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on Central and Western Asia |
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Issue of 2011‒05‒30
eighteen papers chosen by Bibhu Prasad Nayak Institute for Social and Economic Change |
| By: | Beck, T.H.L. (Tilburg University, Center for Economic Research) |
| Abstract: | This paper shows that the finance and growth relationship is as important in resource-based economies as in other economies. This paper also documents less developed financial systems in resource-based economies and banks that are more liquid, better capitalized and more profitable, but give fewer loans to firms. Firms in resource-based economies use less external finance and a smaller share of them uses bank loans, although there is the same level of demand as in other countries, thus pointing to supply constraints. Overall, there is some indication of a natural resource curse in financial development, which falls more on enterprises than on households. This calls for intensified efforts in resource-based economies to deepen and broaden financial systems. |
| Keywords: | Financial Development;Natural Resource Curse. |
| JEL: | G10 G20 Q39 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2011017&r=cwa |
| By: | Gulumser, A.A.; Baycan, T.; Nijkamp, P. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:vuarem:2011-21&r=cwa |
| By: | Poghosyan, K.; Magnus, J.R. (Tilburg University, Center for Economic Research) |
| Abstract: | Two model averaging approaches are used and compared in estimating and forecasting dynamic factor models, the well-known BMA and the recently developed WALS. Both methods propose to combine frequentist estimators using Bayesian weights. We apply our framework to the Armenian economy using quarterly data from 2000–2010, and we estimate and forecast real GDP and inflation dynamics. |
| Keywords: | Dynamic models;Factor analysis;Model averaging;Monte Carlo;Armenia. |
| JEL: | C11 C13 C52 C53 E52 E58 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2011054&r=cwa |
| By: | Dehghan Nejad, Omid |
| Abstract: | The methods of determining the banking interest rate are the main issues in the Iranian economy, this note provides the analysis of banking interest rate and the ways of providing and allocating financial resources in Iran and also, discusses why the financial repression policies in the monetary and banking system do not allow the Iranian economy to growth in its full capacity. |
| Keywords: | Banking Interest Rate; Financial Repression; Monetary and Banking System; Financial Resources |
| JEL: | E5 |
| Date: | 2011–04–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:30924&r=cwa |
| By: | Akgun, A.A.; Baycan Levent, T.; Nijkamp, P. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:vuarem:2011-8&r=cwa |
| By: | Omay, Tolga; Takay Araz, Bahar; Ilalan, Deniz |
| Abstract: | In this study, we examine the relationship between foreign direct investment and terrorist incidents that took place in Turkey for the period from 1991:12 to 2003:12. This research contributes to the literature by checking for a possible non-linear relationship between terrorism and foreign direct investment. The data used to measure the intensity of terrorism were collected from the newspapers of Turkey, and therefore are limited to the direct signals given to the market. Empirical evidence from both linear and non-linear models confirms that terrorism has a large significant negative impact on foreign direct investment. With respect to the nonlinear model, the impact of terrorism on the foreign direct investment is more severe during periods of high terrorism when the intensity of terrorism passes the threshold level 3.725. |
| Keywords: | Terror; FDI, Smoot Transition Model |
| JEL: | C22 F21 J18 |
| Date: | 2011–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31015&r=cwa |
| By: | Stefanie Glotzbach (Sustainability Economics Group, Leuphana University of Lüneburg, Germany) |
| Abstract: | The increasing loss of ecosystem services severely affects life perspectives of today’s poor and future persons. Thus, governing the use of ecosystem services in an intragenerational and intergenerational just way is an urgent issue. I develop a conception of ecological justice that establishes the specific link between justice and ecosystem services, and argue that specific demands on a conception of ecological justice follow from determining ecosystem services as objects of justice. Showing that Rawls’ “A Theory of Justice” (1971) can consistently meet the identified demands, I verify that it is an appropriate theory for deriving a conception of ecological justice. |
| Keywords: | ecological justice, ecosystem services, global justice, intergenerational justice, environmental ethics. |
| JEL: | Q56 Q57 Q19 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:204&r=cwa |
| By: | FUSCO Alessio; SILBER Jacques |
| Abstract: | This paper aims at proposing measures of polarization for the distribution of a variable when information on the latter is only ordinal. The measures proposed are borrowed from the recent literature on the measurement of segregation. An empirical illustration is given, based on the European Union Statistics on Income and Living Conditions (EU-SILC) for the year 2008. The ordinal variable refers to the „ability to make ends meet? and polarization is measured between groups defined by the citizenship of the household member who answered the household questionnaire. Results show that Luxembourg and Estonia have the highest degree of polarization whereas Cyprus, Ireland and the United Kingdom display the lowest degree. |
| Keywords: | polarization; ordinal information; EU-SILC; segregation |
| JEL: | D31 D63 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2011-33&r=cwa |
| By: | Hasnain, Zahid |
