Ratio Working Paper No. 200. Economic Freedom and Institutional Convergence

PublikationWorking paper
Daniel Halvarsson, Ekonomisk frihet, Företagandets villkor, Institutionell ekonomi, Niklas Elert
Ratio Working Paper No. 200
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Francis Fukuyama argues that liberal democracy is the final form of human government and will become more and more prevalent in the long term. If this prediction is true, countries should converge in their political and economic systems toward liberal democracy, a form of institutional convergence. In this paper, we examine whether there is convergence in economic institutions, drawing on the literatures of economic convergence and of industrial organization. We use the Economic Freedom of the World-index over the period 1970-2009 to proxy for economic institutions. Our results indicate that countries with lower institutional quality experience faster institutional change than countries with higher quality, i.e., we observe institutional convergence. But countries with lower institutional quality have higher variability of institutional change. Using distributional analysis, we examine institutional transition probabilities, and find that the probability of a country ending up with high-quality institutions is high in the long-run. These findings support Fukuyama’s prediction.

Elert, N. & Halvarsson, D. (2012). Economic Freedom and Institutional Convergence. Ratio Working Paper No. 200.

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Ratio Working Paper No. 354: Foreign Ownership and Transferring of Gender Norms
Working paperPublikation
Halvarsson, D., Lark, O. & Gustavsson Tingvall, P.


Publicerat i

Ratio Working Paper


In this paper, we study foreign ownership as a vehicle for transferring gender norms across international borders. Specifically, we analyze how the wage differential between men and women in Swedish firms is affected by the degree of gender inequality in the home country of foreign investors. The results suggest that gender norms of the home country matter—the gender wage gap in foreign-owned subsidiaries appears to increase with the degree of gender inequality prevailing in the investors’ home market. This finding is identified from within job-spell variation in wages and proves robust across a series of specifications.

Government-sponsored entrepreneurship education: Is less more?
Artikel (med peer review)Publikation
Sjöö, K., Elert, N. & Wennberg, K.



Entrepreneurship research suggests that entrepreneurship education and training can bridge the gender gap in entrepreneurship, but little empirical research exists assessing the validity and impact of such initiatives. We examine a large government-sponsored entrepreneurship education program aimed at university students in Sweden. While a pre-study indicates that longer university courses are associated with short-term outcomes such as increased self-efficacy and entrepreneurial intentions, results from a more comprehensive study using a pre-post design suggest little effect from these extensive courses on long-term outcomes such as new venture creation and entrepreneurial income. In contrast, we do find positive effects on these long-term outcomes from more limited but more specific training interventions, especially for women. Our study suggests that less extensive but more tailored interventions can be more beneficial than longer or more extensive interventions in promoting entrepreneurship in general, and entrepreneurship of underrepresented groups in particular. We discuss implications for theory, education, and policy.

Maximum Likelihood Estimation of Asymmetric Double Type II Pareto Distributions
Artikel (med peer review)Publikation
Halvarsson, D.



This paper considers a flexible class of asymmetric double Pareto distributions (ADP) that allows for skewness and asymmetric heavy tails. The inference problem is examined for maximum likelihood. Consistency is proven for the general case when all parameters are unknown. After deriving the Fisher information matrix, asymptotic normality and efficiency are established for a restricted model with the location parameter known. The asymptotic properties of the estimators are then examined using Monte Carlo simulations. To assess its goodness of fit, the ADP is applied to companies’ growth rates, for which it is favored over competing models.

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