the distribution of income in china preface notes on the contributors introduction k griffin z renwei part 1 the distribution of income household income and its distribution a r khan k griffin c riskin z renwei three features of the distribution of income during the transition to reform z renwei part 2 income and wealth in rural china the determinants of household income in rural china a r khan the distribution of wealth in rural china t mckinley income distribution and poverty in rural china c riskin part 3 employment and human capital workers in china s rural industries j knight s lina why urban wages differ in china j knight s lina the determinants of educational attainment j knight l shi annex the 1988 household sample survey m eichen z ming index

capital market development in china abstract this paper examines why and how capital markets have developed in a low income socialist country it shows that the development is the response of economic agents operating under a more market oriented economic environment with a highly regulated and inefficient banking system this development has presented new policy challenges and opportunities the paper argues that the developmental effects of the emergence of capital markets in china can be as important as its impact on improving allocative efficiency and resource mobilization

dualism and reform in china according to the dual economy tradition of economic development models less developed economies at an early stage of development are marked by a dichotomy between a modern sector in which workers are hired at an institutional wage in numbers that rise with the growth of the industrial capital stock and a traditional sector in which workers subsist at an income level that is somewhat below the indus

urban bias rural bias or state bias urban rural relations in post revolutionary china the authors aim to evaluate the relevance of urban bias and rural bias to the chinese case they present empirical evidence on the nature and extent of differentiation in rural urban living standards examine the political basis of relevant economic policies and investigate the relationship between these policies both the changes in labour productivity in each sector and the inter sectoral savings transfers both urban and rural bias hypotheses illuminate certain dimensions of chinese development strategy but the realities of rural urban relations have been complex and analysis must be supplemented by a focus on the divide between state and society and the question of state bias

the dilemmas of market socialism capital market reform in china part i bonds this two part article analyses the attempts to reform the socialist financial system in china by diversifying financial assets and introducing capital markets the approach used is that of political economy in the sense of elucidating the interplay between political and economic interests actors and issues in the reform process part i discusses the issue of bonds by governments and enterprises although the reform era has seen gradual progress towards something resembling a bond market in terms of a diversification of bond types and growing competition between bond issues there is no evidence that this has improved allocative efficiency in the economy rather bonds have functioned as one instrument in a complex struggle for resources between political institutional and economic actors in the context of a continuing shortage economy this competitive system falls far short of a true market rather it embodies powerful systemic factors reflecting the basic structural and institutional features o

political pluralism public policies and organizational choices banking branch expansion in india 1948 2003 data on the expansion of 94 commercial banks in india from 1948 to 2003 were analyzed to test the proposition that political pluralism wherein competing parties control the state and national governments of a nation can promote business expansion the results confirm that such political pluralism reduces the power of either government to constrain business decision making but that pluralism might at times lead to unhealthy competition between parties harming local expansion opportunities the data show that in india banks selectively exploit political pluralism to guide their expansion decisions

collective institutional entrepreneurship and contestations in wind energy in india with 21 136 mw of wind energy installed in 2014 india is considered a success story in terms of net installed capacity few existing studies on indian wind energy have highlighted the important role of institutions and how they stemmed from the work of advocacy groups studies also tend to focus on short time periods this paper uses the notion of collective institutional entrepreneurship to analyze indian wind energy across three time periods 1985 1995 1995 2003 and 2003 2013 the analysis shows that indian wind power development was driven by collective efforts of institutional entrepreneurs using two aggregated strategies that is supportive techno economic and socio political networks and an indigenous innovation infrastructure the paper highlights setbacks controversies and tensions between various entrepreneurship groups and argues that actions must be taken for including actors who have been marginalized

labor market participation of chinese agricultural households empirical evidence from zhejiang province abstract this work is devoted to the analysis of the different labor market participation regimes of chinese farm households over the reform process in the 1980s and 1990s using household data over the period 1986 2002 from the province zhejiang we apply a multinomial logit model to empirically examine household farm and regional characteristics affecting the probability that farmers participate in one of four alternative labor market regimes as generally accepted off farm participation is the dominant form of farm households labor market participation but rural households show additionally a significant impact on rural employment mainly linked with non agricultural household business results suggest that labor market decisions are significantly related to several family farm and village characteristics in particular we find education to be a key determinant of participation furthermore results point to a higher probability of female household members to take up off farm work

