the microfinance promise in the past decade microfinance programs have demonstrated that it is possible to lend to low income households while maintaining high repayment rates even without requiring collateral the programs promise a revolution in approaches to alleviating poverty and spreading financial services and millions of poor households are served globally a growing body of economic theory demonstrates how new contractual forms offer a key to microfinance success particularly the use of group lending contracts with joint liability for the most part however high repayment rates have not translated into profits and studies of impacts on poverty yield a mixed picture in describing emerging tensions the paper highlights the diversity of innovative mechanisms beyond group lending contracts the measurement of financial sustainability the estimation of economic and social impacts the costs and benefits of subsidization and the potential to reduce poverty through savings programs rather than just credit the promise of microfinance has pushed far ahead of the evidence and an agenda is put forward for addressing critical empirical gaps and sharpening the terms of policy discussion

south asia energy security challenges and opportunities south asia has witnessed a growing imbalance between energy demand and its supply from indigenous sources resulting in increased import dependence energy endowments differ among the south asian countries however access to the significant energy resources in the neighboring countries is denied which increases the cost of energy supply and reduces energy security of the individual countries and of the region as a whole the countries in the region could benefit significantly only by strengthening the mechanism of energy trade through improved connectivity therefore greater cooperation within south asia could be one of the most effective ways to deal with this regional energy deficit and ensure energy security of the region

wages experience and seniority in this paper we study the sources of wage growth we identify the contribution to such growth of general sector specific and firm specific human capital our results are interpretable within the context of a model where the returns to human capital may be heterogeneous and where firms may offer different combinations of entry level wages and firm specific human capital development we allow for the possibility that wages are match specific and that workers move jobs as a result of identifying a better match to estimate the average returns to experience sector tenure and firm specific tenure within this context we develop an identification strategy which relies on the use of firm closures our data source is a new and unique administrative data set for germany that includes complete work histories as well as individual characteristics we find positive returns to experience and firm tenure for skilled workers the returns to experience for unskilled workers are small and insignificant after 2 years of experience their returns to sector tenure are also zero however their returns to firm tenure are substantial in this paper we study the growth of wages of young workers in germany knowing the extent and reasons for individual wage growth over the life cycle is important for a number of areas in economics just to mention two examples first it is a key element to understanding and designing active labour market programmes many such programmes offer temporary and often subsidized work opportunities examples are the new deal in the u k and the swedish programmes as well as a number of programmes in germany these programmes are based on the assumption that general skills are sufficiently enhanced while working so as to render the workers employable without a wage subsidy thus the success of these programmes depends on how skills improve on the job for the target population and whether this skill enhancement is transferable across jobs second it is a key to understanding the benefits and costs of job mobility this in turn matters for a number of policy issues including the design of pension policies relating for example to final salary schemes as a result of this widespread interest a large body of empirical research has focused on obtaining estimates for the returns of experience and seniority 1 our study uses a new and unique administrative data set with a number of features that are important for our analysis and allow us to avoid many problems encountered in earlier work in this field in our model wages grow due to learning by doing which may be heterogeneous across individuals moreover since firms offer different career profiles and because we allow for match specific effects on wages investments take the form of searching for the firm with the most desirable learning by doing characteristics career structure 2

comparing virtue consequentialist and deontological ethics based corporate social responsibility mitigating microfinance risk in institutional voids due to the nature of lending practices and support services offered to the poor in developing countries portfolio risk is a growing concern for the microfinance industry though previous research highlights the importance of risk for microfinance organizations not much is known about how microfinance organizations can mitigate risks incurred from providing loans to the poor in developing countries further though many microfinance organizations practice corporate social responsibility csr to help create economic and social wealth in developing countries the impact of such csr practices remains an underdeveloped area of inquiry we use a normative ethics lens to develop an ethics based csr theory that differentiates between three forms of ethics based csr virtue consequentialist and deontological we argue that while all three forms can help mitigate risk virtue ethics based csr is potentially the most useful form of csr toward mitigating microfinance portfolio risk we test our hypotheses using a sample of microfinance organizations from across the world our findings suggest that virtue ethics based csr is not just an important philosophical paradigm it can actually help mitigate microfinance portfolio risk when implemented in practice

international investment positions a cross sectional analysis abstract we explore some empirical properties of the level and composition of gross international investment positions in a cross section of countries we find that more open countries with larger domestic financial markets tend to hold greater quantities of foreign assets and liabilities there is some evidence that cross holdings are positively correlated with inflation volatility but negatively correlated with terms of trade volatility

