Anatomy of financial retardation in a less developed country: The case of Sri Lanka, 1951–1976

An attempt is made in this paper to analyse the experience of Sri Lanka during 1951–1976, particularly in relation to its financial sector development. It is shown that the interventionist regime held the key to the pace and pattern of the economy's development. Whether it was the skimpy growth of the financial system, the faltering progression of GNP, the precarious foreign exchange position, or the persistence of inflationary pressure, they were all traceable to the impact on the financial system of a particular set of policies pursued. The year 1977, however, marked a watershed in Sri Lanka's long quest for economic development. The Government began to unwind the entire paraphernalia of administered controls on consumption, investment and foreign exchange. Most of the price controls were removed, subsidies phased out and public corporations were allowed greater autonomy in their pricing and distribution policies. It is necessary to contrast this situation with what existed prior to 1977 in order to assess its impact on the real economy of Sri Lanka. Only then can the cost of financial retardation be measured.     

Firm-Specific Characteristics and the Timing of Foreign Direct Investment Projects

This paper uses a proportional hazard model to study foreign direct investment by Japanese manufacturers in Europe between 1970 and 1994. We divide each firm’s investment total into a sequence of individual investment decisions and analyze how firm-specific characteristics affect each decision. We find that total factor productivity is a significant determinant of a firm’s initial and subsequent investments. Parent-firm size does not have a significant influence on the initial decision to invest. Large firms simply have more investments than smaller firms. Other firm-specific characteristics, such as the R&D intensity, export share and keiretsu membership, also play a role in the investment process. JEL no. F23, L20     

The political economy of stabilization: Commitment,capacity, and public response

Political pressures are generally recognized as important in determining success or failure of economic stabilization and adjustment programs. But there has been little comparative analysis of the politics of stabilization. This study examines the factors affecting (i) political leaders' commitment to stabilization measures (often called ‘political will’); (ii) governmental ability to implement stabilization measures; and (iii) the responses of key interest groups and the public at large to those measures. The study also discusses political implications of the design of programs and the attempted speed of stabilization, and sketches the tactics available to governments to manage political risk, including partial compensation, persuasion, diversion or obfuscation, and containment of protest. The discussion is based on case studies of stabilization efforts in five fairly poor, small, highly trade-dependent countries; Ghana in the late 1960s and early 1970s, and Zambia, Kenya, Sri Lanka and Jamaica in the late 1970s and early 1980s. A subsidiary theme within the broader discussion is the ways in which the political economy of stabilization may differ in such countries, as compared to larger, semi-industrialized economies.     

Changing factor market conditions in South Africa: The capital market – a sectoral description of the period 1970–97

This article explores changing conditions in South African real capital markets. Noteworthy is the evidence of strong restructuring in this market during the 1990s. Whereas the 1970s and 1980s showed the best investment performance among primary commodity sectors and sectors with strong parastatal involvement, the highest investment rates of the 1990s have been associated with the manufacturing industry. We show that the real user cost of capital and capital productitivity contribute plausible determinants of investment rates in South Africa. The extent to which market forces are allowed to bring in line marginal cost and marginal return on capital appears to influence the sustainability of investment.     

An empirical analysis of Sri Lanka's Manufacturing Productivity slow-down

This paper analyses empirically the changes in Sri Lanka's manufacturing productivity during a period of regime shift from import substituting industrialisation to export-oriented industrialisation. We have used a varying coefficients stochastic production frontier model on a balanced panel data set to shed light on the effects of trade liberalisation on Total Factor Productivity which incorporates both changes in Technical Efficiency and Technical Progress. The results of the empirical validation of the stochastic production frontier model reveal that there were two distinct phases of output and productivity growth under each of the two trade liberalisation episodes that occurred during 1978–88 and 1988–97, respectively. The analysis carried out in this paper decomposing Total Factor Productivity into Technical Progress and Technical Efficiency also reveals that during early years of each episode, perspiration or factor inputs was the driving force of increased output growth giving way to ‘inspiration’ or technical progress as each phase matured. The stochastic production frontier empirics reported in this paper together with negative feedback effects emanating from the political turmoil and the prolonged ethnic conflict virtually brought the growth of foreign direct investment to a grinding halt in late 1980s, when the election of new right-wing government appears to have given a shot in the arm to overcome the paralysis of technical progress that seem to have contributed to the productivity slow-down in Sri Lanka's manufacturing sector in the eve of the new millennium.     