urban biased policies and rising income inequality in china since the start of economic reforms in 1978 china has experienced the largest increase in income inequality of all countries for which comparable data are available according to the world bank 1997 china s gini coefficient increased from 28 2 in 1981 to 38 8 in 1995 based on official survey data another study that used internationally standard definitions for incomes estimated china s gini ratio at 38 2 in 1988 and 45 2 in 1995 a level that already surpassed many developing economies in asia azizur khan and carl riskin 1998 are these income inequality changes the consequence of institutional reforms that replaced egalitarian rewards with work incentives employment contracts and labor mobility this paper uses household survey data collected by china s state statistical bureau ssb to investigate the sources and causes of this rising inequality by analyzing gini ratios and generalized entropy measures i decompose the overall inequality into three sectoral components i inequality within rural areas ii inequality within urban areas and iii sectoral disparity the data indicate that increases in rural urban income differentials have been the driving factor behind the rising overall inequality in china i argue that urbanbiased policies and institutions including labor mobility restrictions welfare systems and financial policies of inflation subsidies and investment credits to the urban sector are responsible for the long term rural urban divide and the recent increases in disparity

redistribution and government tactical behaviour an analysis of local public expenditure in china after the 1994 tax reform during the last few decades significant changes have affected chinese public finance in 1994 a major tax reform was undertaken and central local sharing arrangements were deeply modified the evolutions of regional public expenditure in the years following the reform deserve to be analysed the issue is relevant for two additional reasons first income inequality is becoming a relevant issue and it is therefore important to understand whether the chinese government is pursuing some kind of redistribution policy second an analysis of the local expenditure dynamics might provide some important information concerning the objectives and the behaviour of the chinese government the article considers a set of structural political and socio economic variables to analyse the determinants of local public expenditure in 30 chinese regions over the period 1995 2007 the results reveal that redistribution seems not to be a priority for the chinese government expenditure is higher in richer and more internationally open regions and the only redistribution evidence that emerges is related to urban rural disparities

rural urban disparity and sectoral labour allocation in china this study examines china s rural urban segmentation and its causes in the context of economic reforms household survey and aggregate data indicate a v shaped process in which rural urban consumption and income differentials decreased between 1978 and 1985 but then have continually increased to historically high levels this sectoral division is consistent with production function estimates based on provincial data that reveal higher labour productivity in urban state owned industries than in rural industries and agriculture to explain the v shaped change we argue that the precedent of successful rural reforms raised farmers relative earnings but the remaining obstacles to an efficient sectoral allocation of labour have prevented china from eliminating dualism recent financial policies consisting of urban price subsidies and increased investment credits have also had influential distribution effects that are biased against the rural sector

institutional dynamics and technology legitimacy a framework and a case study on biogas technology legitimacy is central for both novel and established technologies to mobilize the resources necessary for growth and survival a loss of legitimacy in turn can have detrimental effects for an industry in this paper we study the rise and fall of technology legitimacy of agricultural biogas in germany over a period of more than 20 years 1990 2012 the field witnessed impressive growth and professionalization for many years and has become one of the key technologies in germany s energy transition in recent years however it has been confronted with major criticism which finally resulted in a substantial cut back of public and political support the aim of our study is twofold in empirical terms we will explain the technology s loss of legitimacy despite its compliance with original policy objectives growth and maturation in theoretical terms we work toward a more general framework to understand technology legitimacy and to explain the institutional dynamics of technological innovation systems

how important are dual economy effects for aggregate productivity this paper brings together development accounting techniques and the dual economy model to address the role that factor markets have in creating variation in aggregate total factor productivity tfp development accounting research has shown that much of the variation in income across countries can be attributed to differences in tfp the dual economy model suggests that aggregate productivity is depressed by having too many factors allocated to low productivity work in agriculture data show large differences in marginal products of similar factors within many developing countries offering prima facie evidence of this misallocation using a simple two sector decomposition of the economy this article estimates the role of these misallocations in accounting for the cross country income distribution a key contribution is the ability to bring sector specific data on human and physical capital stocks to the analysis variation across countries in the degree of misallocation is shown to account for 30 40 of the variation in income per capita and up to 80 of the variation in aggregate tfp

