price distortions in agriculture and their effects an international comparison the central thesis of this paper is that agricultural pricing policies pursued by developing countries produce effects which are diametrically opposite to those produced by the pricing policies of many developed countries and that the policies of both are costly in terms of global welfare in general the agricultural sector in developing countries is heavily taxed while that in the developed countries receives substantial price protection the effects of agricultural price distortions on output consumption trade and rural employment are estimated for nine countries in addition the effects of price distortions on the distribution of income between producers and consumers on government revenue and foreign exchange and the net social losses of the policies are calculated the results indicate that there are large income transfers and impacts on migration from the rural to the urban sector in developing countries and from the urban to the rural sector in developed economies

social influence and mne strategic response to political risk a global network approach abstract according to the conventional view of mne host country relations mnes faced with political risk condition their strategic responses on each party s relative power positions or bargaining influence drawing insight from network theory institutional theory and international relations research i argue that firm sensitivity to political risk is contingent upon a complementary concept social influence social influence arises through the mutual embeddedness of mne and host government in a complex global network of nations to test my hypotheses i construct a global network of trade relations that i combine with a unique transaction level dataset from the global petroleum industry my results demonstrate that social influence as modeled by home host structural equivalence moderates the effects of political risk further my findings provide support for a conceptual and empirical distinction between social influence and the traditional bargaining influence examined in the literature

effectiveness of fertilizer policy reforms to enhance food security in kenya a macro micro simulation analysis food security represents a key challenge in most sub saharan african countries and in kenya in particular where still a relevant share of the population lives below a minimum dietary energy consump

the effects of real exchange rate depreciation on stochastic producer prices in low income agriculture abstract this paper considers the effects of real exchange rate depreciation on stochastic agricultural producer prices in low income agriculture conventional wisdom that real depreciation achieved through nominal currency devaluation stimulates tradables production does not universally hold in the presence of stochastic prices in fact real depreciation is only stimulative in two cases importables that remain importable and nontradables that become exportable garch estimation of time series price data on several commodities from madagascar support the hypotheses generated by the analytical model

national animosity and cross border alliances we extend the cross border strategic alliance knowledge base by introducing dyad specific antagonism animosity between nation pairs and hold that the formation and the type of firm level cross border alliances are nontrivially impacted by conflicting relations and animosity between their home nations we examine the formation of alliances between firms among nation dyads with and without a history of conflicts the frequency and magnitude of conflicts increase the perception of likelihood of opportunism and dyad specific risks materially affect the context in which firms make alliance decisions as animosity between two nations increases the number and the probability of forming alliances within the dyad the nations form decreases conditional on the expected number of alliances increased antagonistic actions of nations outside the dyad and dissimilarity in the historical conflicts that each nation has engaged in outside the dyad i increase the number of equity alliances and ii decrease the number of nonequity alliances as a proportion of total alliances we find positive main effects of learning to contract through prior experience only for equity vs nonequity alliances the reputation effects of antagonism based on relationships with nations outside of the dyad negatively moderate the positive learning effects of prior equity alliance experience abstract from author

the money supply and nominal agricultural prices in the early 1970s food and agricultural prices in the united states rose substantially faster than other prices now early in the 1980s farm prices are depressed relative to other prices in the economy numerous explanations of the behavior of nominal agricultural prices in the past decade have been offered these explanations may be broadly divided into two categories the first is the structuralist explanation it argues that real shocks in selected sectors of the economy such as global crop failures raise prices of certain goods these price increases are later validated or accommodated by expansions in the money supply so that the prices of other goods need not decline in contrast monetarist inflation explanations argue that autonomous increases in the money supply lead or cause the price increases and do not just occur ex post to accommodate real shocks ultimately both explanations recognize that without monetary expansion no long run inflation can occur the fundamental difference is

dodging the grabbing hand the determinants of unofficial activity in 69 countries across 69 countries higher tax rates are associated with less unofficial activity as a percent of gdp but corruption is associated with more unofficial activity entrepreneurs go underground not to avoid official taxes but to reduce the burden of bureaucracy and corruption dodging the grabbing hand in this way reduces tax revenues as a percent of both official and total gdp as a result corrupt governments become small governments and only relatively uncorrupt governments can sustain high tax rates 2000 elsevier science s a all rights reserved

calculating levels of protection is it always appropriate to use world reference prices based on current trading status abstract protection measures such as the nominal protection coefficient npc the effective protection coefficient epc the producer subsidy equivalent pse and the consumer subsidy equivalent cse are conventionally calculated using world reference prices based on current trading status under certain conditions the conventional approach can lead to incorrect estimation of the degree and sometimes even the direction of protection this paper spells out the conditions under which use of world reference prices based on current trading status is incorrect and presents data for wheat in pakistan to illustrate how failure to consider these conditions can lead to misleading policy recommendations

responding to public disclosure of corporate social irresponsibility in host countries information control and ownership control we extend the internalization literature by theorizing on how public disclosure of corporate social irresponsibility csi can damage reputation based firm specific advantages of multinational companies mncs and how foreign subsidiary governance can subsequently be used as strategic responses specifically we distinguish between two foreign subsidiary governance mechanisms information control and ownership control that the prior literature has often assumed operate in parallel and posit that they function in divergent directions in this context furthermore we explain how two host country characteristics press freedom and regulatory quality amplify the need for mncs to utilize different governance mechanisms as responses to csi disclosure

the potential for agricultural trade among eastern and southern african countries abstract this study investigates the potential for expanding trade in grains and cereals among the countries of eastern and southern africa in the absence of measures of comparative costs and disaggregated bilateral data the method was to determine whether the consumption and production characteristics of the countries imply that trade is below its potential the countries demonstrate characteristics consistent with greater trade in grains and cereals than occurs the region is not a chronic importer of grains except in years of severe drought greater intra regional trade in grains is implied by the significantly different structures of consumption and production across countries these differences suggest that greater grain self sufficiency for each country taken separately might not be efficient but it could be for the region as a whole along with the evidence for differences in consumption and production patterns goes statistical support for the likelihood that the countries could absorb each other s surpluses and fill each other s shortages over time

