nep-dev New Economics Papers
on Development
Issue of 2012‒11‒24
eight papers chosen by
Mark Lee
Towson University

  1. Children at Risk: The Effect of Crop Loss on Child Health in Rural Mexico By Maren M. Michaelsen; Songül Tolan
  2. Foreign firm characteristics, absorptive capacity and the institutional framework : the role of mediating factors for FDI spillovers in low- and middle-income countries By Farole, Thomas; Winkler, Deborah
  3. "United we stand divided we fall": maternal social participation and children's nutritional status in Peru By Favara, Marta
  4. Output per head in pre-independence Africa : quantitative conjectures By Leandro Prados de la Escosura
  5. Returns to Education Revisited and Effects of Education on Household Welfare in Nigeria By Ogundari, Kolawole
  6. Who gains and who loses from China’s growth? By Cheptea, Angela
  7. The Relationship between Structural Change and Inequality: A Conceptual Overview with Special Reference to Developing Asia By Aizenman, Joshua; Lee, Minsoo; Park, Donghyun
  8. Spurious Regressions and Near-Multicollinearity, with an Application to Aid, Policies and Growth By Chatelain, Jean-Bernard; Ralf, Kirsten

  1. By: Maren M. Michaelsen; Songül Tolan
    Abstract: This study investigates the effect of an economic shock due to crop loss on health outcomes of children in rural Mexico. Data from the Mexican Family Life Survey for the years 2002 and 2005 off er retrospective information on economic shocks since 1997 and height-for-age z-scores (HAZ) to measure long-term effects on child health. Since crop losses are exogenous to the children, simple OLS regressions are used to estimate the effect of crop loss overall and over time. Children who were hit by crop loss have on average 0.4 standard deviations smaller HAZ two and three years after the shock than other children. For boys and children aged 25 to 60 months being hit by crop loss also increases the probability of being stunted by 20 and 27 percentage points, respectively. The findings demonstrate that, albeit its large poverty reduction programs, Mexico has to invest more to combat poverty and provide mechanisms to help households to cope with sudden economic losses.
    Keywords: Economic shock; crop loss; child health; Mexico
    JEL: I15 J13 Q12
    Date: 2012–10
  2. By: Farole, Thomas; Winkler, Deborah
    Abstract: Using a cross-section of more than 25,000 domestic manufacturing firms in 78 low and middle-income countries from the World Bank's Enterprise Surveys, this paper assesses how mediating factors influence intra-industry productivity spillovers to domestic firms from foreign direct investment. It identifies three types of mediating factors: (i) foreign direct investment spillover potential, (ii) domestic firm absorptive capacity, and (iii) the host country's institutional framework. It finds that all three affect the extent and direction of foreign direct investment spillovers on domestic firm productivity. However, the impact of mediating factors depends significantly on the level of domestic firms'productivity and the structure of foreign ownership.
    Keywords: Foreign Direct Investment,Microfinance,Emerging Markets,Economic Theory&Research,E-Business
    Date: 2012–11–01
  3. By: Favara, Marta
    Abstract: In previous literature, social capital has been hypothesized as a substitute for other forms of capital, such as physical and human capital. This paper contributes to this literature, studying the association between mothers'access to social capital via participation in community organizations and their children's nutritional status at 1 and 5 years. Using the Peruvian sample of the Young Lives project, this study suggests that, where human capital is scarce, social capital might have important implications for child development. Maternal social capital is positively associated with height at 1 year old for those children whose mothers have no formal education. No significant association is found at 5 years of age.
    Keywords: Health Monitoring&Evaluation,Population Policies,Social Capital,Social Inclusion&Institutions,Social Cohesion
    Date: 2012–11–01
  4. By: Leandro Prados de la Escosura
    Abstract: GDP figures for Africa are unreliable. More dependable information can be found in government expenditure and international trade records. These records, though, provide little insight into non-market output. In this paper an attempt is made to draw explicit conjectures on real output per head in preindependence Africa on the basis of trade data so that conjectures can be established about Africa’s long-run growth. Two alternative approaches are considered. One estimates per capita GDP by assuming no increase in output per head outside the tradable sector, for which the purchasing power of per capita exports is accepted as a proxy. Another approach establishes an econometric association between real per capita GDP and the income terms of trade per head for 1950-1990 and, on the basis of the prediction equation’s parameters and the values of the RHS variables, infers real output per head for 1870-1938. Trends in real output per head are then drawn for Africa (and its main regions). By comparing these trends with those from other developing regions, some conjectures about Africa’s relative position over time are put forward. It emerges that economic growth started earlier than usually assumed and there is continuity in growth before and after colonial independence. Sub- Saharan Africa’s retardation is a gradual process, as growing and falling behind took place simultaneously. But it is in the period 1975-1995 when the worst setback in modern Africa’s history took place
