxiety and enhancing affiliative tendencies, can modulate the integration of world knowledge and sentence meanings. The study used a between-participant double-blind randomized placebo-controlled design. Semantic integration, indexed with magnetoencephalography through the N400m marker, was quantified while 45 healthy male participants listened to sentences that were either congruent or incongruent with facts of the world, after receiving intranasally delivered oxytocin or placebo. Compared with congruent sentences, world knowledge incongruent sentences elicited a stronger N400m signal from the left inferior frontal and anterior temporal regions and medial pFC (the N400m effect) in the placebo group. Oxytocin administration significantly attenuated the N400m effect at both sensor and cortical source levels throughout the experiment, in a state-like manner. Additional electrophysiological markers suggest that the absence of the N400m effect in the oxytocin group is unlikely due to the lack of early sensory or semantic processing or a general downregulation of attention. These findings suggest that oxytocin drives listeners to resolve challenges of semantic integration, possibly by promoting the cognitive exploration of alternative possible world scenarios.

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Of Mannequins and Men: Ascriptions of Mind in Faces Are Bounded by Perceptual and Processing Similarities to Human Faces

Jason Deska, Steven Almaraz & Kurt Hugenberg

Social Psychological and Personality Science, forthcoming

Abstract:
Recent research has demonstrated that ascribing minds to humanlike stimuli is a product of both their perceptual similarity to human faces and whether they engaged configural face processing. We present the findings of two experiments in which we both manipulate the amount of humanlike features in faces (in a doll-to-human morph continuum) and manipulate perceivers’ ability to employ configural face processing (via face inversion) while measuring explicit ratings of mind ascription (Study 1) and the spontaneous activation of humanlike concepts (Study 2). In both studies, we find novel evidence that ascribing minds to entities is an interactive product of both having strong perceptual similarity to human faces and being processed using configural processing mechanisms typical of normal face perception. In short, ascribing mind to others is bounded jointly by the featural cues of the target and by processes employed by the perceiver.

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People are unable to recognize or report on their own eye movements

Alasdair Clarke et al.

Quarterly Journal of Experimental Psychology, forthcoming

Abstract:
Eye movements bring new information into our visual system. The selection of each fixation is the result of a complex interplay of image features, task goals, and biases in motor control and perception. To what extent are we aware of the selection of saccades and their consequences? Here we use a converging methods approach to answer this question in three diverse experiments. In Experiment 1, participants were directed to find a target in a scene by a verbal description of it. We then presented the path the eyes took together with those of another participant. Participants could only identify their own path when the comparison scanpath was searching for a different target. In Experiment 2, participants viewed a scene for three seconds and then named objects from the scene. When asked whether they had looked directly at a given object, participants' responses were primarily determined by whether or not the object had been named, and not by whether it had been fixated. In Experiment 3, participants executed saccades towards single targets, and then viewed a replay of either the eye movement they just executed, or that of someone else. Participants were at chance to identify their own saccade, even when it contained under- and overshoot corrections. The consistent inability to report on one’s own eye movements across experiments suggests awareness of eye movements is extremely impoverished or altogether absent. This is surprising given that information about prior eye movements is clearly used during visual search, motor error correction, and learning.

By KEVIN LEWIS | 09:00:00 AM

Friday, October 14, 2016

Going wide

Centrist by Comparison: Extremism and the Expansion of the Political Spectrum

Gabor Simonovits

Political Behavior, forthcoming

Abstract:
While it is well understood that policy suggestions outside the range of mainstream debate are prevalent in various policy domains of American politics, their effects remain unexplored. In this paper, we suggest that proposing policies far from the political mainstream can re-structure voter perceptions of where alternatives lie in the ideological space. We provide support for this hypothesis using results from six survey experiments. We find that the introduction of extreme alternatives into the public discourse makes mainstream policies on the same side of the spectrum look more centrist in the public eye, thus increasing support for these moderate alternatives.

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Ideologically Extreme Candidates in U.S. Presidential Elections, 1948-2012

Marty Cohen et al.

ANNALS of the American Academy of Political and Social Science, September 2016, Pages 126-142

Abstract:
Scholars routinely cite the landslide defeats of Barry Goldwater and George McGovern as evidence that American electorates punish extremism in presidential politics. Yet systematic evidence for this view is thin. In this article we use postwar election outcomes to assess the electoral effects of extremism. In testing ten models over the seventeen elections, we find scant evidence of extremism penalties that were either substantively large or close to statistical significance.

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From the Constituent's Eye: Experimental Evidence on the District Selection Preferences of Individuals

Jonathan Winburn, Michael Henderson & Conor Dowling

Political Research Quarterly, forthcoming

Abstract:
States have increasingly taken the process of redistricting out of the hands of elected legislators and placed it with the public. The shift is in part driven by a concern that legislators are motivated to partition districts to advantage their own and their political party's electoral prospects, whereas citizens are not. We know little, however, about the preferences of the public when it comes to redistricting. One party-based argument is that individuals should prefer to share a district with as many like-minded partisans as possible to maximize their legislative representation, whereas other arguments suggest that nonpartisan factors, such as sharing a district with their community, may be more important. Using a novel experimental design, we find that for most participants, the draw to share a district with copartisans is stronger than a preference for preserving a community (county) within the district even when participants are specifically instructed to attend to local jurisdictional boundaries.

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Bleeding-heart conservatives and hard-headed liberals: The dual processes of moral judgements

Dylan Lane & Danielle Sulikowski

Personality and Individual Differences, forthcoming

Abstract:
Conservatives differ from liberals in a variety of domains, including exhibiting greater fear and disgust sensitivity. Additionally, experimental procedures to reduce reasoning ability lead to stronger endorsement of conservative views. We propose that dual-process models of moral judgements can account for these findings, with conservatives relying on System 1 (fast, emotional) and liberals relying on System 2 (slow, reasoned) processes. To test this theory, we had liberal and conservative participants respond to moral dilemmas under cognitive load or with no load. As predicted, liberals took longer to respond under cognitive load than under no load, indicating a reliance on controlled reasoning processes. Conservatives' response times were not affected by cognitive load. These differences cannot be accounted for by group differences in logical reasoning or working memory capacity. Instead, as predicted, logical reasoning ability positively predicted the time that liberals, but not conservatives, spent contemplating the dilemmas. These findings suggest that differential reliance on Systems 1 and 2 may be a fundamental aspect of left-right political orientation. They also challenge intuitionist models of morality and politics and suggest a dual-process theory of morality could account for some of the discrepancies in the political psychology literature.

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Gender Differences in the Effects of Personality Traits on Party Identification in the United States

Ching-Hsing Wang

Journal of Women, Politics & Policy, forthcoming

Abstract:
This study examines whether the Big Five personality traits have different effects on male and female party identification in the United States. Research has found associations between personality traits and partisanship in the United States. However, there is solid evidence of gender differences in personality traits, and past studies have not yet considered whether personality-partisanship relationship might be gender-differentiated. This study finds that with the increase of agreeableness, women tend to be Republicans, but men tend to be Democrats. Furthermore, as openness to experience increases, women are more likely to be strong partisans, but men are more likely to be independents or leaning partisans. To sum up, this study provides evidence that the effects of the Big Five personality traits on party identification vary by gender and suggests that it is wrong to assume that the Big Five personality traits have the same impacts on male and female party identification.

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Lay Belief in Biopolitics and Political Prejudice

Elizabeth Suhay, Mark Brandt & Travis Proulx

Social Psychological and Personality Science, forthcoming

Abstract:
Building on psychological research linking essentialist beliefs about human differences with prejudice, we test whether lay belief in the biological basis of political ideology is associated with political intolerance and social avoidance. In two studies of American adults (Study 1: N = 288, Study 2: N = 164), we find that belief in the biological basis of political views is associated with greater intolerance and social avoidance of ideologically dissimilar others. The association is substantively large and robust to demographic, religious, and political control variables. These findings stand in contrast to some theoretical expectations that biological attributions for political ideology are associated with tolerance. We conclude that biological lay theories are especially likely to be correlated with prejudice in the political arena, where social identities tend to be salient and linked to intergroup competition and animosity.

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Ideological Differences in Anchoring and Adjustment During Social Inferences

Chadly Stern & Tessa West

Personality and Social Psychology Bulletin, forthcoming

Abstract:
Recent research has demonstrated that conservatives perceive greater similarity to political ingroup members than do liberals. In two studies, we draw from a framework of "anchoring and adjustment" to understand why liberals and conservatives differ in their perceptions of ingroup similarity. Results indicate that when participants made judgments under time pressure, liberals and conservatives did not differ in assuming ingroup similarity. However, when participants were given sufficient time to make judgments, liberals assumed less similarity than conservatives did, suggesting that liberals adjusted their judgments to a greater extent than conservatives did (Studies 1 and 2). In examining an underlying motivational process, we found that when conservatives' desire to affiliate with others was attenuated, they adjusted their initial judgments of ingroup similarity to a similar extent as liberals did (Study 2). We discuss implications for research on ideology and social judgment.

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Effect of Media Environment Diversity and Advertising Tone on Information Search, Selective Exposure, and Affective Polarization

Richard Lau et al.

