We study the capital structure changes of drug firms after an investment-opportunity shock brought about by the Biologics Price Competition and Innovation Act. Using a difference-in-difference approach, we show that the shock led drug firms to make their capital structures less constraining by decreasing leverage, shortening debt maturity, increasing unsecured debt, and reducing convertible debt. New debt covenants became less restrictive and firms raised equity to preserve borrowing capacity. Our results support the view that firms actively manage their capital structures to bolster financial flexibility and increase debt capacity in response to new investment opportunities.

This article discusses the complex issues behind the relation between national and global economic histories and the challenges of a comparative approach. On examining different national approaches (Italian and English) to the management of the early modern maritime sector, it will argue that this comparison allows a privileged view into different varieties of capitalism, highlighting fundamental differences in attitudes toward wage labor and risk management that still influence different approaches to economic activities today.

Robert Skidelsky, a historian whose fame for his monumental biography of John Maynard Keynes is well deserved, here provides us with a brilliant, well-informed history of macroeconomics stretching from the “British recoinage debates” of the 1690s to today. Money and Government was prompted by the 2008 financial crisis. It is an attempt, Skidelsky tells us, to answer the question that Queen Elizabeth II posed to a group of economists at the London School of Economics in October 2008: “Why did no one see it coming?” Not surprisingly, to skip to the bottom line, Skidelsky believes that macroeconomics reached its apogee with Keynes and that it has been more or less downhill from there. The 2008 financial crisis could have been predicted, and ameliorated after it occurred if not prevented, if macroeconomists had remained loyal to Keynes.

Despite the extensive literature on what questionable research practices (QRPs) are and how to measure them, the normative underpinnings of such practices have remained less explored. QRPs often fall into a grey area of justifiable and unjustifiable practices. Where to precisely draw the line between such practices challenges individual scholars and this harms science. We investigate QRPs from a normative perspective using the theory of communicative action. We highlight the role of the collective in assessing individual behaviours. Our contribution is a framework that allows identification of when particular actions cross over from acceptable to unacceptable practice. Thus, this article provides grounds for developing scientific standards to raise the quality of scientific research.

Jim Tozzi is an activist institutional economist. During his 19-year career in the federal civil service, he was a pertinacious institution builder, armed with a PhD in economics but never flaunting it. He gained a reputation, richly deserved in my experience, as a supreme bureaucratic tactician. But he applied his skills to antibureaucratic purposes. Incessantly, and occasionally at professional risk, he promoted and protected internal executive-branch procedures that used economic analysis, and measures of administrative effectiveness, against the incessant forces of political entropy, agency parochialism, and special-interest capture.

Jim Tozzi has for several decades been among the most dedicated and perceptive commentators on the White House Office of Information and Regulatory Affairs (OIRA). Indeed, Tozzi is arguably better suited than anyone to be the keeper of the OIRA flame: from his position in charge of the Office of Regulatory and Information Policy, OIRA’s predecessor organization, Tozzi contributed to the development of Executive Order (EO) 12291 and then stepped in as OIRA’s first Deputy Administrator. Since that time, he has been a steadfast defender of OIRA’s critical role in bringing rigorous analysis, quality control, and policy discipline to Executive Branch regulation. I share Tozzi’s view, and indeed that of all former OIRA officials I have spoken with, of OIRA’s importance to the regulatory state. Preservation of the strength and independence of the office is to me the principal criterion by which policy proposals that effect OIRA should be judged.

For decades, a strong case has been made for comprehensive reform of the U.S. federal government’s regulatory processes (for early contributions, see Weidenbaum & DeFina, 1978; Lave, 1981; Breyer, 1982; Harrison & Portney, 1983; Litan & Nordhaus, 1983; Viscusi, 1992; Breyer, 1993; Sunstein, 1996; Graham, 1996, 1997). Establishment of centralized Office of Management and Budget (OMB) oversight through the Office of Information and Regulatory Affairs (OIRA) was an important achievement, but Congress has not yet passed comprehensive regulatory reform legislation.

Jim Tozzi has a wealth of knowledge and experience with cost-benefit analysis and centralized review of Executive Branch rulemaking. Mine is more limited, but nonetheless significant.1 And while I may agree with much of what he says in his article “Office of Information and Regulatory Affairs: Past, Present and Future,” (Tozzi, 2019) I do see things differently than he does in a number of respects.

