Monthly Archives: April 2017

Keynes College

Lost in the Storm: The Academic Collaborations that Went Missing in Hurricane Isaac

by Raquel Campos, Fernanda L. L. de Leon and Ben McQuillin, discussion paper KDPE 1707, April 2017 

Non-technical summary

When an academic participates in a large conference, her likelihood of subsequently writing a paper with at least one participant at the conference increases by one-sixth (close to 18%). Moreover, it seems that conferences improve the quality of matching among co-authors, leading to papers that are published in higher-ranked journals.

These findings are documented in the paper “Lost in the Storm: The Academic Collaborations that Went Missing in Hurricane Isaac”. This is part of an ongoing programme of work, funded by the Leverhulme Trust, in which economists at University of Kent and University of East Anglia utilise a natural experiment to understand the role of conferences in academic and scientific production generally.

In late August 2012, the imminent landfall of Hurricane Isaac forced the cancellation – at less than 48 hours’ notice – of an important event in political scientists’ annual calendar: the American Political Science Association (APSA) Annual Meeting. By analysing the output patterns – in terms of published and working papers – among 17,468 academics that attend conferences (including academics scheduled to have participated in this cancelled conference, in previous editions of the APSA meeting and/or editions of a similar Annual Meeting), the authors estimate the effects of conferences on the likelihood of academics to form new co-authorships, and provide evidence for the role of conferences as important facilitators for academic networking.

The collaborations that were “lost” (because of the conference cancellation) were disproportionately those that would have been between academics affiliated to geographically distant institutions and whose existing research was closely related. These seem to be recipes for better research, as the remaining collaborations that did form (among participants that did not meet in the cancelled conference) led to papers appearing in journals ranked, on average, 5 places lower.

These results speak to the role of conferences and, more generally, of network constraints in preventing the formation of efficient scientific teams. It is already known that most academic and scientific papers are written by collocated authors, but some questions remain unanswered. First: does inter-institutional collaboration make better science, or is it rather adopted as a research strategy specifically for the most promising and ambitious projects? The results in the present paper suggest strongly the former. Second: do academics and scientists work so predominantly in collocated teams due to preference, or because they are in some way constrained from forming the more productive inter-institutional collaborations. The results in this latest study support the network-constraints explanation and suggest that conferences perform an important function in alleviating these constraints, by allowing academics to meet new collaborators.

You can download the complete paper here.

Dr Amrit Amirapu

Justice delayed is growth denied: The effect of slow courts on relationship-specific industries in India

by Amrit Amirapu, discussion paper KDPE 1706, February 2017.

Non-technical summary

Commerce and manufactures can seldom flourish long in any state which does not enjoy
a regular administration of justice, … in which the faith of contracts is not supported by
law… Adam Smith, The Wealth of Nations, Book V, Chapter III

Are well-functioning formal judicial institutions important for growth and development? Some – including Adam Smith – have argued that they are needed to ensure efficient contract enforcement. Others have argued that informal contracting arrangements such as relational contracts, social norms or kinship networks can provide workable substitutes (Acemoglu and Johnson(2005)). For example, firms might be able to enter into long-term relationships with particular suppliers or customers, relying on the implicit threat that the relationship might end if the parties do not abide by the agreed upon terms. Whether such informal substitutes can adequately make up for more formal systems is an empirical question. In this working paper, I add to a small but growing body of evidence that suggests informal mechanisms provide at most an imperfect substitute: well-functioning courts are good for growth. The setting I study is that of district courts in India, where the most significant problem is speed.

The World Bank, as part of its “Doing Business” Indicators, estimates that it would take about four years to resolve a hypothetical commercial sales dispute over the quality of goods. Only a handful of countries are worse on this measure. Why should slow courts be detrimental to economic outcomes? Slow courts increase the cost of enforcing contracts by delaying the payoff of taking an agent to court. If contracts are costly to enforce, parties may avoid making investments or engaging in potentially surplus-generating transactions. This should be all the more true of transactions that only have value within a specific buyer-supplier relationship, such as the purchase or production of specially tailored intermediate inputs (e.g., branded shoe parts). Such relationship-specific transactions have a greater need for reliable contract enforcement, because if one or the other party doesn’t abide by the rules of the contract, the input has no resale value.

The empirical strategy employed in the paper hinges on this idea: well-functioning judicial institutions should be especially important in industries that require more relationship-specific inputs – what I call “contract-intensive” industries. The strategy is based on several international studies that document the effects of countries’ legal environments on their patterns of trade (Berkowitz et al. (2006); Nunn (2007); Levchenko (2007)). The resulting hypothesis is that firms in contract-intensive industries should grow relatively faster than those in non contract-intensive industries when they have access to more efficient courts.

