the effects of pension funds on markets performance a review the worldwide reforming process of pension systems triggered by the demographic transition and globalization has led several countries to implement multi pillar pension systems and enhance pension funds for this reason the studies on the effects that pension funds exert on markets performance have been flourishing in the last decades in this paper we provide an updated review of the empirical advances in this field of study with particular focus on the effects that pension funds produce on labour markets financial markets and economic growth

financial development and economic growth a meta analysis we analyze 1334 estimates from 67 studies that examine the effect of financial development on economic growth taken together the studies imply a positive and statistically significant effect but the individual estimates vary widely we find that both research design and heterogeneity in the underlying effect play a role in explaining the differences in results studies that do not address endogeneity tend to overstate the effect of finance on growth while the effect seems to be weaker in less developed countries the effect decreases worldwide after the 1980s our results also suggest that stock markets support faster economic growth than other financial intermediaries

globalization as a development strategy in latin america abstract the swinging of the pendulum toward policies that enhance latin america s insertion into the world economy diverted attention from domestic policies that continue to be essential for growth and development broadly defined six domestic policy areas are identified here increasing domestic savings implementing countercyclical fiscal policies mobilizing public resources investing in education promoting employment and reducing income inequality the opportunity cost of not having devoted due attention to these issues throughout the 1990s is surely enormous and for those countries still underplaying domestic variables the longer the delay the greater the costs the imperative of devoting more political capital to domestic strategies of development cannot be overstated whether international financial institutions choose to emphasize them or not

household saving micro theories and micro facts in this survey we review the recent theoretical and empirical literature on household saving and consumption the discussion is structured around a list of motives for saving and how well the standard theory captures these motives we show that almost all of the motives for saving that have been suggested in the informal saving literature can be captured in the standard optimizing model particular attention is given to recent work on the precautionary motive and its implications for saving and consumption behavior we also discuss the behavioral or psychological approach that eschews the use of standard optimization techniques and focuses instead on direct consideration on saving we provide a section on facts who save and how much we then discuss informally the recent decline in the u s saving rate and whether the theory is of much use in understanding this and other changes in aggregate saving rates over time we do not find any convincing explanation for the change in saving rates we also discuss some analyses of saving behavior over the life cycle addressing such questions as whether households save enough for retirement and whether the consumption patterns of older households can be rationalized within a simple life cycle model we also review a great number of studies of the consumption euler equations based on our analysis of the studies cited we conclude that there is still mixed evidence that consumption is excessively sensitive to income we also examine in depth the recent empirical literature on the precautionary motive we conclude that although some households do seem to have a significant precautionary motive at some points in their life cycle this motive is not so strong empirically as some investigators suggest

a framework to update hofstede s cultural value indices economic dynamics and institutional stability this study offers an update of the hofstede cultural value dimensions we argue that changes in economic conditions are the source of cultural dynamics while the endurance of institutional characteristics provides the foundation for cultural stability it is found that national wealth measured by gdp per capita has a curvilinear relationship with individualism long term orientation and power distance scores relatively speaking uncertainty avoidance and masculinity mainly reflect some rather stable institutional traditions such as language religion climate ethnic homogeneity and legal origin and are less likely to change over time

the determinants of private saving in india abstract this paper examines the determinants of private saving in the process of economic development in the light of the indian experience it is found that the saving rate rises with both the level and the rate of growth of disposable income the real interest rate on bank deposits has a significant positive impact but the magnitude of the impact is modest public saving seems to crowd out private saving but less than proportionately furthermore the spread of banking facilities in the economy and the inflation rate have a positive impact and changes in the external terms of trade a negative impact on private saving

marry your like assortative mating and income inequality has there been an increase in positive assortative mating does assortative mating contribute to household income inequality data from the united states census bureau suggests there has been a rise in assortative mating additionally assortative mating aects household income inequality in particular if matching in 2005 between husbands and wives had been random instead of the pattern observed in the data then the gini coe cient would have fallen from the observed 0 43 to 0 34 so that income inequality would be smaller thus assortative mating is important for income inequality the high level of married female labor force participation in 2005 is important for this