基于系统动力学的智力资本投资决策研究——以X公司为例

20世纪70年代以来,智力资本的管理成为企业在竞争性市场中生存与发展的一个关键问题。本文的目的就是设计出一套基于系统动力学的智力资本投资评价模型,为公司管理智力资本提供一个很好的工具。研究首先选择合适方法对公司的智力资本进行计量。通过详细的系统分析构建了X公司智力资本投资的系统动力学模型。利用系统动力学模型对7种智力资本投资方案进行数据模拟。综合考虑投资效率与风险得出智力资本投资方案的优劣排序。     

A new look at the effects of export instability on investment and growth

This paper is concerned with the effects of export instability on investment and growth. It is shown that past cross-sectional empirical studies on the effects of export instability (either in prices or in value terms) used an incorrect measure of instability that does not properly take account of the share of exports in GDP. Using a new instability index and a broad set of conditioning variables, it is shown that export instability was positively associated with investment but negatively associated with growth in a large sample of countries during the period from the early 1970s to the mid 1980s.     

Foreign direct investment in China: Policy,recent trend and impact 1

One of the most important elements of China's economic reform has been the promotion of foreign direct investment (FDI) inflow. Government polices on FDI have gone through different stages in their main objectives since the late‐1970s, from gradually opening to foreign investors, to actively encouraging inward investment, directing FDI in accordance with domestic industrial restructuring, and complying with China's World Trade Organization (WTO) obligations. FDI in China has experienced rapid growth especially since the mid‐1990s, as well as structural change. Most of the earlier investments were small scale, labor‐intensive and export‐oriented. In recent years, more investment has been large scale and more capital and technology intensive, aiming at both domestic and export markets. Moreover, increasingly more investment has come from the industrial world, and has located along the eastern coastal regions, in additional to the two southeastern provinces. FDI has played a crucial role in China's rapid growth, economic transition, and, mostly importantly, integration with the world. China's recent accession to the WTO provides more incentives to foreign investors. At the same time, it will also result in more intense competition for domestic firms.     

Basic needs: The case of Sri Lanka

This article has two related objectives: to judge Sri Lanka's success in meeting its ‘basic needs’ and growth objectives, and to use Sri Lanka's experience to cast light on general hypotheses regarding basic needs. The analysis suggests that Sri Lanka's social expenditures had a substantial cost in growth and unemployment. However, largely because of these social programmes, it has the best social indicators, compared to its income, of any country for which data are available. Its growth has, surprisingly, been above average for low-income countries. Implications for basic-needs programmes include the need to ‘target’ social programmes, the high priority of primary education and the potential high impact, but also high costs, of assuring minimum caloric intakes.     

The real exchange rate,capital inflows and inflation: Sri Lanka 1970–1982

Zusammenfassung Realer Wechselkurs, Kapitalimporte und Inflation: Sri Lanka 1970–1982. - Der Aufsatz unterscheidet zwischen effektiven Kaufkraftparit?ten und realen Wechselkursen. Die Bedeutung der letzteren als ein diagnostisches Werkzeug wird hervorgehoben, indem der Kapitalverkehr einbezogen und das Salter-Modell auf eine offene Volkswirtschaft mit Zolltarifen ausgedehnt wird. Bei Anwendung des Modells auf Sri Lanka stellt sich heraus, da\ die Inflation der Jahre 1977–1982, die mit der unvermeidlichen Erh?hung des realen Wechselkurses infolge massiver Kapitalimporte verbunden war, aus der Erh?hung der Preise von nicht-handelbaren Gütern herrührte und nicht so sehr aus einer exzessiven Geldmengenausweitung. Der Autor meint, eine nicht-inflation?re und wirksame Absorption von sozial erwünschten Kapitalzuflüssen erfordere, da\ die notwendige Erh?hung des realen Wechselkurses durch eine Senkung der Z?lle - also der heimischen Preise handelbarer Güter- herbeizuführen ist und nicht durch eine Erh?hung der Preise nicht-handelbarer Güter oder durch nominale Wechselkursbewegungen. Eine Verringerung der Protektion würde auch den Kaufkraftparit?tenwechselkurs senken, was erforderlich ist, damit die Wettbewerbsf?higkeit auf den Exportm?rkten erhalten bleibt.

