marketing s impact on firm value generalizations from a meta analysis abstractthe interest in the value relevance of marketing investments has given rise to numerous studies on the marketing finance interface this study integrates extant research findings and establishes empirical generalizations on marketing s impact on firm value specifically the authors conduct a meta analysis of prior econometric elasticity estimates of the stock market impact of marketing actions and marketing assets analyses based on 488 elasticities drawn from 83 studies reveal a mean elasticity of 04 for advertising expenditure variables and of 54 for marketing asset variables among marketing assets customer related assets show a higher mean elasticity of 72 compared with 33 for brand related assets further analyses show that advertising elasticities are lower in more concentrated industries and that marketing asset elasticities are higher during recession times researchers should also be aware that characteristics of the research design e g the type of firm value metric used the om

some aspects of trade between australia and pacific island countries australia and pacific island countries pics have maintained an ongoing trade and economic relationship for several years the determinants of trade between australia and pics are examined using a gravity model by utilising time series cross country data for the period 1981 to 2005 the empirical findings indicate that imports by pic from australia are significantly determined by pics population and their per capita gdp the results also suggest that pics exports are significantly determined by pics and australia s population pics infrastructure telecommunications and the distance to australia consistent with the findings of other studies using the gravity model distance is found to be a friction to pics exports to australia while this study identifies factors influencing pics trade with australia a more substantial issue for the governments and trade policy makers in pics is to look into the generally disappointing long term trade performance from a policy perspective pics would need to seriously look at increasing their export potential

dynamics of material productivity and socioeconomic factors based on auto regressive distributed lag model in china material productivity mp measured as economic output such as gross domestic product gdp per corresponding material input is gained significant interest of becoming a widespread environmental sustainability indicator the study of mp s dynamics is very important for policy making on how to improve mp this paper applies the auto regressive distributed lag ardl model to investigate the dynamic impacts of energy intensity for secondary industry sei tertiary industry value added per gdp tva trade openness to and domestic extraction per capita dec on mp in the case of china during the period from 1980 to 2010 the validated and robust results of the model confirm the existence of cointegration among the variables both in the long and short run the impacts of selected socioeconomic factors can be summarized as follows 1 in the long run an sei decrease driven by technology improvement is found to be the main driver of mp and a 1 decrease in sei results in a 0 432 increase in mp 2 the magnitude of the impact of tva on mp is higher over the short run than over the long run 3 to can reluctantly promote mp both in the long and short run 4 dec exhibits fundamentally different behaviors in the long and short run dec is not a strongly significant factor for mp and the magnitude of the impact is very weak in the long run however it has the greatest negative impact on mp in the short run as a 1 increase in dec results in a 0 519 decrease in mp which demonstrates that the marginal revenue of resource input has already dramatically declined these insights from the study could be considerably helpful for sustainable resource management and material productivity enhancement

the impact of government debt expenditure and taxes on aggregate investment and productivity growth in this paper we evaluate empirically the impact of fiscal policy on two key determinants of long term growth i e private investment and productivity growth we mostly focus on a panel of 20 oecd economies from 1970 to 2009 although we also present some estimates based on data for 80 developing economies our findings suggest that high public debt adversely affects both aggregate investment spending and productivity growth through distortions related to the size of the public sector we also find weak evidence of some non linear effects on productivity with government debt becoming more detrimental in advanced economies when above 85 90 of gdp

debt maturity and the international financial architecture this paper presents a theory of the maturity of international sovereign debt and derives its implications for the reform of the international financial architecture the analysis is based on a model in which the need to roll over external debt disciplines the policies of debtor countries but makes them vulnerable to unwarranted debt crises due to bad shocks the paper presents a welfare analysis of several measures that have been discussed in recent debates such as international lending in last resort or the establishment of a mechanism for suspending payments on the external debt of crisis countries jel f34 o19

pollution haven hypothesis revisited a comparison of the brics and mint countries based on vecm approach abstract the aim of this study is to investigate the existence of pollution haven hypothesis phh and test the casual relationship between inward foreign direct investment fdi and environmental pollutions as well as other potential influencing factors of environmental performance to this end a panel vector error correction model vecm and panel co integration test is conducted for two country groups the brics i e brazil russia india china and south africa and the mint i e mexico indonesia nigeria and turkey during 1982 2014 empirical results illustrate a bidirectional and positive causality between fdi inflows and gdp per capita for both groups implying a virtuous circle of fdi growth nexus more importantly both the brics and mint countries illustrate bidirectional and negative causality between fdi inflows and environmental pressures i e per capita energy consumption for brics and per capita carbon emissions for mint such findings indicate the pollution haven hypothesis does not stand in this case in addition it is also found that the opening degree of trade can be promoted by fdi inflows which has rarely been deeply analyzed in prior studies concluding remarks and policy suggestions are proposed in the last section

renegotiation collective action clauses and sovereign debt markets abstract collective action clauses cacs are provisions specifying that a supermajority of bondholders can change the terms of a bond we study how cacs determine governments fiscal incentives sovereign bond prices and default probabilities in environments with and without contingent debt and imf presence we claim that cacs are likely to be an irrelevant dimension of debt contracts in current sovereign debt markets because of the variety of instruments utilized by sovereigns and the implicit imf guarantee nonetheless under a new international bankruptcy regime like that recently proposed by the imf cacs can increase significantly the cost of borrowing for sovereigns contrary to what is suggested in previous empirical literature

collective action clauses how do they affect sovereign bond yields abstract we study the effects of the adoption of collective action clauses cacs on government bond yields by exploiting secondary market data on sovereign bonds quoted in international markets from march 2007 to april 2011 cacs are assessed security by security using a panel data approach we find a u shaped effect of cacs on yields according to the credit rating of the issuer while the impact is negligible for the highest ratings a significant yield discount emerges for mid range ratings which is smaller for bad ratings and possibly insignificant for the worst ratings this relationship appears fairly robust across a number of checks this evidence may reflect the fact that cacs are valuable because they help with orderly restructuring unless the perceived probability of default is too small nevertheless at low ratings this effect can be weakened by an increasing risk of moral hazard