Political Behavior, forthcoming

Abstract:
This paper examines the effects of our modern media environment on affective polarization. We conducted an experiment during the last month of the 2012 presidential election varying both the choice of media sources available about the major presidential candidates, and the tone of political advertisements presented to subjects. We posit that voters in a high-choice, ideologically-diverse media environment will exhibit greater affective polarization than those in a "mainstream" ideologically neutral environment. We also hypothesize that subjects who are exposed to negative rather than positive political advertisements will show increased affective polarization. We provide causal evidence that the combination of a high-choice ideologically diverse media environment and exposure to negative political ads, significantly increases affective polarization. We also find that both overall information search and selective exposure to information are influenced by our experimental manipulations, with the greatest amount of search, and the most biased search, conducted by Romney supporters in the Negative Ads, Diverse Media condition.

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Varieties of American Popular Nationalism

Bart Bonikowski & Paul DiMaggio

American Sociological Review, October 2016, Pages 949-980

Abstract:
Despite the relevance of nationalism for politics and intergroup relations, sociologists have devoted surprisingly little attention to the phenomenon in the United States, and historians and political psychologists who do study the United States have limited their focus to specific forms of nationalist sentiment: ethnocultural or civic nationalism, patriotism, or national pride. This article innovates, first, by examining an unusually broad set of measures (from the 2004 GSS) tapping national identification, ethnocultural and civic criteria for national membership, domain-specific national pride, and invidious comparisons to other nations, thus providing a fuller depiction of Americans' national self-understanding. Second, we use latent class analysis to explore heterogeneity, partitioning the sample into classes characterized by distinctive patterns of attitudes. Conventional distinctions between ethnocultural and civic nationalism describe just about half of the U.S. population and do not account for the unexpectedly low levels of national pride found among respondents who hold restrictive definitions of American nationhood. A subset of primarily younger and well-educated Americans lacks any strong form of patriotic sentiment; a larger class, primarily older and less well educated, embraces every form of nationalist sentiment. Controlling for sociodemographic characteristics and partisan identification, these classes vary significantly in attitudes toward ethnic minorities, immigration, and national sovereignty. Finally, using comparable data from 1996 and 2012, we find structural continuity and distributional change in national sentiments over a period marked by terrorist attacks, war, economic crisis, and political contention.

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More Polarized but More Independent: Political Party Identification and Ideological Self-Categorization Among U.S. Adults, College Students, and Late Adolescents, 1970-2015

Jean Twenge et al.

Personality and Social Psychology Bulletin, October 2016, Pages 1364-1383

Abstract:
In three nationally representative surveys of U.S. residents (N = 10 million) from 1970 to 2015, more Americans in the early 2010s (vs. previous decades) identified as Independent, including when age effects were controlled. More in the early 2010s (vs. previous decades) expressed polarized political views, including stronger political party affiliation or more extreme ideological self-categorization (liberal vs. conservative) with fewer identifying as moderate. The correlation between party affiliation and ideological views grew stronger over time. The overall trend since the 1970s was toward more Americans identifying as Republican or conservative. Older adults were more likely to identify as conservative and Republican. More Millennials (born 1980-1994) identify as conservative than either GenXers or Boomers did at the same age, and fewer are Democrats compared with Boomers. These trends are discussed in the context of social identification processes and their implications for the political dynamics in the United States.

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"That's not how it works": Economic indicators and the construction of partisan economic narratives

Ian Anson

Journal of Elections, Public Opinion and Parties, forthcoming

Abstract:
This study examines the processes through which partisans update their (biased) economic judgments during periods of mixed and asymmetric economic performance. I show evidence that citizens express relatively unbiased perceptions of the movement of the stock market, suggesting that partisans do not engage in processes of motivated reasoning when reporting judgments of widely available economic data. Instead, partisans respond to fluctuations in stock market performance by revising their assumptions about the way the economy works: in response to positive or negative developments, the stock market is perceived to be more or less important for the health of the broader US economy depending upon Americans' partisan worldviews. This form of biased narrative construction has substantial importance in light of a "two-speed" post-Great Recession economy.

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The Mind Versus the Body in Political (and Nonpolitical) Discourse: Linguistic Evidence for an Ideological Signature in U.S. Politics

Michael Robinson et al.

Journal of Language and Social Psychology, forthcoming

Abstract:
Ideological liberals may focus on mental operations to a greater extent than bodily operations, whereas this pattern may be reversed among conservatives. Although there are suggestive sources of evidence, prior research has not directly examined relations between political ideology and this mind-body distinction. The present investigation did so by content-coding texts using the Linguistic Inquiry and Word Count program and its cognitive and bodily process categories. Three studies involving posts to political news websites (Study 1), presidential State of the Union addresses (Study 2), and writing samples by laypersons (Study 3) converged on the hypothesis that texts produced by those with liberal ideologies would score positively in mind-body terms (reflecting a greater relative mental focus), whereas texts produced by those with conservative ideologies would score negatively in mind-body terms (reflecting a greater bodily focus), a novel linguistic signature of political ideology.

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Failure to Converge: Presidential Candidates, Core Partisans, and the Missing Middle in American Electoral Politics

Larry Bartels

ANNALS of the American Academy of Political and Social Science, September 2016, Pages 143-165

Abstract:
The logic of electoral competition suggests that candidates should have to adopt moderate issue positions to win majority support. But U.S. presidential candidates consistently take relatively extreme positions on a variety of important issues. Some observers have attributed these "polarized" positions to the extreme views of the parties' core supporters. I characterize the issue preferences of core Republicans, core Democrats, and swing voters over the past three decades and assess how well the positions of presidential candidates reflect those preferences. I find that Republican candidates have generally been responsive to the positions of their base. However, Democratic candidates have often been even more extreme than the Democratic base, suggesting that electoral polarization is due in significant part to candidates' own convictions rather than the need to mollify core partisans. Neither party's presidential candidates have been more than minimally responsive to the views of swing voters.

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Articulating ideology: How liberals and conservatives justify political affiliations using morality-based explanations

Daniel Rempala, Bradley Okdie & Kilian Garvey

Motivation and Emotion, October 2016, Pages 703-719

Abstract:
Two studies examined the degree to which participants' were aware of their morality-based motivations when determining their political affiliations. Participants from the U.S. indicated what political party (if any) they affiliated with and explained their reasons for that affiliation. For participants who identified as "Liberal/Democrat" or "Conservative/Republican," coders read the responses and identified themes associated with Moral Foundations Theory. In Study 1, thematic differences between liberals and conservatives paralleled previous research, although the extent of the disparities was more pronounced than expected, with the two groups showing little overlap. In Study 2, the actual influence of Moral Foundations (as measured by the Moral Foundations Questionnaire) was dramatically greater than was indicated by the coding of participants' open-ended responses. In addition, actual disparities in use of Moral Foundations between liberals and conservatives were greater than participants' stereotyped perceptions. We discuss how this research furthers our understanding of conscious motivations for political affiliation and can help to facilitate political discourse.

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Why Are "Others" So Polarized? Perceived Political Polarization and Media Use in 10 Countries

JungHwan Yang et al.

Journal of Computer-Mediated Communication, September 2016, Pages 349-367

Abstract:
This study tests the associations between news media use and perceived political polarization, conceptualized as citizens' beliefs about partisan divides among major political parties. Relying on representative surveys in Canada, Colombia, Greece, India, Italy, Japan, South Korea, Norway, the United Kingdom, and the United States, we test whether perceived polarization is related to the use of television news, newspaper, radio news, and online news media. Data show that online news consumption is systematically and consistently related to perceived polarization, but not to attitude polarization, understood as individual attitude extremity. In contrast, the relationships between traditional media use and perceived and attitude polarization is mostly country dependent. An explanation of these findings based on exemplification is proposed and tested in an experimental design.

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Parenthood and the polarisation of political attitudes in Europe

Susan Banducci et al.

European Journal of Political Research, November 2016, Pages 745-766

Abstract:
Becoming a parent can affect the lives of men and women by introducing salient new social roles and identities, altered social networks and tighter constraints on financial resources and time. Even though modern family life has evolved in many important respects, parenthood continues to shape the lives of men and women in very different ways. Given that parenthood can change the lives of men and women in profoundly different ways, it seems that it would bring about changes in the way women and men think about politics and policy issues. Using data from the Wave 4 of the European Social Survey, this article investigates how parenthood, and the distinctions of motherhood and fatherhood, influence attitudes. The findings suggest that parenthood can have a polarising effect on attitudes, and that the polarising effect is most evident in countries where there is less support from the state for parental responsibilities.

By KEVIN LEWIS | 09:00:00 AM

Thursday, October 13, 2016

Seeing opportunities

The Role of Colorism in Explaining African American Females’ Suspension Risk

Jamilia Blake et al.

School Psychology Quarterly, forthcoming

Abstract:
African American female students’ elevated suspension risk has received national attention. Despite a number of studies documenting racial/ethnic disparities in African American females’ school suspension risk, few investigations have attempted to explain why these disparities occur. The purpose of this study was to examine the role of colorism in explaining suspension risk using a nationally representative sample of adolescent females. Controlling for individual- and school-level characteristics associated with school discipline such as student-teacher relationships, prior discipline history, school size and type, the results indicate that colorism was a significant predictor of school suspension risk. African American female adolescents with darker complexions were almost twice as likely to receive an out-of-school suspension as their White female peers. This finding was not found for African American female students with lighter skin complexions. Implications for adopting a colorist framework for understanding school discipline outcomes and future research for advancing the field in this area are discussed.