international capital mobility net versus gross stocks and flows abstract feldstein and horioka 1980 observed that net capital flows have been small in relation to domestic saving and investment flows for oecd countries in the post war period which they interpreted as evidence of low capital mobility this paper argues that the correlation between gross domestic and international financial flows can be a better indicator of capital mobilitythan net capital flows contrary to the conventional wisdom among international economists gross flows have been small in relation to gross domestic asset creation for oecd countries although by this measure the degree of capital mobility increased in the 1980s

the composition of capital inflows when emerging market firms face financing constraints abstract the composition of capital inflows to emerging market economies tends to follow a predictable dynamic pattern across the business cycle in most emerging market economies total inflows are pro cyclical with debt and portfolio equity flowing in first followed later in the expansion by foreign direct investment fdi to understand the dynamic composition of these flows we use a small open economy soe framework to model the composition of capital inflows as the equilibrium outcome of emerging market firms financing decisions we show how costly external financing and fdi search costs generate a state contingent cost of financing such that the cheapest source of financing depends on the phase of the business cycle in this manner the financial frictions are able to explain the interaction between the types of flows and deliver a time varying composition of flows as well as other standard features of emerging market business cycles if as this work suggests flows are an equilibrium outcome of firms financing decisions then volatility of capital inflows is not necessarily bad for an economy furthermore using capital controls to shut down one type of flow and encourage another is certain to have both short and long run welfare implications

circumvention of trade defence measures and business ethics with the rise of globalization the debate around free trade versus fair trade and liberalism versus protectionism has become increasingly complicated at times the regulations of the world trade organization seem to pit developed markets against emerging markets as governments attempt to expand international trade while at the same time protecting local industry to this end antidumping measures have been extensively developed as a way to block foreign low cost goods often produced in emerging countries from entering domestic markets in response some exporters have begun to circumvent these antidumping measures using strategies such as transhipment assembly operations and slightly modified products while previous studies have addressed the ethical aspects of antidumping measures this study will focus on the ethics of circumvention strategies with a special focus on the theories on legal compliance and specifically civil disobedience and conscientious evasion

mainstreaming microfinance social performance management or mission drift summary what scope is there for the pursuit of explicit development goals in the context of increasing integration of specialized microfinance and commercial banking sectors this question and the idea of mission drift is first analyzed using a model that distinguishes between institutions financial and social performance possibilities preferences and assessment systems the model is used to review findings from action research with an international sample of poverty oriented microfinance institutions that suggest some simple steps for improved social performance management it is then used to illustrate the relationship between social and financial performance more widely across the retail financial services sector and to offer pointers for more policy analysis at this level

energy security electricity population and economic growth the case of a developing south asian resource rich economy economic growth and increasing population is driving the demand for energy in developing economies globally including south asia energy security concerns have heightened in these economies consequently raising questions in their ability to meet the key sustainable development goals this paper specifically examines the inter relationships between energy security captured through the channel of electricity availability based on electricity consumption and economic output in a multivariate framework incorporating the effects of capital formation and population for nepal a developing economy in south asia time series econometrics based on the ardl bounds test approach to cointegration and the toda yamamoto granger causality tests are used to examine and test for long run equilibrium relationships and causality between 1975 and 2014 we find that there is no long run relationship between electricity consumption and economic output for nepal distinguishing it at the regional level for south asia however a 1 increase in population increases electricity consumption by 4 16 in the long run we propose that large scale development of available renewable energy such as hydropower and improvements in energy efficiency will not only strengthen energy security in the long run but also will help tackling climate change in south asian developing economies like nepal

current accounts and oil price fluctuations in oil exporting countries the role of financial development abstract oil exporting countries usually experience large current account improvements following a sharp increase in oil prices in this paper we investigate this oil price current account relationship on a sample of 27 oil exporting economies relying upon the estimation of panel smooth transition regression models over the 1980 2010 period we provide evidence that refines the traditional interpretation of oil price effects on current accounts while current accounts are positively affected by oil price variations this effect is nonlinear and depends critically on the degree of financial development of oil exporting economies more specifically oil price variations exert a stronger impact on the current account position for less financially developed countries this influence diminishing with financial deepness

