does exchange rate variability depress trade flows evidence from error correction models this paper examines the impact of exchange rate volatility on the trade flows of the g 7 countries in the context of a multivariate error correction model the error correction models do not show any sign of parameter instability the results indicate that the exchange rate volatility has a significant negative impact on the volume of exports in each of the g 7 countries assuming market participants are risk averse these results imply that exchange rate uncertainty causes them to reduce their activities change prices or shift sources of demand and supply in order to minimize their exposure to the effects of exchange rate volatility this in turn can change the distribution of output across many sectors in these countries it is quite possible that the surprisingly weak relationship between trade flows and exchange rate volatility reported in several previous studies are due to insufficient attention to the stochastic properties of the relevant time series copyright 1993 by mit press

has the european monetary system led to more exports evidence from four european union countries abstract we attempt to investigate whether the exchange rate mechanism erm period has coincided with an increase in intra eu exports we conclude that this has not been the case but it is likely that the elimination of nominal exchange rate variability arising from a single currency will boost intra european union trade

media competition and electoral politics we build a framework linking competition in the media market to political participation media outlets report on the ability of candidates running for office and compete for audience through their choice of slant citizens consume news only if the expected utility of being informed about candidates ability is sufficiently large for their group collectively our results can reconcile seemingly contradictory empirical evidence showing that entry in the media market can either increase or decrease turnout while information pushes up independent turnout partisans adjust their turnout to the ability of their preferred candidate and on average they vote less when informed

market provision of broadcasting a welfare analysis this paper presents a theory of the market provision of broadcasting and uses it to address the nature of market failure in the industry advertising levels may be too low or too high depending on the nuisance cost to viewers the substitutability of programs and the expected benefits to advertisers from contacting viewers market provision may allocate too few or too many resources to programming and these resources may be used to produce programs of the wrong type monopoly ownership may produce higher social surplus than competitive ownership and the ability to price programming may reduce social surplus

does competition encourage credit provision evidence from african trade credit relationships previous work has claimed that monopoly power facilitates the provision of credit because monopolists are better able to enforce payment here we argue that if relationship specific investments are required by borrowers to establish creditworthiness monopoly power may reduce credit provision because holdup problems ex post will deter borrowers from investing in establishing creditworthiness empirically we examine the relationship between monopoly power and credit provision using data on the supply relationships of firms in five african countries consistent with the up front investment story we find that monopoly power is negatively associated with credit provision and that this correlation is stronger in older supplier relationships because the data include several observations per firm we are able to utilize firm fixed effects thus netting out unobserved firm characteristics that may have been driving results in earlier studies

credit markets in northern nigeria credit as insurance in a rural economy this article addresses the issues of imcomplete markets and imperfect information in the context of credit markets in rural northern nigeria in much recent theoretical literature the problems of moral hazard and adverse selection are assumed to be decisive for the organization of agrarian institutions in contrast it is found that in the four villages surveyed credit transactions take advantage of the free flow of information within rural communities information asymmetries between borrower and lender are unimportant and their institutional consequences the use of collateral and interlinked contracts are absent credit transactions play a direct role in pooling risk between households through the use of contracts in which the repayment owed by the borrower depends on the realization of random production shocks by both the borrower and the lender

uninformed votes information effects in presidential elections theory recent scholarship has emphasized the potential importance of cues information shortcuts and statistical aggregation processes in allowing relatively uninformed citizens to act individually or collectively as if they were fully informed hypotheses uninformed voters successfully use cues and information shortcuts to behave as if they were fully informed failing that individual deviations from fully informed voting cancel out in a mass electorate producing the same aggregate election outcome as if voters were fully informed methods hypothetical fully informed vote choices are imputed to individual voters using the observed relationship between political information and vote choices for voters with similar social and demographic characteristics estimated by probit analysis of data from national election study surveys conducted after the six most recent united states presidential elections results both hypotheses are clearly disconfirmed at the individual level the average deviation of actual vote probabilities from hypothetical fully informed vote probabilities was about ten percentage points in the electorate as a whole these deviations were significantly diluted by aggregation but by no means eliminated incumbent presidents did almost five percentage points better and democratic candidates did almost two percentage points better than they would have if voters had in fact been fully informed

