Research

Abstract

Empirical research depends on reliable data. Yet in many countries, statistical agencies do not have the capacity to collect high-quality data on economic development. This is especially the case in Africa, where the capacity to collect such data is affected by the same historical factors that explain economic development - in particular, the slave trade. We hypothesize that the impact of the slave trade on economic development in Africa is biased because cross-country heterogeneity in statistical capacity related to the slave trade creates a non-classical measurement error in GDP per capita. Our empirical evidence supports this view. When replacing GDP per capita by nighttime light intensity per capita - an indicator of economic development unrelated to statistical capacity - the impact of the slave trade on economic development drops by a factor of 2 to 4 depending on model specification and estimation methodology (OLS, IV, and high-dimensional sparse models). Various robustness tests further corroborate our main hypothesis.

Link to publication: https://doi.org/10.1093/jae/ejac020

Abstract

Human capital accumulation is a key driver of economic development across countries. Although previous studies have shown that country-specific circumstances (e.g., cultural, health-related, and educational factors) are strongly related with the accumulation of human capital in society, few studies have explored the importance of innate ability factors in general and ADHD-related behavioral symptoms in particular for cognitive skill outcomes. This paper hypothesizes and empirically establishes the educational burden of the ADHD-related behavioral symptoms on aggregate cognitive achievement outcomes. We use a novel compilation of the 2- and 7-repeat allele variants of the human DRD4 exon III gene that candidate gene association studies have identified as an important biomarker in the etiology of childhood ADHD. We find that our indicator for the prevalence of ADHD genetic risk in society has a negative and statistically significant impact on educational achievement. Additional sensitivity tests and estimation methods further corroborate our main hypothesis.

Link to publication: https://doi.org/10.1093/oep/gpac019

Abstract

In this paper, we employ a correlated random effects econometric framework to simultaneously estimate the within and between effects of age on subjective well-being based on longitudinal survey data from the German Socio-Economic Panel (SOEP). The proposed approach helps to explain differing findings on the relationship between age and subjective well-being reported in a series of studies based on cross-sectional and/or longitudinal panel data. We find empirical support for a wave-like pattern of subjective well-being over the life course. In contrast to the existing literature, our results point to significantly different life cycle patterns for the within- and between-person results. While the between-person results show robust turning points of age around the mid-40s and 90s, the within-person findings indicate that subjective well-being is rather stable between age 16 and 23 and then approaches a local maximum at age 75. We show that the type of variation employed in the empirical analysis (e.g., cross-sectional vs. longitudinal panel) of the age-well-being association has a non-negligible impact on the obtained results and the inferences drawn. Moreover, we do not find support of a U-shape association between subjective well-being and age. This finding holds even if we restrict the sample to those survey respondents aged 18-65 years, indicating that the age-well-being relationship is more complex than a U-shape would predict. A series of additional robustness tests corroborate our main findings.

Link to publication: https://doi.org/10.1016/j.jeoa.2021.100366

Abstract

Knowledge creation has been a pivotal ingredient of endogenous growth theory to understand differences in standards of living across countries. Yet, the identification of key drivers explaining cross-country differences in knowledge creation still remains a topic of central interest in this research field. In this paper, I provide a framework to hypothesize and empirically test the persistent effects of novelty-seeking traits on cross-country differences in scientific knowledge creation. The results suggest a positive and statistically significant relationship between both outcomes that is consistent with the hypothesis that the prevalence of novelty-seeking traits in society facilitates scientific knowledge creation through beneficial human behaviors related to risk-taking and explorative behavior. The empirical findings remain qualitatively unaffected when controlling for additional historical, biogeographical, and socioeconomic factors that appear as additional important determinants in the creation of scientific knowledge in society.  

Link to publication: https://doi.org/10.1017/S1365100521000092

Abstract

Entrepreneurship is a cornerstone of technological innovation and economic development. We posit that the genetic make-up of countries (populations) will affect the extent of their engagement in entrepreneurial activities, in addition to the factors showcased by prior literature (e.g., institutions, culture, socio-economic, demographic, or historical). To test this conjecture we employ a country-level genetic measure that is commonly associated with novelty- and risk-seeking behaviours using the frequency of the 2- and 7-repeat allele variants of the DRD4 exon III gene. Our results confirm a systematic, positive association between genetics and entrepreneurial activities across 97 countries using a large set of controls and battery of robustness tests. These findings reconcile the "nature versus nurture" debate with respect to entrepreneurial activities around the world and provide some valuable insights on the significance of different determinants of entrepreneurship.

