The Carroll Round

The Carroll Round Box 571016 Washington, DC 20057 Tel: (202) 687-5696 Fax: (202) 687-1431 [email protected] http://carrollround.georgetown.edu The Tenth Annual Carroll Round Steering Committee James O. Arnold Albert M. Chiang Amanda B. Delp, Chair Malin Hu Katrina G. Koser Nancy Lee Douglas M. Proctor Vivek Sampathkumar Monica C. Scheid Matthew H. Shapiro Carroll Round Proceedings Copyright © 2011 The Carroll Round Georgetown University Washington, DC http://carrollround.georgetown.edu All rights reserved. No part of this publication may be reproduced or transmitted in any former by any means, electronic or mechanical, including photography, recording, or an information storage and retrieval system, without the written permission of the contributing authors. The Carroll Round reserves the copyright to the Carroll Round Proceedings volumes. Original works included in this volume are printed by consent of the respective authors as established in the “Non-Exclusive Copyright Agreement.” The Carroll Round has received permission to copy, display, and distribute copies of the contributors’ works through the Carroll Round website (carrollround.georgetown.edu) and through the annual proceedings publication. The contributing authors, however, retain the copyright and all other rights including, without limitation, the right to copy, distribute, publish, display, or modify the copyright work, and to transfer, assign, or grant license of any such rights. The views expressed in the enclosed papers are those of the authors and do not necessarily represent those of the Carroll Round or Georgetown University. Printed in the United States of America. CARROLL ROUND PROCEEDINGS The Ninth Annual Carroll Round An Undergraduate Conference Focusing on Contemporary International Economics Research and Policy VOLUME 6 Editor in Chief: Vivek Sampathkumar Associate Editors: James O. Arnold, Albert M. Chiang, Amanda B. Delp, Malin Hu, Katrina G. Koser, Nancy Lee, Douglas M. Proctor, Monica C. Scheid, Matthew H. Shapiro A Carroll Round Publication The Ninth and Tenth Carroll Round Steering Committees Georgetown University, Washington, DC 2011 CONTENTS What is the Carroll Round? vii Notes on Paper Submissions and Conference Participation vii Acknowledgements viii A Brief History of the Carroll Round x Introduction: Why I Support the Carroll Round xv Carroll Round Proceedings Economic Shocks and Internal Conflict: New Evidence from the Open-EconomyTrilemma** 3 PETER DAVENPORT HULL Wesleyan University Monetary Policy and Bank Loan Supply* 4 YANG DU Williams College Export-Country GDP Growth, Market Openness, and Antidumping Filings* 43 ARIELL ZIMRAN Georgetown University Does Participation in Export Markets Increase TFP? Evaluating the Learning By Exporting 70 Hypothesis Using Firm-Level Data** DANIEL LIM Georgetown University The Effect of News Media on UK Consumers' Unflation Assessment 71 ROB HARRIS University of Warwick Determinants of Asylum Migration To Germany 1980-2008 IN UN FLORA NG 87 Dartmouth College Money Illusion and its Implication on Unemployment 99 TAKUMA HABU University of Warwick Determinants of Cost of Credit Across Firms in Eastern Europe and Central Asia 114 TOM J. HAN Georgetown University Determinants of Bank Profitability in Ukraine 134 ANTONINA DAVYDENKO American University in Bulgaria The Monopoly-Bank Model and Equity Markets 146 VERA CHAU * denotes full-length papers New York University ** denotes abstract only iv TABLE OF CONTENTS Microenterprises Performance under Consulting Services and Clustering: 159 A Study of Egypt and Turkey AHMAD Z. WAHDAT Oberlin College How do Capital Losses Affect Investment Following Natural Disasters? 174 TODD KAWAKITA Dartmouth College Private Electricity: Cure or Constraint? 185 JORGE A. APONTE M. Georgetown University The Role of the Informal Sector in Equitable Water Distribution 198 SARAH HINKFUSS Harvard College Early Participants of Multilateral Environmental Agreements and Their Effect on Later 238 Membership ANNA KLIS Georgetown University Parental Death: Effects on Intelligence 252 BENJAMIN ARNOLD University of Michigan Intergenerational Transfer of Human Capital Among Immigrant and Native Families 272 KELSEY HAMPLE Illinois Wesleyan University Undervaluation of Renminbi and the Role of People's Bank of China in the Misalignment. 286 HANG QIAN Dartmouth College A Common Currency for MERCOSUR: Trade and Foreign Direct Investment Implications** 306 PAUL UNANUE Georgetown University TRADE LIBERALIZATION AND THE GEOGRAPHY OF INCOME: 307 PRODUCTION, MIGRATION, AND INEQUALITY IN LATIN AMERICA ALLISON KERN Georgetown University Aid, Policies, and Long Run Growth 321 BENJAMIN MORLEY University of Warwick * denotes full-length papers ** denotes abstract only v TABLE OF CONTENTS FDI and the Dutch Disease 336 KATHERINE DONATO Georgetown University The Effects of Institutional Quality on Foreign Ownership: An International Firm-level Study 349 KATHERINE M.M. NG AND PONGRITH N. CHANTRAPORN University of San Francisco How does Politician Quality relate to Governance Quality? 