management buyouts evidence on taxes as a source of value this paper estimates the value of tax benefits in 76 management buyouts of public companies completed in the period 1980 to 1986 the median value of tax benefits estimated at the time the buyout company goes private has a lower bound of 21 and an upper bound of 143 of the premium paid to pre buyout shareholders the estimated value depends on the rate buyout debt is repaid and the tax rate applied to the interest deductions the paper also presents evidence on the actual taxes paid and debt repayment rates by these companies after the buyout the results in this paper suggest that tax benefits are an important source of the wealth gains in management buyouts

does the bond market predict bankruptcy settlements this study shows the extent to which deviations from the absolute priority rule increase or decrease the bankruptcy emergence payoff to traded i e usually junior claimants bondholders the data indicate that on average bondholders benefit albeit slightly from absolute priority rule apr violations this paper also examines the degree to which the bond market in the bankruptcy filing month anticipates departures from the apr and other influences on the payoff to bondholders in other words we investigate the informational efficiency of the market for bankrupt bonds overall despite the complex and lengthy nature of bankruptcy proceedings the results support efficiency the finance literature has traditionally assumed that when a firm enters bankruptcy the creditors become the owners and the value of the firm is distributed according to the absolute priority rule apr the apr states that senior creditors should be fully compensated before junior creditors receive any portion of the bankrupt firm s value and junior creditors should receive full payment before shareholders receive any compensation in practice formal bankruptcy proceedings are complex processes that often violate the apr brown 1989 captures some of the intricacies of this process in a game theoretic model showing that the solution to the bargaining process in bankruptcy can involve deviations from the apr although the solution

institutions and progress an insistent theme in richard nelson s work is that of capitalism as an engine of progress in this paper i explore this idea through a sequence of his writing distinguishing progress as outcome from progress as instituted process this leads to a deeper issue within this nelsonian theme namely the incompatibility between progress and equilibrium i argue that evolving systems are ordered and coordinated but they are never in equilibrium capitalism is restless it always generates change from within and the proximate source of this progressive tendency is the uneven accumulation of knowledge capitalism is restless because knowledge is restless copyright 2001 by oxford university press

technology structural change and bop constrained growth a structuralist toolbox the latin american structuralism las is a significant part of the heterodox tradition in the theory of long run growth with a focus on the problems of developing economies which started their industrialization process when other regions had already accumulated substantial technological capabilities the emergence of a centre periphery system posed specific problems to growth and distribution in laggard economies which las discusses in a systematic way in this paper we presented a simple model which firstly captures key insights of the las school such as the persistency of technological asymmetries and structural heterogeneity secondly it can be used to analyze the impacts of shocks and policies based on how they affect supply side and demand side parameters of the model thirdly it links more closely post keynesian macroeconomics based on the bop constraint with the evolutionary microeconomics concerned with the dynamics of learning lastly it can be used as a toolbox and a teachable model in the analysis of the interactions between structural change technological catching up and long run growth

global growth and international cooperation a structuralist perspective this paper revisits the structuralist ideas on trade and growth and suggests based on the prebisch s principle of implicit reciprocity that policies for promoting structural change in the periphery may lead to higher global growth and a better income distribution across countries the paper discusses the inter relations and complementarities that exist between autonomous expenditure and industrial and technology policies in the long run with this objective we develop a structuralist growth model in which the technology gap and the growth rate of the domestic autonomous expenditure are endogenously determined in a two country centre and periphery international economy copyright the author 2010 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

event risk covenants and bondholder returns in leveraged buyouts abstract prebuyout bondholders on average suffer statistically significant wealth losses in leveraged buyouts bonds with strong covenant protection however gain value while those with no protection lose value the disposition of bonds after buyouts e g remained outstanding called tendered defeased is also strongly linked to type of covenant protection we also document that covenant use declines for bonds issued after 1980 finally the losses to bondholders are small compared with the gains accruing to shareholders

structural change and the bop constraint why did latin america fail to converge this paper discusses why latin america failed to achieve sustainable convergence with the developed world since 1960 and analyses different phases of convergence and divergence using a structuralist keynesian approach first it is argued that there are critical differences between latin america the developed economies and the asian economies as regards the evolution of the income elasticity of the demand for imports the rate of growth of exports and the balance of payments constrained rate of growth the income elasticity of the demand for imports in latin america showed an upward trend particularly after the mid 1970s which was not matched by a similar increase in exports a pattern in sharp contrast with that of the east asian countries the evolution of and exports are used to set forth a typology of latin american economic growth since 1960 in addition the paper relates elasticities and the less favourable latin american performance to the intensity and direction of structural change using a broad sample of developed and developing economies it is shown that the developing countries that succeed in reducing the income gap are those that transformed their economic structures in favour of sectors with higher schumpeterian and keynesian efficiency copyright the author 2009 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

