nep-dev New Economics Papers
on Development
Issue of 2005‒06‒27
seven papers chosen by
Jeong-Joon Lee
Towson University

  1. Buyback of Colombian Sovereign Debt By Peter Rowland
  2. Economic growth, convergence and quality of human capital formation system By Luciano Nakabashi; Lízia de Figueiredo
  3. The New Growth Theoris and their Empirics By Rosa Capolupo
  4. Overseas R&D Activities by Multinational Enterprises: Evidence from Japanese Firm-Level Data By Yasuyuki Todo; Satoshi Shimizutani
  5. Determinant Factors of FDI Spillovers – What Do We Really Know? By Nuno Crespo; Maria Paula Fontoura
  6. The benefits of liberalising product markets and reducing barriers to international trade and investment: the case of the United States and the European Union By OECD Economics Department
  7. Credit Crunch in East Asia: A Retrospective By Masahiro Enya; Akira Kohsaka; Mervin Pobre

  1. By: Peter Rowland
    Abstract: At a request from the Ministry of Finance, Banco de la República last year carried out an investigation into the feasibility to use parts of the foreign reserves to buy back some of Colombia’s outstanding sovereign U.S.-dollar debt. This project resulted in two thorough technical reports. This paper aims to complement these reports by a general discussion on the subject. Even if many economists will find the discussion and the empirical results interesting, the main target group of the paper is professionals and policy makers without a background in Economics or Finance. The paper discusses emerging market debt in general, the Colombian debt in particular, and the current level of the Colombian foreign reserves. It, thereafter, continues by discussing buyback of sovereign debt, and what a country could gain or lose from such a buyback and why. The paper also includes a cross-country empirical analysis of the relationship between the sovereign spread of the outstanding debt of a country and its foreign reserve levels.
  2. By: Luciano Nakabashi (Cedeplar-UFMG); Lízia de Figueiredo (Cedeplar-UFMG)
    Abstract: This paper’s goal is to make use of a human capital proxy that takes into account quantitative and qualitative aspects of this factor to measure with a higher level of accuracy the impact of human capital on countries’ income level and rate of growth. The empirical study will take place by means of a comparative analysis of Mankiw, Romer and Weil’s 1992 paper.
    Keywords: human capital proxy, qualitative aspects of human capital
    JEL: C21 E13 I20 O11 O41
    Date: 2005–06
  3. By: Rosa Capolupo
    Abstract: The aim of this paper is to update the reviews on endogenous growth theories in order to explore whether recent empirical studies are more supportive of their main predictions. Among the core topics studied in the growth econometric framework, namely, convergence, identifications of growth determinants and factors responsible of growth differences in the data, the primary focus of this paper is on the last two. Since the use of econometrics was originally motivated by convergence issues, in this work we will review econometric studies that test primarily the relevance of endogenous models in terms of significance and robustness of growth’s determinant coefficients. We argue that: (i) causal inference drawn from the empirical growth literature remains highly questionable, ii) there are estimates for a wide range of potential factors but their magnitude and robustness are still under debate. Overall, however, if properly interpreted, endogenous growth models' predictions are increasingly gaining empirical support.
    JEL: O47 O41 C31
  4. By: Yasuyuki Todo; Satoshi Shimizutani
    Abstract: This paper investigates both the determinants and the impact of overseas subsidiaries' R&D activities, using firm-level panel data for Japanese multinational enterprises. We distinguish between overseas innovative and adaptive R&D and find substantial differences between the two types of R&D. The evidence suggests that overseas innovative R&D aims at the exploitation of foreign advanced knowledge, and by doing so, it helps to raise the productivity of the parent firm. In contrast, the primary role of overseas adaptive R&D is to enhance the productivity of overseas subsidiaries through the use of parent firms' knowledge. In addition, we find no complementarity between home and overseas innovative R&D, i.e., no evidence that overseas innovative R&D raises the marginal effect of home R&D on home productivity.
    Keywords: overseas R&D activities, multinational enterprises, total factor productivity
    JEL: F23 O30
    Date: 2005–05
  5. By: Nuno Crespo; Maria Paula Fontoura