financial deregulation and economic performance an attempt to relate european financial history to current ldc issues abstract the mckinnon model of repressed capital and money markets is tested against concise accounts of the development of such markets in england france germany and italy differences of a national and institutional character are observed it is concluded that the question is more complex than one of repressed vs unrepressed capital markets and that the explosive reactions in latin america from recent deregulation may have originated not in inconsistencies in policies wrong order of reform steps or other current explanations so much as precipitousness which failed to give markets sufficient time to settle down between deregulation measures getting asset prices right rather than underpriced and overtraded and permitting expectations time to settle in stable fashion

the nature of the savings function in developing countries a survey of the theoretical and empirical literature the savings rate marginal or average is regarded as a key performance indicator by development economists and foreign aid practitioners admonish their clients to increase their savings ratio as a primary condition for achieving a satisfactory rate of economic growth however not only have questions been raised regarding the significance of the savings effort as an independent determinant of economic progress but the formulation of policies designed to increase the savings propensity has suffered from a dearth of knowledge regarding the nature of the savings function in developing countries a number of alternative savings hypotheses derived mainly from the literature relating to developed economies have been advanced but the paucity of reliable data has made it difficult to test these hypotheses and obtain results which warrant a reasonable degree of confidence the purpose of this article is a to review the theoretical and empirical literature on the savings function in developing countries b to assess critically the findings with respect to the major hypotheses and c to summarize the state of our knowledge on this important topic we shall begin with a brief review of the nature of the data on savings in developing countries with which economic analysts must work

fiscal policy monetary targets and the price level in a centrally planned economy an application to the case of china this paper presents a planned economy monetary model of china a money supply equation links changes in broad money to government transactions evaluated at official prices the demand for real money balances by consumers equals the nominal demand for money deflated by an unobserved true price index the model explains money demand as the divergence between the then official and true price indices changes in the money supply are explained by government transactions while money demand is explained by real income and the anticipated true rate of inflation the true rate of inflation is 2 5 times the official rate copyright 1987 by ohio state university press

chinese urbanization and development before and after economic reform a comparative reappraisal abstract this paper analyzes the recent process and consequences of china s urbanization by weighing the short term policies and long term strategies concerning national development and urban growth against the objective material conditions and competing group interests in chinese society comparative insights are drawn from the experiences of other late developing countries where the effects of political decisions concerning urban growth have been fundamentally modified by social and economic forces thus china s urbanization is examined here in terms of the four major aspects of third world urbanization overurbanization urban bias and the parasitic versus generative nature of cities rural development and the role of small urban places and interregional balance in urbanization and development the rapid and complex process of urbanization certainly helps boost the dynamic of the post mao chinese economy but not without the problematic symptoms of congestion and inequality

sustainable competitive advantage combining institutional and resource based views this article suggests that the context and process of resource selection have an important influence on firm heterogeneity and sustainable competitive advantage it is argued that a firm s sustainable advantage depends on its ability to manage the institutional context of its resource decisions a firm s institutional context includes its internal culture as well as broader influences from the state society and interfirm relations that define socially acceptable economic behavior a process model of firm heterogeneity is proposed that combines the insights of a resource based view with the institutional perspective from organization theory normative rationality institutional isolating mechanisms and institutional sources of firm homogeneity are proposed as determinants of rent potential that complement and extend resource based explanations of firm variation and sustainable competitive advantage the article suggests that both resource capital and institutional capital are indispensable to sustainable competitive advantage 1997 john wiley sons ltd