growth and the external constraint lessons from the spanish case the present article attempts to determine the role played by the balance of payments constraint on economic growth in spain 1960 94 using cointegration techniques this empirical exercise also serves to reveal some shortcomings in the usual procedures for estimating thirlwall s law in particular the spanish case reveals how important it is to introduce a variable that expresses the competitiveness gains generated by improvements in quality of the goods and services into the export function it also demonstrates the inadequate simplification entailed in an a priori exclusion of relative prices in external equilibrium equation not taking these two aspects into consideration may give rise to an erroneous confirmation of thirlwall s law especially if as in the spanish case both effects offset each other finally if the aim is to analyse long term relationships between variables it would seem advisable to use procedures such as cointegration with variables in levels

sources procedures and microeconomic effects of innovation fabio arcangeli paul david frank engelman christopher freeman massimo moggi richard nelson luigi orsenigo nathan rosenberg michele salvati g n von tunzelman two anonymous referees and the participants at the meeting of the committee on distribution growth and technical progress of the italian national research council cnr rome november 16 1985 have helped with various redraftings a particularly grateful acknowledgment is for the insightful and patient help of moses abramovitz this work has been undertaken at the science policy research unit spru university of sussex as part of the research program of the designated research centre sponsored by the economic and social research council esrc earlier support to the research that led to this paper by the italian national research council cnr is also gratefully acknowledged the statistical research has been undertaken with the assistance of stephano brioschi ilaria fornari and giovannu prennushi

stagnation or transformation of a dual economy through endogenous productivity growth a growth model is developed for an open dual economy the economy expands owing to a higher growth rate of labour productivity in the modern sector through the kaldor verdoorn channel and higher effective demand through a keynesian channel the model incorporates a retardation mechanism affecting the slopes of productivity and output growth schedules as labour surplus and economies of scale diminish a wage led or profit led regime and initial conditions may give rise to de industrialization in terms of both output and employment a growth trap sustaining a situation of structural heterogeneity or sustainable employment and adequate output and productivity growth

spillovers among sovereign debt markets identification through absolute magnitude restrictions this paper studies spillovers among us and european sovereign yields we employ absolute magnitude restrictions on the impact matrix to identify the countries that were the main sources of spillovers despite the large size of shocks from euro area stressed countries connectedness among sovereign yields declined between 2008 and 2012 due to financial fragmentation particularly between countries with more divergent business and fiscal cycles we show that none of the sovereign yields were insulated from foreign shocks and that shocks to the greek bond market in 2010 explained 20 30 of the variance of sovereign yields in stressed countries while in 2011 2012 italy not spain was the source of systemic risk

productivity and long term growth potential in the uk economy 1924 1968 this paper examines the long term structural determinants of labour productivity for the uk economy using a panel data set from 1924 to 1968 trade union product market competition and human capital explanations are embedded within the model and compared labour quality or human capital is found to be the most important of the explanations considered

srisk a conditional capital shortfall measure of systemic risk we introduce srisk to measure the systemic risk contribution of a financial firm srisk measures the capital shortfall of a firm conditional on a severe market decline and is a function of its size leverage and risk we use the measure to study top financial institutions in the recent financial crisis srisk delivers useful rankings of systemic institutions at various stages of the crisis and identifies fannie mae freddie mac morgan stanley bear stearns and lehman brothers as top contributors as early as 2005 q1 moreover aggregate srisk provides early warning signals of distress in indicators of real activity received june 7 2011 accepted april 18 2016 by editor geert bekaert

the valuation impacts of specially designated dividends this paper examines the valuation impacts of specially designated dividends sdds by analyzing the behavior of stock and bond prices on dates surrounding their announcements the evidence presented here suggests that sdds are considered positive signals by the market with most of the gains associated with their announcements accruing to stockholders in addition we present some evidence that the gain to stockholders is negatively related to the frequency of sdd announcements

balance of payments constrained growth a rejoinder to professor thirlwall professor thirlwall has argued that the growth rate of a country is constrained by the requirement that the external current account must broadly balance he maintains that a country s growth can be analysed using a dynamic harrod trade multiplier and that a country s long run growth rate y will approximate to the ratio of the rate of growth of exports x to the income elasticity of demand for imports a in a recent article in this journal mcgregor and swales 1985 doubts were expressed about the theoretical and empirical grounds on which thirlwall makes these claims in his reply thirlwall argues that such doubts are unfounded he clarifies his theory on a number of points he argues that his theory was subjected to inappropriate empirical tests and whilst accepting that equation 1 can be derived from a strict neoclassical model he invites the reader to choose between the plausibility of the neoclassical story as against the keynesian alternative