mode of entry mode into a foreign market the case of u s mutual funds in canada abstract u s mutual fund companies offer funds in canada through two channels foreign direct investment or trade in advisement services the total value of u s controlled funds amounts to 18 of the canadian equity fund market this paper investigates how the fund level and firm level characteristics affect the channel used to enter the canadian market empirical results indicate that the funds offered through fdi are not especially successful in the u s market but are associated with dominant companies whereas the funds offered through trade in advisement services are highly successful in the u s market and are from companies with relatively few successful funds

the interest elasticity of savings in developing countries the existing evidence abstract this paper presents a critical analysis of some of the most recent empirical work on the interest elasticity of savings in developing economies supported by a set of empirical results the paper argues that a the real interest elasticity of savings is not easily detected using the existing empirical models which generally yield insignificant interest rate parameters in the seventies b the existing models suffer from serious defects that make if very difficult to interpret the estimated parameters

choice of foreign market entry mode impact of ownership location and internalization factors firms interested in servicing foreign markets face a difficult decision with regards to the choice of an entry mode the options available to a firm include exporting licensing joint venture and sole venture several factors that determine the choice of a specific foreign market entry mode have been identified in previous literature these factors can be classified into three categories ownership advantages of a firm location advantages of a market and internalization advantages of integrating transactions this study examines the independent and joint influences of these factors on the choice of an entry mode multinomial logistic regression model is employed to test the hypothesized effects

determinants of private savings behaviour in turkey this study investigates the effects on private saving rates of a number of policy and non policy variables the analysis covers the period 1968 1994 the empirical private saving model for turkey is estimated the findings support the hypothesis that private saving rates have strong inertia the evidence indicates that government saving does not tend to crowd out private savings and the ricardian equivalence does not hold strictly income level has a positive impact on private saving rate and growth rate of income is not statistically significant from a policy point of view financial depth and development measures in turkey suggest that countries with deeper financial systems tend to have higher private saving rates private credit and real interest rates try to capture the severity of the borrowing constraints and the degree of financial repression for turkey moreover the negative impact of life expectancy rate lends support to the life cycle hypothesis the precautionary motive for saving is suppor

how mncs choose entry modes and form alliances the china experience this study examine two dimensions of firms foreign market entry strategy mode of entry and formation of alliances based on the existing literature we propose a model that describes how host country home country and industry specific factors affect foreign firms decisions on how they enter the market and whether they will enter with a partner firm or not the model also describes how operation related factors i e the location and the level of local government affect these decisions seven major hypotheses were tested using a longitudinal sample of 2 998 foreign business activities in china between 1979 and 1993 our sample consists of foreign investing firms from the u s europe japan and other asian countries by choosing china as a host country the study offers insights into how firms of different regional groups adapted their strategies to a changing host environment

savings and the terms of trade under borrowing constraints the authors examine the extent to which permanent terms of trade shocks have an asymmetric effect on private savings using a simple three period model they show that if households expect to face binding constraints on borrowing in bad states of nature when the economy is in a long trough rather than a sharp peak savings rates will respond asymmetrically to favorable movements in the permanent component of the terms of trade in contrast with the predictions of conventional consumption smoothing models they test the asymmetric effects of terms of trade disturbances using an econometric model that controls for various standard determinants of private savings the results based on panel data for non oil commodity exporters of sub saharan africa for 1980 96 a group of countries for which movements in the terms of trade have traditionally represented a key source of macroeconomic shocks indicate that increases in the permanent component of the terms of trade measured using three alternative filtering techniques indeed tend to be associated with higher rates of private savings

explaining differences in the domestic savings ratio across countries a panel data study this article seeks to analyse the major determinants of differences in the domestic savings ratio between countries using panel data for 62 countries over the period 1967 95 a basic distinction is made between the determinants of the capacity to save and the willingness to save the capacity to save depends primarily on the level of per capita income but non linearly and the growth of income the life cycle hypothesis and the empirics strongly support these hypotheses the willingness to save is assumed to depend on financial variables such as the rate of interest the level of financial deepening and inflation we find no support for a positive interest rate effect but strong support for the level of financial deepening measured by the ratio of quasi liquid liabilities to gdp inflation exerts a mild positive effect on saving but soon turns negative total saving may also depend on tax effort but a surprisingly strong negative relation is found between the ratio of tax revenue to gdp and the domestic savings ratio

