Phanindra V. Wunnava

Determinants of foreign direct investment: empirical evidence from EU accession candidates

This study examines bilateral foreign direct investments (FDI) between the members of the European Union and eight central and east European candidate (CEEC) economies in transition, awaiting accession into the European Union (EU). Cross-section data were obtained for Bulgaria, Czech Republic, Estonia, Hungary, Poland, Romania, Slovak Republic, and Slovenia for 1997. Once the main characteristics of FDI recipient and donor nations are identified in a bilateral framework, it will be feasible to predict future FDI inflows. This study reveals that the key determinants of FDI inflows in CEECs are size of the host economy, host country risk, labour costs in host country, and openness to trade. Countries that are receiving fewer foreign investments could make themselves more attractive to potential donor nations by focusing on some of the key determinants identified by this study.

Factors affecting infant mortality rates: evidence from cross–sectional data

This paper empirically tests for factors affecting infant mortality rates. Based on a crosssectional model (covering 117 countries for the year 1993) that corrects for heteroscedasticity, the results show that fertility rates, female participation in the labour force, per capita GNP, and female literacy rates significantly affect infant mortality rates. Surprisingly, government expenditure on health-care, as a percentage of GNP, does not play a major role in determining infant mortality rates.

An Empirical Study of the Life-Cycle Hypothesis with Respect to Alumni Donations

It has been shown through the life-cycle hypothesis that as age increases so does consumer spending. We propose to relate this hypothesis to the specific case of charitable contributions at a small liberal arts college. This study is similar to one done previously by James H. Grant and David L. Lindauer (4). However, our model specification and econometric treat ment differ somewhat from their study. Tax treatment of charitable donations plays an important role in the size of donations. Many previous studies have assessed this relationship and found it to be positive.1 Grant and Lindauer go on however to say that more than just income and marginal tax rates determine the level of alumni contributions. The results of their study demonstrate that although the growth rate of alumni donations does eventually become nega tive, this point does not coincide with the retirement age. This suggests that the level of contributions is not entirely dependent on the income profile of the donor. Our results were not consistent with this finding. Instead of a diverging pattern of contribution level, we discovered that the growth rate of donations coincided with the age-income profile and became negative at the retirement age.

Unit roots and structural breaks in North American unemployment rates

Abstract This paper examines the univariate time-series properties of the unemployment rate in Canada, Mexico, and the United States. Tests are employed that allow for endogenously determined break dates and the results are compared to stationarity tests that assume no break in the data. The structural break unit-root tests contradict the findings of the standard tests. We conclude that North American unemployment rates are trend stationary around a breaking trend.

New approaches to economic and social analyses of discrimination

Preface and Dedication Unemployment: Alternative Explanations and Discriminatory Consequences Why Is the Black Unemployment Rate Always Twice as High as the White Unemployment Rate? by Steven Shulman Efficiency Wage Theory: Critical Reflections on the NeoKeynesian Theory of Unemployment and Discrimination by William A. Darity, Jr. Discrimination and Efficiency Wages: Estimates of the Role of Efficiency Wages in Male/Female Wage Differentials by Michael D. Robinson and Phanindra V. Wunnava Competition, Discrimination and Differential Wage Rates: On the Continued Relevance of Marxian Theory to the Analysis of Earnings and Employment Inequality by Rhonda M. Williams Labor-Market Segmentation: Evidence and Implications of Gender Barriers The Structure and Process of Sex Segregation by William T. Bielby Organizational Evidence of Ascription in Labor Markets by James N. Baron Working Conditions, Segmented Labor Markets and Gender Discrimination by David Fairris and Lori Kletzer Supply-Side Responses to Inequity The Measurement of Labor Market Discrimination When Minorities Respond to Discrimination by Harriet Orcutt Duleep and Nadja Zalokar Lifetime Work Expectations and Estimates of Gender Discrimination by Solomon W. Polachek and Charng Kao Markets: Social Amplifiers or Dampers? Is an Active Policy Necessary/Effective? Circulation Causation in Social Processes: The Case of the Ghetto and Black-Owned Businesses by Timothy Bates Discrimination, Returns to Education and Teenage Childbearing by Elaine McCrate Earnings of Black Immigrants: Implications for Racial Discrimination by Stephen A. Woodbury Accounting for the Economic Progress of Black Americans by James J. Heckman Index

The role of foreign capital in domestic manufacturing productivity: empirical evidence from Asian economies

The paper empirically examines the relative contribution of foreign and domestic machinery and equipment on manufacturing productivity in seven Asian economies. A Cobb-Douglas production function is used to test whether foreign machinery is more productive than domestic machinery. The study is based on a pooled cross-sectional time-series model, including seven countries - Hong Kong, Singapore, South Korea, Malaysia, Indonesia, the Philippines and India - for the years 1975 to 1990. The results support the hypothesis that a countrys stage of development, skill-level of its labour force, and the technology embodied in capital play a crucial role in determining the relative impact of foreign and domestic capital on manufacturing productivity.

The effect of political regimes and technology on economic growth

Do political regimes have a significant effect on economic growth? This study builds on the new neoclassical growth model to identify economic determinants of growth, and explicitly tests for the influence of political variables on economic performance for the 1990s. The results suggest that democracies and bureaucracies significantly outperform autocracies. Economic growth is also promoted by increased protection of property rights, and higher investment in education. Moreover, technology has become a requirement for efficient production, and hence, is crucial in promoting growth. Countries can therefore increase the level of economic growth by increasing the levels of education and technology in the economy, and establishing codified laws to foster property rights.

Testing Mundell's Intuition of Endogenous OCA Theory

This paper presents an empirical assessment of the endogenous optimum currency area theory. Frankel and Rose (1998) study the endogeneity of a currency union through the lens of international trade flows. Our study extends Frankel and Roses model by using FDI flows to test the original theory developed by Mundell in 1973. A gravity model is used to empirically assess the effectiveness of the convergence criteria by examining location specific advantages that guide multinational investment within the European Union. A fixed effects model based on a panel data of foreign direct investment (FDI) flows within the EU-15 shows that horizontal investment promotes the diffusion of the production process across the national border. Specifically, our results suggest that economic convergence ensured by belonging to the common currency area helps double FDI flows.

Union-Nonunion Gender Wage and Benefit Differentials across Establishment Sizes

Based on data from the National Longitudinal Surveys of Youth (NLSY), both male and female workers in larger establishments receive not only higher wages but also have a higher probability of receiving benefits than those in smaller establishments. This phenomenon reinforces the well documented size effect. This study also provides evidence of vast gender differences in estimated union effects on the different components of the compensation structure. Hence unions should not treat both genders similarly with respect to wages and benefits. Specifically, unions may be successful in attracting more female workers to join rank and file if unions could play an active role in making available maternity (paternity) leave, and also provided opportunities for women to join large establishments.

Countercyclical union wage premium? Evidence for the 1980s

Empirical results based on pooled male data from the Panel Survey of Income Dynamics indicate an overall union wage premium of about 11.92 percent for the 1980s. In response to fluctuations in local labor market conditions, proxied by the local unemployment rate, a much more flexible wage-setting process is found in the nonunion sector relative to the union sector. The long-term effect of unemployment on nonunion real wages suggests an approximate 0.6 percent decline for every one percentage point increase in unemployment, a statistically significant reduction, but the long-term effect of unemployment on real wages of union members is negligible. The union wage premium ranges between 11.6 to 12.3 percent for the sample years. Even though union wages are insensitive to short-run fluctuations in local labor market conditions, and are somewhat countercyclical in nature, widespread union wage concessions which occurred during the 1980s may now be exerting a downward pressure on union wages.