relationships and traders in madagascar this article documents the role that personal relationships play in economic exchange original survey data show that agricultural traders in madagascar perceive relationships as the most important factor for success in their business evidence details the extent to which relationships are used to serve a variety of purposes such as the circulation of information about prices and market conditions the provision of trade credit the prevention and handling of contractual difficulties the regularity of trade flows and the mitigation of risk of these the regularity of supply and demand and the sharing of risk appear particularly important larger and more prosperous traders are those with quantitatively and qualitatively better relationships family plays little role in business beyond assistance at start up

the statistical distribution of exchange rates empirical evidence and economic implications the abundant evidence that changes in exchange rates have distributions with fatter tails than the normal distribution has led researchers to consider non normal distributions including the student the stable paretian and mixtures of distributions this paper compares the empirical fits of three non normal candidates and the normal distribution for daily changes in the logarithms of exchange rates using maximum likelihood estimation of the parameters and chi square goodness of fit tests the student and mixture of two normals provide the best fits but there is evidence that the distribution parameters may vary over time

exchange rate volatility exchange rate regime and trade volume evidence from the uk us export function 1889 1999 abstract this paper investigated the impact of exchange rate volatility and exchange rate regime on the british exports to the united states using data for the period 1889 1999 the empirical findings suggest that neither exchange rate volatility nor the different exchange rate regimes that spanned the last century had an effect on export volume

quantity restrictions on advertising commercial media bias and welfare abstract we study the welfare effect of a quantity restriction on advertising in free to air television and other advertising financed media in the presence of commercial media bias broadcasters face a trade off between increasing the number of viewers by sending content that is highly valued by viewers and increasing the price of advertising by choosing advertiser friendly content a cap on advertising drives the per viewer price of ads up thus content improves for viewers therefore the cap can be welfare enhancing even when viewers are not ad averse competition among broadcasters makes it more likely that a cap on advertising improves welfare thus there is a complementarity between regulation and competition on this market we also show that a tax on advertising revenues has quite different effects than a cap on advertising quantity

competition and truth in the market for news in this essay we evaluate the case for competition in news markets from the perspective of economics first we consider the simple proposition that when more points of view are heard and defended beliefs will converge to the truth this concept of competition is several steps removed from market competition among actual media firms but it has played a prominent role in the legal arguments for a free press we then explore three mechanisms by which increasing competition or more precisely increasing the number of independently owned firms can limit bias or distortions that originate on the supply side of the media market first when governments attempt to manipulate news competition can increase the likelihood that the media remain independent second when news providers have an interest in manipulating consumers beliefs diversity in such incentives can reduce the risk of information being suppressed or distorted third competition may drive firms to invest in providing timely and accurate coverage overall we argue that there are robust reasons to expect competition to be effective in disciplining supply side bias next we ask how the effect of competition changes when distortions originate on the demand side of the market when consumers themselves demand biased or less socially relevant news we find that increased competition may or may not improve welfare in these cases though we caution against using this as a justification for concentrating media power in the hands of state controlled or regulated firms

concentration and self censorship in commercial media within a simple model of non localized hotelling type competition among arbitrary numbers of media outlets we characterize quality and content of media under dierent ownership structures assuming advertising sponsored prot maximizing outlets we show that i topics sensitive to advertisers can be underreported self censored by all outlets in the market ii self censorship increases with the concentration of ownership iii adding outlets while keeping the number of owners xed may even increase self censorship the latter result relies on consumers most preferred outlets being potentially owned by the same media companies we argue that externalities resulting from self censorship could be empirically large

citizen editors endogenous information acquisition and news accuracy abstract this paper provides a model of the market for news where profit maximizing media outlets choose their editors from a population of rational citizens the analysis identifies a novel mechanism of media bias the bias in a media outlet s news reports is the result of the slanted endogenous information acquisition strategy of its editor in particular the results show that the expected accuracy of news reports is lower the more ideological an editor is nevertheless citizens find it optimal to acquire information from a media outlet whose editor has similar ideological preferences depending on the distribution of citizens ideological preferences a media outlet may choose an ideological editor even in a monopolistic market moreover ideological editors are more likely to be present in the market for news i the higher the number of media outlets competing in the market for news ii the lower the opportunity cost that citizens have to incur to acquire information

