role of industrial district externalities in export and value added performance evidence from the population of italian firms becchetti l de panizza a and oropallo f 2007 role of industrial district externalities in export and value added performance evidence from the population of italian firms regional studies 41 601 621 the paper tries to shed light on the export and value added performance of industrial districts by integrating information on the population of italian firms from the asia database of the italian statistical institute with balance sheet data for all limited liability companies in selected manufacturing industries the findings show that firms located in industrial districts specialized or not in the leading manufacturing activity of the district export more and have higher added value than firms located elsewhere net of the impact of relevant controls the robustness check undertaken on the agglomeration performance nexus detects as expected a significant relationship between dichotomous district indicators and global and industry specific continuous measures of agglomeration and specializat

the perceived returns to education and the demand for schooling economists emphasize the link between market returns to education and investments in schooling though many studies estimate these returns with earnings data it is the perceived returns that affect schooling decisions and these perceptions may be inaccurate using survey data for eighth grade boys in the dominican republic we find that the perceived returns to secondary school are extremely low despite high measured returns students at randomly selected schools given information on the higher measured returns completed on average 0 20 0 35 more years of school over the next four years than those who were not

growth of firms in developing countries evidence from cote d ivoire the paper presents evidence in support of a particular growth process of firms that is consistent with a missing middle in the size distribution of manufacturing firms in african countries firm growth is explained by size and age effects as a result of efficiency exploiting through scale enlargements and learning but is strongly moderated by reputation effects and formal legitimation which facilitate access to output markets and resources complementing the model with data on growth obstacles as perceived by the owners of firms medium sized firms are found to be strongly hurt by insufficient access to infrastructure and financial services

the economics of small business finance the roles of private equity and debt markets in the financial growth cycle abstract this article examines the economics of financing small business in private equity and debt markets firms are viewed through a financial growth cycle paradigm in which different capital structures are optimal at different points in the cycle we show the sources of small business finance and how capital structure varies with firm size and age the interconnectedness of small firm finance is discussed along with the impact of the macroeconomic environment we also analyze a number of research and policy issues review the literature and suggest topics for future research

global land use implications of first and second generation biofuel targets recently an active debate has emerged around greenhouse gas emissions due to indirect land use change iluc of expanding agricultural areas dedicated to biofuel production in this paper we provide a detailed analysis of the iluc effect and further address the issues of deforestation irrigation water use and crop price increases due to expanding biofuel acreage we use globiom an economic partial equilibrium model of the global forest agriculture and biomass sectors with a bottom up representation of agricultural and forestry management practices the results indicate that second generation biofuel production fed by wood from sustainably managed existing forests would lead to a negative iluc factor meaning that overall emissions are 27 lower compared to the no biofuel scenario by 2030 the iluc factor of first generation biofuels global expansion is generally positive requiring some 25 years to be paid back by the ghg savings from the substitution of biofuels for conventional fuels second generation biofuels perform better also with respect to the other investigated criteria on the condition that they are not sourced from dedicated plantations directly competing for agricultural land if so then efficient first generation systems are preferable since no clear technology champion for all situations exists we would recommend targeting policy instruments directly at the positive and negative effects of biofuel production rather than at the production itself

land use dynamics and the environment we build a benchmark framework to study optimal land use encompassing land use activities and environmental degradation we focus on the spatial externalities of land use as drivers of spatial patterns even if land is immobile by nature location s actions affect the whole space through pollution which flows across locations resulting in both local and global damages in contrast to the previous literature on spatial dynamics we prove that the social optimum problem is well posed i e the solution exists and is unique taking advantage of this result we illustrate the richness of our model by means of a numerical analysis considering a global dynamic algorithm we find that our model reproduces a great variety of spatial patterns related to the interaction between land use activities and the environment in particular we identify the central role of abatement technology as pollution stabilizer allowing the economy to achieve stable steady states that are spatially heterogeneous