American discontent with offshore production features heavily in trade policy debates. But Americans more typically encounter offshore production in apolitical contexts as consumers. We argue that these ostensibly apolitical encounters with offshore production are, in fact, freighted with political consequences. This paper asks: When and for whom does consumer-based exposure to offshore production reduce support for free trade? This is an important in its own right, but also sheds light on the contexts in which more overtly political references to offshore production are likely to find the most fertile ground. We answer these questions using a survey experiment that embeds an offshoring “prime” into an advertisement for pet furniture, varying the location of production across different treatment groups. We find that our experimental exposure to offshore production depressed enthusiasm for free trade, but only when production occurred in China, and mainly among white men living near trade-related job loss. That heterogeneity resonates with work on the economic and social aspects of the decline in American manufacturing employment.

Entrepreneurs should act as stewards of entrepreneurial rent. Entrepreneurial rent is the difference between the ex post value of a venture and its ex ante costs. It is the result of competition among buyers and sellers within the market process rather than the sole efforts of the entrepreneur. As a result, entrepreneurs should allocate entrepreneurial rent for the benefit of other market participants rather than consuming it for themselves. The moral obligation to steward entrepreneurial rent is consistent with traditional bases of property rights and the norm of social welfare maximization, and it applies to corporations and their shareholders, as well as individual entrepreneurs.

We propose a simple metric to measure two aspects of market integration, namely, economic integration (defined as a common cash-flow dynamic) and financial integration (defined as a common risk-pricing dynamic) and then examine their evolution through time while controlling for volatility. We find that developed (DEV) countries exhibit greater degrees of financial and economic integration than emerging (EMG) markets. Although the financial integration gap between these markets remains large throughout the sample period, the EMG economies are catching up with their DEV counterparts in recent years; their level of economic integration has reached that of DEV countries.

Scholars increasingly acknowledge the contingent, varied, complex nature of capitalism, yet overlook a viable vision of the early nineteenth-century United States: communal capitalism. Communal societies proliferated in the early United States as a way to regulate the market. The most industrious, materially successful model of this approach was George Rapp’s Harmony Society, established in 1805. Rapp was a radical Pietist, immigrating with his followers from Württemberg in order to establish a purified community that would persevere into the millennium he predicted was imminent. Despite a ban on private property, the Harmonists embraced the market, building textile factories and conducting market activity under the moniker “Rapp & Associates.” Technologically innovative, shrewd in business, and dogged in pursuit of a “divine economy,” the example of the Harmony Society helps us better understand how religious businesses helped shape the early American capitalist system and, specifically, the contributions of German Pietism to economic thought in the Atlantic world. Ultimately, we discover how the Harmonists’ communal capitalism forsook wages and private property, while embracing stocks, bonds, leases, mortgages, patents, trademarks, licenses, litigation, and contracts as they built an incredibly successful and wealthy manufacturing community in the then-western United States, even as George Rapp’s authoritarian leadership style created tensions within his workforce of immigrant women, men, and children.

The recent arrival of women on corporate boards has been extensively discussed in the literature. However, most of the studies focus on very recent times. This article analyzes the presence of women on the corporate boards of the largest firms in Switzerland across the past hundred years. It shows that until the beginning of the 1970s, the very few women sitting on the boardrooms belonged to the families owning the firms. Two main factors contributed then to the progressive opening of the corporate elites to women. First, the extending in 1971 of “universal suffrage” to women led to a feminization of the political elites, and women with a political profile entered the boardrooms of firms in the distribution and retailing sector. Second, the increasing globalization of the economy at the end of the twentieth century contributed to weaken the cohesion of the very male and Swiss corporate elite. At the beginning of the twenty-first century, however, the presence of women remained low in international comparison, and they were still hitting the “glass ceiling” regarding the top positions in the firm.

Using a novel database of firm patents and board characteristics across 45 countries, we examine both within- and cross-country determinants of board gender diversity and its relation to corporate innovation. Boards are more likely to include women in countries with narrower gender gaps, higher female labor market participation, and less masculine cultures. Firms with gender diverse boards have more patents and novel patents, and a higher innovative efficiency. Further analyses suggest that gender diverse boards are associated with more failure-tolerant and long-term chief executive officer (CEO) incentives, more innovative corporate cultures, and more diverse inventors, characteristics that are conducive to an improved innovative performance.

This paper proposes a classification of government expropriations of foreign property based on the types of alliances sought out by governments in their quest for support for those actions. Based on a review of historical literature and social science studies of expropriations in sub-Saharan Africa and Latin America in the twentieth century, we define three types of alliances: with organized labor, with domestic business owners, or with sections of the civil service or the ruling party. We posit that each sector allying itself with the government expects rewards from the expropriation. We maintain that the type of alliance is determined by several factors, in particular, the longevity and legitimacy of the nation-state of the expropriating country, the strength of organized labor, and the political participation and strength of the domestic business sector. Our framework complements existing studies explaining when and why expropriations take place.