commodity price shocks and civil conflict evidence from colombia how do income shocks aect armed con ict theory suggests two op posite eects if labor is used to appropriate resources violently higher wages may lower con ict by reducing labor supplied to appropriation this is the opportunity cost eect alternatively a rise in contestable income may increase violence by raising gains from appropriation this is the rapacity eect our paper exploits exogenous price shocks in inter national commodity markets and a rich dataset on civil war in colombia to assess how dierent income shocks aect con ict we examine changes in the price of agricultural goods which are labor intensive and natural resources which are capital intensive we focus on coee and oil the two largest exports we nd that a sharp fall in coee prices in the 1990s increased violence dierentially in regions growing more coee by lower ing wages and the opportunity cost of joining armed groups in contrast a rise in oil prices increased violence dierentially in the oil region by in creasing municipal revenue siphoned through rapacity this pattern holds in several other agricultural and natural resource sectors providing robust evidence that price shocks aect con ict in opposite directions depending on the factor intensity of the commodity

investment cash flow sensitivity and financial constraint a cluster analysis approach this article sheds light on the mixed empirical evidence concerning financial constraint and investment sensitivity to cash flow the literature suggests that measuring financial constraint is far from straightforward and we therefore propose a cluster analysis procedure to identify unambiguous groups of constrained firms we found the investment results to be highly sensitive to cash flow for financial constraint firms moreover in line with previous research our results showed that the traditional criteria used to identify financially constrained firms led to ambiguous interpretations overall our results propose that the cluster analysis can be used to encompass the various single criterion approaches thereby providing a finer measurement of the financial constraint construct and deeper insight into the relationship between investment sensitivity to cash flow and financial constraint

business groups and internal capital markets the recovery of the mexican economy in the aftermath of the 1995 crisis in the second half of the nineties the mexican economy experienced a severe financial crisis however as the initial panic subsided mexico started to show promising signals of macroeconomic recovery not only did the economy rebound within a year but also grew steadily afterward averaging an annual rate slightly above 5 during 1996 2000 in this article it is suggested that the business group structure helped in the recovery of the economy the collapse of the banking system and the interruption of financing flows through the domestic financial markets was overcome by a change in the firms capital structure firms when possible started to depend more on trade credit and the internal capital market of business groups created a financial cushion that kept the economy working in order to offer a rationale for the mexican experience a theoretical model is presented where it is shown that moral hazard problems are reduced within a business group as long as affiliated firms in the nontradable sector surrender control rights during periods of crisis copyright 2007 oxford university press

financial development and financing constraints international evidence from the structural investment model this article provides evidence that financial development impacts growth by reducing financing constraints that would otherwise distort efficient allocation of investment the financing constraints are inferred from the investment euler equation by assuming that the firm s stochastic discount factor is a function of the firm s financial position specifically the stock of liquid assets the magnitude of the changes in the cost of capital is twice as large in a country with a low level of financial development as in a country with an average level of financial development the size effect business cycles and legal environment effects are also considered copyright 2003 oxford university press

the effect of prenatal stress on cooperation evidence from violent conflict in uganda abstract are preferences endogenously determined in the womb we play a public goods game with ugandan children born during a conflict characterised by high civilian victimisation children whose caregivers suffer from post traumatic stress disorder are more likely to free ride in the game genetic and environmental factors alone do not explain the relationship but children s 2d 4d digit ratio a marker of fetal hormone exposure associated with epigenetic effects of maternal distress does our findings extend the fetal origins literature to the domain of preferences by reducing next generation s taste for cooperation conflict may have father reaching economic consequences than previously thought

violence and birth outcomes evidence from homicides in brazil abstract this paper uses microdata from brazilian vital statistics on births and deaths between 2000 and 2010 to estimate the impact of in utero exposure to local violence measured by homicide rates on birth outcomes the estimates show that exposure to violence during the first trimester of pregnancy leads to a small but precisely estimated increase in the risk of low birthweight and prematurity effects are found both in small municipalities where homicides are rare and in large municipalities where violence is endemic and are particularly pronounced among children of poorly educated mothers implying that violence compounds the disadvantage that these children already suffer as a result of their households lower socioeconomic status