the impact of economic contractions on the effectiveness of r d and advertising evidence from u s companies spanning three decades the critical role of research and development r d and advertising in the marketing strategy of the firm is well established this paper conceptually and empirically examines why and how much the effectiveness of these two marketing instruments differs between times of economic expansions versus periods of economic contractions and whether these results depend on the cyclicality of the industry in question we consider a key marketing metric market share and a key financial metric firm profit our empirical setting is 1 175 u s firms across a time period spanning over three decades we find that r d and advertising contribute to firm performance but that their effectiveness is not constant across the business cycle increasing advertising share in contractions has a stronger effect on profit and market share than increasing advertising share in expansions likewise investments in r d in contractions lead to higher gains in market share and profit than r d investments in expansions albeit only in subsequent years if in contractions the firm faces tight budget constraints and has to choose between either maintaining r d or advertising our simulation results show that maintaining r d is associated with better company performance we find that advertising effectiveness in general and in contractions in particular is systematically moderated by the degree of cyclicality of the industry in which the firm operates in relatively stable industries advertising effects are small or even nonsignificant and they do not go beyond the year the firm advertises however in highly cyclical industries advertising effects are long lasting its total effect being 50 larger market share and 200 larger profits than in industries of average cyclicality the effect of industry cyclicality on advertising effectiveness is especially pronounced in contractions collectively these findings provide valuable and actionable insights into how firms should respond to contractions in order to grow profits and market share

is corruption grease grit or a gamble corruption increases variance of productivity across countries the effect of corruption on economic growth has attracted interest in empirical development economics the conventional view of corruption as impediment for growth has been challenged by the grease on the wheels hypothesis we take a new perspective on the issue and suggest corruption as macro risk referred to as a gamble hypothesis using cross country data and two alternative indicators of corruption we find corruption to be a significant driver of heteroscedasticity in total productivity this supports the new gamble hypothesis we also note some misleading interpretations in the previously published frontier applications to avoid these shortcomings we apply a flexible semi nonparametric estimator

unique equilibrium in a model of self fulfilling currency attacks even though self fulfilling currency attacks lead to multiple equilibria when fundamentals are common knowledge we demonstrate the uniqueness of equilibrium when speculators face a small amount of noise in their signals about the fundamentals this unique equilibrium depends not only on the fundamentals but also on financial variables such as the quantity of hot money in circulation and the costs of speculative trading in contrast to multiple equilibrium models our model allows analysis of policy proposals directed at curtailing currency attacks

tariffs and growth an empirical exploration of contingent relationships abstract a large body of empirical research indicates that countries with low policy induced trade barriers tend to enjoy rapid growth ceteris paribus in contrast alternative theoretical models suggest that the relationship between trade barriers and growth may be contingent on the level of development employing a direct trade barrier measure ad valorem tariff rates we find evidence of such a contingency the marginal effect of tariffs on growth is declining in the level of per capita income moreover evidence of a negative relationship between tariffs and growth is apparent only among the world s rich countries

foreign exchange reserve adequacy and exogenous shocks abstractone of the traditional benchmarks in international macroeconomics is that a country should maintain reserves that can cover at least 12 weeks of imports the notion of reserve adequacy however is not static and is intimately associated with the occurrence of financial crises as well as exogenous shocks with many observers using the reduction in reserves below this benchmark as a sign of fragility this article provides a benefit cost type approach to evaluating reserve adequacy the benefits of holding reserves are evaluated using a dynamic random effects probit model of financial crises while the cost of reserve holdings output loss due to an over investment in reserves is obtained from a panel growth equation using the methodology outlined above the study finds that in small states the optimal holding of foreign exchange reserves is approximately 25 weeks of imports approximately 13 weeks higher than the international rule of thumb this estimate of optimal reserve holdings is interrela

the effect of trade openness on women s welfare and work life summary this study of 134 countries analyzes whether women are generally the losers or winners of globalization the results show that economic integration does not directly improve women s life expectancies women s access to primary and secondary education may improve slightly although women s welfare does not seem to improve more than that of men on the other hand economic integration does influence women s professional lives in developing countries trade openness increases female labor force participation in industrialized states it decreases the share of working women trade openness in developed countries increases the number of women employed in the service sector while in developing states it increases the number of women working in industrial jobs and in agriculture

co ordination failure moral hazard and sovereign bankruptcy procedures we study a model of sovereign debt crisis that combines problems of creditor co ordination and debtor moral hazard solving the sovereign debtor s incentives leads to excessive rollover failure by creditors when sovereign default occurs we discuss how the incidence of crises might be reduced by international sovereign bankruptcy procedures involving contractibility of sovereign debtor s payoffs suspension of convertibility in a discovery phase and penalties in case of malfeasance in relation to the current debate this is more akin to the imf s sovereign debt restructuring mechanism than the collective action clauses promoted by others

