Estimating the Local Effectiveness of Institutions: a Latent-Variable Approach
2019/03/12
研討會日期 : 2019-03-12
時間 : 14:30
主講人 : Professor Hans-Jörg Schmerer
主持人 : Professor Kamhon Kan
地點 : Conference Room B110
演講者簡介 : Professor Schmerer received his Ph.D. in Economics from University of Tübingen in 2012. He is currently a Professor at University of Hagen. His research fields are International Trade and Labor Economics.
演講摘要 : There is consensus in the academic debate that strong institutions promote exports. Most existing studies in this field build on country- or province-level estimates of institutional quality without taking regional heterogeneity into consideration. Our new identification strategy allows constructing more detailed proxies on the effectiveness of institutions at the firm-level. An otherwise identical firm located in an environment with good institutions and better government effectiveness should be able to export more. Put differently, the export performance comprises information on the institutional quality the firm is faced with. We argue that this interdependence can be uncovered if effectiveness is linked to the firm's distance from its political hub. Development in earlier stages is likely more focused on provincial capitals. Development in the hinterland takes place with a certain lag. This second hypothesis enables us to use distance as a proxy for the effectiveness of institutions. Using methods of structural equation modelling we predict unobserved institutional quality at the zip-code level. We test the impact of this novel identification strategy in a panel data regression that compares the coefficients obtained from provincial measure of institutions with our new index.
