This article uses data from the 2003 Survey of Small Business Finances to determine if banks rati... more This article uses data from the 2003 Survey of Small Business Finances to determine if banks ration credit more severely to black-owned firms. Our results reveal this is the case. Using the Heckman two-step procedure, we determined that black- and white-owned firms have a comparable demand for credit as measured by their actual use of lines of credit. Controlling for firm and owner characteristics, however, black-owned firms had lower line of credit limits suggesting constraints in supply. Further, our findings suggest the supply of credit to black-owned firms is even more severely constrained than other minority-owned firms. These findings highlight the possibility of discrimination against black-owned firms in the form of credit rationing.
If you have any problems with this purchase, please contact us for assistance by email: Support@S... more If you have any problems with this purchase, please contact us for assistance by email: Support@SSRN.com or by phone: 877-SSRNHelp (877.777.6435) in the United States, or +1 585 442 8170 outside of the United States. We are open Monday through Friday between ...
Journal of International Migration and Integration / Revue de l integration et de la migration internationale
Cultural norms embody the communalism and familism that characterize social structures and tradit... more Cultural norms embody the communalism and familism that characterize social structures and traditions of care among certain identity groups, notably, Hispanics. In turn, they affect remitting behavior as they do family dynamics thereby extending care transnationally. Using the 2006 Latino National Survey, the largest instrument that captures socioeconomic variables and political perspectives among Hispanics residing in the USA, we constructed a Hispanic identity index that is used to capture the role of cultural norms in remittance behavior. This index is used as an explanatory variable in a logit model for the probability and frequency of remitting money. We find that both the probability and frequency of remitting increase with higher levels of self-defined familism as reflected by the Hispanic index. This effect is stronger among males, renters, foreign-born non-US citizens, and migrants with fewer years of residence in the USA. Incorporating variables such as our Hispanic identi...
We investigate the manner in which a desire to emulate the rich influences individuals allocatio... more We investigate the manner in which a desire to emulate the rich influences individuals allocation of time between labour and leisure, greater inequality inducing longer work hours as a result. Data on work hours in ten countries over the period 1963–98 show that greater inequality is indeed associated longer work hours. These Veblen effects are large and the estimates are robust using country fixed effects and other specifications. Because consumption inequality is a public bad, a social welfare optimum cannot be implemented by a flat tax on consumption but may be accomplished by more complicated (progressive) consumption taxes.
This paper provides a simple model and an empirical test of the effect of interpersonal income co... more This paper provides a simple model and an empirical test of the effect of interpersonal income comparisons on labor supply. By focusing on the relative income of a full-time working man and its effect on the wife’s labor supply decision, we examine the role of relative income in labor supply decisions while avoiding the endogeneity problem that plagues the relative
We explain the substantial decline in work hours over the 20th century by the joint infuence of ... more We explain the substantial decline in work hours over the 20th century by the joint infuence of the employee's pecuniary emulation of the conspicuous consumption of top income earners and the balance of political power of employers and employees in the presence of conflicts of interest over the issue of working time. We present a new labor discipline model incorporating Veblen effects in which hours are determined by employers and subject to complete contracts but employee work effort is not. We show that while Veblen effects increase the hours sought by employees, the hours selected by pro t-maximizing employers may exceed that preferred by employees, who may then seek to reduce work hours by means of
collective bargaining or governmental intervention. We also identify conditions under which employees will prefer longer hours than offered by employers. Using newly available data on top income shares, and on work hours from ten major industrial economies and covering the entire past century we test two hypotheses: that increases in the relative incomes of the very rich are associated with increased hours, while increases in the political representation
of workers have the opposite effect. The estimated effects are large in economic magnitude,highly signi cant and robust to alternative econometric speci cations, including country and time fixed effects. Using an alternative data set covering the last third of the past century we show that these results are robust to the inclusion of a measure of taxation and find that decentralized trade union bargaining (but not centralized bargaining) may raise working
hours.