economic growth and climate the carbon dioxide problem in contemplating the future course of economic growth in the west scientists are divided between one group crying wolf and another which denies that species existence one persistent concern has been that man s economic activities would reach a scale where the global climate would be significantly affected unlike many of the wolf cries this one in my opinion should be taken very seriously the present article will first give a brief overview of the climatic implications of economic activity with special reference to carbon dioxide and then will present possible strategies for control a more complete report with references to the literature on climatic change is contained in nordhaus 1976 it is thought that the economic activities which most affect climate are agriculture and energy of these the latter is probably more significant is certainly more easily analyzed and will be discussed here in the energy sector emissions of carbon dioxide particulate matter and heat are of significance for the global climate

agglomeration as local instability of spatially uniform steady states humans exhibit a fundamental propensity to interact for social cultural technological and other reasons in this paper we seek to determine when the propensity to interact expressed in the form of a spatial externality becomes strong enough to induce agglomeration we design an abstract world where the only possible reason for agglomeration is the spatial externality in this world the uniform population distribution is a steady state then to ask under what circumstances does a spatial externality induce agglomeration is to ask under what circumstances does it induce an instability of the steady state anything other than a uniform steady state implies some agglomeration

what factors drive individual misperceptions of the returns to schooling in tanzania some lessons for education policy evidence on educational returns and the factors that determine the demand for schooling in developing countries is extremely scarce building on previous studies that show individuals underestimati

pattern formation spatial externalities and regulation in coupled economic ecological systems abstract we study the management of ecosystems in which interacting state variables that are affected by management decisions diffuse in space we study pattern formation first in a setting where economic agents maximize myopic profits and ignore spillovers onto agents at other sites and second in the context of a social planner who internalizes these spillovers we compare patterns under these two institutions and study how the differences in the patterns generated by these two institutions impact the design of regulatory schemes to internalize the externalities at the same time we introduce new methods based on fourier series type decompositions that enable us to turn an intractable infinite dimensional optimal control problem into a countable number of finite dimensional optimal control problems as far as we know these methods are new to the economics literature our theory is applied to the management and regulation of a semi arid system

finance firm size and growth the authors examine whether financial development boosts the growth of small firms more than large firms and hence provides information on the mechanisms through which financial development fosters aggregate economic growth they define an industry s technological firm size as the firm size implied by industrial specific production technologies including capital intensities and scale economies using cross industry cross country data the results indicate that financial development exerts a disproportionately large effect on the growth of industries that are technologically more dependent on small firms this suggests that financial development accelerates economic growth by removing growth constraints on small firms and also implies that financial development has sectoral as well as aggregate growth ramifications

credit constraints in italian industrial districts italy is characterized by strong differences both in the productive and in the financial structure small and medium firms tend to concentrate in the so called marshallian industrial district whose productive system has been thoroughly studied but whose financial features are partially overlooked this paper aims at investigating how the location of a firm in an industrial district affects its ability to resort to external finance mostly bank loans the econometric analysis on a panel of 1700 firms over the 1989 1995 period shows that firms located inside industrial districts have an advantage in terms of financial relations with the banking system both the cost of credit and the probability to face financial constraints are lower nevertheless the cyclical pattern of this advantage is not in favour of district firms following the tightening of monetary policy increases in interest rates on bank loans are proportionally higher for firms inside the district furthermore also the advantage consisti

post keynesian economics towards coherence this paper provides a comprehensive survey of post keynesian economics it argues that post keynesian economics has passed through the important initial stage of mounting a concerted critique of mainstream economics the focus however is on the stage reflected in current post keynesian research which the paper argues is concerned with elaborating a distinctive coherent approach that takes precedence over critique several traditions upon which post keynesian economics relies are identified institutionalism is proposed as an additional contributing tradition a novel aspect of the paper it is recognized however that more research is necessary to complete the post keynesian approach c 1996 academic press limited copyright 1996 by oxford university press

