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on Central and Western Asia |
| By: | Lahiri, Soumitra |
| Abstract: | Indian share market has never been like this. Market indexes have appreciated in an unprecedented manner since June 2006 and are creating new records of attaining altitudes that were beyond dreams a couple of years back. Media and Government never give up the opportunity of going gala over new laurels of economic prosperity being achieved by the nation. Even amidst such overall positivism question arises as to whether the achievements being flaunted about are truly real or not. The value of Indian currency (Rs) has been gaining on value against hard currencies like US Dollar etc since mid 2002 and the Indian capital market experienced true upheaval from 2003 onwards. Furthermore, Internet trading and thereafter derivative trading was introduced by Government of India during the year 2000 when since investments from foreign institutional investors started pouring in. Therefore, besides the economic prosperity or irrespective of economic prosperity, an investment boom could happen since exchange rate decline was rendering extra income/capital appreciation for foreign institutional investors. The article describes as to how investments from foreign investors have influenced mania in Indian share market and consequently driven the country on the verge of bankruptcy and/or virtual financial crash that may happen any ti |
| Keywords: | Globalization; decontrolling of economy; investments; foreign institutional investors; market index; India; Indian capital market |
| JEL: | G14 F41 |
| Date: | 2007–02–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:1778&r=cwa |
| By: | Mayur, Manas; Kumar, Manoj |
| Abstract: | This paper examines the determinants of the going public decision of the Indian companies. A probit regression model is used to analyze the influence of fundamental financial data of Indian companies on their going public decision. The size, profitability, age and leverage emerged as the significant determinants of going public decision of Indian companies. The statistically insignificant relationship between the financing needs and likelihood of an IPO found in our study is similar to the Pagano et al.,1998 and contrary to the findings of several other studies done on same issue. |
| Keywords: | Initial Public Offerings; Going public decision; emerging markets; India |
| JEL: | G10 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:1801&r=cwa |
| By: | Basant, R. & Commander, S. & Harrison, R. & Menezes Filho, N. A. |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:ibm:ibmecp:wpe_68&r=cwa |
| By: | Chetan Ghate |
| Abstract: | We construct a simple political economy model with imperfect capital markets to explain infrastructure investments across Indian states. The model predicts that: i) the fixed cost of accessing the modern sector, ii) the initial stock of infrastructure, iii) median voter wealth, and iv) corruption, can all potentially explain why different states have different level of infrastructure investments. The theoretical model is motivated by recent empirical work on India that argues that there as on why per capita income across Indian states have diverged is because of the distribution of infrastructure investments. The model suggests that reducing leakages in funds earmarked for infrastructure and reducing the ?xed costs of accessing the modern sector - beyond their other well known effects - are policy complements. Together, they can incentivize politicians to spend more on infrastructure. |
| Keywords: | Public investment, positive political economy, median voter theorem |
| JEL: | P16 E43 O40 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:esi:egpdis:2007-07&r=cwa |
| By: | Mete Feridun (Department of Economics, Loughborough University) |
| Abstract: | This article aims at identifying the determinants of currency crises in Turkey the period 1980:01-2006:06. Following a general-to-specific model selection methodology, a broad set of pre-selected variables were tested through bivariate logit regressions. Significant variables were then used in a multivariate logit model. Strong evidence emerged that current account balance/GDP, short-term debt/long-term debt, domestic credit/GDP, foreign liabilities/foreign assets of banks, and fiscal balance/GDP are significant with correct signs. The measures of goodness-of-fit and in-sample predictive power of the model turned out to be favorable. The resulting model correctly calls 87.18% and 73.08% of the months at 10% and 20% levels, respectively. |
| Keywords: | Speculative attacks; currency crises; logit model, Turkey. |
| JEL: | F30 E44 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2007_01&r=cwa |
| By: | Abay Asfaw (International Food Policy Research Institute); Stephan Klasen (Göttingen University and IZA); Francesca Lamanna (Göttingen University) |