customer satisfaction productivity and profitability differences between goods and services there is widespread belief that firms should pursue superiority in both customer satisfaction and productivity however there is reason to believe these two goals are not always compatible if a firm improves productivity by downsizing it may achieve an increase in productivity in the short term but future profitability may be threatened if customer satisfaction is highly dependent on the efforts of personnel if so there are potential tradeoffs between customer satisfaction and productivity for industries as diverse as airlines banking education hotels and restaurants managers in these types of service industries as well as goods industries in which the service component is increasing need to understand whether or not this is the case for example if efforts to improve productivity can actually harm customer satisfaction and vice versa the downsizing of u s and european companies should be viewed with concern it follows that developing a better understanding of how customer satisfaction and productivity relate to one another is of substantial and growing importance especially in light of expected continued growth in services throughout the world economy the objective of this paper is to investigate whether there are conditions under which there are tradeoffs between customer satisfaction and productivity a review of the literature reveals two conflicting viewpoints one school of thought argues that customer satisfaction and productivity are compatible as improvements in customer satisfaction can decrease the time andeffort devoted to handling returns rework warranties and complaint management while at the same time lowering the cost of making future transactions the second argues that increasing customer satisfaction should increase costs as doing so often requires efforts to improve product attributes or overall product design a conceptual framework useful in resolving these contradictory viewpoints is developed the framework serves in turn as a basis for developing a theoretical model relating customer satisfaction and productivity the model predicts that customer satisfaction and productivity are less likely to be compatible when 1 customer satisfaction is relatively more dependent on customization the degree to which the firm s offering is customized to meet heterogeneous customers needs as opposed to standardization the degree to which the firm s offering is reliable standardized and free from deficiencies and 2 when it is difficult costly to provide high levels of both customization and standardization simultaneously to move forward from the model s propositions to the development of testable hypotheses we argue that services are more likely than goods to have the preceding characteristics hence tradeoffs between customer satisfaction and productivity should be more prevalent for services than for goods although this classification is not precise many services are standardizable and many goods have a service component it has the advantage of allowing an initial test of the propositions the empirical work employs a database matching customer based measures of firm performance with traditional measures of business performance such as productivity and return on investment roi the central feature of this database is the set of customer satisfaction indices provided by the swedish customer satisfaction barometer scsb the scsb provides a uniform set of comparable customer based firm performance measures and offers a unique opportunity to test the study s hypotheses the findings indicate that the association between changes in customer satisfaction and changes in productivity is positive for goods but negative for services in addition while both customer satisfaction and productivity are positively associated with roi for goods and services the interaction between the two is positive for goods but significantly less so for services taken together the findings suggest support for the contention that tradeoffs are more likely for services hence simultaneous attempts to increase both customer satisfaction and productivity are likely to be more challenging in such industries of course this does not imply that such firms should not seek improvements in both productivity and customer satisfaction for example appropriate applications of information technology may improve both customer satisfaction and productivity simultaneously the findings should provide motivation for future research concerning the nature of customer satisfaction and productivity as well as appropriate strategy and tactics for each one it is worth emphasizing that this is an issue that is not only important today but certainly will become even more important in the future as the growth of services continues and world markets become increasingly competitive the importance of customer satisfaction will also increase to compete in such a world firms must strike the right balance between their efforts to compete efficiently and their efforts to compete effectively

how well does advertising work generalizations from meta analysis of brand advertising elasticities abstract the authors conduct a meta analysis of 751 short term and 402 long term direct to consumer brand advertising elasticities estimated in 56 studies published between 1960 and 2008 the study finds several new empirical generalizations about advertising elasticity the most important are as follows the average short term advertising elasticity is 12 which is substantially lower than the prior meta analytic mean of 22 there has been a decline in the advertising elasticity over time and advertising elasticity is higher 1 for durable goods than nondurable goods 2 in the early stage than the mature stage of the life cycle 3 for yearly data than quarterly data and 4 when advertising is measured in gross rating points than monetary terms the mean long term advertising elasticity is 24 which is much lower than the implied mean in the prior meta analysis 41 many of the results for short term elasticity hold for long term elasticity with some notable exceptions the authors discuss t

the v factor distribution timing and correlates of the great indian growth turnaround we analyze a panel of output series for india disaggregated by 15 states and 14 broad industry groups using principal components bai 2004 bai and ng 2004 we find that a single common v factor captures well the significant shift in the cross sectional distribution of state sectoral output growth rates since the 2nd half of the 1980s the timing of the turnaround implied by the v factor is more closely related to the pattern of policy reforms than has been found in previous research regression based analysis also provides some insights into the uneven distribution of the turnaround across indian states

does strengthening collective action clauses cacs help does improving creditor coordination by strengthening cacs lead to efficiency gains in the functioning of sovereign bond markets we address this question in a model featuring both debtor moral hazard and creditor coordination under incomplete information conditional on default we characterize the interim efficient cac threshold and show that strengthening cacs away from unanimity results in interim welfare gains however once the impact of strengthening cacs on debtor s incentives is taken into account we demonstrate the robust possibility of a conflict between ex ante and interim efficiency we calibrate our model to quantify such a welfare trade off and discuss the policy implications of our results

the price elasticity of selective demand a meta analysis of econometric models of sales the author describes a meta analysis of econometric studies that estimated the elasticity of selective sales or market share to price the literature review yielded 367 suitable price elasticities

measuring protection mission impossible abstract there seems to be some confusion between openness and protection measures in the international trade literature the aim of this paper is to bring together the state of the art in quantifying trade policy measures and for this reason we focus on the extent of the protection granted by policies rather than on the degree of openness of the economy given the considerable amount of literature that deals with these issues we will limit our review as follows on the one hand we focus on trade policies implemented at the border and therefore do not consider all the other possible public interventions influencing trade flows on the other hand we only take into account indexes that explicitly adopt a metric expressed in a scalar aggregate tariff and quota equivalent measures or an index in a closed interval we distinguish between indexes that aggregate across products same barrier for more products and indexes that aggregate across instruments more barriers for the same product finally in order to classify the large number of indexes covered in our review we propose a typology based on three categories incidence outcome and equivalence

the effects of imf and world bank lending on long run economic growth an empirical analysis summary the international monetary fund and the world bank frequently and often repeatedly extend loans to developing nations these loans have been blamed for generating adverse economic outcomes the growth impact of fund and bank loan programs is assessed using an empirical growth model that controls for other determinants of growth a unique feature of this study is the use of the value of loans rather than the number of programs the estimates indicate that bank lending stimulates growth in some cases primarily by increasing public investment fund lending is either neutral or detrimental to growth the channel for this effect is a negative impact of fund lending on public as well as private investment

