Working papers

Abstract Most enlightenment philosophers argued that the separation between Church and State would prevent capture of resources by one state religion. We formalize and test a theory that addresses a different danger. We demonstrate that a reduction in the separation between Church and State can be corrosive to political institutions, especially the Judiciary. We show that religious leaders use their high legitimacy to gain political office, and become particularly abusive politicians, misusing their political authority to undermine the independence of the Judiciary. We provide a theoretical framework and estimate the structural equations of our theory using data from Pakistan. Our empirical strategy exploits the plausibly exogenous timing of a military coup to provide causal evidence for the key predictions of our theory.
Keywords Religion, Judicial independence, Elections, Economic development
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Abstract In this paper, we consider a spatiotemporal growth model where a social planner chooses the optimal location of economic activity across space by maximization of a spatiotemporal utilitarian social welfare function. Space and time are continuous, and capital law of motion is a parabolic partial differential diffusion equation. The production function is AK. We generalize previous work by considering a continuum of social welfare functions ranging from Benthamite to Millian functions. Using a dynamic programming method in infinite dimension, we can identify a closed-form solution to the induced HJB equation in infinite dimension and recover the optimal control for the original spatiotemporal optimal control problem. Optimal stationary spatial distributions are also obtained analytically. We prove that the Benthamite case is the unique case for which the optimal stationary detrended consumption spatial distribution is uniform. Interestingly enough, we also find that as the social welfare function gets closer to the Millian case, the optimal spatiotemporal dynamics amplify the typical neoclassical dilution population size effect, even in the long-run.
Keywords Spatiotemporal growth models, Benthamite vs Millian social welfare functions, IMPERFECT ALTRUISM, Diffusion, Dynamic programming in infinite dimension
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Abstract We consider an economy with three cities producing different outputs. Two cities produce intermediate goods, a type 1 producing an intermediate "agricultural" good with capital and labor only, and a type 2 producing an intermediate "industrial" good with capital, labor and human capital, and the last type 3 city produces the final good which is obtained from the two intermediate goods and labor. The asymmetric introduction of human capital allows us to prove that the three cities experience at the equilibrium heterogeneous endogenous growth rates which are proportional to the growth rate of human capital. We show that the "industrial" type 2 city is characterized by the larger growth rate while the "agricultural" type 1 city experiences the lower growth rate, and thus the type 3 city is characterized by a growth rate which is a convex combination of the two formers. This implies that the relative size in terms of output of the "agricultural" city decreases over time. This property allows to recover the empirical fact that most nonagricultural production occurs in growing metropolitan areas. But, simultaneously, as we prove that total labor employed in each city is proportional to the total population, the relative population size distribution of cities is constant over time as shown in empirical studies.
Keywords Urban dynamics, Human capital, Endogenous growth, Heterogeneous growth rates, City inequalities
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Abstract This study investigates the differences between zombie firms and non-zombie firms in corporate social responsibility activities such as reporting, disclosure and fulfillment. Using Chinese listing company data collected from 2009 to 2016, we apply a three stage model with a double Heckman correction to deal with potential self-selection/endogeneity bias and to measure the differences consistently. We found that zombie firms are less willing to release standalone corporate social responsibility reports than non-zombie firms. Among companies that release standalone corporate social responsibility reports, the corporate social responsibility disclosure of zombie firms is at least not worse than non-zombie firms, but the corporate social responsibility fulfillment is significantly lower. We conclude from this gap between disclosure and fulfillment to the hypocritical behavior of zombie firms, due to the absence of control in corporate social responsibility. We suggest that government should enhance supervision over zombie firms’ corporate social responsibility activities and subsidies towards them in order to lower their economic damage. Supplementary analyses provide some clues concerning the heterogeneity of inconsistence in term of external support characteristics, ownership and censorship which require further studies.
Keywords Corporate social responsibility, Zombie firms, Reports, Disclosure, Fulfillment, Hypocrisy
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