environmental impacts of changes to healthier diets in europe food consumption causes together with mobility shelter and the use of electrical products most life cycle impacts of consumption meat and dairy are among the highest contributors to environmental impacts from food consumption a healthier diet might have less environmental impacts using the e3iot environmentally extended input output database developed in an eu study on environmental impacts of products eipro this paper estimates the difference in impacts between the european status quo and three simulated diet baskets i e a pattern according to universal dietary recommendations the same pattern with reduced meat consumption and a mediterranean pattern with reduced meat consumption production technologies protein and energy intake were kept constant though this implies just moderate dietary shifts impact reductions of up to 8 were possible in reduced meat scenarios the slightly changed food costs do not lead to significant first order rebound effects second order rebounds were estimated by applying the capri partial equilibrium model this analysis showed that european meat production sector will most likely respond by higher exports to compensate for losses on the domestic meat market higher impact reductions probably would need more drastic diet changes 2011 elsevier b v

the costs of low birth weight birth weight has emerged as the leading indicator of infant health and welfare and the central focus of infant health policy this is because low birth weight lbw infants experience severe health and developmental difficulties that can impose enormous costs on society but would the prevention of lbw generate equally sizable cost savings and health improvements estimates of the return to lbwprevention from cross sectional associations may be biased by omitted variables that cannot be influenced by policy such as genetic factors to address this we compare the hospital costs health at birth and infant mortality rates between heavier and lighter infants from all twin pairs born in the united states we also examine the effect of maternal smoking during pregnancy the leading risk factor for lbw in the united states on health among singleton births after controlling for detailed background characteristics both analyses imply substantially smaller effects of lbw than previously thought suggesting two possibilities 1 existing estimates overstate the true costs and consequences of lbw by at least a factor of four and by as much as a factor of 20 or 2 different lbw preventing interventions have different health and cost consequences implying that policy efforts that presume a single return to reducing lbw will necessarily be suboptimal

corporate investment with financial constraints sensitivity of investment to funds from voluntary asset sales we examine the importance of financial constraints for firm investment by looking at the relationship between investment expenditures and proceeds from voluntary asset sales asset sales provide a cleaner indicator of liquidity than cash flows since it appears not to be positively correlated with investment opportunities the cross sectional differences in firm investment are examined using an endogenous switching regression model with unknown sample separation we find that cash obtained from asset sales is a significant determinant of corporate investment and that the sensitivity of investment to proceeds from asset sales is significantly stronger for firms that are likely to be financially constrained

from the cradle to the labor market the effect of birth weight on adult outcomes lower birth weight babies have worse outcomes both short run in terms of one year mortality rates and longer run in terms of educational attainment and earnings however recent research has called into question whether birth weight itself is important or whether it simply reflects other hard to measure characteristics by applying within twin techniques using an unusually rich dataset from norway we examine the effects of birth weight on both short run and long run outcomes for the same cohorts we find that birth weight does matter despite short run twin fixed effects estimates that are much smaller than ols estimates the effects on longer run outcomes such as adult height iq earnings and education are significant and similar in magnitude to ols estimates