state ownership and transparency in foreign direct investment we contribute to ib literature on state owned multinationals by examining an understudied element of mne strategy transparency drawing insight from accounting finance and political science we develop theory and hypotheses regarding ownership effects on fdi disclosure we argue that transparency of outward fdi depends on both state ownership and home and host country institutions we also posit that host governments harness their soes to exploit information disclosed by foreign mnes discouraging inward fdi transparency we test our hypotheses using a unique transaction level database from the global petroleum industry analyzing a sample of 965 investment disclosures across 81 developing and developed countries we find state ownership reduces mne transparency soes are less sensitive to host country political risk than private firms soes from better governed countries are more transparent and regardless of ownership foreign mnes are more opaque when investing in the presence of a host country soe

information technology and transnational integration theory and evidence on the evolution of the modern multinational enterprise reflecting amplified hazards in cross border exchange and imperfections in markets for intangibles internalization has been central in multinational enterprise mne theory this centrality notwithstanding the fact is that internalization coheres with lower powered incentives and carries an implicit drawback namely higher realized production costs with the emergence and deployment of information and communication technology ict modern mnes are reshaping their transnational governance to address this cost the modern mne uses ict to mitigate transaction costs and evolves more to arm s length exchange to incentivize lower production costs a testable prediction is that mnes in industries more susceptible to and employing more ict will exhibit a reduced propensity for transnational integration we examine this hypothesis using available data from 1982 to 1997 for us mnes across all manufacturing sectors regression results and robustness tests are strongly congruent with the prediction this study a first to explore empirically the role of ict in the evolution of transnational exchange suggests that mne theory until now founded primarily on transaction cost economics and a cross border control theory of value capture is more likely to keep pace with developments in mne practice by opening up to incentive theories of exchange governance and a cross border coordination theory of value creation

forecasting agricultural exports and imports in south africa the implementation of wide ranging policy reforms including trade and exchange rate policies is improving the efficiency of the south african economy and its reintegration into the global economy with rapid export expansion agricultural exports in the southern african customs union increased from r8 14 billion in 1995 to r23 0 billion in 2003 whilst agricultural imports rose from r6 83 billion to r13 84 billion during the same period this article uses alternative approaches to forecasting agricultural exports and imports in south africa the models used include exponential smoothing autoregressive integrated moving average arima vector autoregression var engle granger eg single equation and vector error correction models vecm we found that the arima and eg methods outperform the var and vecm according to theil s u statistic the var outperforms the vecm in forecasting agricultural exports in south africa the combined forecasts have a lower variance compared to individual forecasts ther

agriculture and economic development in sub saharan africa and asia this paper is a comparative study of the role of agriculture in economic development in sub saharan africa and asia popular notions of economic duality and agricultural squeeze in sub saharan africa are re examined and new explanations in terms of agrarian structures and resource availabilities are put forward to account for the apparent economic duality in that continent comparison with surplus labour economies of asia highlights the constraints posed by the prevailing agrarian structures for capital accumulation and industrialization in post colonial sub saharan africa policy conclusions from this new perspective are contrasted to the conventional policies focussing on price reform and market liberalization

neopatrimonialism and the political economy of economic performance in africa critical reflections during the past two decades neopatrimonialism has become the convenient all purpose and ubiquitous moniker for african governance the school of thought behind this research program which the author refers to as the neopatrimonialism school has produced an impressive literature on africa its analysis informs policymakers and its language permeates media reportage on african states while neopatrimonialism has long been a focus of development studies in recent times it has assumed politically and economically exigent status the school identifies causal links between neopatrimonialism and economic performance and makes predictions drawing from what is referred to as the logic of neopatrimonialism neopatrimonialism is said to account for trade policies hyperinflation economic stagnation low investment in infrastructure urban bias andultimately the lack of economic development in africa this article examines the empirical basis of predictions and policy prescriptions it argues that while descriptive of the social practices of the states and individuals that occupy different positions within african societies the concept of neopatrimonialism has little analytical content and no predictive value with respect to economic policy and performance

friends acquaintances or strangers partner selection in r d alliances like governance structure and alliance scope partner selection may serve to safeguard firms intellectual assets in r d alliances we categorize potential alliance partners into friends acquainta

the causes of africa s food crisis abstract this paper examines the causes of africa s food crisis by examining patterns of food imports the econometric results indicate that the rise in food imports during 1970 87 can be explained by a combination of demographic policy and economic factors which have raised domestic demand for imported food these factors include urban migration peaks in income especially during commodity booms lower international prices of food and distorted exchange rates after accounting for these factors the residual trend in food imports per capita is negative over this period evidence is also presented showing that in ghana policy reforms have led to reverse migration from urban to rural areas

macro prices and structural change the role of macro price policy foreign exchange rates interest rates wage rates and indirectly the rural urban terms of trade or food prices for short in influencing the rate and composition of structural change in an economy has been emphasized recently as a major component of agricultural and food policy timmer falcon and pearson but empirical measurement of factors influencing structural change has largely ignored these price variables the classic study by chenery and syrquin for example measured economic structure by the size of agriculture s share in gross domestic product agshr the same as in this study but it contained only income and country size as explanatory variables although this may make sense in a world where basic price relationships among capital labor food and energy remain more or less constant the 1970s have seen sharp swings in these relationships in fact the two oil price shocks of the 1970s offer an opportunity to model a major perturbation as it ripples through the macroeconomy and into the agricultural sector no other single macroeconomic event in recent history has so opened windows of opportunity for understanding cause and effect relationships between the food and agricultural sector and basic macro price variables the adjustment of the agricultural sector to higher energy prices reflects the net and often conflicting pressures from both the farm and household micro adjustments and the macro adjustment processes not surprisingly the empirical experience from 1960 to 1980 of the seven asia pacific developing countries analyzed in this paper reflects drastically different agricultural sector adjustments the model and empirical specification used here permit such diversity energy prices affect the process of structural change primarily by altering the relative terms of trade between the agricultural and nonagricultural sectors of an economy this effect is caused mostly by macroeconomic pressures on the balance of payments and foreign exchange rates in the face of changed energy prices as schuh suggests agriculture tends to produce a relatively large share of tradable goods and services and thus energyxporting countries usually face a deterioration of the rural urban terms of trade when oil prices rise this causes a more rapid decline in agriculture s share in gross domestic product gdp than would be expected on the basis of the chenery syrquin analysis oil importing countries on the other hand should see improved rural urban terms of trade and a relatively healthier agriculture sector when oil prices rise their agriculture sectors shares in gdp should not decline as rapidly as in the chenery syrquin model