Link to publication: https://doi.org/10.1016/j.techfore.2021.120788

Abstract

What role do immigrants play in firms’ ability to absorb and apply foreign knowledge? Based on a matched employer-employee dataset from Danish manufacturing firms over the period 2001 to 2011, this study examines the impact of foreign knowledge accessible by firms’ immigrant employees on firm-level total factor productivity (TFP). We construct various firm-specific absorbable foreign knowledge measures that link firms’ immigrant employees to the technological knowledge base of their country of origin. The empirical results suggest that firms employing immigrant employees have higher firm-level TFP outcomes and a higher probability of new firm-level patent applications. The average productivity gain associated with the hiring of one immigrant employee is about 1.5 percent in the year following the firm’s hiring decision. Additional results show that the estimated productivity increase varies with the level of education and the occupational positions of the immigrant employees. The results are robust to the inclusion of a large range of firm-specific controls and various sensitivity checks.  

Link to publication: https://doi.org/10.1093/icc/dtaa047

Abstract

This paper advances a new country‐level measure of ethno‐linguistic diversity, making use of Greenberg's definition of diversity by synthesizing information on the share of different ethno‐linguistic groups in a country's population and, more importantly, information on intergroup linguistic distances derived from a recently developed lexicostatistical approach. I show that this measure captures ethno‐linguistic diversity at lower levels of linguistic aggregation. However, unlike the commonly used phylogenetic language tree approach, I found that these distance‐weighted diversity measures continue to have a strong negative statistical association with economic growth that is not sensitive to the underlying resemblance function between ethno‐linguistic groups. 

Link to publication: https://doi.org/10.1111/obes.12205

Abstract

The issue of novelty-seeking traits have been related to important economic attitudes such as risk-taking, entrepreneurial, and explorative behaviors that foster technological progress and, thus, economic development. However, numerous molecular genetic studies have shown that novelty-seeking bearing individuals are prone to certain psychological “disadvantages” such as Attention Deficit Hyperactivity Disorder (ADHD), leading to occupational and educational difficulties in modern societies. Using a recent compilation of DRD4 exon III allele frequencies – a particular gene variant that population geneticists have found to be sometimes associated with the human phenotype of novelty-seeking behavior – this paper advances a new country-level measure on the prevalence of novelty-seeking traits for a large number of countries worldwide. The results suggest a stable non-monotonic inverted U-shaped relationship between the country-level DRD4 exon III allele frequency measure and economic development. This finding is suggestive of the potential “benefits” and “costs” of novelty-seeking traits for the aggregate economy. 

Link to publication: https://doi.org/10.1016/j.jdeveco.2016.12.009

Abstract

This paper empirically investigates the evolutionary drivers of between-population variation of the human DRD4 exon III locus, a particular gene associated with the human personality trait of novelty-seeking behavior. Providing a novel compilation of worldwide DRD4 exon III allele frequencies in a large sample of indigenous populations around the world, this study employs population-specific biogeographic indicators to test the hypothesis of natural selection acting on the set of DRD4 exon III allele variants. The estimates suggest that migratory distance from East Africa and various population-specific biogeographic indicators, such as latitude, land suitability for agriculture, pasture land, and terrain ruggedness, contributed significantly to overall between-population DRD4 exon III polymorphism.

Link to publication: https://doi.org/10.1016/j.evolhumbehav.2016.04.005 

Abstract

From an engineering perspective, the service that a capital good provides is energy conversion – that is, the physical "work" done by a machine. A capital good's service can thus be measured directly by the energy consumed in production. We show important empirical advantages of this approximation over traditional measures. The empirical application reveals that this approach avoids a number of conceptual problems of the latter. Furthermore, this measure captures the utilization of the capital stock more accurately as it is more sensitive to fluctuations in economic activity. With a growth accounting exercise, it is shown that the differences between the new and the traditional measures are important for empirical work. Using the new measure yields significantly different results. Especially in times of global recession it provides higher and more feasible total factor productivity growth rates. 

Link to publication: https://doi.org/10.1080/00036846.2016.1173178

Abstract

This paper investigates the empirical relationship between ethnic diversity, polarization, and economic growth. Ethnicity is assumed to affect economic growth through a number of possible transmission channels that are generally included in cross-country growth regressions. This paper provides an extensive empirical analysis shedding light on the various sources through which ethnic diversity and polarization affects economic growth indirectly. It advances and empirically establishes the hypothesis that ethnic diversity has a strong direct negative impact on economic growth, whereas ethnic polarization has non-negligible indirect economic effects through the specified channel variables.

Link to publication: https://doi.org/10.1016/j.worlddev.2014.01.012