| Abstract: | Why do politicians distort public investments? And given that public investments are poor because presumably that is what is politically rational, what types of reforms are likely to be both efficiency improving and compatible with the interests of politicians? This paper explores these two questions in the context of Mongolia. It argues that Mongolian members of parliament have an incentive to over-spend on smaller projects that bring benefits to specific geographical localities and to under-spend on large infrastructure that would bring economic benefits to Mongolia on the whole. The incentive for the former is that members of parliament internalize the political benefits from the provision of particular, targeted benefits to specific communities. The disincentive for the latter is that large infrastructure carries a political risk because the political faction in control of that particular ministry would have access to huge rents and become politically too powerful. The identity of these"winners"is uncertain ex ante, given the relatively egalitarian and ethnically homogenous nature of Mongolia's society and polity. Anticipating this risk, members of parliament are reluctant to fund these projects. Since these large infrastructure projects are crucial for national growth, neglecting them hurts all members of parliament. Members of parliament will therefore support reforms that collectively tie their hands by safeguarding large, strategic investment projects from political interference thereby ensuring that no political faction becomes too powerful. This protection of mega-projects would need to be part of a bargain that also allows geographical targeting of some percentage of the capital budget. |
| Keywords: | Debt Markets,Public Sector Expenditure Policy,Political Economy,Access to Finance,Parliamentary Government |
| Date: | 2011–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5667&r=cwa |
| By: | Elena Meschi (CEE, Institute of Education, University of London); Erol Taymaz (Department of Economics, Middle East Technical University, Ankara); Marco Vivarelli (DISES, Università Cattolica del Sacro Cuore - Piacenza) |
| Abstract: | In this paper we report evidence on the relationship between trade openness, technology adoption and the relative demand for skilled labour in the Turkish manufacturing sector, using firm level data over the period 1980-2001. In a dynamic panel data setting, using a unique database comprising data from 17,462 firms, we estimate an augmented cost share equation whereby the wage bill share of skilled workers in a given firm is related to international exposure and technology adoption. Both at the sectoral and firm level, it emerged that R&D expenditures are positive and significantly related to skill upgrading. This result supports the skill biased technological change argument in the case of a middle-income country such as Turkey. Moreover, the sectoral analysis revealed that increasing export towards more industrialised countries (mainly the E.U.) tends to shift the production toward less skill-intensive activities. While this result is consistent with the HOSS theorem, on the other hand import penetration from more developed countries turns out to facilitate the adoption of new technologies embodied in capital and intermediate goods, thus shifting the production toward more skill-intensive technologies. This result is confirmed by the firm level analysis that finds a positive impact of technological transfer from abroad, foreign ownership and export on the demand for skills, highlighting the role of increasing globalisation in fostering skill upgrading within firms. Our microdata also allowed us to investigate the direct impact of import flows in shaping the relative demand for skills. The results showed that those firms belonging to the sectors that most raised their inputs from more developed countries also experienced a higher increase in their labour cost share of skilled workers. This finding is a further support to the hypothesis that imports from industrialised countries imply a transfer of new technologies, in turn leading to a higher demand for skilled labour. |
| Keywords: | globalization, technology transfer, skills, panel data, GMM-SYS |
| JEL: | F16 O15 O33 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie2:dises1062&r=cwa |
| By: | Gibson, John; McKenzie, David |
| Abstract: | High-skilled emigration is an emotive issue that in popular discourse is often referred to as brain drain, conjuring images of extremely negative impacts on developing countries. Recent discussions of brain gain, diaspora effects, and other advantages of migration have been used to argue against this, but much of the discussion has been absent of evidence. This paper builds upon a new wave of empirical research to answer eight key questions underlying much of the brain drain debate: 1) What is brain drain? 2) Why should economists care about it? 3) Is brain drain increasing? 4) Is there a positive relationship between skilled and unskilled migration? 5) What makes brain drain more likely? 6) Does brain gain exist? 7) Do high-skilled workers remit, invest, and share knowledge back home? and 8) What do we know about the fiscal and production externalities of brain drain? |
| Keywords: | Population Policies,Tertiary Education,International Migration,Health Monitoring&Evaluation,Remittances |
| Date: | 2011–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5668&r=cwa |
| By: | Dominic Rohner (Department of Economics, University of Zurich); Mathias Thoenig (Department of Economics, University of Lausanne); Fabrizio Zilibottix (Department of Economics, University of Zurich) |
| Abstract: | We construct a dynamic theory of civil conflict hinging on inter-ethnic trust and trade. The model economy is inhabited by two ethnic groups. Inter-ethnic trade requires imperfectly observed bilateral investments and one group has to form beliefs on the average propensity to trade of the other group. Since conflict disrupts trade, the onset of a conflict signals that the aggressor has a low propensity to trade. Agents observe the history of conflicts and update their beliefs over time, transmitting them to the next generation. The theory bears a set of testable predictions. First, war is a stochastic process whose frequency depends on the state of endogenous beliefs. Second, the probability of future conflicts increases after each conflict episode. Third, "accidental" conflicts that do not reflect economic fundamentals can lead to a permanent breakdown of trust, plunging a society into a vicious cycle of recurrent conflicts (a war trap). The incidence of conflict can be reduced by policies abating cultural barriers, fostering inter-ethnic trade and human capital, and shifting beliefs. Coercive peace policies such as peacekeeping forces or externally imposed regime changes have instead no persistent effects. |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:hic:wpaper:95&r=cwa |
