Terms of trade effects on endogenous growth rates in LDCs

Abstract

This paper presents a model in which long‐term GDP growth rates of LDCs are dependent upon world price levels. The model combines an endogenous growth framework a la Romer (1986, Journal of Political Economy, 94, pp. 1002–1037) with traditional Heckscher‐Ohlin‐Samuelson international trade, while assuming investment in capital to be financed solely by domestic savings. This relatively strong assumption is justified by the empirical observation that for most LDCs foreign investment constitutes only a very small part of gross capital formation. We find that an increase in the price of capital‐intensive goods will raise the long‐term growth rate. In other words, in this model protection of the capital‐intensive goods sector will cause higher economic growth.     

自然资源禀赋与经济发展的悖论——发展中国家经济现状成因及发展方向的探讨

自然资源丰裕国家与其不良经济发展现状的相悖现象由来已久,特别是现今的许多发展中国家都拥有着相当丰富的自然资源。贸易模式和人力资本投资是悖论产生的直接和间接原因,更进一步,良好的政策制定和政治性推动机制在发展中国家经济发展之初尤为重要。     

Interest rates,saving and investment: Evidence from India

Abstract

The role of interest rates in the process of economic development is examined through an empirical inquiry into the interest rate‐saving‐investment nexus in the Indian economy during the period 1955–95. The results are generally in support of the financial liberalization school of thought. Higher real interest rates seem to promote both financial and total savings, and stimulate private investment. On the investment side, the combined salutary effect of interest rate increases operating through increased debt intermediation and self‐financed capital accumulation outweighs the direct cost effect on investment. Overall, the study casts doubt on the robustness of results coming from the vast cross‐country literature on the subject and calls for systematic time‐series analyses covering a variety of country situations to inform the on‐going policy debate.     

An Analysis of the Linkage Between Agricultural Exports and Economic Growth in Pakistan

Summary

This article examines the relationship between agricultural exports and economic growth. Pakistan is used as a case study due to its large amounts of agricultural exports which have competed with industry for government support. This study estimates three simultaneous equations representing GDP, agricultural exports, and total imports while incorporating factors such as income remittances from abroad, investment, and manufactured exports as independent variables. The timing of this information is critical as Pakistan's policy makers now face major agricultural reforms in their quest for development. The estimation results show that a favorable relationship exists between agricultural exports and growth in GDP.     

Incorporating Trade into the Investment Development Path: A Case Study of Korea and Taiwan

We suggest that there is some interface between the investment development path (IDP) and the trade development path (TDP)-with both trade and foreign direct investment (FDI) of created asset-intensive products increasing their significance relative to gross national product (GNP) of countries. The proportion of intra-industry trade and FDI to total trade and FDI also increases as an economy develops, particularly so for created asset-intensive products. We have taken the FDI intensity of manufacturing sectors as a proxy for a created asset intensity, and classified it into three categories, viz. above, average and below created asset intensities. Trade and FDI data from the Korean and Taiwan economies between 1968 and 1997 generally support the idea of an integrated TDP and IDP. The growth of trade and FDI tends to be positively correlated with GNP per capita and with the created asset intensity of products.     

International Tax Co-operation and Capital Mobility

The international mobility of capital and the geographical dispersion of firms have clear advantages for the growth and modernization of developing countries. They also create fundamental challenges for national tax authorities. Modern principles of capital taxation for the open developing economy indicate the need to find the correct balance between the encouragement of private investment and the finance of social infrastructure, both of which are necessary for sustainable growth. This balance can be sub-optimal where countries compete for inward investment by granting tax incentives or exercise conflicting principles in determining the tax base. The current practice of international taxation indicates that fiscal authorities in Latin America and the Caribbean could attain a more equitable share of capital tax revenue without depressing investment and growth. This might be achieved through more effective regional tax rules, double taxation treaties, information sharing and treatment of offshore financial centres along the lines already promoted for OECD members. These findings have wider implications for developing countries as a whole.     

Economic Meltdown in Malaysia

Abstract

The economic downturn in Malaysia has encouraged a debate on the benefits of its export-oriented industrialisation strategy. There is renewed interest in the agricultural and livestock sectors. One of the beneficiaries of this policy change could be the dairy farming sector. Using desktop research and ‘key-informant’ techniques, this study reviews various factors that could influence the development of the dairy farming sector in Malaysia. The study concludes that the (a) Government may encourage the start-up of integrated plantation crop, animal feed and livestock farms, (b) investment and trade linkages with neighbouring countries could lead to diversification of import sources, and (c) consumption of dairy products may have matured, leading to increases in dairy self-sufficiency. It is postulated that these developments will produce a dynamic environment and significant threats to the interests of traditional dairy exporting countries.     