| Abstract: | The excess female mortality in India and other South Asian countries is no longer contentious. Less known are the reasons for such excess female mortality in the country. In this study, we argue that intra-household gender-discrimination in receipt of medical attention can be one of the most important factors for the unbalanced sex ratio in the country. The 52nd Indian National Sample Survey, which collected for the first time detailed verbal autopsies of deceased persons, is used in the analysis. Place of death, which indicates whether a person get medical help immediately before her/his death, is used as a health indicator variable. The multinomial logit results show that keeping all other factors constant, girls are 1.7 percent less likely to die in hospital than their brothers. The coefficients of different interaction variables also reveal that the probability of infant and very young girls with live female siblings to die in hospital is extremely low. The robustness of the results is also checked using different indicators. The results confirm that girls are highly discriminated in access to hospital treatment and in the number of times being hospitalized before their death compared to boys. Therefore, in addition to the current effort of the government to control sex-selective abortions, efforts should be made to reduce the current intra-household gender-disparities in getting medical care at least for life threatening illnesses. |
| Keywords: | gender discrimination, access to health care, place of death, India |
| JEL: | D63 I12 J16 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2586&r=cwa |
| By: | Mete Feridun (Department of Economics, Loughborough University) |
| Abstract: | This article aims at identifying the leading indicators of currency crises in Turkey in its post-liberalization history through the signals approach introduced by Kaminsky et al (1998). Based on a broad set of potential indicators, a number of variables are found to be persistently signaling the currency crises during the period 1980:01-2006:06. Particularly, variables such as short-term debt/international reserves, imports, exports, M2/international reserves, and current account balance/GDP are consistent with the results of previous work in the literature. Analysis of the average lead time of the indicators reveals that the first signal is issued 4.4 months before a crisis erupts with public debt/GDP offering the longest lead time with 10.2 months, and government consumption/GDP offering the shortest with 2.2 months. Analysis of the persistence of the indicators reveals that the indicator issuing the most persistent signals is the government consumption/GDP and the one issuing the least persistent signals is FDI/GDP. Results are encouraging from the vantage point of an early warning system since signaling, on average, occurs sufficiently early to allow preemptive policy actions. |
| Keywords: | Speculative attacks; currency crises; signals approach, Turkey. |
| JEL: | F30 E44 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2006_26&r=cwa |
| By: | Erdogdu, Oya |
| Abstract: | The permanent income hypothesis states a strong relationship between household consumption and lifetime income. Based on this argument, this study, following previous studies in that respect, analyzes the possible impact of expectations in this relationship in case of uncertainty in the model. The empirical analyses for Turkey could not find a statistically significant relationship between household consumption, income and confidence index which is used as a proxy for income expectations. However, besides, expectations on purchasing power and employmet opportunities having statistically significant effect on household consumption expenditures, they do decrease the percentage of unexplained variance. |
| Keywords: | Consumption; expectations; confidence index |
| JEL: | E21 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:1764&r=cwa |
| By: | Necmiddin Bagdadioglu (Dept of Public Finance, Haceteppe University, Turkey); Thomas Weyman-Jones (Department of Economics, Loughborough University, UK) |
| Abstract: | This paper considers panel data procedures for regulatory benchmarking that allow for both latent heterogeneity and inefficiency, encapsulating the regulatory dilemma in comparative efficiency analysis for incentive regulation. It applies a distance function model with appropriate concavity properties for econometric estimation to a panel of electricity distribution utilities in Turkey, since electricity industry reform is a major policy issue there. The results confirm the importance of allowing simultaneously for heterogeneity and inefficiency and emphasise the need for specific time-invariant heterogeneity information, such as geographical data, on regulated utilities in different regions. |
| Keywords: | efficiency and productivity analysis, regulation, electricity distribution. |
| JEL: | L51 D24 C23 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2007_03&r=cwa |
| By: | Raghuram G. |
| Abstract: | Indian Railways (IR), which was declared to be heading towards bankruptcy as per the Expert Group on Indian Railways in 2001, is today the second largest profit making Public Sector Undertaking after ONGC. The fund balance crossed Rs.12,000 crores in 2005-06, which had reached a low of just Rs.149 crores in 1990-2000. The total investment being planning for the eight-year time frame (2007-2015) is tentatively in the order of Rs.350,000 crores. This confidence is not only due to the rising trend of performance, but also due to the significant growth in the past two years. These two years coincided with Mr. Lalu Prasad being at the helm of affairs of the IR, having moved into his position on 23rd May, 2004. Railway officials called this as the ‘turnaround’ of IR. This paper attempts a diagnosis of the ‘turnaround,’ beginning with the question as to whether it really was a ‘turnaround’. This paper then carried out an analysis of the various determinants of the ‘turnaround’ related to goods, passenger and other operations. This is followed by a critical assessment of the strategies and key processes being the ‘turnaround’. Finally the sustainability of the ‘turnaround’ is explored. |