small businesses and liquidity constraints in financing business investment evidence from shanghai s manufacturing sector abstract when firms experience financial hierarchy external finance if at all available is substantially more expensive than internal finance factors such as transaction costs agency problem and asymmetric information have created such a hierarchy stiglitz and weiss 1981 argue that asymmetric information between firms and potential suppliers of external finance creates adverse selection and moral hazard problems in the credit market in developed market economies this problem of a higher cost of external finance is commonly thought to be more serious for small firms because they are more disadvantaged than their larger counterparts in accessing external finance due to several factors 1 public information on small firms is generally not available and leads to the even greater problem of asymmetric information i e more severe adverse selection and moral hazard problems these information problems have excluded small firms from bond and share markets 2 due to the lack of available means of external finance small firms rely more heavily on bank loans than their larger counterparts in addition as small firms are more interested in cultivating stable relationships with a few banks in order to secure a stable supply of credit these banks become virtual monopolies by lending to small businesses and exercise their market power in lending to small firms most of existing research considers only small firms in market economies little research has been done to understand the relationship between firm size and investment financing in any economy in transition this paper makes a contribution to the literature by studying the relationship between firm size and liquidity constraints by using a firm level data of manufacturing enterprises in shanghai during the period of 1989 1992 we consider whether small manufacturing firms in shanghai are constrained by the availability of liquidity compared with their larger counterparts when they are financing their fixed investment in a transforming economy such as china or other similar transition economies external finance relies heavily on loans from banks that are fully owned by the state due to historical reasons allocations of credit are always biased in favor of state owned enterprises such a lending bias imposes an extra cost on small chinese enterprises in financing investment as the majority of them are not state owned in such an environment our empirical results show that small manufacturing firms in shanghai are actually less liquidity constrained than their larger counterparts in financing their fixed investment this surprising result is rather different from what people normally predict based on the experience in market economies we suggest three possible explanations for this peculiar finding 1 the composition of various firm size classes plays an important role in explaining the result non state enterprises which are fast growing and efficient dominate the small firm classes their successes in the markets helps them to generate enough internal funds to smooth their investment over time 2 the presence of heavy indebtedness of large state owned enterprises may deprive them of sufficient cash available for investment decision given that state owned enterprises have been making heavy losses the central and regional governments have a liquidity problem in satisfying their huge liquidity demands 3 small enterprises in non state sectors can rely on the informal credit market to obtain funds for investment although they are excluded from the state banking system however the further trade liberalization in terms of eliminating tariffs and quotas caused by china s bid of joining the wto will erode the profits of these small enterprises as imported goods will be supplied at lower prices in addition further reforms in financial sectors may also affect the supply of external finance to small enterprises in nonstate sectors the consequence may lead to a tight liquidity constraint for small enterprises in china

financial development and economic growth international evidence the importance of the relationship between financial development and economic growth has been well recognized and emphasized in the field of economic development 1 although recent writings on this subject seem to accept the hypothesis that financial development is crucial for successful economic growth 2 patrick asked the critical question which sector financial or real leads in the dynamic process of economic development patrick identified two possible patterns in the causal relationship between financial development and economic growth in the first growth induces an expansion of the financial system 3 according to this view called demand following the lack of financial growth is a manifestation of the lack of demand for financial services as the real side of the economy develops its demands for various new financial services materialize and these are met rather passively from the financial side in the second pattern the expansion of the financial system precedes the demand for its services channeling scarce resources from small savers to large investors according to relative rates of return the financial sector precedes and induces real growth the deliberate establishment and promotion of financial institutions in many less developed countries ldcs might reflect this belief in the supply leading relationship between the two developments a natural question then concerns the direction of causality between financial development and economic growth patrick asserted that the direction of causality changes over the course of development in his view financial development is able to induce real innovation type investment before sustained modern economic growth gets under way and as the process of real growth occurs the supply leading impetus gradually becomes less important and the demand following financial response

analyzing the functional dynamics of technological innovation systems a scheme of analysis various researchers and policy analysts have made empirical studies of innovation systems in order to understand their current structure and trace their dynamics however policy makers often experience difficulties in extracting practical guidelines from studies of this kind in this paper we operationalize our previous work on a functional approach to analyzing innovation system dynamics into a practical scheme of analysis for policy makers the scheme is based on previous literature and our own experience in developing and applying functional thinking it can be used by policy makers not only to identify the key policy issues but also to set policy goals