the economic impacts of climate change evidence from agricultural output and random fluctuations in weather fisher et al 2012 hereafter fhrs have uncovered coding and data errors in our paper deschenes and greenstone 2007 hereafter dg we acknowledge and are embarrassed by these mistakes we are grateful to fhrs for uncovering them we hope that this reply will also contribute to advancing the literature on the vital question of the impact of climate change on the us agricultural sector fhrs main critiques of dg are as follows i there are errors in the weather data and climate change projections used by dg ii the climate change projections are based on the hadley 2 model and scenarios rather than the more recent hadley 3 model and scenarios iii standard errors are biased due to spatial correlation iv the inclusion of state by year fixed effects does not leave enough weather variation to obtain meaningful estimates of the relationship between agriculture profits and weather v storage and inventory adjustment in response to yield shocks invalidate the use of annual profit data and vi fhrs argue that a better specified hedonic model produces robust estimates unlike the results reported in dg four of these critiques have little basis and we respond to them here in the introduction specifically with respect to ii the more recent daily climate predictions were not available when we wrote dg nevertheless the most important issue is providing the reliable estimates of climate change and in this note we report estimates based on the climate model we used in dg and a more recent one that we gained access to in the meantime iii in the primary table on agricultural profits dg reports two sets of standard errors with the first clustered at the county level and the second based on a variance covariance matrix that accounts for spatial correlation using the method proposed in conley 1999 thus the claim of fhrs 2012 seems overblown nevertheless to ease comparisons of papers in this literature this note will adopt the fhrs convention of reporting estimated standard errors clustered at the county and state levels we find that inference is largely unaffected by the choice between these different assumptions about the variance covariance matrix

psychometrics as a tool to improve credit information this paper studies the use of psychometric tests designed by the entrepreneurial finance lab efl as a tool to screen out high credit risk and potentially increase access to credit for small business owners in peru we compare repayment behavior patterns across entrepreneurs who were offered a loan based on the traditional credit scoring method versus the efl tool we find that the psychometric test can lower the risk of the loan portfolio when used as a secondary screening mechanism for already banked entrepreneurs that is those with a credit history the efl tool can also allow lenders to offer credit to some unbanked entrepreneurs that is those without a credit history who were rejected based on their traditional credit scores without increasing the risk of the portfolio

diffusion induced instability and pattern formation in infinite horizon recursive optimal control this paper develops local stability analysis for deterministic optimal control theory for recursive infinite horizon intertemporal optimization problems where there is a continuum of spatial sites and the state variable can diffuse over these sites we identify sufficient conditions for a type of local instability which emerges from the interaction of the discount rate on the future the curvature of the hamiltonian and the spatial features of the problem we call this phenomenon optimal diffusion induced instability odi we illustrate our analytical methods with three stylized applications the first application is the optimal management of spatially connected human dominated ecosystems the second and third applications are harvesting of spatially interconnected renewable resources jel classification c6 q2

banking conditions and regional economic performance evidence of a regional credit channel abstract this paper examines the empirical relationship between banking conditions and economic performance at the state level we develop a regional credit view to explain how due to information costs regional banking conditions can affect local economic activity by impacting on a region s ability to fund local investments localized information costs suggest that banking sector problems may constrain economic activity in financially distressed regions whereas no such link need be evident in financially sound regions we test for the empirical relevance of this asymmetry for the 1983 1990 period using state level data and find evidence that local banking sector conditions explain more of real personal income growth in states where bank loan quality has been poor than in those where banking conditions are relatively healthy

returns to education and wage equations the paper shows why considering a number of education dependent covariates in a wage equation decreases the coefficient of education in that equation this result is illustrated empirically with a meta analysis for portugal the education coefficient decreases when covariates are used that can be considered post education decisions on the other hand it is independent of sample size tenure and whether hourly or monthly wages are used these results support the use of a simple specification of the mincer equation for the study of the total returns to education

the influence of financial and legal institutions on firm size abstract theory does not predict an unambiguous relationship between a country s financial and legal institutions and firm size using data on the largest industrial firms for 44 countries we find that firm size is positively related to financial intermediary development the efficiency of the legal system and property rights protection we do not find any evidence that firms are larger in order to internalize the functions of the banking system or to compensate for the general inefficiency of the legal system

spatial growth and industry age between 1970 and 2000 employment growth across u s counties exhibited very different patterns in manufacturing and services whereas manufacturing employment growth was negatively related to initial manufacturing employment across the entire distribution of counties service employment growth was positively related to initial service employment for intermediate sized counties this paper presents a theory to rationalize these facts local sectoral growth is driven by technological diffusion across space and depends on the age of the sector the theory correctly predicts the relation between county employment growth and initial county employment in manufacturing at the turn of the 20th century

