trade facilitation and manufactured exports is africa different summary trade facilitation defined as reducing the transaction costs associated with the enforcement regulation and administration of trade policies has been at the forefront of discussions on policy measures for reducing the costs of exporting and importing in developing countries this study uses a new panel dataset for 124 developed and developing countries available for the period 2003 04 to assess the impact of trade facilitation and other trade related institutional constraints on manufacturing export performance with particular reference to africa we estimate a standard gravity model augmented with trade facilitation regulatory quality and infrastructure indicators our results show that trade facilitation reforms could contribute to improve export performance in africa but other reforms including the quality of the regulatory environment and the quality of the basic transport and communications infrastructure are also needed furthermore improvements in on the border and behind the border policies yield a higher return in terms of increasing manufacturing export performance in african countries than in the rest of the world

estimating the effects of free trade agreements on international trade flows using matching econometrics abstract this paper provides the first cross section estimates of long run treatment effects of free trade agreements on members bilateral international trade flows using nonparametric matching econometrics our nonparametric cross section estimates of ex post long run treatment effects are much more stable across years and have more economically plausible values than corresponding ols cross section estimates from typical gravity equations we provide plausible estimates of the long run effects of membership in the original european economic community eec and the central american common market cacm between 1960 and 2000 and the estimates confirm anecdotal reports of these agreements effectiveness

the impact of regulatory heterogeneity on agri food trade we estimate the impact of regulatory heterogeneity on agri food trade using a gravity analysis that relies on detailed data on non tariff measures ntms collected by the ntm impact project the data cover a broad range of import requirements for agricultural and food products for the eu and nine of its major trade partners we find that trade is significantly reduced when importing countries have stricter maximum residue limits mrls for plant products than exporting countries for most other measures due to their qualitative nature we were unable to infer whether the importer has stricter standards relative to the exporter and we do not find a robust relationship between these measures and trade our findings suggest that at least for some import standards harmonising regulations will increase trade we also conclude that tariff reductions remain an effective means to increase trade even when ntms abound

market access conditions and sub saharan africa s exports diversification summary despite some progress in the last decade sub saharan africa s participation in the global economy remains generally limited and poorly diversified among the various reasons behind the lack of competitiveness of sub saharan africa exports this paper analyzes whether changes in market access conditions affect export diversification the findings of this paper indicate that market access conditions remain important and that the presence of trade relationships depends not only on favorable market access conditions but also on how these compare relative to foreign competitors these results imply that freer trade within sub saharan african countries could provide significant incentive to intra regional trade

measurement estimation and comparison of credit migration matrices abstract credit migration matrices are cardinal inputs to many risk management applications their accurate estimation is therefore critical we explore two approaches cohort and two variants of duration one imposing the other relaxing time homogeneity and the resulting differences both statistically through matrix norms and economically using a credit portfolio model we propose a new metric for comparing these matrices based on singular values and apply it to credit rating histories of s p rated us firms from 1981 2002 we show that the migration matrices have been increasing in size since the mid 1990s with 2002 being the largest in the sense of being the most dynamic we develop a testing procedure using bootstrap techniques to assess statistically the differences between migration matrices as represented by our metric we demonstrate that it can matter substantially which estimation method is chosen economic credit risk capital differences implied by different estimation techniques can be as large as differences between economic regimes recession vs expansion ignoring the efficiency gain inherent in the duration methods by using the cohort method instead is more damaging than imposing a possibly false assumption of time homogeneity

export performance and trade facilitation reform hard and soft infrastructure summary we estimate the impact of aggregate indicators of soft and hard infrastructure on the export performance of developing countries we derive four new indicators for more than 100 countries over the period 2004 07 estimates show that trade facilitation reforms do improve the export performance of developing countries this is particularly true with investment in physical infrastructure and regulatory reform to improve the business environment the findings provide evidence that the marginal effect of the transport efficiency and business environment improvement on exports appears to be decreasing in per capita income in contrast the impact of physical infrastructure and information and communications technology on exports appears increasingly important the richer a country becomes we also find statistical evidence on the complementarity between hard infrastructure and soft infrastructure as captured by our indicators finally drawing on estimates we compute illustrative ad valorem equivalents of improving each indicator halfway to the level of the top performer in the region

bank behavior based on internal credit ratings of borrowers abstract this study examines the relation of bank loan terms to borrower risk defined by the banks internal credit rating the analysis is not restricted to a static view it also incorporates rating transition and its implications on the relation money illusion and phenomena linked with relationship banking are discovered as important factors the results show that riskier borrowers pay higher loan rate premiums and rely more on bank finance housebanks obtain more collateral and provide more finance caused by money illusion in times of high market interest rates loan rate premiums are relatively small whereas in times of low market interest rates they are relatively high there was no evidence for an appropriate adjustment of loan terms to rating changes