This paper examines how bank competition affects the amount of credit provided to small businesse... more This paper examines how bank competition affects the amount of credit provided to small businesses using both the loan turndown rate and the size of granted loans and L/Cs. Using 2003 National Survey of Small Business Finance data, we show that commercial banking in concentrated banking markets are more likely to reject loan applications. Moreover, the size of granted loans is found to be significantly smaller in concentrated markets. Finally, we show that the total limit of L/Cs that a firm has is also significantly smaller for firms in concentrated banking markets. Our finding challenges a notion that credit market competition may be inimical to the formation of mutually beneficial relationships between firms and specific creditors. We do not find any evidence that bank concentration is instrumental in building relationship
banking and our results suggest the opposite.
This paper examines how banking market concentration affects small business credit. Based on an i... more This paper examines how banking market concentration affects small business credit. Based on an idea that L/C limit and L/C balance provide useful proxies for credit supply to and credit demand of a firm, we examine the effect of bank concentration on L/C limits and L/C balances. Using both OLS and Heckit models to correct for sample selection, bank concentration is found to lower limits of L/Cs, while there was no statistically significant differences in L/C balances. We also find that small firms in concentrated banking markets have lower overall debt-to-asset ratio.
This article uses data from the 2003 Survey of Small Business Finances to determine if banks rati... more This article uses data from the 2003 Survey of Small Business Finances to determine if banks ration credit more severely to black-owned firms. Our results reveal this is the case. Using the Heckman
two-step procedure, we determined that black- and white-owned firms have a comparable demand for credit as measured by their actual use of lines of credit. Controlling for firm and owner characteristics, however, black-owned firms had lower line of credit limits suggesting constraints in supply. Further, our findings suggest the supply of credit to black-owned firms is even more severely constrained than other minority-owned firms. These findings highlight the possibility of discrimination against black-owned firms in the form of credit rationing.
This paper provides a simple model and an empirical test of the effect of interpersonal income co... more This paper provides a simple model and an empirical test of the effect of interpersonal income comparisons on labor supply. By focusing on the relative income of a full-time working man and its effect on the wife’s labor supply decision, we examine the role of relative income in labor supply decisions while avoiding the endogeneity problem that plagues the relative income–labor supply connection. The results show that the relative income of husbands plays an important role in the labor supply decisions of married women. The effects are economically meaningful and robust across various measures of relative income and reference groups.
We investigate the manner in which a desire to emulate the rich influences individuals allocatio... more We investigate the manner in which a desire to emulate the rich influences individuals allocation of time between labour and leisure, greater inequality inducing longer work hours as a result. Data on work hours in ten countries over the period 1963–98 show that greater inequality is indeed associated longer work hours. These Veblen effects are large and the estimates are robust using country fixed effects and other specifications. Because consumption inequality is a public bad, a social welfare optimum cannot be implemented by a flat tax on consumption but may be accomplished by more complicated (progressive) consumption taxes.
This article uses data from the 2003 Survey of Small Business Finances to determine if banks rati... more This article uses data from the 2003 Survey of Small Business Finances to determine if banks ration credit more severely to black-owned firms. Our results reveal this is the case. Using the Heckman two-step procedure, we determined that black- and white-owned firms have a comparable demand for credit as measured by their actual use of lines of credit. Controlling for firm and owner characteristics, however, black-owned firms had lower line of credit limits suggesting constraints in supply. Further, our findings suggest the supply of credit to black-owned firms is even more severely constrained than other minority-owned firms. These findings highlight the possibility of discrimination against black-owned firms in the form of credit rationing.
If you have any problems with this purchase, please contact us for assistance by email: Support@S... more If you have any problems with this purchase, please contact us for assistance by email: Support@SSRN.com or by phone: 877-SSRNHelp (877.777.6435) in the United States, or +1 585 442 8170 outside of the United States. We are open Monday through Friday between ...