| By: | Gerald Eisenkopf (Department of Economics, University of Konstanz, Germany); Ruslan Gurtoviy (Department of Business Administration, University of Trier, Germany); Verena Utikal (Department of Economics, University of Erlangen-Nürnberg, Germany) |
| Abstract: | A small lie appears trivial but it obviously violates moral commandments. We analyze whether the preference for others’ truth telling is absolute or depends on the size of a lie. In a laboratory experiment we compare punishment for different sizes of lies controlling for the resulting economic harm. We find that people are sensitive to the size of a lie and that this behavioural pattern is driven by honest people. People who lie themselves punish softly in any context. |
| Keywords: | Lying, norm violation, punishment, experiment |
| JEL: | C91 D82 |
| Date: | 2011–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1114&r=cwa |
| By: | Leeuwen, E.S. van; Nijkamp, P.; Rietveld, P. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:vuarem:2011-18&r=cwa |
| By: | Tao Kong |
| Abstract: | Among both academics and the wider development community there seems to be a general acceptance of the value of good governance and its role in promoting economic growth. However, beyond this general statement, there is a lack of deeper theoretical understanding as to why good governance is expected to foster economic growth and how such effects may take place. We de.ne governance quality as the capacity of a government to internalize externality. A theoretical model is developed to formally integrate governance quality into an endogenous growth framework. We elucidate the underlying mechanisms, through which governance quality affects economic performance: governance quality affects the productivity of public investment and in turn has an impact on economic performance. We also highlight that the endogeneity of governance quality and development stages have strong implications for the governance-growth relationship. |
| JEL: | O41 O43 P16 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:acb:cbeeco:2011-537&r=cwa |
| By: | Jensen, Jesper; Tarr, David G. |
| Abstract: | This paper develops an innovative 21 sector computable general equilibrium model of Armenia to assess the impact on Armenia of a Deep and Comprehensive Free Trade Agreement with the European Union, as well as further regional or multilateral trade policy commitments. The analysis finds that such an agreement with the European Union will likely result in substantial gains to Armenia, but shows that the gains derive from the deep aspects of the agreement. In order of importance, the sources of the gains are: (i) trade facilitation and reduction in border costs; (ii) services liberalization; and (iii) standards harmonization. A shallow agreement with the European Union that focuses only on preferential tariff liberalization in goods will likely lead to small losses to Armenia primarily due to a loss of productivity from lost varieties of technologies from the rest of the world region in manufactured products. Additional gains can be expected in the long run from an improvement in the investment climate. The authors estimate only small gains from a services agreement with countries of the Commonwealth of Independent States, but significant gains from expanding services liberalization multilaterally. |
| Keywords: | Economic Theory&Research,Transport Economics Policy&Planning,Emerging Markets,Free Trade,Trade Policy |
| Date: | 2011–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5662&r=cwa |
| By: | Davide Castellani (Department of Economics, Finance and Statistics, Università di Perugia); Alfredo Jimenez Palmero (Department of Economics and Business Administration, University of Burgos, Spain); Antonello Zanfei (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo") |
| Abstract: | The negative effect of distance is justified by the existence of transport costs which hamper the international exchange of final and intermediate goods, and by higher uncertainty about local markets. We submit that distance plays a remarkably different role in the case of R&D FDIs since they mainly involve the international transfer, absorption and use of knowledge. Using data on bilateral investment projects in R&D, manufacturing and other business activities between 58 countries, we find that geographic distance does not hinder R&D FDIs as much as in the case of production and other investment activities. Furthermore, once we control for institutional and psychic distance, in particular language and religious differences, the negative effect of geographic distance vanishes. |
| Keywords: | Multinational Firms, International Business, Technological Change, Choices and Consequences, Diffusion Processes. |
| JEL: | F23 O33 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:urb:wpaper:11_06&r=cwa |
| By: | Christoph Böhringer, Bouwe Dijkstra and Knut Einar Rosendahl (Statistics Norway) |
| Abstract: | We consider an international emissions trading scheme with partial sectoral and regional coverage. Sectoral and regional expansion of the trading scheme is beneficial in aggregate, but not necessarily for individual countries. We simulate international CO2 emission quota markets using marginal abatement cost functions and the Copenhagen 2020 climate policy targets for selected countries that strategically allocate emissions in a bid to manipulate the quota price. Quota exporters and importers generally have conflicting interests about admitting more countries to the trading coalition, and our results indicate that some countries may lose substantially when the coalition expands in terms of new countries. For a given coalition, expanding sectoral coverage makes most countries better off, but some countries (notably the USA and Russia) may lose out due to loss of strategic advantages. In general, exporters tend to have stronger strategic power than importers. |
| Keywords: | Emissions Trading; Allocation of Quotas; Strategic Behavior |
| JEL: | C61 C72 Q25 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:654&r=cwa |