covenants and collateral as incentives to monitor although monitoring borrowers is thought to be a major function of financial institutions the presence of other claimants reduces an institutional lender s incentives to do this thus loan contracts must be structured to enhance the lender s incentives to monitor covenants make a loan s effective maturity and the ability to collateralize makes a loan s effective priority contingent on monitoring by the lender thus both covenants and collateral can be motivated as contractual devices that increase a lender s incentive to monitor these results are consistent with a number of stylized facts about the use of covenants and collateral in institutional lending modern finance theory suggests that financial intermediaries such as commercial banks insurance companies and finance companies monitor and control their borrowers on behalf of other investors 1 this article investigates how the loans made by these institutions can be structured so as to best enhance the institutions role as delegated monitors covenants and collateral are common features of loans made by financial institutions but these features are somewhat difficult to justify consider loan covenants clauses in a loan contract that require the borrower to take or refrain from various actions berlin and mester 1992 magee and sridhar 1994 and park 1994 show that by giving institutions the right to renegotiate or call loans when covenants are violated covenants serve as tripwires that enhance the flexibility and efficiency of financial contracting also as documented in smith and warner 1979 control rights from covenants reduce borrower adverse selection or moral hazard nevertheless by allowing institutions to demand repayment based on any information contractible or not

accounting for changing prices the value relevance of historical cost price level and replacement cost accounting in mexico this paper investigates the value relevance of historical cost price level and replacement cost accounting using a sample of mexican firms from 1989 to 1995 it contributes to prior research by distinguishing between two distinct aspects of changing prices 1 the change in the general price level and 2 the change in the value of specific non monetary assets i select mexico to examine because it is unique in requiring and disclosing separately price level and replacement cost adjustments a sample of mexican firms also addresses a key reason cited for mixed results in previous assessments of the usefulness of price level and replacement cost accounting using united states data the effects of inflation are too weak to detect high rates of inflation in mexico ranging between 7 and 52 during the sample period mitigate that potential problem results indicate that replacement cost adjustments are relatively and incrementally relevant beyond historical cost and price level measures while price level adjustments are incrementally value relevant beyond historical measures

earnings as an explanatory variable for returns in this paper we investigate whether the level of earnings divided by price at the beginning of the stock return period is relevant for evaluating earnings returns associations the primary model motivating this research relies on the idea that book value owners equity and market value are both stock variables indicating the wealth of the firm s equity holders the related flow variables after adjusting for dividends are respectively earnings divided by price at the beginning of the return period a p 1 and market returns it then follows that earnings divided by beginning of period price should be associated with stock returns although models based on a relation between market value and book value are used occasionally in the accounting research literature see for example landsman 1986 harris and ohlson 1987 and barth

disentangling demand enhancing and trade cost effects of maximum residue regulations maximum residue level mrl regulations in plant products can create unnecessary trade barriers on one hand and enhance demand via risk mitigation or quality assurance on the other we stipulate a generalized gravity equation model to disentangle the effects of mrls on the import demand and foreign exporters supply applying the framework to the mrls on pesticides imposed by high income organization for economic co operation and development countries we find that the mrls jointly enhance the import demand and hinder foreign exporters supply in addition exporters from the less and least developed countries are more constrained by the mrls than their competitors from the developed world jel f14 q17

tripling africa s primary exports what how where abstract income growth in africa that is high enough to achieve the internationally agreed development goals implies a rise in the region s per capita income by the early 2020s to about latin america s current level the paper shows that such income growth would be associated roughly with a nine fold increase in africa s manufactured exports but also with a tripling of its primary exports which in absolute terms would account for two thirds of the increase in the region s total exports focusing on the demand potential for such an increase in africa s primary exports the paper argues that rising global demand from sustained rapid growth in natural resource poor asian countries particularly china provides sizeable new opportunities for africa s primary exports in africa extractive industries are poised best to benefit directly from china s rising imports while exporters of agricultural products are more likely to benefit indirectly from rising world market prices associated with asia s growing prim

the effects of trade policies for fresh fruit and vegetables of the european union abstract this paper examines the economic effects of the trade policies for fresh fruit and vegetables adopted by the european union eu after the uruguay round agreement on agriculture uraa the new import regimes are based on entry prices that in effect work as minimum prices at the same time the eu has signed trade preference agreements particularly with southern mediterranean countries that are important suppliers of fruit and vegetables to the eu the management of the import regime is a balance between two conflicting objectives to support internal producers and to preserve trade flows from preferred countries on the side of export subsidies to handle the reduction commitments under the uraa the eu has introduced rationing trough tender procedures the analysis shows that such subsidies do not seem able to boost the exports of eligible products therefore eu policy makers should ask whether the eu should continue to offer such subsidies

