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In this paper, we traced the survival status of 94,401 small businesses in 17 European emerging markets from 2007 to 2017 and empirically examined the determinants of their survival, focusing on institutional quality and financial development. We found that institutional quality and the level of financial development impact the survival probability of the researched SMEs in statistically significant and economically meaningful ways. The evidence holds even when we control for a set of firm-level characteristics such as ownership structure, financial performance, firm size, and age. The findings are also uniform across industries and country groups and robust beyond the difference in assumption of hazard distribution, firm size, region, and time period. [ABSTRACT FROM AUTHOR]

We show that the descendants of ancient farmers may have an interest in marrying among themselves, and thus maintaining the gendered division of labour originally justified on comparative-advantage grounds by the advent of the plough, even after they emigrate to a modern industrial economy where individual productivity depends on education rather than physical characteristics. The result rests on the argument that, if efficiency requires the more productive spouse to specialize in raising income, and the less productive one in raising children, irrespective of gender, an efficient domestic equilibrium will be implemented by a costlessly enforceable pre-marital contract stipulating that the husband should do the former and the wife the latter. A contract may not be needed, however, if time spent with children gives direct utility, because an efficient equilibrium may then be characterized by little or no division of labour. [ABSTRACT FROM AUTHOR]

Entrepreneurship and the business environment, in general, are being influenced by the existence of formal and informal institutions. This study focuses on the negative versus positive perceptions of Moroccan, Chinese, and German entrepreneurs to formal and informal institutions, and the associations of these perceptions with self-efficacy and market versus network orientation of the business environment.

Over the past 30 years, the academic literature has legitimised the significant impact of environmental conditions on entrepreneurial activity. In the past 5 years, in particular, the academic debate has focused on the elements that configure entrepreneurship ecosystems and their influence on the creation of high-growth ventures. Previous studies have also recognised the heterogeneity of environmental conditions (including policies, support programs, funding, culture, professional infrastructure, university support, labour market, R&D, and market dynamics) across regions/countries. Yet, an in-depth discussion is required to address how environmental conditions vary per entrepreneurial stage of enterprises within certain regions/countries, as well as how these conditions determine the technological factor of the entrepreneurial process. By reviewing the literature from 2000 to 2017, this paper analyses the environmental conditions that have influenced the transitions towards becoming potential entrepreneurs, nascent/new entrepreneurs, and established/consolidated entrepreneurs in both developed and developing economies. Our findings show why diversity in entrepreneurship and context is significant. Favourable conditions include professional support, incubators/accelerators, networking with multiple agents, and R&D investments. Less favourable conditions include a lack of funding sources, labour market conditions, and social norms. Our paper contributes by proposing a research agenda and implications for stakeholders. [ABSTRACT FROM AUTHOR]

Decline and break-up of institutionalized cooperation, at all levels, has occurred frequently. Some of its concomitants, such as international migration, have become topical in the globalized world. Aspects of the phenomenon have also become known as failing states. However, the focus in most social sciences has been on institutional emergence and persistence, not collapse. We develop an endogenous explanation of collapsing institutions. Collapse may be an implication of the very economic success of institutionalized cooperation and of increasing system complexity, when cognitive conditions for effective collective decision-making do not proportionately evolve. Moreover, we show that collapse is not a simple logical reverse of emergence. Rather, institutions break up at different factor constellations than the ones prevailing at emergence. We approach endogenous institutional break-up and its asymmetry from various paradigmatic and disciplinary perspectives, employing psychology, anthropology, network analysis, and institutional economics. These perspectives cover individuals, groups, interaction-arenas, populations, and social networks. [ABSTRACT FROM AUTHOR]

