David Kernohan

Measuring Firm-Level Productivity Convergence in the UK: The Role of Taxation and R&D Investment

This paper examines the direct effects of corporate tax on firm productivity along with the interaction effects of tax policy and R&D activity on productivity at firm level for over 13,062 firms during 2004-2011. Our main findings are first, that there is evidence for productivity convergence and we find that there is a positive robust relationship between R&D and firm productivity, whereas tax policy has a negative distortionary effect on TFP. Second, firms with greater export orientation do not seem to achieve much improvement in productivity, whereas the favourable productivity effect in the case of R&D-based firms suggests that if there are tax incentives in place for R&D type activity, it can promote innovation and drive productivity convergence (lagging firms closing the technology gap with those at the frontier), particularly so when there is a continued decline in overall economic activity. The results also show a significant non-linear effect of tax rate on firm-level productivity, identifying an inverse U-shaped relationship

Relativizing Human Rights

Research, policy analysis, and conditional aid policy among some donor countries rely on standards-based measures of country human rights performance. These measures code annual performance based on narrative reports published by the US State Department and Amnesty International. The coding yields a performance ranking for countries that in our view is “absolute” or reflects that current state of human rights performance without taking into account the relative social, political, or economic conditions within countries. While this absolute ranking is useful for empirical analyses of some human rights questions and policy applications, it can lead to perverse outcomes in other areas of work. This article provides an alternative method for ranking country human rights performance that takes into account an array of additional variables that are related to the protection of civil and political rights. The method involves three stages. Stage one applies principal component factor analysis to five different standards-based measures of civil and political rights to extract a single human rights “factor score.” Stage two regresses the factor score on a series of explanatory variables for the protection of civil and political rights for which there is widespread consensus and then saves the residual as an indicator of the “over” or “under” performance of countries with respect to the protection of those rights. Stage three plots the “factor score” alongside the relative score to compare these different measures of human rights performance over time and across different regions. Our results lead to a new depiction of human rights progress in the world that we believe will be of interest to human rights scholars and practitioners.

Good neighbours matter: economic geography and the diffusion of human rights

ABSTRACT Using multi-country panel data, this paper investigates the geopolitical and economic aspects of human rights performance. Human rights performance depends on the relative levels of economic development and spatial proximity to ‘good’ and ‘bad’ neighbours. The paper tests for basic effects of income, and applies spatial weighting models, to analyse the neighbours’ impact on human rights levels, treating this impact as partly endogenous. It takes into account size and distance when comparing each country’s human rights performance with what would be predicted from a weighted average of its neighbours’ performance. There are (1) geographical clusters and (2) size and proximity effects for human rights performance.

Blind faith in the Balkans: trade policy options for South-East Europe

This paper examines persistent concerns that trade openness in South-East Europe is much less advanced than it was for the former CEECs in the mid to late 1990s. Using econometric tests, we find that trade patterns appear to remain problematic. Second, partial equilibrium simulations are used to examine different institutional structures. These suggest that the present system of regional ties may do little to stimulate internal trade. In view of this, current plans to extend the Stability Pact matrix of bilateral trade agreements into a pan-regional trade group may be inadequate.

COOPERATION AND OPTIMISM IN A SOCIAL DILEMMA: Cooperation and Optimism in a Social Dilemma

We examine the influence of optimism about local and foreign people on social cooperation using a public goods game. Firstly, we find that optimism fuels social cooperation, and secondly, that this positive effect holds when optimism is focused either jointly or individually.

Economic Geography and Human Rights

This paper investigates the geo-political and international economic aspects of human rights performance using a pooled cross-section time-series data set. We start with simple descriptive accounts of the recent geographic history of human rights performance. We then test for basic economic effects of income and then apply tools from the spatial economics literature to examine the degree to which clusters of relative human rights performance exist. Using spatial weighting models we analyse the spatial impact of proximity and human rights performance of neighbours on overall levels of human rights performance. Unlike previous studies, our approach treats this spatial impact as partly endogenous: one country’s human rights performance may affect its neighbours through a variety of potential geographical spillover mechanisms. The spatial weighting models take into account size and distance of neighbours in order to compare each country’s human rights performance with what would be predicted by regression on a weighted average of its neighbours’ performance. The findings suggest that there are (a) geographical clusters of human rights performance and (b) size and proximity effects for human rights performance, both of which have significant implications for the promotion and protection of human rights.