urbanization rural land system and social security for migrants in china abstract temporary migration due to lack of social security for migrants rural land tenure insecurity due to frequent land reallocation and abusive land requisition due to lack of functioning land markets are all major policy challenges that china is facing in its yet to be finished economic transition although there have been intensive studies and various policy recommendations on these issues most discussions have so far neglected the close interrelationships between these issues and have failed to analyse them in an integrated framework the paper aims to establish such an analytical framework by taking into account the impacts of china s characteristics that is a large developing country in transition on the country s migration and rural land policies we propose a policy package to address these challenges in a holistic manner

the impact of china s economic reforms on agricultural productivity growth this paper presents a method for assessing the relative importance of price increases and strengthened individual incentives due to the introduction of the responsibility system for the post 1978 increase in china s agricultural productivity data on post 1978 chinese agricultural performance suggest that a little over three quarters of the measured productivity increase is due to payment system changes and the remainder to price increases we also use our method to calculate incentive indices giving an estimate of the fraction of their marginal product that peasants received under the pre 1978 regime

modelling impact of advertising and optimizing advertising policy an application in recreation abstract this paper deals with the problem of the desirable level of advertising expenditure the optimal distribution of this expenditure in time and the allocation over the media tv radio and newspaper for a recreation park in the netherlands although the model id developed for the specific situation of this park in principle it can be applied in all situations where the interest is in short term day by day effects of promotional activities on sales examples are other situations in the recreation and leisure business cultural events theatre cinema and sales promotions e g weekend offerings for products in supermarkets first a model was specified and estimated that relates number of visitors to advertising effort it also takes into account non advertising variables that effect the number of visitors then this model was used in a heuristic advertising planning procedure which by means of incremental analysis for a given budget level searches for the optimal allocation of the advertising budget over media and time with this procedure ways to readjust the advertising policy were found by allocating the budget differently over media and time and by changing the overall budget level several recommendations were made to the management of the park a number of which have already been implemented

institutional activism in the early american automobile industry abstract a common proposition is that new industries gain constitutive legitimacy through claim making by institutional activists yet neoinstitutional research seldom analyzes the effects of claim making on the formation of new organizations and how the effect of claim making is moderated by other sources of constitutive legitimacy advertising legal recognition and a policy regime favorable to business i explore the relationship between claim making by activists and new organization building in a study of the early american automobile industry when auto clubs organized reliability contests to validate the automobile the results show that the visibility of reliability contests within the focal state increased foundings of car firms in the state but that this effect diminished with advertising legal recognition of the car and the existence of a business friendly governor in the focal state taken together these results demonstrate that claim making is crucial in the early phase of gaining legitimacy for new industries

growth efficiency and convergence in china s state and collective industry in china as in the soviet union and eastern europe economic reform initiatives seek to increase productivity by introducing elements of market oriented policies and institutions into an economy formerly dominated by state planning efforts to evaluate the impact of reform of chinese industry have focused on the measurement of productivity change in state enterprises this study expands the prior framework of analysis in several directions our investigation of productivity trends is not limited to state enterprises but includes quantitative comparisons with china s fast growing collective industries which contributed 36 of overall industrial output in 1988 1 unlike previous studies our analysis works with gross rather than net output this permits us to investigate changes in the productivity of intermediate inputs which occupy a large portion of total costs in chinese industry as well as labor and capital to do this we develop a quasi frontier estimation procedure which seems appropriate for comparisons of total factor productivity based on chinese industrial data finally we offer a quantitative perspective on the extent to which reform efforts have moved industrial resource allocation toward patterns expected of a market system the analysis confirms our previous finding based on a restricted framework employing only labor fixed capital and net output that multifactor productivity in state industry has risen substantially during

financial repression the new structuralists and stabilization policy in semi industrialized economies abstract this paper examines the short and long run effects of a variety of macroeconomic policies in a simple model where the curb market plays a pivotal role as the marginal supplier of loanable funds it is found that financial liberalization may fail in the short run and contrary to the claims of the new structuralists that the financial market repercussions of devaluation may be favorable in evaluating any policy the time horizon is critical short and long run multipliers may differ in sign in all cases save that of a contraction in the stock of bank credit