empirical marketing generalization using meta analysis a decade of work in marketing meta analysis has produced empirical generalizations concerning parameters in models of advertising price diffusion and consumer behavior results from these meta analyses should replace the now discredited zero null hypotheses of such parameters in future work probably more important than nonzero grand mean average effects is an approach called parametric adjustability which provides estimated parameter values for specific conditions reflecting markets and research technologies systematic application of the methodology can also help guide research along productive routes and away from repetition of work which has little potential to add new knowledge

government spending corruption and economic growth there is considerable debate over the effects of both corruption and government spending on growth but few studies have considered how the interaction between them might affect economic growth this paper provides a contribution to the debate starting wigth an endogenous growth model and extending it to account for the effects of corruption on components of government spending namely military and investment spending it then illustrates the non negligible indirect effects of corruption on military spending and government investment expenditure using model simulations the resulting model is then estimated on a comprehensive panel of 106 countries and the results show that the interactions between corruption and investment and corruption and military spending have strong negative impacts on economic growth the results also indicate important complementarities between corruption and military spending suggesting that combating corruption will not only have direct positive effects but is also likely to have positive indirect effects through reducing the size of the negative impact of the military burden they are also found to be robust across different measures of corruption levels of economic development and groupings of countries this suggests that policies to reduce corruption combined with those to reduce military burdens such as regional security agreements would have a considerable impact on economic growth

governance quality remittances and their implications for food and nutrition security in sub saharan africa abstract despite impressive progress in the fight against malnutrition and hunger in recent years food and nutrition insecurity remains a major concern in sub saharan africa ssa countries in this study we employ a panel data covering 15 ssa countries from 1996 to 2015 to investigate the growth effects of remittances and quality of governance on food and nutrition security proxied by the average value of food production and the average dietary energy supply adequacy respectively we use a dynamic empirical model based on system gmm to control for unobserved heterogeneity and potential endogeneity of the explanatory variables the empirical results emanating from our analysis show that the interaction of remittances and the composite index of governance quality exerts positive and significant effects on the average value of food production and also contributes to the improvement of average dietary energy supply adequacy in ssa in addition the control of corruption government effectiveness political stability and rule of law scores increase both measures of food and nutrition security albeit the contribution of control over corruption score is relatively the largest as compared to other indicators of governance

international transmission mechanisms and contagion in housing markets this paper explores international transmission mechanism and its role in contagion effect in the housing markets across six major asian cities the analysis is based on the identification of house price diffusion effects through a global vector autoregressive gvar model estimated using quarterly data for six major asian cities hong kong tokyo seoul singapore taipei and bangkok from 1991q1 to 2011q2 the empirical results indicate that the open economies heavily relying on international trade such as singapore japan tokyo taiwan taipei and thailand bangkok show positive correlations between the economy s openness and house prices which is consistent with the balassa samuelson hypothesis interestingly some region specific conditions also appear to play important roles as determinants of house price movements which may be driven by restrictive housing policies and demand supply imbalances such as singapore and bangkok these results are reasonably robust across several model specifications the findings bear significant implications for formulation of investment strategy and public policies

thresholds in the finance growth nexus a cross country analysis thresholds of inflation government size trade openness and per capita income for the finance growth nexus are investigated using five year averages of standard variables for 84 countries from 1965 to 2004 the results suggest that i high inflation crowds out positive effects of financial depth on long run growth ii small government sizes hurt the finance growth nexus in low income countries while large government sizes hurt high income countries iii low levels of trade openness are sufficient for finance growth nexus in high income countries but low income countries need higher levels of trade openness for similar magnitudes of the finance growth nexus and iv catch up effects through the finance growth nexus are higher for moderate per capita income levels

new empirical generalizations on the determinants of price elasticity abstract the importance of pricing decisions for firms has fueled an extensive stream of research on price elasticities in an influential meta analytical study tellis 1988 summarized price elasticity research findings until 1986 however empirical generalizations on price elasticity require modifications because of 1 changes in market characteristics i e characteristics of brands product categories and economic conditions and 2 changes in the research methodology used to assess price elasticities therefore the authors present a meta analysis of price elasticity with new empirical generalizations on its determinants across a set of 1851 price elasticities based on 81 studies the average price elasticity is 2 62 a salient finding is that over the past four decades sales elasticities have significantly increased in magnitude whereas share and choice elasticities have remained fairly constant the authors find that accommodating price endogeneity has a strong magnitude increasing impa

tariffs and growth in the late 19th century the paper estimates the correlation between tariffs and economic growth in the late 19th century in the context of three types of growth equation unconditional convergence equations conditional convergence equations and factor accumulation models it does so for a panel of ten countries between 1875 and 1914 tariffs were positively correlated with growth in these countries during this period economic theory is ambiguous as regards the relationship between trade policy and growth the growth literature of the past decade has produced an impressive array of models in which protection can either increase or reduce long run growth rates grossman and helpman 1991 rivera batiz and romer 1991 stokey 1991 young 1991 such theoretical ambiguity invites empirical research while new growth theory is ambiguous on the subject the new empirical growth literature has produced a consensus that free trade is positively associated with growth based on evidence from the late 20th century but see rodrlguez and rodrik 1999 for a sceptical review of the literature the clear

a century of economic growth in latin america abstract this paper makes a contribution to the study of economic growth in developing countries by analyzing the six largest latin american economies over 105 years within a two equation framework confirming previous findings physical and human capital prove to be key determinants of gdp per head growth however a more controversial result is an overall negative conditional correlation between trade openness and gdp per head growth though openness has a positive link via investment the evidence also shows that macroeconomic instability has been a drag on long term growth in the region