oil extraction and poverty reduction in the niger delta a critical examination of partnership initiatives the combination of corporate community conflicts and oil transnational corporations tncs rhetoric about being socially responsible has meant that the issue of community development and poverty reduction have recently moved from the periphery to the heart of strategic business thinking within the nigerian oil industry as a result oil tncs have increasingly responded to this challenge by adopting partnership strategies as a means to contribute to poverty reductions in their host communities as well as secure their social licence to operate this paper critically examines the strengths and weaknesses of the different community development partnership cdps initiatives employed by shell exxon mobil and total to contribute to poverty reduction within their host communities in the niger delta nigeria drawing on empirical data and critical analysis the paper argues that while the cdp initiatives by spdc mpn and epnl have the potential to contribute to community development the failure to integrate negative injunction duties into existing partnerships means that the partnerships make no difference to how oil tncs conduct their core business operation consequently cdps have had limited positive impact on poverty reduction in the niger delta the paper concludes by examining the implications of the emerging issues for partnership and poverty reduction

shareholder value stakeholder management and social issues what s the bottom line we test the relationship between shareholder value stakeholder management and social issue participation building better relations with primary stakeholders like employees customers suppliers and communities could lead to increased shareholder wealth by helping firms develop intangible valuable assets which can be sources of competitive advantage on the other hand using corporate resources for social issues not related to primary stakeholders may not create value for shareholders we test these propositions with data from s p 500 firms and find evidence that stakeholder management leads to improved shareholder value while social issue participation is negatively associated with shareholder value copyright 2001 john wiley sons ltd

financial openness sudden stops and current account reversals in this paper i use a panel data set to investigate the mechanics of sudden stops of capital inflows and current account reversals i am particularly interested in four questions a what is the relationship between sudden stops and current account reversals b to what extent does financial openness affect the probability of a country being subject to a current account reversal in other words do restrictions on capital mobility reduce the probability of such occurrences c does openness both trade openness and financial openness play a role in determining the effect of current account reversals on economic performance i e gdp growth and d does the exchange rate regime affect the intensity with which reversals affect real activity the empirical analysis shows that sudden stops and current account reversals have been closely related the econometric analysis suggests that restricting capital mobility does not reduce the probability of experiencing a reversal current account reversals in turn have had a negative effect on real growth that goes beyond their direct effect on investment the regression analysis indicates that the negative effects of current account reversals on growth will depend on the country s degree of trade openness more open countries will suffer less in terms of lower growth relative to trend than countries with a lower degree of trade openness on the other hand the degree of financial openness does not appear to be related to the intensity with which reversals affect real economic performance the empirical analysis also suggests that countries with more flexible exchange rate regimes are able to accommodate better shocks stemming from a reversal than countries with more rigid exchange rate regimes this abstract was borrowed from another version of this item

life cycle prices and production we use scanner data and time diaries to document how households substitute time for money through shopping and home production we document substantial heterogeneity in prices paid for identical goods for the same area and time with older households shopping the most and paying the lowest prices doubling shopping frequency lowers a good s price by 7 to 10 percent we estimate the shopper s price of time and use this series to estimate an elasticity of substitution between time and goods in home production of roughly 1 8 the observed life cycle time allocation implies a consumption series that differs markedly from expenditures

promoting regional energy co operation in south asia abstract energy is a key ingredient of the socio economic development of any region south asia is not only one of the fastest growing regions in the world it is also one of the poorest which thus puts energy at the very heart of the development process in the region this paper looks at the challenges faced by the south asia sub region for economic co operation sasec comprised of bangladesh bhutan india and nepal and also at the role of greater regional energy co operation therein the region is characterized by pressures of growing economies and increasing population while the per capita energy consumption is one of the lowest in the world energy intensity continues to be very high a large portion of the population lacks access to modern sources of energy and depends on traditional sources that are not only inefficient but also have severe health and environmental problems associated with them increasing oil import dependency and huge investment needs for energy market development pose a further challenge the region has a good resource potential and tremendous scope for energy co operation which can play a key role in addressing many of these energy security concerns and in putting it on the path of sustainable development it is ironic that the record in the area has been so limited and that too in the most basic form of co operation i e bilateral arrangements between countries this paper puts forth a multi pronged strategy for sub regional energy co operation encompassing softer options aimed at confidence building to more substantial and larger scale co operation efforts delays in decision making to ensure stronger and mutually beneficial co operation efforts are associated with high costs not only to the energy sector but also for the entire development agenda with the precarious energy situation in the region and unprecedented increases in international oil prices seen in recent times it is high time for policy makers financing institutions ngos and the civil society to push for a greater integration of the sasec energy sector