the boundaries of multinational enterprises and the theory of international trade this paper begins with a review of empirical evidence on multinational firms conceptual underpinnings of a theory are developed relying in particular on the notion of knowledge capital as a mobile joint input into geographically separated production facilities this idea is embedded in a simple two country general equilibrium model that supports multinational production in equilibrium under conditions consistent with the empirical evidence the final section examines internalization and shows why certain properties of knowledge capital also imply a preference for transferring technologies internally within the firm rather than through arm s length markets

are there cultural effects on saving some cross sectional evidence why are there such large differences in saving rates across countries conventional economic analyses have not been successful in explaining international saving differences so economists have sometimes suggested that national saving differences may be explained by cultural differences this paper tests the hypothesis that cultural factors influence saving by comparing saving patterns of immigrants to canada from different cultures using data from the canadian survey of family expenditures we find no evidence of cultural effects on saving

a survey of recent developments in the literature of finance and growth this paper provides a survey of the recent progress in the literature of financial development and economic growth the survey highlights that most empirical studies focus on either testing the role of financial development in stimulating economic growth or examining the direction of causality between these two variables although the positive role of finance on growth has become a stylized fact there are some methodological reservations about the results from these empirical studies several key issues unresolved in the literature are highlighted the paper also points to several directions for future research

a note on time preference and the tobin effect abstract this paper proposes an alternative time preference specification to uzawa preferences time preference is modeled as an increasing function of real wealth so that the tobin effect and stability rest on optimizing behavior as opposed to counterintuitive preference assumptions

business cycle fluctuations and household saving in oecd countries a panel data analysis abstract we investigate the cyclicality of the household saving to household disposable income ratio for a panel of 16 oecd countries over the period 1969 2012 we find evidence that the household saving ratio is countercyclical we empirically investigate whether the determinants of saving suggested by a standard buffer stock model of saving can explain this finding the three main determinants of household saving implied by such a model i e unemployment risk household wealth and credit constraints have a significant impact on the household saving ratio while their combined effect completely offsets its countercyclicality the saving regression results are robust to potential endogeneity of the regressors to making use of a reduced sample size that leaves out the period of the great recession and to the one by one addition of variables suggested by alternative theories that also predict a countercyclical saving ratio

the relationship between income inequality and aggregate saving an empirical analysis using cross country panel data abstractif the rich save more than the poor an increase in income inequality raises aggregate saving we investigate whether income inequality is positively related to aggregate saving ratio by estimating a fixed effect model based on a panel data of 48 countries for the period 1991 2010 we find evidence that aggregate saving ratio increases with income inequality using various inequality measures in particular the effect of income distribution on saving is greater and statistically more significant with in financially developed rich and oecd countries it suggests that the rich save much more than the poor under advanced financial system and in a rich country we also find that the relationship between income inequality and saving ratio is closer in the 2000s than the 1990s this finding may result from financial development and the high income level in the 2000s

determinants of foreign investment of u s advertising agencies this paper investigates the impact of several factors on the foreign investment of u s advertising agencies by using the theories on the determinants of foreign direct investment by manufacturing firms for the two years examined the hypotheses about the impact of host country market size host country geographic proximity firm size firm s international operations experience oligopolistic reaction and presence of home country customers abroad are all confirmed this paper also investigates the impact of oligopolistic reaction among the top ten and the second ten largest agencies and finds a stronger impact for the former

a comparison of national saving rates in the uk us and italy abstract we develop the approach of gokhale kotlikoff and sabelhaus 1996 understanding the postwar decline in us saving a cohort analysis brookings papers on economic activity 0 315 390 based on the life cycle model of savings to decompose the differences in the national saving rates between the uk us and italy our work suggests that the us saving rate is lower principally because americans on average retire later in contrast the italian saving rate is higher predominantly because italians are credit constrained particularly when young we also found that demography and the different tax and benefit systems are able to explain little of the cross sectional differences in saving rates the study accounts for the possible importance of inter generational private transfers in determining saving rates

household saving in developing countries first cross country evidence although most studies have relied on domestic or private sector saving data this article uses household data available from the u n system of national accounts for a sample of 10 countries household saving functions are estimated using combined time series and cross country observations in order to test households responses to income and growth rates of return monetary wealth foreign saving and demographic variables the results show that income and wealth variables affect saving strongly and in ways consistent with standard theories inflation and the interest rate do not show clear effects on saving which is also consistent with their theoretical ambiguity foreign saving and monetary assets have strong negative effects on household saving which suggests the importance of liquidity constraints and monetary wealth in developing countries