sector value addition technology and co2 emissions in saudi arabia abstract this study assesses the environmental kuznets curve ekc hypothesis with the case study of saudi arabia by considering three channels volume of production sector value addition to gdp and technological innovation using a long time series data set and applying autoregressive distributed lags ardl methodology this study nullifies the existence of the ekc hypothesis in the case of saudi arabia the study also provides robust evidence that economic growth fosters co2 emissions linearly the results also present that the value addition of growth in the industrial and service sectors is responsible for faster growth in co2 emissions while agriculture value addition is negatively and insignificantly associated with emissions finally this study shows that technological innovation is insignificant in helping to reduce co2 emissions thus substantial technological progress in the production process would reduce co2 emissions without harming economic growth

inefficient foreign borrowing a dual and common agency perspective studying the implications of uncoordinated borrowing the paper first looks at whether and when countries borrow too much in the aggregate it then revisits the original sin debate analyzing whether and when equity portfolio investment international portfolio diversification domestic currency denomination and longer maturities enhance borrowing countries access to international lending the paper thereby relates a country s level and quality of access to international capital markets to a variety of institutional features such as the level of domestic savings their location the extent of control rights held by political authorities and the interests of dominant domestic political forces

intercourse across economic growth trade and renewable energy consumption in developing and developed countries abstract this article exploits a dynamic simultaneous equation panel data approach to research the bond across economic growth renewable sort of energy and trade for information of 72 countries since 1990 until 2012 we likewise analyze this relationship by separating all countries into three groups as per the level of development whole developing high income developing upper middle income developing lower middle income developing lower income developing developed major developed and others developed countries the outcomes demonstrate a feedback linkage between income and renewable energy consumption between trade and renewable energy consumption and between trade and income this implies that the three variables considered are interdependent

distributional consequences of globalisation empirical evidence from panel data abstract this paper investigates the impact of globalisation on cross country inequality using a large panel dataset the findings reveal that location and capital are the main determinants of inequality trade intensity and foreign direct investment make only a small contribution approximately 4 the relative contributions of trade and foreign direct investment to inequality have changed little over time and have certainly not increased at the same rate as the rise in global trade and investment activity hence globalisation does not emerge as a significant factor in driving cross country inequality differences emerge when countries are grouped by relative income but the main findings persist

does human capital constrain the impact of foreign direct investment and remittances on economic growth in ghana this article empirically investigates whether human capital constrains the impact of foreign direct investment fdi and remittances on economic growth in ghana an economic growth model for ghana is specified and estimated using fully modified ordinary least squares fmols estimator and employing annual data spanning the period 1965 to 2008 empirical results indicate that fdi and remittances are key determinants of economic growth in ghana results indicate that human capital enhances the impact of fdi and remittances on economic growth although both government expenditure and trade openness are growth enhancing government expenditure appears to crowd out private investment empirical results also indicate that domestic inflationary pressures unstable political environment and volatile global economy exert a negative impact on economic growth in ghana

is globalization reducing absolute poverty summary using data from 114 countries 1983 2007 we examine the relationship between globalization and world bank absolute poverty estimates we find a significant negative correlation between globalization and poverty robust to several econometric specifications including a fixed effect panel a long run first difference and a pooled ols regression introducing two instruments for globalization we also show that results are robust to correction for potential endogeneity we motivate and test the instruments in several ways in particular information flows and more liberal trade restrictions robustly correlate with lower absolute poverty

the architecture of globalization a network approach to international economic integration we combine data on international trade linkages with network methods to examine the global trading system as an interdependent complex network we map the topology of the international trade network and suggest new network based measures of international economic integration at both a global system wide level and a local country level we develop network based measures that incorporate not only the volume of trade but also the influence that a country has on the international trading system these measures incorporate the structure and function of the network and may provide a more meaningful approach to globalization than current measures based on trade volumes we find that in terms of participation and influence in the network global trade is hierarchical with a core periphery structure at higher levels of trade though integration of smaller countries into the network increased considerably over the 1990s the network is strongly balkanized according to geography of trading partners but not as strongly by income or legal origin using these new measures we find that a country s position in the network has substantial implications for economic growth we therefore suggest that a network approach to international economic integration has potential for useful applications in international business finance and development

openness and the finance growth nexus abstract rajan and zingales 2003 hypothesize that openness trade and financial is a crucial determinant of financial development the main policy implication emerging from this hypothesis is that openness should be promoted as a means of facilitating economic growth through financial development while subsequent research confirms that openness affects financial development we study whether finance continues to be growth promoting as economies become increasingly open a key implicit assumption behind the policy recommendation using data from 78 economies for the period 1981 2006 we find that very high levels of financial openness generally erode the growth promoting role of financial development while high trade openness strengthens it these worldwide findings by and large hold for subsamples of sub saharan african latin american and oecd economies notable exceptions are the invariance of the finance growth fg nexus on trade openness in oecd economies and the positive effect of financial openness on the fg link in latin american economies

crisis costs and debtor discipline the efficacy of public policy in sovereign debt crises abstract recent debate on the reform of the international financial architecture has highlighted the potentially important role of the official sector in crisis management we examine how such public intervention in sovereign debt crises affects efficiency ex ante and ex post our results shed light on the scale of capital inflows and the implications for debtor country output of such a regime the efficacy of measures such as officially sanctioned stays on creditor litigation depend critically on the quality of public sector surveillance and the size of the costs of sovereign debt crises

rules of thumb for sovereign debt crises abstract this paper investigates the economic and political conditions that are associated to the occurrence of a sovereign debt crisis we use a new statistical approach classification and regression tree that allows us to derive a collection of rules of thumb that help identify the typical characteristics of defaulters we find that not all crises are equal they differ depending on whether the government faces insolvency illiquidity or various macroeconomic risks we also characterize the set of fundamentals that can be associated with a relatively risk free zone this classification is important for discussing appropriate policy options to prevent crises and improve response time and prediction