microfinance mission drift summary claims have been made that microfinance institutions mfis experience mission drift as they increasingly cater to customers who are better off than their original customers we investigate mission drift using average loan size as a main proxy and the mfis lending methodology main market and gender bias as further mission drift measures we employ a large data set of rated multi country mfis spanning 11 years and perform panel data estimations with instruments we find that the average loan size has not increased in the industry as a whole nor is there a tendency toward more individual loans or a higher proportion of lending to urban costumers regressions show that an increase in average profit and average cost tends to increase average loan and the other drift measures more focus should be given to cost efficiency in the mfi

global growth opportunities and market integration we propose an exogenous measure of a country s growth opportunities by interacting the country s local industry mix with global price to earnings pe ratios we find that these exogenous growth opportunities predict future changes in real gdp and investment in a large panel of countries this relation is strongest in countries that have liberalized their capital accounts equity markets and banking systems we also find that financial development external finance dependence and investor protection measures are much less important in aligning growth opportunities with growth than is capital market openness finally we formulate new tests of market integration and segmentation by linking local and global pe ratios to relative economic growth in a perfectly integrated world economy capital should be invested where it

net foreign asset com position does financial development matter abstract we investigate the relationship between a country s domestic financial development and the composition of its net foreign asset position using a pooled mean group estimator and data for 50 countries for the 1970 2007 period the results show that financial development reduces a country s long run net foreign asset position in addition financial development leads to higher net equity and lower net debt positions these findings confirm the theoretical predictions of mendoza et al 2009 the results are robust to using different indicators of financial development and inclusion of the level of development of a country in the cointegrating relationship

financial institutions and markets across countries and over time the updated financial development and structure database this article introduces the updated and expanded version of the financial development and structure database the database includes indicators on the size efficiency and stability of banks nonbank financial institutions and equity and bond markets over 1960 2007 it also contains indicators of financial globalization

modeling energy and development an evaluation of models and concepts most global energy models are developed by institutes from developed countries focusing primarily on issues that are important in industrialized countries evaluation of the results for asia of the ipcc sres models shows that broad concepts of energy and development the energy ladder and the environmental kuznets curve can be observed in the results of the models however improvements can be made in modeling the issues that underlie these concepts like traditional fuels electrification economic structural change income distribution and informal economies given the rapidly growing importance of energy trajectories of developing countries for global sustainability the challenge for the future is to develop energy models that include all these aspects of energy and development

understanding interdependence the macroeconomics of the open economy list of figureslist of tablesintroduction1the endogeneity of exchange rate regimes32exchange rate behavior under alternative exchange rate arrangements343panel one money for how many 844exchange rates prices and external adjustment in the united states and japan1075the dynamic optimizing approach to the current account theory and evidence1696international capital mobility in the 1990s2017a retrospective on the debt crisis2628trade liberalization in disinflation2919inflation and growth in an integrated approach31310panel the outlook for stabilization and reform in central and eastern europe36811international cooperation in the making of national macroeconomic policies where do we stand 39112the political economy of monetary union44813what do we need to know about the international monetary system 509conference participants531author index535subject index543

estimating the performance effects of business groups in emerging markets business groups confederations of legally independent firms are ubiquitous in emerging economies yet very little is known about their effects on the performance of affiliated firms we conceive of business groups as responses to market failures and high transaction costs in doing so we develop hypotheses about the effects of group affiliation on firm profitability affiliation could either boost or depress firm profitability and members of a group are likely to earn rates of return similar to other members of the same group using a unique data set compiled largely from local sources we test for these effects in 14 emerging markets argentina brazil chile india indonesia israel mexico peru the philippines south africa south korea taiwan thailand and turkey we find evidence that business groups indeed affect the broad patterns of economic performance in 12 of the markets we examine group affiliation appears to have as profound an effect on profitability as does industry membership yet strategy scholars have a much clearer grasp of industries than of groups moreover membership in a group raises the profitability of the average group member in several of the markets we examine this runs contrary to the wisdom conventional in advanced economies that unrelated diversification depresses profitability overall our findings suggest that the roots of sustained differences in profitability may vary across institutional contexts conclusions drawn in one context may well not apply to another copyright 2001 john wiley sons ltd