Capital market imperfections in economic transition: empirical evidence from Ukrainian agriculture

This article investigates the link between financing and investment in Ukrainian agriculture during economic transition. The main contribution of the study is to provide empirical evidence for the coexistence of financial constraints and soft budget constraints (SBCs). This is of particular importance because credit constraints and SBCs have completely different economic effects. The lack of differentiation between these forms of capital market imperfections yields overlapping effects of financing on investment and may therefore cause a misinterpretation of econometric results. Our empirical analyses are based on an econometric estimation of the Euler investment equations for 529 large farms from three Ukrainian regions between 2001 and 2005. The results confirm that financial variables significantly influence farms' investment, providing empirical evidence of an imperfect capital market in Ukrainian agriculture. It turns out that credit constraints in the Ukrainian agricultural sector are more important than SBCs. We show that the estimated level of financial constraints for profitable farms with access to loans is higher if both types of capital market imperfections are appropriately distinguished.     

土地财政区域差异研究综述

[目的]进一步揭示土地财政已存在的区域差异规律,为构建更为科学、切实可行的政策建议,推动"征地→批租"地方政府土地财政模式转型提供新的研究视角。[方法]文献资料方法和比较研究方法。[结果]现有研究证实了土地财政规模及依赖程度、财政收入激励下地方政府土地出让方式、土地财政推动经济增长、土地财政影响居民收入消费及公共品供给、土地财政与城市用地规模联动关系等方面,在全国范围内都存在东部、中部、西部的区域差异。国外保有环节的房地产税是地方政府持续的财政资金来源;同时,是促进房地产市场有序发展、抑制城市蔓延的有效政策工具。[结论]未来研究方向是以地市为单元,探明各类土地财政构成要素对于经济增长、居民收入与消费及产业服务化、城市公共品供给、城市各类用地规模增长的影响内在机理;构建区域差别化的保有环节房地产税征收管理政策方案。     

International capital markets and open‐economy macroeconomics

Abstract

The standard open‐economy model on which the Bretton Woods macroeconomics is based takes into account neither the systemically fragmented nature of international capital markets nor the institutional relationship between savings and investment in semi‐industrial economies. This paper suggests that a more realistic approach to these structural features, possibly along the lines suggested by recent “new‐Keynesian” theories of market failure, would yield a model of macroeconomic behaviour which emphasizes investor uncertainty and vulnerability to external shock. The policy implications have interesting parallels with Keynes's own views on stabilization.     

Imported Intermediate Inputs and Firms’ Productivity Growth: Evidence from the Food Industry

Imported goods play a central role in determining the gains from trade. Using detailed trade and firm‐level data for Italy and France, we investigate the relationship between trade integration, imported intermediate inputs and firm performance in the food industry. Our main findings show that an increase in import competition spurs firm‐level productivity growth. Furthermore, the productivity growth effect attributable to imported intermediate inputs is significantly stronger than the effect due to imported final products. In addition, we find that new imported inputs are of particular importance, especially for Italian food firms, though less so for the French firms. Finally, the productivity growth effect of trade integration tends to be asymmetric across firms: more productive firms gain more from trade integration. These stylised facts have interesting policy implications.     

Agricultural Comparative Advantage and Government Policy Interventions

International trade patterns are often explained by comparative advantage which is frequently thought to depend on variations in national factor endowments. Government intervention in agricultural markets may also have an impact on trade patterns. This study explores the relation between factor endowments and agricultural trade patterns and examines the impact of agricultural and environmental policies on trade flows. Measures of national endowments of capital, labour, land and energy reserves are computed for a sample of 40 countries and used to estimate Heckscher‐Ohlin‐Vanek equations with net trade in several agricultural commodities as the dependant variable. Variables measuring agricultural policy and environmental regulations are added to the equations and tested for significance. The variables representing government intervention do not contribute to the explanation of trade patterns while national factor endowments do account for much of the variation in trade patterns of grains, oilseeds, cotton, and, to a lesser extent, meat products and an aggregate of all agricultural goods. Commodities such as sugar, tropical products and fruits and vegetables do not appear to be well explained by factor endowments.     

农村公共产品供给中的政府责任担当:基于扩大内需视角

扩大农村消费需求对于拉动经济增长具有重要作用,增加农村公共产品供给又是扩大农村消费需求的关键。增加农村公共产品供给不仅能够缓解农村贫困、提高农民收入,而且能够直接提高农村消费能力。总量不足是我国农村公共产品供给中存在的主要问题,体现为农村基础设施建设落后,农村教育、医疗卫生及社会保障事业城乡差距明显。农村公共产品供给不足的原因主要在于政府责任的缺失。增加农村公共产品供给,政府应切实统筹城乡发展,加大对农业、农村的投入力度,合理界定纵向间政府职责、建立政府间责任分担机制,建立体现农民偏好的决策机制、提高供给效率,强化农村公共产品市场化改革中的政府责任。     

The efficiency of the Australian dairy processing industry

In this article we analyse trends in the economic performance of the dairy processing industry and evaluate the link between these trends and the deregulation of the industry. Using Stochastic Frontier Analysis to derive Malmquist total factor productivity estimates, we show that the industry exhibits a relatively high level of technical efficiency. Victoria, the major producing state, has been effectively on the frontier over the period studied. In recent years, the rapid expansion in capital investment that has attended the shift towards deregulation, has been accompanied by an apparent slowdown in both productivity growth and technical progress. There is also evidence of a convergence in productivity levels across states.     