thirlwall and balance of payments constrained growth this paper outlines the theory which thirlwall uses to determine the growth of domestic income and argues that crucial elements of this theory appear to be very weak the empirical evidence presented by thirlwall to support his argument for balance of payments constrained growth is considered

performance pricing in bank debt contracts abstract performance pricing links bank debt interest rate spreads to a borrower s performance via two options interest decreasing performance pricing reduces spreads if credit quality improves it is more common when prepayment is more likely or costly and when adverse selection costs are higher and is less common when multiple performance measures better predict credit quality interest increasing performance pricing increases spreads if credit quality deteriorates it is more common when lenders reduce interest rates to add this provision when downgrades are more likely and when moral hazard costs are higher we find lower spreads for contracts with interest increasing performance pricing

factor decomposition of the eurozone sovereign cds spreads in the present study we examine the factors driving eurozone sovereign credit default swap cds spreads during the eurozone sovereign debt crisis for identifying factors we utilize independent component analysis ica a technique similar to principal component analysis pca we identify three factors that impact spreads and capture the features specific to the crisis such as the breakup risk of the eurozone peripheral factor global factor and eurozone common factor in contrast when pca is applied only a single factor is identified moreover using ica with a garch model we show that the source of volatility for cds spreads shifted from the global factor in 2009 and the peripheral factor in 2010 to the eurozone common factor in 2012 and that the dynamic correlation reflects the decoupling between low credit risk countries such as germany and high credit risk countries such as greece we also show that the goodness of fit of the ica based model is better than other models used such as the student s t copula model

economic growth and balance of payments constraint in brazil an analysis of the 1995 2013 period abstract the purpose of this work is to analyze the balance of payments constrained growth in brazil considering thirwall s law 1979 to this end we estimate export and import demand functions using two econometric models vector error correction and structural state space model for the period of 1995 2013 our results suggest that the balance of payments is a constraint to the brazilian economic growth given i the ratio between exports and imports income elasticities ii the low sensitivity of exports to changes in the real exchange rate and iii the evidence that exports are more sensitive to alterations in commodities prices than to changes in the real exchange rate

the impact of merger bids on the participating firms security holders this paper investigates whether merger bids have an impact on the wealth of the participating firms bondholders and stockholders monthly and daily bond and stock returns are calculated relative to the announcement date of a merger bid for a sample of conglomerate mergers the results show that while the stockholders of target firms gain from a merger bid no other securityholders either gain or lose to provide direct evidence on the existence of diversification effects and incentive effects we test whether the bondholders returns are dependent upon the correlation between the returns of the merging firms and whether the size of the bondholders and stockholders returns in individual mergers are correlated the results are consistent with a capital market that efficiently resolves conflicts of interest between stockholders and bondholders recent empirical studies by mandelker 22 langetieg 18 dodd 6 and asquith 1 provide evidence that mergers have a favorable effect on the market value of the common stocks of merging firms the acquired firms stockholders earn large positive abnormal returns from the merger and the acquiring firms stockholders are affected little if at all although these empirical studies provide extensive evidence concerning the effects of mergers on the stockholders of the merging firms they still leave several important questions unanswered first these studies examine the returns of only one group of the firm s claimants the stockholders it is possible that the positive abnormal returns reported come at the expense of other claimants that is mergers may impose a loss on some claimants of the merging firms and the stockholders positive abnormal returns may simply reflect negative abnormal returns to these other claimants jensen and meckling 15 argue that there is an incentive for the stockholders of leveraged firms to expropriate the bondholders wealth by undertaking investment projects which increase the firm s riskiness since a merger is also a corporate investment it follows that there is an incentive for the stockholders to acquire firms which increase the variability of the firm s cashflow that is the stockholders may earn positive abnormal returns even if there is no real synergy at the expense of bondholders by increasing the firm s risk through merger the bondholders lose because of the increase in the default risk of the

exploring the robustness of the balance of payments constrained growth idea in a multiple good framework this paper derives the balance of payments constrained growth bpcg model as a special case of a three good framework that incorporates exportables importables and non tradables the conditions under which the canonical form of the bpcg rate can be derived are made explicit and the assumptions scrutinized it is shown that the presence of nontradables substitutability between exportables and importables and incomplete specialization in expenditure generally dampen the externallyconstrained growth rate these ndings help explain why empirical estimates tend to overestimate the bpcg rate overall our ndings underscore the observation that tests of the bpcg hypothesis are as much a test of the internal structure of the economy under consideration