the making of a rentier class wealth accumulation and political control in senegal political and economic dynamics set in motion by efforts to consolidate post colonial regimes have contributed to the continuing weakness of indigenous bourgeoisies throughout much of post colonial africa this article suggests that state power has been used to foster private rent seeking rather than productive local private investment in order to promote and sustain the political cohesion of ruling classes the political consolidation of dominant rentier classes forged through state patronage and clientelist mechanisms of control creates obstacles to the emergence of local class strata interested in or capable of using state power to promote the expanded accumulation of capital be it local or foreign a study of senegal illustrates this point

contagion influence on trade and investment policy a network perspective adopting a network perspective we demonstrate that two different yet complementary forces influence the formation of trade and investment policy one the one hand nations that are trading partners develop similar policies through a process of close and enduring interaction on the other hand nations that compete for trading opportunities adopt comparable policies through a process of establishing similar types of relations with other nations even though they may not have direct ties to each other implications for managers of multinational enterprises are developed

urbanization informal sector and development abstract urbanization is a universal phenomenon in the postwar world but its qualitative nature is varied across countries some nations have experienced urbanization that accompanied skill upgrading industrialization and the expansion of the urban formal modern sector but others urbanized without such modernization and underwent the expansion of the urban informal traditional sector simultaneously the question that naturally arises is what are the underlying causes for the differences the purpose of the paper is to tackle this question analytically based on a dynamic model of urbanization and development

economic statism private capital and the dilemmas of accumulation in nigeria abstract nigeria s persistent economic stagnation is attributable to a mutually reinforcing political dynamic comprising a weak developmental state and pervasive rent seeking within the private sector this syndrome was a source of nigeria s initial economic crisis in the early 1980s and it continues to impede structural adjustment initiatives economic policy reform has been compromised by state strategies designed to preserve the gains of elite rentier groups while private entrepreneurs have responded to policy change by seeking new rental havens in finance and other nontradable sectors in consequence structural adjustment has failed to elicit a supply response or to generate significant political support for a more propitious enabling environment nigeria s experience reinforces the perception that changes in nominal incentives must be accompanied by broader institutional transformation if economic reform is to be effective

extending the bargaining power model explaining bargaining outcomes among nations mnes and ngos participants in international bargaining include different types nation states mnes ngos and multilateral organizations and different numbers of these actors our theoretical contribution is to extend the bargaining power paradigm with a framework that models bargaining in this complex environment as a network the configuration of supports and constraints among all participating actors in the bargaining environment is captured in the structure of the network antecedents of an actor s bargaining influence in the network include the actor s basis of power network position bargaining outcome preferences and motivation to influence bargaining the network bargaining power nbp model uses network theory to build upon and integrate insights from previous literature in a way that allows us to simultaneously apply these different insights to explain bargaining outcomes these insights include effects of coalitions strategies of less powerful actors leveraging more powerful allies integration of international and domestic politics and applicability to mne related issues beyond fdi finally we illustrate nbp in a scenario of privatized utilities in the dominican republic in which the bargaining power outcome predicted by nbp differs from that of the canonical bargaining power perspective

estimating the level of protection the implications of seasonal price fluctuations abstract the nominal protection coefficients npcs effective protection coefficients epcs and producers subsidy equivalents pses are usually estimated from annual prices which are the unweighted average of seasonal prices in the presence of seasonal fluctuations in prices the npcs epcs and pses estimated from annual data can seriously over underestimate the actual protection received by the producers and consumers the bias results from the fact that price and quantity traded normally relate negatively and unweighted average price consistently overestimates the trade weighted average price the bias in the npc estimates is demonstrated both theoretically and empirically in most cases quantity traded at each price is not known and the paper suggests empirical methods for estimating the trade weights

changes needed in agricultural policy for female headed farm families in tropical africa abstract the decline in per capita agricultural production has been reversed somewhat in tropical africa by the structural adjustment programs which have increased producer prices liberalized marketing and devalued currencies but the 30 of smallholder farm households which are female headed will not be assisted much due to their special constraints of shortages of labor and credit lack of extension visits and appropriate labor saving technologies for these households the authors argue improved extension services credit for agricultural inputs small ruminant animals and poultry labor saving devices and craft inputs will be necessary to increase their incomes and levels of living

lessons learned in structural adjustment lending in the developing world and implications for eastern europe discussion conditional program assistance which has come to be designated as structural adjustment sa was and still is the order of the day in many countries in africa and elsewhere tweeten mosley and toye also from both methodological and pragmatic viewpoints the experience of several countries which perhaps each in its own way found themselves in the obligation of improving their efficiency through the removal of disincentives and economic distor

the effect of policy reforms on agricultural incentives in sub saharan africa in 1981 the world bank s report on subsaharan africa cited trade and exchange rate biases against exports poor macroeconomic and public sector management and a price bias against agriculture as contributing to the region s poor performance and slow growth world bank 1981 1986b since then average per capita income in the region has continued to fall overall agricultural production has grown more slowly than population declining food production per capita has led to rising food imports and for many of the primary agricultural exports africa s share of world trade has fallen steadily from 1970 to 1983 many african governments now agree on the central role of agriculture and the need to strengthen incentives in the sector united nations this paper assesses how reforms in macroeconomic and sector policies have affected agricultural incentives government policies can be broadly classified into three groups macroeconomic policies that affect incentives in all sectors generally agricultural sector policies that affect farm profitability directly by changing commodity and input prices and general and sector specific policies that may affect farm profitability indirectly by changing factor prices and influencing productivity e g public expenditures on research extension and infrastructure this paper analyzes the impact on agricultural incentives of the first two groups of policies the analysis of producer prices presented below is based on data for about twothirds of the countries in sub saharan africa which account for more than three fourths of agricultural gross domestic product gdp country coverage varies by indicator depending in part on whether comprehensive data are available simple averages are used to summarize policy performance across countries in contrast to weighted averages commonly used to assess aggregate economic effects the analysis of producer prices covers one to four principal export crops per country 2