We replicate and extend the social history treatment of the Berg, Dickhaut, and McCabe (1995) investment game, to further document how the reporting of financial history influences how laboratory societies organize themselves over time. We replicate Berg et al. (1995) by conducting a No History and a Financial History session to determine whether a report summarizing the financial transactions of a previous experimental session will significantly reduce entropy in the amounts sent by Investors and returned by Stewards in the investment game, as Berg et al. (1995) found. We extend Berg et al. (1995) in two ways. First, we conduct a total of five sessions (one No History and four Financial History sessions). Second, we introduce Shannon's (1948) measure of entropy from information theory to assess whether the introduction of financial transaction history reduces the amount of dispersion in the amounts invested and returned across generations of players. Results across sessions indicate that entropy declined in both the amounts sent by Investors and the percentage returned by Stewards, but these patterns are weaker and mixed compared to those in the Berg et al. (1995) study. Additional research is needed to test how initial conditions, path dependencies, actors' strategic reasoning about others' behavior, multiple sessions, and communication may mediate the impact of financial history. The study's multiple successive Financial History sessions and entropy measure are new to the investment game literature.

In Poland municipalities do not fulfil their statutory obligations of providing dwellings for vulnerable households and often limit their activity to merely providing housing for persons to whom the court has granted the right to dwelling in eviction proceedings. However, even for these people there are not enough dwellings. This very difficult situation of Polish municipalities in terms of the provision of direct housing assistance results from history-related problems with the quality of the existing housing stock, a lack of reform of municipal lease rules and insufficient financial resources. The author focused on a comparison of the municipal housing stock management in the largest cities in the context of changes that took place in years 2009-2016. The results of the research proved there were important differences among cities in terms of the activity of applying the available instruments. Despite acting in the same institutional framework, some municipalities were able to improve the housing situation of citizens most in need of assistance, step by step. The survey covered the voivodeship capital cities of Poland. Critical analysis of literature and documents as well as an analysis of statistical data were used.

All law is relatively coarse after its initial implementation as the legislature cannot foresee all contingencies that can arise in the actual application of the law. Therefore, decisions need to be made by street-level administrators as novel and particular circumstances arise. Economists have largely ignored the political science literature on street-level bureaucrats, such as policemen, welfare case managers, or regulatory agents. I present a case study in the context of market entry regulation in Germany. Qualitative and quantitative evidence suggests that bureaucratic discretion exists, that is, administrative actions can be found on different ends of a decision space, and that its effects are potentially large. Administrators do not apply legislation in a uniform manner and we observe a systematically different application of rules across subnational jurisdictions. [ABSTRACT FROM AUTHOR]

¿Quién es el más afectado por la corrupción, el ciudadano rico o el pobre? ¿Quién tiene más probabilidades de validar las actividades corruptas, los ricos o los pobres? Una pregunta fundamental que enfrenta un ciudadano es si acepta coexistir en un sistema corrupto o no; en otras palabras, si las personas tuvieran una opción para elegir entre un Estado corrupto y un Estado honesto, ¿cuál deberían sostener? Afirmamos que en una sociedad caracterizada por habitantes con diferentes niveles de ingresos la respuesta a la pregunta puede diferir entre los ricos y los pobres. Mostramos que con los costos significativos de la corrupción la parte pobre de la sociedad tiende a sufrir más que la rica en relación con un sistema honesto en el que los funcionarios públicos son dignos. Al aplicar la técnica de mínimos cuadrados robustos para México durante el periodo de 1996 a 2016, se muestra que: 1) en México los ricos soportan/gustan/desean/coadyuvan más un sistema corrupto; 2) los pobres se ven muy afectados por un sistema corrupto; 3) el gobierno y sus políticas no tienen efecto alguno sobre el ingreso de los ricos, mientras que para los pobres, en tanto mejor o de mayor calidad sean las políticas públicas del gobierno, menos pobres serán los ciudadanos, y 4) la desigualdad económica, medida por el índice de Gini, afecta en mayor medida a los pobres en comparación con los ricos.