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Media Role Models and Black Educational Attainment: Evidence from the Cosby Show

Kirsten Cornelson

University of Toronto Working Paper, May 2015

Abstract:
The tendency of young people to imitate older members of their social groups could explain the surprising persistence of black-white education gaps in the U.S. over the past five decades. It is difficult to separate these "role modeling" effects, however, from other factors influencing educational attainment. This paper assesses the influence of role models on young people's educational choices by examining the impact of a popular 1980's sitcom: The Cosby Show. The show portrayed an upper middle class black family headed by highly educated parents, who frequently discussed the importance of education with their five children. If role model effects exist, black teenagers should have had a stronger response to this message. To test this hypothesis, I relate educational attainment to city-level Cosby Show ratings during the period in which a respondent was aged 16-20. In order to control for the possible endogeneity of Cosby Show popularity, I use Thursday night NBA games as an instrument for ratings. I show that exposure to The Cosby Show significantly increased college attainment among black men, with smaller effects for black women. I estimate that at least 110,000 young black men and women completed college as a result of the show. There is no similar effect among the white sample. The results do not appear to be driven by reduced discrimination, as Cosby Show ratings are not related to changes in either the black-white wage differential or in the return to college for blacks.

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Why Are Some STEM Fields More Gender Balanced Than Others?

Sapna Cheryan et al.

Psychological Bulletin, forthcoming

Abstract:
Women obtain more than half of U.S. undergraduate degrees in biology, chemistry, and mathematics, yet they earn less than 20% of computer science, engineering, and physics undergraduate degrees (National Science Foundation, 2014a). Gender differences in interest in computer science, engineering, and physics appear even before college. Why are women represented in some science, technology, engineering, and mathematics (STEM) fields more than others? We conduct a critical review of the most commonly cited factors explaining gender disparities in STEM participation and investigate whether these factors explain differential gender participation across STEM fields. Math performance and discrimination influence who enters STEM, but there is little evidence to date that these factors explain why women’s underrepresentation is relatively worse in some STEM fields. We introduce a model with three overarching factors to explain the larger gender gaps in participation in computer science, engineering, and physics than in biology, chemistry, and mathematics: (a) masculine cultures that signal a lower sense of belonging to women than men, (b) a lack of sufficient early experience with computer science, engineering, and physics, and (c) gender gaps in self-efficacy. Efforts to increase women’s participation in computer science, engineering, and physics may benefit from changing masculine cultures and providing students with early experiences that signal equally to both girls and boys that they belong and can succeed in these fields.

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Light Bulbs or Seeds? How Metaphors for Ideas Influence Judgments About Genius

Kristen Elmore & Myra Luna-Lucero

Social Psychological and Personality Science, forthcoming

Abstract:
Ideas are commonly described using metaphors; a bright idea appears like a “light bulb” or the “seed” of an idea takes root. However, little is known about how these metaphors may shape beliefs about ideas or the role of effort versus genius in their creation, an important omission given the known motivational consequences of such beliefs. We explore whether the light bulb metaphor, although widespread and intuitively appealing, may foster the belief that innovative ideas are exceptional occurrences that appear suddenly and effortlessly — inferences that may be particularly compatible with gendered stereotypes of genius as male. Across three experiments, we find evidence that these metaphors influence judgments of idea quality and perceptions of an inventor’s genius. Moreover, these effects varied by the inventor’s gender and reflected prevailing gender stereotypes: Whereas the seed (vs. light bulb) metaphor increased the perceived genius of female inventors, the opposite pattern emerged for male inventors.

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Are Firms That Discriminate More Likely to Go Out of Business?

Devah Pager

Sociological Science, September 2016

Abstract:
Economic theory has long maintained that employers pay a price for engaging in racial discrimination. According to Gary Becker’s seminal work on this topic and the rich literature that followed, racial preferences unrelated to productivity are costly and, in a competitive market, should drive discriminatory employers out of business. Though a dominant theoretical proposition in the field of economics, this argument has never before been subjected to direct empirical scrutiny. This research pairs an experimental audit study of racial discrimination in employment with an employer database capturing information on establishment survival, examining the relationship between observed discrimination and firm longevity. Results suggest that employers who engage in hiring discrimination are less likely to remain in business six years later.

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Title IX and the Education of Teen Mothers

Melanie Guldi

Economics of Education Review, forthcoming

Abstract:
Title IX of the 1972 Educational Amendments to the Civil Rights Act (Title IX) made it illegal for an institution receiving Federal funding to exclude pregnant/parenting teens from the classroom. During the 1970s, education outcomes improved for all women but especially for teen mothers. I examine whether Title IX can explain any part of the advances for teen mothers. Opportunity costs of staying in school decrease for a larger fraction of teens in areas where teen motherhood rates are higher prior to Title IX. I use this variation to test whether teens in areas with higher pre-Title IX teen motherhood rates exhibit larger educational gains than teens in other areas. Next I examine whether these gains are higher for teen mothers versus individuals who are not teen mothers. My results suggest that Title IX improved teen mothers’ education outcomes and that these effects are most pronounced for black teen mothers.

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Disentangling the Causal Mechanisms of Representative Bureaucracy: Evidence From Assignment of Students to Gifted Programs

Sean Nicholson-Crotty et al.

Journal of Public Administration Research and Theory, October 2016, Pages 745-757

Abstract:
Scholars have suggested that the benefits of representative bureaucracy arise from bureaucrats acting in the interests of clients who share their characteristics, increased diversity encouraging even nonminority bureaucrats work to further the interests of minority clients, and/or the actions of clients that are more responsive to bureaucrats that share their characteristics. Despite decades of research, the literature has been unable to empirically disentangle these mechanisms, primarily because the vast majority of studies examine only organization-level data, and, at the aggregate level, they all produce identical findings. In contrast, this study makes use of data that allows us to observe the behavior of individual clients and bureaucrats, as well as the aggregate characteristics of the organizations in which they interact. Specifically, we make use of student-level data to predict differences in the probability that an elementary student is referred to gifted services by race. Our results suggest that black students are more likely to be referred to gifted services when taught by a black teacher but that increased presence of black teachers in the school other than the classroom teacher has little effect. We find some evidence that the classroom teacher effect is partially driven by teachers’ more positive views of own-race students. Our results do not suggest, however, that the positive impact of teacher-student race congruence on gifted assignment can be explained by differences in student test score performance or increased parental interaction with the teacher.

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Teacher Expectations Matter

Nicholas Papageorge, Seth Gershenson & Kyungmin Kang

Johns Hopkins University Working Paper, August 2016

Abstract:
We develop and estimate a joint model of the education and teacher-expectation production functions that identifies both the distribution of biases in teacher expectations and the impact of those biases on student outcomes via self-fulfilling prophecies. The identification strategy leverages insights from the measurement-error literature and a unique feature of a nationally representative dataset: two teachers provided their educational expectations for each student. We provide novel, arguably causal evidence that teacher expectations affect students' educational attainment. Estimates suggest that the elasticity of the likelihood of college completion with respect to teachers' expectations is about 0.12. On average, teachers are overly optimistic about students' ability to complete a four-year college degree. However, the degree of over-optimism of white teachers is significantly larger for white students than for black students. This highlights a nuance that is frequently overlooked in discussions of biased beliefs: unbiased (i.e., accurate) beliefs can be counterproductive if there are positive returns to optimism or if there are socio-demographic gaps in the degree of teachers' over-optimism, both of which we find evidence of. We use the estimated model to assess the effects of two policies on black students' college completion: hiring more black teachers and "de-biasing" white teachers so that they are similarly optimistic about black and white students.

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Implicit Racial Bias in Medical School Admissions

Quinn Capers et al.

Academic Medicine, forthcoming

Approach: To measure implicit racial bias, all 140 members of the Ohio State University College of Medicine (OSUCOM) admissions committee took the black-white implicit association test (IAT) prior to the 2012-2013 cycle. Results were collated by gender and student versus faculty status. To record their impressions of the impact of the IAT on the admissions process, members took a survey at the end of the cycle, which 100 (71%) completed.

Outcomes: All groups (men, women, students, faculty) displayed significant levels of implicit white preference; men (d = 0.697) and faculty (d = 0.820) had the largest bias measures (P < .001). Most survey respondents (67%) thought the IAT might be helpful in reducing bias, 48% were conscious of their individual results when interviewing candidates in the next cycle, and 21% reported knowledge of their IAT results impacted their admissions decisions in the subsequent cycle. The class that matriculated following the IAT exercise was the most diverse in OSUCOM's history at that time.

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Could trends in time children spend with parents help explain the black–white gap in human capital? Evidence from the American Time Use Survey

Richard Patterson

Education Economics, forthcoming

Abstract:
It is widely believed that the time children spend with parents significantly impacts human capital formation. If time varies significantly between black and white children, this may help explain the large racial gap in test scores and wages. In this study, I use data from the American Time Use Survey to examine the patterns in the time black and white children receive from mothers at each age between birth and age 14 years. I relate patterns in parenting time to trends in human capital formation observed in the literature. I observe that black children spend significantly less time with their mothers than white children in the first years of life. However, differences in parenting time rapidly decline with age and there are never significant differences in teaching time after socioeconomic variables are controlled. My findings suggest that the black–white human capital gap is unlikely to be driven by differences in teaching time or differences in parenting time after children enter school.