the effect of agricultural policies on land use and environmental quality in this paper i consider the environmental quality gains that may be achieved by reducing agricultural income supports a new methodology is developed to estimate land use shares in an application to wisconsin milk price support reductions result in shifts of marginal agricultural land to forest reducing soil erosion and providing off site water quality improvements the environmental benefits are estimated to be at least as large as the decreased welfare burden on consumers and taxpayers indicating a central role for environmental quality considerations in motivating policy reforms and a more efficient means of achieving the environmental quality goals of land retirement programs

optimal harvesting of stochastic spatial resources abstract we characterize the optimal harvest of a renewable resource in a generalized stochastic spatially explicit model despite the complexity of the model we are able to obtain sharp analytical results we find that the optimal harvest rule in general depends upon dispersal patterns of the resource across space and only in special circumstances do we find a modified golden rule of growth that is independent of dispersal patterns we also find that the optimal harvest rule may include closure of some areas to harvest either on a temporary or permanent basis biological reserves reserves alone cannot correct open access but may under sufficient spatial heterogeneity and connectivity increase profits if appropriate harvest controls are in place outside of reserves

property rights and finance which is the tighter constraint on private sector investment weak property rights or limited access to external finance from a survey of new firms in post communist countries we find that weak property rights discourage firms from reinvesting their profits even when bank loans are available where property rights are relatively strong firms reinvest their profits where they are relatively weak entrepreneurs do not want to invest from retained earnings

financial and legal constraints to growth does firm size matter using a unique firm level survey database covering 54 countries we investigate the effect of financial legal and corruption problems on firms growth rates whether these factors constrain growth depends on firm size it is consistently the smallest firms that are most constrained financial and institutional development weakens the constraining effects of financial legal and corruption obstacles and it is again the small firms that benefit the most there is only a weak relation between firms perception of the quality of the courts in their country and firm growth we also provide evidence that the corruption of bank officials constrains firm growth

historical financing of small and medium size enterprises we focus on the economies of the north atlantic core during the 19th and early 20th centuries and find that an impressive variety of local financial institutions emerged to supply the needs of smes wherever there was sufficient demand for their services although these intermediaries had significant weaknesses they were able to tap into local information networks and so extend credit to firms that were too young or small to secure funds from large regional or national institutions in addition by raising the return to savings for local households they helped to mobilize significant new resources for economic development

a more complete conceptual framework for sme finance abstract we propose a more complete conceptual framework for analysis of sme credit availability issues in this framework lending technologies are the key conduit through which government policies and national financial structures affect credit availability we emphasize a causal chain from policy to financial structures which affect the feasibility and profitability of different lending technologies these technologies in turn have important effects on sme credit availability financial structures include the presence of different financial institution types and the conditions under which they operate lending technologies include several transactions technologies plus relationship lending we argue that the framework implicit in most of the literature is oversimplified neglects key elements of the chain and often yields misleading conclusions a common oversimplification is the treatment of transactions technologies as a homogeneous group unsuitable for serving informationally opaque smes and a frequent misleading conclusion is that large institutions are disadvantaged in lending to opaque smes