thirlwall s law and balance of payments constrained growth more on the debate the various criticisms that have levelled against thirlwall s law by mcgregor and swales are examined it is shown that their arguments are untenable the relationship between the necolassical law of one price and thirlwall s law is clarified thirlwall s law is not overwhelmingly rejected by the evidence as mcgregor and swales assert their suppression of the influence of the price term on the estimates used in the test proposed by mccombie is inappropriate their regression analyis is also mid specified and a preferable specification provides no support for their conclusions they repeatedly argue that thirlwall s modele cannot account for changes in market shares and the that the estimated income elasticities of demand for exports and imports cannot capture the effects of non price competition this was shown to be erroneous by mccombie and the reasons advanced are further elaborated mcgregor and swales provide another interpretation of the relationship between thirlwll s law and the harrod foreign tr

the assessment british economic cgowth over the long run it is now conventional wisdom that for some hundred years or so british growth and especially productivity performance have been deeply disappointing when compared with that of other advanced countries more contentious but nevertheless widely held is the belief that the failures of the post war economy are deeply rooted in the past presenting successive governments both with an unenviable legacy and a most daunting task in their aspiration to remedy britain s relative economic decline thus eatwell 1982 claims that the weakness of the british economy is the cumulative product of the entire history of britain since the end of the nineteenth century when it first became evident that b ritain was unable or unwilling to adapt to a competitive world in which her pre eminence could no longer be taken for granted certainly complaints about the poor quality of industrial management trade union obstacles to productivity advance the inappropriate and inadequate education system in the uk and slowness to develop and apply advanced technology were commonplace at the turn of the century as they have been in recent decades furthermore the twentieth century has seen a constant and often painful need to restructure economic activity in the face of a declining share of world trade and changing comparative advantage whilst in terms of olson s thesis 1982 suffering the sclerotic effect of special interest groups undisrupted by war foreign occupation or totalitarian government

thirlwall law and balance of payments constrained growth further comment on the debate this paper reviews the debate that has occurred in applied economics over thirlwall s law mccombie 1989 mcgregor and swales 1985 1986 thirlwall 1986 the empired evidence concering the validity of the law is re assessed using a variety of tests including that suggested by mccombie 1989 and the new data set provided by bairam 1988 the law is overwhelmingly rejected by the evidence contrary to the conclusions of mccombie and bairam the rationale for the assumption of constant relative prices which is required to derive thirlwall s law is reconsidered the original law of one price rationale renders the approach incoherent the more recent rationale of sticky oligopolistic price improves the internal consistency of the model but necessitates consideration of non price competition however neither the theory underlying thirlwall s law nor empirical tests of the law property account for this in principle the law cannot be employed to distinguish between demanding constrained and supply co

moral hazard and nonexclusive contracts we study equilibria for economies with hidden action in environments in which the agents contractual relationships with competing financial intermediaries cannot be monitored or are not contractible upon we fully characterize equilibrium allocations and contracts for such economies as well as discuss their welfare properties depending on the parameters of the economy either the optimal action choice is not sustained in equilibrium or if it is agents necessarily enter into multiple contractual relationships and intermediaries make positive profits even under free entry conditions the main features and implications of these environments are consistent with several stylized facts of markets for unsecured loans

thirlwall s law and balance of payments constrained growth a comment on the debate 1989 thirlwall s law and balance of payments constrained growth a comment on the debate applied economics vol 21 no 5 pp 611 629

capital shortfall a new approach to ranking and regulating systemic risks the financial crisis of 2007 2009 has given way to the sovereign debt crisis of 2010 2012 yet many of the banking issues remain the same we discuss a method to estimate the capital that a financial firm would need to raise if we have another financial crisis this measure of capital shortfall is based on publicly available information but is conceptually similar to the stress tests conducted by us and european regulators we argue that this measure summarizes the major characteristics of systemic risk and provides a reliable interpretation of the past and current financial crises

redenomination risk spillovers in the eurozone abstract in this paper we use sovereign quanto cds spreads as proxy for redenomination risk in the eurozone i e the risk of a sovereign default obtained by the redenomination of debt in a different currency quanto cds spreads are the difference between the cds quotes in u s dollars and euros we capture spillovers with c o v a r a risk indicator proposed by adrian and brunnermeier 2016 that measures the difference between the value at risk of country i conditional on a state of distress in country j and the median state our sample starts on the onset of the great recession we find that belgium ireland italy and spain are the only eurozone countries exposed to redenomination risk spillovers however in the shorter post omt sample the only vulnerable countries are italy and spain