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Ethnic Enclave and Entrepreneurial Financing: Asian Venture Capitalists in Silicon Valley

Jing Zhang, Poh Kam Wong & Yuen Ping Ho

Strategic Entrepreneurship Journal, September 2016, Pages 318–335

Abstract:
We examine the dilemma of ethnic investors in using ethnic network ties to invest by extending the ‘ethnic enclave’ concept to incorporate two dimensions: social network and social status. Our analysis of the first round of venture capital funding in Silicon Valley from 1976 to 2004 shows a higher likelihood of Asian venture capitalists (VCs) investing in Asian-led ventures than mainstream VCs. In addition, the valuation of their investments in mainstream ventures is higher than those by mainstream VCs in such ventures. In contrast, this premium effect is not observed when mainstream VCs invest in Asian ventures. These asymmetrical findings suggest the premium Asian VCs pay to compete in the mainstream venture market is due to their lower social status rather than their social network disadvantages.

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More on the Impact of Economic Freedom on the Black–White Income Gap

Gary Hoover, Ryan Compton & Daniel Giedeman

Public Finance Review, forthcoming

Abstract:
Using household-level data from 1980 to 2010, we examine whether economic freedom, as measured by the Economic Freedom of North America Index, has similar effects on white household income as it does on black household income. Our findings suggest that the positive effect of economic freedom found in most studies affects black households less than white households. Further, using the Oaxaca decomposition, our results show that economic freedom is an important factor explaining the gap between black and white household incomes.

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Predicting Readiness for Diversity Training: The Influence of Perceived Ethnic Discrimination and Dyadic Dissimilarity

Yunhyung Chung, Stanley Gully & Kathi Lovelace

Journal of Personnel Psychology, forthcoming

Abstract:
Using data collected from 160 employed professionals in the US, we performed multivariate and univariate multiple regression analyses to examine the joint effect of perceived ethnic discrimination and ethnic dyadic dissimilarity on trainee readiness for diversity training (pre-training motivation to learn, self-efficacy, intention to use, and perceived utility). A significant interaction effect showed that individuals displayed stronger pre-training motivation to learn, intention to use, and perceived utility when they perceived discrimination based on ethnic background and when they were ethnically dissimilar to their supervisor. However, perceived ethnic discrimination was not associated with these three readiness variables when subordinate-supervisor ethnic backgrounds were the same. Implications for theory and practice are discussed.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, October 12, 2016

Trade warriors

Economic Interests and Threat Assessment in the U.S. Congress, 1890–1914

Michael Flynn & Benjamin Fordham

International Interactions, forthcoming

Abstract:
Why do some domestic actors see the international environment as a threatening place populated by untrustworthy powers, when others find opportunities for peaceful cooperation in the same conditions? Because these actors confront the same international environment, the reasons for their divergent evaluations must rest on differences in their own beliefs and interests. In this article, we consider the impact of societal interests in trade and trade protection on elite assessments of the international environment. We examine evaluations of the international environment in speeches given in the U.S. Congress during naval appropriations debates between 1890 and 1914. The manufacturing sector’s interest in trade protection led political leaders who represented manufacturing regions to offer more negative assessments of the international environment, while those representing export-oriented agricultural areas of the country gave more positive evaluations. These effects were roughly comparable to those associated with party, as well as individual-level characteristics, such as having served as a military officer.

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Made in the U.S.A.? A Study of Firm Responses to Domestic Production Incentives

Rebecca Lester

Stanford Working Paper, August 2016

Abstract:
How do U.S. companies respond to incentives intended to encourage domestic production and manufacturing? I study this question in the context of the Domestic Production Activities Deduction (DPAD), which was enacted in the American Jobs Creation Act of 2004 and is currently the second largest U.S. corporate tax expenditure. Specifically, I examine 1) whether and to what extent firms shift income to maximize the domestic manufacturing benefit, and 2) the extent that firms actually increase domestic investment and employment, measured using confidential data from the U.S. Bureau of Economic Analysis. While I find a positive effect of DPAD on domestic investment, I also find that DPAD firms shift income across time and across borders to maximize the tax benefit. These results show that changes in firm reporting are an important and economically significant response that has not been studied previously in this context. Additionally, these findings inform the ongoing policy debate on the possible extension or repeal of this tax incentive.

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Better, Faster, Stronger: Global Innovation and Trade Liberalization

Federica Coelli et al.

NBER Working Paper, September 2016

Abstract:
This paper estimates the effect of trade policy during the Great Liberalization of the 1990s on innovation in over 60 countries using international firm-level patent data. The empirical strategy exploits ex-ante differences in firms' exposure to countries and industries, allowing us to construct firm-specific measures of tariffs. This provides a source of variation that enables us to establish the causal impact of trade policy on innovation. Our results suggest that trade liberalization has economically significant effects on innovation and, ultimately, on technical change and growth. According to our estimates, about 7 percent of the increase in knowledge creation during the 1990s can be explained by trade policy reforms. Furthermore, we find that the increase in patenting reflects innovation, rather than simply more protection of existing knowledge. Both improved market access and more import competition contribute to the positive innovation response to trade liberalization.

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Could tariffs be pro-cyclical?

James Lake & Maia Linask

Journal of International Economics, forthcoming

Abstract:
Conventional wisdom says that tariffs are counter-cyclical. We analyze the relationship between business cycles and applied MFN tariffs using a disaggregated product-level panel dataset covering 72 countries between 2000 and 2011. Strikingly, and counter to conventional wisdom, we find that tariffs are pro-cyclical. Further investigation reveals that this pro-cyclicality is driven by the tariff setting behavior of developing countries; tariffs are acyclical in developed countries. We present evidence that pro-cyclical market power drives the pro-cyclicality of tariffs in developing countries, providing further evidence of the importance of terms of trade motivations in explaining trade policy.

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Psychological Costs of Currency Transition: Evidence from the Euro Adoption

Vladimir Otrachshenko, Olga Popova & José Tavares

European Journal of Political Economy, forthcoming

Abstract:
This paper assesses the perceived individual psychological costs of adhering to the Euro. We use the difference-in-differences approach (DD), comparing individual levels of satisfaction with the economy in Slovakia immediately before and after the introduction of the Euro, with similar individuals in neighboring Czech Republic, which did not adopt the Euro. Both countries were economically and politically integrated for decades, and display similar macroeconomic behavior before and after the currency change in Slovakia. What we assess is not the actual, economic, costs stemming from the Euro adoption, but the change in utility as perceived by the individuals. There is evidence of substantial psychological costs associated with currency transition, especially for the old, the unemployed, the poorly educated and households with children. Our results are robust to the use of alternative control groups and to estimation procedures using the DD matching approach. The significant perceived costs uncovered in this paper suggest policy-makers should not ignore them when considering a sweeping economic change such as the adoption of a new currency.

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The complexity of outsourced services and the role of international business travel

Runjuan Liu, Barry Scholnick & Adam Finn

Journal of Economic Geography, forthcoming

Abstract:
We hypothesize that face-to-face communication between international business partners is a valuable mechanism for reducing transaction costs, even in contexts where electronic communication is pervasive. Specifically, we examine whether face-to-face interactions (as measured by international business travel) have greater impacts where transaction costs are higher, e.g., where services with greater complexity are outsourced offshore. Matching data from the Survey of International Air Travelers with Bureau of Economic Analysis data on U.S. service outsourcing, we find that international business travel leads to more outsourcing of more complex services. We further provide evidence on the differential role of international business travel by showing that: (i) business travel by managers leads to relatively more outsourcing of more complex services and (ii) business travel by non-diaspora members leads to relatively more outsourcing of more complex services.

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Plant Exit and U.S. Imports from Low-Wage Countries

David Rigby, Thomas Kemeny & Abigail Cooke

International Economics, forthcoming

Abstract:
Over the past twenty years, imports to the U.S. from low-wage countries have increased dramatically. In this paper we examine how low-wage country import competition in the U.S. influences the probability of manufacturing establishment closure. Confidential data from the U.S. Bureau of the Census are used to track all manufacturing establishments between 1992 and 2007. These data are linked to measures of import competition built from individual trade transactions. Controlling for a variety of plant and firm covariates, we show that low-wage import competition has played a significant role in manufacturing plant exit. Analysis employs fixed effects panel models running across three periods: the first plant-level panels examining trade and exit for the U.S. economy. Our results appear robust to concerns regarding endogeneity.

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Misreporting Trade: Tariff Evasion, Corruption, and Auditing Standards

Derek Kellenberg & Arik Levinson

NBER Working Paper, September 2016

Abstract:
In official international trade statistics, annual commerce between every pair of countries is reported twice: once by the importing country and once by the exporter. These double reports provide an opportunity for audit. In principle, the two reported trade values should differ systematically only by transport costs, because the values reported by importers include freight and insurance. But in practice, after controlling for distance and other standard trade costs, the remaining gaps between importer- and exporter-reported trade vary systematically with GDP, tariffs and taxes, auditing standards, corruption, and trade agreements, suggesting that firms intentionally misreport trade data. These misreports have implications for trade agreements and domestic fiscal policy, and for empirical assessments of the efficacy of those policies.

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Does Global Market Integration Weaken Opinion-Policy Congruence in the American States?

