social absorption capability systems of innovation and manufactured export response to preferential trade incentives abstract in many extant analyses of the impact of non reciprocal system of trade preferences it is typical to focus on the details of market access value of tariff concessions as explanation for why export of beneficiaries may or may not respond to incentives very often the role that supply related factors can and do play in the process is relegated to the background this paper argues that the social absorption capability of a beneficiary s economy as expressed in her incumbent systems of innovation is a crucial determinant of export performance response the experience of sub sahara african countries under the us african growth and opportunity act apparel trade incentive is used as a classical illustration of this proposition it is shown that the comparative efficiency of lesotho despite emerging from a relatively weak trade performance potential background in recording the highest level of export success among beneficiaries of the scheme is a function of the relative efficiency of her systems of innovation

value chain dynamics settlement trajectories and regional development fold n value chain dynamics settlement trajectories and regional development regional studies global value chain gvc analysis has little to say about the interaction between regions and global chain dynamics however recent calls to address broader development issues have resulted in efforts to incorporate a spatial dimension in gvc analysis addressing this issue the paper argues that gvc analysis needs to be combined with the examination of livelihoods at settlement level livelihood diversification or lack thereof indicates particular settlement trajectories that constitute regional development pathways it is also suggested that the understanding of how regions are shaped by value chain dynamics will improve by adding elements from global production network gpn theory to the combined methodology namely by an examination of territorial embeddedness and value creation enhancement capture distribution at settlement level

global commodity chains and endogenous growth export dynamism and development in mexico and honduras summary mexico s garment exports to the united states soared in the mid 1990s and recently honduras has become one of the fastest growing exporters in the americas we find little evidence that the apparel sector s dynamism is generating conditions for endogenous growth and sustainable development in either country however in spite of differences in the industrial organization of export oriented garment production in mexico and honduras the countries face similar challenges regulatory regimes with rules of origin designed to benefit us fabric manufacturers competitive pressures from china and the broader institutional and macroeconomic environments associated with the region s liberalization strategy

growth and defense pooled estimates for the nato alliance 1951 1988 in two provocative and influential contributions emile benoit 4 5 uncovered a net positive association between defense spending and economic growth for 44 less developed countries ldcs during the 1950 65 period apparently a larger defense burden as measured by the share of national income devoted to defense may have promoted growth for these countries this finding was controversial and generated an extensive literature that either found fault with benoit s methodology or else investigated the relationship between growth and defense with alternative methodologies one such methodology relied on an aggregate production function to derive an equation for the sources of growth owing to technological change labor growth investment productivity differences among sectors and externalities this supply side approach was associated with feder 13 and ram 22 when a feder ram model was used researchers typically discovered either a small positive effect or else no impact of defense on growth except for alexander 1 the feder ram approach has been applied to large cross sections of ldcs to cross sections of ldcs and developed countries or to individual countries over time the purpose of this paper is fivefold first we extend the three sector feder ram model to allow for the influence of defense spillin externalities as the defense expenditures of a nation s allies affect the nation s own defense and civilian sectors in either a positive or negative fashion spillin externalities can stem from input complementarity or substitutability procurement practices joint ventures or operational considerations second we check the data for unit roots and when appropriate cointegration these tests help us to avoid a dynamic misspecification third we estimate a three sector feder ram growth equation for each of ten nato allies for the 1951

does economic upgrading lead to social upgrading in global production networks evidence from morocco summary this paper contributes to the global production networks gpns literature by analyzing the relationship between economic upgrading increase in the value added of production and social upgrading improvements for workers in gpns it does so by drawing on primary data from moroccan garment supplier firms showing that economic upgrading can lead to social upgrading with mixed outcomes especially in a fast fashion model the most advanced form of economic upgrading functional upgrading often translates into social upgrading and downgrading simultaneously for different workers this is due to contradictory commercial requirements imposed by global buyers in gpns

military spending and stochastic growth abstract this study examines capital accumulation military spending arms accumulation and output growth in a stochastic endogenous growth model the analysis shows that higher lower growth in foreign military spending leads to faster slower economic growth in the home country if the home country s intertemporal substitution elasticity in consumption is smaller larger but more volatility in foreign military spending can lead to higher economic growth in the home country when its intertemporal substitution elasticity is large in addition shocks to output production may stimulate economic growth

upgrading in global value chains lessons from latin american clusters it has been shown that clustering helps local enterprises in industrial districts overcome growth constraints and compete in distant markets in advanced and less developed countries nevertheless recent contributions have stressed that more attention needs to be paid to external linkages and to the role played by global buyers to foster upgrading at cluster levels in this study we contribute to this debate focusing on the analysis of the relationships existing between clustering global value chains upgrading and sectoral patterns of innovation in latin america we find that sectoral specificities matter and influence the mode and the extent of upgrading in clusters integrated in global value chains

management ownership and market valuation an empirical analysis we investigate the relationship between management ownership and market valuation of the firm as measured by tobin s q in a 1980 cross section of 371 fortune 500 firms we find evidence of a significant nonmonotonic relationship tobin s q first increases then declines and finally rises slightly as ownership by the board of directors rises for older firms there is evidence that q is lower when the firm is run by a member of the founding family than when it is run by an officer unrelated to the founder

technological capabilities and industrialization abstract this paper reviews the implications for industrial strategy of recent research on technological capabilities at the firm and national levels after exploring the nature and determinants of microlevel technological development a simple framework for explaining the growth of national capabilities is set out based on the interplay of incentives capabilities and institutions each may suffer market failure and so require corrective intervention the experience of some industrializing countries is described to assess the validity of this framework it is concluded that interventions carefully and selectively applied are necessary for industrial success