earnings schooling ability and cognitive skills conventional estimates now available for a large number of countries generally indicate that the social returns to education are positive large and competitive with returns to investment in physical capital that such estimates are good guides for public resource allocation has however been questioned the heart of the problem lies in the interpretation of the positive relationship between the education and the earnings of workers whether as the conventional estimates assume the coefficient of the education variable in the earnings function measures the effect on the productivity of workers of human capital acquired in school it has been hypothesized that education in part or instead represents screening for native ability and motivation or credentialism and that as a consequence conventional measures of the social benefit of education are substantially upward biased 2 in this paper we attempt to distinguish the influence on earnings of cognitive achievement native ability and years of education as a means of adjudicating the human capital screening and credentialist hypotheses our econometric analysis is based on two rigorously comparable micro data sets from kenya and tanzania generated by surveys of the urban wage labor force specifically for this study these data sets contain the usual variables found in earnings function estimates of the benefits of schooling individual earnings years of education and years of employment experience in addition they contain two variables measures of the worker s cognitive skills and of his or her reasoning ability not previously found in studies of developing countries and only rarely found in studies of the education earnings relationship in developed countries 3 with these variables we can estimate the direct effects on earnings of cognitive skills ability and years of schooling by using them to estimate educational production functions and educational attainment functions and linking these functions with the earnings function in a recursive framework we can also assess the various indirect effects on earnings of ability and years of schooling having data sets from two countries very similar with respect to size resource endowments structure of production and employment and level of development means that not only can we subject our results to the usual statistical tests but we can also assess their replicability both kenya and tanzania have nearly achieved the objective of universal primary education while university enrollments remain at less than 1 percent of the relevant age group the important policy issues re boissiere development research department the world bank 1818 h street washington d c 20433 knight institute of economics and statistics oxford university sabot williams college williamstown ma 01267 we are grateful to the educational testing service of princeton for the design of tests used in this study and to j armitage j behrman j hausman d hendry d jamison and an anonymous referee for their insights and advice helpful comments were also received from participants in seminars at oxford and yale universities the views presented here are our own they should not be interpreted as reflecting those of the world bank george psacharopoulos 1973 1981 contains a listing of 44 countries in which rate of return studies had been conducted and of the estimates obtained 2for instance kenneth arrow 1973 mark blaug 1976 samuel bowles and herbert gintis 1976 john riley 1979 michael spence 1976 and lester thurow 1975 3for attempts to control for ability and or for cognitive achievement in studies for the united states see jere behrman et al 1980 gary chamberlain and zvi griliches 1977 griliches and william mason 1972 michael olneck 1977 paul taubman and terence wales 1974 taubman 1975 and david wise 1975 see also the survey articles by griliches 1977 1979 in most instances the data refer to special subgroups in the population and clear distinction cannot be made between natural ability and cognitive skills acquired in school

does compulsory school attendance affect schooling and earnings we establish that season of birth is related to educational attainment because of school start age policy and compulsory school attendance laws individuals born in the beginning of the year start school at an older age and can therefore drop out after completing less schooling than individuals born near the end of the year roughly 25 percent of potential dropouts remain in school because of compulsory schooling laws we estimate the impact of compulsory schooling on earnings by using quarter of birth as an instrument for education the instrumental variables estimate of the return to education is close to the ordinary least squares estimate suggesting that there is little bias in conventional estimates every developed country in the world has a compulsory schooling requirement yet little is known about the effect these laws have on educational attainment and earnings 1 this paper exploits an unusual natural experiment to estimate the impact of compulsory schooling laws in the united states the experiment stems from the fact that children born in different months of the year start school at different ages while compulsory schooling laws generally require students to remain in school until their sixteenth or seventeenth birthday in effect the interaction of school entry requirements and compulsory schooling laws compel students born

why are the returns to schooling higher for women than for men many studies have found that the impact of schooling on earnings is greater for females than for males despite the fact that females tend to earn less both absolutely and controlling for personal characteristics this study investigates possible reasons for this effect using data from the national longitudinal survey of youth 1979 one explanation is that education appears to have a double effect on the earnings of women it increases their skills and productivity as it does with men and in addition it appears to reduce the gap in male and female earnings attributable to factors such as discrimination tastes and circumstances the latter appear to account for about half of the differential in the returns to schooling

estimating outcome distributions for compliers in instrumental variables models in imbens and ingrist 1994 angrist imbens and rubin 1996 and imbens and rubin 1997 assumptions have been outlined under which instrumental variables estimands can be given a causal interpretation as a local average treatment effect without requiring functional form or constant treatment effect assumptions we extend these results by showing that under these assumptions one can estimate more from the data than the average causal effect for the subpopulation of compliers one can in principle estimate the entire marginal distribution of the outcome under different treatments for this subpopulation these distributions might be useful for a policy maker who wishes to take into account not only differences in average of earnings when contemplating the merits of one job training programme vs another we also show that the standard instrumental variables estimator implicitly estimates these underlying outcome distributions without imposing the required nonnegativity on these implicit density estimates and that imposing non negativity can substantially alter the estimates of the local average treatment effect we illustrate these points by presenting an analysis of the returns to a high school education using quarter of birth as an instrument we show that the standard instrumental variables estimates implicitly estimate the outcome distributions to be negative over a substantial range and that the estimates of the local average treatment effect change considerably when we impose nonnegativity in any of a variety of ways