Bret Anderson, Brian Krueger & Ping Xu

Politics & Policy, August 2016, Pages 677–711

Abstract:
Theories of economic globalization suggest that public opinion-public policy congruence should be affected by a state's degree of integration with international markets. With as much attention researchers have given to the opinion-policy linkage in the American states, it is surprising that this literature has neglected these well-known globalization frameworks. We take advantage of the wide variation in U.S. states’ integration in global markets, public policies, and political orientations of citizens, to assess whether global market integration depresses the association between citizen opinion and public policies. Using three decades of state-level data, our results suggest that high global market integration does not attenuate the relationship between state opinion and state public spending. Not only does this finding run counter to the well-known policy convergence thesis, but our results also suggest that the association between opinion and policy in the American states may be strongest under conditions of high global market integration.

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Why Is China Investing in Africa? Evidence from the Firm Level

Wenjie Chen, David Dollar & Heiwai Tang

World Bank Economic Review, forthcoming

Abstract:
China’s increased trade with, and investment in, Africa have boosted the continent’s economic growth but have also generated considerable controversy. The aggregate data on China’s overseas direct investment (ODI) in African countries reveal that China’s share of the stock of foreign investment is small, though growing rapidly. China’s attraction to resource-rich countries is no different from Western investment. China’s overall ODI is uncorrelated with a measure of rule of law, whereas Western investment favors the better governance environments. As a result, Chinese investment in strong and weak governance environments is about the same, but its share of foreign investment is higher in the weak governance states. Micro data from MOFCOM’s database on registered Chinese firms investing in Africa between 1998 and 2012 provide a different perspective. Key words in project descriptions are used to code the investments into 25 sectors. This database captures the small and medium private firms investing in Africa. Contrary to common perceptions, there are few projects in natural resource sectors. Most projects are in services, with a significant number in manufacturing as well. Country-sector-level regressions based on firms’ transaction-level data find that Chinese ODI, both horizontal and vertical, is profit-driven, like investment from other countries. In particular, regressions show that Chinese ODI is relatively more concentrated in skill-intensive sectors in skill-abundant countries but in capital-intensive sectors in capital-scarce countries. These patterns are mostly observed in politically unstable countries, suggesting stronger incentives to seek profits in tougher environments.

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Does Environmental Regulation Drive away Inbound Foreign Direct Investment? Evidence from a Quasi-Natural Experiment in China

Xiqian Cai et al.

Journal of Development Economics, November 2016, Pages 73–85

Abstract:
This paper investigates whether environmental regulation affects inbound foreign direct investment. The identification uses the Two Control Zones (TCZ) policy implemented by the Chinese government in 1998, in which tougher environmental regulations were imposed in TCZ cities but not others. Our difference-in-difference-in-differences estimation explores three-dimension variations; specifically, city (i.e., TCZ versus non-TCZ cities), industry (i.e.,more polluting industries relative to less polluting ones), and year (i.e., before and after the TCZ policy). We find that tougher environmental regulation leads to less foreign direct investment. Meanwhile, we find that foreign multinationals from countries with better environmental protections than China are insensitive to the toughening environmental regulation, while those from countries with worse environmental protections than China show strong negative responses.

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Coordination and the fight against tax havens

Kai Konrad & Tim Stolper

Journal of International Economics, forthcoming

Abstract:
The success or failure of the fight against tax havens is the outcome of a many player coordination game between a tax haven and its potential investors. Key determinants are the costly international pressure and the size of the haven country’s revenue pool. The latter is determined endogenously by the decisions of many individual investors. Our analysis suggests a non-standard market model that explains why haven countries would ever comply with international standards of transparency despite the large empirically observable returns in the tax haven business. It also alludes to why service fees in tax havens can be positive despite a competitive financial market with multiple tax havens. Furthermore, we identify a trade-off between the fight against tax havens and high tax rates. Finally, low fines for disclosed offshore tax evasion, e.g. in special programs for tax evaders who voluntarily report their offshore wealth, strengthen haven countries against international pressure.

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WTO Dispute Determinants

David Kuenzel

European Economic Review, forthcoming

Abstract:
The notion of dispute resolution is central to WTO theory, which emphasizes country size and the ability to retaliate against trading partners as major determinants of WTO disputes. But these explanations cannot account for the steady drop in trade quarrels since the early 2000 s and are silent on the link between trade policy and dispute initiations. This paper presents a new theory to show that “tariff overhangs”, the difference between WTO members' bound and applied tariffs, are the key to understanding the WTO dispute pattern. In the model, lower tariff overhangs constrain WTO members' legal policy options when responding to adverse shocks. Moreover, countries are more likely to gain from dispute filings through WTO-administered tariff retaliation when applied tariff rates are close to their bindings. Guided by this framework, the paper presents empirical evidence that tariff overhangs are an essential determinant of WTO disputes.

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Cultural and Economic Impacts on Global Cultural Products: Evidence from U.S. Movies

Sangkil Moon et al.

Journal of International Marketing, September 2016, Pages 78-97

Abstract:
Existing international product diffusion studies have identified economic and cultural factors that influence consumers’ acceptance of new products, but they have not fully examined these factors’ roles in the international diffusion of global cultural products. The authors examine country-level economic and cultural factors that influence consumers’ acceptance of new global cultural products across countries. Using 846 recent U.S. movies’ box office performances in 48 national markets as the empirical context, the authors obtain the following key novel findings on product sales: (1) an inverse U-shaped impact of economic development status, (2) a positive impact of the cultural compatibility of the product and the market, and (3) a U-shaped impact of intercountry cultural distance in the presence of cultural compatibility and a decreasing linear impact of cultural distance in the absence of cultural compatibility.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, October 11, 2016

Clueless

Your Understanding Is My Understanding: Evidence for a Community of Knowledge

Steven Sloman & Nathaniel Rabb

Psychological Science, forthcoming

Abstract:
In four experiments, we tested the community-of-knowledge hypothesis, that people fail to distinguish their own knowledge from other people’s knowledge. In all the experiments, despite the absence of any actual explanatory information, people rated their own understanding of novel natural phenomena as higher when they were told that scientists understood the phenomena than when they were told that scientists did not yet understand them. In Experiment 2, we found that this occurs only when people have ostensible access to the scientists’ explanations; the effect does not occur when the explanations exist but are held in secret. In Experiment 3, we further ruled out two classes of alternative explanations (one appealing to task demands and the other proposing that judgments were mediated by inferences about a phenomenon’s understandability). In Experiment 4, we ruled out the possibility that the effect could be attributed to a pragmatic inference.

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Weather and the Psychology of Purchasing Outdoor Movie Tickets

Lukas Buchheim & Thomas Kolaska

Management Science, forthcoming

Abstract:
The consequences of many economic decisions materialize only in the future. To make informed choices in such decision problems, consumers need to anticipate the likelihood of future states of the world, the state dependence of their preferences, and the choice alternatives that may become relevant. This complex task may expose consumers to psychological biases like extrapolative expectations, projection bias, or salience. We test whether customers are affected by such biases when they buy advance tickets for an outdoor movie theater, a real-world situation that, because of the availability of reliable weather forecasts, closely resembles a stylized decision problem under risk. We find that customers’ decisions are heavily influenced by the weather at the time of purchase, even though the latter is irrelevant for the experience of visiting the theater in the future. The empirical evidence cannot be fully explained by a range of candidate rational explanations, but is consistent with the presence of the aforementioned psychological mechanisms.

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Developing expert political judgment: The impact of training and practice on judgmental accuracy in geopolitical forecasting tournaments

Welton Chang et al.

Judgment and Decision Making, September 2016, Pages 509–526

Abstract:
The heuristics-and-biases research program highlights reasons for expecting people to be poor intuitive forecasters. This article tests the power of a cognitive-debiasing training module (“CHAMPS KNOW”) to improve probability judgments in a four-year series of geopolitical forecasting tournaments sponsored by the U.S. intelligence community. Although the training lasted less than one hour, it consistently improved accuracy (Brier scores) by 6 to 11% over the control condition. Cognitive ability and practice also made largely independent contributions to predictive accuracy. Given the brevity of the training tutorials and the heterogeneity of the problems posed, the observed effects are likely to be lower-bound estimates of what could be achieved by more intensive interventions. Future work should isolate which prongs of the multipronged CHAMPS KNOW training were most effective in improving judgment on which categories of problems.

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How Traumatic Violence Permanently Changes Shopping Behavior

Ozge Sigirci, Marc Rockmore & Brian Wansink

Frontiers in Psychology, September 2016

Abstract:
Traumatic experiences – such as combat, living in a conflict country or war-torn nation, or experiencing a violent crime or natural disaster – change social relationships and may also influence a life-time of consumer relationships with brands and shopping. Our focus on this previously overlooked area is centered on an analysis of the long-term shopping habits of 355 combat veterans. We show that those who experienced heavy trauma (e.g., heavy combat) exhibited similar disconnection from brands as others have experienced in social relationships. They became more transactional in that they were more open to switching brands, to trying new products, and buying the least expensive alternative (p < 0.01). In contrast, those who had experienced a light trauma were more influenced by ads and more open to buying brands even when they cost more (p < 0.00). Trauma, such as combat, may change one’s decision horizon. Functionality and price become more important, which is consistent with the idea that they are more focused on the present moment than on building on the past or saving for the future.