the conundrum of successful credit projects in floundering rural financial markets many governments use credit projects to foster agricultural development and donors spend billions of dollars supporting these activities in low income countries lics most of these activities are justified by the purported impact that loans have on ultimate borrowers for example credit demands filled additional crops produced changes in modern inputs used and borrowers incomes increased most project evaluations report favorable impacts that in turn stimulate donors and governments to spend more money on agricultural credit these favorable evaluations have prompted policymakers to conclude that rural financial markets are strengthened by most credit projects at the same time other researchers have evaluated rural financial markets in countries with successful credit projects and have found mounting problems they report on markets that lose substantial portions of the purchasing power of their loan portfolios to ravages of default or inflation concentrations of cheap loans in the hands of the wealthy political meddling in lending systems that offer few savings opportunities large transaction costs for lenders and borrowers lenders who are addicted to outside funds for their sustenance and credit institutions that sporadically implode or self destruct these reports of healthy parts but infirm wholes present a conundrum how can the major parts of the rural financial system involved in donor and government projects be doing well while the system as a whole is doing poorly are these projects islands of tranquility in otherwise stormy seas or is one of these two approaches to evaluation giving an erroneous picture unfortunately few credit project evaluations are published in journals or books although a large number of these studies have been done typically evaluation results are buried in unpublished reports or in graduate student theses while millions of dollars have been spent

rural reforms and agricultural growth in china this paper employs province level panel data to assess the contributions of decollectivization price adjustments and other reforms to china s agricultural growth in the reform period decollectivization is found to improve total factor productivity and to account for about half of the output growth during 1978 84 the adjustment in state procurement prices also contributed positively to output growth its impact came mainly from the responses in input use the effect of other market related reforms on productivity and output growth was very small reasons for slowdown in agricultural growth after 1984 are also analyzed copyright 1992 by american economic association

growth of china s rural enterprises impacts on urban rural relations china s rural enterprises are economic units established by local government in the countryside or by the peasants and they operate outside the planning system rural enterprises have grown twice as fast as the rest of the economy since 1984 the rural enterprise sector has so far challenged the urban economy in both product markets and markets for raw materials what are the prospects for their relationship competition or cooperation to answer the question we develop a well specified but simple model of the rural and urban economies the rural enterprise boom was caused in this model by the presence of barriers to factor mobility within china price distortions and the pool of available labour in the countryside the origins of the boom imply that rural enterprise exports tend to be relatively labour intensive the complementarities between rural and urban enterprises are likely to dominate their future economic relationship and lead to further growth in the rural enterprise sector

models of financially repressed developing economies abstract the past decade has witnessed an explosion of research on financial sector models of financially repressed developing economies for the most part financial repression is interpreted to be the technique of holding interest rates particularly deposit rates of interest below their free market equilibrium levels the recent spate of activity in this field was produced by the simultaneous publication in 1973 of books by mckinnon and shaw both authors demonstrate how economic theory can be applied to the analysis of the effects of financial conditions on investment and the real rate of economic growth since 1973 models of financially repressed developing economies have been formalized mathematically extended to open economies in order to analyse exchange rate policies and tested empirically this paper presents a critical survey of the major contributions to the literature in this field since 1973

collectivization and china s agricultural crisis in 1959 1961 the agricultural crisis in china in 1959 61 after the initial success of the collectivization movement resulted in 30 million extra deaths in this paper a game theory hypothesis proposes the main cause of this catastrophe i argue that because of the difficulty in supervising agricultural work the success of an agricultural collective depends on a self enforcing contract in which each one promises to discipline oneself a self enforcing contract however can be sustained only in a repeated game in the fall of 1958 the right to withdraw from a collective was deprived the nature of the collectivization was thus changed from a repeated game to a one time game as a result the self enforcing contract could not be sustained and agricultural productivity collapsed the empirical evidence is consistent with this hypothesis

financial deregulation and segmented capital markets the case of korea abstract this paper deals with the relation between the official and the unregulated or curb segments of the capital market in korea the paper focuses on the behavior of officially controlled interest rates paid on time deposits and on freely determined curb market interest rates the effects of financial deregulation on interest rates investment and growth are investigated it is argued that under some plausible circumstances financial deregulation can generate significant crowding out in the curb market reducing the total degree of financial intermediation the empirical results provide some support to the crowding out hypothesis and indicate that changes in the officially controlled time deposit rate have been positively related to changes in the freely determined curb market interest rate an aggregate investment function is also estimated for korea it is found that an increase decrease in the curb rate discourages encourages investment on the other hand increases in the real volume of credit intermediate in the official segment have a positive effect on real aggregate investment