Journal of International Migration and Integration / Revue de l integration et de la migration internationale
Cultural norms embody the communalism and familism that characterize social structures and tradit... more Cultural norms embody the communalism and familism that characterize social structures and traditions of care among certain identity groups, notably, Hispanics. In turn, they affect remitting behavior as they do family dynamics thereby extending care transnationally. Using the 2006 Latino National Survey, the largest instrument that captures socioeconomic variables and political perspectives among Hispanics residing in the USA, we constructed a Hispanic identity index that is used to capture the role of cultural norms in remittance behavior. This index is used as an explanatory variable in a logit model for the probability and frequency of remitting money. We find that both the probability and frequency of remitting increase with higher levels of self-defined familism as reflected by the Hispanic index. This effect is stronger among males, renters, foreign-born non-US citizens, and migrants with fewer years of residence in the USA. Incorporating variables such as our Hispanic identi...
We investigate the manner in which a desire to emulate the rich influences individuals allocatio... more We investigate the manner in which a desire to emulate the rich influences individuals allocation of time between labour and leisure, greater inequality inducing longer work hours as a result. Data on work hours in ten countries over the period 1963–98 show that greater inequality is indeed associated longer work hours. These Veblen effects are large and the estimates are robust using country fixed effects and other specifications. Because consumption inequality is a public bad, a social welfare optimum cannot be implemented by a flat tax on consumption but may be accomplished by more complicated (progressive) consumption taxes.
This paper provides a simple model and an empirical test of the effect of interpersonal income co... more This paper provides a simple model and an empirical test of the effect of interpersonal income comparisons on labor supply. By focusing on the relative income of a full-time working man and its effect on the wife’s labor supply decision, we examine the role of relative income in labor supply decisions while avoiding the endogeneity problem that plagues the relative
We explain the substantial decline in work hours over the 20th century by the joint infuence of ... more We explain the substantial decline in work hours over the 20th century by the joint infuence of the employee's pecuniary emulation of the conspicuous consumption of top income earners and the balance of political power of employers and employees in the presence of conflicts of interest over the issue of working time. We present a new labor discipline model incorporating Veblen effects in which hours are determined by employers and subject to complete contracts but employee work effort is not. We show that while Veblen effects increase the hours sought by employees, the hours selected by pro t-maximizing employers may exceed that preferred by employees, who may then seek to reduce work hours by means of
collective bargaining or governmental intervention. We also identify conditions under which employees will prefer longer hours than offered by employers. Using newly available data on top income shares, and on work hours from ten major industrial economies and covering the entire past century we test two hypotheses: that increases in the relative incomes of the very rich are associated with increased hours, while increases in the political representation
of workers have the opposite effect. The estimated effects are large in economic magnitude,highly signi cant and robust to alternative econometric speci cations, including country and time fixed effects. Using an alternative data set covering the last third of the past century we show that these results are robust to the inclusion of a measure of taxation and find that decentralized trade union bargaining (but not centralized bargaining) may raise working
hours.
This paper examines how bank competition affects the amount of credit provided to small businesse... more This paper examines how bank competition affects the amount of credit provided to small businesses using both the loan turndown rate and the size of granted loans and L/Cs. Using 2003 National Survey of Small Business Finance data, we show that commercial banking in concentrated banking markets are more likely to reject loan applications. Moreover, the size of granted loans is found to be significantly smaller in concentrated markets. Finally, we show that the total limit of L/Cs that a firm has is also significantly smaller for firms in concentrated banking markets. Our finding challenges a notion that credit market competition may be inimical to the formation of mutually beneficial relationships between firms and specific creditors. We do not find any evidence that bank concentration is instrumental in building relationship
banking and our results suggest the opposite.
This paper examines how banking market concentration affects small business credit. Based on an i... more This paper examines how banking market concentration affects small business credit. Based on an idea that L/C limit and L/C balance provide useful proxies for credit supply to and credit demand of a firm, we examine the effect of bank concentration on L/C limits and L/C balances. Using both OLS and Heckit models to correct for sample selection, bank concentration is found to lower limits of L/Cs, while there was no statistically significant differences in L/C balances. We also find that small firms in concentrated banking markets have lower overall debt-to-asset ratio.