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Resumen El tipo de cambio real, importaciones de capital e inflación: Sri Lanka entre 1970 y 1982. - El trabajo distingue entre tipo de cambio real y tipo de cambio efectivo PPA y enfatiza la importancia de este último como instrumenta de diagnóstico integrando la cuenta de capital y extendiendo el modelo de Salter a la economía abierta distorsionada por aranceles. Se aplica el modelo a Sri Lanka resultando que la inflación entre 1977 y 1982, que acompa?ó al inevitable aumento del tipo de cambio real, a raíz de la importación masiva de capital, fue debida más bien al aumento de los precios nomínales de los bienes no comerciados que a la expansión monetaria excesiva. Se arguye que la absorción eficiente y no inflacionaria de importaciones de capital socialmente deseadas requiere que la revaluación necesaria del tipo de cambio sea producto de una reducción de aranceles, o sea, del precio nacional de los bienes comerciados, y no de aumentos en los precios de los bienes no comerciados o de movimientos nominales del tipo de cambio. Reducir la protección significaría también devaluar el tipo de cambio PPA necesario para mantener la competitividad de las exportaciones.

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Résumé Le taux de change réel, afflux des capitaux et inflation: Sri Lanka 1970–1982. — L’article distingue les taux de change PPA effectifs et réels et souligne l’importance du dernier taux comme instrument diagnostique en intégrant la balance des capitaux et étendant le modèle de Salter à une économie ouverte aux tarifs douaniers. L’auteur applique le modèle à Sri Lanka et trouve comme résultat que l’inflation en 1977–1982 qui accompagnait l’augmentation inévitable du taux de change réel incitée par des afflux massifs des capitaux était due à l’augmentation du prix monétare des biens non-commercés au lieu de l’expansion monétaire excessive. Il argue que l’absorption non-inflationniste et efficiente des afflux des capitaux qui sont désirables d’un point de vue social rend nécessaire la révaluation du taux de change réel qui devrait être accomplie par une réduction tarifaire et des restrictions quantitatives et ainsi par la réduction des prix locaux des biens commercés au lieu des augmentations des prix des biens non-commercés ou des mouvements en taux de change nominal. Une réduction de la protection dévaluerait le taux de change PPA ce qui est nécessaire pour maintenir la capacité concurrentielle des exportations.

     

A Matter of Trust: The Ashby Research Service and the Business of Market Research

As Australia's pioneering market research firm, the Ashby Research Service helped introduce market research to Australian businesses and played a leading role in building confidence in market research as a business investment. By examining the firm's activities and organisational operations from the 1930s to the 1970s, this article contends that the establishment, development, maintenance, and deepening of trust underpinned all aspects of the firm's operations – from internal practices to externally focused client relations. The long-term approach also illustrates the multiplicity of factors contributing to the development of trust in business, and underscores the importance of culture in this process.     

The Dynamic Linkages between Foreign Direct Investment and Domestic Investment in ECOWAS Countries: A Panel Cointegration Analysis

Abstract: This paper examines the crowding out or crowding in effect of foreign direct investment inflow on domestic investment in Africa. Data for the period 1970–2008 were extracted from the UN statistical online database and the World Development Indicator 2009 online database and the study employed a recent panel cointegration estimation technique. The study revealed that foreign direct investment inflow crowds out domestic investment in the ECOWAS region. The study therefore recommends that policy makers in the ECOWAS countries focus on promotional resources to attract some types of foreign direct investment and regulate others. Policies should also be directed at putting in place a better targeted approach to screen foreign direct investment applications to ascertain their productive base before allowing them.     

Sri Lanka’s Rural Non-Farm Economy: Removing Constraints to Pro-Poor Growth

We use a survey of rural enterprises from Sri Lanka to explore characteristics of the informal non-farm sector and identify obstacles to its expansion and productivity. Value added in this sector amounts to 80% of agricultural GDP participating households’ incomes are significantly higher than those of households who do not participate. Barriers to entry are low and the impact of non-farm development on inequality modest, implying a large potential contribution to growth and poverty reduction. Infrastructure constraints negatively affect new startups, investment in, and productivity of existing enterprises, with small enterprises being particularly affected.     

Stages of growth revisited

Neoclassical growth theory and the institutional approach to economic development grew apart during the 1970s and 1980s. More integration of these two schools of thought can lead to better analysis and policy. This paper identifies shortcomings of the neoclassical model, especially an overemphasis on savings and investment, and explores stages of growth theory in the context of institutional economics. Its strengths and weaknesses and its application to South Africa are considered.     

