Suchergebnisse

"In this note we consider the preferences of a profit maximizing firm for international ownership in a world in which firms compete in an international Cournot oligopoly, and in which countries use strategic trade policy. We find that firms prefer national ownership and show that full indigenisation occurs in the equilibrium." (author's abstract)

This paper constructs the float adjusted measure of home bias and explores the determinants of bond home bias by employing the International Monetary Fund's high quality dataset (2001 to 2009) on cross-border bond investment. The paper finds that Australian investors' prefer investing in countries with higher economic development and more developed bond markets. Exchange rate volatility appears to be an impediment for cross-border bond investment. Investors prefer investing in countries with stronger quality of institutions including bureaucratic quality, government effectiveness, regulatory quality, rule of law, efficiency of judicial system, risk of contract repudiation, and rating of accounting standards.

Home Bias in Economics Journals is an interesting new paper by Dirk Bethmann, Felix Bransch, Michael Kvasnicka, and Abdolkarim Sadrieh (via Marginal Revolution)....Researchers from Harvard, but also nearby Massachusetts Institute of Technology (MIT), and from Chicago (co-)author a disproportionate share of articles in their respective home journal.... We study this question in a difference-in-differences framework, using data on both current and past author affiliations and cumulative citation counts for articles published between 1995 and 2015 in the QJE, JPE, and American Economic Review (AER), which serves as a benchmark. We find that median article quality is lower in the QJE if authors have ties to Harvard and/or MIT than if authors are from other top-10 universities, but higher in the JPE if authors have ties to Chicago. We also find that home ties matter for the odds of journals to publish highly influential and low impact papers. Again, the JPE appears to benefit, if anything, from its home ties, while the QJE does not. On the bottom end as well, articles with a Chicago aliation in the JPE are less likely to be amongst the group of relatively low impact articles (i.e., to rank among the 25% or 10% of least cited articles published in the three journals in a year) than articles in the JPE authored by researchers from other top-10 institutions. Those are the what, but not the why. These findings naturally provoke some thought from my time at Chicago, and as JPE editor. While I was at the JPE there was an explicit ethic about these matters. Yes, the JPE  publishes papers by Chicago faculty, but only the best ones.  Faculty were expected to self-select the best papers, especially innovative ones that have trouble elsewhere, but are likely to have impact t. That ethic was even stronger for Chicago PhD dissertations. The JPE really really discouraged Chicago Ph.D. dissertations, and only very rarely published them. (I'm curious how much of the JPE/QJE difference comes down to dissertations rather than faculty papers). When I was there, there were only four editors, all based at Chicago. There was also a rule that a second editor had to sign off on any revision and on any publication decision. This was wonderful discipline, and I learned a lot from my fellow editors' view of papers. That procedure also helps to enforce the higher bar standard. All being from the same institution helped a well to produce collegiality, as well as interest in keeping up the brand. Some of my hardest times as editor came from rejecting colleagues' pretty good but not good enough papers. For colleagues, I also was strict about the one revision rule, and rejecting a few promising but still not ready papers from colleagues (and friends) caused more heartache.The JPE also had a culture of decisive editing. The referees provide advice, but the editor makes decisions. This culture leads to publishing the kind of innovative papers that referees may disparage,  especially when an author crosses field boundaries and invades sensitive turf. In this way a home journal, run by a small number of long-term editors, with an institutional reputation, is different than an association journal, with a large board of coeditors who serve short times, and act independently.  I benefited from the JPE's policies. Sherwin Rosen published "Time consistent health insurance" over referee objections, though of course asking for a revision that addressed those objections. "The Random Walk in GNP," my first big paper, was published in the JPE after being rejected elsewhere. "Determinacy and Identification," a sprawling new-Keynesian critique, could never have been published anywhere else. "A simple test of consumption insurance" (as well as Barb Mace's "Full Insurance" which inspired my paper, a worthy exception to the rule against PhD theses) would likely have had a terrible time anywhere else. John Campbell and I might have published By Force of Habit elsewhere,  but the JPE editor was important to boiling it down and focusing it. Was it a good idea for the JPE to publish these, or would the world be better if half had spent another few years batting from journal to journal, and half ended up not published at all? Of course, perhaps there were  other, better, papers from outsiders that the JPE could have published. You judge. I also have plenty of papers rejected by the JPE, even desk rejected. And most of my papers get rejected by at least 3 or 4 journals before finding a home. Welcome to the club. Things have changed. The JPE is a much bigger journal, with a big and spread out editorial board. Other journals, like the AER, have also expanded and added sub journals. Perhaps the concept of a small general interest journal, run by decisive editors willing to take some risk in the quest of innovative papers, publishing papers that at least two of four editors can understand and judge, is out of date; nostalgia for a simpler time.  I hope the new JPE retains the special character that made the old JPE so good. 

Credit rating agencies are frequently criticized for producing sovereign ratings that do not accurately reflect the economic and political fundamentals of rated countries. This article discusses how the home country of rating agencies could affect rating decisions as a result of political economy influences and culture. Using data from nine agencies based in six countries, we investigate empirically if there is systematic evidence for a home bias in sovereign ratings. Specifically, we use dyadic panel data to test whether, all else being equal, agencies assign better ratings to their home countries, as well as to countries economically, politically and culturally aligned with them. While most of the variation in ratings is explained by the fundamentals of rated countries, our results provide empirical support for the existence of a home bias in sovereign ratings. We find that the bias becomes more accentuated following the onset of the Global Financial Crisis and appears to be driven by economic and cultural ties, not geopolitics.

Credit rating agencies are frequently criticized for producing biased sovereign ratings. This article discusses how the home country of rating agencies could affect rating decisions as a result of political economy influences and cultural distance. Using data from nine agencies based in six countries, we test whether agencies assign better ratings to their home countries, as well as to countries economically, geopolitically and culturally aligned with them. Our results show biases in favor of the respective home country, culturally more similar countries, and countries in which home-country banks have a larger risk exposure. Linguistic similarity seems to be the main transmission channel that explains the advantage of the home country.