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Adaptation and Fallibility in Experts’ Judgments of Novice Performers

Jeffrey Larson & Darron Billeter

Journal of Experimental Psychology: Learning, Memory, and Cognition, forthcoming

Abstract:
Competition judges are often selected for their expertise, under the belief that a high level of performance expertise should enable accurate judgments of the competitors. Contrary to this assumption, we find evidence that expertise can reduce judgment accuracy. Adaptation level theory proposes that discriminatory capacity decreases with greater distance from one’s adaptation level. Because experts’ learning has produced an adaptation level close to ideal performance standards, they may be less able to discriminate among lower-level competitors. As a result, expertise increases judgment accuracy of high-level competitions but decreases judgment accuracy of low-level competitions. Additionally, we demonstrate that, consistent with an adaptation level theory account of expert judgment, experts systematically give more critical ratings than intermediates or novices. In summary, this work demonstrates a systematic change in human perception that occurs as task learning increases.

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Remember Hard But Think Softly: Metaphorical Effects of Hardness/Softness on Cognitive Functions

Jiushu Xie et al.

Frontiers in Psychology, September 2016

Abstract:
Previous studies have found that bodily stimulation, such as hardness biases social judgment and evaluation via metaphorical association; however, it remains unclear whether bodily stimulation also affects cognitive functions, such as memory and creativity. The current study used metaphorical associations between “hard” and “rigid” and between “soft” and “flexible” in Chinese, to investigate whether the experience of hardness affects cognitive functions whose performance depends prospectively on rigidity (memory) and flexibility (creativity). In Experiment 1, we found that Chinese-speaking participants performed better at recalling previously memorized words while sitting on a hard-surface stool (the hard condition) than a cushioned one (the soft condition). In Experiment 2, participants sitting on a cushioned stool outperformed those sitting on a hard-surface stool on a Chinese riddle task, which required creative/flexible thinking, but not on an analogical reasoning task, which required both rigid and flexible thinking. The results suggest the hardness experience affects cognitive functions that are metaphorically associated with rigidity or flexibility. They support the embodiment proposition that cognitive functions and representations can be grounded in bodily states via metaphorical associations.

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Insight with hands and things

Frédéric Vallée-Tourangeau et al.

Acta Psychologica, October 2016, Pages 195–205

Abstract:
Two experiments examined whether different task ecologies influenced insight problem solving. The 17 animals problem was employed, a pure insight problem. Its initial formulation encourages the application of a direct arithmetic solution, but its solution requires the spatial arrangement of sets involving some degree of overlap. Participants were randomly allocated to either a tablet condition where they could use a stylus and an electronic tablet to sketch a solution or a model building condition where participants were given material with which to build enclosures and figurines. In both experiments, participants were much more likely to develop a working solution in the model building condition. The difference in performance elicited by different task ecologies was unrelated to individual differences in working memory, actively open-minded thinking, or need for cognition (Experiment 1), although individual differences in creativity were correlated with problem solving success in Experiment 2. The discussion focuses on the implications of these findings for the prevailing metatheoretical commitment to methodological individualism that places the individual as the ontological locus of cognition.

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Wild and free: Unpredictability and spaciousness as predictors of creative performance

Thomas van Rompay & Tineke Jol

Journal of Environmental Psychology, December 2016, Pages 140–148

Abstract:
Inspired by research that demonstrates the positive effects of nature-based imagery on wellbeing and cognitive performance, the current research aims to study to what extent nature imagery can also enhance creative performance. To this end, imagery presenting green settings varying in unpredictability and spaciousness was displayed before and during a creative drawing task in a high school classroom. After completion participants additionally filled out a questionnaire comprising self-report measures for perceived creativity and positive affect. Both unpredictability and spaciousness enhanced creative performance, with images combining these two factors being particularly inspiring. Furthermore, spaciousness resulted in higher self-reported creativity. The effects of unpredictability and spaciousness on positive affect were not significant. These findings demonstrate that nature imagery has the potential to increase creativity in individuals and warrant follow-up studies that may further clarify the role of spaciousness, unpredictability, and potentially other creativity-enhancing features of nature imagery.

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Direct Speaker Gaze Promotes Trust in Truth-Ambiguous Statements

Helene Kreysa, Luise Kessler & Stefan Schweinberger

PLoS ONE, September 2016

Abstract:
A speaker’s gaze behaviour can provide perceivers with a multitude of cues which are relevant for communication, thus constituting an important non-verbal interaction channel. The present study investigated whether direct eye gaze of a speaker affects the likelihood of listeners believing truth-ambiguous statements. Participants were presented with videos in which a speaker produced such statements with either direct or averted gaze. The statements were selected through a rating study to ensure that participants were unlikely to know a-priori whether they were true or not (e.g., “sniffer dogs cannot smell the difference between identical twins”). Participants indicated in a forced-choice task whether or not they believed each statement. We found that participants were more likely to believe statements by a speaker looking at them directly, compared to a speaker with averted gaze. Moreover, when participants disagreed with a statement, they were slower to do so when the statement was uttered with direct (compared to averted) gaze, suggesting that the process of rejecting a statement as untrue may be inhibited when that statement is accompanied by direct gaze.

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Verbal Ability, Argument Order, and Attitude Formation

Mindaugas Mozuraitis, Craig Chambers & Meredyth Daneman

Frontiers in Psychology, September 2016

Abstract:
The current study explored the interaction of verbal ability and presentation order on readers’ attitude formation when presented with two-sided arguments. Participants read arguments for and against compulsory voting and genetic engineering, and attitudes were assessed before and after reading the passages. Participants’ verbal ability was measured, combining vocabulary knowledge and reading comprehension skill. Results suggested that low verbal-ability participants were more persuaded by the most recent set of arguments whereas high verbal-ability participants formed attitudes independent of presentation order. Contrary to previous literature, individual differences in the personality trait need for cognition did not interact with presentation order. The results suggest that verbal ability is an important moderator of the effect of presentation order when formulating opinions from complex prose.

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Stress and Cognitive Flexibility: Cortisol Increases Are Associated with Enhanced Updating but Impaired Switching

Elizabeth Goldfarb et al.

Journal of Cognitive Neuroscience, forthcoming

Abstract:
Acute stress has frequently been shown to impair cognitive flexibility. Most studies have examined the effect of stress on cognitive flexibility by measuring how stress changes performance in paradigms that require participants to switch between different task demands. These processes typically implicate pFC function, a region known to be impaired by stress. However, cognitive flexibility is a multifaceted construct. Another dimension of flexibility, updating to incorporate relevant information, involves the dorsal striatum. Function in this region has been shown to be enhanced by stress. Using a within-subject design, we tested whether updating flexibility in a DMS task would be enhanced by an acute stress manipulation (cold pressor task). Participants' cortisol response to stress positively correlated with a relative increase in accuracy on updating flexibility (compared with trials with no working memory interference). In contrast, in line with earlier studies, cortisol responses correlated with worse performance when switching between trials with different task demands. These results demonstrate that stress-related increases in cortisol are associated with both increases and decreases in cognitive flexibility, depending on task demands.

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It Must Be My Favourite Brand: Using Retroactive Brand Replacements in Doctored Photographs to Influence Brand Preferences

Maria Hellenthal, Mark Howe & Lauren Knott

Applied Cognitive Psychology, forthcoming

Abstract:
We examined whether memories for personally chosen brands could be altered by retroactive exposure to less-liked competitor brands embedded in manipulated photographs. In addition, we investigated whether memory errors would lead to preference change for falsely remembered brands. Fifty participants were asked to compile their personal ‘brand lifestyle basket’, which was then captured in a photo showing the basket and participant. After 1 week, participants were exposed to the photograph in which some of the originally chosen brands were replaced by different brands of the same category. Results of a memory test revealed a robust misinformation effect. The analysis of premanipulation and postmanipulation preference ratings indicated a positive shift in attitude and behaviour towards falsely accepted misinformation brands. Our findings contribute to what we know about the behavioural consequences of false memories and extend the generalizability of false memory effects to what might be considered a futuristic advertising measure.

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Looking Forward and Looking Back: The Likelihood of an Event’s Future Reoccurrence Affects Perceptions of the Time It Occurred in the Past

Kao Si, Robert Wyer & Xianchi Dai

Personality and Social Psychology Bulletin, forthcoming

Abstract:
Past events are perceived to be temporally more distant when they are unlikely rather than likely to reoccur in the future. This can be because (a) future events that are unlikely to occur are perceived to be temporally remote and (b) these feelings of remoteness can generalize and influence subjective distance judgments of the events’ occurrences in the past. Six studies confirmed this effect and provided insights into the processes that underlie it. Alternative interpretations and implications of the current findings are discussed.

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Seeing What You Want to See: How Imprecise Uncertainty Ranges Enhance Motivated Reasoning

Nathan Dieckmann et al.

Risk Analysis, forthcoming

Abstract:
In this article, we consider a novel criterion for evaluating representations of uncertainty ranges, namely, the extent to which a representation enhances motivated reasoning. In two studies, we show that perceptions of the distribution underlying ambiguous numerical ranges are affected by the motivations and worldviews of end users. This motivated reasoning effect remained after controlling for objective numeracy and fluid intelligence but was attenuated when the correct interpretation was made clear. We suggest that analysts and communicators explicitly consider the potential for motivated evaluation when evaluating uncertainty displays.

