The Journal of Economics

Volume XIX, No. 2, 1993

URBANIZATION AS A FACTOR IN ECONOMIC GROWTH: AN EMPIRICAL STUDY

Ronald L. Moomaw and Ali M. Shatter

This paper tests the effect of urbanization on economic growth by adapting a growth equation of Barro's. We add variables measuring the percentage of the population that is urban, the concentration of the urban population in large cities, and the concentration of the urban population in large cities has a positive effect on economic growth and concentration in the primate city has a negative effect. Perhaps urban concentration in response to economic forces enhances growth, and such concentration in response to political forces retards growth. (O1,R1)


GROWTH, PRODUCTIVITY AND TECHNOLOGICAL CHANGE IN THE PHILADELPHIA BOOT AND SHOE INDUSTRY: 1860-1870

Brian D. Eggleston

This paper examines growth, productivity and technological change in the Philadelphia boot and shoe industry over the period 1860- 1870. The first part of the paper provides a broad sketch of the evolution of the U.S. boot and shoe industry from Colonial times to the Civil War era. Growth within the Philadelphia industry is then discussed within this context. The second part of the paper provides estimated production relationships (based on a model first advanced by Dhrymes) for 1860 and 1870. The estimates indicate that over the period 1860-1870, efficiency and scale parameters increased while the elasticity of substitution decreased. (N6,L6)


IMPACTS OF POTENTIAL BILATERAL TRADE AGREEMENT BETWEEN CHINA AND TAIWAN ON THE U.S. FEED GRAIN MARKET

C.S. Kim, H.C. Bolling, William Lin, and Theresa Sun

This paper examines the effects of the U.S. feed grain market of a potential trade agreement between China, as a corn exporter, and Taiwan, as a corn importer. Taiwan is the fourth largest U.S. corn importer, but a normalization of the trade with China could reduce the exports of U.S. corn to Taiwan. Based on 1989- 90 data and using three different scenarios, results indicate that if the U.S. loses the entire Taiwanese corn market to China, the worst scenario, the net welfare loss for the United States could reach $110 million.


PRIVATIZATION AND THE REEMERGENCE OF THE MARKET ECONOMY IN HUNGARY

Z. Edward O'Relley

Antecedents to the current Hungarian privatization effort are reviewed and evaluated within the context of the New Economic Mechanism (NEM), followed by a discussion of the aims and results of the pre-privatization process that took place in the 1980s. The objectives and processes of the current effort are discussed next, noting both its initial results and likely future prospects (O17,O52,P21).


THE ABSTINENCE THEORY, LIQUIDITY PREFERENCE AND THE SAVING- INVESTMENT NEXUS

Christopher Brown

This article examines the theoretical basis for the supposition that the pace of investment and productivity growth are casually related to the willingness of the public to abstain from consumption. The argument is made that the abstinence theory, either in its crude form or in its loanable funds incarnation, in untenable within the institutional context of modern finance and capital goods production. Savings has no direct connection to the price or availability of bank finance or to the prospect of obtaining funding for capital projects, though the portfolio decisions of the public have important implications with respect to these variables. (E12,E20)


PRICING IN THE PRESENCE OF COMMON COSTS: A SIMPLIFICATION

Dennis A. Johnson

The persistence of arbitrary cost allocations to facilitate pricing decisions in business firms suggests economists have not been persuasive in showing such practices are unhelpful. In the joint cost variable proportions case persuasion is made more difficult by the lack of a simple graphical device by which optimal output prices can be illustrated. This article rectifies this shortcoming, showing rigorously that in certain circumstances the profit maximizing conditions for a firm producing products in variable proportions are formally equivalent to those of the third degree discriminating monopolist. This permits a simple graphical solution for output prices. (D40,M21)


ENTRY, EXIT, AND INDUSTRY PERFORMANCE

William F. Chappell, Walter J. Mayer, and William F. Shughart II

This paper provides evidence that the relationship between industry performance and the entry and exit of firms is more complex than heretofore assumed. In particular, using a data set consisting of 327 four-digit manufacturing industries in 1977, we find that the impact of entry on profitability depends on the number of the firms that enter: Modest increases in the volume of entry tend to enhance industry profits, but if the number of entrants is sufficiently large, industry profits fall. Because the welfare effects are ambiguous, caution is warranted in assessing the policy implications of entry activity on industry performance. (L11,L41)


INTEREST-RATE DIFFERENTIALS AND BORROWING CONSTRAINTS: THE TWO- PERIOD CASE

Daniel K. Biederman

A consumer lives for two periods and faces a borrowing constraint as well as a higher interest rate for borrowing than for lending. Two cases of particular interest are that in which the borrowing constraint is binding and that in which the interest-rate differential discourages lending and borrowing altogether. When the agent borrows up to his limit, the demand functions are likely to lack the neoclassical homogeneity properties which apply in all other cases of optimizing behavior. Furthermore, the constrained borrower supplies less labor than the agent who is discouraged from lending and borrowing altogether. (D91 and J22)


CONCENTRATION, ENTRY BARRIERS AND PROFITABILITY: AN EMPIRICAL VINDICATION OF THE TRADITIONAL PARADIGM

Alexander W. Jenkins

Empirical support for the traditional profitability/market power- concentration model is reassessed for a sample of 55 3-digit SIC Canadian manufacturing industries, 1979-81, using a dichotomous, consumer-producer goods, specification and principal components remedy for severe collinearity, particularly among concentration and entry barrier variables. A modest, statistically significant, positive relation is supported, especially in consumer goods industries where the degree of bilateral monopoly is typically minimal. In addition, product differentiation and import penetration appear to have respective weakly positive and moderately negative impacts on profitability/market power in consumer goods industries (L1,L4,L6)


VERTICALLY DIFFERENTIATED PRODUCT AND OPTIMAL DISCRIMINATORY TARIFFS: A CASE OF COURNOT COMPETITION

Chih-Min Pan

Gatisos (1990) and Hwang and Mai (1991) show that the more cost efficient exporting country shall receive a higher tariff. However, their results are contradictory to what we observe in the real world. By incorporating vertical product differentiation, this paper provides a clear explanation. (F12,L13)


FEMALE-INTENSIVENESS OF POSITIONS AND PAY DIFFERENCES: A CASE STUDY OF HOSPITAL ADMINISTRATION

Jana F. Kuzmicki and Fay Ross Greckel

Using data for 44 administrative job categories in over 300 hospitals and medical centers, the authors examine the relationship between salary level in a given position and the responsibility factors, human capital variables, and ratio of females to total incumbents for that position. Regression analysis indicates that the ratio of females to total incumbents is negatively-related to salary levels, although responsibility factors and human capital variables explain a larger proportion of the salary variance (J16,J30)


DIFFERENCES IN UNION RELATIVE WAGE EFFECTS ACROSS GENDER AND RACE: A LONGITUDINAL ANALYSIS

Dwight W. Adamson

This paper utilizes longitudinal union variables to examine race and gender differences in the union effect from entering, leaving, and staying in the union sector. The union effects are estimated over a time trend from the 1970 to 1982. The results show that the female union joiner effect remains stable over time. In general, the results also show that unions' ability to impact wages for all white workers has attenuated over time. With the exception of female union joiners, union effects for blacks have remained relatively constant. (J3,J5,J7)