thresholds in the process of international financial integration abstract the financial crisis has re ignited the fierce debate about the merits of financial globalization and its implications for growth especially for developing countries the empirical literature has not been able to conclusively establish the presumed growth benefits of financial integration indeed a new literature proposes that the indirect benefits of financial integration may be more important than the traditional financing channel emphasized in previous analyses a major complication however is that there seem to be certain threshold levels of financial and institutional development that an economy needs to attain before it can derive the indirect benefits and reduce the risks of financial openness in this paper we develop a unified empirical framework for characterizing such threshold conditions we find that there are clearly identifiable thresholds in variables such as financial depth and institutional quality the cost benefit trade off from financial openness improves significantly once these threshold conditions are satisfied we also find that the thresholds are lower for foreign direct investment and portfolio equity liabilities compared to those for debt liabilities

transforming disadvantages into advantages developing country mnes in the least developed countries we analyze the advantages and disadvantages of developing country multinational enterprises mnes in comparison with developed country mnes developing country mnes tend to be less competitive than their developed country counterparts partly because they suffer the disadvantage of operating in home countries with underdeveloped institutions we argue that this disadvantage can become an advantage when both types of mne operate in countries with difficult governance conditions because developing country mnes are used to operating in such conditions the empirical analysis shows that although developing country mnes rarely appear among the largest mnes in the world they are more prevalent among the largest foreign firms in the least developed countries ldcs especially in ldcs with poorer regulatory quality and lower control of corruption

entrepreneurship in and around institutional voids a case study from bangladesh abstract in many developing countries those living in poverty are unable to participate in markets due to the weakness or complete absence of supportive institutions this study examines in microcosm such institutional voids and illustrates the activities of an entrepreneurial actor in rural bangladesh aimed at addressing them the findings enable us to better understand why institutional voids originate and to unpack institutional processes in a setting characterized by extreme resource constraints and an institutional fabric that is rich but often at odds with market development we depict the crafting of new institutional arrangements as an ongoing process of bricolage and unveil its political nature as well as its potentially negative consequences

the pecking order of cross border investment abstract is there a pecking order of cross border investment in that countries become financially integrated through some types of investment rather than others using a novel database of bilateral capital stocks for all types of investment fdi portfolio equity securities debt securities as well as loans for a broad set of 77 countries we show that such a pecking order indeed exists the paper focuses on two key determinants of this pecking order information frictions and the quality of host country institutions overall we find that in particular fdi and to some extent also loans are substantially more sensitive to information frictions than investment in portfolio equity and debt securities we also show that the share as well as the size of fdi that a country receive are largely insensitive to institutional factors in host countries while portfolio investment is by far the most sensitive to the quality of institutions this provides new evidence in favor of some hypotheses but contradicts others put forward in the literature on trade in financial assets

the long or short of it determinants of foreign currency exposure in external balance sheets abstract a major focus of the recent literature on the determination of optimal portfolios in open economy macroeconomic models has been on the role of currency movements in determining portfolio returns that may hedge various macroeconomic shocks however there is little empirical evidence on the foreign currency exposures that are embedded in international balance sheets using a new database we provide stylized facts concerning the cross country and time series variation in aggregate foreign currency exposure and its various subcomponents in panel estimation we find that richer more open economies take longer foreign currency positions in addition we find that an increase in the propensity for a currency to depreciate during bad times is associated with a longer position in foreign currencies providing a hedge against domestic output fluctuations we view these new stylized facts as informative in their own right and also potentially useful to the burgeoning theoretical literature on the macroeconomics of international portfolios

the influence of unrelated and related diversification on fraudulent reporting this study suggests that unrelated diversification has a positive influence on the probability of fraudulent reporting whereas related diversification has a negative influence on the probability of fraudulent reporting the strength of the influence of these corporate level strategies is contingent on the moral character of the firm unrelated diversification provides opportunity for financial innovation within the firm s internal capital market which can result in fraudulent reporting this is more likely when the moral character of the firm is driven by a conscienceless financial self interest motive as implied by the firm s contempt toward the larger community in terms of damage inflicted on the interests of people outside the firm in contrast related diversification where product divisions focus on mutual sharing and monitoring of operational activities can reduce the probability of fraudulent reporting this is more likely when constituents within the firm view themselves as moral citizens as implied by the firm s benevolence toward the larger community hence while unrelated diversification focuses the energies of managers within the firm on financial manipulation related diversification focuses these energies on productive purposes

business strategy and poverty alleviation currently entrepreneurs and corporations overwhelmingly do not view the alleviation of global poverty as a strategic priority yet business activity can have a negative as well as a positive effect on each distinctive form of poverty in order to reduce poverty entrepreneurs have to find ways of limiting the negative aspects this might be achieved by deliberately augmenting strategies so that they can achieve a synthesis in partnership with governments and ngo s