food availability entitlements and the chinese famine of 1959 61 food availability decline and sen s entitlement are two leading approaches in understanding causes of famine previous research based on case studies has given independent support to each approach this paper analyses the chinese famine of 1959 61 by considering jointly the urban bias and the decline in food availability as causes we find that both factors contributed significantly to the increase in death rates during this famine to our knowledge this paper is the first econometric study to assess the importance of famine causes using the entitlement approach

ethical issues in the evolution ofcorporate governance in china china is establishing its corporate governance structures by emulating the stylized anglo american model however the country does not yet have the necessary formal and informal institutions or the financial infrastructure to make these structures work effectively corruption stock market manipulation tax cheating fraudulent dealing all manners of plundering of state assets and the lack protection of shareholders rights are some of the more conspicuous manifestations of the ethical issues that have emerged in this mismatch this study shows how these issues arise in the context of the characteristics of country s economic and corporate governance development it evaluates various potential policy responses that may be implemented to improve governance effectiveness and diminish the damage from those problems

chapter 9 econometric and time series market response models publisher summary marketing has seen a rapid expansion in the widespread use of quantitative methods correlation and regression analysis were among the first techniques used as marketing research emerged as a discipline after world war ii in the early 1970s regression analysis became econometrics simultaneous equation systems could be estimated almost as easily as single regression equations while econometrics as a whole continues to flourish as new and more sophisticated estimation techniques and associated computer software have become available simultaneous equation systems have not become widely prevalent the dynamic structure of marketing variables themselves is addressed in the chapter followed by discussions of leads and lags among marketing variables and the assessment of the direction of causality dynamic properties of sales response functions have been discussed in more detail marketing generalizations that have been uncovered as well as empirical evidence on the shape of the sales response function is reported

inefficiencies from financial liberalization in the absence of well functioning equity markets since the seminal works by mckinnon 1973 and shaw 1973 there has been active research into the working of financially repressed economies and the beneficial effects of elnancial liberalization see fry 1982 for a survey of literature they claim that liberalization of the elnancial sector from interest rate ceilings and other restrictions facilitates economic development and growth because higher interest rates lead to both increased savings and greater efficiency of capital allocation today the idea that financial activity should not be repressed has become the new orthodoxy in academia as well as in the major international institutions that provide policy guidelines for developing countries the elnancial liberalization argument however is incomplete the literature on emancial liberalization has emphasized eliminating interest rate ceilings and fostering free competition among banks it has largely overlooked the possibility that endogenous constraints in the credit market such as imperfect information could be signielcant barriers to efelcient credit allocation even when banks are freed from interest rate ceilings nor has the literature dealt with market structure e g the oligopolistic and cartelized banking systems found in most locs the literature has emphasized the role of the banking sector which is correctly perceived as the only organized capital market in most developing countries it has neglected the potential

financial market liberalisation in ldcs the incidence of risk allocation effects of interest rate increases high deposit interest rates are central to the financial liberalisation argument the article investigates the relatively neglected issue of who must pay two issues are stressed if loan charges increase the incidence falls on typically highly geared businesses and overall financial saving may not rise as claimed second although loan charges need not increase and enhanced credit availability may compensate borrowers if they do the financial risks of banks increase these risks are pertinent to monetary policy and may force actions contrary to the liberalisation approach institutional developments to foster the supply of risk bearing capital are emphasised in conclusion

reform and urban bias in china income inequalities between urban and rural areas remain high in china but the gap has begun to narrow peasant incomes have increased dramatically since the post mao reforms rural areas have new power but this is a consequence not a cause of the reforms the improvement in rural conditions reflects a change in the central state s development strategy and ideology and the local response to incentives embedded in china s reforms the impetus for these changes is self preservation of the state and the chinese communist party the failure to close decisively the income disparities between the urban and rural areas similarly stems from concerns of regime stability and preservation of the party state