superfund cleanups and infant health in 1980 outcry over the health effects of toxic waste in love canal new york resulted in the comprehensive environmental response compensation and liability act which became known as superfund superfund was intended to provide a mechanism for conducting remedial clean ups at the most dangerous hazardous waste sites over the years it became the largest and most expensive federal program to deal with toxic waste in the us given the substantial cost and slow rate of clean up there is considerable debate on whether it is in the public interest to continue the program in its current form epa 2006 while the costs of the programs are clear its benefits are not well understood indeed the policy is controversial in part because there is a paucity of reliable information on the program s benefits some previous studies find poorer birth outcomes near a site while others do not see martine vrijheid 2000 however evidence of a correlation between proximity to a site and poor birth outcomes does not necessarily represent a causal effect because populations living near hazardous waste sites are typically different from the general population and their health outcomes are likely to differ even in the absence of negative health effects from exposure for example michael greenstone and justin gallagher 2008 found that residents of areas near hazardous waste sites are more likely to be poor and have lower levels of education than others our project is the first to examine the effect of site cleanups on infant health rather than simply focusing on proximity to a site we focus on single births that occurred within 5km of a superfund site between 1989 and 2003 in five large states florida michigan new jersey pennsylvania and texas the basis of our difference in differences approach is to compare changes in birth outcomes before and after a site s clean up among births to mothers who live within 2 000 meters of the site and among those who live between 2 000 and 5 000 meters away our approach is made feasible by access to confidential vital statistics data that includes the exact street address of the mother s residence our large sample gives us statistical power to detect small effects

global capital flows and financing constraints firms often cite financing constraints as one of their primary obstacles to investment global capital flows by bringing in scarce capital may ease the financing constraints of host country firms but if incoming foreign investors borrow heavily from domestic banks foreign direct investment may exacerbate financing constraints by crowding host country firms out of domestic capital markets combining a unique cross country firm level panel with time series data on restrictions on international transactions and capital flows harrison love and mcmillan find that different measures of global flows are associated with a reduction in firm level financing constraints first the authors show that one type of capital inflow foreign direct investment is associated with a reduction in financing constraints second they test whether restrictions on international transactions affects the financing constraints of firms the results suggest that only one type of restriction those on capital account transactions negatively affects firms financing constraints the authors also show that multinational firms are not financially constrained and do not appear to be sensitive to the level of foreign direct investment this implies that foreign direct investment eases financing constraints for non multinational firms finally the authors show that 1 foreign direct investment only eases financing constraints in the non g7 countries and 2 other kinds of flows such as portfolio investment have no impact on financing constraints

unintended consequences of sanctions for human rights conflict minerals and infant mortality abstractare victims of human rights abuses better off with or without economic sanctions targeted at their perpetrators we study this question in the context of a us human rights policy the conflict minerals section of the 2010 dodd frank act by discouraging companies from sourcing tin tungsten and tantalum from the eastern democratic republic of the congo the policy has acted as a de facto boycott on mineral purchases that may finance warlords and armed militias we estimate the policy s impact on the mortality of children born before 2013 and find that it increased the probability of infant deaths in villages near the policy targeted mines by at least 143 percent we find suggestive evidence that the legislation induced boycott did so by reducing mothers consumption of infant health care goods and services

environmental economic and social analysis of peri urban pig production abstract intensive livestock production expands rapidly around cities to meet the food demand and the improvement of people s living standard in developing countries such as china however little is known about the environmental costs and socio economic performances of these systems here the performance of peri urban pig farms in beijing was assessed using data of a comprehensive survey conducted on 92 pig farms during 2012 2013 and calculations with the nutrient flows in food chains environment and resources model 13 indicators related to environmental economic and social aspects were selected for this assessment this is an important study unravelling the complexity and dynamics of the pig production system in peri urban area results show that larger farms performed better than smaller farms mainly because large farms had lower feed cost and better manure management nitrogen and phosphorus surplus were negatively related to farm size and farm income positively when expressed per unit of pork produced nitrogen and phosphorus use efficiency at animal level ranged from 21 to 26 and 28 34 respectively meanwhile the rate of nutrient surplus was from 48 to 75 g nitrogen kg pork 1 for nitrogen and 4 9 g phosphorus kg pork 1 for phosphorus the four farm size classes farm income ranged from 0 02 to 3 1 yuan per kg pork results also indicated that recycling of manure for crop production was a proper way to lower nutrient surpluses and environmental costs in livestock production system the selection of indicators had great significance to the performance of the farm in terms of different purposes and needs more in depth and comprehensive research in conclusion the environmental economic and social performance of the farms was positively related to farm size there are significant opportunities for improving the performance of pig production systems in beijing through animal feeding lower feed conversion and crude protein and improving manure recycling through a further integration of crop and animal farms insights from pig production systems in peri urban region of beijing provide relevant guidance to the sustainable livestock production in cities of rapidly developing countries

