This thesis consists of six essays related to experimental investigation of social preference. We investigate the effects of a pure income effect on social preference in the first essay. In the second essay we explore the effects of gender in altruism and the corresponding anticipation behavior. The third essay discusses the effects of different type of rebate schemes on altruistic behavior. We study the effects of a real and a minimal identity on initiation and escalation of conflict in the fourth essay. The fifth essay investigates the effects of social cues in (anti) social behavior. The final essay tests the effects of pure framing on altruistic behavior.

Wavelets orthogonally decompose data into different frequency components, and the temporal and frequency information of the data could be studied simultaneously. This analysis belongs within local nature analysis. Wavelets are therefore useful for managing time-varying characteristics found in most real-world time series and are an ideal tool for studying non-stationary or transient time series while avoiding the assumption of stationarity. Given the promising properties of wavelets, this thesis thoroughly discusses wavelet theory and adds three new applications of wavelets in economic and financial fields, providing new insights into three interesting phenomena. The second chapter introduces wavelet theory in detail and presents a thorough survey of the economic and financial applications of wavelets. In the third chapter, wavelets are applied in time series to extract business cycles or trend. They are useful for capturing the changing volatility of business cycles. The extracted business cycles and trend are linearly independent. We provide detailed comparisons with four alternative filters, including two of each detrending filters and bandpass filters. The result shows that wavelets are a good alternative filter for extracting business cycles or trend based on multiresolution wavelet analysis. The fourth chapter distinguishes contagion and interdependence. To achieve this purpose, we define contagion as a significant increase in short-run market commovement after a shock to one market. Following the application of wavelets to 27 global representative markets’ daily stock-return data series from 1996.1 to 1997.12, a multivariate GARCH model and a Granger-causality methodology are used on the results of wavelets to generate short-run pair-wise contemporaneous correlations and lead-lag relationships, respectively, both of which are involved in short-run relationships. The empirical evidence reveals no significant increase in interdependence during the financial crisis; contagion is just an illusion of interdependence. In addition, the evidence explains the phenomenon in which major negative events in global markets began to occur one month after the outbreak of the crisis. The view that contagion is regional is not supported. The fifth chapter studies how macroeconomic news announcements affect the U.S. stock market and how market participants’ responses to announcements vary over the business cycle. The arrival of scheduled macroeconomic announcements in the U.S. stock market leads to a two-stage adjustment process for prices and trading transactions. In a short first stage, the release of a news announcement induces a sharp and nearly instantaneous price change along with a rise in trading transactions. In a prolonged second stage, it causes significant and persistent increases in price volatility and trading transactions within about an hour. After allowing for different stages of the business cycle, we demonstrate that the release of a news announcement induces larger immediate price changes per interval in the expansion period, but more immediate price changes per interval in the contraction period, from the old equilibrium to the approximate new equilibrium. It costs smaller subsequent adjustments of stock prices along with a lower number of trading transactions across a shorter time in the contraction period, when the information contained in the news announcement is incorporated fully in stock prices. We use a static analysis to investigate the immediate effects of news announcements, as measured by the surprise in the news, on prices, and adopt a wavelet analysis to examine their eventual effects on prices. The evidence shows that only 6 out of 17 announcements have a significant immediate impact, but all announcements have an eventual impact over different time periods. The combination of the results of both analyses gives us the time-profile of each news announcement’s impact on stock prices, and shows that the impact is significant within about an hour, but is exhausted after a day.

This thesis provides three empirical essays on the non-linear dynamics of the finance-growth nexus using most recent econometric techniques. The first essay examines the relationship between financial structure and economic development for Germany, the USA, France and Turkey between 1989 and 2012. Nonlinear Autoregressive Distributed Lags (NARDL) is employed to investigate whether a dynamic change exists in the financial structure of these countries in response to a change in their stage of economic development suggested by the view of ‘new structuralism’. Unlike previous literature, which classified the financial systems of Germany as bank-based, the USA as market-based and France and Turkey as in an intermediate position between these two forms, the findings of the first essay presented in this work supports ‘new structuralism’. The second essay investigates the role of institutional quality on the relationship between finance and growth for 26 transition countries during 1996-2013 using the Dynamic Panel Threshold Model. The results have been reported for the entire sample and the sub-samples, Central Eastern European (CEE) and (CIS). The findings demonstrate that finance has greater effects on growth when associated with a sound institutional framework with more clear-cut results obtained in (CIS). The third essay provides new evidence on the relationship between state-ownership of banks and economic growth employing the method used in the second essay to capture differing effects of state-ownership in the banking system on growth with respect to a change in the quality of political, financial and legal institutions. The data evaluated concerned three different stages of economic development for 126 countries over the period 1999-2010. In contrast with the existing evidence which assumes homogeneity in the growth effects of the state-ownership of banks across different countries, the results of this study demonstrate this effect is rather heterogonous and depends strongly on the varying country characteristics.