virtue theory as a dynamic theory of business this paper develops a meta theory of business based on virtue theory which links the concept of virtues the common good and the dynamic economy into a unifying and comprehensive theory of business traditional theories and models of business have outlived their usefulness as they are unable to adequately explain social reality virtue theory shows firms that pursue ethically driven strategies can realise a greater profit potential than those firms who currently use profit driven strategies the theory expounds that the business of business is ethical business and that the crises that business and society face today are crises of leadership and ethics the issues of leadership and corporate social responsibility are discussed in the context of the proposed theory

regional cooperation on energy in south asia unraveling the political challenges in implementing transnational pipelines and electricity grids political challenges are arguably the biggest constraint to the realization of regional energy projects in south asia an issue that has impeded cooperation despite the existence of substantial economic incentives although challenges such as technical difficulties financial constraints and bureaucratic inefficiency are important they are essentially subsidiary issues the solutions to which are held hostage by often mentioned but rarely examined political impediments while existing accounts of political obstacles in contemporary literature are relatively abstract this paper draws on interviews with government officials academics representatives of regional institutions and officials of multilateral development banks in bangladesh nepal pakistan and india to get insights into their experience of possibilities for and limitations to energy cooperation by synthesizing the findings of interviews with relevant literature this paper undertakes a systematic analysis of the political challenges to regional energy projects and provides a number of policy recommendations to overcome these impediments

a pecking order of capital inflows and international tax principles abstract even though financial markets today show a high degree of integration the world capital market is still far from the textbook story of high capital mobility the purpose of this paper is to highlight key sources of market failure in the context of international capital flows and to provide guidelines for efficient tax structure in the presence of capital market imperfections the analysis distinguishes three types of international capital flows foreign portfolio debt investment foreign portfolio equity investment and foreign direct investment the paper emphasizes the efficiency of a non uniform tax treatment of the various vehicles of international capital flows

europe 1992 issues and prospects for the financial markets financial markets vittorio grilli one potential effect of the integration of european financial markets concerns the geographical location of financial hot spots it is likely that liberalization will tend to promote countries with already large and well developed international financial markets attracting the residents of smaller countries these markets will become larger and more liquid and thus even more appealing it is very unlikely that other european countries could design policies apt to threaten london s supremacy as the main european financial centre while the article focuses on the market for bank deposits similar considerations apply to other financial markets it appears that a large part of cross country bank deposits are explained by country specific factors such as particular institutional arrangements in the areas of capital controls tax regulations and secrecy laws however the relative importance of these factors varies between inter bank deposits and non bank deposits taxation and banking secrecy matter for non bank deposits while the very size of the economy influences inter bank deposits finally imperfect competition and switching costs imply that more intense competition wilt be felt primarily in the market for large deposits small deposit contracts will probably be unaffected by liberalization at least in the short run

resource security competition for global resources strategic intent and governments as owners we develop a resource security theory by examining the intent of acquisitions of scarce resources by multinational firms results suggest that owners of firms can shape the intent of resource acquisitions specifically state owned enterprises soes tend to acquire and pay more for resources for exploration rather than exploitation this is because soes owners governments are most concerned with securing their country s future we contribute to the literature by suggesting that ownership influences resource acquisitions that resource security is of importance to multinational enterprises and that soes invest abroad to safeguard both their own and their home countries future

the external wealth of nations measures of foreign assets and liabilities for industrial and developing countries abstract although capital flows are closely monitored surprisingly little is known about the accumulated stocks of foreign assets and liabilities held by various countries especially in the developing world this paper constructs estimates of foreign assets and liabilities and their equity and debt subcomponents for a sample of 67 industrial and developing countries it characterizes the stylized facts of international balance sheets and asks whether there are trends in net foreign asset positions and shifts in debt equity ratios over time finally it explores the sensitivity of estimated stock positions to the treatment of valuation effects not captured in balance of payments data

institutions and the external capital structure of countries abstract a widespread view holds that countries that finance themselves through foreign direct investment and portfolio equity rather than bonds and loans are less prone to crises but what determines countries external capital structures in a cross section of advanced economies emerging markets and developing countries we find that equity like liabilities as a share of countries total external liabilities are positively and significantly associated with indicators of educational attainment openness natural resource abundance and especially institutional quality these relationships are robust to attempts to control for possible endogeneity suggesting that better institutional quality may help improve countries external capital structures