effects of exchange rate variations on bilateral trade with a vehicle currency evidence from china and singapore abstract using a testable gravity type bilateral trade model derived from an underlying demand and supply model this paper explores the effects of exchange rate variations on bilateral trade in an exchange rate regime with a vehicle currency the introduction of the vehicle currency allows us to figure out whether variations in the trade volume due to the fluctuation of the bilateral exchange rate are primarily due to changes in demand or in supply or both more specifically in this theoretical framework the appreciation of one country s currency against the vehicle currency is expected to promote its imports but the effect of revaluation of the country s currency against the vehicle currency on its exports is ambiguous moreover high volatility of the exchange rate of one country s currency against the vehicle currency is also expected to depress its import volume from the empirical point of view the decomposition of the bilateral exchange rate of two currencies into the bilateral rates of these two currencies against the vehicle currency provides a new alternative to avoid the econometric problem of potential reverse causality in assessing the effects through compiling a novel monthly bilateral trade dataset between china and singapore over 21 years or 252 months we empirically test the predictions of our model which get robust support from the results

implications of rational inattention abstract a constraint that actions can depend on observations only through a communication channel with finite shannon capacity is shown to be able to play a role very similar to that of a signal extraction problem or an adjustment cost in standard control problems the resulting theory looks enough like familiar dynamic rational expectations theories to suggest that it might be useful and practical while the implications for policy are different enough to be interesting

time scarcity and the market for news abstract we develop a theory of news coverage in environments of information abundance time constrained consumers browse through news items across competing outlets they choose which outlets to access and which stories to read or skip thus indirectly deciding how much time to spend on a given outlet firms decide on rankings of news items that maximize their profits we show that even when readers or television viewers and firms are rational and unbiased they spend more time on the news than they would like and not necessarily on the topics they prefer in particular relevant news items may be crowded out we then study how reader efficient standards can be restored and derive implications on diverse aspects of new and traditional media these include tabloidization and polarization of the news and other aspects relevant for the political economy of the media including political knowledge gaps and voter turnout

a spatial theory of news consumption and electoral competition we characterize the optimal editorial positions of the media in a model in which the media influence both voting behaviour and party policies political parties are less likely to choose partisan policies when more voters consume informative news when there are two media outlets each should be slightly biased relative to its audience in order to attract voters with relatively extreme views voter welfare is typically higher under a duopoly than under a monopoly two media outlets under joint ownership may provide more diverse viewpoints than two independent ones but voter welfare is not always higher copyright 2008 wiley blackwell

integration and search engine bias competition authorities all over the world worry that integration between search engines mainly google and publishers could lead to abuses of dominant position in particular one concern is that of own content bias meaning that google would bias its rankings in favor of the publishers it owns or has an interest in to the detriment of competitors and users in order to investigate this issue we develop a theoretical framework in which the search engine i allocates users across publishers and ii competes with publishers to attract advertisers we show that the search engine is biased against publishers that display many ads even without integration although integration may lead to own content bias it can also reduce bias by increasing the value of a marginal consumer to the search engine integration also has a positive eect on users by reducing the nuisance costs due to excessive advertising its net eect is therefore ambiguous in general and we provide sucient conditions for it to be desirable or not

the effects of real exchange rate risk on international trade abstract by assuming real profit maximization and uncertain prices as well as exchange rates we conclude that it is uncertain percentage changes in the real exchange rate that are risky in international trade empirical estimation of fourteen bilateral trade flows among industrialized countries finds a significant negative effect on trade quantity from such risk in a number of these cases the expectation variable has a positive effect in a larger number of cases significant price effects from the expectation variable are fewer and from risk are negligible

trade credit and productive efficiency in developing countries abstract in developing countries credit shortages are often so severe as to impact a firm s day to day production decisions using firm level data from five african countries i show supplier credit is positively correlated with capacity utilization the result continues to hold when credit access is instrumented using supplier characteristics i claim that this is because firms lacking credit likely face inventory shortages leading to lower rates of capacity utilization this explanation yields several further predictions that are supported by the data there is a positive relationship between supplier credit and inventory holdings moreover raw materials stockouts are positively correlated with capacity utilization particularly in inventory intensive industries

will affirmative action policies eliminate negative stereotypes a key question concerning affirmative action is whether the labor market gains it brings to minorities can continue without it becoming a permanent fixture in the labor market the authors argue that this depends on how the policy affects employers beliefs about the productivity of minority workers they study the joint determination of employer beliefs and worker productivity in a model of statistical discrimination in job assignments the authors prove that even when identifiable groups are equally endowed ex ante affirmative action can bring about a situation in which employers correctly perceive the groups to be unequally productive ex post copyright 1993 by american economic association

