Student Research Conference: Academic Year 2003-2004
Ranmali Abeyasinghe did her honors research with Dr. Michael Seeborg on Democracy, Political Stability, and Developing Country Growth: Theory and Evidence. ABSTRACT: This research project examines the hypothesis that democracy and political stability have significant effects on the economic growth in developing countries vis-a-vis developed countries. Previous empirical studies find rather ambiguous results when testing for the relationship between democracy and growth. This paper extends these past studies by focusing on the effects of democracy and political stability in developing countries. It also attempts to differentiate the effects of political stability and democracy on economic growth. The results of this paper suggest that democracy does not have a significant impact on economic growth. Instead, the results suggest that political stability, regardless of regime type, has the greatest effects on a country's economic growth.
George Coontz did his independent research with Dr. Timothy Query on Making Investment Decisions Based on Prior Merger and Acquisition Performance in the Pre-announcement Period. ABSTRACT: Corporate mergers and acquisitions are very complex business transactions with a great deal at stake to the companies involved. To the individual investor, these transactions and how they are undertaken play a key role in investment decisions. Looking at the largest mergers (in dollars) since 1995, this study hopes to find consistent increases in shareholder wealth before announcement. This study hopes to find reliable data supporting financial and economic theories of increased shareholder wealth. This study will look at the pre-announcement period to investigate if there are any signs in the market that would signal a time to invest.
† Mahi Garg did her honors research with Dr. Michael Seeborg on Wage Differentials for Immigrant Women in the United States: The Heightened Effect of Gender and Ethnic Interaction. ABSTRACT: The United States is one of only a handful of nations in which immigrant women outnumber immigrant men. These women come from increasingly diverse regions, thereby bringing considerably different skills to the U.S. workforce. However, the question of how gender and ethnicity interact with each other to affect the economic performance of female immigrants remains especially understudied. Thus, this paper aims at providing some insight into this formerly neglected dimension of female immigrant performance. It examines the sources of wage differentials between immigrant females and other groups in the U.S. labor force, paying particular attention to earnings inequalities created by the interaction of gender and ethnicity. OLS regressions are used to carry out the analysis. A random sample of 100,000 immigrants and 50,000 natives is drawn from the 5% 2000 IPUMS data set. Their salary and wage income is regressed on several variables accounting for differences in human capital, gender, and nationality, including interactions between gender and ethnicity. The results show that females and immigrants have relatively low wages because of their sex and country of birth. In addition, interactions between gender and ethnicity are found to be significant determinants of wages.
Conor Howard did his honors research with Dr. Margaret Chapman on Is There Assessor Bias in the Real Estate Market? ABSTRACT: The purpose of this paper is to determine if the valuation of property adheres to the 33 1/3 proportion of market value required by the State of Illinois or if assessors are over-valuing Bloomington real estate disproportionately across high and low income neighborhoods. Assessors have a motivation to over-value high-income properties disproportionately resulting in intentional and systematic bias, which inequitably alters the property tax system. The results support this idea by showing a higher percent variation between market and assessed values in high-income households. This implies that higher income households are paying a disproportionately higher property tax than low and moderate-income households.
Will Irwin did his honors research with Dr. Michael Seeborg on Racial Discrimination in Major League Baseball: Can It Exist When Productivity is Crystal Clear? ABSTRACT: Minority workers in many industries have dealt with wage and hiring discrimination. In Major League Baseball, it is typically assumed that fair hiring practices are used and that fair wages are offered due to the intense negotiation process involved with each player contract. However, past research shows that both wage and hiring discrimination has been present during some recent time periods. With most industries, racial discrimination is difficult to measure due to the implicit bias in the productivity variables. However, in baseball, productivity can be easily measured with offensive and defensive performance statistics, which are determined completely independent of race. This paper attempts to use a human capital theory based regression and chi-squared analysis to determine whether or not racial wage and hiring discrimination is present in Major League Baseball. The key findings are that offensive production and games played are the determinants of salary, while race is not and that racial hiring discrimination is not present for the data used.
†* Satish Lohani did his honors research with Dr. Ilaria Ossella-Durbal on the Effect of Foreign Aid on Development: Does More Money Bring More Development? ABSTRACT: Developing countries face challenges of massive poverty, slow GDP growth, high mortality rates from illness, and low levels of education. The governments in these countries do not have sufficient financial resources to fight these challenges effectively. Foreign aid has played an instrumental role in the implementation of development programs to combat poverty. The purpose of this paper is to examine whether foreign aid has a positive impact on development. Development in this paper is measured using the Human Development Index (HDI) that incorporates a knowledge index, health index, and standard of living index. Social aid is used to capture foreign aid towards development purposes. The hypothesis that foreign aid has a positive effect on the HDI is tested using ordinary least squares regression. Regression results show that foreign aid has a negative relationship with development. The findings of the study indicate that foreign direct investment and domestic investment play a significant role in a country's development.
†* Alexis Manning did her honors research with Dr. Robert Leekley on The Resource Curse Revisited. ABSTRACT: This research project examines the phenomenon of the resource curse - the inverse relationship between natural resource abundance and economic growth seen in developing countries since 1965. A large body of empirical research detects a negative statistical relationship between natural resource abundance and slow economic growth in developing countries during the latter part of the twentieth century. The resource curse argues that natural resources interact with various social, political, and economic factors, and the modification of these factors results in slower economic growth. This paper aims to investigate the validity of the resource curse. In contrast with many previous studies, the results of this paper do not find a statistically significant relationship between natural resources and economic growth and therefore, the results do not support the existence of a resource curse. This study also explores some possible theoretical and empirical problems present in previous studies.
† Indicates papers presented at the Midwest Economics Association Annual Meeting. * Indicates papers presented at the Georgetown Carroll Round Conference.