upgrading primary production a global commodity chain approach abstract global commodity chain gcc analysis has been concerned mainly with examining power relations in global manufacturing industries although it has been preoccupied increasingly by the question of how developing country dc producers can upgrade this paper extends gcc analysis to traditional primary commodities where international traders exercise the driving role and suggests a new agenda for their upgrading in dcs based upon public action

the globalization of organic agro food networks summary this article analyzes the booming world trade in organic agro foods such as tropical products counterseasonal fresh produce and processed foods research focuses on expanding south north networks linking major us and european markets with major production regions particularly in latin america employing a commodity network approach i analyze organic production distribution and consumption patterns and the roles of social political and economic actors in consolidating international trade organic certification proves central to network governance shaping product specifications production parameters and enterprise participation my analysis identifies key contradictions between mainstream agro industrial and alternative movement conventions in global organic networks 2004 published by elsevier ltd

the impact of military burden on long run growth and welfare abstract this paper presents an endogenous growth model to examine how a government s resource allocation between the defense and non defense sectors will govern both economic growth and social welfare we demonstrate that there exists an optimal defense expenditure share that maximizes the economic growth rate but this rate is smaller than the welfare maximizing share this result can be viewed as a possible vehicle to explain why in many developing countries arms limitation and disarmament negotiations usually have low performance even failing

raiders or saviors the evidence on six controversial investors abstract carl icahn irwin jacobs carl lindner david murdock victor posner and the late charles bluhdorn are usually portrayed as corporate raiders the evidence here however shows that between 1977 and 1982 when it was first announced that they had purchased stock in a given firm stock prices on average increased significantly the investors activities in target firms for the two years following the initial stock purchase are likewise inconsistent with raiding we discuss two hypotheses that are consistent with the evidence first these investors improve the management of target firms second they are systematically able to identify under priced stocks

globalisation and unequalisation what can be learned from value chain analysis although many have gained from the process of globalisation there remains a stubbornly large number of people living in absolute poverty and a rise in inequality within and between countries the issue is thus not whether to participate in the global economy but how to do so in a manner which provides for sustainable and equitable income growth this study shows how value chain analysis can be used to chart the growing disjuncture between global economic activity and global income distribution and to provide causal explanations for this outcome in so doing value chain analysis provides valuable insights into policy formulation and implementation

which way is up in upgrading trajectories of change in the value chain for south african wine summary global value chain gvc analysis uses the concept of upgrading to highlight paths for developing country firms to move up the value chain usually through the lenses of four categories product process functional and inter sectoral upgrading the implicit normative expectation is that these firms move toward producing higher value added products and or take on more sophisticated functions along a value chain in this article upgrading is approached more broadly as reaching a better deal including a balance between rewards and risk the case study of south african wine shows that better product quality improved processes and some functional upgrading have co existed with processes of downgrading higher risks and limited rewards especially in traditional export markets a reflection on further conceptual development and directions for empirical research is also provided

do regimes matter epistemic communities and mediterranean pollution control international regimes have received increasing attention in the literature on international relations however little attention has been systematically paid to how compliance with them has been achieved an analysis of the mediterranean action plan a coordinated effort to protect the mediterranean sea from pollution shows that this regime actually served to empower a group of experts members of an epistemic community who were then able to redirect their governments toward the pursuit of new objectives acting in an effective transnational coalition these new actors contributed to the development of convergent state policies in compliance with the regime and were also effective in promoting stronger and broader rules for pollution control this suggests that in addition to providing a form of order in an anarchic international political system regimes may also contribute to governmental learning and influence patterns of behavior by empowering new groups who are able to direct their governments toward new ends

the monitoring rationale for dividends and the interaction of capital structure and dividend decisions abstract this paper develops an agency cost framework for the simultaneous determination of a firm s capital structure and dividend decisions in the model simultaneity is contingent on the applicability of easterbrook s 1984 monitoring rationale for paying dividends which in turn is hypothesized to depend on the existence of alternative sources of monitoring estimations of the rozeff 1982 specification for dividend payout for subsamples stratified according to the prevalence of non dividend monitoring mechanisms and growth induced capital market monitoring confirm the sample specific validity of the monitoring rationale a simultaneous system of equations is then estimated and consistent with our hypothesis simultaneity between capital structure and dividend decisions is observed only for the subsample in which the monitoring rationale for dividends is found applicable

the asian drivers and ssa is there a future for export oriented african industrialisation export oriented industrialisation is the orthodoxy and is widely indicated as a development path for sub saharan africa in recent years there has been a surge of clothing exports from a limited number of ssa economies to the us in 2006 these exports accounted for more than half of ssa s manufactured exports excluding south africa however the ending of quota controls on chinese clothing exports to the us led to a significant fall in these exports is this a harbinger for the future of export oriented industrialisation in ssa in a world of a level trading playing field