This thesis consists of three empirical and one theoretical essays on three determinants of financial development (FD) namely government ownership of banks, foreign capital inflows (FCI) and institutional quality. Some research has concluded that government ownership of banks negatively affects their soundness. Bretton Wood institutions have used these conclusions to advocate for state-owned banks privatization. The first essay shows that this research was weak in the way it controlled for fundamental determinants of soundness of banks, and lacked rigorous econometric analysis. With data covering 2001-2011, we show that if there is any relationship between government ownership of banks and their subsequent soundness, it is positive. These results are robust to various measures of FD, institutional quality and econometric approaches. The second essay presents a theoretical model predicting a negative relationship between Official Development Assistance (ODA) and FD when political institutions are weak. The third essay empirically investigates the hypothesis that the effects of ODA on FD are influenced by the level of democracy in recipient countries. Using a panel data for 37 developing countries covering 1980-2005, we apply different econometric approaches (pooled OLS, IV2SLS, fixed effects and dynamic GMM) to show that while ODA is harmful to FD in autocracies it could be effective in democracies. These results are robust to various measures of FD and democracy. The fourth essay is an empirical investigation of the hypothesis that different types of FCIs have different impacts on credit availability in developing countries. Using 5-year average data for 53 developing countries covering 1990-2013 and disaggregating FCIs into their main five types, we apply OLS, fixed effects, and dynamic GMM to show that there is a positive and statistically significant relationship between FDI, debt and equity and private credit while remittances and ODA are not significant determinants of private credit in developing countries.

This thesis consists of three distinct essays on development economics. In chapter 2, I examine the effect of variation in the intensity of trade policy changes across industries over time on informal sector jobs in India, taking into account heterogeneous nature of the labour market regulations, using difference-in-difference identification approach and repeated cross sectional data for the period 1988 and 1994. The results suggest that the probability of informal employment increases in more exposed industries to trade liberalisation relative to less exposed industries, but industries experienced reduction in informality if more exposed industries are located in states with flexible labour regulations. Chapter 3 of the thesis examines the relationship between parental income, child labour and human capital accumulation in India, using the unanticipated trade liberalisation that created exogenous variation in industry specific tariffs over time as instrument. The variation in industry tariff leads to differences in earnings of parents across industries, and this provides a good setting for the identification of the causal effect of changes in parents’ income on child’s labour and schooling. Using instrumental variable (IV) estimation approach, I find positive income effect for children’s schooling but a negative effect on work, and the effect is larger for girls compared to boys. Chapter 4 examines the effect of income shocks on household welfare, taking into account various coping strategies adopted by households. Using the General Household Panel survey data in Nigeria for the period 2010-2012 and fixed effects estimation approach, idiosyncratic shocks are found to have little impact on consumption and the various risk-coping strategies play only limited roles in providing the much needed insurance to households in the face of shocks. Also, the effect of shocks vary according to households characteristics, such as whether the household-head is male or female, and being urban or rural dweller are crucial.

This PhD thesis consists of three independently written chapters. The first investigates the effect of centralised pay regulation of teachers on school performance, finding schools add less value to their pupils in areas where teachers' outside options are higher. The second chapter uses a discrete choice dynamic model to investigate the effect of a severe budget cut to a conditional cash transfer programme in England that paid young people from low-income households to attend post-compulsory schooling. The structural estimate of the effect on participation is found to be similar to reduced-form equivalent comparing England with the rest of the UK. The structural approach has the advantage of further counterfactual policy analysis, from which a policy alternative of removing the over-16 element of the Child Benefit is highlighted as a potentially superior alternative. Finally, the third chapter tests a new approximation technique for estimating large discrete choice dynamic models. The new technique is found to perform well compared to the incumbent technique that is most commonly applied in the literature and is shown to potentially be considerably faster.

This thesis comprises three related essays in microeconometrics. Motivated by trends in prices, purity and supply disruption in the US markets for cocaine and heroin over the past thirty years, the first essay conducts an applied theoretical and empirical analysis of the impact of seizures on retail market conditions. The main finding is that rising supply disruption may be directly responsible for falling prices. This occurs since seizures raise the cost of wholesale narcotics, incentivising sellers to dilute their product. This leads to declines in purity, reducing demand and causing prices to fall. The second and third essays make a greater methodological contribution, focussing on identification of spillover (or peer) effects. Each seeks to address a shortcoming of existing identification strategies. The second essay studies identification of spillover effects in the absence of network data, using panel data instead. Identification conditions are derived under which both spillovers, and the underlying network, are either partially or fully identified. The approach is applied to study research and development (R&D) spillovers between US firms, finding evidence of underinvestment in R&D. The third essay studies identification of spillover effects if the researcher does not observe a source of strictly exogenous variation in the outcomes. Instead, variation in the variance and covariance of the outcomes over the network is exploited. The essay derives testable identification conditions, which hold for generic networks and fail only in special cases. The method is applied to study spillovers in education, finding evidence of strong, positive peer effects in mathematics test scores for first year kindergarten students in the US.

No description available.

No description available.

No description available.