price and advertising effectiveness over the business cycle abstract firms are under increasing pressure to justify their marketing expenditures this evolution toward greater accountability is reinforced in harsh economic times when marketing budgets are among the first to be reconsidered to make such decisions managers must know whether and to what extent marketing s effectiveness varies with the economic tide however surprisingly little research addresses this issue therefore the authors conduct a systematic investigation of the business cycle s impact on the effectiveness of two important marketing instruments price and advertising to do so they estimate time varying short and long term advertising and price elasticities for 150 brands across 36 consumer packaged goods categories using 18 years of monthly u k data from 1993 to 2010 the long term price sensitivity tends to decrease during economic expansions whereas long term advertising elasticities increase during contractions the long term own and cross price elasticities increase moreover

collective action clauses in international sovereign bond contracts whence the opposition in the debate on strengthening the international financial architecture which peaked in 2002 after a series of emerging market sovereign debt crises the universal adoption of collective action clauses cacs was the most promising reform proposal academics and the official sector had been promoting cacs at least since 1995 yet market practice did not begin to change until 2003 this delay is often attributed to the opposition of investors and sovereign borrower to cacs this paper evaluates the publicly stated as well as the suspected private motives of the two sides to block the spread of cacs it draws on a wide range of existing evidence and adds some new theoretical considerations to show that there is no reason to be sceptical of cacs unless bailouts exist as an alternative crisis resolution mechanism this conclusion may be of interest purely for the sake of historical accuracy but more importantly it may help to better understand any potential future resistance by market participants e g in the process of introducing cacs in bonds governed by german law

foreign law bonds can they reduce sovereign borrowing costs abstract governments often issue bonds in foreign jurisdictions which can provide additional legal protection vis a vis domestic bonds this paper studies the effect of this jurisdiction choice on bond prices we test whether foreign law bonds trade at a premium compared to domestic law bonds we use the euro area 2006 2013 as a unique testing ground controlling for currency risk liquidity risk and term structure foreign law bonds indeed carry significantly lower yields in distress periods and this effect rises as the risk of a sovereign default increases these results indicate that in times of crisis governments can borrow at lower rates under foreign law

individual investor perceptions and behavior during the financial crisis combining monthly survey data with matching trading records we examine how individual investor perceptions change and drive trading and risk taking behavior during the 2008 2009 financial crisis we find that investor perceptions fluctuate significantly during the crisis with risk tolerance and risk perceptions being less volatile than return expectations during the worst months of the crisis investors return expectations and risk tolerance decrease while their risk perceptions increase towards the end of the crisis investor perceptions recover we document substantial swings in trading and risk taking behavior that are driven by changes in investor perceptions overall individual investors continue to trade actively and do not de risk their investment portfolios during the crisis

international diversification and firm performance the s curve hypothesis a proposed theoretical framework for the study of multinationality and performance includes both benefits and costs of geographic expansion over different phases of internationalization data on 1 489 japanese firms over 12 years show a consistent horizontal x s shaped x relationship between multinationality and performance further firms investing more heavily in intangible assets such as technology and advertising achieved greater profitability gains from growth in foreign direct investment our framework and findings highlight complexity and temporal dynamics

sovereign liquidity crises the strategic case for a payments standstill is sovereign borrowing so different from corporate debt that there is no need for bankruptcy style procedures to protect debtors with the waiver of immunity sovereign debtors who already face severe disruption from short term creditors grabbing their currency reserves are also exposed to litigious creditors trying to seize what assets they can in a race of the vultures shielding sovereign debtors from inter creditor conflict by authorised standstills on payments doubt less runs some risk of debtor s moral hazard but the lack of an orderly procedure for resolving sovereign liquidity crises means that the imf is de facto forced to bail out countries in trouble this leads to both debtor and creditor moral hazard as investors lend without monitoring knowing that their investments are essentially guaranteed the strategic case for legalising standstills is to rescue the international financial system from this time consistent trap

losers and winners in economic growth this paper examines the growth rates in 116 economies from 1965 to 1985 it finds that the lowest quintile had an average growth rate of real gross domestic product gdp per capita of 1 3 percent whereas the highest quintile averaged 4 8 percent the authors isolate five influences that discriminate reasonably well between slow and fast growers a conditional convergence effect whereby a country grows faster if it begins with lower real gdp per capita in relation to its initial level of human capital in the forms of educational attainment and health a positive effect on growth from a high ratio of investment to gdp although this effect is weaker than that reported in some previous studies a negative effect from excessively large government a negative effect from government induced distortions of markets and a negative effect from political instability overall the fitted growth rates for eighty five economies for 1965 85 had a correlation of 0 8 with the actual values the authors also find that female educational attainment has a pronounced negative effect on fertility whereas female and male attainment are each positively related to life expectancy and negatively related to infant mortality

personal selling elasticities a meta analysis abstract this article presents a meta analysis of prior econometric estimates of personal selling elasticity that is the ratio of the percentage change in an objective ratio scaled measure of sales output e g dollar or unit purchases to the corresponding percentage change in an objective ratio scaled measure of personal selling input e g dollar expenditures the authors conduct a meta analysis of 506 personal selling elasticity estimates drawn from analyses of 88 empirical data sets across 75 previous articles they find a mean estimate of current period personal selling elasticity of 34 they also find that elasticity estimates are higher for early life cycle stage offerings higher from studies set in europe than from those set in the united states and smaller in more recent years in addition elasticity estimates are affected significantly by analysts use of relative rather than absolute sales output measures by cross sectional rather than panel data by omission of promotions by lagge

practice prize winner dynamic marketing budget allocation across countries products and marketing activities previous research on marketing budget decisions has shown that profit improvement from better allocation across products or regions is much higher than from improving the overall budget however despite its high managerial relevance contributions by marketing scholars are rare in this paper we introduce an innovative and feasible solution to the dynamic marketing budget allocation problem for multiproduct multicountry firms specifically our decision support model allows determining near optimal marketing budgets at the country product marketing activity level in an excel supported environment each year the model accounts for marketing dynamics and a product s growth potential as well as for trade offs with respect to marketing effectiveness and profit contribution the model has been successfully implemented at bayer one the world s largest pharmaceutical and chemical firms the profit improvement potential is more than 50 and worth nearly 500 million in incremental discounted cash flows