differences in income elasticities and trends in real exchange rates abstract one might expect that differences in income elasticities in trade and or differences in growth rates among countries would give rise to strong secular trends in real exchange rates for example fast growing countries might need steady depreciation to get the world to accept their growing exports in fact however income elasticities are systematically related to growth rates by the 45 degree rule under which fast growing countries appear to face high income elasticities of demand for their exports while having low income elasticities of import demand the net effect of this relationship between elasticities and growth rates is that secular trends in real exchange rates are much smaller than one might otherwise have expected relative ppp holds fairly well this paper documents the existence of a 45 degree rule and suggests an explanation in terms of increasing returns and product differentiation

systemic risk measurement multivariate garch estimation of covar abstract we modify adrian and brunnermeier s 2011 covar the var of the financial system conditional on an institution being in financial distress we change the definition of financial distress from an institution being exactly at its var to being at most at its var this change allows us to consider more severe distress events to backtest covar and to improve its consistency monotonicity with respect to the dependence parameter we define the systemic risk contribution of an institution as the change from its covar in its benchmark state defined as a one standard deviation event to its covar under financial distress we estimate the systemic risk contributions of four financial industry groups consisting of a large number of institutions for the sample period june 2000 to february 2008 and the 12 months prior to the beginning of the crisis we also investigate the link between institutions contributions to systemic risk and their characteristics

uneven growth between interdependent economies an evolutionary view on technology gaps trade and growth preface part one theory and empirics of international growth rate differentials and technology gaps chapter 1 technology growth and welfare a historical perspective 1 1 the search for welfare and the role of technology 1 2 aim of the book 1 3 organisation of the rest of the book notes chapter 2 the literature on economic growth and technological change 2 1 a brief overview 2 2 the traditional literature on economic growth 2 3 new neoclassical growth models endogenous innovation 2 4 the role of technological change 2 5 explaining growth rate differentials notes chapter 3 an evolutionary theory of economic growth and technological change the basics 3 1 economic growth as an evolutionary process a macroeconomic interpretation 3 2 economic growth as an evolutionary process a microeconomic interpretation 3 3 towards an evolutionary theory notes chapter 4 technology and growth in an international perspective 1960 1990 an impressionistic approach 4 1 economic growth and structural change 4 2 technology 4 3 technology and growth catching up or falling behind a global issue 4 4 summary and conclusions appendix iv 1 postwar economic welfare and the selection of country samples appendix iv 2 the 3 digit isic sector classification revision 2 appendix iv 3 on measuring and graphing structural differences between countries appendix iv 4 some tests for the influence of multicollinearity on the regressions in section 4 2 notes part two technology spillovers between interdependent economies catching up or falling behind chapter 5 a model of catching up or falling behind 5 1 description of the model 5 2 solving the model 5 3 the outcomes of the model under varying parameter restrictions 5 4 conclusions of the model notes chapter 6 an empirical test of the model 6 1 testing procedure and data sources 6 2 result 6 3 interpreting the results 6 4 summary and some policy conclusions appendix vi l a description of the data appendix vi 2 the calculation of the n statistic notes part three technological change international trade and economic growth chapter 7 an evolutionary model of technological change specialisation and economic growth 7 1 a descriptive interpretation 7 2 the model 7 3 simulation results 7 4 summary and conclusions appendix vii 1 initial values of the simulation runs for the 3 country 2 sector case appendix vii 2 some mathematical details of the selection equation in discrete time notes chapter 8 an empirical view on the evolution of trade and technology 8 1 patents as indicators of innovation 8 2 summarising some known correlations 8 3 trade and technology a dynamic evolutionary framework 8 4 estimation of the replicator equation 8 5 some further tests on the robustness of the replicator estimates 8 6 explaining the results for the patent variables 8 7 summary and conclusions

public policies and the art of catching up matching the historical evidence with a multicountry agent based model in this paper we study the effects of industrial policies on international convergence using a multi country agent based model which builds upon dosi et al 2019b the model features a group of microfounded economies with evolving industries populated by heterogeneous firms that compete in international markets in each country technological change is driven by firms activities of search and innovation while aggregate demand formation and distribution follows keynesian dynamics interactions among countries take place via trade flows and international technological imitation we employ the model to assess the different strategies that laggard countries can adopt to catch up with leaders market friendly policies industrial policies targeting the development of firms capabilities and rd protectionist policies focusing on tariffs only we find that markets cannot do the magic in absence of government interventions laggards will continue to fall behind on the contrary industrial policies can successfully drive international convergence among leaders and laggards while protectionism alone is not necessary to support catching up and countries get stuck in a sort of middle income trap finally in a global trade war where developed economies impose retaliatory tariffs both laggards and leaders are worse off and world productivity growth slows down

