Essays In Spatial Econometrics
Essays In Spatial Econometrics
Loading...
Files
Publication or External Link
Date
2005-08-29
Authors
Mathur, Aparna
Advisor
Kelejian, Harry
Shea, John
Shea, John
Citation
DRUM DOI
Abstract
Spatial econometrics is a subfield of econometrics that deals with the treatment of spatial
interactions in regression models for cross sectional and panel data.
Chapter 1: This is the first paper that highlights the role of spatial interactions, in the
context of bankruptcy laws, in the entrepreneurship decision. This chapter is in two parts:
one of which relates to the birth, and the other to the death, of businesses. The focus of
the paper is on small businesses in the US. Small firms represent more than 90% of all
enterprises and play a large role in entry and exit in the US. Further, the US has
traditionally had pro-debtor bankruptcy laws. Hence this paper asks whether laws that
facilitate easy exit, such as bankruptcy laws, are an important consideration in entry (and
exit) of small businesses. This paper studies the decision of an entrepreneur to begin (or
end) a business in a particular state, as a function of bankruptcy regulations and other
business variables in that state as well as those in neighboring states. The study uses
longitudinal household level data from the SIPP (Census) dataset. I estimate a random
effects probit model with a lagged endogenous variable. The paper finds that higher
bankruptcy exemptions in neighboring states lower the probability of starting a business
in the state of residence. The bankruptcy exemption in one's own state has a significant
and positive impact on entrepreneurship.
Chapter II: This paper is a first attempt to empirically model determinants of FDI flows
to emerging market economies, using a spatial approach. The paper uses data on FDI
inflows to 29 emerging market and developing economies for the period 1980-2000.
Apart from various country characteristics, we include a corruption perception index and
an index of labor productivity as determinants of these flows. The unique contribution of
this paper is to include a weighted average of these conditions in "neighbor countries"
amongst factors that may explain FDI flows into a country. Results indicate that
corruption perception and labor productivity, in both host and neighbor countries,
significantly determine FDI inflows to a host country.