in google we trust we examine the incentives of a monopolistic search engine funded by advertising to provide reliable search results we distinguish two types of search results sponsored and organic not paid for organic results are most important in searches for online content while sponsored results are more important in product searches by modeling the underlying markets for online content and offline products we can identify the sources of distortions for each type of result and their interaction this explicit treatment proves crucial for understanding not only spillovers across markets but also fundamental policy issues such as the welfare effects of integration in particular integration of the engine with a small fraction of content providers is welfare enhancing when incentives to distort are stronger for sponsored than organic search but welfare reducing in the opposite case

ethnicity and credit in african manufacturing abstract this paper investigates whether market interaction can by itself perpetuate the lack of ethnic diversity that is observed in the business communities of many developing countries using case study data on manufacturing firms in kenya and zimbabwe we find no evidence that blacks or women are disadvantaged in the attribution of bank credit once we control for firm size and other observable characteristics in contrast an ethnic and gender bias is noticeable in the attribution of supplier credit although we cannot rule out the presence of discrimination the bulk of the evidence indicates that network effects play an important role in explaining this bias

the effects of exchange rate volatility on agricultural trade i extend cho sheldon and mccorriston s 2002 analysis of the effect of exchange rate volatility on agricultural trade among the g 10 countries to a broad sample of developed and developing nations i replicate their original finding that exchange rate volatility has a large negative impact on agricultural trade between g 10 members after controlling for agricultural export subsidies which are correlated with exchange rate volatility i show that the original impact declines by half using the extended sample i find that the effect of exchange rate volatility is much larger for developing country exporters than for developed exporters copyright 2008 oxford university press

mass media and special interest groups abstract media revenues are an important determinant of media behavior it is generally accepted that news coverage depends not only on the preferences of media consumers but also on the preferences of advertisers or subsidizing groups however existing models reach the opposite conclusions about the relationship between the profitability of advertising and media bias we present a theoretical model that reconciles these results the model shows that the sign of the effect of marginal costs of production or marginal advertising revenues on the level of distortion in news coverage depends on complementarity or substitutability between media bias and audience size for an interest group the existence of a budget constraint for an interest group and media outlets reliance on subscription in addition to advertising revenues

why is it so difficult to find an effect of exchange rate risk on trade abstract it is commonly argued that exchange rate risk hampers international trade however the large literature on this subject has not yet provided conclusive evidence this paper analyzes why it is so difficult to obtain a clear answer from time series analyses we use data on bilateral aggregate u s exports to the other g7 countries the results show that as far as the exchange rate is concerned export decisions are mostly affected by the probability distribution of the about one year ahead rate the riskiness of the exchange rate at such a long horizon appears fairly constant over time with only short term fluctuations this makes it difficult to discover the true effect of exchange rate risk on trade from the time series data that are typically available

can prominence matter even in an almost frictionless market consumer search on the internet is rarely random sponsored links appear higher up a webpage and consumers often click them firms also bid aggressively for these prominent positions at the top of the page but why should prominence matter when visiting an additional website is almost costless i present a model in which consumers know their valuations for the products offered in the market but do not know which retailer sells which product i show that a prominent retailer earns significantly more profit than other firms even when the cost of searching websites and comparing products is essentially zero

measuring and analysing the effects of short term volatility in real exchange rates this paper examines short term volatility in the real effective exchange rates of industrial countries and its impact on their imports it yields three conclusions first volatility has not diminished as markets have gained experience with floating exchange rates the trend appears to be in the opposite direction for some countries second exposure to short term volatility has differed among countries japan and sweden have experienced much more than most other industrial countries third volatility appears to depress the volume of international trade this third finding is consistent with results reported by cushman and by akhtar and hilton and challenges earlier findings by hooper and kohlhagen

real exchange rate volatility and the us bilateral trade a var approach this paper uses var models to investigate the impact of real exchange rate volatility on u s bilateral imports from the united kingdom france germany japan and canada the var systems include u s and foreign macro variables and are estimated separately for each country the major results suggest that the effect of volatility on imports is weak although permanent shocks to volatility do have a negative impact on this measure of trade and those effects are relatively more important over the flexible rate period copyright 1989 by mit press

