nep-dev New Economics Papers
on Development
Issue of 2011‒06‒04
seven papers chosen by
Mark Lee
Towson University

  1. Capital formation in new cooperatives in China: policy and practice By Li Zhao
  2. Public and Private Institutional Responses to Advocacy Attacks: The Case of the Global Cocoa Industry and Child Labour Abuse By Clark, Alexandra; Gow, Hamish
  3. Labour market integration and its effect on child labour By Gärtner, Manfred
  4. FDI and growth: what cross-country industry data say By Cipollina, Maria; Giovannetti, Giorgia; Pietrovito, Filomena; Pozzolo, Alberto Franco
  5. Civil War and Human Development: Impacts of Finance and Financial Infrastructure By Baddeley, M.
  6. Schooling is Associated Not Only with Long-Run Wages, But Also with Wage Risks and Disability Risks: The Pakistani Experience By Asma Hyder; Jere R. Behrman
  7. Trade Liberalization and the Wage Skill Premium: Evidence from Indonesia By Amiti, Mary; Cameron, Lisa

  1. By: Li Zhao
    Abstract: This paper aims to fill one knowledge gap on understanding the issue of capital formation in new co-operatives in developing countries. By doing so, it presents the main findings of capital formation and investment in a small sample of horticulture shareholding co-operatives in rural China, because shareholding co-operatives, as one best example of new multi-stakeholder co-operatives in China, have become a vehicle to mobilize additional resources. To better understand shareholder co-operatives’ stakeholder heterogeneity, two main groups of stakeholders are identified, namely, member stakeholders (investor-members and patron-members) and non-member stakeholders (non-member investors and non-member donors/grant-givers). Following a brief theoretical overview concerning co-operative multi-stakeholdership and capital acquisition and constraints, I then analyze both the rules-in-form and rules-in-use with respect to the co-operative stakeholders’ capital involvement in China. Cases observed indicate a hybridization feature of the co-operative capital base, including member contributions, public subsidies, income from the market sale, institutional capital and social capital. There exist at least four ways to raise equity capital from co-operative members. External capital comes mostly from direct government support in the form of grants and project funding, and indirect financial support through preferential treatment and policies. Different from the situation in the West, debt capital does not appear to be a widely-used traditional financing source. New co-operatives in China have difficulty even in borrowing short-term debt, not to mention receiving long-term loans. Also specialized/non-traditional external capital sources such as those provided by co-operative banks do not suffice. Co-operative banks are not always ready to provide micro-credit to co-operatives. Only when the government plays an active role, this lending process is facilitated. Many innovative financial systems are also observed in the field, which facilitate the mobilization of more external capital for co-operatives.
    Keywords: Capital Formation, Co-operative, Multi-stakeholder, China
    JEL: H44 K29 O13 P13 P26 Q13 Q18
    Date: 2011
  2. By: Clark, Alexandra; Gow, Hamish
    Abstract: Over the past decade the global agri-food industry has come under increasing attack by advocacy groups related to their production and marketing processes (Bowmar and Gow, 2009). Advocacy groups have used these attacks to exploit the growing intergenerational disconnect between consumers and farming to campaign for narrowly defined political ideals while challenging traditional agricultural practices (Olin, 1999). This disconnect has provided advocacy groups the opportunity to use boycotts and other media attacks to severely adverse impact not only branded manufacturers and retailers, but their farmer suppliers. The agri-food industryâs challenge is to understand how to develop appropriate individual and collective responses to these attacks that minimize their current and future adverse impact and provide mutually beneficial outcomes for all of the channel members. Using an instrumental case study of the international cocoa and chocolate industryâs response to the child labour abuse and trafficking claims, we analyse and evaluate the alternative individual and collective responses that firms can implement to minimize their current and future adverse impact from advocacy attacks and provide mutually beneficial outcomes for all of the channel members. This paper follows a comparative institutional analysis methodology to analyse the multiple nested case studies and evaluate the impact and implications of each alternative.
    Keywords: Certification, Advocacy, Cocoa, Chocolate, Agribusiness, Agricultural and Food Policy, Community/Rural/Urban Development, Environmental Economics and Policy, International Development, Marketing,
    Date: 2011
  3. By: Gärtner, Manfred
    Abstract: This note demonstrates that when developing countries remove barriers to migration and integrate their labour markets, children may be driven out of schools and into informal or paid employment in the comparatively rich countries. In industrialized countries, the same mechanism might force individuals or families to hold multiple jobs, into public welfare programs or into government-subsidized employment.
    Keywords: Labour market, migration, integration, child labour, subsistence, minimum wage.
    JEL: J13 O15
    Date: 2011–05
  4. By: Cipollina, Maria; Giovannetti, Giorgia; Pietrovito, Filomena; Pozzolo, Alberto Franco
    Keywords: Foreign Direct Investment, Economic Growth, Capital Intensity, Technological Progress, Total Factor Productivity
    Date: 2011–05–07
  5. By: Baddeley, M.
    Abstract: In this paper interactions between finance, development and armed conflict are explored to demonstrate that financial factors are crucial in sustaining conflict-underdevelopment feedback loops. Military expenditure drains resources, financial instability leads to conflict (and vice versa), war retards the development of financial institutions/infrastructure, and interactions between finance and conflict are exacerbated by distributional struggles. Some of these feedback effects are captured within a two-stage model of war, finance and development and this is used as the basis for an empirical analysis. Econometrically, the model is estimated using panel estimation and two stage Probit least squares (2SPLS) binary dependent variable estimation techniques to control for simultaneity and heterogeneity. The results suggest that financial constraints and financial instability increase the chances of civil war directly and, via negative impacts on development, indirectly too.
    JEL: O15 O16 O43 H56
    Date: 2011–02–24
  6. By: Asma Hyder (Business School, National University of Sciences and Technology, Islamabad); Jere R. Behrman (Department of Economics, University of Pennsylvania)
    Abstract: Many studies document significantly positive associations between schooling attainment and wages in developing countries. But when individuals enter occupations subsequent to completing their schooling, they not only face an expected work-life path of wages, but a number of other occupational characteristics, including wage risks and disability risks, for which there may be compensating wage differentials. This study examines the relations between schooling on one hand and mean wages and these two types of risks on the other hand, based on 77,685 individuals from the wage-earning population as recorded in six Labor Force Surveys of Pakistan. The results suggest that schooling is positively associated with mean total wages and wage rates, but has different associations with these two types of risks: Disability risks decline as schooling increases but wage risks, and even more, wage rate risks increase as schooling increases. The schooling-wage risks relation, but not the schooling-disability risks relation,is consistent with there being compensating differentials.
    Keywords: Wages, Risks, Labor Markets, Job Disabilities, Compensating Differentials,Developing Country, Schooling
    JEL: J31 J28 O53
    Date: 2011–05–09
  7. By: Amiti, Mary; Cameron, Lisa
    Abstract: In this paper, we analyze the effect of reducing import tariffs on intermediate inputs and final goods on the wage skill premium within firms in Indonesia – a country with a high share of unskilled workers. We present a new finding that reducing input tariffs reduces the wage skill premium within firms that import their intermediate inputs. However, we do not find significant effects from reducing tariffs on final goods on the wage skill premium within firms.
    Keywords: import tariffs; intermediate inputs; wage inequality
    JEL: F10 F12 F13 F14 F16
    Date: 2011–05

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