| Date: | 2007–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:2007-02-03&r=cwa |
| By: | Morris Sebastian |
| Abstract: | Multilateral agencies and economists with much influence have been urging laissez-faire in agriculture. While success with the rich countries has been minimal despite the commitments under the WTO, many poor countries with much agricultural potential in the long run have been coaxed to adopt near free trade in agriculture with disastrous results especially for the poor in these economies. There are fundamental problems in achieving even global (leave aside optimum for any particular country) optimality through world trade in agriculture given the immovability of land. Additionally the fact that poor countries start their transformation process with much of their population engaged in agriculture imposes special requirements upon agriculture. Incomes have to rise in agriculture to overcome poverty and to constitute rising domestic demand for modern manufactures and therefore the infant industry argument holds with additional force. We bring together the historical experience of agricultural development, the relationship between economic development and agriculture, trade in agriculture, the role of state action especially in the late industrialisation context. The differences between land endowed and land poor countries are recognised in their analyses. We develop a perspective on the comparative advantage of nations in agriculture and the evolution of the same. The metrics of agriculture and trade, arising out of the dynamics of the share of agriculture in GDP, the dependence of agriculture on land endowments, the biological limits to consumption of agricultural products, underlie a dynamic structural model of the revealed comparative advantage which is developed and tested using panel data from about 100 countries. The nature of agricultural products on several dimensions – its long lead in production, its perishability in some cases, its storability in others, but above all the grouping of many agricultural products into low price and income elasticity of demand – is used. The purpose is to draw insights that can usefully inform the content of state intervention, and trade policy especially from the point of view of a country like India which is likely to lose its comparative advantage in many agricultural products as incomes rise. The comparative advantage of countries in agriculture is most usefully characterized as rising of the arable land endowments per person and declining as the per capita income rises relative to the worlds “average” per capita income. A structural model on the lines above is estimated empirically. The Model is also dynamic since the rise in per capita incomes at a faster rate in transforming countries can be used as data to predict with a high degree of reliability that they would see a decline in their competitiveness. Similarly countries with low arable land per person would see a rapid fall in their competitiveness. Yet land abundance in poor countries does not automatically result in high competitiveness. [The abundance of easily mined other natural resources like fuels acting through the balance of payments could lower greatly the revealed competitiveness of agriculture]. To realize the same, much land has to be brought under the plough and enhanced, a task where the role of the state is important. Irrigation development as also the use of machinery on land enhances the competitiveness of agriculture. And the former is dependent much upon the ability of the state to put together public irrigation and support private irrigation. Even more importantly the investments in storage, market support, transportation, information provision, demonstration of new technologies and extension all of which are required at the beginning of the agricultural transformation require active intervention of the state. The problem for the poor countries with land abundance is compounded by the large distortion of international prices resulting from subsidization by rich countries as they face declining competitiveness in agriculture due to very high incomes. The coaxing of land rich poor countries in this situation to embrace laissez faire policies by the multilateral agencies is shameful and nothing short of suicide for these countries. The costs of subsidization in the rich countries are very small and the political benefits very large, so a roll back of subsidization is least likely. Agriculture is the first industry where surpluses can arise to stoke development as such. The historical evidence that no country of substantial size has been able to industrialize without a prior or simultaneous agricultural revolution has to be noted. And the infant industry argument is valid for agriculture as much as for industry. Both these further condemn the laissez faire position. Protection of agriculture is therefore the least distortionary way for the “large” land-poor poor countries as they advance to protect their employment. Protection alone without active support of the state to overcome the significant market distortions in agriculture and its inputs may not be enough. Protection in land scarce economies ought to be scaled down only as such economies are able to absorb labour shed by an advancing agriculture in other segments of the economy. Functionality also demands that the role of the state in agriculture and subsidization recognizes not only the market failures arising out of the public good nature of many inputs, but also the