behind the market stage where real societies exist part i the role of public and private order institutions this two part article is an attempt to clarify the social conditions upon which the viability and efficiency of the market system rest it strives to show that the embeddedness thesis that is an explanation based upon the existence of long run personal ties involving the use of reputation mechanisms among transactors cannot fully elucidate the question as to how the problem of trust is solved in market societies as explained in part i there are difficulties of both theoretical and empirical historical kinds and these explain why the market order needs to be sustained by private and public order institutions in part ii the role of generalised morality in backing or supplementing such institutions is discussed in the light of game theory and particular emphasis is put on the ability of moral norms to sustain honest behaviour by generating the right kind of preferences and establishing trust the vexed problem of the dynamics of norm emergence and erosion is then addressed with a view to showing

news droughts news floods and u s disaster relief this paper studies the influence of mass media on u s government response to approximately 5 000 natural disasters occurring between 1968 and 2002 these disasters took nearly 63 000 lives and affected 125 million people per year we show that u s relief depends on whether the disaster occurs at the same time as other newsworthy events such as the olympic games which are obviously unrelated to need we argue that the only plausible explanation of this is that relief decisions are driven by news coverage of disasters and that the other newsworthy material crowds out this news coverage

the market for news we investigate the market for news under two assumptions that readers hold beliefs which they like to see confirmed and that newspapers can slant stories toward these beliefs we show that on the topics where readers share common beliefs one should not expect accuracy even from competitive media competition results in lower prices but common slanting toward reader biases on topics where reader beliefs diverge such as politically divisive issues however newspapers segment the market and slant toward extreme positions yet in the aggregate a reader with access to all news sources could get an unbiased perspective generally speaking reader heterogeneity is more important for accuracy in media than competition per se

bilateral trade flows the linder hypothesis and exchange risk bilateral trade flows are used to examine the linder hypothesis and the effect of exchange rate variability in a gra vity type trade model derived from an underlying demand and supply mo del a behavioral model is used to justify examining these issues joi ntly the model performs well empirically using a sample of seventeen countries for the period 1974 82 the authors find overwhelming supp ort for the linder hypothesis and this version of the gravity model moreover they find strong support for the hypothesis that increased exchange rate variability affects bilateral trade flows copyright 1987 by mit press

optimal information disclosure a sender randomly draws a prospect characterized by its profitability to the sender and its relevance to a receiver the receiver observes only a signal provided by the sender and accepts the prospect if his bayesian inference about the prospect s relevance exceeds his opportunity cost the sender s profits are typically maximized by partial information disclosure whereby the receiver is induced to accept less relevant but more profitable prospects switches by pooling them with more relevant but less profitable ones baits extensions include maximizing a weighted sum of sender profits and receiver surplus and allowing the sender to use monetary incentives

efficiency and the role of default when security markets are incomplete this paper argues that default plays an important positive role in the economy if markets are incomplete and traders are only able to enter into contracts that they will be able to execute regardless of future events contingent contracting may be severely restricted moreover opening new markets may not relieve these restrictions default promotes efficiency in a way that opening new markets does not by making it possible for traders to enter into contracts that they will be able to execute with high probability but not with certainty copyright 1993 by american economic association

search diversion and platform competition abstract platforms use search diversion in order to trade off total consumer traffic for higher revenues derived by exposing consumers to unsolicited products e g advertising we show that competition between platforms leads to lower equilibrium levels of search diversion relative to a monopoly platform when the intensity of competition is high on the other hand if there is only mild competition then competing platforms induce more search diversion relative to a platform monopolist when platforms charge consumers fixed access fees all equilibrium levels of search diversion under platform competition are equal to the monopoly level irrespective of the nature of competition furthermore relative to platforms that cannot charge such fees platforms that charge positive negative access fees to consumers have weaker stronger incentives to divert search

nominal exchange rate regimes and the real exchange rate abstract two assumptions about the real exchange rate are common in the literature on international finance 1 the real exchange rate is a random walk 2 the time series properties of the real exchange rate depend on the nominal exchange rate regime this paper presents evidence that indicates that the random walk behavior of the real exchange rate is only a characteristic of the post world war ii period moreover our findings also suggest that what is crucial to the real exchange rate behavior is the particular historical period rather than the nominal exchange rate arrangement