institutional change in value chains evidence from tea in nepal local conditions in developing countries have long played a part in determining whether their small scale firms can benefit from deepening their participation in global value chains gvcs institutional theory allows us to characterize these local conditions not simply as particularistic oddities but rather as elements of an institutional matrix that affects the livelihoods of chain participants however the institutional dimension of gvc analysis has been traditionally neglected in the literature to the detriment of our understanding of the impacts of upgrading in gvcs this study aims to remedy this failure by illustrating how institutional context mediates between value chain upgrading and the livelihoods of chain participants it particular it seeks to elucidate how value chain upgrading spurs a process of change in the institutions that govern the livelihoods of suppliers in developing countries this examination sheds light on the more general question of how value chain upgrading sometimes helps but sometimes hurts the welfare of chain participants this theoretical contribution to the value chain literature is based upon an institutional analysis of primary qualitative data from more than 80 small scale tea farmers in nepal some of whom had upgraded from conventional to organically certified production our study finds that value chain upgrading launches a process of institutional change that can be summarized in a general typology the typology highlights how rules strategies organizations and informal norms affect whether a given upgrading intervention yields livelihood benefits in a particular place upgrading can yield positive impacts in chain linked livelihood dimensions such as price and yet induce negative changes in other livelihood dimensions such as risk and thereby yield overall adverse livelihood implications in a process we dub immiserizing upgrading these findings contribute to advancing the conceptual literature on global value chains gvcs by suggesting a general typology for cycles of institutional change that influence livelihood outcomes the typology provides a framework to analyze such processes that is also of use to development practitioners seeking to understand the conditions under which upgrading worsens or improves the welfare of value chain participants the research findings provide an interesting window into how certification schemes interact with the daily lives of the rural poor

the political dimensions of payments for ecosystem services pes cascade or stairway this paper aims to advance our understanding of payments for ecosystem services pes as political projects by offering an analytical tool for investigating power relations political decisions place specific ideas and social norms in the construction and operation of pes schemes this proposed analytic tool is based on a revised version of the ecosystem service cascade which we propose to transform into an ecosystem service stairway model as a device to analyse political processes in ecosystem service construction and provision we show that the key to understanding the politics of pes lies in the antagonistic processes between the different steps of the stairway in particular we show that the definition and mobilisation of the ecosystem service potential esp is the stage where the most fundamental political decisions are made here the role of intermediaries is particularly significant as they introduce their own conceptions of society nature relations which function as epistemic selectivities in further defining and mobilising the esp and in generating the resulting ecosystem services ess we illustrate our main conceptual insights and evaluate the usefulness of our political ecosystem stairway model by applying it to two latin american cases one in brazil and the other in bolivia

going global in groups structural transformation and china s special economic zones overseas summary china s special economic zones helped the country industrialize by attracting foreign investment in 2006 beijing initiated an overseas trade and cooperation zone program assisting chinese companies to invest abroad while also building china s soft power through the transfer of a key component of china s development success little is known about the 19 zones approved so far under this program or the impact they are likely to have on structural transformation and industrial development in their host countries this paper identifies the 19 zones and their proposed locations the process of selection developers implementation and the chinese incentive regime it then focuses on the african zones using a typology of factors that have proven critical for zone development in the past the paper evaluates the potential of these zones for fostering structural transformation in africa

the government as a shareholder a case from the united states we study a sample of u s corporations in which the federal government held 35 100 percent of the outstanding common stock for between 1 and 23 years during and following world war ii we find that although the firms experienced abnormally high turnover among corporate board members the tenure of senior management was relatively stable moreover the performance of the government owned companies was not significantly different than that of private sector firms in the same industry hence the interim government custodianship of the firms in our case does not have the effects normally attributed to government ownership

negotiated block trades and corporate control we identify negotiated trades of large percentage blocks of stock as corporate control transactions when a block trades and the firm is not fully acquired cumulative abnormal returns average 5 6 and 33 of the chief executives are replaced within a year stock price increases are larger when control passes to the new blockholder when management does not resist the blockholder s effort to influence corporate policy and when the block purchaser eventually fully acquires the firm these findings suggest that the specific skills and expertise of blockholders and not just the concentration of ownership are important determinants of firm value we examine 106 negotiated trades of at least 5 of the common stock of new york stock exchange nyse and american stock exchange amex listed corporations our primary objective is to assess the impact of these transactions on the firms whose shares are traded we also investigate the importance of active block investor s specific managerial expertise and incentives for firm value the emerging literature on concentrated ownership focuses on how the level of ownership affects a blockholder s incentives to undertake a variety of corporate decisions although it has been recognized that a blockholder s identity also can be important less attention has been paid to this issue several recent studies however provide evidence that blockholders incentives and expertise are not homogeneous for example holderness and sheehan 1985 find that the stock market reacts more favorably to initial block accumulations by six controversial investors who are often portrayed in the press as raiders than to initial accumulations by a random sample of investors morck shleifer and vishny 1988 find that firm value tends to be lower when the firm is run by a member of the founder s family than when it is run by an officer unrelated to the founder brickley lease and smith 1988 document that institutional blockholders are less willing to vote against management on antitakeover amendments when they are likely to have business dealings with the firm when a block trades the concentration of ownership typically does not change but the blockholder s identity does

the african growth and opportunity act and the global commodity chain for clothing abstract this paper examines responses to the african growth and opportunity act in sub saharan africa s clothing sector the paper reviews statistical evidence on supply response as well as presenting recent fieldwork findings from southern africa using a modified version of global commodity value chain analysis it argues that while there has been a significant level of response this has been largely confined to enterprises of a particular type the latter has evolved globally in relation to the specificities of the us clothing market this has consequences both for chain analysis and for broader debates concerning industrial upgrading and trade vs aid

fiscal faux pas an analysis of the revenue implications of trade liberalization abstract this paper examines the argument that trade liberalization depresses tax revenue gdp ratios in developing countries this occurs because the structural characteristics associated with developing countries limit their ability to make the transition from trade to domestic taxes using a panel of 80 developing and industrialized countries over 1970 98 the econometric analysis carried out employs a fixed effects regression framework to examine the evidence the results indicate that low income and upper middle income countries have experienced declining tax revenues as a result of falling income and trade tax revenues and that structural characteristics have been significant in explaining the decline