the intra industry effects of going private transactions we demonstrate that bids to take firms private generate significantly positive valuation effects for industry rivals of target firms these valuation effects cannot reflect either synergy or monopoly since no consolidation of operating firms is involved in such transactions participation by buyout specialists in the bid does not significantly affect these gains bids by outsiders and bids by incumbent managers generate similar valuation effects for industry rivals the effect on share prices of industry rivals is inversely related to the capitalized values of rival firms relative to the target firm we also report valuation effects for target firms we examine the implications of going private bids for the valuation of horizontal rivals of target firms we hypothesize that going private transactions reflect in part private information held by the bidder about the target firm we argue that if the financial market perceives that elements of this private information are industry wide rather than firm specific the value of the target firm s horizontal rivals should change in response to the goingprivate bid announcement 1 unlike interfirm mergers and acquisitions going private transactions do not involve a consolidation of separate operating firms consequently changes in the value of rival firms induced by goingprivate bids are due neither to the demonstration of synergies associated with a consolidation of operating firms nor to the effects of induced monopoly or collusion 2 we also report valuation effects on target firms we find that announcements of going private bids generate statistically significant positive intra industry effects industry rivals of targets of goingprivate bids receive a positive 2 day average excess return of 1 32 which is statistically significant the average 2 day excess return to target firms is 17 35 and is statistically significant we test whether participation of

accumulation innovation and catching up an extended cumulative growth model this paper presents an extended model of cumulative growth in which the effects of innovation and catching up are considered innovation adds another source of cumulative growth to that of traditional models and allows a consideration of the importance of non price determinants of international competitiveness catching up is the major force leading to convergence in productivity owing to the effect of the diffusion of technology the model allows one to analyse whether cumulative forces may lead to stable growth and whether this solution generates convergence in productivity levels the structural model is tested for a set of oecd countries over the period 1965 94

ceo compensation after deregulation the case of electric utilities the 1992 national energy policy act nepa intensified competition in the electric utility industry by allowing nonutility generators to produce and sell power in wholesale energy markets congress expected nepa to lead to improved operating efficiencies by substituting market forces for regulation a data set that is unique to the utility industry allows us to test how and whether utility firms reallocated resources to improve efficiencies and more important for this study whether ceo compensation changed in accordance with agency theory predictions that ceo compensation would become more incentive based and more equity based in the competitive operating environment

the national system of innovation in historical perspective contrary to some recent work on so called globalisation this paper argues that national and regional systems of innovation remain an essential domain of economic analysis their importance derives from the networks of relationships which are necessary for any firm to innovate whilst external international connections are certainly of growing importance the influence of the national education system industrial relations technical and scientific institutions government policies cul tural traditions and many other national institutions is fundamental the historical examples of germany japan and the former ussr illustrate this point as well as the more recent contrast between east asian and latin american countries introduction the national system of friedrich list according to this author s recollections the first person to use the expression national system of innovation was bengt ake lundvall and he is also the editor of a highly original and thought provoking book 1992 on this subject however as he and his colleagues would be the first to agree and as lundvall himself points out the idea actually goes back at least to friedrich list s conception of the national system of political economy 1841 which might just as well have been called the national system of innovation the main concern of list was with the problem of germany overtaking england and for underdeveloped countries as germany then was in relation to england he advocated not only protection of infant industries but a broad range of policies designed to accelerate or to make possible industrialisation and economic growth most of these policies were concerned with learning about new technology and applying it the racialist and colonialist overtones of the book were in strong contrast to the inter nationalist cosmopolitan approach of the classical free trade economists and list s belief that holland and denmark should join the german bund and acquire german nationality because of their descent and whole character reads somewhat strangely in the european community of today nevertheless despite these unattractive features of his outlook he clearly anticipated many contemporary theories after reviewing the changing ideas of economists about development in the years since the second world war the world bank 1991 concludes that it is intangible investment in knowledge accumulation which is decisive rather than physical capital investment as was at one time believed pages 33 35 the report cites the new growth theory

sustainability in a post keynesian growth model for an open economy the paper expands the bop constraint growth model and kaldorian regimes productivity and demand regimes in order to include some of the concerns raised by ecological economics in post keynesian models for open economies the demand regime is modified by taking into account porter s hypothesis which suggests that environmental innovations spurred by environmental policies can foster competitiveness as a result the equilibrium bop constrained rate of growth increases leading to a different version of thirlwall s law which opens room for analyzing the impact of environmental innovations on convergence between developing and developed economies the productivity regime in turn considers the growth and employment implications of innovations in labor productivity standard innovations and environmental efficiency environmental innovations it is argued that the fiscal policy and composition of public expenditure matter for long run growth employment and sustainability