trade openness and income a re examination abstract this study uses a new innovative measure of trade protection and finds that less trade protection is associated with higher income per capita using data from 131 developed and developing countries

bond restructuring and moral hazard are collective action clauses costly abstract recent emerging market crises have prompted debate over the costs and benefits of collective action clauses cacs in bond contracts cacs may facilitate the restructuring of repayment terms in the event of financial distress proponents of cacs argue they should lower borrowing costs while opponents contend that they lead to moral hazard and increased borrowing costs this paper examines the pricing of bonds with and without cacs using data for both primary and secondary market yields and finds no evidence that the presence of cacs has increased yields for either higher or lower rated issuers

industrial protection in the developed countries much has been said in recent years about growing industrial protectionism in the developed countries but little effort has been made to assess quantitatively the increases in protection that have actually occurred this essay will provide estimates for the major developed countries the united states the european common market and japan on changes in their tariff and non tariff barriers on manufactured imports in general and on imports from the developing countries in particular the protection of agricultural products is however excluded from the preview of the essay

trade reform with quotas partial rent retention and tariffs quotas are the predominant means of protection in developed countries with quota rents commonly shared between exporter and importer this paper derives shadow prices appropriate to evaluating trade reform under these circumstances and provides a number of useful sufficient conditions for welfare improving piecemeal reform in doing so the authors apply the distorted quantity constrained expenditure function and use implicit separability to derive more powerful results than have previously been available

impact of openness on growth in different country groups this paper evaluates the impact of openness on growth in different country groups using a panel of 79 countries over the period 1970 98 it distinguishes itself from many existing studies in three aspects firstly both trade and fdi are included as measures of openness secondly countries are classified into high middle and low income groups to compare the roles of trade and fdi in these groups thirdly the possible problems of endogeneity and multicollinearity of trade and fdi are carefully dealt with in a panel data setting the main findings are as follows total trade has a general positive impact on growth in all country groups although the impact from imports is not significant in high income countries fdi has a positive impact on growth in high and middle income countries but not in low income countries with the existing absorptive capabilities low income countries can benefit from both exports and imports but not from fdi these findings suggest that trade and fdi affect growth through different channels and under different conditions the paper also discusses important policy implications

trade openness and economic growth a cross country empirical investigation abstract this paper demonstrates that trade liberalization does not have a simple and straightforward relationship with growth using a large number of openness measures for a cross section of countries over the last three decades we use two groups of trade openness measures the regression results for numerous trade intensity ratios are mostly consistent with the existing literature however contrary to the conventional view on the growth effects of trade barriers our estimation results show that trade barriers are positively and in most specifications significantly associated with growth especially for developing countries and they are consistent with the findings of theoretical growth and development literature

minerals institutions openness and growth an empirical analysis competing explanations of the resource curse are tested using panel data the data support the existence of a mineral resource curse for developing countries with weak institutions consistent with the hypothesis that owners of mineral resources use weak institutions and openness to trade to stifle the development of human capital to the detriment of growth in other sectors of the economy manufacturing imports substitute for the development of domestic production so openness to trade correlates with lower growth in mineral dependent economies the dutch disease and debt overhang explanations of the resource curse are not supported

endogenous product cycles we construct a model of the product cycle featuring endogenous innovation and endogenous technology transfer competitive entrepreneurs in the north expend resources to bring out new products whenever expected present discounted value of future oligopoly profits exceeds current product development costs each northern oligopolist continuously faces the risk that its product will be copied by a southern imitator at which time its profit stream will come to an end in the south competitive entrepreneurs may devote resources to learning the production processes that have been developed in the north there too costs of reverse engineering must be covered by a stream of operating profits we study the determinants of the long run rate of growth of the world economy and the long run rate of technological diffusion we also provide an analysis of the effects of exogenous events and of public policy on relative wage rates in the two regions

tariff rates tariff revenue and tariff reform some new facts this article compares the statutory and valorem tariff rates official rates with the ratio of tariff revenues to import values collected rates for jamaica kenya and pakistan it identifies four general features of the tariff codes considers whether these features apply to all developing countries and discusses four implications of these features for tariff reform first the collected rate for any given item in the tariff code is only weakly related to the official rate for the item second the variation of collected rates on average increase much less than the official rates fourth the relation between official rates and collected rates is nonlinear because the slope is lower at higher levels of the official rate

sovereign debt as intertemporal barter author s kletzer kenneth m wright brian d abstract borrowing and lending between sovereign parties is modeled as intertemporal barter that smoothes the consumption of a risk averse party subject to endowment shocks the surplus anticipated in the relationship offers sufficient incentive for cooperation by all parties including any other competitive agents who are potential lenders to the sovereign the sole punishments consist of renegotiation proof changes in the path of future payments we show that intertemporal trade can be sustained in the absence of any exogenous enforcement of lending relationships whatsoever that is borrowing and lending are possible under anarchy and are supported by punishments that consist of cheating any cheater long term implicit relationships may be fulfilled as the continual renegotiation of simple incomplete short term loans the analysis suggests that the crucial role of the explicit loan contract is the identification of the relationship and the parties involved

openness domestic performance and growth abstract semiparametric estimation shows that growth is contingent on openness domestic performance and level of development economies with low degree of openness can adopt more open policies and stronger measures to achieve better domestic performance and hasten their growth