the eclipse of the state reflections on stateness in an era of globalization the economic logic of the current international economy does not predict the eclipse of the state economic globalization does restrict state power but transnational capital needs capable states as much or more than does domestically oriented business national success in the current global political economy has been associated not with minimal states but with states that are capable active and engaged pressure for eclipse flows from the conjunction between transnational economic forces and the political hegemony of an anglo american ideology that in j p nettl s words simply leaves no room for any valid notion of the state even this combination of economic and political pressure is unlikely to eclipse the state but it is likely to put public institutions on the defensive eclipsing any possibility of the embedded liberalism described by john ruggie a leaner meaner state is the likely outcome the possibility of a more progressive alternative outcome would depend in part on whether current zero sum visions of the relation between the state and civil society can be replaced by a more synergistic view

the changing global geography of low technology labor intensive industry clothing footwear and furniture summary a basic approach to the geographic investigation of low technology labor intensive industries is sketched out by invoking notions of industrial organization locational agglomeration and spatial divisions of labor the distribution of the clothing footwear and furniture industries across the contemporary world is described on the basis of detailed published statistics special emphasis is accorded to similarities and contrasts in the geography of production between more developed and less developed countries i show that no matter what the level of development agglomeration tends to be a pervasive though not universal feature of these three industries global trading patterns in the three industries are subjected to extended investigation i examine international flows of finished products as well as production sharing activities involving various kinds of subcontracting arrangements between high wage and low wage countries i then attempt to demonstrate in theory how spatial agglomeration and international commodity flows function as mutually reinforcing phenomena via the play of increasing returns effects the significance of low wage low technology industries for processes of economic development is also stressed in the conclusion i suggest that the global geography of production is tending more and more to assume the form of a far flung mosaic of competing and collaborating agglomerations at various levels of productive capability and development

the effect of a large shareholder on corporate value this article analyzes the value of a corporation as a function of its ownership structure shareholders can acquire costly information about the manager s effort to produce output concentrating share ownership leads the largest shareholder to i acquire more precise signals of effort and ii modify the compensation contract better monitoring increases output and hence firm value however the risk averse large shareholder bears more idiosyncratic firm risk as his stake in the firm increases these forces equilibrate at a unique welfare maximizing ownership structure under a strong condition on the purchase or sale of shares by large stockholders investors have incentives to trade toward the ownership structure that maximizes the social surplus when all investors are price takers only a diffuse ownership structure can arise in a competitive equilibrium

proxy contests and the governance of publicly held corporations abstract analysis of 60 proxy contests for seats on the boards of exchange listed firms during 1978 1985 shows that three years after the contest less than one fifth of the sample firms remain independent publicly held corporations run by the same management team proxy contests are typically followed by managerial resignations even when dissidents fail to obtain a majority of board seats and are often followed by sale or liquidation of the firm the average stockholder wealth gains associated with proxy contests are largely attributable to gains by companies in which dissident activity leads to sale or liquidation

can financial incentives change farmers motivations an agrarian system approach to development pathways at the nicaraguan agricultural frontier abstract this article offers a conceptual methodological approach to assess how new institutional frameworks such as pes payments for ecosystem services interact with motivations for land use change at the individual and collective level increasing empirical evidence suggests that the effects of payments on inducing long term behavioural change can vary substantially depending on how they are integrated in territorial dynamics we show how individual motivation is the result of collective societal pathways that generate particular opportunities and constraints as well as guiding ideas and habits that work within these pathways through an illustrative case study at the agricultural frontier in nicaragua we show how an agrarian system approach offers a more nuanced understanding of the dynamic interactions on the ground and allows us to better connect farmers individual motivations to collective development pathways in that territory our case study also demonstrates how a local pes intervention is unlikely to lastingly alter the production system logic of farmers or stimulate long term pro environmental behaviour unless accompanied by other types of policies

snails southern hake and sustainability neoliberalism and natural resource exports in chile abstract this examination of the recent history of the fishing sector in chile shows that in this sector which has played an important role in chile s export success short term growth was achieved at the cost of long term sustainability with negative implications for those involved in the industry this case raises the more general issue of the importance of regulatory frameworks in the promotion of natural resource exports neoliberal policy frameworks which generally assume that self regulating markets produce better results than explicit efforts to modify market results have been increasingly adopted by developing countries analyses of the implications of these policy frameworks for the long term sustainability of growth based upon natural resource exports have not grown along with the popularity of the policies themselves this article is an effort to redress the imbalance

the law and large block trades although these issues have been analyzed by legal scholars since andrew berle and gardiner means in 1932 no systematic empirical evidence has been collected we investigate the validity of this belief as well as broader implications of the law on large block trades by analyzing 106 trades of at least 5 of common stock of exchange listed firms between 1978 and 1982 we find that when block sellers receive premium stock prices typically increase but not to the price per share received by the blockholders we argue that this tension is resolved by assigning a different set of rights and obligations to large block shareholders when they act as managers

military expenditures and economic growth in less developed countries an augmented model and further evidence a study of the impact of military expenditures on economic growth and development examines the differences in the results of previous studies which led to contradictory conclusions the authors find that these differences are due to sample variations specificational choices and the different time periods examined the data indicate that there is no consistent statistically significant connection between military spending and economic growth augmentation of the models suggests that military expenditures neither help nor hurt economic growth to any significant extent 2 tables