does the quality of institutions enhance savings the case of sub saharan africa over the last three decades there has been increasing disparity in savings across regions and income groupings globally in this paper we investigate whether the quality of institutions explains

the experience factor in foreign market entry behavior of service firms the paper examines the effect of international experience on service firms selection of foreign markets and entry modes the investigation utilizes survey date from 151 united states based service firms results on market selection suggest that as their experience increases and becomes geographically more diversified service firms tend to choose markets that are culturally less similar to their home country on entry mode choice the paper departs from traditional linear conceptualizations and hypothesizes a u shaped relationship between experience and propensity for integrated entry modes results generally support the hypothesis the paper explains these findings and describes how service firms resemble and differ from manufacturing firms in their foreign market entry behavior

a comparison of saving rates microdata evidence from seventeen latin american and caribbean countries using microdata on expenditure and income for seventeen latin american and caribbean countries this paper presents stylized facts on saving behavior by age education income and place of residence counterfactual saving rates are computed by imposing the saving behavior the population distribution or the income distribution of two benchmark economies the united states and korea the results suggest that the difference in national saving rates between latin america and caribbean and the benchmark economies can mainly be attributed to differences in saving behavior of the population and to a lesser extent to differences in the distribution of the population by education levels other demographic or income distribution differences are not quantitatively important as explanations of saving rates

measuring r d in small firms how much are we missing the oecd surveys on r d are considerably biased towards underestimating r d in small firms this conclusion is derived from the author s comparison between the official dutch r d survey and the findings of his own survey among 3000 firms although being based on dutch observations only the author s considerations have an impact on other oecd countries since the official dutch r d survey is fully compatible with those in other countries the findings call into question the results from a number of empirical studies bearing on subjects such as market structure and r d firm size and r d or r d and growth

efficiency with costly information a reinterpretation of evidence from managed portfolios we investigate the informational efficiency of mutual fund performance for the period 1965 84 results are shown to be sensitive to the measurement of performance chosen we find that returns on s p stocks returns on non s p stocks and returns on bonds are significant factors in performance assessment once we correct for the impact of non s p assets on mutual fund returns we find that mutual funds do not earn returns that justify their information acquisition costs this is consistent with results for prior periods coauthors are martin j gruber sanjiv das and matthew hlavka article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

long live democracy the determinants of political instability in latin america abstract we investigate the underlying causes of political instability in a panel of 18 latin american countries from 1971 2000 we test whether regime type regime durability factionalism income inequality ethnic diversity ethnic discrimination regional spillover effects urban growth and macroeconomic variables matter for instability we find several important results 1 democracy has a significant negative effect on instability that is robust to several alternative specifications 2 factionalised political systems experience higher instability 3 income inequality ethnic fractionalisation and urban growth have important nonlinear effects on instability and 4 of the macroeconomic variables we study only openness to trade has a significant negative effect on instability

the determinants of household and private savings in thailand a broad set of possible determinants of household and private savings behaviour is examined through an in depth case study of thailand during the period 1960 to 2004 results suggest that an increase in economic growth inflation and terms of trade all have a significant positive impact on household and private saving rates in contrast the availability of bank credit tends to reduce household and private saving rates while an increase in both old and young dependency has a negative impact on household and private saving rates the magnitude of the impact on the former is far greater than that on the latter furthermore public saving seems to crowd out household and private saving but less than proportionately this reflects a possible role of fiscal policy in increasing national savings in the economy over and above these variables corporate saving is another important determinant of household saving an increase in the former brings about a significant reduction in the latter

institutions and savings in developing and emerging economies domestic savings are an important prerequisite for capital formation and growth in this paper we analyze a new channel through which institutions influence aggregate savings and economic development whereas research in the field of savings decisions concentrates largely on the level of the individual the literature on institutions and growth as well as on aggregate savings formation focuses on the aggregate national level first we develop a framework that brings together both lines of reasoning arguing that institutions may influence the individual savings decision as well as national savings in aggregate this potential for institutional quality to influence economic performance has been neglected so far second we build upon the empirical literature on aggregate savings formation and provide results supporting our hypothesis that better economic institutions drive aggregate savings formation upwards by contrast we do not find such effects in the case of the political environment our findings are robust when checked against a number of changes in explanatory variables estimation methods and the treatment of instruments