perversities that low price and income elasticities, when combined with the long “lead” can bring to the functioning of markets. Similarly the structure of the value chain from production to final consumption in distant lands – especially the fact that the aggregators and processors in the value chain would be able to capture rents – creates the basis for a crucial role for the state in trading, stocking and processing. Shortages and variations in output again create the need for buffer stocking. Successful late agricultural transformations have been built upon the state playing these roles. The state’s role in processing while crucial has not generally been successfully realised, the complexity of the tasks being a basic bottleneck. Laissez faire policies in agriculture when without reference to the stage of development, and state failure to compensate for the market perversities underlie the disaster that agriculture has been for poor countries with much agricultural potential. |
| Keywords: | Corn-Laws; dynamic comparative advantage; protection; produced-good, agriculture; metrical-analysis; land-endowment; cross-country regression; international trade; export-led-growth; India; poor-countries |
| Date: | 2007–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:2007-02-02&r=cwa |
| By: | Waheed, Muhammad; Alam, Tasneem; Ghauri, Saghir Pervaiz |
| Abstract: | The purpose of this paper is to examine the unit root properties of eleven Pakistani macroeconomic series using annual data. Along with traditional unit root tests, we use the procedure developed by Zivot and Andrews to test the null of unit root against the break-stationary alternative. Conventional unit root tests indicate that all variable are non-stationary at the levels. Results from Zivot and Andrews test suggest that we can reject the null of unit root for CPI and WPI at 5 percent significance level while we fail to reject the unit root hypothesis for the remaining 9 series. At the same time, the Zivot and Andrews test identifies endogenously the point of the single most significant structural break in every time series examined. The results show that ten of the eleven series studied bear witness to the presence of a structural break during the period 1972 to 1976. |
| Keywords: | Structural break; unit root; pakistan |
| JEL: | C22 |
| Date: | 2006–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:1797&r=cwa |
| By: | Terry McKinley (International Poverty Centre) |
| Abstract: | The U.S. economy is monopolizing global net savings, i.e., about two-thirds of the total. Other rich countries, such as Japan and Germany, oil exporters, such as Saudi Arabia, middleincome countries, such as China, and even some low-income countries, such as India and Indonesia, export capital to finance yearly U.S. current-account deficits. The resulting global imbalances are neither sustainable nor equitable. Capital should be recycled to poorer countries, instead of funneled, overwhelmingly, to the world’s largest rich country. Low-income countries need a substantially higher injection of real external resources and should be allowed to pursue more expansionary, growth-oriented economic policies. Blaming capital-exporting developing countries, such as China, for global imbalances is not the answer. Such countries are merely succeeding in developing rapidly. Other rich countries, which account for most capital exports, have to take the lead in dramatically restructuring their expenditures. They will be able thereafter to absorb a greater share of developing-country exports. The danger of a recession in the U.S. is rising, threatening growth in the rest of the world. U.S. policymakers have to move aggressively to contain private consumption, especially real estate spending, in favor of productive private investment, and boost exports relative to imports. Without such a structural adjustment, the danger of a ‘hard landing’ for the U.S. economy—and, by implication, for the rest of the world—will escalate. |
| Keywords: | Global capital flows, world economy, structural adjustment, poverty |
| JEL: | B41 D11 D12 E31 I32 O54 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:0012&r=cwa |
| By: | Shareen Joshi (University of Chicago); T. Paul Schultz (Economic Growth Center, Yale University) |
| Abstract: | The paper analyzes 141 villages in Matlab, Bangladesh from 1974 to 1996, in which half the villages received from 1977 to 1996 a door-to-door outreach family planning and maternal-child health program. Village and individual data confirm a decline in fertility of about 15 percent in the program villages compared with the control villages by 1982, as others have noted, which persists until 1996. The consequences of the program on a series of long run family welfare outcomes are then estimated in addition to fertility: women’s health, earnings and household assets, use of preventive health inputs, and finally the inter-generational effects on the health and schooling of the woman’s children. Within two decades many of these indicators of the welfare of women and their children improve significantly in conjunction with the program-induced decline in fertility and child mortality. This suggests social returns to this reproductive health program in rural South Asia have many facets beyond fertility reduction, which do not appear to dissipate over two decades. |
| Keywords: | Fertility, Family Planning, Gender and Development, Program Evaluation, Bangladesh |
| JEL: | O12 J13 I12 J16 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:egc:wpaper:951&r=cwa |