comparative advantage in uk manufacturing trade 1910 1935 this paper uses a maintained hypothesis of comparative advantage based on relative factor endowments to investigate uk manufacturing trade prior to world war ii the results from several independent tests indicate that britain exported goods intensive in the use of unskilled labour and had a comparative disadvantage in goods intensive in the use of human capital right up to the mid 1930s this is consistent with the views of contemporaries but somewhat at odds with recent optimistic assessments of structural change in pre war britain this abstract was borrowed from another version of this item

event risk an analysis of losses to bondholders and super poison put bond covenants ten percent of the investment grade industrial bonds that were associated with major capital restructurings between 1 983 and 1988 had already been downgraded to speculative grade as of august 1989 in response to these downgrades and the corresponding wealth losses for bondholders over 40 percent of recently issued investment grade industrial bonds are protected from this type of event risk by virtue of specialized covenants these event risk convenants may have initially reduced interest costs for borrowers by roughly 20 to 30 basis points however the magnitude of the effect appears to have declined along with the general decline in corporate restructurings the wave of corporate restructurings in the 1980s and the accompanying expansion of debt gave rise to a marked deterioration in credit quality in the corporate bond market the financing of the restructurings typically included new debt with a priority equal to or higher than that of the firm s outstanding bonds as a result of the increase in risk billions of dollars in outstanding bonds were downgraded from investment grade to speculative grade in the process investors became increasingly concerned with event risk the risk of a substantial decline in the market price of a firm s outstanding bonds arising from an unforeseen and major change in its capital structure since late 1988 several corporate bond offerings have included event risk covenants as a safeguard against leverage induced losses most of the covenants are super poison puts which give investors the right to sell their bonds back to the issuer at par in the event of a leveraged restructuring and subsequent downgrading to speculative grade

regional balance of payments problems an interpretation ho l s 1993 regional balance of payments problems an interpretation reg studies 27 457 466 this paper lays out a simple model and an accounting framework for analysing the relationship between different components of regional savings and investment between internal savings and external savings and between government sector savings and private sector savings in general stepping up investment to enhance regional growth must cause a deterioration of the regional trade balance in the short run even though the trade balance is likely to improve in the longer run analyses in recent years often ignore the effect of capital formation on trade as an example the german unification in requiring a rebuilding of capital stock suddenly rendered obsolete by a major change in relative factor prices requires a real appreciation of the dm and a deterioration of the german trade balance given nominal exchange rates this means higher german inflation than its trading partners on the other hand the pape

a synoptic view of regional growth and unemployment ii the post keynesian theory this paper discusses the post keynesian explanation of the causes of disparities in regional growth and unemployment rates it begins by examining the relationship between the real wage rate the level of demand and regional unemployment next it shows how regional growth is primarily determined by the rate of growth of exports a two region model is outlined which demonstrates how regional growth rates are interrelated through interregional trade flows and the regional balance of payments constraint the paper concludes with a discussion of the cumulative causation theory of regional growth

going private transactions bondholder returns and wealth transfer effects abstract we examine how buyout activity and deal characteristics drive bondholder returns and the wealth transfer effects between bondholders and stockholders in going private transactions from 1981 to 2006 we find that various deal characteristics are major determinants of the cross sectional variation in bondholder returns in particular a single private equity acquirer mitigates bondholder losses on the other hand bondholders have larger losses when a reputable buyout firm is involved in the deal bondholders experience losses in the 1980s and 2000s but enjoy gains in the 1990s our findings remain robust to consideration of deal financing relative cost of credit and level of market overheating we find a negative and significant relationship between stockholder and bondholder wealth effects which supports the wealth transfer hypothesis

a structural economic dynamics approach to balance of payments constrained growth this paper derives a balance of payments equilibrium growth rate analogous to thirlwall s law from a pasinettian multi sector macrodynamic framework the resulting formula which we call the multi sectoral thirlwall s law asserts that a country s growth rate of per capita income is directly proportional to the growth rate of its exports with such a proportionality being inversely directly related to sectoral income elasticities of demand for imports exports these income elasticities are weighted by coefficients that measure the share of each sector in total imports and exports respectively it is shown that several theoretical empirical and policy implications can be drawn from such a structural economic dynamics approach to balance of payments constrained growth