international evidence on how income inequality and credit market imperfections affect private saving rates abstract this paper empirically examines the hypothesis that income distribution exerts an independent effect on private saving rates across countries and tests particular channels for income inequality to affect private saving rates cross sectional and panel regression results show that inequality has a robust positive effect on private saving rates that depends on financial market development and credit available to the private sector the paper thus identifies credit market imperfections as the likely reason for the inequality private saving link the data provide no evidence supporting a subsistence channel for inequality to affect private saving as suggested by nonhomothetic utility functions

saving in the world abstract this paper presents new evidence on the behavior of saving in the world by extending previous empirical research in several dimensions after extensively surveying the relevant theoretical and empirical literature the paper reports estimates of saving determinants relying on the newly constructed and largest available database covering 165 countries over 1981 2012 the empirical specification includes determinants not considered in the literature explores differences in saving behavior nesting the 2008 10 crisis period and four different country groups searches for commonalities across key saving aggregates national private household and corporate saving rates and is subject to a robustness analysis based on different estimation techniques the results confirm in part existing research but also shed light on some ambiguous or contradictory findings and highlight the role of neglected determinants compared to the literature we find a larger number of significant determinants changes across periods and country groups and similarities across different saving aggregates

does income inequality raise aggregate saving this paper reviews analytically and empirically the links between income distribution and aggregate saving consumption theory brings out a number of direct channels through which income inequality can affect overall household saving positively in most cases however recent political economy theory points toward indirect negative effects of inequality through firm investment and public saving on aggregate saving on theoretical grounds the sign of the saving inequality link is therefore ambiguous this paper presents new empirical evidence on the relationship between income distribution and aggregate saving based on a new and improved income distribution database for both industrial and developing countries the empirical results using alternative inequality and saving measures and various econometric specifications on both cross section and panel data provide no support for the notion that income inequality has any systematic effect on aggregate saving these findings are consistent with the theoretical ambiguity q 2000 elsevier science b v all rights reserved

the relation between savings and growth cointegration and causality evidence from asia the direction of causality between savings and growth remains unclear even though it is of critical importance for development policy in this paper granger causality analysis is undertaken for seven asian countries using the vecm engle and granger and var procedures we find that in most cases the direction of causality runs primarily from growth or income to savings although in some countries there is also evidence of a feedback effect from savings to income and growth thus development policy should focus less on promoting high savings rates and more on promoting high growth rates estimation of the savings functions are presented using engle and granger s static ols and stock and watson s dynamic ols dols procedures where appropriate the high savings rates in asia are found to be due to the high rate of growth of income per capita declining shares of dependent population and some special institutional features such as the high central provident fund rates in singapore interest rates ar

what drives private saving around the world the authors investigate the policy and non policy factors behind saving disparities using a large panel data set and an encompassing approach including several relevant determinants of private saving they extend the literature in several dimensions by 1 using the largest data set on aggregate saving assembled to date 2 using panel instrumental variable techniques to correct for endogeneity and heterogeneity 3 performing robustness checks on changes in estimation procedures data samples and model specification their main empirical findings a private saving rates show considerable inertia are highly serially correlated even after controlling for other relevant factors b private sector rates rise with the level and growth rate of real per capita income so policies that spur development are in indirect but effective way to raise private saving rates c predictions of the life cycle hypothesis are supported in that dependency ratios generally have a negative effect on private saving rates d the precautionary motive for saving is supported by the finding that inflation conventionally taken as a summary measure of macroeconomic volatility has a positive impact on private saving holding other facts constant e fiscal policy is a moderately effective tool for raising national saving f the direct effect of financial liberalization are largely detrimental to private saving rates greater availability of credit reduces the private saving rate financial depth and higher real interest rates do not increase saving

consumption puzzles and precautionary savings abstract when marginal utility is convex agents accumulate savings as a precautionary measure against labor income eventualities this paper shows that precautionary savings can go a long way in making the excess growth excess smoothness and excess sensitivity features of consumption consistent with the stochastic processes of labor income observed in the u s at the microeconomic level

understanding domestic savings an empirical approach abstractthere are two unusual and important features in the evolution of the savings rate in chile first the economy increased the average savings rate by 11 percentage points in the period 1985

