scholarly journals Migrants, Ancestors, and Foreign Investments

2018 ◽  
Vol 86 (4) ◽  
pp. 1448-1486 ◽  
Author(s):  
Konrad B Burchardi ◽  
Thomas Chaney ◽  
Tarek A Hassan
Keyword(s):  
Causal Effect ◽  
Foreign Country ◽  
Reduced Form ◽  
Information Frictions ◽  
Factor Endowments ◽  
Percentage Points ◽  
Form Model ◽  
Reduced Form Model ◽  
The Mean ◽  
Push Factor

Abstract We use 130 years of data on historical migrations to the U.S. to show a causal effect of the ancestry composition of U.S. counties on foreign direct investment (FDI) sent and received by local firms. To isolate the causal effect of ancestry on FDI, we build a simple reduced-form model of migrations: Migrations from a foreign country to a U.S. county at a given time depend on (1) a push factor, causing emigration from that foreign country to the entire U.S., and (2) a pull factor, causing immigration from all origins into that U.S. county. The interaction between time-series variation in origin-specific push factors and destination-specific pull factors generates quasi-random variation in the allocation of migrants across U.S. counties. We find that doubling the number of residents with ancestry from a given foreign country relative to the mean increases the probability that at least one local firm engages in FDI with that country by 4 percentage points. We present evidence that this effect is primarily driven by a reduction in information frictions, and not by better contract enforcement, taste similarities, or a convergence in factor endowments.

A Reduced Form Model of Default Spreads with Markov-Switching Macroeconomic Factors

2010 ◽  
Author(s):  
Georges Dionne ◽  
Genevieve Gauthier ◽  
Khemais Hammami ◽  
Mathieu Maurice ◽  
Jean-Guy Simonato
Keyword(s):  
Markov Switching ◽  
Reduced Form ◽  
Macroeconomic Factors ◽  
Form Model ◽  
Reduced Form Model

scholarly journals Measuring the Impact of Promotions on Brand Switching When Consumers Are Forward Looking

2003 ◽  
Vol 40 (4) ◽  
pp. 389-405 ◽  
Author(s):  
Baohong Sun ◽  
Scott A. Neslin ◽  
Kannan Srinivasan
Keyword(s):  
Structural Model ◽  
Simulated Data ◽  
Real Data ◽  
Reduced Form ◽  
Coefficient Estimates ◽  
Dynamic Structural Model ◽  
Brand Switching ◽  
Form Model ◽  
Reduced Form Model ◽  
The Impact

Logit choice models have been used extensively to study promotion response. This article examines whether brand-switching elasticities derived from these models are overestimated as a result of rational consumer adjustment of purchase timing to coincide with promotion schedules and whether a dynamic structural model can address this bias. Using simulated data, the authors first show that if the structural model is correct, brand-switching elasticities are overestimated by stand-alone logit models. A nested logit model improves the estimates, but not completely. Second, the authors estimate the models on real data. The results indicate that the structural model fits better and produces sensible coefficient estimates. The authors then observe the same pattern in switching elasticities as they do in the simulation. Third, the authors predict sales assuming a 50% increase in promotion frequency. The reduced-form models predict much higher sales levels than does the dynamic structural model. The authors conclude that reduced-form model estimates of brand-switching elasticities can be overstated and that a dynamic structural model is best for addressing the problem. Reduced-form models that include incidence can partially, though not completely, address the issue. The authors discuss the implications for researchers and managers.

A reduced form model of default spreads with Markov-switching macroeconomic factors

2011 ◽  
Vol 35 (8) ◽  
pp. 1984-2000 ◽  
Author(s):  
Georges Dionne ◽  
Geneviève Gauthier ◽  
Khemais Hammami ◽  
Mathieu Maurice ◽  
Jean-Guy Simonato
Keyword(s):  
Markov Switching ◽  
Reduced Form ◽  
Macroeconomic Factors ◽  
Form Model ◽  
Reduced Form Model

scholarly journals The European Vulnerable Option Pricing with Jumps Based on a Mixed Model

2016 ◽  
Vol 2016 ◽  
pp. 1-9 ◽  
Author(s):  
Chao Wang ◽  
Jianmin He ◽  
Shouwei Li
Keyword(s):  
Option Pricing ◽  
Mixed Model ◽  
Structural Model ◽  
Jump Diffusion ◽  
Reduced Form ◽  
Martingale Method ◽  
Underlying Asset ◽  
Form Model ◽  
Reduced Form Model ◽  
Vulnerable Option

In this paper, we combine the reduced-form model with the structural model to discuss the European vulnerable option pricing. We define that the default occurs when the default process jumps or the corporate goes bankrupt. Assuming that the underlying asset follows the jump-diffusion process and the default follows the Vasicek model, we can have the expression of European vulnerable option. Then we use the measure transformation and martingale method to derive the explicit solution of it.

scholarly journals Explaining the environmental Kuznets curve: structural change and international agreements in reducing sulphur emissions

1997 ◽  
Vol 2 (4) ◽  
pp. 485-503 ◽  
Author(s):  
SANDER M. DE BRUYN
Keyword(s):  
Environmental Policy ◽  
Structural Changes ◽  
Decomposition Analysis ◽  
International Agreements ◽  
Reduced Form ◽  
Kuznets Curve ◽  
Explanatory Variables ◽  
Developed Economies ◽  
Form Model ◽  
Reduced Form Model

Environmental Kuznets curves have been estimated using a simple reduced-form model that gives no information on the mechanisms underlying the estimated inverted U-shaped relationship between some pollutants and income. Various intuitive appealing explanations for the observed patterns have been offered, such as structural changes and environmental policy, but these have rarely been empirically investigated. Expanding the reduced-form model with explanatory variables may introduce serious multicollinearity problems, a reason why decomposition analysis is a preferable alternative for investigating the origins of change in emissions. Applying decomposition analysis fails to find evidence for structural changes as an important determinant of the impressive reductions in SO2 emissions of developed economies during the 1980s. Environmental policy, fostered by international agreements, gives a better explanation why pollution curbs downward at high income levels. Besides the level of income, the present state of the environment seems an important, but often neglected, variable that explains the ambition of environmental policy.

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