    Keywords: GDP, Long-run growth, Pre-independence Africa, Sub-Saharan Africa
    JEL: E01 N17 O47 O55
    Date: 2012–11
  5. By: Ogundari, Kolawole
    Abstract: Human capital development, especially higher educational attainment attaches high premium to human skills as an important factor of production. In view of this, the objective of the study is defined in two folds; first, to revisit returns to education in Nigeria and second, to investigate effects of education on the economic welfare of households in Nigeria. The study uses Double Hurdle (DH) model and Quantile Regression (QR), respectively for the objective one and two. Thus, our findings show that returns to schooling (i.e., labour market earnings) at primary, secondary and postgraduate levels are very low relative to schooling at the tertiary education in Nigeria. Also, we find the effects of primary, secondary and postgraduate education on household economic welfare to be substantially lower compared with that of tertiary education in the country. The implication of these findings is that investment up to completing tertiary education is vital for higher welfare through increasing labour market earnings among households in Nigeria.
    Keywords: Community/Rural/Urban Development, Industrial Organization, Production Economics, Public Economics,
    Date: 2012–08
  6. By: Cheptea, Angela
    Abstract: Recent trade evolutions credit China with a large and growing market potential, and explain the increasing attractiveness of the Chinese market to foreign producers. In 2007 one tenth of internationally traded products were shipped to China. The present paper aims to determine the countries that profit and suffer the most from the recent expansion of the Chinese market. We use an econometric shift-share methodology that permits to identify for each trade flow the share of growth arising from the capacity to target the products and markets with the highest increase in demand, and the share due exclusively to exporter's performance. Export dynamics specific to each country (exporter) are estimated for the Chinese market and compared to those of the global market, for all internationally traded products and agri-food products alone. We estimate the contribution of countries' geographical and sectoral structure, and their export performance to the evolution of their market shares, and differentiate between changes in export volumes and prices.
    Keywords: International trade, Export performance, Market shares, Shift-Share, China, Agribusiness, Agricultural and Food Policy,
    Date: 2012–09–18
  7. By: Aizenman, Joshua (Asian Development Bank Institute); Lee, Minsoo (Asian Development Bank Institute); Park, Donghyun (Asian Development Bank Institute)
    Abstract: Structural change has a far-reaching impact on inequality. Extensive structural change is both a cause and consequence of the exceptionally rapid economic growth, which enabled developing Asia to raise living standards and reduce poverty at a historically unprecedented rate. The region has already begun the difficult and complex task of addressing inequality arising from structural change. There is a growing recognition that more sustainable growth supported by broad-based political and social support requires a growth strategy, which provides equality of opportunity, especially in education and employment. The newly developing more inclusive growth philosophy envisions expanded social protection systems and social safety nets to protect the poor and the vulnerable.
    Keywords: inequality; structural change; developing asia
    JEL: O15 O53 P46
    Date: 2012–11–13
  8. By: Chatelain, Jean-Bernard; Ralf, Kirsten
    Abstract: In multiple regressions, explanatory variables with simple correlation coefficients with the dependent variable below 0.1 in absolute value (such as aid with economic growth) may have very large and statistically significant estimated parameters which are unfortunately "outliers driven" and spurious. This is obtained by including another regressor which is highly correlated with the initial regressor, such as a lag, a square or interaction terms of this regressor. The analysis is applied on the "Botswana outliers driven" Burnside and Dollar [2000] article which found that aid had an effect on growth only for countries achieving good macroeconomic policies.
    Keywords: Near-Multicollinearity; Student t-Statistic; Spurious regressions; Ceteris paribus; Parameter Inflation Factor; Growth; Foreign Aid
    JEL: F35 C52 C12 P45
    Date: 2012–11–08

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