barriers to formal saving micro and macroeconomic effects this paper examines different barriers to formal saving considering various interventions and their possible effects at microeconomic and macroeconomic levels it presents a comprehensive review of the literature based on a detailed classification of the barriers associated with supply side factors related to access to financial products and demand side barriers related to the use and frequency of use of those products the paper concludes that this classification and analysis contributes to a fuller understanding of the question of financial inclusion and how to achieve it

regional heterogeneity in the relationship between fiscal imbalances and foreign exchange market pressure summary the relationship between fiscal imbalances and other macroeconomic variables is complex and multifaceted however it remains important to understand it not least in order to facilitate the design of appropriate policy one central issue is whether the relationship varies across countries or groups of countries if it does an implication is that policy will also have to be differentiated this paper empirically explores the relationship between fiscal imbalances and pressures in the foreign exchange fx market in latin america caribbean lac and east asia the pacific eap regions using panel data over 1970 2000 it finds that fiscal imbalances have a significant effect on fx pressures in lac but not in eap

strategy and structure in innovative manufacturing smes the case of an english region based within the west midlands region of england the current paper considers the relative characteristic of product innovators and non innovators along seven dimensions of strategy data was collected by means of a remotely administered survey as part of the development of a regional innovation strategy and innovators were defined using a rate of innovation measure amongst the principal findings innovators are found to spend a significantly greater proportion of turnover on research and development tend marginally towards greater internal control and reactivity be more willing to assume long term debt but less likely to successfully access it be more likely to have links with universities and support organisations and to depend upon a small number of customers for a significant component of total sales revenue in addition the pre eminence of vertical value chain linkages over horizontal or third party linkages is a further striking feature of the firms articulation with their external environments

on the calculation of marginal effects in the bivariate probit model abstract we examine the effects of marginal changes in continuous variables on the joint conditional and marginal probabilities involved in the bivariate probit model and contrast them with the univariate probit case we provide an empirical application using canadian data

the saving collapse during the transition in eastern europe almost all of the transition economies in eastern europe and the former soviet union experienced a severe decline in their national saving rates the saving collapse could be explained by the elimination of involuntary saving a feature of central planning or by a change in equilibrium saving reflecting the new economic circumstances following the end of socialism the predicted saving rates of market economies with the same fundamentals as the transition economies before the transition are computed to test for the presence of involuntary saving the results provide some support for the hypothesis of consumption smoothing also considered is whether differences m the extent of liberalization affected saving rates in the cross section of transition economies this is found to be the case greater liberalization is association with lower saving with a one year lag to the extent that liberalization is associated with future growth this finding is consistent with smoothing m the face of output evolving along j curve

expense ratios of north american mutual funds the average expense ratio paid by canadian mutual fund investors is 50 higher than that paid in the united states this discrepancy is commonly thought to exist because canadian funds do not take advantage of economies of scale and have less competition a monopolistic competition framework is used to develop a model for the mutual fund industry by allowing each fund to have different attributes the model permits funds to charge different expense ratios in equilibrium and is found to strongly fit the north american mutual fund market empirical analysis indicates that these two common explanations and measurable fund attributes account for 24 of the discrepancy jel classification l11 l13 and g15 les ratios de depenses des fonds mutuels nord americains le taux moyen de depenses payees par les investisseurs canadiens dans les fonds mutuels sont de 50 plus elevees que celles qu on paie aux etats unis cet ecart est attribued habitude au fait que les fonds canadiens ne tirent pas profit des economies d echelle et qu il y a moins de concurrence au canada on utilise un modele de concurrence monopolistique pour analyser l industrie des fonds mutuels en permettant achaque fond d avoir certains attributs le modele permet aux fonds de charger des taux de depenses differents en equilibre il semble que cela corresponde aux caracteristiques du marchedes fonds mutuels americains une analyse empirique montre que les deux explications usuelles et les attributs mesurables des fonds expliquent 24 de l ecart

under reporting of r d in small firms the impact on international r d comparisons there is a widely recognised tendency for conventional measures of r d activity to under estimate the r d investments of small companies this arises due to small firms emphasis on developmental rather than fundamental research and because this activity is often informally organised international survey evidence suggests a greater degree of formality in the organisation of r d in german small firms this reduces the likely degree of under estimation of german small firms r d activity relative to that in the u k as a result aggregate r d figures may be under estimating the true level by 13 9 per cent in the u k and 2 4 per cent in germany this is equivalent to around half of the historical difference between aggregate levels of business r d in the u k and germany

