Corporate lobbying impacts innovation and overall productivity in the U.S. Nasir Hossein Dad and his co-author have built a quantitative model that shows how firms decide to invest in lobbying and research and development (R&D) to strategically grow. Dad, a PhD candidate with the Department of Economics, and his co-author, Duc Nguyen have found that lobbying might substitute for R&D, reducing firms’ incentive to innovate, or complement it by increasing returns on innovation, making the net effect uncertain. [Read more…]
Understanding the Immigrant Pay Gap: Stephen Tino
Stephen Tino is a first-generation Canadian whose upbringing was rooted in the immigration experience. As a PhD candidate in the Department of Economics at the University of Toronto, he has been drawing on that experience to explore the pay gap between immigrants and non-immigrants in the country.
“In various countries around the world, immigrants tend to earn less than non-immigrants,” Tino explained. “The pay gap in Canada is around 16%, and this is similar to the pay gap in other countries. A lot of previous research into the immigrant pay gap focuses on the skills of the workers, such as the language skills of immigrants when they come to a new country or their literacy, or how the different types of education they receive in their home countries might not translate to the same types of jobs in the host country. [Read more…]
How Businesses Manage Geographic Expansion: Anubha Agarwal
The Department of Economics’ Anubha Agarwal is examining an understudied aspect of how firms expand into multiple geographic markets. The PhD candidate’s study looks at how the number of geographic markets of firms in non-tradable sectors and competition in local markets increased in Canada between 2001-2018. Using her model, she finds that the rise in the innovation costs for entrepreneurs, compositional changes in entrants, and the increase in product differentiation between local varieties can explain most of these empirical trends. The study also finds that subsidizing the geographic expansion of more productive and more expansion-efficient firms can increase social welfare and efficiency in the economy.
“Firms can grow within a market by increasing their size, but my focus is on how firms grow by entering multiple geographic markets. Growth in geographic markets is important for firms in non-tradable goods and services sectors, like coffee shops or financial services that require physical presence near customers,” Agarwal said. [Read more…]
Of Political Economy and Discipline: In Memory of Professor Emeritus John W. L. Winder
Professor Emeritus of the Department of Political Economy, John W.L. Winder was a pioneer in the field of Canadian econometric forecasting models. He died on October 23, 2024, at the age of 92 after having dedicated his life to his work, the University of Toronto, and St. Thomas Anglican Church, just 90 meters from the Department of Economics. The archives of the October 1962 Staff Bulletin outlined his first appointment as assistant professor of economics. Educated at both the University of Toronto and at the University of Chicago, the Bulletin said, Winder was with the Institute for Economic Research at Queen’s University, had business experience with A. V. Roe Canada Ltd., and the Toronto Daily Star. Immediately prior to joining the University of Toronto he had been on faculty at the Ontario Agricultural College in Guelph. [Read more…]
Exploring Grade Shocks and Undergraduate Program Choices with Annabel Thorton
Exam scheduling can have a long-term impact on both students’ choice of majors and their future earnings. The finding comes from “Persevere or Pivot? The Causal Impact of Grade Shocks on the College Major Decision,” a new paper by Annabel Thorton, a PhD candidate with the Department of Economics. Thorton’s research project looked at random variations in exam timetable characteristics to estimate the effect of grade shocks on students’ major choices. She found that when students write two exams close together, they tend to do more poorly on the second one, resulting in a student’s course grade to drop by approximately 1%. That 1% drop in grade value, a grade shock, then reduced the likelihood of a student majoring in that subject by 11%. Thorton’s data comes from all first-year Faculty of Arts and Sciences students at the University of Toronto. [Read more…]
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