the composition of international capital flows risk sharing through foreign direct investment abstract evidence on international capital flows suggests that foreign direct investment fdi is less volatile than other financial flows to explain this finding i model international capital flows under the assumptions of imperfect enforcement of financial contracts and inalienability of fdi imperfect enforcement of contracts leads to endogenous financing constraints and the pricing of default risk inalienability implies that it is not as advantageous to expropriate fdi relative to other flows these features combine to give a risk sharing advantage to fdi over other capital flows this risk sharing advantage of fdi translates into a lower default premium and lower sensitivity to changes in a country s financing constraint the model offers the new implication that financially constrained countries should borrow relatively more through fdi this is because fdi is harder to expropriate and not because fdi is more productive or less volatile using several creditworthiness and country risk ratings to measure financing constraints i present new evidence linking fdi and financing constraints moreover numerical simulations of the model generate stronger serial correlation for fdi than for other flows into developing countries this corroborates the view that non fdi flows are more short term and more likely to change direction

new convergences in poverty reduction conflict and state fragility what business should know a common moral imperative to reduce human suffering in developing countries has helped to bring the international poverty reduction and conflict mitigation agendas together but while research and practice are well established in the fields of poverty and conflict the nexus between these two fields at the theoretical and practical levels is largely nascent lack of a shared body of knowledge has arguably impeded the ability of these communities to work together toward the overlapping goals of reducing poverty and conflict in countries affected by violence and instability business as a key sector of the international community could potentially make significant contributions to the joint agenda if it were better integrated in efforts to develop the nexus this article surveys the current states of knowledge in the fields of poverty and conflict including the increasing influence of the fragile states theory it then discusses some of the major schools of thought helping to bring poverty reduction efforts into alliance with conflict mitigation efforts the third section identifies important conceptual convergences and divergences between the fields and reconsiders the prominent assumption that economic opportunity can be a powerful incentive for peace and stability finally this article discusses potential areas that could advance the nexus of poverty and conflict at both a theoretical and practical level

let there be light a multi actor approach to alleviating energy poverty in asia abstract energy poverty is the primary energy security issue impacting almost 800 million people particularly women and children in the developing countries of asia current trends indicate that should there be no change to existing policies and the governance systems and institutions underpinning them the absolute number of energy poor will barely shift most significantly addressing energy poverty is critical to absolute poverty reduction enhanced gender equality and political stability in the asian region we offer a solution to progress the energy poverty alleviation effort focused on encouraging sustainable development centred investment this will involve multi actor partnerships between developed and developing country governments investors and multilateral institutions we propose that there may be spill over effects for investing firms in the form of strengthened corporate reputation consequently energy poverty alleviation efforts can create new opportunities for commerce multilateral institutions ngos and developing and developed countries it is envisaged that the multi actor approach put forward by this paper will facilitate the partnerships programs and provisions needed to alleviate energy poverty in asia however critical to the success of this collaborative approach is a genuine shift in sentiment from the key stakeholders involved in the effort

the shifting composition of external liabilities what determines the composition of external liabilities both across countries and over time more specifically which countries account for the massive increase in equity like liabilities foreign direct investment and portfolio equity especially since the mid 1990s the empirical analysis draws on the newly released external wealth of nations mark ii dataset in the cross section we find that larger more open economies with a better institutional quality score have a greater equity share in external liabilities which is also positively related to natural resource production along the time series dimension we find that the shift towards equity financing is stronger among those countries that have undertaken a greater degree of domestic financial reform jel f21 f34 f36

filling the institutional void the social behavior and performance of family vs non family technology firms in emerging markets family businesses fbs are said to treat their employees with unusual consideration to form a cohesive internal community they are also claimed to develop deeper more extensive connections or relationships with outside stakeholders both behaviors may increase the viability of a business intended to support an owning family and its later generations such social linkages we believe may compensate for the lack of capital product and labor institutional infrastructures in dynamic emerging economies this survey study of a most challenging emerging market sector namely korean hightechnology businesses argues three major points 1 relationships of community and connection will be more common in fbs than in non fbs 2 these relationships will enhance performance in emerging market hightechnology sectors which because of their competitive complex and everchanging nature rely on significant expert knowledge and social capital within and outside the organizational community 3 the performance of fbs will benefit more from these community and connection relationships than the performance of non fbs because in these personally intimate settings employees and external partners will be especially likely to return the generosity of a visibly active owning family or to penalize its selfishness significant empirical support was found for most of these hypotheses