One of the main problems in fully integrating uncertainty in entrepreneurship process theory is how to distinguish entrepreneurial competence from pure luck. We propose a routine-based approach where entrepreneurs use their idiosyncratic knowledge to identify emergent demand routines—that is, standardized demand behavior lacking specifically adequate artifacts—that can serve as an objective reference point to their judgment of emergent opportunity situations and coordination of resources. Uncertainty is assessed from its structural nature to its endogenous origins in creatively reflexive market interactions. Routines reduce uncertainty when agents choose to adopt standardized behavior over ad hoc creative action. Thus, routines stabilize market interactions as they get increasingly more established, though emergent demand routines are volatile enough to allow for price divergences. Entrepreneurs can cohesively or generatively introduce products as specific artifacts for these routines, thus making profits by either consolidating or triggering (or both) emergent demand routines in the market. Entrepreneurial competence is thus a matter of convergence between entrepreneurial idiosyncratic judgment and emergent demand routines resulting in unique situations, which explain differences among entrepreneurs, serial business creation, and business longevity. [ABSTRACT FROM AUTHOR]

Despite the wide variety of agendas used in legislative settings, the literature on sophisticated voting has focused on two formats: the so‐called Euro–Latin and Anglo–American agendas. In the current paper, I introduce a broad class of agendas whose defining structural features—history‐independence and persistence—are common in legislative settings. I then characterize the social choice rules implemented by sophisticated voting on agendas with these two features. I also characterize the rules implemented by more specialized formats (called priority agendas and convex agendas) whose structure is closely related to the prevailing rules for order‐of‐voting used by legislatures. These results establish a clear connection between structure and outcomes for a wide range of legislative agendas. [ABSTRACT FROM AUTHOR]

Many political systems with direct democracy mechanisms have adopted rules preventing decisions from being made by simple majority rule. The device added most commonly to majority rule in national referendums is a quorum requirement. The two most common are participation and approval quorums. Such rules are responses to three major concerns: the legitimacy of the referendum outcome, its representativeness, and protection of minorities regarding issues that should demand a broad consensus. Guided by a pivotal voter model, we conduct a laboratory experiment to investigate the performances of different quorums in attaining such goals. We introduce two main innovations in relation to previous work on the topic. First, part of the electorate goes to the polls out of a sense of civic duty. Second, we test the performances of a different quorum, the rejection quorum, recently proposed in the literature. We conclude that, depending on the preferred criterion, either the approval or the rejection quorum is the best. [ABSTRACT FROM AUTHOR]

Spontaneous emergence of institutionalized cooperation in ubiquitous social dilemmas still is a field of highest relevance in behavioral and organizational economic research. In contrast to the theoretical prediction of defective behavior, manifold forms and degrees of cooperation exist in reality. We explain the emergence of general cooperation, even in one-shot interactions with strangers, from local interactions in a network through what we call a social-leverage mechanism. By this, more agents than just the two interaction partners get involved in an interaction, particularly common acquaintances. We analyze the social-leverage mechanism and conditions of cooperation under locality, common acquaintanceship, related assortativity, as well as "weak" and "strong ties" in the social network. We trace the co-evolution of the network, its structural dynamics, and stable cooperative equilibria. Our model relates to the tradition of emergent coordination in decentralized, non-Walrasian search, coordination and exchange systems (e.g., Diamond 1984; Axtell 2005) and in purely local interactions on, e.g., ring networks (e.g., Albin and Foley J Econ Behav Organ 18(1), 27–51, 1992). We conclude that, under social leverage, just local interaction may generate and stabilize general cooperation. We consider this the emergence of an exchange and trade system (a market) and relate this to empirical cases of the emergence of exchange cultures in the early Silk Road (seventh–ninth century) and in contemporary African countries, when formal enforcement through states and courts are largely lacking. We conclude applications and policy implications for cutting-edge techno-organizational areas of AI and platform economies. [ABSTRACT FROM AUTHOR]

We study optimal incentive contracts with multiple agents when performance is evaluated by a reviewer. The reviewer may be biased in favor of the agents, but the degree of bias is unknown to the principal. We show that a contest, which is a contract in which the principal fixes a set of prizes to be allocated to the agents, is optimal. By using a contest, the principal can commit to sustaining incentives despite the reviewer's potential leniency bias. The optimal effort profile can be uniquely implemented by an all‐pay auction with a cap. Our analysis has implications for various applications, such as the design of worker compensation or the allocation of research grants. [ABSTRACT FROM AUTHOR]

