Social interaction and economic institution

2004 2004

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Abstract (summary)

The first chapter explores the link between inequality and longer work hours. It shows that desire to keep up with the consumption standard set by the rich provides a link between inequality and work hour. In an attempt to provide an empirical support for this idea, I find that coefficient of inequality is statistically significant in both OLS and fixed effects estimates and its effects are large and estimates are robust across a variety of specifications. The second chapter further develops the idea of Veblen effect by showing relationship between earnings inequality of men and labor supply decision of their wives. This result not only confirms the proposed effect of earnings inequality on individual labor supply decision, it also discriminates emulation effect from other explanations about the potential link such as rat-race model. The third chapter provides a cost-benefit analysis of relationship banking. When banks can acquire ex post informational monopoly on borrowing firms, banks may increase the number of firms they initially finance by offering lower loan rates. At the same time, banks have an incentive to limit the size of loans granted to young and untested firms, preventing the potential over-investment problem that may arise from the lower loan rates they offer. Therefore, relationship banks can effectively prevent over-investment that has been suggested as a potential problem of relationship banking. Using NSSBF data set, I show that the young and small firms in a concentrated banking market display relatively lower debt-to-asset ratio and less institutional debt while the interest rates offered to them are lower.

Indexing (details)

Labor economics;
Income inequality;
Working hours;
Relationship banking;
Benefit cost analysis
0510: Labor economics
0508: Finance
Identifier / keyword
Social sciences; Economic institution; Inequality; Relationship banking; Social interaction; Work hours
Social interaction and economic institution
Park, Yongjin
Number of pages
Publication year
Degree date
School code
DAI-A 65/01, Dissertation Abstracts International
Place of publication
Ann Arbor
Country of publication
United States
Bowles, Samuel
University of Massachusetts Amherst
University location
United States -- Massachusetts
Source type
Dissertations & Theses
Document type
Dissertation/thesis number
ProQuest document ID
Database copyright ProQuest LLC; ProQuest does not claim copyright in the individual underlying works.
Document URL
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