opinion dynamics via search engines and other algorithmic gatekeepers abstract ranking algorithms are the information gatekeepers of the internet era we develop a stylized model to study the interplay between a ranking algorithm and individual clicking behavior we consider a search engine that uses an algorithm based on popularity and on personalization the analysis shows the presence of a feedback effect whereby individuals clicking on websites indirectly provide information about their private signals to successive searchers through the popularity ranking algorithm accordingly when individuals provide sufficiently positive feedback to the ranking algorithm popularity based rankings tend to aggregate information while personalization acts in the opposite direction moreover we find that under fairly general conditions popularity based rankings generate an advantage of the fewer effect fewer websites reporting a given signal attract relatively more traffic overall this highlights a novel ranking driven channel that can potentially explain the diffusion of misinformation as websites reporting incorrect information may attract an amplified amount of traffic precisely because they are few

international financial volatility and commodity exports evidence from the thai agricultural sector using 1981 2006 data from the bank of thailand i estimate the effect of four measures of real exchange rate volatility on thai exports of five key agricultural commodities controlling for both the level of the real exchange rate and foreign incomes estimates of the effect of volatility on export volume are generally negative and often significant lending support to a range of theoretical models that predict such an effect no such relationship exists between lagged values of exchange rate volatility and agricultural production the range of results obtained using various measures of volatility suggests caution in comparing studies using different measures copyright 2010 oxford university press

conditional exchange rate volatility and the volume of international trade evidence from the early 1900s exports from britain to the united states from 1900 to 1940 are examined to ascertain the effect of exchange rate volatility on the volume of trade in addition to using a rolling standard deviation measure of exchange rate uncertainty the conditional variance of the exchange rate series modeled as a generalized autoregressive conditional heteroskedastic process is used to generate an alternative measure of exchange rate uncertainty the results of estimation using the two measures of exchange rate volatility suggest that increases in the volatility of the real exchange rate reduce the volume of trade copyright 1992 by mit press

prominence and consumer search this article examines the implications of prominence in search markets we model prominence by supposing that the prominent firm will be sampled first by all consumers if there are no systematic quality differences among firms we find that the prominent firm will charge a lower price than its less prominent rivals making a firm prominent will typically lead to higher industry profit but lower consumer surplus and welfare the model is extended by introducing heterogeneous product qualities in which case the firm with the highest quality product has the greatest incentive to become prominent and making it prominent will boost industry profit consumer surplus and welfare

the impact of interfirm relationships on investment evidence from the polish dairy sector abstract financial constraints and credit market imperfections are a major constraint on investment growth and poverty reduction in transition and developing countries this paper analyses the impact on investments of financial assistance programs as part of interfirm relationships our empirical evidence is based on a two stage survey methodology qualitative evidence on dairy companies assistance programs was gathered in the first stage through in depth interviews at the level of the dairy companies quantitative data on 290 milk producing rural households in poland was collected through a random survey in the second stage the empirical analysis shows that dairy companies have played an important role in financial assistance in particular for dairy specific investments in addition they had an important indirect impact on farm activities and investments through feed supply and loan guarantee programs

on the existence of pure and mixed strategy nash equilibria in discontinuous games a game is better reply secure if for every nonequilibrium strategy x and every payoff vector limit u resulting from strategies approaching x some player i has a strategy yielding a payoff strictly above u i even if the others deviate slightly from x if strategy spaces are compact and convex payoffs are quasiconcave in the owner s strategy and the game is better reply secure then a pure strategy nash equilibrium exists better reply security holds in many economic games it also permits new results on the existence of symmetric and mixed strategy nash equilibria

the impact of targeting technology on advertising markets and media competition an important component of advertising effectiveness is the quality of the match between advertisers and the intended recipients of ads traditionally media have been able to tighten such matches by providing content tailored for specific groups of consumers for example local media outlets attract audiences from their localities ensuring that when local advertis ers place ads they are mostly viewed by their potential customer base recently online adver tising has afforded new technologies that tar get consumers directly rather than indirectly through tailored content a leading example of such targeting is based on geographic loca tion as inferred from ip addresses so while the boston globe may have had an advantage in selling ads to boston advertisers now the new york times can offer boston based ads to consumers located in boston industry specula tion is that such technologies may spur higher demand for online advertising but that these technologies will benefit general outlets more than local newspapers 1 it may be problematic for the future of the local news industry if gen eral outlets gain at their expense to date there has been little analysis on how the market for advertising might be impacted by targeting 2 intuition suggests that an outlet

