Recent literatures on entrepreneurship and economic growth estimate the empirical relationships between the following pairs of variables: (1) institutions and entrepreneurial activity; (2) institutions and economic growth; and (3) entrepreneurship and economic growth. This paper revisits each of...

This paper exploits a unique dataset on corruption and informal sector employment in 476 Brazilian municipalities to estimate whether corruption impacts GDP or income levels once variation in informal economic activity is taken into account. Overall, I find that higher levels of corruption and a...

Conditional information ratios (CIR) measure lower partial performance of a portfolio conditional to the distribution of returns on the benchmark. The Information Curve plotted by a serial CIR provides an overall view of performance especially under downside scenarios. The CIR approach is...

The Economic Freedom of the World (EFW) index is extensively used in academic research to show how economic freedom relates to a wide array of economic and social outcomes. Given this, it is important that researchers understand the goal of the index and how to properly utilize this index in...

To solve the dependency problem between factors, in the context of linear multi-factor models, this study proposes an optimal procedure to find orthogonalized risk premia, which also facilitates the decomposition of the coefficient of determination. Importantly, the new risk premia may diverge...

We apply Marginal Conditional Stochastic Dominance (MCSD) tests to returns on sentiment beta sorted portfolios and sentiment-arbitrage portfolios, constructed using the Baker and Wurgler (2007) index of sentiment levels. The theory of MCSD demonstrates that, if one (mutually exclusive) subset of...

Using data from the National Survey on Drug Use and Health, evidence of income inferiority in illegal drug consumption is presented. This is done by estimation of binary choice probit models with endogenous regressors. The simultaneity issue between drug consumption and income has been addressed...

We use a version of the Meade model to consider the effects of interdependent import tariffs in the presence illegal immigration. First, we consider the small union case and derive the Nash tariff equilibrium for two potential members of a Preferential Trade Agreement (PTA). We analyze...

Following Barzel (1976), product quality increases in response to unit taxation but remains unchanged by ad valorem taxation. While many tax theorists agree this argument is theoretically sound, empirical support of Barzel’s theory is limited to the cigarette market. This paper tests and...

Saving traditional small ‘mom and pop’ businesses has been a justification for political and court decisions preventing Wal-Mart from opening new stores virtually everywhere across the United States. We present the first rigorous econometric investigation of how Wal-Mart actually impacts the...