A World Bank Intervention in the Sri Lankan Welfare Sector: The National Development Trust Fund

In 1991 the World Bank moved to streamline the Sri Lankan welfare sector by funding a poverty alleviation project which promoted the role of non-government organization (NGOs) and decentralized government agencies and replaced traditional consumption-oriented transfers with an emphasis on household self-reliance through productive activity. The project's design was based on a model which depends for its success on key conditions—guaranteed political independence and a well-developed NGO sector—which did not exist in Sri Lanka in the early 1990s. Additional problems included management deficiencies and failure to provide key supports for production-related poverty reduction.     

On ‘the political economy of stabilization’

Joan Nelson (1984) includes Sri Lanka in the period 1977–1982 in a series of case studies of the factors affecting the political acceptability of stabilization and adjustment programs. This is misleading because, unlike the other countries dealt with, Sri Lanka was not faced with an economic crisis when it accepted large multilateral loans under policy conditionality. In fact, the economic policies pursued in Sri Lanka after 1977 reflect the interests and political program of the domestic capitalist class. The existence of such a class introduces dimensions to the analysis of the politics of adjustment not dealt with in Nelson's framework.     

“一带一路”沿线国家外债风险评价及启示——基于31个沿线国家的数据分析

"一带一路"沿线国家的外债风险对中国企业境外投资的经济效益和社会效应都有重要影响。本文以负债率、偿债率和债务率指标为基础构建了外债风险评价指标体系,选取"一带一路"沿线31个国家2010年-2017年的数据,运用模糊物元分析法综合测度沿线国家的外债风险,并进行成因分析。研究结果表明:"一带一路"沿线国家外债风险总体呈上升趋势;蒙古、老挝、斯里兰卡、乌克兰、哈萨克斯坦、巴基斯坦和吉尔吉斯斯坦等国家的外债风险非常高;财政赤字、贸易条件恶化、国际市场利率提高是推动沿线国家外债风险上升的最主要原因。为提升中国企业对沿线国家直接投资的质量和效益,中国企业应优化直接投资的空间布局,减少对高外债风险国家的投资;拓宽投资领域,增加非能源领域的投资,带动沿线国家经济增长和就业;投资前应严格审核项目,合理融资方式,避免增加债务风险。     

Growth accounting for a technology follower in a world of ideas: The case of Singapore

We account for the sources of Singapore's growth by being explicit about the channels through which Singapore benefits from international R&D spillovers. We find that 61.5% of Singapore's real GDP per worker growth over the 1970–2004 period is due to multifactor productivity growth. More specifically, 52.1% of the growth is explained by an increase in the effectiveness of accessing ideas through improvement in Singapore's educational quality as well as increases in machinery imports and foreign direct investment from the G5 countries. Taking account of technology transfer raises the average rate of return to capital to 12.5%.     

日本入关后对外贸易政策演变述析

日本入关后在经济贸易发展的过程中,政府强有力的宏观调控发挥了很大的作用,日本政府主导了对外贸易的发展及对外贸易政策的制定和实施。入关后,日本政府充分利用了关贸总协定(GATT)相关条款,一方面通过实施保护贸易政策为国内竞争力较弱的产业提供了充分发展的时间和市场空间;另一方面也实施了贸易和投资逐步自由化的政策。日本入关后到上世纪70年代中期以前实施的初级阶段战略性贸易政策是相当成功的,随后实施的高级阶段战略性贸易政策并没有取得很好地进一步提升日本经济实力的效果。     

Explaining a Miracle: Intensification and the Transition Towards Sustainable Small-scale Agriculture in Dryland Machakos and Kitui Districts,Kenya

The transition to sustainable agriculture in tropical small-scale farming has been discussed intensively since Boserup published her theory on the role of population pressure as a leading factor. Bosemp's work challenged the Malthusian approach to rural transformation. Recent evidence supports the Boserup theory as applied to Machakos District, Kenya. This paper aims to establish how much of terracing is directly explained by population density increases as opposed to other district and village-level variables by using a retrospective multivariate analysis in Machakos and Kitui Districts, Kenya. The findings suggest that variables such as the distance to major urban markets and the windfall profits from the coffee boom in the late 1970s are at least as important in explaining the investment in the quality of land in Machakos and Kitui Districts.