a monetary analysis of food price determination erratic food price movements during the 1970s have received much attention in recent literature salathe and boehm found that movements in retail food prices since 1970 have been substantially more volatile than in earlier periods and that the food component of the consumer price index cpi has often displayed an annual rate of change different from that of the total cpi such changes in agricultural prices reflect low price elasticities for food products and the difficulty of predicting weather patterns and their effects on farm output research interest stems from relatively larger recent price changes caused by persistent general inflation and unexpected supply disruptions several recent studies of retail food prices are based on cost push theories these models posit that as input costs faced by food manufacturers rise the increases are passed through to consumers in the form of higher product prices to model cost push behavior changes in components of the marketing bill such as processing packaging and transportation costs are measured and related to subsequent changes in retail product prices examples of such empirical studies are those by lamm heien and lamm and westcott however these models represent only one perspective of the pricing process this paper suggests the use of a family of alternative models in particular by making a clear distinction between changes in nominal and real values a different set of variables is selected to measure each component of overall price change it is argued that not all models can explain behavior of both real and nominal price changes

shifting fortunes the political economy of financial liberalization in nigeria abstract on the recommendation of the world bank nigeria began to liberalize its financial sector in 1986 contrary to the prediction of financial repression theory savings and investment decline in the wake of banking deregulation by 1995 the nigerian financial system was in a state of collapse the paper locates the main failure of nigeria s financial deregulation in the political and institutional setting of reform the institutional mechanisms needed to supervise and regulate banking under the new system were absent while private sector banking capacities were weak moreover financial liberalization was quickly captured by a clientalist state as a means of reallocating rents to strategic constituents an additional precipitating factor was macroeconomic instability the paper points to the importance of incorporating political and institutional variables into any model of financial reform or transformation

does foreign aid mitigate the adverse effect of expropriation risk on foreign direct investment abstract we construct a model of fdi risk and aid where a country loses access to fdi and aid if the country expropriates fdi we show that i the threat of expropriation leads to under investment ii the optimal level of fdi decreases as the risk of expropriation rises and iii aid mitigates the adverse effect of expropriation risk on fdi the empirical analysis employs data for 35 low income countries and 28 countries in sub saharan africa over the period 1983 2004 we find that risk has a negative effect on fdi and that aid mitigates but cannot eliminate the adverse effect of risk

directly unproductive profit seeking dup activities this paper propses directly unproductive profit seeking dup activities as a general concept that embraces a wide range of recently analyzed economic activities including the subset of rent seeking activities considered by krueger it then proceeds to provide a synthesis and generalization of the welfare theoretic analysis of such activities by developing a fourfold categorization of cases depending on the levels of distortions before and after the dup activity thus a unification and overview of the subject are achieved

location and the multinational enterprise a neglected factor this article first traces the changing world economic scenario for international business over the past two decades and then goes on to examine its implications for the location of foreign direct investment and multinational enterprise activity it suggests that many of the explanations of the 1970s and early 1980s need to be modified as firm specific assets have become mobile across natural boundaries a final section of the article examines the dynamic interface between the value added activities of multinational enterprises in different locations

institutions sans frontieres international agreements and foreign investment we examine whether the presence of international investment agreements iias negotiated among countries for foreign investor protection lowers political risk faced by multinational enterprises mnes drawing on research from international business political science and international law we argue that iias increase expected future cash flows and hence the value of foreign assets by limiting the ability of host governments to make discriminatory policy changes however the need for iia protection and the ability to benefit from it varies with firm characteristics using detailed transaction level data for sale of petroleum assets in 45 countries we find that mnes pay significantly higher amounts for those protected by iias than similar but unprotected assets an effect moderated by the firm s reserve size and state ownership

managing adjustment costs political authority and the implementation of adjustment programs with special reference to african countries abstract the degree to which a government implements a program given no disruptive factors depends critically on its legitimate authority to carry out the program and the degree to which management aspects notably management costs of the program were satisfactorily dealt with at the design stage program designers should understand the nature dimensions justification and basis of legitimate authority when the government s legitimate authority is inadequate program designers must advise the government to obtain it a properly designed program should also include measures to speed up entry prevent inefficient exit and minimize unemployment and underutilization of capacity have a framework for ensuring competitive and open markets and arm the program manager with tools to alleviate social tensions arising from certain distributional consequences and to respond to predictable nationalistic preferences

interpreting changes from the 1970s to the 1990s in african agriculture through village studies abstract assessments of the performance of agriculture in sub saharan africa are typically based on official production statistics at national level between the early 1970s and the mid 1990s these often show alarmingly poor rates of growth but there are good reasons to doubt the statistics and their interpretation an alternative is to examine the record from the village level upward this paper looks at the evidence from 26 case studies of change between the mid 1970s and the mid 1980s at the district or village level these suggest less cause for alarm than the national statistics they confirm that access to markets is essential for agricultural development the single biggest idea in the policy reforms of the 1980s but they also underline the importance of the detail of policy in remedying failures in product capital and insurance markets and in public investment in technology

informing food security decisions in africa empirical analysis and policy dialogue discussions of economic and agricultural development in africa have focused heavily in recent years on structural adjustment i e basic policy changes aimed at allowing international and domestic markets to play a greater role in coordinating national economic activities often these structural adjustments and accompanying policies aimed at improving economic performance have been based on several implicit assumptions about how african food systems operate yet for many countries little empirical information has been available to test these assumptions hence designing policies too often becomes an exercise in planning without facts this paper argues that not only is there a need to base food security and structural adjustment policies more firmly on empirical information but that the process by which the information is obtained is as important as the information itself agricultural economists and other social scientists can and increasingly should design policy research in africa in ways that simultaneously increase effective demand for empirical information as an input into the ongoing policy process and augment african capacity continually to inform policy deliberations we illustrate the payoffs to such an approach by drawing on selected experience in several african countries weber

de globalization theories predictions and opportunities for international business research de globalization now a distinct possibility would induce a significant qualitative shift in strategies structures and behaviors observable in international business ib coming to terms with this qualitative shift would require ib research to develop a much deeper integration of politics the key driver of de globalization to support such integration this paper introduces two relevant theories of de globalization from political science liberalism and realism both predict de globalization under current conditions but lead to different expectations about the future world economy liberalism suggests a patchwork of economic linkages while realism predicts the emergence of economic blocs around major countries this paper discusses the resulting opportunities in three areas of ib research political strategies and roles of multinational enterprises mnes global value chains and the role of the national context for political strategies and roles there is a need to explore how regular business activities and deliberate political agency of mnes affect the political sustainability of globalization for value chains questions include their future reach and specialization changes in organizational forms and the impact of political considerations on location decisions research opportunities on national contexts relate to their ability to sustain globalization and their connection with economic and military power