choice between non equity entry modes an organizational capability perspective many studies have examined the choice between different types of equity and non equity modes however none has focused on the choice between different types of non equity modes that service firms employ routinely this study develops a theoretical framework based on the organizational capability perspective to explain the choice between two non equity modes franchising and management service contracts while previous studies are based on the premise that foreign market entrants choose a mode equity or non equity that offers them most control given their particular circumstances the premise of this study is that foreign entrants choose a non equity mode that in addition offers effective transfer of the firm s capabilities to the host country venture

capital mobility in developing countries some measurement issues and empirical estimates an economy s financial integration with the outside world the extent of capital mobility across its borders is a key determinant of some of its most important macroeconomic properties yet little is known about this characteristic of many developing economies an important stumbling block in the empirical assessment of financial integration openness is the many approaches to measuring it the author describes and evaluates different tests of capital mobility surveys existing evidence and applies four tests of capital mobility to assess the degree to which the many developing countries tested have achieved integration with the world financial markets the four tests are the 1 magnitude of gross capital flows 2 uncovered interest rate parity 3 strength of saving investment correlations and 4 behavior of domestic consumption over time the evidence suggests that most developing countries can be considered to be financially open in only 18 of the 57 developing countries classified did the data fail to show financial openness and that many countries may be experiencing an increased degree of integration with world financial markets

declining public pensions in an era of demographic ageing will private provision fill the gap abstract demographic crisis and imprudent commitments have induced a crisis in public pension programmes in oecd countries will present and prospective cutbacks lead to greater private saving either in the form of private pension provision or in other forms of saving the paper surveys existing evidence and provides new results on three questions do individuals substitute private for public provision of savings when public pension programmes are cut back voluntarily do individuals respond to incentives to join sponsored or tax subsidised arrangements if encouraged by the government and if individuals are prepared to make such arrangements and where saving is voluntary do they save enough to replace previous prospective public pension flows

an application of the theory of foreign direct investment to multinational banking in ldcs for assessing the determinants of mnbs expansion into ldcs a model that incorporates both supply and demand factors is constructed a reduced form of the model is tested by using pooled data over the period 1975 1982 for a sample of twenty three ldcs the results of the study indicate that market size the presence of multinational corporations from the home country the extent of economic development and the balance of payments are all significant determinants of the growth of mnbs in ldcs

saving in developing countries theory and review in the literature on economic development much of the interest in saving has been focused on the relation between saving and growth but saving is not only about accumulation it is about smoothing consumption in the face of volatile and unpredictable income and helping to ensure the living standards of poor people whose lives are difficult and uncertain this paper develops a model of households which cannot borrow but which accumulate assets as a buffer stock to protect consumption when incomes are low such households dissave as often as they save do not accumulate assets over the long term and have on average very small asset holdings but their consumption is markedly smoother than their income much of the evidence is as consistent with this view of saving as it is incosistent with standard views of smoothing over the life cycle and with explanations of the link between saving and growth in terms of life cycle saving behavior consumption smoothing is also a useful way of thinking about government policy where volatility in the world prices of taxed commodities can generate sharp fluctuations in government revenues as well as reallocations of revenue between the private and public sectors many important policy issues in developing countries hinge on issues of consumption and smoothing and research on these issues is currently likely to be more productive than work on the relation between saving and growth

financial liberalisations in latin america in the 1990s a reassessment this paper studies the experience of latin america latam with financial liberalisation in the 1990s the rush towards financial liberalisations in the early 1990s was associated with expectations that external financing would alleviate the scarcity of saving in latam thereby increasing investment and growth yet the data and several case studies suggest that the gains from external financing are overrated the bottleneck inhibiting economic growth is less the scarcity of saving and more the scarcity of good governance a possible interpretation for these findings is that in countries where private savings and investments were taxed in an arbitrary and unpredictable way the credibility of a new regime could not be assumed or imposed instead credibility must be acquired as an outcome of a learning process consequently increasing the saving and investment rates tends to be a time consuming process this also suggests that greater political instability and polarisation would induce consumers to be more cautious in increasing their saving and investment rates following a reform hence reaching a sustained take off in latin america is a harder task to accomplish than in asia