does one size fit all a reexamination of the finance and growth relationship abstract recent research has found a strong positive effect of a country s financial development on economic growth we propose that this relationship may vary according to the level of financial development divided in three regions in the low region countries with very low levels of financial development additional improvements in financial markets have an uncertain effect on growth in the intermediate region financial development has a large positive effect on growth finally in the high region the effect is positive but smaller we examine a panel of 74 countries using generalized method of moments gmm dynamic panel techniques and find support for the different regions

why doesn t capital flow from rich to poor countries an empirical investigation we examine the empirical role of difierent explanations for the lack of ows of capital from rich to poor countries the lucas paradox the theoretical explanations include difierences in fundamentals across countries and capital market imperfections we show that during 1970i2000 low institutional quality is the leading explanation for example improving peru s institutional quality to australia s level implies a quadrupling of foreign investment recent studies emphasize the role of institutions for achieving higher levels of income but remain silent on the speciflc mechanisms our results indicate that foreign investment might be a channel through which institutions afiect long run development

potential gains from expanding regional electricity trade in south asia abstract the south asia region is lagging behind many regions in regional electricity trading despite the huge potential for trade using an electricity system optimization model this study quantifies the benefits of unrestricted cross border electricity trade in south asia during the 2015 2040 period the study finds that the unrestricted electricity trade provision would save us 226 billion us 9 billion per year of electricity supply costs over the period 100 billion when discounted at 5 rate the ratio of benefits in the form of reduction of fuel and other operating costs to increased costs of generation and interconnection investment would be more than 5 1 the provision would reduce regional power sector carbon dioxide emissions by 8 mainly through substitution of coal based generation with hydro based generation although regional emissions would be well above current levels absent other policy interventions because of rapidly growing demand to achieve these benefits the region would need to add 95 gw of new cross border transmission interconnection capacity but at the same time it would avoid 36 gw of additional interconnection capacity between the regional grids within india

strengthening of energy security low carbon growth in asia role of regional energy cooperation through trade abstract prudent demand supply management of energy is pivotal for the energy security of the countries and transitions towards the sustainable low carbon energy system this study empirically investigates the existing demand supply gaps of energy in the south though east asian stea countries and analyzes how the gaps can be minimized most efficiently through intraregional energy trade stochastic frontier gravity model extended with the determinants of efficiency models used for both primary energy and renewable energy goods reg trade the result implies that for most of the countries intraregional export of primary energy as well as reg are positively influenced by gross domestic products gdp of the exporting and importing countries tariff and distance adversely affect the exports while the implication of cross exchange ratio seems minimal in both cases regional trade agreements rta are also found to have notable positive impact on intraregional trade results show that china and thailand are the most efficient in this intraregional primary energy export while bangladesh and myanmar remain the least efficient china and japan are the most efficient in reg exports while bangladesh remains the least efficient on average the whole region has the weighted export efficiency of 56 5 in intraregional primary energy trade and 63 1 in reg trade the determinants of efficiency model reveals that institutional quality better infrastructure goods market efficiency and technological readiness have reasonable impacts to enhance the countries intraregional energy trade efficiencies

on the solvency of nations cross country evidence on the dynamics of external adjustment we test the hypothesis that net foreign asset positions are consistent with external solvency and examine the dynamics of external adjustment using data for 50 countries over the 1970 2006 period our analysis adapts bohn s 2007 error correction reaction function approach which tests for a negative long run relationship between net exports nx and net foreign assets nfa as a sufficiency condition for the intertemporal budget constraint to hold to a dynamic panel framework pooled mean group pmg and mean group error correction estimation yield evidence of a statistically significant negative response of nx to nfa moreover we cannot reject the hypothesis that the response is largely homogeneous across countries our sensitivity analysis shows that the countries with relatively weaker fundamentals need to respond more strongly to the changes in nfa to keep their nfas on a sustainable path

institutionalizing ethics in institutional voids building positive ethical strength to serve women microfinance borrowers in negative contexts this study examines whether microfinance institutions mfis that serve women borrowers at the base of the economic pyramid are likely to adopt a written code of positive organizational ethics poe using econometric analysis of operational and economic data of a sample of mfis from across the world we find that two contextual factors poverty level and lack of women s empowerment moderate the influence of an mfi s percentage of women borrowers on the probability of the mfi having a poe code mfis that serve more women borrowers are more likely to adopt a poe code especially in negative contexts where women borrowers face poverty and disempowerment and are therefore susceptible to abuse this study provides evidence that mfis can build positive ethical strength in negative contexts