This article uses data from the 2003 Survey of Small Business Finances to determine if banks rati... more This article uses data from the 2003 Survey of Small Business Finances to determine if banks ration credit more severely to black-owned firms. Our results reveal this is the case. Using the Heckman
two-step procedure, we determined that black- and white-owned firms have a comparable demand for credit as measured by their actual use of lines of credit. Controlling for firm and owner characteristics, however, black-owned firms had lower line of credit limits suggesting constraints in supply. Further, our findings suggest the supply of credit to black-owned firms is even more severely constrained than other minority-owned firms. These findings highlight the possibility of discrimination against black-owned firms in the form of credit rationing.
This paper provides a simple model and an empirical test of the effect of interpersonal income co... more This paper provides a simple model and an empirical test of the effect of interpersonal income comparisons on labor supply. By focusing on the relative income of a full-time working man and its effect on the wife’s labor supply decision, we examine the role of relative income in labor supply decisions while avoiding the endogeneity problem that plagues the relative income–labor supply connection. The results show that the relative income of husbands plays an important role in the labor supply decisions of married women. The effects are economically meaningful and robust across various measures of relative income and reference groups.
We investigate the manner in which a desire to emulate the rich influences individuals allocatio... more We investigate the manner in which a desire to emulate the rich influences individuals allocation of time between labour and leisure, greater inequality inducing longer work hours as a result. Data on work hours in ten countries over the period 1963–98 show that greater inequality is indeed associated longer work hours. These Veblen effects are large and the estimates are robust using country fixed effects and other specifications. Because consumption inequality is a public bad, a social welfare optimum cannot be implemented by a flat tax on consumption but may be accomplished by more complicated (progressive) consumption taxes.
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Papers by Yongjin Park
collective bargaining or governmental intervention. We also identify conditions under which employees will prefer longer hours than offered by employers. Using newly available data on top income shares, and on work hours from ten major industrial economies and covering the entire past century we test two hypotheses: that increases in the relative incomes of the very rich are associated with increased hours, while increases in the political representation
of workers have the opposite effect. The estimated effects are large in economic magnitude,highly signi cant and robust to alternative econometric speci cations, including country and time fixed effects. Using an alternative data set covering the last third of the past century we show that these results are robust to the inclusion of a measure of taxation and find that decentralized trade union bargaining (but not centralized bargaining) may raise working
hours.
banking and our results suggest the opposite.
two-step procedure, we determined that black- and white-owned firms have a comparable demand for credit as measured by their actual use of lines of credit. Controlling for firm and owner characteristics, however, black-owned firms had lower line of credit limits suggesting constraints in supply. Further, our findings suggest the supply of credit to black-owned firms is even more severely constrained than other minority-owned firms. These findings highlight the possibility of discrimination against black-owned firms in the form of credit rationing.
collective bargaining or governmental intervention. We also identify conditions under which employees will prefer longer hours than offered by employers. Using newly available data on top income shares, and on work hours from ten major industrial economies and covering the entire past century we test two hypotheses: that increases in the relative incomes of the very rich are associated with increased hours, while increases in the political representation
of workers have the opposite effect. The estimated effects are large in economic magnitude,highly signi cant and robust to alternative econometric speci cations, including country and time fixed effects. Using an alternative data set covering the last third of the past century we show that these results are robust to the inclusion of a measure of taxation and find that decentralized trade union bargaining (but not centralized bargaining) may raise working
hours.
banking and our results suggest the opposite.
two-step procedure, we determined that black- and white-owned firms have a comparable demand for credit as measured by their actual use of lines of credit. Controlling for firm and owner characteristics, however, black-owned firms had lower line of credit limits suggesting constraints in supply. Further, our findings suggest the supply of credit to black-owned firms is even more severely constrained than other minority-owned firms. These findings highlight the possibility of discrimination against black-owned firms in the form of credit rationing.