agency conflicts in public and negotiated transfers of corporate control we analyze control transfers in firms with a dominant minority blockholder and otherwise dispersed owners and show that the transaction mode is important negotiated block trades preserve a low level of ownership concentration inducing more inefficient extraction of private benefits in contrast public acquisitions increase ownership concentration resulting in fewer private benefits and higher firm value within our model the incumbent and new controlling party prefer to trade the block because of the dispersed shareholders free riding behavior we also explore the regulatory implications of this agency problem and its impact on the terms of block trades

global value chains a review of the multi disciplinary literature this article reviews the rapidly growing domain of global value chain gvc research by analyzing several highly cited conceptual frameworks and then appraising gvc studies published in such disciplines as international business general management supply chain management operations management economic geography regional and development studies and international political economy building on gvc conceptual frameworks we conducted the review based on a comparative institutional perspective that encompasses critical governance issues at the micro gvc and macro levels our results indicate that some of these issues have garnered significantly more scholarly attention than others we suggest several future research topics such as microfoundations of gvc governance gvc mapping learning impact of lead firm ownership and strategy dynamics of gvc arrangements value creation and distribution financialization digitization the impact of renewed protectionism the impact of gvcs on their macro environment and chain level performance management

the latte revolution regulation markets and consumption in the global coffee chain abstract coffee is a truly global commodity and a major foreign exchange earner in many developing countries the global coffee chain has changed dramatically as a result of deregulation new consumption patterns and evolving corporate strategies from a balanced contest between producing and consuming countries within the politics of international coffee agreements power relations shifted to the advantage of transnational corporations a relatively stable institutional environment where proportions of generated income were fairly distributed between producing and consuming countries turned into one that is more informal unstable and unequal through the lenses of global commodity chain analysis this paper examines how these transformations affect developing countries and what policy instruments are available to address the emerging imbalances

trade policy reform and the competitive response in kwazulu natal province south africa like many other formerly protected economies the liberalization of the external trade regime has placed new competitive pressures on south african enterprises detailed research in over 130 enterprises in the kwazulu natal kzn province of south africa shows the extent to which firms have been able to respond to these new competitive pressures and particularly on their ability to hear and to meet more demanding customers requirements inevitably the response has been varied but there are reasons to be concerned that the pace of adjustment has been suboptimal this reflects imperfections in information markets the challenges poses by the need for new social relations in production and the limited implementation of new supply sided policies designed to compensate firms for the reduction in protective barriers

selling success constructing value in conservation and development summary selling success is crucial in conservation and development solutions ideas projects and people must actively be constructed as valuable to get donors and policy makers to buy into them exactly how success travels and becomes capital however is not often explicated using a southern african conservation and development intervention the paper compares positive translation along the project s accountability chain with the broader circulation of positive references to the project s payments for ecosystem services initiative while both illuminate the construction of value in conservation and development the paper concludes that a neoliberal context increasingly emphasizes the latter tactic of epistemic circulation

private sector development policies practices and problems private sector development psd has become a central concern of most donors development cooperation efforts during the last decade this paper is a critical review of policies in the area donors work with concepts of psd which are highly abstract treat developing countries private sectors as tabula rasa and focus mainly on macro level preconditions in practice however concrete psd policies are mostly micro level ones the paper argues that they are shaped mostly by the nature and interests of private sectors in donor country themselves incorporate a high proportion of tied aid and fail basic tests of coherence

governance of global value chains in response to food safety and certification standards the case of shrimp from vietnam summary we use global value chain gvc theory to understand governance of vietnam s shrimp farming industry we describe this gvc as buyer driven with important food safety standards imposed by governments of importing countries and new certification systems promoted by nongovernmental organizations ngos governance relations are clear between governments in importing countries and vietnam and between importers and ngos governance relations become more fragmented further down the chain where large numbers of small scale producers and traders operate this fragmentation may adversely affect access to the most lucrative markets and have the unanticipated effect of marginalizing small scale farmers and traders

technological infrastructure and international competitiveness the paper is probably the first written paper using the concept of the national innovation system and it analyses how technological infrastructure differs between countries and how such differences are reflected in international competitiveness it makes a critical review of new in the 1980s developments in the theory of international trade and confronts them with recent empirical results it shows how competitiveness cannot be explained by wage rates prices currency rates technological leadership gives absolute rather than comparative advantage and technological leadership will reflect institutions supporting coupling creating clustering comprehending and coping in connection with technology the analysis is rooted in historical context through references to friedrich list and his criticism of adam smith and laissez faire special emphasis is put on list s concept of mental capital finally the analytical arguments are illustrated by the catching up and forging ahead of first germany and later japan the paper concludes that disequilibria in international trade will be persistent and that for laggard economy the free trade doctrine may be unduly restrictive another conclusion is that public investment in technological infrastructure and intellectual capital is crucial for successful economic development it is pointed out that there is a need to couple education science trade and industry policy in order to build competitiveness

a real options perspective on sequential acquisitions in china we examine how firms in an emerging market address their information disadvantage in takeovers one strategy is to complete the acquisition sequentially rather than as a one time deal in contrast to firms in developed economies that enjoy relatively easy access to information emerging market firms face differential access to information on target firms owing to institutional weaknesses and constraints in those markets sequential acquisitions are conceptualized as a real option based strategy whereby the sequential acquirer resolves valuation uncertainty through information gathering and learning after making a toehold purchase the value of a sequential acquisition strategy increases for firms that are at an information disadvantage statistical analysis based on 272 completed acquisitions of chinese listed firms between 1995 and 2003 shows that the sequential method is more likely to be chosen over a single transaction mode when the acquirer is a private firm or when the acquirer is diversifying into a new business area thus we offer a new way of viewing real option strategies in emerging economies by treating sequential acquisitions as information and learning mechanisms as opposed to tools for hedging