This study estimates the relationship of institutional (judicial and political) and monetary (petty and grand) dimensions of corruption with six different types of innovations. Using cross country firm level data from World Bank Enterprise Survey for 16 developing and emerging economies, the study reveals that, in most of the cases, monetary dimensions of corruption grease the wheels of the innovations involving interactions with public offices and have an insignificant or negative association in opposite cases. Results show that corruption is disproportionately associated with the innovative activities of firms operating in different industrial groups devised as per Castellacci (Research Policy, 37(6), 978–994, 2008). Interestingly, both monetary dimensions of corruption are positively correlated with major innovation indicators in SMEs. Large firms are more the victims of the monetary corruption. Furthermore, innovation in the services sector is more harmed by petty corruption than is innovation in the manufacturing sector. Services firms seem to be taking advantage of grand corruption. Judicial corruption is found to be positively associated with most of the innovation indicators, highlighting the loopholes in the judicial system. Moreover, political corruption benefits both SMEs and large firms in most of their innovative activities. In the end, the study provides important policy insights from the analysis. [ABSTRACT FROM AUTHOR]

This paper is the first one to present a model of primaries with endogenous party affiliations. I show that closed primaries (where only affiliated party members can vote) result in more charismatic candidates than open primaries. This occurs because, in equilibrium, closed-primary voters care more about winning and therefore they are more willing to trade off their ideologically preferred candidate for one who is more likely to win, i.e., a more charismatic one. I also show that under open primaries, the party leaders have higher incentives to choose more extreme platforms. As a consequence, open-primary nominees are more likely to be extremists than closed-primary ones—which is consistent with the most recent empirical evidence. Finally, I show that, if instead of organizing primaries, party leaders were to handpick the nominees, the candidates would be even more moderate and more charismatic. [ABSTRACT FROM AUTHOR]

Happiness research has been a great success and has offered us great insights into the determinants and consequences of subjective well-being. As many contributions have accumulated, there are necessarily diminishing marginal insights. Most likely future happiness research will pursue the trodden paths. However, most fruitful results can be gained by comparing happiness to other human goals; by critically analyzing how the insights gained can be used for policy; by finding out what institutional prerequisites support happiness; as well as by turning to big issues so far neglected. The impact of tourism on life satisfaction is provided as an example. [ABSTRACT FROM AUTHOR]

This paper analyzes the relationship between access to infrastructure services and support for religious parties based on the evidence produced by a recent democratic experience in Tunisia in which a religious political party, Ennahdha, governed from 2011 to 2014. The experience points to a complex relationship. In the 2011 election, areas with higher access are associated with higher support for Ennahdha than areas with lower access. In the 2014 election, however, infrastructure access is positively correlated with support for the party in areas where access had improved but negatively correlated with support for the party in areas that already had high access. A possible pragmatic general implication is that, to be politically competitive, religious parties, cannot bet solely on their religious commitment to provide basic services, including infrastructure, to the poor. They need to recognize the multiplicity of voter's concerns and their evolving agenda. [ABSTRACT FROM AUTHOR]

Ostracism is practiced by virtually all societies around the world as a means of enforcing cooperation. In this paper, we use a public goods experiment to study whether groups choose to implement an institution that allows for the exclusion of members. We distinguish between a costless exclusion institution and a costly exclusion institution that, if chosen, reduces the endowment of all players. We also provide a comparison with an exclusion institution that is exogenously imposed upon groups. A significant share of the experimental groups choose the exclusion institution, even when it comes at a cost, and the support for the institution increases over time. Average contributions to the public good are significantly higher when the exclusion option is available, not only because low contributors are excluded but also because high contributors sustain a higher cooperation level under the exclusion institution. Subjects who vote in favor of the exclusion institution contribute more than those who vote against it, but only when the institution is implemented. These results are largely inconsistent with standard economic theory but can be better explained by assuming heterogeneous groups in which some players have selfish and others have social preferences. [ABSTRACT FROM AUTHOR]