intertemporal variation in financial constraints on investment this article is concerned with understanding how financial constraints on investment vary over the business cycle and whether these constraints are related to macroeconomic policies these issues are investigated within the framework of a time varying parameter model using u s company panel data from 1971 to 1993 a preliminary investigation of parameter stability in investment equations using cross sectional estimation techniques indicates a pattern of parameter variation that conforms to the one captured by the return to normality model the return to normality model is estimated using a bayesian approach the estimation results provide evidence that support the predictions of the models of asymmetric information in capital markets

identifying the effect of unemployment on crime abstract in this paper we analyze the relationship between unemployment and crime using u s state data we estimate the effect of unemployment on the rates of seven felony offenses we control extensively for state level demographic and economic factors and estimate specifications that include state specific time trends state effects and year effects in addition we use prime defense contracts and a state specific measure of exposure to oil shocks as instruments for unemployment rates we find significantly positive effects of unemployment on property crime rates that are stable across model specifications our estimates suggest that a substantial portion of the decline in property crime rates during the 1990s is attributable to the decline in the unemployment rate the evidence for violent crime is considerably weaker however a closer analysis of the violent crime of rape yields some evidence that the employment prospects of males are weakly related to state rape rates

explicit lagrange multiplier for firms facing a debt ceiling constraint abstract this paper provides the explicit expression of investment facing a binding debt ceiling and the explicit expression of the lagrange multipliers related to the binding debt ceiling constraint this result allows us to check for misspecification of the parameterizations of these lagrange multipliers used in euler investment equations tests during the 1990 s

no money no honey financial versus knowledge and demand constraints on innovation the paper adds to the literature on the barriers to innovation in two ways first we assess comparatively what mostly constrains firms ability to translate investment in innovation activity into new products and processes whether it is mainly finance as most of the literature would suggest or whether it is mostly knowledge and market related aspects second we suggest a method to correct for the sample selection bias that often affects empirical contributions to this scholarship by filtering out firms that are not interested in innovation from those that struggle to engage in it we obtain a relevant sample of potential innovators which allows us to analyse the comparative effect of financial and non financial barriers on innovation success we find that demand side factors particularly concentrated market structure and lack of demand are as important as financial constraints in determining firms innovation failures this evidence redirects attention from financial to non financial barriers by considering traditional demand market structure and regulation factors involved in reduced firm innovation performance the empirical analysis is based on an unbalanced panel of firm level data from four waves of the uk community innovation survey cis between 2002 and 2010 merged with data from the uk business structure database

using systems based life cycle assessment to investigate the environmental and economic impacts and benefits of the livestock sector in the uk the livestock industry is a significant component of the agricultural and rural sectors in the uk grassland for livestock accounts for almost half of the terrestrial surface of the uk and almost two thirds of its managed agricultural land it therefore accounts for a major proportion of rural employment and income and provides many landscape and biodiversity benefits taking an ecosystems services framework approach an integrated livestock ecosystems linear programming model was developed to assess economic and environmental impacts of the livestock sector this combined life cycle assessment systems analysis with economic and valuation data and enabled plausible future scenarios to be assessed in terms of provisioning regulating and cultural services analysis showed the main benefit coming from provisioning services and also the significant role the sector plays in providing cultural services and the trade offs between these and the cost of regulating services with respect to emissions to air and water