impacts of monetary and macroeconomic factors on food prices in eastern and southern africa eastern and southern africa has been experiencing relatively large increases in real food prices since the early 1980s real food prices in some african countries grew as much as 11 per year during the 1980 1996 period the huge volatility in food prices coincided with the implementation of structural adjustment programmes in several african countries this study examines the impacts of monetary and macroeconomic factors on real food prices in eastern and southern africa using the technique of cointegration and error correction modelling to test the long run relationship between real food prices and the factors that influence their behaviour in selected african countries demand elasticities for food are estimated for selected countries the empirical results show that changes in domestic food production coupled with income trade exchange rate and monetary policies have significant impacts on real food prices with wide implications for food availability and food security in the region

separable but not equal the location determinants of discrete services offshoring activities in this paper we explore the question of why firms offshore particular services to specific geographic locations we draw on research related to the unique characteristics of services in trade and commerce and more recent analyses of the transnational unbundling and spatial dispersion of business processes we move beyond a simple assessment of the cost sensitivity or relative sophistication of offshoring services and develop a typology emphasizing the degree to which offshoring services activities are interactive repetitive or innovative we suggest that the location of offshoring projects will depend on the particular mix of these attributes and test this assertion using a data set of 595 export oriented offshore services projects initiated from 2002 to 2005 by us and uk company parents in 45 developed and developing countries we find that offshore location choices greatly depend on these services characteristics and in sometimes surprising ways and draw implications from our findings for international business theory policy and practice

the real exchange rate and macroeconomic performance in sub saharan africa abstract pooled time series and cross section data for 33 countries in sub saharan africa ssa confirm the negative relationship between the real exchange rate rer misalignment and economic performance economic growth imports exports saving and investment macroeconomic instability also slows growth and other indicators of performance higher levels of misalignment are accompanied by higher levels of macroeconomic instability both lower levels of rer misalignment and instability lead to better economic performance the edwards model of rer determination performs well for the region black market premia tend to show a greater degree of misalignment in rer than alternative measures

property rights protection corporate transparency and growth in countries with secure property rights corporate transparency improves investment efficiency and increases growth by alleviating information asymmetry however in countries with insecure property rights greater transparency can increase the risk of government expropriation therefore some firms that would benefit most from transparency cannot take full advantage of it as they set sub optimal transparency levels using data from 59 industries in 69 countries we find that in countries with weak property rights protection industries that would benefit the most from transparency exhibit worse investment efficiency and grow more slowly than industries that can efficiently operate at minimal levels of transparency

testing the bargaining hypothesis in the manufacturing sector in developing countries the bargaining power model of hc mnc host country multinational corporation interaction conceives of economic nationalism in terms of rational self interest and assumes both inherent conflict and convergent objectives in extractive industries there is strong evidence that outcomes are a function of relative bargaining power and that as power shifts to developing hcs over time the bargain obsolesces a cross national study of the bargaining model using data from 563 subsidiaries of u s manufacturing firms in forty nine developing countries indicates that while the bargaining framework is an accurate model of mnc host country relationships manufacturing is not characterized by the inherent structurally based and secular obsolescence that is found in the natural resource industries shifts in bargaining power to hcs may take place when technology is mature and global integration limited in industries characterized by changing technologies and the spread of global integration the bargain will obsolesce very slowly and the relative power of mncs may even increase over time

is market liberalization compatible with food security storage trade and price policies for maize in southern africa abstract concern for the negative impacts of staple food price fluctuations limits the extent to which governments in low income countries are willing to liberalize their agricultural markets these concerns are legitimate as such price fluctuations can lead to high transactions costs for poor consumers in the short run and low growth in the long run however past government attempts to stabilize food prices completely have been expensive and ineffective use of a dynamic programming optimization model suggests that a different type of policy regime could reduce price variability significantly compared to what would prevail in free markets and could accomplish this at relatively low cost this policy regime includes allowing some official price flexibility with respect to changes in production and world price exporting when regional market opportunities exist and holding considerably lower stocks than in the past

has recovery begun africa s adjustment in the 1980s revisited this article reviews the 1989 debate between the world bank and the economic commission for africa over africa s adjustment and on the basis of most recent statistics concludes that there is little evidence that the region is in throes of a recovery some countries however did relatively better than others in the 1980s and an attempt is made to account for differences in performance it is concluded that success in adjustment results not from world bank international monetary fund programs as such but rather from policy coherence accompanied by healthy movement in key variables namely the real exchange rate and public development expenditure

the effects of sfas 131 geographic segment disclosures by us multinational companies on the valuation of foreign earnings foreign operations are becoming increasingly important for us companies we investigate whether the market s valuation of foreign earnings is a function of the firm s geographic segment disclosures specifically we examine the effects of an increase in the number of geographic segments disclosed and the inclusion of earnings measures in geographic segment disclosures following the adoption of sfas 131 we find strong evidence that our proxies for increased disclosure are positively associated with the valuation of foreign earnings our results are robust to a number of sensitivity analyses taken together our results suggest that the pricing of foreign earnings is associated with important aspects of the firm s information environment

economic openness democracy and income inequality an empirical analysis scholars have studied effects of economic openness and democracy on national income inequality in two literatures in democracy studies scholars agree democracy reduces inequality but empirical evidence is ambiguous in globalization studies effects of economic openness on inequality are debated but have not been rigorously examined this article is the first systematic statistical study of the effects of both economic openness and democracy on income inequality these effects need to be studied together the authors measure national income inequality from a comprehensive gini coefficient data set economic openness is measured from trade flows foreign direct investment inflows and financial capital inflows the period studied is 1960 to 1996 the unit of analysis is a country decade and the sample includes 69 countries the authors find that democracy and trade reduce income inequality foreign direct investments increase income inequality and financial capital does not affect income inequality policy implications are discussed

