Theoretical and microeconometric perspectives on insurance and international economics [Elektronische Ressource] / vorgelegt von Iris Kesternich

Iris Kesternich

Informations

• Publié par: ludwig-maximilians-universitat_munchen
• Publié le: 01 janvier 2009
• Nombre de lectures: 17
• Langue: English
• Poids de l'ouvrage: 4 Mo

Extrait

Theoretical and Microeconometric Perspectives on
Insurance and International Economics
Inaugural-Dissertation
zur Erlangung des Grades
Doctor oeconomiae publicae (Dr. oec. publ.)
an der Ludwig-Maximilians-Universität München
2009
vorgelegt von
Iris Kesternich
Referentin: Prof. Dr. Monika Schnitzer
Korreferent: Prof. Dr. Florian Heiss
Promotionsabschlussberatung: 19. Mai 2010To the memory of my fatherAcknowledgements
First and foremost I wish to thank my supervisor, Monika Schnitzer. Her advice, guidance
and support have been very important both for the completion of my thesis and in my
decision to pursue a scientific career. I have learnt and benefitted in many distinct ways
throughourjointwork. Further, IwouldliketothankJoachimWinterwhohasshapedmy
idea of what applied economics is. His advice and support have been very valuable. Both
Monika Schnitzer and Joachim Winter are role models in their dedication to research,
teaching and mentoring. I am also grateful to Florian Heiss and Jonas Schreyögg, who
offered their support and time and kindly agreed to join my thesis committee. Florian
Heiss has supported my research with many ideas and constructive comments.
I am also deeply grateful to my coauthors Claudia Buch, Alexander Lipponer and Heiner
Schumacher. Working jointly with them has been and continues to be a great source of
mutual support, inspiration and motivation.
IalsowouldliketothankmycurrentandformercolleaguesattheSeminarofComparative
Economics, the Seminar of Empirical Economics and the Munich Graduate School of
Economics. It has been a pleasure working with you. I would like to mention explicitly
Anna Gumpert, Karolina Kaiser, Stefan Vetter and Martin Watzinger. Special thanks
goes to the team of student assistants at the Seminar of Comparative Economics for their
excellent research assistance.
Part of this thesis has been written during visits to the Research Centre of the Deutsche
Bundesbank. The hospitality of the institution as well as the possibility to work with the
Foreign Direct Investment Micro-Database (MiDi) are gratefully acknowledged. Through-
out my thesis I have benefitted from through financial support through the German Sci-
ence Foundation under GRK 801 and SFB-TR 15.
Finally, my greatest gratitude goes to my family and friends for their love and support.
Munich, 27th of September 2010
Iris KesternichContents
1 Introduction 1
2 Who is afraid of political risk? Multinational firms and their choice of capital
structure 10
2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.2 The base line model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.3 Political risk and the optimal financial structure . . . . . . . . . . . . . . . . . . . 17
2.4 Empirical predictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.5 Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.6 Econometric Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.7 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3 Financial constraints and the margins of FDI 49
3.1 Motivation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.2 Finance and the margins of FDI: Theory . . . . . . . . . . . . . . . . . . . . . . . 51
3.2.1 Non-binding collateral constraint . . . . . . . . . . . . . . . . . . . . . . . 56
3.2.2 Binding collateral constraint . . . . . . . . . . . . . . . . . . . . . . . . . . 58
3.2.3 Financial constraints at the affiliate level . . . . . . . . . . . . . . . . . . . 60
3.2.4 Summing up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
3.3 Data and stylized facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
3.3.1 Data sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
3.3.2 Dependent and explanatory variables . . . . . . . . . . . . . . . . . . . . . 66
3.3.3 Stylized facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
3.4 Productivity versus financial constraints: Regression results . . . . . . . . . . . . 68
3.4.1 Extensive margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
3.4.2 Extensive margin: Number of affiliates . . . . . . . . . . . . . . . . . . . . 74
9Contents 10
3.4.3 Intensive margin: Sales of affiliates . . . . . . . . . . . . . . . . . . . . . . 75
3.4.4 Heckman selection model . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
3.4.5 Summing up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
3.5 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
3.6 Mathematical appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
4 On the use of information in repeated insurance markets 85
4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
4.2 A repeated insurance market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
4.2.1 Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
4.2.2 Equilibria in an oligopolistic insurance market with symmetric information 91
4.2.3 Equilibria in an oligopolistic market with asymmetric 93
4.3 Explicit collusion and market entry . . . . . . . . . . . . . . . . . . . . . . . . . . 95
4.4 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
4.4.1 Examples of the evolution of information in insurance markets . . . . . . 99
4.4.2 Welfare and policy implications . . . . . . . . . . . . . . . . . . . . . . . . 100
4.5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
5 What if everybody had a choice? Using hypothetical choice experiments to
analyze the demand for prescription drug insurance 102
5.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
5.2 Medicare Part D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
5.2.1 The market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
5.2.2 Market outcomes and prior research on the active deciders . . . . . . . . 107
5.2.3 Types of plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
5.2.4 Groups of consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
5.3 Hypothetical choice experiments . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
5.3.1 Real versus hypothetical choice experiments . . . . . . . . . . . . . . . . 112
5.4 Data and descriptives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
5.4.1 The RPS hypothetical choice experiment . . . . . . . . . . . . . . . . . . 119
5.5 Multinomial Logit Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
5.6 Econometric results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
5.7 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
5.8 Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
5.8.1 The RPS hypothetical choice experiments . . . . . . . . . . . . . . . . . . 132Contents 11
List of Figures 142
List of Tables 143
Bibliography 144Chapter 1
Introduction
“Raw facts are, as such, a meaningless jumble.”
(Joseph Schumpeter, Business Cycles, Vol. I)
Ever since John Maynard Keynes labeled econometrics as “statistical alchemy” rather
than a science (Keynes (1940)), the theory versus empirics debate in economics has been
ongoing. More recently, this debate has been taken up again in the field of development
economics, lanced by the article “Is there too little theory in development economics?”
by Mookherjee (2005). The debate started in view of the multitude of empirical papers
whose relation to economic theory has remained at best unclear. During the last few
years, the role of empirics in economics has been growing, partially due to the increased
possibilities of storing and handling huge data sets. This is reflected for example by the
increase in (partially) empirical papers published in top journals, by the type of work that
Ph.D. students from top graduate schools do or by the number of Nobel Prizes that have
been awarded to empirical researchers in the last decade (Eichengreen (2009)).
However, as unsatisfactory an empirical study without theoretical background may be
considered by many economists, theory that does not explain or that even contradicts
empirical facts is essentially questionable. Econometrics plays an important role in test-
ing hypotheses derived from economic theory, but even more in helping theoretical re-
searchers to find out which questions to ask (Banerjee (2005)). Empirical findings have
often challenged existing theory and they have been a starting point for theoretical anal-
yses. Even the critics of econometrics will not deny that the history of science is full of
examples where empirical findings have preceded and encouraged important theoretical
breakthroughs.
One important motivation for this thesis has been that economic research could greatly
benefit from a close cooperation between theorists and econometricians. To say it in
Koopmans’ words