zeros and lumps in investment empirical evidence on irreversibilities and nonconvexities the objective of this paper is to investigate if and how capital adjustment departs from the smooth pattern implied by standard model based on convex adjustment costs using norwegian micro data we start by documenting the intermittent and lumpy nature of investment rates we then present two pieces of econometric evidence on these issues first we estimate a discrete hazard model to determine the probability of having an episode of high investment conditional on the length of the interval from the last high investment episode second we estimate a switching regression model that allows for the response of the investment rate to fundamentals to differ across regimes in both cases we investigate the aggregate implications of our results

investment decisions in troubled times a bayesian approach applied to brazilian firms abstract this study analyses the investment decision of 497 brazilian firms during a period of unstable macroeconomic conditions the role of financial constraints is considered in a bayesian econometric model we estimate three different models and the results indicate the presence of financial restrictions especially for capital intensive firms the recursive predictive density criterion indicates that the most preferred model is the one in which firm specific effects are correlated with cash flow financial restrictions are more important for capital intensive firms probably due to their lower profitability indexes higher fixed costs and higher degree of property diversification

the effects of poor neonatal health on children s cognitive development we make use of a new data resource merged birth and school records for all children born in florida from 1992 to 2002 to study the relationship between birth weight and cognitive development using singletons as well as twin and sibling fixed effects models we find that the effects of early health on cognitive development are essentially constant through the school career that these effects are similar across a wide range of family backgrounds and that they are invariant to measures of school quality we conclude that the effects of early health on adult outcomes are therefore set very early

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

working capital and fixed investment new evidence on financing constraints this article presents new tests for finance constraints on investment by emphasizing the often neglected role of working capital as both a use and a source of funds the coefficient of endogenous working capital investment is negative in a fixed investment regression as expected if working capital competes with fixed investment for a limited pool of finance this finding addresses a criticism of previous research on finance constraints that cash flows may simply proxy shifts in investment demand in addition previous studies may have underestimated the impact of finance constraints on growth and investment because firms smooth fixed investment in the short run with working capital

corporate structure liquidity and investment evidence from japanese industrial groups this paper presents evidence suggesting that information and incentive problems in the capital market affect investment we come to this conclusion by examining two sets of japanese firms the first set has close financial ties to large japanese banks that serve as their primary source of external finance and are likely to be well informed about the firm the second set of firms has weaker links to a main bank and presumably faces greater problems raising capital investment is more sensitive to liquidity for the second set of firms than for the first set the analysis also highlights the role of financial intermediaries in the investment process

deciding on large scale investments abstractthis study analyses the importance of investment factors across investment sizes and the frequency of large investment decisions within the firms we use data from 1442 investment decisions made by 226 brazilian firms between 1997 and 2010 the results indicate that the influence of investment factors is different for investments of different sizes the results also indicate that the increase in the frequency of large scale investment decisions made by the firm influences especially the role of cash flow diminishing its importance as an investment factor this result allows one to argue that probably firms more experienced in large scale decisions could be bolder in their decision making process relying less on the accumulation of funds through cash flow