food poverty profile and decomposition applied to ghana abstract a new procedure for deriving a food poverty line and estimating a decomposable poverty measure is applied to the 1974 1975 ghana household budget survey a food poverty profile is constructed which estimates the relative contributions of regional and socioeconomic variables to overall food poverty the incidence of food poverty is found to be more prevalent in 1 rural areas and locations close to the sahel and 2 households with many members and illiterate female or self employed heads comparisons of least cost diets and observed diets incorporating tastes suggest that households exercise food preferences which have relatively high costs

the effects of recent price liberalization on kenyan peri urban dairy a case study using the policy analysis matrix approach abstract when shortages of dairy products became severe in kenya early in 1992 prices of dairy products were de controlled to improve the incentives to producers the impact of that policy change is examined using the policy analysis matrix pam methodology a case study of the marketing chain involving small holder peri urban dairy producers in the nyeri region is considered the price policy reform removed only between 20 per cent and 30 per cent of the negative policy effects on most dairy producers depending on the technology used the market thus remains non competitive and a single large dairy processor was the biggest beneficiary of the policy change

diplomatic and corporate networks bridges to foreign locations firms and governments operate in broad networks in which the home government and its diplomatic service are a critical node or a referral point between firms and potential partners in foreign locations thus diplomatic relations between countries matter for the choice of foreign investment location using a network perspective we argue that the extent to which good diplomatic relations induce firms to invest in friendly host countries depends on their political connections to home governments those with stronger ties to home governments can better access and leverage intergovernmental diplomatic connections thus benefiting potentially from enhanced access to information reduced political risks and increased legitimacy such ability of politically connected firms is more useful where weak institutional impartiality in the host country inhibits neutral treatment of foreign investors empirically using overseas investment location decisions by chinese firms we find that the types of home government ties i e whether they are organizational or personal and whether those relationships are with central or local goverments and the impartiality of host institutions are both important contingencies affecting firms utilization of diplomatic relations we discuss the implications of our study to research on network theory political ties and internationalization of emerging market firms

government intervention in the venezuelan petroleum industry an empirical investigation of political risk two important aspects of political risk analysis that have not received much attention in the literature are a the reasons why multinational firms experience different types of intervention and b the timing of intervention in order to address these issues this research develops a conceptual model of political risk based on the premise that host government intervention is related to specific objectives of the government vis a vis multinational firms information reflecting the attainment of objectives motivates the government to intervene in a given manner the application of this model to the case of the venezuelan petroleum industry from years 1947 to 1976 provides some support for this model and gives insight into the timing of specific types of intervention

political instability in africa a rent seeking approach the foregoing analysis developed the paradigm of self interest motivated revolutionary activities in effect the construct presented differs from the by product theory developed by tullock only in its specific modeling of government created rents as the engine which drives the violent political behavior the empirical test of the positive relationship between rent creation by the government and the amount of destabilizing political activity yields strong support for the structuring of politically destabilizing activities as rent seeking in nature it is the authors hope that further empirical investigation and a more general and rigorous modeling of revolution as a rent seeking activity will become an important part of the literature in public choice

network triads transitivity referral and venture capital decisions in china and russia this article examines the effects of dyadic ties and interpersonal trust on referrals and investment decisions of venture capitalists in the chinese and russian contexts the study uses the postulate of transitivity of social network theory as a conceptual framework the findings reveal that referee venture capitalist tie referee entrepreneur tie and interpersonal trust between referee and venture capitalist have positive effects on referrals and investment decisions of venture capitalists the institutional social and cultural differences between china and russia have minimal effects on referrals interpersonal trust has positive effects on investment decisions in russia

the effects of macroeconomic factors on south african agriculture significant research efforts have been devoted to understanding the effects of macroeconomic factors on the agriculture sector analysing the sources of volatility in the industry is critical for designing appropriate policies to stabilize agricultural markets reduce poverty and increase economic growth agriculture is a competitive sector with prices that are more flexible than those in nonagricultural sectors this article uses annual data over the 1957 2004 period and a vector error correction model in investigating the dynamic effects of exchange rates money supply and other macroeconomic variables on the agricultural sector in south africa overall real exchange rates interest rates inflation and money supply m3 shocks have significant and persistent impacts on agricultural output prices received by farmers and farm input prices m3 and interest rate shocks tend to put agriculture in a cost price squeeze agricultural price movements are a source of macroeconomic instability in the country r

interrelationships between monetary instruments and agricultural commodity trade during the last decade agricultural economists have devoted increasing attention to the macroeconomic aspects of agricultural problems indeed a recent presidential address to the american agricultural economics association tweeten centered on the macroeconomics of agriculture given the currency of the monetary approach to macroeconomics it is not surprising therefore that there is also a growing interest in the effects of monetary instruments and monetary phenomena on agricultural commodity trade in this paper i shall discuss what i feel are some of the most pertinent issues that researchers must address in this area before we proceed too far with our discussion it is important to define what i mean by a monetary instrument perhaps arbitrarily i reserve the term monetary instrument for those macroeconomic variables which are primarily determined within domestic or international monetary markets obvious examples are the level of the money supply interest rates and exchange rates i justify the term instrument by noting that as far as the agricultural sector is concerned these variables are by and large predetermined for example the levels of the money supply and interest rates in the united states are to a large extent determined by the policy of the federal reserve similarly the price of the currency the exchange rateis ultimately determined by the demand and the supply for the currency and thus at least partially by governmental policy the first step in any attempt to outline research needs and goals is an identification of what has been done in the past although the literature on the macroeconomics of agriculture is farily large and rapidly expanding eckstein and heien lamm schuh 1976 and tweeten are important examples relatively li tl attention has been given to the effect of monetary instruments on agricultural trade what attention has been given to this area of resea ch has revolved mainly around the role of exchange rates in determining agricultural exports and prices thus it is logical to start our discussion with a brief survey of the literature on exchange rates and agriculture

do countries matter for voluntary disclosure evidence from cross listed firms in the us this paper explores the likelihood and consequences of voluntary disclosure proxied by management earnings forecasts for a sample of 1005 cross listed firms in the us from 40 countries over the period 1996 2005 our study is grounded in a three tiered conceptual framework that relies on insights from and implications of institutional theory agency theory and bonding theory to explain the costs and benefits associated with voluntary disclosure consistent with institutional theory and agency theory our results indicate that disclosure likelihood increases with the strength of cross listed firms home country legal institutions and is also influenced by us listing type product market internationalization and ownership structure further our results show that voluntarily committing to us disclosure practice is associated with lower information asymmetry which supports reputational bonding theory overall our study provides a costs and benefits framework to understand voluntary disclosure practices in an international context our work also presents evidence that home country institutions still matter when foreign firms migrate into the us financial market which highlights the importance of country level institution development