identifying control motives in managerial ownership evidence from antitakeover legislation this study uses the introduction of second generation antitakeover legislation as a natural experimental setting to infer the value that managers place on the control rights conferred by stock ownership we conjecture that managers will reduce their stockholdings in the post legislation period because they can ensure their prior level of control while holding fewer risky shares using a variety of specifications we find robust evidence consistent with this revealed preference hypothesis further demonstrating the key role played by control considerations in managers stockholding decisions the reductions in ownership are concentrated in management teams with higher levels of initial ownership and in firms without poison pills

fdi agoa and manufactured exports by a landlocked least developed african economy lesotho lesotho a resource poor country located inside south africa is now africa s largest exporter of apparel to the us its performance very unusual for africa relies heavily on asian investors and trade privileges this article traces the origins of fdi in lesotho and the determinants of its export competitiveness showing that apparel production suffers from low productivity poor skills and weak local links its prospects after agoa the african growth and opportunities act remain uncertain unless the government addresses these structural problems lesotho holds important lessons for industrial development in africa going beyond creating a good investment environment

revisiting the revisited terms of trade will china make a difference in challenging the conventional wisdom at the time singer and prebisch posited a number of explanations for declining terms of trade of developing economies including both country and product specific factors over the past decade we have begun to witness a simultaneous process of price differentiation within commodities with the prices of some commodities increasing and within manufacturing with the price of many manufactures falling these price changes may reverse the decline in the terms of trade of commodity producers the entry of china into the global market has played an important role in this augmenting the demand for many hard commodities its role as an exporter of manufactures coupled with concentration in global buying may undermine the prices of many manufactures

unemployment and the formation of duty free zones abstract a number of authors have suggested that the formation of a duty free zone may reduce the welfare of the host country their analyses assumed full employment for a country suffering unwemployment of the harris todaro type we show that the value of national output at world prices increases with the formation of a duty free zone which involves the reduction of tariffs on intermediate imports into the zone

a success of some sort social enterprises and drip irrigation in the developing world this paper explains the processes behind the framing of drip irrigation as a promising technology to address current poverty and environmental challenges in the developing world i draw from critical development and science and technology studies and highlight that this imagery has been actively performed insiders elaborated a compelling narrative calling upon a will to improve through technology and the moral legitimacy of social entrepreneurship in development they worked hard to establish a supportive coalition in an ever wider network this story hinges on several assumptions which upon closer scrutiny appear to be problematic the unicity of smallholder farming the attribution of inherent technical characteristics to a specific object the drip kit regardless of the context in which it is used and the framing of social entrepreneurship and market based approaches as alternative models even though these rather constitute a re working of existing arrangements within the international development community nonetheless the pro poor and environmentally friendly smallholder drip irrigation narrative still continues to be successful in harnessing the support of the international development community despite the little capacity drip irrigation has had to transform smallholder farming especially in sub saharan africa unpacking the origins actors and building blocks of the discursive success of smallholder drip irrigation provides fresh perspectives on the practices of development in the sector and is the first step toward more meaningful engagement with smallholder farmers in the developing world

a reconsideration of the welfare economics of a free trade zone abstract this paper presents a model of a free trade zone which incorporates the fact that such zones are often established by government subsidies designed to promote non traditional exports in our model the condition is derived under which the establishment of a free trade zone can increase welfare regardless of the relative factor intensity of a zone based industry however the relative factor intensity of a free trade zone plays a crucial role in determining the change in welfare following economic growth and foreign investment

government size and economic growth a new framework and some evidence from cross section and time series data a study of the impact of government size on economic performance and growth is important theoretically one point of view suggests that a larger government size is likely to be detrimental to efficiency and economic growth because for example i government operations are often conducted inefficiently ii the regulatory process imposes excessive burdens and costs on the economic system and iii many of government s fiscal and monetary policies tend to distort economic incentives and lower the productivity of the system at the other extreme one can identify some points of view that assign to the government a critical role in the process of economic development and could argue that a larger government size is likely to be a more powerful engine of economic development there are several arguments on which the latter point of view is based these include besides others i role of the government in harmonizing conflicts between private and social interests ii prevention of exploitation of the country by foreigners and iii securing an increase in productive investment and providing a socially optimal direction for growth and development

blocks liquidity and corporate control the paper develops a simple model of corporate ownership structure in which costs and benefits of ownership concentration are analyzed the model cornpares the liquidity benefits obtained through dispersed corporate ownership with the benefits from efficient management control achieved by some degree of ownership concentration the paper reexamines the free rider problem in corporate control in the presence of liquidity trading derives predictions for the trade and pricing of blocks and provides criteria for the optimal choice of ownership structure the recent incomplete contracting approach in corporate finance has considerably improved our understanding of how small firms determine their capital structure the basic setting considered in this line of research is one where a founder manager seeks funding from one or several financiers the main premise is that the founder manager in her dealings with the financiers is primarily concerned with maintaining her private benefits of control for small firms these are often quite large relative to the financial returns thus for a small firm the problem of determining the financial structure often reduces to the problem of how to obtain fundingr while giving away as little control as possible to the financiers of course most financiers insist on some form of protection so that the final compromise reached in most financial contracts for small firms is one resembling a debt contract or a venture capital contract which protects the founder manager s control as long as the firm is performing adequately this perspective for small firms does not extend naturally to large firms because the private benefits of control of the managers for large firms are likely to be small relative to the firm s monetary returns so that protection of these benefits is not an overriding consideration moreover large firms