structural changes cointegration and the empirics of thirlwall s law thirlwall s law establishes a relation between the long run growth rate the growth of exports and the long run income elasticity of imports the estimation of this parameter requires cointegration techniques which in turn require a large span of data thus exposing the estimates to risks of structural changes while this problem has been recognized in the literature the evidence produced is still partial being concerned with a very limited number of countries and in some respects unsatisfactory in this article we fill this gap by assessing thirlwall s empirical regularity on a sample of 22 organization for economic cooperation and development oecd countries using econometric techniques that allow for the presence of a shift of unknown date in the long run parameters the results are generally supportive of thirlwall s hypothesis and allow us to reconcile and qualify the evidence provided in the existing literature

takeover defenses and wealth effects on securityholders the case of poison pill adoptions abstract this is the first study to examine the valuation effects of any antitakeover amendment on both bondholders and stockholders we present new evidence documenting that on average there is a significant wealth loss experienced by bondholders at poison pill adoption announcement while stockholders are unaffected our finding of significant bondholder losses is consistent with the proposed negative signal hypothesis we document results which indicate that bondholders correctly anticipate the degree of leverage increase at the time of the announcement we also show that the proportion of insider ownership is negatively related to bondholder wealth effect at announcement this supports the notion that higher insider manager ownership leads to a greater alignment of manager stockholder interests while increasing the stockholder bondholder agency costs long run analysis of leverage and performance measures reveal that pill adopting firms are not under leveraged as compared to their industry rivals however supporting the negative signal hypothesis the leverage of sample firms rises significantly after the pill adoption performance measures reveal that sample firms significantly underperform their industry cohorts this result suggests that poison pill adoptions are motivated by poor managers attempting to immunize themselves from the disciplinary actions of the corporate control market

controlling the conflict of interest in management buyouts a controversial aspect of the management buyouts that were popular throughout the 1980s is the potential for a conflict of interest to arise when a manager bids to acquire the firm he manages this study examines 184 management buyouts and reports three findings first returns to prebuyout shareholders are greater when managers must bid against outside acquirers second bid revisions in the face of competition exceed revisions due to shareholder litigation and negotiations with boards third the incidence of competition is negatively related to the prebuyout share holdings of managers coauthors are ronald f singer anju seth and darla f lang copyright 1994 by mit press

gauging potential sovereign risk contagion in europe abstract this study adopts the covar methodology to analyse the tail risk relationships among european sovereigns which provide arguably important information for policymakers to identify countries that should come under close scrutiny during the current debt crisis

real exchange rate and elasticity of labour supply in a balance of payments constrained macrodynamics a macrodynamic model is proposed in which the real exchange rate and the elasticity of labour supply interact defining different trajectories of growth and income distribution in a developing economy growth depends on imports of capital goods which are paid with exports there are no capital flows and hence is constrained by equilibrium in current account the role of the elasticity of labour supply is to prevent the real exchange rate from appreciating as the economy grows thereby sustaining international competitiveness the model allows for endogenous technological change and considers the impact of migration from the subsistence to the modern sector on the cumulative kaldor verdoorn process of learning copyright the author 2009 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

the balance of payments constrained growth rate and the natural rate of growth new empirical evidence this paper implements a panel approach to investigate the empirical relevance of thirlwall s law which states that long run growth must be consistent with balance of payments bop equilibrium and is thus determined on the demand side building on ardl modelling mean group and pooled mean group estimation methods we use annual data over the 1960 2010 years for a panel of 22 oecd countries and find significant support for the law next we also explore empirically the hypothesis that the bop constrained growth rate yb must equal the natural or potential rate of growth yn and find that the data do not reject this hypothesis finally we adopt a new approach based on panel granger causality methods to explore the direction of causality between yb and yn the results indicate the existence of unidirectional long run causality from yb to yn thus reinforcing the view embodied in the law that long run growth is demand determined and constrained by the bop

structural modernization and development traps an empirical approach in this paper we analyse economic development through the lenses of a newly developed index the structural modernization index this index combines two dimensions that have been widely invoked as prime drivers of economic development namely structural change and technological catch up for each country the index calculates the productivity gap with respect to the world frontier in activities that typically represent the modern part of the economy and weighs this relative productivity by the employment share of those activities in the total labour force in doing so it combines a technological dimension relative productivity and a structural dimension the size of the modern sector thus providing a concise measure of the degree of modernity of an economy the index is calculated for a large sample of countries over a long time span significant efforts have been made to put together a dataset with international comparable data on value added and employment disaggregated by sectors for 100 countries covering the period 1950 2009 the estimates are used to explore the relationship between structural modernization and the so called poverty and middle income traps in analysing this relationship the interactive nature of structural change and technological catch up is stressed important insights are obtained regarding the nature of low and middle income development traps finally the usefulness of this new index is illustrated when studying the diverse structural trajectories of a set of countries that can be taken as examples of success and failure in the process of economic development