By KEVIN LEWIS | 09:00:00 AM

Monday, October 10, 2016

Grabbing power

Dictators Walking the Mogadishu Line: How Men Become Monsters and Monsters Become Men

Shaun Larcom, Mare Sarr & Tim Willems

World Bank Economic Review, forthcoming

Abstract:
History offers many examples of dictators who worsened their behavior significantly over time (like Zimbabwe’s Mugabe) as well as dictators who displayed remarkable improvements (like Rawlings of Ghana). We show that such mutations can result from rational behavior when the dictator’s flow use of repression is complementary to his stock of wrongdoings: past wrongdoings then perpetuate further wrongdoings and the dictator can unintentionally get trapped in a repressive steady state where he himself suffers from ex-post regret. This then begs the question why such a dictator would ever choose to do wrong in the first place. We show that this can be explained from the dictator’s uncertainty over his degree of impunity in relation to wrongdoing, which induces him to experiment along this dimension. This produces a setting where any individual rising to power can end up as either a moderate leader, or as a dreaded tyrant. Since derailment is accidental and accompanied by ex-post regret, increasing accountability can be in the interest of both the public and the dictator.

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Terrorism Risk and Democratic Preferences in Pakistan

Faiz Ur Rehman & Paolo Vanin

Journal of Development Economics, January 2017, Pages 95–106

Abstract:
Beyond direct damages, terrorism creates fear and insecurity, potentially reducing support for democratic institutions if these are deemed inadequate to tackle the threat. To investigate this possibility, we use data from Pakistan, a country that experienced an exponential rise in terrorism since 2001. Exploiting individual-level data on democratic attitudes and district-level information on terrorist attacks, we document that persistent exposure to terrorism (and more broadly to violence) is associated to a significantly lower support for democratic values. This correlation is robust to various alternative specifications (including an IV strategy), relevant in magnitude, and more pronounced for individuals who are male, poor, or less exposed to the media. Terrorism thus threatens not only individuals, but also democratic institutions.

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Why class inequality breeds coups but not civil wars

Christian Houle

Journal of Peace Research, September 2016, Pages 680-695

Abstract:
Does class inequality increase the risk of civil war? I posit that inequality between social classes affects civil wars through two pathways: (1) it heightens the risk of political violence by fueling distributive conflicts; and (2) it reduces structural coup-proofing, which, in turn, increases the capacity of the military to fight insurgents. Combining these effects implies that the net effect of class inequality on civil war is ambiguous. Although class inequality increases the propensity for violence, in unequal countries political violence rarely takes the form of wars because such countries have strong militaries. Class inequality, however, breeds other forms of political violence. In particular, it increases the likelihood of military coups. The two effects of class inequality reinforce each other in the case of coups: inequality simultaneously stirs distributional conflicts and increases the capacity of the military to mount coups by reducing coup-proofing. Using data on 128 developing countries between 1960 and 2008, I find that while class inequality fosters coups, it has no discernible effect on civil wars. I also provide evidence consistent with my causal mechanisms: (1) inequality creates greater threat to the rulers by fueling political instability; (2) inequality reduces structural coup-proofing; and (3) structural coup-proofing increases the likelihood of civil war.

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Rescuing Autocracy from Itself: China's Anti-Corruption Campaign

Xi Lu & Peter Lorentzen

University of California Working Paper, September 2016

Abstract:
In order to maintain popular support or at least acquiescence, autocrats must control the rapacious tendencies of other members of the governing elite. At the same time, the support of this elite is at least as important as the support of the broader population. This creates difficult tradeoffs and limits the autocrat's ability to enforce discipline. We explore this issue in the context of Chinese leader Xi Jinping's ongoing anti-corruption campaign. There have been two schools of thought about this campaign. One holds that it is nothing but a cover for intra-elite struggle and a purge of Xi's opponents, while the other finds more credibility in the CCP's claim that the movement is sincere. In this article, we demonstrate three facts, using a new dataset we have created. First, we use the political connections revealed by legal documents and media reports to visualize the corruption network. We demonstrate that although many of the corrupt officials are connected, Xi's most prominent political opponent, Bo Xilai, is less central by any network measure than other officials who were not viewed as challenging Xi's leadership. Second, we use a recursive selection model to analyze who the campaign has targeted, providing evidence that even personal ties to top leaders provided little protection. Finally, using another comprehensive dataset on the prefectural-city level, we show that the provinces later targeted by the corruption campaign differed from the rest in important ways. In particular, it appears that promotion patterns departed from the growth-oriented meritocratic selection procedures evidence in other provinces. Overall, our findings contradict the factional purge view and are more consistent with the view that the campaign is indeed primarily an attempt to root out systemic corruption problems.

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Unlikely Democrats: Economic Elite Uncertainty under Dictatorship and Support for Democratization

Michael Albertus & Victor Gay

American Journal of Political Science, forthcoming

Abstract:
Influential recent scholarship assumes that authoritarian rulers act as perfect agents of economic elites, foreclosing the possibility that economic elites may at times prefer democracy absent a popular threat from below. Motivated by a puzzling set of democratic transitions, we relax this assumption and examine how elite uncertainty about dictatorship — a novel and generalizable causal mechanism impacting democratization — can induce elite support for democracy. We construct a noisy signaling model in which a potential autocrat attempts to convince economic elites that he will be a faithful partner should elites install him in power. The model generates clear predictions about how two major types of elite uncertainty — uncertainty in a potential autocratic successor's policies produced by variance in the pool of would-be dictator types, and uncertainty in the truthfulness of policy promises made by potential autocratic successors — impact the likelihood of elite-driven democratization. We demonstrate the model's plausibility in a series of cases of democratic transition.

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Inequality and the Emergence of Vigilante Organizations: The Case of Mexican Autodefensas

Brian Phillips

Comparative Political Studies, forthcoming

Abstract:
What explains the emergence of vigilante organizations? Throughout the world, vigilantes emerge to illegally punish perceived criminals, often leading to serious consequences. However, the literature presents partial and conflicting explanations for this phenomenon. This article argues that local economic inequality creates a situation ripe for vigilante organizations. Inequality creates demand for vigilantism because poorer citizens feel relatively deprived of security compared with wealthier neighbors who have advantages regarding private and public security. In addition, inequality suggests a patron-and-worker distribution of labor, and this is ideal for organizing a particular type of group, the patron-funded vigilante group. Empirical tests use original data on the 2013 wave of Mexican vigilante organizations, present in 13 of Mexico’s 32 federal entities. Municipal-level income inequality is robustly associated with organized vigilantism. Less support is found for competing explanations.

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The Rebels’ Resource Curse: A Theory of Insurgent-Civilian Dynamics

Radha Sarkar & Amar Sarkar

Studies in Conflict & Terrorism, forthcoming

Abstract:
The relationship between armed rebels and local civilians is among the least understood aspects of insurgency. This article posits a novel theory, the rebels’ resource curse, to argue that the interaction between rebel groups and local communities can be traced to revenue-generating resources. The theory is developed using a case study comparison approach to critically analyse how access to revenue- generating resources among the Naxalites in India and the FARC in Colombia affect these interactions. The theory proposes that insurgents face a resource curse similar to that faced by states. Rather than resource wealth contributing to greater social engagement and fruitful insurgent-civilian interactions, it appears to precipitate isolationist, and even exploitative and violent, relations between insurgents and local civilian populations. Conversely, resource scarcity predicts a greater degree of social integration and cohesion between civilians and insurgents. The framework of the rebels’ resource curse can also be applied productively to other insurgent groups, enhancing our understanding of the social realities of insurgency.

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Mining and Local Corruption in Africa

Carl Henrik Knutsen et al.

American Journal of Political Science, forthcoming

Abstract:
We investigate whether mining affects local corruption in Africa. Several cross-country analyses report that natural resources have adverse effects on political institutions by increasing corruption, whereas other country-level studies show no evidence of such “political resource curses.” These studies face well-known endogeneity and other methodological issues, and employing micro-level data would allow for drawing stronger inferences. Hence, we connect 92,762 Afrobarometer survey respondents to spatial data on 496 industrial mines. Using a difference-in-differences strategy, we find that mining increases bribe payments, and this result is robust to using alternative models. Mines are initially located in less corrupt areas, but mining areas turn more corrupt after mines open. When exploring mechanisms, we find that local economic activity relates differently to corruption in mining and non-mining areas, suggesting that mining income incentivizes and enables local officials already present to require more bribes.

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Elections, Ethnicity, and Political Instability

Charles Butcher & Benjamin Goldsmith

Comparative Political Studies, forthcoming

Abstract:
This article provides a new perspective on the impact of elections on violent political instability in ethnically divided states. A number of scholars argue that elections may provoke large-scale violence in ethnically divided states. In this article, we theorize that elections have a pacifying effect in the most ethnically fractionalized countries as they reduce endemic uncertainty and encourage coalition building, lowering the rate at which electoral losers discount the future. Probit regressions using cross-national data for the period 1960-2010 support the notion that instability onsets are less likely in ethnically fractionalized states during election periods, and especially in the year after a national election.