thy neighbor s keeper the design of a credit cooperative with theory and a test economists now appreciate that resource allocation in less economically developed economies is profoundly influenced by non firm economic institutions however our theories of non firm institutions often suggest different answers to many questions including those of policy this paper illustrates a method for discriminating between alternative theories using data from german credit cooperatives from the nineteenth and early twentieth century germany we build a model of credit cooperatives designed to provide monitoring incentives and test this using nineteenth century data authors

regional finance a survey the role of money and nancial markets in the regional matters 1 economy has been attracting increasing attention in we start with a review of the treatment of money recent years it has been a topic of interest for longer in regional economics and then turn to the much

vocational training programs and youth labor market outcomes evidence from nepal abstract lack of skills is arguably one of the most important determinants of high levels of unemployment and poverty in response policymakers often initiate vocational training programs in effort to enhance skill formation among the youth using a regression discontinuity design we examine a large youth training intervention in nepal we find twelve months after the start of the training program that the intervention generated an increase in non farm employment of 10 percentage points itt estimates and up to 31 percentage points for program compliers late estimates we also detect sizeable gains in monthly earnings women who start self employment activities inside their homes largely drive these impacts we argue that low baseline educational levels and non farm employment levels and nepal s social and cultural norms towards women drive our large program impacts our results suggest that the program enables otherwise underemployed women to earn an income while staying at home close to household errands and in line with the socio cultural norms that prevent them from taking up employment outside the house

african smes networks and manufacturing performance abstract this paper examines the role of private support institutions in determining small and medium enterprise smes growth and performance in sub saharan africa ssa it finds that smes in ssa get around market failures and lack of formal institutions by creating private governance systems in the form of long term business relationships and tight ethnically based business networks there are important links between these informal governance institutions and sme performance networks raise the performance of insiders and in the sparse business environments of the ssa region have attendant negative consequences for market participation of outsiders such as indigenous african smes this is indicated through the determinants of access to supplier credit policy interventions will be needed to improve the platform for relation based governance mechanisms and to address the exclusionary effects of tight networks

investment and the banking system a kaleckian approach for regions in brazil this paper analyzes the effects of the regional distribution of the banking system on investment rates in brazil the investigation relies on a perspective whereby the role of external funds in ind

peer monitoring and credit markets a major problem for institutional lenders is ensuring that borrowers exercise prudence in the use of the funds so that the likelihood of repayment is enhanced one partial solution is peer monitoring having neighbors who are in a good position to monitor the borrower be required to pay a penalty if the borrower goes bankrupt peer monitoring is largely responsible for the successful financial performance of the grameen bank of bangladesh and of similar group lending programs elsewhere but peer monitoring has a cost it transfers risk from the bank which is in a better position to bear risk to the cosigner in a simple model of peer monitoring in a competitive credit market this article demonstrates that the transfer of risk leads to an improvement in borrowers welfare

uk bank services for small business how competitive is the market abstract this study is the first to employ an econometric model to examine the pricing behaviour of british financial institutions with respect to key bank products services offered to small and medium sized enterprises smes including current accounts investment accounts business loans and mortgages a mean group approach is used on a panel of monthly data to gauge individual banks reactions to identify factors influencing the setting of deposit and loan rates and to assess the competitive structure that best describes the uks sme banking market though the results should be interpreted with caution the empirical evidence is suggestive of a complex oligopoly policies directed at improving information and making it easier for small businesses to change banks accounts would reduce inertia and improve competition among financial institutions