the costs of indonesian sugar policy a policy analysis matrix approach indonesian sugar policy is a complex web of contradictory policies including mandatory production price supports and fertilizer and credit subsidies the policy analysis matrix pam was developed by monke and pearson to provide a more complete perspective on social profitability and the divergence between private and social costs than other commonly used social cost benefit measures the pam is used to analyze the effects of indonesian sugar policy on sugar production in irrigated and dryland areas on java the main sugar producing region in indonesia and to identify the distribution of resource transfers

liberalization and food price distributions arch m evidence from madagascar abstract there is no well articulated theory of how stochastic food prices respond to economic liberalization measures a surprising oversight in the vast literature on market oriented reforms this paper presents reduced form estimates of the effects of liberalization measures on food commodity prices in madagascar using autoregressive conditional heteroskedastic in mean arch m methods the data indicate that the short term effects of liberalization on the mean and variance of food prices vary substantially by commodity region and season in the long term liberalization increases both the mean and the variance of food prices the abandonment of a quantity rationed state marketing system with administrative pricing also leads to smaller inter regional and interseasonal differences in mean food prices and a sharp increase in price autocorrelation real exchange rates have pronounced positive effects on mean food prices but these effects emerge indirectly rather than directly through induced changes to border parity prices

economic reform and political transition in africa the quest for a politics of development the 1980s were bracketed by crises in africa as protracted economic malaise was succeeded by a wave of political reform analysts have sought to understand the sources of economic decline as well as the political requisites for recovery in the region neoclassical and structuralist analyses have been challenged by state centric views of economic change the latter perspective emphasizes the need for capable developmental states as a basis for long term adjustment but a political theory of economic change is still lacking such a theory must address the institutional foundations of growth as well as the shifting basis of social coalitions in african regimes political liberalization suggests the possibility of a new setting for economic reform though the effects of political reform on institutions and coalitions remain ambiguous and democratization cannot be regarded as a panacea for the region s developmental failure future research must look more closely at the interests and structures in transitional regimes and scholars should adopt a more comparative vantage on africa s challenges of reform

swinging for the fences the effects of ceo stock options on company risk taking and performance we unpack the concept of managerial risk taking distinguishing among three of its major elements the size of an outlay the variance of potential outcomes and the likelihood of extreme loss we

the impact of prices and macroeconomic policies on agricultural supply a synthesis of available results abstract this paper reviews the literature dealing with the link of agricultural prices and macroeconomic policies to agricultural supply with particular emphasis on sub saharan africa although the study echoes the stylized facts on price elasticities underlined in previous literature reviews the paper points out that our understanding of the quantitative dimensions of agricultural supply response is weak given the importance of this assumed response for growth poverty alleviation and the environment indeed issues such as simultaneity of variables data pooling omission of variables and asymmetry in supply responses to price changes have not been adequately addressed in many instances

strategies for sustainable agricultural development in the ethiopian highlands this paper investigates the impacts of population growth market access agricultural credit and technical assistance programs land policies livelihood strategies and other factors on changes in land management natural resource conditions and human welfare indicators since 1991 in the northern ethiopian highlands based on a survey of 198 villages we find that population growth has contributed significantly to land degradation poverty and food insecurity in this region in contrast better market access and some credit and technical assistance programs were associated with improvement or less decline in land quality wealth and food security suggesting the possibility of win win win development outcomes with appropriate interventions land redistribution was associated with adoption of inorganic fertilizer but also with declining use of fallow and declining soil fertility we find also that different land management practices are adopted where different livelihood strategies are pursued suggesting the importance of considering livelihood strategies in technical assistance programs development strategies should be tailored to the different comparative advantages of different locations no one size fits all strategy will work everywhere this abstract was borrowed from another version of this item

state owned mncs and host country expropriation risk the role of home state soft power and economic gunboat diplomacy expropriation risk has a binding effect on foreign direct investment fdi however state owned multinational corporations may counter the monopoly power of the host state by leveraging the political influence of their home government the magnitude of this counter force we argue may vary depending on the strength of political relations between the home and host state and the level of economic dependence of the host country on the home market we find supporting evidence of our hypotheses using chinese firm level fdi information between 2003 and 2010

subsidized imports currency devaluation and agricultural decline impact on food supply and demand balance in zaire abstract an adjusted small world trade liberalization model with 1984 as the base year was used to predict changes in zaire s net agricultural trade due to export subsidies from developed countries currency devaluation and stagnation in small farm technology given the availability of low cost food grain imports under the us export enhancement program zairian wheat imports increase 8 2 in the intermediate run assuming foreign exchange is available for food imports furthermore if improvements in agricultural technology are not forthcoming output of food and export crops will decline resulting in a loss of revenue from the farm sector and a deterioration in the country s balance of trade however since 1983 currency devaluation appears to have had the largest impact on net trade in food and export crops

the measurement of agricultural price distortion in developing countries the most common means of measuring agricultural price distortion in less developed countries has been through the estimation of variously defined nominal protection coefficients the objectives of this article are a to demonstrate that the coefficients which have been employed are inadequate for measuring price distortion b to develop a suitable method for measuring distortion at each point on domestic marketing chains and c to demonstrate using the example of maize in kenya the potential magnitude and direction of the differences between the conventional coefficients and the distortion coefficients developed in the article

maize pricing policy in eastern and southern africa abstract public sector attempts to determine official producer and consumer prices suffer from a number of problems made more apparent by the process of agricultural market liberalization six measures to ease the financial problems of policy adjustment are identified covering the clarification of the post reform role of official prices the move towards economically based pricing structures the introduction of within year price flexibility to reduce the costs of intervention the incorporation of macroeconomic linkages into the procedures for price setting the use of multi annual analysis and modelling for price determination and the articulation of modified systems of price support as marketing board networks are cut back an important conclusion is the need for a gradual phased approach to price reform