357 Econometric Evidence for Indian State Legislatures SIDDHARTH E. GEORGE, SHAMIL JOBANPUTRA, XING C. ONG, YOUNIL YOU London School of Economics and Political Science IMF Precautionary Agreements: Determinants of Entry 374 MICHAEL KARNO Georgetown University Appendix A: Ninth Annual Carroll Round Presentation Schedule Appendix B: Past Speakers Appendix C: Former Carroll Round Steering Committees Appendix D: Members of the Advisory Panel Appendix E: Past Participants * denotes full-length papers ** denotes abstract only vi WHAT IS THE CARROLL ROUND? The Carroll Round is an international economics conference for undergraduate students held annually at Georgetown University in Washington, D.C. It takes the format of a professional academic conference at which students present their original research in international economics (broadly defined) that are typically honors theses. The goal of the Carroll Round is to foster the exchange of ideas among the leading undergraduate economics students by encouraging and supporting the pursuit of scholarly innovation. To date, over 250 students from universities and colleges in North America, Western and Eastern Europe, and Australia have participated, making the Carroll Round the premier conference of its kind. The conference also provides opportunities for participants to interact with prominent academic and policy economists. Alumni have moved on to top Ph.D., J.D., M.B.A., and other graduate programs, positions at the Federal Reserve, World Bank, and other public institutions, and major private corporations. NOTES ON PAPER SUBMISSIONS AND CONFERENCE PARTICIPATION The Carroll Round Proceedings is a publication of synopses and full-length papers from the Carroll Round Undergraduate International Economics Conference at George- town University. We do not accept paper submissions from the general public. If you are interested in presenting at the conference, please log on to our website: http://carrollround. georgetown.edu. All undergraduate students who have written or are in the process of writ- ing original work in the field of international economics (broadly defined) are encouraged to apply. vii ACKNOWLEDGEMENTS In its ten years, the Carroll Round has managed to grow from an ambitious project into the premier conference for students from across the globe to share their research in international economics. Because this achievement and the conference’s future would not be possible without the support of our donors, faculty, speakers, session chairs, and George- town University, the Carroll Round Steering Committee would like to represent those who have committed so much of their time and energy. We would first like to recognize Ms. Marianne Keler for her continued generosity and for proposing the establishment of an endowment account to which every Carroll Round supporter can contribute toward the long-term institutionalization of the Carroll Round. Ms. Marianne Keler and Mr. Michael Kershow have been the primary contributors to and advocates of the Carroll Round since its establishment in 2001. Without this support, the Carroll Round would never have achieved fruition or continued for the past nine years. We thank Mr. Yunho Song, a Georgetown graduate and long-time supporter of the conference, who established an endowment fund that will partly finance the Carroll Round for many years to come. For his support and extremely generous financial contribution, we and all future participants of the Carroll Round are truly indebted. The Carroll Round has been gifted with many other individuals committed to its cause. Therefore, we would also like to recognize Mr. Mario Espinosa, Mr. Oleg Nodelman, Mr. and Mrs. Kenneth Kunkel, and former Carroll Round Steering Committee members Mr. Stephen Brinkmann and Mr. Scott Pedowitz. We express our gratitude to the Kanzanjian Foundation, which provided the start-up funds without which it would have been impos- sible to develop the Carroll Round Proceedings. Within Georgetown, the conference is indebted to Mr. Mohamed Abdel-Kader, Ms. Carma Fauntleroy, Ms. Cara Sodos, and Ms. Reema Ghazi, all of whom have made tireless efforts to advocate the Carroll Round cause from our campus’s development and advance- ment departments. We are also deeply appreciative of the efforts of Mr. Thomas Esch, Ms. Christine Smith, Dr. Venilde Jeronimo, Ms. Katerina Kulagina, and Ms. Elizabeth Franzino from years past. Additionally, we would like to recognize

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