The Unequal Effect of India's Industrial Liberalization on Firms’ Decision to Innovate: Do Business Conditions Matter?

Product‐market competition can boost industry growth if firms invest more in innovation. Using a natural policy experiment, the removal of India's License Raj, we show that firms in liberalized industries were 9% more likely to invest in R&D than firms in non‐liberalized industries. However, the impacts were not the same across firms of different size. After the reforms, firms in the top quartile were 23% more likely to invest in R&D than those in the lowest size quartile. Both productivity differences across firms and the heterogeneous impacts of business conditions on firms explain unequal effects of India's industrial liberalization reform.     

Stretching the Border: Shopping,Petty Trade and Everyday Life Experiences in the Polish–Ukrainian Borderland

This article examines the practices and experiences of Ukrainian border crossers who are engaged in informal small-scale economic practices, namely shopping and petty trade, at the Medyka border crossing in Poland. By examining the societal, network and territorial embeddedness of the economic activities of these border crossers, we aim to shed light on the practices and experiences that form part of their daily lives. For many, the presence of the state border has become a resource for shopping and petty trade. People share a common purpose of making the most of their border crossing; they work together to plan and coordinate, or improvise and semi-plan, in the borderland and beyond, to supplement their income or to make a living. As a result, daily life for these border crossers occurs on both sides of the state border, ‘stretching’ the border in both a mental and a physical sense, despite the controlled institutional demarcation between Poland and Ukraine.     

Bank Relationships and Private Firms’ Financial Reporting Quality

Private firms with relatively high (proprietary) costs of disclosure may benefit from a close relationship with a bank. Relationship lending is based on intertemporal contracting that assumes that the bank is able to acquire private information about the firm and, moreover, to keep this information private. For both reasons, we expect and find that private firms with fewer bank relationships exhibit lower levels of financial reporting quality. Controlling for many other factors, firms with a single bank relationship disclose their financial reports about 14 days later. The size of such firms’ financial reports is also smaller, containing approximately 8% fewer words than the median report. Firms with a single bank relationship also exhibit more earnings management, exceeding the median value of the three-year sum of absolute discretionary accruals by about 20%. The results are robust to different econometric specifications, including endogeneity concerns. They indicate that private firms choose to be opaque in the presence of fewer lending relationships.     

The Development of Inequality and Poverty in Indonesia, 1932–2008

We estimate inequality in Indonesia between 1932 and 2008. Inequality increased at the start of this period but declined sharply from the 1960s onwards. The increase was due to a shift from domestic to export agriculture over the period up to the Great Depression. During the 1930s, as the price of export crops declined, the income of rich farmers suffered a blow. Yet this was counterbalanced by an increasing gap between expenditures in the urban and rural sectors, causing an overall rise in inequality. As for the second half of the century, we find that the employment shift towards manufacturing and services—combined with an increase in labour productivity in agriculture—accounts for inequality’s decline, which was halted in the 1990s. These inequality trends affected poverty as well, but prior to the 1940s the negative impact of the rise in inequality was offset by an increase in per capita GDP. Between 1950 and 1980 a decline in inequality, combined with increased per capita GDP, rapidly raised a large portion of the population above the poverty line.     

New environmental policy instruments to realize forest expansion in Flanders (northern Belgium): A base for smart regulation?

This paper evaluates the current instrument mix, designs options for smart regulation and estimates the support base of new instruments for the forest expansion policy in Flanders (northern Belgium). The framework applied is a combination of theories on instrument choice (ICT), policy transfer and legitimacy. The ICT points out that there is a need for new environmental policy instruments (NEPI) oriented to private actors that inform them or create win–win situations for all involved parties. The need is especially high for farmers, who are key actors. The policy transfer analysis suggested instruments currently in use in the Netherlands, England and Denmark that can fulfill these needs. However, the acceptability – or legitimacy – of the suggested instruments in Flanders is only high for three of these, notably the carbon fund, flexible grant scheme and expert advice (especially by forest groups). This largely fills some smart regulation gaps, like the need for information (expert advice), the involvement of other institutional actors (certifiers, forest groups) and the higher involvement of the private sector (all). However, some gaps, such as flexible land purchase through cooperation with real estate agents or other private agents and opportunities for win–win outcomes with farmers, remain. Thus, it is not possible to fully optimize the instrument mix in accordance with the smart regulation requirements in Flanders’ forest expansion policy at this moment. However, as continuity or incremental change is characteristic of most public policy, this does not mean that the suggested changes will be impossible in the near future, especially with the changing character of the rural space.     

Technology Adoption,Export Status,and Skill Upgrading: Theory and Evidence

This paper develops a model of trade that features heterogeneous firms, technology choice and different types of skilled labor in a general equilibrium framework to explain within‐industry increase in the relative demand for skilled workers. Its main contribution is to investigate the impact of firms' export and technology choice decisions on skill upgrading. Only firms in the upper range of the productivity distribution produce for the foreign market using high‐technology. Since this technology is skilled‐biased, exporters that resort to modern technologies are more skill intensive. Empirical evidence is also provided to support the model's main predictions using plant‐level panel data from Chile's manufacturing sector (1990–1999).     

Persistent but not consistent: The growth of national income in Holland 1347–1807

In this paper we construct a detailed dataset of the national accounts of Holland (1347–1807). Using this dataset, we demonstrate that this economy was characterized by persistent economic growth caused by, depending on the period, structural change (share of industry and services in the economy increases), technological development, and factor substitution. During the entire period GDP per capita increased by on average 0.19% per year. This persistent growth, however, was highly unstable due largely to the importance of international services in the economy.