Labour market regulations have important implications for both the incidence of cross-border acquisitions, and the outcomes for acquiring firms. This column explores how variations in labour regulations between countries affect cross-border acquisitions and subsequent firm performance. For a sample of 50 countries, firms are found to enjoy larger returns when they acquire a target in a country with weaker labour regulations than the acquirer’s home country.
Ross Levine, Chen Lin, Thursday, July 2, 2015
Mercedes Delgado, Christian Ketels, Michael Porter, Scott Stern, Thursday, September 18, 2014
There is a consensus among economists that ‘deep roots’ – geography, natural endowments, and institutions – are important determinants of prosperity differences across countries. This column argues that deep roots matter, but they are neither the whole story nor an excuse for political inaction today. Current policies are important – especially the broad range of policies that shape the business environment and the sophistication of companies – and they are affected but not determined by the past.
Coen Teulings, Friday, July 11, 2014
The financial crisis and the Great Recession have led to calls for more economic history in economic education. This column argues for a much broader use of history in economics courses, as a device for teaching both the logic and the empirical relevance of economics. A proposed curriculum would include the rise of agriculture, urbanisation, war, the rule of law, and demography.
Enrico Spolaore, Romain Wacziarg, Thursday, October 3, 2013
There is now widespread agreement that ‘deep’ history matters for comparative development. Recent research has shown that ancestry – the transmission of genetic and cultural traits across generations – matters more than the history of geographic regions. This column argues that long-term divergences in inherited traits can create barriers to the diffusion of technology. The greater a population’s genetic distance to the population on the technological frontier, the lower its relative income will be. Development policies should aim at reducing barriers to exchange and communication.
Alberto Alesina, Stelios Michalopoulos, Elias Papaioannou, Sunday, November 18, 2012
This paper explores the consequences and origins of contemporary differences in well-being across ethnic groups within countries. The authors show that ethnic inequality is strongly inversely related to per capita income, and that differences in geographic endowments across ethnic homelands explain a sizable portion of contemporary ethnic inequality. This deeply rooted inequality in geographic attributes across ethnic regions is also negatively related to comparative development.
Diego Comin, Mikhail Dmitriev, Esteban Rossi-Hansberg , Sunday, November 11, 2012
This paper studies empirically technology diffusion across countries and over time, finding significant evidence that technology diffuses slower to locations that are farther away from adoption leaders. The authors document the significant role that geography plays in determining technology diffusion across countries.
John C Bluedorn, Akos Valentinyi, Michael Vlassopoulos, Tuesday, December 15, 2009
Hot countries tend to be poorer. This column uses the cross-century, cross-country variation in climatic temperatures to estimate the effects of historic temperature upon current incomes. The negative relationship between current temperature and income appears due to temperature variations in the 18th and 19th centuries. That suggests that the consequences of climate change may be felt for a very long time.
Nathan Nunn, Diego Puga, Wednesday, June 6, 2007
African nations with ‘bad’ terrain suffered less from the slave trade. More than a century after the slave trade ended, the protective benefits of ruggedness still outweigh its contemporary economic disadvantages when it comes to GDP per capita.