    Abstract: Empirical evidence about FDI spillovers to domestic firms has provided mixed results. This global evaluation has recently been complemented with the analysis of the factors that determine the existence, dimension and sign of FDI spillovers. We survey the arguments that support these factors and analyze the empirical evidence already produced. FDI spillovers depend on many factors, frequently with an indeterminate effect. Absorptive capacity of domestic firms and regions are a precondition for incorporating the benefits of FDI spillovers. Concerning the remaining factors, the results suggest opposite effects or, in some cases, are still insufficient to legitimate decisive conclusions.
    Keywords: productivity; spillovers; FDI; determinant factors.
    JEL: O12 F23
  6. By: OECD Economics Department
    Abstract: This paper provides an assessment of the impact of a package of structural reforms in the European Union and the United States on long-run trade and output gains accruing to OECD countries. The package includes reforms that reduce competition-restraining regulations, cut tariff barriers and ease restrictions on foreign direct investment to "best practice" levels in the OECD area. The analysis, which is based on earlier OECD studies, indicates that such reforms could lead to gains in GDP per capita in both transatlantic areas of up to 3 to 3 ½ per cent. Moreover, due to trade linkages, the benefits of reforms in the United States and the European Union would spread to other OECD countries, with an estimated increase in GDP per capita of up to 1½ per cent. As the analysis is confined to a relatively narrow set of policies and abstracts from potential dynamic effects from reform-induced increase in innovation, the overall gains from broad reforms could be significantly higher than reported in the paper. <p> Les bénéfices de la libéralisation des marchés de produits et de la réduction des barrières aux échanges et aux investissements internationaux: le cas des Etats-Unis et de l'Union européenne <p> Ce document offre une évaluation des réformes globales structurelles en Europe et aux États-Unis sur les échanges et la croissance de long terme dans les pays de l'OCDE. Ces réformes incluent l'ensemble des mesures politiques visant la réduction de la réglementation anti-compétitive, la baisse des barrières tarifaires et des restrictions sur les investissements directs étrangers vers les "meilleures pratiques" observées au sein des pays de l'OCDE. L'analyse, qui s'appuie sur de précédents travaux de l'OCDE, montre que de telles réformes peuvent conduire à une augmentation du PIB par habitant entre 3 et 3½ pour cent. De plus, en raison d'effets de transmission via les échanges, le bénéfice des réformes en Europe et aux États-Unis devrait se répandre à l'ensemble des autres pays de l'OCDE conduisant à une augmentation du PIB moyen par habitant de plus de 1½ pour cent. Étant donné que l'analyse ne couvre qu'un nombre de mesures spécifiques et exclut les effets dynamiques potentiels de l'innovation, les bénéfices tirés d'un ensemble de réformes beaucoup plus large pourraient bien être plus élevés que ceux reportés dans ce document.
    Keywords: international trade; foreign direct investment; regulation; growth and productivity;United States; European Union
    JEL: F13 F21 K2 O4
    Date: 2005–06–07
  7. By: Masahiro Enya (Faculty of Politics, Economics and Law, Osaka International University); Akira Kohsaka (Osaka School of International Public Policy, Osaka University); Mervin Pobre (Osaka School of International Public Policy, Osaka University)
    Abstract: In this paper, we explore the issue on credit crunch from a comparative perspective. Utilizing longer time series data, we investigate the existence of credit crunch in selected crisis-hit economies in East Asia over the period 1980-2002. We detected some episodes of credit crunch both before and after the Asian economic crisis. These episodes after the Crisis are somewhat different from those detected by previous studies on the issue. We, then, review the credit-crunch episodes in the broad macroeconomic context in order to assess our results in the longer-run perspective. We are well aware that financial liberalization has changed the financial environments of these countries more or less in due course. Even so, the mixed results we obtained on the existence of credit crunch do not suggest that the impact of the austerity programs on financial intermediation after the Asian Crisis was ambiguous. On the contrary, they implied that the impact of the programs were so severe that credit crunch or supply retrenchment was overwhelmed by a sharp fall in credit demand because of real and expected persistent overall economic depression.
    Keywords: human capital; credit crunch, East Asia, Asian Economic Crisis, disequilibrium analysis
    JEL: E5 O11 O53
    Date: 2004–03

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