Labour-Related Structural Trends in South African Maize Production

The substitution of capital goods, including new technology, for land and labour has played an important role and has influenced the structure of Sout African agriculture. Farm labour-related trends in the summer rainfall grain-producing area of South Africa are considered. The amount of labour used, the remuneration of labour, the substitution of capital for labour and productivity trends are analyzed. Growth rates were obtained by fitting exponential functions with time as independent variable. The decline in the number of farm employees per 1000 hectares under cultivation since 1970 probably resulted from mechanization and thus capital-labour substitution in maize production, especially in harvesting. Tax concessions on new capital improvements, the subsidization of agriculture in general and the increasing rate of urbanization contributed to this trend. The scarcity of capital relative to unskilled labour, which has been reinforced by policy measures favouring capital intensity (capital formation has increased by 4.0% per annum between 1950 and 1980, compared with an increase of 0.71% per annum in the number of farm employees in the same period); this implies that corrective policy changes are required to improve the present distorted situation. This will enable the commercial agricultural sector of South Africa to play a more meaningful role in the socio-economic development of the whole subcontinent.     

The Moral Setting for Governance in Keonjhar: The Cultural Framing of Public Episodes and Development Processes in Northern Orissa,India

A discussion of the theory of technology and economic growth suggests potentially negative implications for the impact of the Internet on developing countries. Technology in general is undoubtedly central to the growth process, but economists define technology in very broad terms. The impact of any particular, invented, technology is likely to be small. This theoretical perspective is supported by the empirical evidence on the limited impact of past "information revolutions" on less-developed countries (LDCs) and the present impact of the Internet on advanced economies. Furthermore, LDCs appear ill-prepared to benefit from the opportunities that the Internet does present--they lack the physical and human capital, along with the institutions required, to exploit the e-economy. Finally, even optimistic forecasts of the Internet's global economic impact are small in scale compared with the challenge of development. This has significant implications for development policy.     

我国公益林经营现状与经济政策改进

从我国公益林建设现状入手,分析公益林经营现存的问题。以经济学理论为支撑,借助森林分类经营理论对公益林进行经济学划分,将其按照非私有物品的特性,分为完全公共物品属性的公益林、非完全公共物品属性的公益林、部分具有私人物品属性的公益林、可参与市场交易的公益林。在这种划分的情况下,采取不同的资金来源方式、补偿方式及管护方式。最后给出了政策创新建议。     

Foreign Aid: Good for Investment,Bad for Productivity

Abstract

This paper examines the effects of aid on sources of growth: capital accumulation and total factor productivity (TFP) growth; the latter captures the effect on growth after removing the contribution of factor accumulation. Given the role of TFP in explaining cross-country differences in income levels and growth rates, the productivity effect can play a significant role in explaining the impact of aid on growth. Contradictory effects of aid were found: aid boosts investment but adversely affects TFP, suggesting that efficiency losses may undermine the overall effects of aid on growth. It was also found that aid reduces the efficacy of financial institutions in supporting productivity growth, a surprising result that possibly illuminates the nature of aid distribution in receiving countries.     

Regional Economic Growth and Inequality in India during the Pre- and Post-reform Periods

Abstract

This paper evaluates the economic performance of 15 major states in India, and examines whether initially disparate states displayed any tendency towards convergence in real per capita income during the period 1960/61–2006/07. Though the growth performance of the states has improved in the post-reform period, since 1991 the states have diverged in per capita income. The states following different steady-state paths are classified into three clubs—one convergent and two non-convergent. The regional divergence and club convergence are explained in terms of interstate variations in physical and social infrastructures, state-level policy reforms, foreign direct investment flows and economic structure. The poorly performing states could improve their relative economic position by undertaking investments in physical and social infrastructures, and speeding up the reform process by liberalizing investment and infrastructure policies. As industry and services are the major sources of regional divergence, any effort to reduce regional imbalance must focus primarily on these two sectors.     

Branding Food Culture: UNESCO Creative Cities of Gastronomy

ABSTRACT

Although branding is a well-established practice in consumer goods marketing its application to intangibles is a relatively new activity. This article analyzes the co-branding between the United Nations and urban centers that are successful in becoming UNESCO Creative Cities of Gastronomy. Cities with this status have the potential to generate benefits from enhanced brand image, with associated economic and social rewards. However, it requires ongoing investment to create awareness among potential tourists and investors and in the development of enhanced pride and coordination among city residents and businesses. Numerous cities are likely to join the existing five UNESCO Creative Cities of Gastronomy over coming years as a result of efforts from UNESCO to raise its profile, alongside individual cities prioritizing food tourism in their economic development plans and increasing global importance of food security as evidenced by it being the theme for World Exposition being hosted by Italy in 2015.