information sharing in credit markets we present a model with adverse selection where information sharing between lenders arises endogenously lenders incentives to share information about borrowers are positively related to the mobility and heterogeneity of borrowers to the size of the credit market and to advances in information technology such incentives are instead reduced by the fear of competition from potential entrants in addition information sharing increases the volume of lending when adverse selection is so severe that safe borrowers drop out of the market these predictions are supported by international and historical evidence in the context of the consumer credit market a large body of literature on credit markets has shown that asymmetric information may prevent the efficient allocation of lending leading to credit rationing e g jaffee and russell 1976 stiglitz and weiss 1981 or to a wedge between lending and borrowing rates e g king 1986 in this literature informational asymmetries are taken to be exogenous lenders fail to observe some relevant characteristic or action of potential borrowers and have no way of learning about it in some countries however lenders can improve their knowledge about new customers by exchanging information with other lenders through information brokers generally known as credit bureaus the latter collect file and distribute the information voluntarily supplied by their members and operate on the principle of reciprocity lenders who do not provide data are denied access to the bureau s files in other countries instead these institutions do not exist the literature offers no guide to identify the factors that lead to endogenous communication between lenders this paper is an attempt to fill the gap information sharing is important for a number of reasons it may increase the degree of competitiveness within credit markets vives 1990 improve

why governments should invest more to educate girls abstract women and men often receive the same percentage increase in their wage rates with advances in schooling because these returns decline with more schooling the marginal returns for women will tend to exceed those for men especially in countries where women are much less educated the health and schooling of children are more closely related to their mother s education than father s more educated women work more hours in the market labor force broadening the tax base and thereby potentially reducing tax distortions these three conditions it is argued justify the disproportionate allocation of public expenditures toward women s education

the optimal carbon sequestration in agricultural soils do the dynamics of the physical process matter the kyoto protocol which came into force in february 2005 allows countries to resort to supplementary activities consisting particularly in carbon sequestration in agricultural soils existing papers studying the optimal carbon sequestration recognize the importance of the temporality of sequestration but overlook the fact that it is an asymmetric dynamic process this paper takes explicitly into account the temporality of sequestration its first contribution lies in the modelling of the asymmetry of the sequestration de sequestration process at a micro level and of its consequences at a macro level its second contribution is empirical we compute numerically the optimal path of sequestration de sequestration for specific damage and cost functions and a calibration that mimics roughly the world conditions we show that with these assumptions sequestration must be permanent and that the error made when sequestration is supposed immediate can be very significant

the impact of cross ownership on the reaction of corporate investment and financing constraints a panel threshold model this paper studies whether or not investment decisions are financially constrained in a cross ownership system of taiwan different from the financial structure in the usa subsidiaries in taiwan are allowed to buy stocks of the parent companies hence the conventional debt to equity ratio is inappropriate to divide firms into high and low debt firms instead a new threshold variable the adjusted debt equity ratio ade is employed to divide the sample into high debt firms and low debt firms a panel of 115 taiwan listed firms for the period 1991 1997 is used evidence supports the cash flow hypothesis and ade has a notable significant influence on the financial constraints

do rivals enhance your credit conditions abstract in a model where firms rely on bank financing to build capacity put up specialized productive assets as collateral and then compete a la cournot we introduce a probability of default we investigate how the number of competitors affects the equilibrium amount of bank credit and derive conditions under which an inverted u shaped relationship occurs on the one hand more competitors enhance the resale value of collateralized productive assets on the other hand more competitors shrink firms profits and the resulting income that can be pledged to banks we then extend the analysis to firms outside the cournot industry that are willing to buy productive assets in liquidation and show that the equilibrium bank credit becomes monotonically decreasing in the number of competitors

regional financial development and bank competition effects on firms growth fernandez de guevara j and maudos j regional financial development and bank competition effects on firms growth regional studies this paper analyses the effect of regional financial development and bank competition on firms growth using the spanish provinces as a testing ground the results show that firms in industries with a greater dependence on external finance grow faster in more financially developed provinces the results also show that bank monopoly power has an inverted u effect on firms growth suggesting that market power has its highest effect at intermediate values the effect is heterogeneous among firms according to the financial dependence of the industry to which they belong this result is consistent with the literature on relationship banking which argues that bank competition can have a negative effect on the availability of finance for more informationally opaque firms fernandez de guevara j et maudos j le developpement financier regional et la concurrence bancaire l imp

schooling and labor market consequences of school construction in indonesia evidence from an unusual policy experiment between 1973 and 1978 the indonesian government engaged in one of the largest school construction programs on record combining differences across regions in the number of schools constructed with differences across cohorts induced by the timing of the program suggests that each primary school constructed per 1 000 children led to an average increase of 0 12 to 0 19 years of education as well as a 1 5 to 2 7 percent increase in wages this implies estimates of economic returns to education ranging from 6 8 to 10 6 percent