I test this hypothesis, taking advantage of the considerable variation in court efficiency across
Indian states, and find that fast courts are highly predictive of future growth of contract intensive industries in India’s formal manufacturing sector. The results suggest that, for an industry in the 75th percentile of contract intensity, an improvement of one standard deviation in court efficiency would imply a higher annual growth rate of gross value added of 0.9 percentage points, which is about 50% of the average growth rate in the sample. Similar results hold for growth in employment, investment in capital and net entry of factories.

You can download the complete paper here.

Workshop: Validation Methods for Agent-Based Models

The School of Economics will be hosting a workshop on ‘Validation Methods for Agent-Based Models’ on Monday 24 April. The workshop will comprise a series of presentations relating to this very active area of research on the afternoon of 24 April, followed by an informal reception.

Background

Agent-based models (ABM) aim to explore aspects of the interaction of economic agents that are difficult to model using standard approaches, such as the emergence of statistical equilibrium from decentralised interaction. Because these models are typically simulated rather than estimated, a major hurdle facing this approach has traditionally been the problem of calibrating the parameter values of these models from empirical data, known as the ‘validation problem’. This problem arises from the emergent properties and non-linearities of ABMs, as well as the fact that each simulation run is idiosyncratic.

There has recently been fast progress on this issue, however, as various methodologies have been developed to address this problem. The purpose of the workshop is to gather these experts in the field of ABM validation in order to examine the relative merits of these methodologies, identify avenues for further progress on the validation problem as well as potential collaborations.

Further details, including the schedule and accompanying papers (where available) can be viewed on our website.

As well as presenting at the workshop, we are pleased that Professor Thomas Lux of the University of Kiel will be staying at the School a little longer as a Thirlwall scholar. Professor Lux’s research interests involve the modelling of the dynamics of financial markets, of contagion in interbank and bank-firm networks and of estimation/validation of agent based models. More details can be found via his webpage: https://www.gwif.vwl.uni-kiel.de/en/team/reserach-team/prof.-dr.-thomas-lux

The workshop is sponsored by the Macroeconomics, Growth and History Centre (MaGHiC), University of Kent.

 

 

Lost in the storm: how a hurricane blew through political science

As 80mph winds swept across the Caribbean and the southern US, Hurricane Isaac left 41 people dead and caused $2.4 billion (£1.9 billion) of damage. The cost to the academic field of political science is less well known.

However, a new study by the School’s Fernanda Leite Lopez de Leon together with Ben McQuillin and Raquel Campos, indicates that the destructive tropical cyclone led to 76 academic papers that would otherwise have been written never seeing the light of day. The paper was presented at the Royal Economic Society’s 2017 Annual Conference on 10 April.

This is an excerpt from an article in Times Higher Education by Ellie Bothwell. Click here to read the full piece.

Professor Miguel Leon-Ledesma

Money Macro and Finance Group

Professor Miguel Leon-Ledesma has been invited to join the steering committee of the UK’s Money Macro and Finance Research Group (MMF).

The MMF is a study group which exists to promote and disseminate economic research in these fields of study, primarily in the UK. The group was founded in 1969 as the Money Study Group and quickly established itself as a key national forum for monetary economists in the UK. It has now broadened its focus and its title reflects this.

It was the first of the study groups to be funded by the Social Science Research Council.

Further information on the group can be found on its website: www.mmf.ac.uk.

 

Finalists' dinner

Finalists’ Dinner 2017

The School held its third finalists’ dinner at the Abode Hotel in Canterbury on the last day of the Spring term, Friday 6 April. The dinner marked the end of teaching for final year students.

We had a fantastic evening celebrating with our finalists and would like to wish them the very best of luck in the forthcoming exams.

Photos from the event are viewable on our Facebook page.

This year’s graduation ceremony for Economics students will be held on Monday 10 July 2017 in Canterbury Cathedral and will be followed by a reception from 4-6pm in the Cathedral Lodge.

Prof Rob Fraser

The Economic Impacts of Pests and Diseases

Good biosecurity policy decisions, particularly in relation to plant industry protection, are of ever-increasing importance. Growth in the speed and diversity of trade, the effects of climate change and the resultant spread of pests and diseases continue to highlight this.

A new book entitled Plant Biosecurity Policy Evaluation: The Economic Impacts of Pests and Diseases has been authored by the School’s Emeritus Professor Rob Fraser together with David Cook (University of Western Australia) and Andrew Wilby (University of Lancaster).

The book contains an introduction to the issues confronting plant biosecurity policymakers and how the economic risks of invasive species can be assessed over time.

It describes both probability models that show what might happen if species ‘invade’ a region and values models that help decide what management actions should be taken.

As the first book of its kind focusing on a comprehensive range of policies, case studies and applications, Plant Biosecurity Policy Evaluation is perfect for biosecurity policy makers, decision-support specialists, advanced students of agricultural studies, public policy and invasive species research.

The book is available to purchase from World Scientific:

www.worldscientific.com/worldscibooks/10.1142/q0064