multistage multiproduct advertising budgeting abstract we propose and analyze an effective model for the multistage multiproduct advertising budgeting problem this model optimizes the advertising investment for several products by considering cross elasticities different sales drivers and the whole planning horizon we derive a simple procedure to compute the optimal advertising budget and its optimal allocation the model was tested to plan a realistic advertising campaign we observed that the multistage approach may significantly increase the advertising profit compared to the successive application of the single stage approach

urban rural gap and poverty traps in china a prefecture level analysis urban rural gap and regional inequality are long standing problems in china and result in considerable number of studies this article examines the dynamic behaviours of incomes for both urban and

education and off farm work an investigation is presented of the determinants of educational selectivity in a framework that emphasizes the coordination of household members sectoral time allocation is based on members comparative advantage which in turn depends on the utilization and returns to schooling in the farm and nonfarm sectors central to the model is a knowledge spillover hypothesis that workers who participate in off farm work may still contribute knowledge to farm management estimation of the model is based on cross sectional chinese farm household data collected in 1990 from 204 households in sichuan province it is concluded that schooling does not enhance labour productivity when carrying out routine tasks that the contribution to farm efficiency by the most educated members is not affected by their non farm participation and that schooling increases labour market wage rates these empirical results give comparative advantage for the better educated farmers to work off the farm

interprovincial disparities in china output and consumption 1952 1987 the flood of economic information from china in recent years has permitted reassessment of the chinese model of development and the extent to which china s own development experience has conformed to it the prevailing consensus of the 1970s concerning the substance of the model itself typically characterized in terms of the chinese leadership s objectives and priorities and its strategy for pursuing them has stood up quite well the same cannot be said about past appraisals of the extent to which china s economic reality has been reshaped to accord with the model s prescriptions one of the most widely remarked elements of the chinese model is the high priority assigned to regional objectives and more specifically to balance in the distribution of productive capacity and equity in the distribution of income and hence consumption during the maoist era i e prior to 1979 the central government pursued regional objectives through such measures as interregional transfers of investment resources effected via the planning system subsidization of health and education expenditures in poor regions and attempts to maintain a safety net of state relief effected largely via control of grain surpluses in short there is little doubt that prior to 1979 the chinese leadership placed an unusually high value on the spread of modern growth and the improvements in welfare associated with it and persistently acted to limit the emergence or widening of interregional disparities although china s post mao leaders have shown greater concern with efficiency and with the potential trade offs between efficiency and such goals as balance and equity their continuation of many redistributive policies indicates that they have not abandoned regional objectives but how successful has china been in achieving these objectives

education and allocative efficiency household income growth during rural reforms in china this paper studies the contribution of schooling to rural income in china during factor market liberalization between 1986 and 1995 the relaxation of controls permitted farm households to reallocate productive inputs from agriculture to nonagricultural activities it is hypothesized that education facilitates this adjustment panel data from sichuan province suggest that schooling enhanced the ability of farmers to devote labor and capital to nonfarm production given the evidence that less than optimum levels of these inputs were allocated to nonagricultural uses during the transition the expansion of nonfarm activities contributed significantly to household income growth

opening of china s trade labour market reform and impact on rural wages government policy in china supports urban wages at the expense of returns to farm labour a model is developed to estimate how wto accession and complementary labour market reform will influence factor returns in china with wto membership a larger cut in manufacturing tariffs compared to agriculture will improve agriculture s terms of trade and will raise the agricultural wage complementary labour market reforms will further boost farm wages as labour exits agriculture in large numbers we estimate that wto membership and complementary labour market reforms will result in a decline in the agricultural labour force by about 25 per cent

credit policy inflation and growth in a financially repressed economy this report analyzes credit policy in an open economy macro model incorporating stylized facts about the financial sector of ldc s absence of security markets existence of a curbmarket these facts are incorporated in the financial sector part of a keynes wicksell growth model it focuses on a transmission channel of monetary policy into the supply side of the economy via the cost of working capital it shows that ignoring this effect when analysing restrictive credit policy leads to underestimates of inflation and overestimation of output and current account improvements it is shown that a credit crunch can be stagflationary in the short run a cut in the real stock of credit is shown to lead to a lower steady state capital stock