landing fees vs harvest quotas with uncertain fish stocks a revised version of this paper was published in the journal of environmental economics and management volume 43 issue 2 march 2002 pages 325 338

who are russia s entrepreneurs social scientists studying entrepreneurship have emphasized three distinct sets of variables the institutional environment sociological variables and personal and psychological characteristics we are conducting surveys in five large developing and transition economies to better understand entrepreneurship in this short paper using over 2 000 interviews from a pilot study in russia we find evidence that the three sets of variables matter perceptions of the local institutional environment social network effects and individual characteristics are all important in determining entrepreneurial behavior jel m13 o12 p12

on modeling and interpreting the economics of catastrophic climate change with climate change as prototype example this paper analyzes the implications of structural uncertainty for the economics of low probability high impact catastrophes even when updated by bayesian learning uncertain structural parameters induce a critical tail fattening of posterior predictive distributions such fattened tails have strong im plications for situations like climate change where a catastrophe is theoretically possible because prior knowledge cannot place sufficiently narrow bounds on overall damages this paper shows that the economic consequences of fat tailed structural uncertainty along with unsureness about high temperature damages can readily outweigh the effects of discounting in climate change policy analysis

small and medium size enterprises access to finance as a growth constraint abstract this paper presents recent research on access to finance by small and medium size enterprises smes smes form a large part of private sector in many developed and developing countries while cross country research sheds doubt on a causal link between smes and economic development there is substantial evidence that small firms face larger growth constraints and have less access to formal sources of external finance potentially explaining the lack of smes contribution to growth financial and institutional development helps alleviate smes growth constraints and increase their access to external finance and thus levels the playing field between firms of different sizes specific financing tools such as leasing and factoring can be useful in facilitating greater access to finance even in the absence of well developed institutions as can systems of credit information sharing and a more competitive banking structure

business collateral and personal commitments in sme lending abstract using a database of sme credit approvals from a large belgian bank this paper extends the empirical evidence on the determinants of collateral by examining the determinants of business collateral simultaneously with the determinants of personal collateral commitments our results suggest that firm and relationship characteristics seem to be more important determinants of collateral commitment protection than loan and lender characteristics family firms are more likely to offer a higher degree of collateral commitment protection while introducing competition between banks decreases this likelihood the collateral requirement decreases in the length of the bank borrower relationship furthermore trade credit seems to have a signalling effect the lazy banks hypothesis was not supported our results suggest that beside risk arguments also commercial arguments help explain the pledging of collateral using a continuation ratio logit model we discover several differences in the determinants of the collateralisation decision and the determinants of the type of collateral commitments

returns to investment in education a global update the author updates compilations of rate of return estimates to investment in education published since 1985 and discusses methodological issues surrounding those estimates some key patterns among the three main levels of education primary education continues to exhibit the highest social profitability in all world regions private returns are considerably higher than social returns because of the public subsidization of education the degree of public subsidy increases with the level of education which is regressive social and private returns at all levels generally decline by the level of a country s per capita income overall the returns to female education are higher than those to male education but at individual levels of education the pattern is more mixed the returns to the academic secondary school track are higher than the vocational track since unit cost of vocational education is much higher and the returns for those who work in the private competitive sector of the economy are higher than in the public noncompetitive sector and the returns in the self employment unregulated sector of the economy are higher than in the dependent employment sector controversies in the literature are discussed in the light of the new evidence the undisputable and universal positive correlation between education and earnings can be interpreted in many ways the causation issue on whether education really affects earnings can be answered only with experimental data generated by randomly exposing different people to various amounts of education given the fact that moral and pragmatic considerations prevent the generation of such pure data researchers have to make do with indirect inferences or natural experiments some have been attempted the author looks at the research on overeducation or surplus schooling the conclusions reinforce earlier patterns they confirm that primary education continues to be the number one investment priority in developing countries they also show that educating females is marginally more profitable than educating males that the academic secondary school curriculum is a better investment than the technical vocational tract and that the returns to education obey the same rules as investment in conventional capital that is they decline as investment is expanded