free competition without sustainable development tanzanian cotton sector liberalisation 1994 95 to 1997 98 this article summarises the results of fieldwork carried out in 1997 8 season on post liberalisation changes in the tanzanian cotton sector developments in primary marketing ginning and the export trade are reviewed on the basis of survey material market entry by private companies has been high leading to considerable competition and slight increases in producers share of the world price but real producer price and cultivation increases have not been sustained following changes in the input supply system insecticide use has fallen sharply along with the quality and underlying international price of the cotton crop tanzania s place in the world market has been re defined as a producer for a specific time based market window this places a question mark over the sustainability of the sector s future and by inference over policy reforms whose main emphasis is to increase competition

broken chain agoa and foreign direct investment in the kenyan clothing industry drawing upon survey and interview research covering 23 of an estimated total of 35 clothing manufacturing establishments operating in kenya as well as interviews with the policy community this paper examines the local economic development impacts associated with the recent agoa prompted re birth of the clothing industry in kenya just after its recent high watermark in 2003 it provides evidence of the characteristics of these manufacturing establishments as well as evidence of the multiple and interconnected failures on the part of government parent companies agents and customers to promote the longer term sustainability of the industry as such it provides further case study evidence of africa s uniquely problematic incorporation into global commodity chains

gasoline demand in the oecd an application of pooling and testing procedures abstract this study utilizes a pooled inter country data set finding the long run price elasticity falls in the range 0 55 to 0 9 depending on the choice of pooled estimators the estimators included the ols within and between country estimators plus five feasible gls estimators even allowing for a ten year distributed lag on price to reflect changes in auto efficiency characteristics the within country estimator yields appreciably more inelastic estimates than did the o s estimator which was heavily influenced by the between or inter country variation this difference raises intriguing questions for future research

export processing zones in madagascar a success story under threat summary the success of export processing zones or the zone franche in madagascar since 1990 is with the exception of mauritius an isolated and unknown case in africa this paper based on first hand data explains that the zone franche has had a highly significant macroeconomic impact in terms of exports and jobs we show that average wages in the zone franche are equivalent to the other formal activity sectors other things being equal and that labor standards there are higher than average the zone franche quickly recovered from the 2002 crisis and has benefited a great deal from agoa the final phase out of the multi fibre arrangement in 2005 is expected to have a negative impact on the zone franche

the africa growth and opportunity act and its rules of origin generosity undermined the african growth and opportunity act agoa signed into american law on may 18 2000 is a major plank of u s initiatives toward the african continent the act aims broadly at improving economic policymaking in africa enabling countries to embrace globalization and securing durable political and economic stability as an incentive for africa to adopt the necessary policy reform agoa offers increased preferential access for african exports to the united states this paper describes the provisions of agoa and assesses its quantitative impact on african exports particularly in the apparel sector its main conclusions are 1 agoa will provide real opportunities to africa even on conservative estimates about africa s supply response africa s non oil exports could be increased by about 8 11 percent 2 however the medium term gains could have been much greater if agoa had not imposed certain conditions and not excluded certain items from its coverage the most important condition is the stringent rule of origin that is the requirement that exporters source certain inputs from within africa or the united states estimates suggest that the absence of these conditions would have magnified the impact nearly five fold resulting in an overall increase in non oil exports of us 0 54 billion compared with the us 100 us 140 million increase that is expected in the presence of these restrictions these restrictions particularly on apparel will come at a particularly inopportune time as africa will be exposed to competition from other developing countries when the quotas maintained on the latters exports under the multi fiber arrangement mfa are eliminated africa s apparel exports will be lower by over 30 percent with the dismantling of the mfa if on the other hand agoa had provided unrestricted access the negative impact of the dismantling could be nearly fully offset

foreign direct investment education and wages in indonesian manufacturing this paper examines whether the higher wages paid by foreign owned manufacturing plants than by domestically owned plants typical of most countries represents a higher price for labor that is does it reflect a higher price for workers of a given quality as represented by the level of education we then ask whether foreign owned plants pay a higher price for labor given the characteristics of the plants foreign owned firms are found to pay a higher price for labor of a given educational level than domestically owned ones only a part of the difference is associated with plant characteristics rather than ownership

sectoral systems of innovation and production the concept sectoral system of innovation and production provides a multidimensional integrated and dynamic view of sectors it is proposed that a sectoral system is a set of products and the set of agents carrying out market and non market interactions for the creation production and sale of those products a sectoral systems has a specific knowledge base technologies inputs and demand agents are individuals and organizations at various levels of aggregation they interact through processes of communication exchange co operation competition and command and these interactions are shaped by institutions a sectoral system undergoes change and transformation through the co evolution of its various elements 2002 elsevier science b v all rights reserved

the blue revolution in asia upgrading and governance in aquaculture value chains summary in this article we examine the upgrading trajectories of selected aquaculture value chains in four asian countries and the links between upgrading and three factors of value chain governance coordination mechanisms types of drivers and domestic regulation we find instances of improving products processes and value chain coordination while moving up the value chain is rare we also find that the type of value chain driver and the quality of the domestic regulatory framework are main facilitators of upgrading we conclude by highlighting lessons on the potential limits and risks of upgrading the blue revolution in asia