trade policy issues and empirical analysis interest in u s trade policy has been stimulated in recent years by the massive american trade deficit by the belief that intervention by foreign governments in international markets has given other countries a competitive edge over the united states and by concern about the increase in protectionism among industrial countries in turn major analytical developments in international economics have revolutionized trade theory broadening its scope both by introducing in a more formal manner such concepts as imperfect competition increasing returns product differentiation and learning effects and by including the study of political and economic factors that shape trade policy decisions this collection of papers the result of a conference held by the nber applies these new trade theories to existing world cases and also presents complementary empirical studies that are grounded in more traditional trade theories the volume is divided into four parts the papers in part 1 consider the problem of imperfect competition empirically assessing the economic effect of various trade policies introduced in industries in which the new trade theory seems to apply those in part 2 isolate the effects of protection from the influences of the many economic changes that accompany actual periods of protection and also examine how the effects from exogenous changes in economic conditions vary with the form of protection part 3 provides new empirical evidence on the effect of foreign production by a country s firms on the home country s exports finally in part 4 two key bilateral issues are analyzed recent u s japanese trade tensions and the incident involving the threat of the imposition of countervailing duties by the united states on canadian softwood lumber

differences in relative prices and international differences in growth rates the new growth literature following paul m romer 1986 and robert e lucas jr 1988 has formulated models in which growth rates can differ systematically across countries a large empirical literature has used cross sectional techniques to examine the cause of international differences in growth rates this paper examines whether this work has used data which have been constructed in such a way as to introduce inadvertently a spurious correlation between growth and income levels this effect occurs because relative prices evolve because of different rates of technological progress in different industries many of the new growth models assume single goods or goods produced by the same technology so this phenomenon has so far escaped analysis if technological progress is more rapid in some sectors than others relative prices will change during the process of development the change of relative prices has two effects on measured growth rates first the choice of base prices affects the growth rate this phenomenon is sometimes called the gerschenkron effect second using any base prices or weights introduces a spurious correlation between income and growth less developed countries would tend to have lower growth rates not because they grew more slowly but because of data construction techniques for the sake of simplicity these phenomena will be called the gerschenkron or the level effect and the spurious correlation effect 3 this paper examines the international comparison program icp and the penn world tables pwt which are based on the icp the penn world tables are the data most widely used in empirical studies of international differences in economic growth both the icp and pwt use international prices to adjust for differences in the purchasing power of currencies these prices most closely resemble hungarian prices using such prices tends to produce time series with lower growth rates than those in the national accounts for countries less developed than hungary conversely the growth rates would be higher for countries more developed than hungary however the growth rates of poorer countries are not systematically lower in the penn world tables the paper examines why the growth rates are not distorted and makes some specific recommendations for data construction and use virginia polytechnic institute and state university blacksburg va 24061 0316 part of this work was supported by a grant from the institute of international studies at brown university and by a summer internship at the division of international finance at the federal reserve board i am grateful to peter garber david weil oded galor and anonymous referees for helpful comments alan heston and robert summers have also helped me understand icp and pwt methodology of course i alone am responsible for any mistakes in this paper iexamples include steve dowrick and duc tho nguyen 1989 robert j barro 1991 j bradford de long and lawrence h summers 1991 and n gregory mankiw et al 1992 2a series of papers by christina d romer 1986a b 1989 has already emphasized the importance of data construction techniques in another context 3there is a third effect a real acceleration effect caused by shifting consumption patterns and the reallocation of resources between sectors growth accountants such as angus maddison 1987 adjust estimates of total factor productivity for this sort of shift william j baumol et al 1989 have also referred to this phenomenon for an analysis in terms of a simple multisector solow model see nuxoll 1992a

dynamic linkages between diffusion of information communication technology and labour productivity in south asia at present diffusion of information communication technology ict is a significant area of concern for sustainable development and growth of a country regions with abundant labour such as south asia require significant improvements in the diffusion of ict to achieve higher productivity for their labour which in turn can increase the pace of economic growth in this context the objective of this study is to investigate whether ict could be used to improve labour productivity for countries in south asia this study first investigates the general status of diffusion of ict among south asian countries the initial results based on descriptive statistics indicate that there is a significant gap among the south asian countries with maldives having the highest ict facilities second using robust panel data methodologies this study concludes that south asia s drive for higher productivity of its abundant labour force can substantially be improved in the long run by increasing diffusion of ict in the prese

does trade openness contribute to food security a dynamic panel analysis abstract despite significant progress in the fight against hunger during the last decades food insecurity remains a major problem in many countries especially developing ones in this study we use a large cross country data to investigate the impact of trade openness and other factors on food security measured by dietary energy consumption we employ a system gmm approach to account for unobserved heterogeneity correlated individual effects and potential endogeneity of the explanatory variables the empirical results reveal that trade openness and economic growth exert positive and significant impacts on dietary energy consumption and also contribute to improvements in dietary diversity the results are robust to the inclusion of additional variables capturing specific agro climatic constraints e g weather related and regional country characteristics and to the sample composition most geographical regions are found to have significantly higher food security levels compared to sub saharan africa additional results indicate that besides calorie consumption trade openness also improves dietary diversity and diet quality related aspects of food security

immigrant remittances and the venture investment environment of developing countries despite the increasing importance of financial and social remittances to developing countries their impact on home country venture investing environments has been largely overlooked i develop a framework grounded in transaction costs economics and social knowledge theories to investigate relationships between remittances and home country 1 capital availability 2 new business creation and 3 economic internationalization my framework also accounts for individual and collective immigrant attributes that may moderate the impact of remittances on these alternative indicators of the venture investment environment analyses of immigrant remittances to 61 developing countries from 2002 2007 indicate that they increase general and more narrowly defined venture capital availability as well as broader openness to international trade remittances also increase new business start up rates when the developing country s public sector is sufficiently small positive venture funding effects of remittances are magnified when coming from immigrants living in highly concentrated communities but are diminished when coming from highly educated immigrants overall results suggest that developing country immigrants of varying backgrounds play an important role in venture funding founding and integration with the world economy