inequality saving and global imbalances a new theory with evidence from oecd and asian countries global imbalances are attributable to savings deficiency in some economies and savings glut in others the recent global crisis has triggered widespread social conflict over income inequality the inequality saving link has again become a pressing issue needing serious attention we present a new theory to explain why the link between inequality and saving is negative in oecd countries but positive in emerging asia we also offer an econometric analysis of differences in inequality saving links between those economies we find that aggressive financial services lead to a negative link by creating income illusion for overconsumption but imperfect financial markets contribute to a positive link by interacting with industrial policies as part of growth strategies while ignoring liquidity constraints on consumption

household saving behaviour in an extended life cycle model a comparative study of china and india abstract this paper examines the determinants of household saving in china and india over the last few decades using the life cycle model with appropriate modifications to account for the expected benefits of pension saving consistent with the predictions made in the life cycle model higher income growth promotes more household saving and higher age dependency does the opposite an increase in the inflation rate appears to encourage household saving interestingly the evidence suggests that an increase in expected pension benefits tends to discourage household saving in china in the long run but the reverse is found in india

why are latin america s savings rates so low an international comparative analysis abstract this paper presents a theoretical and empirical assessment of the determinants of savings rates with special emphasis on latin american savings rates the study is based on international comparisons using data from 36 countries for 1970 1992 a distinction is made between private and public savings the later are endogenously determined by economic and political variables per capita income growth is the most important determinant of private and public savings public savings are lower in countries with higher political instability public savings crowd out private savings but less than proportionately low latin american savings are due to the magnitudes of their determinants rather than structural differences

the hierarchical model of market entry modes in this study we propose and test a hierarchical model of market entry modes entry modes can first be viewed as equity based versus non equity based within equity based modes the choice is between wholly owned operations and equity joint ventures while within non equity based modes the choice is between contractual agreements and export empirically we demonstrate that there are factors that exert substantial influences at the equity versus non equity level but rather weak influences at the lower level of choice hierarchy the empirical results are based on a sample of over 10 000 foreign entry activities into china between 1979 to 1998 the findings provide supportive evidence for the hierarchical model of market entry modes

patience and prosperity abstract this paper introduces wealth dependent time preference into a simple model of endogenous growth the model generates adjustment dynamics in line with the historical facts on savings and economic growth in europe from the high middle ages to today along a virtuous cycle of development more wealth leads to more patience which leads to more savings and further increasing wealth savings rates and income growth rates are thus jointly increasing during the process of development until they converge towards constants along a balanced growth path during the transition to modern growth an economy in which the association of wealth and patience is stronger overtakes an otherwise identical economy and generates temporarily diverging growth rates

effects of transitory shocks to aggregate output on consumption in poor countries this paper provides instrumental variables estimates of the response of aggregate private consumption to transitory output shocks in poor countries to identify exogenous unanticipated idiosyncratic and transitory variations in national output we use year to year variations in rainfall as an instrumental variable in a panel of 39 sub saharan african countries during the period 1980 2009 our estimates yield a marginal propensity to consume out of transitory output of around 0 2 to explain this result we show using instrumental variables techniques that there is a significant negative effect of transitory output shocks on net current transfers and a significant positive and quantitatively large effect on the trade balance an important implication is that frictions to private financial flows do not necessarily imply large effects of transitory shocks to aggregate output on private consumption in poor countries

taxation and savings a neoclassical perspective this paper discusses recent neoclassical analyses of taxation and savings contrary to the popular view that fiscal policy has highly ambiguous impacts on savings neoclassical models admit a host of policies with clear and potentially quite powerful affects on the accumulation of wealth the paper considers four fundamental types of fiscal policies and compares their quantitative affect on savings the essential elements of these policies involve inter and intragenerational redistribution marginal and intra marginal taxation and the level of government consumption conventional accounting measures of taxes spending and deficits provide at best little guide to changes in underlying fiscal instruments and at worst precisely opposite indicators of the direction of such changes indeed the continued use of and concern with conventional fiscal measures is symptomatic of wide spread fiscal illusion these points are developed within the context of certainty models the paper also considers the role of fiscal policy in both mitigating and exacerbating economic risks facing the private sector since precaution is a major motivation for saving governments can greatly influence wealth accumulation either by using fiscal policy to pool private risks or by making fiscal policy itself highly uncertain this abstract was borrowed from another version of this item