local means in value chain ends dynamics of product and social upgrading in apparel manufacturing in guatemala and colombia summary this paper contributes to existing discussions of global value chains gvc and industrial upgrading by examining observations from eight months of field research in guatemala and colombia where upgrading firms have their own nationally distinct form of labor relations despite producing the same products for the same overseas buyers analysis of these observations leads to the conclusion that labor relations show significant leeway in relation to upgrading outcomes and that local history merits more attention as a driver of management strategy the paper concludes with a discussion of relevant theory and implications for future research

coping with the upheavals of globalization in the shea value chain the maintenance and relevance of upstream shea nut supply chain organization in western burkina faso summary market globalization has had only a weak impact on the regional shea nut supply chain in western burkina faso despite the boom in the shea trade and the arrival of leading foreign firms we show that despite the fact that wholesalers have kept the shea chain locked in an oligarchic organization for the last 50 years they still play an important role in the smooth functioning of the chain and in profit sharing down the chain to the rural poor we suggest that development actors should consider shea traders and their role in the coordination of the chain more carefully 2014 the authors published by elsevier ltd this is an open access article under the cc by nc sa license http creativecommons org licenses by nc sa 3 0

spurred to upgrade a review of triggers and consequences of industrial upgrading in the global value chain literature summary the global value chains gvc literature intervenes in today s challenging development context by focusing on the means by which developing country industries can upgrade their market positions and outcomes for workers yet while this literature has produced hundreds of rich empirical case studies there has to date been no attempt to systematically analyze this case literature for lessons regarding the antecedents and consequences of the key outcome of upgrading this paper undertakes a systematic analysis of a representative sample of 45 case studies of primary product and light manufacturing industries in developing countries these studies were coded for factors involved in initiating and sustaining upgrading processes the results of upgrading and the role of local institutions in these processes we find that contrary to the major assumptions of the literature advanced country buyers are not the main force in the initiation of industrial upgrading rather in most cases developing country firms initiate upgrades when pushed by shocks of market vulnerability usually produced by state policies that force them to seek to change their status quo operations once initiated upgrading processes can produce a wide spectrum of results from little to no advancement in market position treadmilling to vaulting to the forefront of a global industry leaps forward on the basis of the sources of learning present in the local institutional environment such as state agencies and business associations we also identify conditions under which state participation in upgrading processes can lead to increased local institutional capacity together these findings suggest a framework for upgrading that we refer to as an induced search model this model has important implications for future research on the dynamics of industrial upgrading in developing countries techniques of state intervention and processes of mutually supportive learning between actors in the public and private sector

can africa industrialize by processing primary commodities the case of mozambican cashew nuts abstract industrialization strategies based on vertical diversification into processing of primary commodities have long been appealing to low income countries the performance of such strategies is mixed an aggregate level literature is divided on the advisability of low income countries processing commodities for export especially for countries relatively poor in human capital while this general literature usefully illuminates the policy debate over processing cashew nuts in mozambique commodity and country specific factors reveal the weaknesses of conducting debate at too aggregated a level it may be that the most significant constraints on processing industrialization are political rather than purely technical or economic

trade preferences for developing countries a survey of results empirical studies of the trade and development effects of the major preferential trading schemes between the industrialised countries and the developing countries are surveyed most studies find the agreements to be trade creating improving welfare for the donor though general equilibrium analysis indicates that terms of trade deterioration offsets efficiency gains there is some evidence that trade preferences stimulate ldc exports of preferred products but total exports are not significantly affected due to limited product coverage the existing literature does not provide evidence on the degree of infant industry protection or on economic diversification of the beneficiaries

industrialization trajectories in madagascar s export apparel industry ownership embeddedness markets and upgrading summary the paper shows the importance of ownership as a conceptual category within global value chain gvc analysis through analyzing firm types based on their gvc linkage market access and ownership profile in madagascar s apparel export industry the central argument is that ownership leading to variances in embeddedness matters ownership characteristics of supplier firms shape the ability to shift between different end markets respond to lead firm requirements and pursue upgrading with madagascar s exclusion from agoa benefits this has enabled locally embedded european french diaspora owned firms and regionally embedded mauritian owned firms to shift market channels and upgrade while asian owned firms largely exited the industry

alternative mechanisms for corporate control we examine performance and management characteristics of fortune 500 firms experiencing one of three types of control change internally precipitated management turnover hostile takeover and friendly takeover we find that firms experiencing internally precipitated management turnover perform poorly relative to other firms in their industries but are not concentrated in poorly performing industries in contrast targets of hostile takeovers are concentrated in troubled industries there is also weaker evidence that hostile takeover targets underperform their industry peers we interpret this evidence as consistent with the idea that the board of directors is capable of firing managers whose leadership leads to poor performance relative to industry but that an external challenge in the form of a hostile takeover is often required when the whole industry is in decline the evidence also indicates that firms run by a member of the founding family are less likely to experience either internally precipitated top management turnover or a hostile takeover on the other hand firms whose top management team is dominated by a single relatively young top executive while lacking in internal discipline are more likely to experience a hostile takeover this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item

creating value by changing the old guard the impact of controlling shareholder heterogeneity on firm performance and corporate policies theory suggests that controlling shareholders can influence firm value through both shared benefits creation and private benefits consumption using negotiated control block transfers from 31 countries we look beyond ownership concentration and investigate how controlling shareholder heterogeneity influences the relative importance of these two effects we document that a control transfer precipitates positive firm outcomes particularly when the vendor has maintained control over an extended period and the acquirer displays a strong incentive to engage in restructuring in such cases we observe a sustained positive price reaction more focused corporate investments lower leverage higher operating efficiency and superior long term performance