exchange rate variability and the export demand for malaysia s semiconductors an empirical study this article examines the effects of exchange rate variability on export demand for semiconductors which is the largest sub sector of electronics industry in malaysia as reported by malaysian industrial development authority mida 2004 the empirical results which are estimated based on the johansen s multivariate cointegration tests and error correction model suggest that there is a unique long run relationship among quantities of export relative price real foreign income and real exchange rate variability the major finding of this article is that the variability of real exchange rate has some effect on semiconductor exports in both the long run and the short run in the light of rapid advances in technology in the global markets for electronics products the findings are useful to policy makers for the design and target of appropriate exchange rate and industrial policies to enhance the export competitiveness of semiconductor industry

when to drop a bombshell sender who is either good or bad wishes to look good at an exogenous deadline sender privately observes if and when she can release a public flow of information about her private type releasing information earlier exposes to greater scrutiny but signals credibility in equilibrium bad sender releases information later than good sender we find empirical support for the dynamic predictions of our model using data on the timing of u s presidential scandals and u s initial public offerings in the context of elections our results suggest that october surprises are driven by the strategic behaviour of bad sender

mass media competition political competition and public policy if better informed voters receive favourable policies then mass media will affect policy because mass media provide most of the information people use in voting this paper models the incentives of the media to deliver news to different groups the increasing returns to scale technology and advertising financing of media firms induce them to provide more news to large groups such as taxpayers and dispersed consumer interests and groups that are valuable to advertisers this news bias alters the tradeoff in political competition and therefore introduces a bias in public policy the paper also discusses the effects of broadcast media replacing newspapers as the main information source about politics the model predicts that this change should raise spending on government programmes used by poor and rural voters

contracts hold up and exports textiles and opium in colonial india trade and export it is argued spur economic growth this paper studies the microeco nomics of exporting we build a heuristic model of transactions between exporters and producers and relate it to east india company operations in colonial bengal our model and the historical record stress two difficulties the exporter and its agents might not uphold payment agreements and producers might not honor sales contracts the model shows when procurement succeeds or fails highlighting the tension between these two hold up problems we analyze several cases including the east india company s cotton textile venture the famous opium monopoly and present day contract farming

drivers of structural transformation the case of the manufacturing sector in africa abstract this paper analyzes the driving factors of manufacturing development in africa using the system gmm technique with four year average panel data over the period 1995 2014 including 53 african countries the paper finds four main results 1 there is a u shaped relationship between the manufacturing share of gdp and per capita gdp 2 exchange rate depreciation stimulates africa s manufacturing sector 3 good governance especially a low level of corruption and better government effectiveness contribute to africa s manufacturing development 4 the size of domestic market positively affects the manufacturing share of gdp on the other hand the paper finds no significant effects of fdi and urbanization on manufacturing development the implication of these findings is that improving the level of competitiveness expanding the size of domestic market combating corruption as well as improving government effectiveness are key for africa s manufacturing sector development moreover the u shaped relationship between the manufacturing share of gdp and per capita gdp implies that african countries should not expect industrialization to automatically happen with income increase but rather they should proactively tackle key obstacles to the development of the manufacturing sector

inventories and risk in african manufacturing using a panel data set for zimbabwe which includes firm specific measures of contractual risk we show that contractual risk has a major effect on the holding input stocks and to a lesser extent the constitution of cash reserves this is consistent with inventories being a hedge against stockout risk by contrast firms facing more inter annual market risk hold less inventories this suggests that african manufacturers prefer adapting to long term market fluctuations as they materialise rather than building up inventories this interpretation is consistent with the finding that high market risk firms also have a low capacity utilisation rate

trade credit in small and medium size firms an application of the system estimator with panel data financing through suppliers is a subject that has been little studied in the economic literature in general and in corporate finance in particular although several hypotheses have been put forward to explain the different reasons behind this phenomenon trade credit is not based on a general theory

optimal sticky prices under rational inattention this paper presents a model in which price setting firms decide what to pay attention to subject to a constraint on information flow when idiosyncratic conditions are more variable or more important than aggregate conditions firms pay more attention to idiosyncratic conditions than to aggregate conditions when we calibrate the model to match the large average absolute size of price changes observed in micro data prices react fast and by large amounts to idiosyncratic shocks but only slowly and by small amounts to nominal shocks nominal shocks have strong and persistent real effects we use the model to investigate how the optimal allocation of attention and the dynamics of prices depend on the firms environment jel e 3 e5 d8