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The commander’s dilemma: Creating and controlling armed group violence

Amelia Hoover Green

Journal of Peace Research, September 2016, Pages 619-632

Abstract:
This article proposes a framework for understanding variation in armed groups’ abilities to control wartime violence, including violence against civilians. I argue that patterns (both levels and forms) of violence are shaped by armed group leaders’ attempts to meet two conflicting imperatives. To succeed, commanders must build a fighting force capable of swift, unhesitating violence; they must also maintain some control over the level, form(s), and targeting of violence. I refer to this situation as the Commander’s Dilemma. Drawing on literatures from psychology and sociology, I argue that effective behavioral control cannot be achieved via extrinsic incentives (i.e. pecuniary or non-pecuniary rewards and punishments) alone. Rather, effective control of combatant violence depends upon armed group institutions intended to align combatants’ preferences with those of commanders. I therefore focus analytically on political education, the armed group institution most likely to operate in this way. In particular, I hypothesize that armed groups with strong and consistent institutions for political education should display, on average, narrower repertoires of violence than those without. This argument finds preliminary support in a cross-national analysis of reported rape by rebel forces, as well as a qualitative investigation of armed groups during civil war in El Salvador. More broadly, this approach suggests that the creation of restraint is at least as important to our understandings of wartime violence as the production of violence.

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Does Communist Party Membership Pay? Estimating the Economic Returns to Party Membership in the Labor Market in China

Joanne Song McLaughlin

Journal of Comparative Economics, forthcoming

Abstract:
Many studies have found that Chinese Communist Party membership brings economic benefits to party members, but some studies also argue that the premium associated with party membership is merely due to members’ higher levels of ability and advantageous family backgrounds. The lack of consensus on the economic returns of party membership implies that the role of party membership is not well understood. This study estimates the economic returns to Chinese Communist Party membership using complementary approaches to address the endogeneity of party membership status: propensity score matching and instrumental variable. Although the magnitudes of these estimates vary across estimators, all the estimates show positive economic returns to party membership. This paper also examines possible mechanisms for how party membership may bring benefits to members and provides evidence that party membership may generate political capital, but not social capital in the labor market in China.

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Borrowed Time: Sovereign Finance, Regime Type, and Leader Survival

Matthew DiGiuseppe & Patrick Shea

Economics & Politics, November 2016, Pages 342–367

Abstract:
This study explores the conditional influence of sovereign credit on leader survival. We specifically focus on credit's heterogeneous effect on leadership survival across regimes. We argue that non-democratic leaders are more sensitive to credit access and cost than democratic leadership. We use event history analysis to test the conditional relationship between sovereign credit and leader tenure from 1981 to 2004. Examining both domestic and global determinants of credit access and costs, our findings are consistent with the assertion that non-democratic leadership survival is linked to credit even when addressing issues of endogeneity.

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Pathogens, Weather Shocks, and Civil Conflicts

Matteo Cervellati, Uwe Sunde & Simona Valmori

Economic Journal, forthcoming

Abstract:
This paper documents a statistically strong and quantitatively relevant effect of high exposure to infectious diseases on the risk of civil conflicts. The analysis exploits data on the presence and endemicity of multi-host vector-transmitted pathogens in a country, which is closely related to geo-climatic conditions due to the specific features of these pathogens. Exploiting within-country variation over time shows that this effect of pathogen exposure is significantly amplified by weather shocks. The results indicate health shocks and the outbreak of epidemics as a potential channel, while we find no evidence that the effect works through alternative channels like income, population dynamics, or institutions.

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Civil War and the Formation of Social Trust in Kosovo: Posttraumatic Growth or War-related Distress?

Sara Kijewski & Markus Freitag

Journal of Conflict Resolution, forthcoming

Abstract:
While a new, growing subset of the literature argues that armed conflict does not necessarily erode social cohesion in the postwar era, we challenge this perspective and examine how civil war experiences shape social trust in Kosovo after the war from 1998 to 1999. Based on a nationwide survey conducted in 2010 and the disaggregated conflict event data set of the Armed Conflict Location & Event Data Project, we simultaneously analyze the impact of individual war-related experiences and exposure to war in the community through hierarchical analyses of twenty-six municipalities. Our findings confirm that civil war is negatively related to social trust. This effect proves to be more conclusive for individual war experiences than for contextual war exposure. Arguably, the occurrence of instances of violence with lasting psychological as well as social structural consequences provides people with clear evidence of the untrustworthiness, uncooperativeness, and hostility of others, diminishing social trust in the aftermath of war.

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Resilient Leaders and Institutional Reform: Theory and Evidence

Timothy Besley, Torsten Persson & Marta Reynal-Querol

Economica, October 2016, Pages 584–623

Abstract:
Strengthening executive constraints is one of the key means of improving political governance. This paper argues that resilient leaders who face a lower probability of being replaced are less likely to reform institutions in the direction of constraining executive power. We test this idea empirically using data on leaders since 1875 using two proxies of resilience: whether a leader survives long enough to die in office, and whether recent natural disasters occur during the leader's tenure. We show that both are associated with lower rates of leader turnover and a lower probability of a transition to strong executive constraints. This effect is robust across a wide range of specifications. Moreover, in line with the theory, it is specific to strengthening executive constraints rather than generalized political reform.

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The Role of Civil Wars and Elections in Inducing Political Assassinations

Arie Perliger

Studies in Conflict & Terrorism, forthcoming

Abstract:
Political assassinations can dramatically impact political and social dynamics, especially in times of violent political conflicts or electoral competition. The current study explores if and how specific social and political events facilitate the occurrence of political assassinations. After an examination of the logic of political assassinations, a theoretical framework is presented, which explains the role of civil wars and electoral processes as facilitators of different types of political assassinations. The theory is tested via a dataset of political assassinations worldwide between the years 1946–2013. The findings confirm that different sets of structural and contextual factors facilitate assassinations against heads of state, legislators, and leaders of opposition movements/parties. In addition, the findings illustrate the tendency of elections, especially in non-liberal settings and in polarized societies, to facilitate political assassinations rather than to calm the political environment. In contrast, civil wars have a more limited impact on the probability of assassinations, and their intensity and endurance mainly enhance the risk of assassinations of legislators.

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Oil and terrorism: An investigation of mediators

James Piazza

Public Choice, forthcoming

Abstract:
Do states with oil wealth experience more terrorism and, if so, why? Drawing from the intrastate war literature, this study considers several factors that prospectively mediate the relationship between oil wealth and terrorism: state weakness; rentier state authoritarianism; corruption of government officials; income inequality; human rights violations; foreign military intervention; and heightened separatist activity. Based on structural equation modeling on a sample of 130 non-OECD countries for the period 1970–2012, the paper produces two main empirical findings. First, while onshore oil production increases terrorist attacks in countries, on- and offshore production and oil revenues from exports do not increase such attacks. Second, the impact of oil on terrorism is mediated through increased human rights abuses. Exploitation of oil is found to be associated with a worsening of physical integrity rights abuses that, in turn, lead to popular grievances that help to fuel terrorist campaigns.

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Good Geography, Good Institutions? Historical Evidence from Nineteenth-Century British Colonies

Eik Swee & Laura Panza

European Economic Review, October 2016, Pages 264–283

Abstract:
This paper uses a historical natural experiment – the opening of the Suez Canal – to investigate the relationship between geography and the formation of institutions. While the conventional view is that good geography (commodity endowment) inevitably favours the creation of extractive institutions, we discover that a second aspect of geography – location – may in fact encourage the establishment of non-extractive institutions when rent extraction by elites depends on the productivity of non-elites. Specifically, we find that entrepôt colonies (Hong Kong and the Straits Settlements) received larger public investments in the post-Suez period than resource colonies (British India, Ceylon, and West Africa), after accounting for year effects and permanent differences across colonies. We demonstrate, using supplementary data, that the entrepôt colonies' locational advantage, coupled with their lack of extractable resources, plays a key role in explaining our empirical findings.

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State hydrocarbon rents, authoritarian survival and the onset of democracy: Evidence from a new dataset

Viola Lucas & Thomas Richter

Research & Politics, August 2016

Abstract:
This article surveys the effects of state hydrocarbon rents — defined as government income from oil and natural gas — on authoritarian survival and the onset of democracy. We also examine the association of changing state hydrocarbon rents with state spending and taxation based on a new collection of historical data, the Global State Revenues and Expenditures dataset. Using these novel data, we provide evidence that increasing state rents from oil and gas hinder democratization by reducing citizens’ tax burden. However, an increase in the oil and gas income flowing directly into state coffers does not appear to lower the average risk of ouster by rival authoritarian elites. We have found no evidence of the systematic distributional effects of state hydrocarbon income on regime survival.

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Local conditions of drought-related violence in sub-Saharan Africa: The role of road and water infrastructures

Adrien Detges

Journal of Peace Research, September 2016, Pages 696-710

Abstract:
Despite growing concerns about the possible security implications of extreme precipitation shortfalls in vulnerable and politically fragile regions, the particular conditions that make armed violence more or less likely in times of drought remain poorly understood. Using a spatially disaggregated research design and focusing on sub-Saharan Africa, the present analysis assesses how far violent and nonviolent outcomes in the wake of drought can be accounted for by regional differences in the provision of key infrastructures that help coping with drought and preventing violence. The results indicate that civil conflict events in connection with drought are more likely in administrative areas with poorly developed road infrastructures. Drought-related communal violence, on the other hand, is more likely in regions where an important part of the population lacks access to an improved water source. Thus, while the provision of key infrastructures seems to moderate local conflict risks in connection with drought, there are nevertheless important distinctions with regard to different types of infrastructures and forms of armed violence. However, the importance of precipitation shortfalls as a conflict-facilitating factor in sub-Saharan Africa should not be overstated, as the overall contribution of drought measures to predicting violent events is modest in all calculated models.

By KEVIN LEWIS | 09:00:00 AM


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