the obsolescing bargaining model mnc host developing country relations revisited the traditional bargaining model of mnc host developing country relations has become obsolete today those relations are better understood as the result of a two tier multi party bargaining process tier 1 bargaining between the governments of host and home countries occurs bilaterally or through multilateral institutions it produces macro rules on fdi that affect micro negotiations in tier 2 per the traditional bargaining model the extent of fdi liberalization resulting from tier 1 bargaining varies predictably across home host country pairs and industries suggestions for testing the two tier bargaining model are also presented

nigeria during and after the oil boom a policy comparison with indonesia nigeria and indonesia provide an interesting contrast with regard to performance and policy during and after the oil boom roughly a decade after the first oil shock nigeria is faced with several economic problems including a serious decline in its agricultural sector and a deteriorating external debt situation while some decline in the nonoil traded goods sector reflects efficient adjustment to the oil boom policy with regard to public expenditure exchange rates pricing and the trade regime could exacerbate such decline and impede readjustment as the boom subsides the links between oil prices deficits inflation and real exchange rate appreciation are analyzed and nigerian and indonesian fiscal and exchange rate and agricultural and foreign borrowing strategies are compared it is concluded that with the exception of cuts in the deficit since 1984 nigerian policy following the boom has not been conducive to adjustment to the current period of low oil prices and high real interest rates corrective measures and policy options are discussed

an investigation of the effect of monetary factors on agriculture abstract this paper uses an econometric model to assess some of the effects of macro monetary factors on u s agricultural markets attention is focused on impacts of decreasing increasing the level of domestic credit on agricultural trade prices inventory accumulation and domestic disappearance results show that tight monetary policy lowers prices and increase demand for domestic agriculture however the upward pressure on the exchange rate seriously deteriorates the position of u s exports in international markets

resource nationalism meets the market political risk and the value of petroleum reserves this paper investigates the effect of resource nationalism on the value of petroleum crude oil and natural gas reserves we develop a framework for treating resource nationalism as political risk and utilize data on reserve transactions from john s herold and political risk ratings from international country risk guide and institutional investor for the period 2000 2006 controlling for other factors that affect reserve value we demonstrate the value destruction of political risk and estimate the political risk discount for 37 countries the paper contributes to both the international business literature and practitioner approaches to political risk analysis in demonstrating use of publicly available market data from real asset transactions to measure the cost of political risk we also show that the discount depends on market conditions the higher expected future petroleum prices are the larger is the discount at any level of political risk this insight adds a new dimension to analysis of political risk which is typically measured and examined without regard to market conditions

macroeconomics and agriculture in tunisia this article aims to analyse the impact of changes in the monetary policy and the exchange rate on agricultural supply prices and exports the methodology used is based on the multivariate cointegration approach ten variables are considered interest and exchange rates money supply inflation agricultural output and input prices agricultural supply and exports income and the rate of commercial openness the sample period covers annual data from 1967 to 2002 due to the short sample period two subsystems are considered first long run relationships are identified in each subsystem second both subsystems are merged in order to calculate the short run dynamics the results indicate that changes in macroeconomic variables have an effect on the agricultural sector but the reverse effect does not hold

livestock pricing policy in sub saharan africa objectives instruments and impact in five countries abstract livestock pricing policies in many developing countries are often instituted without a good appreciation of the consequences of such policies for allocative efficiency output and trade this paper evaluates in a comparative cross country context the objectives and instruments of livestock pricing policy in five sub saharan african countries ivory coast mali nigeria sudan and zimbabwe during the period 1970 1986 it assesses the extent to which pricing policy objectives have been attained and also estimates the effects of price interventions on output consumption trade and government revenues in order to draw out lessons for the future the empirical results indicate that in comparison with real border prices a certain degree of success was achieved in stabilising real domestic producer prices in the study countries the results also show that since the early 1980s there has been a gradual shift away from taxation of producers however consumers still appear to gain as much as producers in three of the study countries with negative consequences for foreign exchange earnings and government revenues the analysis reveals the importance of domestic inflation and exchange rates as key variables for livestock pricing policies and highlights the need to address the macroeconomic imbalances that cause exchange rate distortions and high domestic inflation at the same time that direct price distortions are being tackled

economic reform programmes and agricultural development macro policy sequencing in ghana 1983 1988 abstract 1983 saw the institution of an economic reform programme as a policy response to economic decline in ghana results indicate achievement of some degree of stabilization and growth agricultural performance was mixed a result partly attributed to poor macro policy sequencing this article highlights the importance of orderly macro policy sequencing for the achievement of growth and development it suggests setting structural measures within demand management measures in a mutually enhancing package consideration of social dimensions of reform programmes and measures to ameliorate hardships among vulnerable groups in initial stages of programmes is emphasized as important for the sustainability of economic reforms

why kill the golden goose a political economy model of export taxation why do governments tax exports at rates that are ultimately self defeating an answer may lie in the time inconsistent nature of a low tax policy using a dynamic model of export taxation i show that the sustainability of a low tax policy depends on three variables the ratio of sunk costs to total costs how heavily future export revenue is discounted and expected future export earnings using data on taxation leadership duration and profitability i test this theory for 32 countries and six crops from sub saharan africa these three variables are statistically and economically relevant predictors of tax regime

the impact of ethanol production on food prices the role of interplay between the u s and brazil abstract food prices have increased rapidly in recent years and so has ethanol production some studies have claimed that there is a connection between the two the main purpose of this paper is to add to this literature by examining the influence that the interplay between brazil and the u s in ethanol production has on food prices specifically and controlling for other variables which have been shown to affect food prices we investigate whether sugarcane ethanol and corn ethanol production have similar impacts on food prices and whether ethanol productivity affects food prices we find a positive significant effect of brazilian market share in world ethanol market on relative food prices we also find that an increase of brazilian cane ethanol area has a negative effect on relative food prices

from the editors endogeneity in international business research this essay builds on the exposition by thomas et al and focuses on analyzing cause and effect in international business research we attempt to explain how endogeneity problems occur and why they are so prevalent in international business research in a non technical fashion we then discuss the importance of explicitly identifying how the chosen research design best approximates a randomized controlled experiment finally we provide some guidelines on achieving this goal and emphasize the practices that seem most relevant to jibs reviewers in evaluating high quality international business research