inside the war on poverty the impact of food stamps on birth outcomes this paper evaluates the health impacts of a signature initiative of the war on poverty the introduction of the modern food stamp pro gram fsp using variation in the month fsp began operating in each u s county we find that pregnancies exposed to fsp three months prior to birth yielded deliveries with increased birth weight with the largest gains at the lowest birth weights we also find small but statistically insig nificant improvements in neonatal mortality we conclude that the sizable increase in income from fsp improved birth outcomes for both whites and african americans with larger impacts for african american mothers n this paper we evaluate the health consequences of a sizable improvement in the resources available to ameri ca s poorest in particular we examine the impact of the food stamp program fsp which in 2007 provided 34 billion in payments to about 13 million households on infant health our paper makes two distinct contributions first although the goal of the fsp is to increase the nutri tion of the poor few papers have examined its impact on health outcomes second building on work by hoynes and schanzenbach 2009 we argue that the fsp treatment represents an exogenous increase in income for the poor our analysis therefore represents a causal estimate of the impact of income on health an important topic with little convincing evidence due to concerns about endogeneity and reverse causality currie 2009 we use the natural experiment afforded by the nation wide rollout of the modern fsp during the 1960s and early 1970s our identification strategy uses the sharp timing of the county by county rollout of the fsp which was initially constrained by congressional funding authorizations and ultimately became available in all counties by 1975 speci fically we use information on the month the fsp began operating in each of the roughly 3 100 u s counties and examine the impact of the fsp rollout on mean birth weight low birth weight gestation and neonatal mortality throughout the history of the fsp the program para meters have been set by the u s department of agriculture usda and are uniform across states in the absence of the state level variation often leveraged by economists to eval uate transfer programs previous fsp research has typically resorted to strong assumptions as to the comparability of fsp participants and eligible nonparticipants currie 2003 not surprisingly the literature is far from settled as to what casual impact if any the fsp has on nutrition and health hoynes and schanzenbach 2009 use this county rollout to examine the impact of the fsp on food consumption using the psid they found that the introduction of the fsp increased total food spending and decreased out of pocket food spending importantly consistent with the predictions of canonical microeconomic theory the magnitude of the increase in food expenditures was similar to an equivalent sized income transfer implying that most recipient house holds were inframarginal that is they would spend more on the subsidized good than the face value of the in kind transfer as one of the largest antipoverty programs in the united states comparable in cost to the earned income tax credit eitc and substantially larger than temporary assistance to needy families tanf understanding fsp effects is valuable both in its own right and for what it reveals about the relationship between income and health 1

the relation between firm growth and q with multiple capital goods theory and evidence from panel data on japanese firms we derive from a model of investment with multiple capital goods a one to one relation between the growth rate of the capital aggregate and the stock market based q we estimate the growth q relation using a panel of japanese manufacturing firms taking into account the endogeneity of q identification is achieved by combining the theoretical structure of the q model and an assumed serial correlation structure of the technology shock which is the error term in the growth q equation for early years of our sample cash flow has significant explanatory power over and above q the significance of cash flow disappears for more recent years for the heavy industry when japanese capital markets was liberalized the estimated q coefficient implies that the adjustment cost is less than a half of gross profits net of the adjustment cost

the demand for money in the united states evidence from cointegration tests this paper uses recent cointegration test procedures to investigate the underlying economic relationship between real money balances real income and interest rates for the united states unlike recent studies of money demand the authors analysis uses quarterly data spanning the period 1915 88 thus providing a sample encompassing a wide variety of economic experiences the evidence presented indicates that the broader m2 measure of money is the preferable measure with which to consider the long run effects of monetary policy copyright 1991 by ohio state university press

financial development and economic growth views and agenda this critique argues that the preponderance of theoretical reasoning and empirical evidence suggests a positive first order relationship between financial development and economic growth the body of work would push even most skeptics toward the belief that the development of financial markets and institutions is a critical and inextricable part of the growth process and away from the view that the financial system is an inconsequential sideshow responding passively to economic growth many gaps remain however and the paper highlights areas in acute need of additional research

investment cash flow sensitivities credit rationing and financing constraints in small and medium sized firms the controversy on whether investment cash flow sensitivity is a good indicator of financing constraints is still unsolved we apply a comprehensive approach by cross validating our analysis with both balance sheet and qualitative data on self declared credit rationing and financing constraints on a sample of mainly small and medium sized firms our qualitative information shows that self declared credit rationing is weakly related to both traditional a priori factors such as firm size age and location and lenders rational decisions taken on the basis of their credit risk models we use the qualitative information on firms which were denied additional credit to provide evidence relevant to the investment cash flow sensitivity debate the evidence shows that self declared credit rationing significantly discriminates between firms which possess or not such sensitivity while a priori criteria do not the same result does not apply when we consider the wider group of financially constrained firms which do not seem to have a higher investment cash flow sensitivity supporting the more recent empirical evidence in this direction