has exchange risk depressed international trade the impact of third country exchange risk abstract this paper argues that the effect of exchange risk on bilateral and aggregate trade flows should be analyzed by including the impact of third country exchange risk factors in addition to direct bilateral or multilateral risk after a theoretical examination of these effects us bilateral export flow to its six largest trading partners are analyzed empirically i find individuality and jointly significant third country risk effects in most cases in contrast to some recent bilateral efforts i find a steadily growing negative impact on trade flows from exchange risk during floating and in contrast to recent aggregate trade flow studies i conclude that there was no temporary decline in exchange risk during the late 1970s

the impact of the post 1972 floating exchange rate regime on us exports by employing the techniques of cointegration and error correction models this article empirically investigates the impact of the post 1972 floating exchange rate regime on the volume of us bilateral exports to canada germany japan and the uk the econometric models specified in the analysis were estimated using quarterly data for the sample period 1959 1 1997 4 the empirical results provide evidence that the post 1972 exchange rate regime is less conducive to trade than the bretton woods fixed exchange rate regime

adapting to the financial landscape evidence from small firms in nairobi abstract small enterprises face a financial landscape that limits their access to bank loans and trade credit they adapt by relying on a range of other mechanisms to relieve the financing constraint employing an institutional framework the paper explores the use of credit from suppliers customers and other sources a unique finding is that very small firms use purchase orders as a signaling device to obtain irregular access to trade credit the use of pre payments installments and overdrafts is also investigated the results indicate that small firms may be less credit constrained than is suggested by a narrow definition of credit evidence is drawn from a survey of 115 micro and small manufacturing enterprises in nairobi

the effects of exchange rate variability on international trade a meta regression analysis the trade effects of exchange rate variability have been an issue in international economics for the past 30 years the contribution of this article is to apply meta regression analysis mra to the empirical literature on average exchange rate variability exerts a negative effect on international trade yet mra confirms the view that this result is highly conditional by identifying factors that help to explain why estimated trade effects vary from significantly negative to significantly positive mra evidence on the pronounced heterogeneity of the empirical findings may be instructive for policy first by establishing that average trade effects are not sufficiently robust to generalize across countries and second by suggesting the importance of hedging opportunities hence of financial development for trade promotion for the practice of mra we make a case for checking the robustness of results with respect to estimation technique model specification and sample

networks trust and innovation in tanzania s manufacturing sector abstract the social dimensions of innovation are examined for a group of manufacturers in mwanza tanzania social networks of businesspeople in mwanza are found to support innovation in manufacturing firms trust in these relations is especially important as it improves the quality of information exchanges and encourages the development of strong intracommunity ties and weak intercommunity relations a typology of manufacturers demonstrates how different social strategies relate to innovation the findings suggest that openness to social relations enhances innovation but that weak formal institutions discourage manufacturers from extending their social relations beyond core networks

competition for attention in the information overload age limited consumer attention limits product market competition prices are stochastically lower the more attention is paid ads compete to be the lowest price in a sector but compete for attention with ads from other sectors equilibrium ad shares follow a ces form when a sector gets more pro table its advertising expands others lose ad market share the information hump shows highest ad levels for intermediate attention levels the information age takes off when the number of viable sectors grows but total ad volume reaches an upper limit overall advertising is excessive though the allocation across sectors is optimal

trade credit in zimbabwean manufacturing abstract credit from suppliers is an important but often neglected source of finance for manufacturing firms zimbabwe is no exception unlike credit from financial institutions trade credit does not rely on formal collateral but on trust and reputation contract enforcement is flexible network effects and statistical discrimination affect the screening of trade credit applicants black entrepreneurs are disadvantaged by their lack of business contacts and by the difficulty of distinguishing themselves from the mass of financially insecure and short lived african owned businesses in zimbabwe a vicious circle is created between weak financial base unreliability as a debtor and inability to gain access to credit

fox news and political knowledge abstract the effects of partisan media on political knowledge are theoretically ambiguous knowledge effects are important because of their close connection to welfare effects but the existing empirical literature on knowledge is limited we study the knowledge effects of the fox news channel following dellavigna and kaplan 2007 we exploit naturally random variation in fox s availability to identify causal effects we use knowledge survey data from 2000 2004 and 2008 our final sample has nearly one million question level observations we first confirm and expand on previous findings of fox effects on voting we then present an array of results from our knowledge analysis while average effects across issues over the full time frame are near zero and most precise we find evidence of positive effects both for issues that were more favorable to republicans and for issues that fox covered more often and negative effects for issues fox neglected we also present evidence of fox being associated with a decline in newspaper readership