The question of complementarity or substitutability of FDI and international labour mobility has not yet been answered. The substitutability assumption does not take into consideration the technological spillover of FDI in the host countries. Moreover, migration flows reveal cultural characteristics and labour force properties of their native country which may stimulate bilateral business netwo...

It is well known that conflicts of interests between borrowers and creditors can raise the cost of external financing. In this paper we provide new evidence that borrower-creditor conflicts of interests also affect the sensitivity of debt financing to aggregate business conditions. In the presence of incomplete contracts, creditors cannot fully observe or verify diversion of free cash flow by b...

This paper reviews and documents methodology for fitting hidden Markov switching models to New Zealand GDP data. A primary objective is to better understand the utility of these methods for modelling growth and volatility regimes present in the New Zealand data and their interaction. Properties of the models are developed together with a description of the estimation methods, including use of t...

We examine the effect of house price appreciation on bank loan portfolios during the 1996—2006 period. While most previous research in this area has concentrated on loan demand effects, we evaluate how house prices affect a bank’s credit supply. Controlling for possible simultaneity between house prices and bank loan portfolio growth, we find that banks affected by greater house price appreciat...

We document empirical evidence linking regional growth in the United States over the last 25 years with entrepreneurial activity, or ‘business dynamism’. The main data source is the Business Dynamics Statistics (BDS) released by the US Census Bureau. We uncover a new stylised fact: across US states, it is not the level but rather the change in business entry rate that has a significant positive...

I investigate the determinants of business cycles synchronization, across regions and over time. I use both international and intranational data to evaluate the linkages between trade in goods, trade in ...nancial assets, specialization and business cycles synchronization in the context of a system of simultaneous equations. In all speci...cations, the results are as follows. (i) Simultaneity i...

Entrepreneurship Among Married Couples in the United States: A Simultaneous Probit Approach This article proposes a simultaneous probit equation framework to analyse the business ownership patterns of married couples in the United States. A structural model of knowledge spillovers within couples is formulated and estimated. Empirical analysis reveals significant and substantial positive interde...

We provide a business cycle model in which endogenous markup fluctuations are the main driving force. These fluctuations occur due to some form of ‘animal spirits’, impelling firms in their entry-exit decisions within each sector. By contrast to existing models of the business cycle emphasizing the role of animal spirits, we do not rely on the sink property of the equilibrium to generate indete...

We use panel data on the number of new firm registrations in 92 countries to study how the magnitude of reforms affects its impact on new firm registrations. We find that small reforms, in general less than 40% reduction in costs, days or procedures required for business registration, do not have a significant effect on new firm creation. This suggests that small reforms do not have the intende...

This study analyzes the sensitivity of US giving to both business cycle fluctuations and trend growth. With tax revenues as a point of reference, US giving constitutes a relatively stable source of revenue. Total giving is characterized by a business cycle volatility which is comparable to the moderate one of indirect taxes. However, this overall finding is composed of the respective sub-compon...