Abstract We forecast recessions in Canada using an autoregressive probit model. Its autoregressive structure captures the persistence of the binary recession indicator, smooths forecasted probabilities and reduces false‐positive signals. Leveraging a monthly dataset from 1973 to 2022, we estimate the model using composite likelihood methods. We also perform a variable‐selection procedure on numerous macrofinancial variables. Our findings suggest that the autoregressive model improves forecasting performance relative to a range of probit models proposed in the Canadian literature. Our results also highlight the reliability of US economic activity measures, commodity prices and financial indicators in forecasting Canadian recessions.
Abstract In this paper, we study foreign ownership as a vehicle for transferring gender norms across international borders. Using detailed matched employer‐employee data from Sweden, we analyze how the within‐firm gender pay gap is affected by the degree of gender inequality in the home country of foreign investors. The results suggest that home‐country gender norms matter: The pay gap between men and women in foreign‐owned subsidiaries tends to decrease with the degree of gender equality in the investors' home market. Specifically, we find that acquisitions from countries with higher levels of gender equality tend to reduce the gender pay gap, whereas acquisitions from countries with lower levels of gender equality have no significant impact. We identify the effect from within‐match variation in incomes and rely on a dynamic difference‐in‐differences model and a high‐dimensional fixed effects model.
Abstract We investigate the anticompetitive effects of debt financing and managerial incentives in the presence of managers incurring personal bankruptcy costs. We characterize the strategic value for firms' shareholders of resorting to debt and managerial incentives as complementary devices to sustain collusion among firms, when managerial bankruptcy costs are sufficiently responsive to the severity of financial distress. The shareholders' inability to commit to debt and managerial contracts implies that common lending to different firms constitutes a key driver for collusion. These results square with the well‐documented empirical evidence on debt financing, managerial incentives, and common lending in sectors plagued by collusion.
Abstract We study optimal monopoly pricing of non‐durable goods over two periods when consumer preferences evolve endogenously. We introduce a propensity for a second purchase that defines the influence of the first‐period purchase on the second‐period willingness to pay for the product, reflecting either satiation or habit. With this setting, second‐period demand depends on first‐period purchase and price, raising a dynamic pricing problem. Optimal pricing is analyzed with, at the second period, either uniform pricing or price discrimination between past and new buyers. We show that the propensity for a second purchase affects the capacity of the monopoly to commit on the pricing scheme and on second‐period prices. In particular, the monopoly, if able, cannot escape from discriminating between past and new buyers at the second period. However, this pricing scheme is more profitable for the monopoly, as compared to uniform pricing, if there is strong enough satiation. Moreover, the monopoly can commit on second‐period prices only with uniform pricing and habit. These results contrast with the standard literature on dynamic pricing and behaviour‐based price discrimination.
Abstract Primary health care is the doorkeeper for individual health and the cornerstone of universal health coverage. Despite global efforts to promote universal health coverage, the underuse of primary health‐care services remains prevalent in rural areas, resulting in significant health concerns for rural residents. As a part of the policy to strengthen primary health care, the Chinese government has established a rural physician program to deliver immediate and convenient health‐care services. This paper provides the first evaluation of the effects of the rural physician program. We find that although most rural physicians have limited education and lack professional training, the program significantly improves rural residents' health outcomes. The improvement is mainly attributed to changes in health awareness and health‐seeking behaviours among rural residents, enhanced accessibility to nearby health‐care providers, regular health examinations and the diagnosis of simple diseases. However, the program demonstrates limited effect in addressing complex chronic diseases. Moreover, a cost‐benefit analysis indicates that the benefits derived from the program outweigh the associated costs. Therefore, this paper highlights a relatively cost‐effective way to improve the health status of rural and impoverished populations, particularly in developing countries and regions.