estimation of rating class transition probabilities with incomplete data abstract this paper shows that the well known duration and cohort methods for estimating transition probabilities of external bond ratings are not suitable for internal rating data more precisely the duration method cannot and the cohort method should not be used in connection with banks ratings generated from internal models structural differences within the borrower monitoring process of banks and rating agencies are responsible for this result a maximum likelihood ml estimation procedure which accounts for the peculiarities of internal bank ratings is introduced and applied to data from a german bank the empirical results indicate that the differences between cohort and ml transition matrices are both statistically and economically significant furthermore evidence of rating reversals business cycle dependent transition probabilities and on the factors which determine the borrower monitoring intensity of banks is provided

how bad is antidumping evidence from panel data abstract current research on antidumping suggests a number of channels through which antidumping affects the volume of world trade this paper uses a structural approach to the gravity model framework to evaluate these hypotheses using data on trade volume over the period 1948 to 2001 we conclude that the volume and welfare effects have been negative but quite modest

to spray or not to spray pesticides banana exports and food safety how governments regulate food safety and environmental protection including pesticide residue levels has important implications for trade the world trade organization wto ministerial held in doha qatar in november 2001 included statements on standards and their impact on market access for developing countries these issues will continue to be important in trade policy dialogues it is assumed and evidence from recent analysis confirms that food safety standards can affect the ability of agricultural producers to meet regulatory standards set by importing countries the authors explore a fundamental question in food safety and environmental standards do regulations on pesticide have an effect on trade they examine regulatory data from 11 oecd importing countries and trade data from 19 exporting countries the results suggest that a 10 percent increase in regulatory stringency tighter restrictions on the pesticide chlorpyrifos leads to a decrease in banana imports by 14 8 percent this represents a significant impact on trade and affect prospects of developing countries who continue to rely on exports of agricultural commodities such as bananas the findings also suggest that the lack of consensus on international standards and divergent national regulations on pesticides is costly for example the authors estimate that if the world were to adopt a standard at a level of regulatory stringency suggested by codex the body charged with setting global standards in this area in contrast with one set at the level in place in the european union there would be a u s 5 3 billion loss in world exports

the incremental information content of replacement cost earnings abstract the study explores the incremental explanatory power of replacement cost earnings variables derived from asr 190 data with respect to explaining cross sectional differences in security returns as such the study is a natural extension of previous research including analyses of the effect of security returns of asr 190 data at the time of disclosure investigations of cross sectional relationships between security returns and historical cost earnings and studies of multiple signals the basic finding is that pre holding gain net income provides no incremental explanatory powerm given knowledge of historical cost earnings however the converse does not hold taken together the findings are consistent with the contention that pre holding gain net income is a garbled version of historical cost earnings the basic finding is robust under several extensions of the initial research design the research design incorporates a two stage approach which permits a determination of the incremental explanatory power of collinear variables the findings are in contrast to those of a previous study by easman et al 1979 the nature of the difference in research design inducing the difference is identified potential reasons for the difference in findings are provided

agrifood industry transformation and small farmers in developing countries summary this article introduces this special issue on the rapid transformation of the agrifood industry in developing countries and its effects on small farmers we review the literature from the late 1980s to the present and find evidence first of food processing then retail transformation and mixed evidence of impacts on small farmers both inclusion particularly with resource providing contracts and exclusion sometimes from scale constraint sometimes from inadequate non land assets the special issue papers contribute to the debate by confirming the mix of cases of inclusion and exclusion the cases are main in horticulture and dairy key hopes for smallholder development

have financial statements lost their relevance the authors explore the concern that financial statements no longer have the same relevance to investors that they had in the past they test for value relevance by measuring the total return that could have been earned from prior knowledge of financial statement information and by examining the explanatory power of accounting information on market values and annual market adjusted returns both analyses are applied to a broad sample of exchange listed and nasdaq firms for the 1952 94 period the authors find mixed evidence on value relevance of financial statement reporting during the test period

the eu entry price system for fresh fruits and vegetables paper tiger or powerful market barrier abstract the eu protects eu growers of 15 kinds of fresh fruits and vegetables against international competition by the entry price system eps which is designed to restrict imports below the product specific politically designated entry price level this study investigates the relevance of the eps per product and country of origin we develop two indicators for the effectiveness of the eps which serve as variables in a cluster analysis identifying four classes differing in the relevance of the eps the relevance of the eps is found to be heterogeneous among products as well as countries of origin it is highest for artichokes courgettes cucumbers lemons plums and tomatoes the influence of the eps on apples clementines and pears is significantly lower and of least relevance for apricots mandarins oranges peaches and nectarines and table grapes the eps has the greatest effect on countries which neighbour the eu whereas it is of minor importance for exports from far away countries with the exception of china and south africa