Credit conditions and recoveries from financial crises

Recoveries from recessions associated with a financial crisis tend to be sluggish. In this paper, we present evidence that stressed credit conditions are an important factor constraining the pace of recovery. In particular, using industry-level data, we find that industries relying more on external finance grow more slowly than other industries during recoveries from recessions associated with financial crises. Additional tests, based on establishment size, on alternative definitions of financial crises, and on corporate-government interest rate spreads, support the findings. Moreover, for subsets of industries where financial frictions are more severe, we find much stronger differential growth effects.     

Does women’s participation in agricultural technology adoption decisions affect the adoption of climate‐smart agriculture? Insights from Indo‐Gangetic Plains of India

Increased participation of women in the agricultural technology adoption decision by farm households is one of the key indicators of gender empowerment in the agricultural sector. This study examines whether women’s participation in the household decision to adopt agricultural technology affects the adoption of climate‐smart agriculture (CSA), using data collected from 1,267 farm households from two Indian states of Bihar and Haryana. When we considered the sex of the household head (using a dummy variable for male‐headed vs female‐headed household) as a basis of analyzing the role of gender in the adoption of CSA, we found that women in Haryana had no role in the adoption of CSA. On the contrary, when we considered women’s participation in technology adoption decisions as a basis of gender analysis, we found that women’s participation in technology adoption decisions in Haryana is much higher as compared to Bihar. Consequently, the likelihood to adopt CSA is higher in Haryana than in Bihar. We also found that wealth, training, and access to extension and market positively influenced CSA adoption. Qualitative analysis shows that women farmers prioritize family food security rather than farm income, and therefore, they are more likely to focus on CSA to ensure food security.     

The effects of festival impacts on support intentions based on residents’ ratings of festival performance and satisfaction: a new integrative approach

Festivals can provide an effective vehicle for sustainable tourism. It is therefore necessary to examine the impacts of festival tourism as well as their consequences in order to manage their relevance to the local community. The lack of a multiple mediation approach, however, has hampered research on the psycho-social process through which festival impacts (perceived benefits, costs, and affective impact) influence resident support. We propose a new integrative approach in which resident-rated festival performance and satisfaction are putative mediators that transmit the effects of the three festival impacts to support for future festivals. The theoretical foundations of this integrative approach or model are jointly built on social exchange theory, the affective theory of social exchange, and the theory of reasoned action. The integrative model was successfully validated using eight sample festivals within China, which included 353 observations with 10,000 bootstraps. The empirical findings reveal that 14 out of the 17 hypotheses received empirical support in this study, and it thereby contributes significantly to new understanding in the literature.     

The nutrition transition to 2030. Why developing countries are likely to bear the major burden

Considerable increases in food consumption, shifts in consumption patterns and changes in the entire food system have occurred globally. These changes, initially limited to the industrialized world, are now being experienced at an even faster pace in many of the advanced economies of the developing world. The past evolution of this transition in nutrition and lifestyles is by now well documented. Based on FAO's outlook for global food and agriculture, this paper outlines the likely future changes in food consumption patterns and the global trajectory of the nutrition transition over the next 30 years. It presents the main drivers of the nutrition transition and examines their influence on the prospective changes in consumption patterns. The paper illustrates how the current burden of undernourishment and malnutrition in developing countries is likely to compound the adverse effects of the nutrition transition, notably the increasing prevalence of obesity and non-communicable diseases (NCDs); it shows how and where the current problem of undernutrition could create a growing future burden of overweight, obesity and NCDs and that both undernourishment and overnutrition are likely to co-exist for a long time in the vast majority of developing countries, creating a widespread double burden of malnutrition.     

INTEGRATING RISK MANAGEMENT AND CAPITAL MANAGEMENT

Capital management and risk management are two sides of the same coin. But by treating them separately, the conventional theory and practice of corporate finance fails to account for important connections between them. Moreover, an exclusive focus on debt and equity ignores the full range of capital resources available to a corporation, thus distorting management's view of the firm's cost of capital (and its return on equity).
An understanding of the role of corporate capital–including off-balance sheet as well as paid-up capital—and its relationship to the riskiness of a firm's activities provides the foundation on which the author builds a corporate finance framework that ties together both the insurance and capital markets. This framework, called the "Insurative Model," captures the economics of both conventional insurance and corporate finance instruments and embraces a wide variety of solutions and instruments—be they debt, equity, insurance, derivative, contingent capital, or any other—and allows managers to evaluate their effectiveness in a consistent, unified way.
The Insurative Model demonstrates that a company's decisions on insurance and risk retention can be just as important as its decisions about its debt-equity mix. In fact, the determination of a firm's optimal debt-equity ratio should be the last in a series of capital and risk management decisions. Earlier decisions should address risk retention, risk transfer, and the optimal amounts and structure of off-balance-sheet capital used to support the company's retained risks.     

The Anatomy of a Socially Responsible Corporation

Prior research treats corporate social responsibility (CSR) as a unitary construct. Using principal component analysis, we show that CSR activities can be divided into two types: responsive CSR (RCSR), which includes initiatives that address specific concerns caused by firm activity, and adaptive CSR (ACSR), which are initiatives that anticipate concerns before they arise. We find that responsive motives are roughly three times more dominant than adaptive motives. Larger firms, older firms, and more diversified firms invest more in RCSR while younger firms and more focused firms tend to invest more in ACSR.     

The use of organized commodity markets to manage food import price instability and risk

The article explores the possibility of insuring the price risks of wheat and maize imports of low‐income food‐deficit countries (LIFDCs). Optimal strategies for an importing agent, who hedges with futures and options are derived, based on the objective of minimizing the unpredictability of import bills. Ex post simulations for a set of LIFDCs are run on wheat and maize imports hedged with futures and options in the Chicago Board of Trade, to explore the extent to which hedging reduces the unpredictability in import bills. Simulations encompass both periods of normal price behavior, as well as the period of global upheaval that occurred in 2007 and 2008. Results show that hedging with futures alone affords agents considerable opportunities for reducing import cost unpredictability, and the same holds with options, albeit, to a lesser extent. However, during the recent price spike of 2007–2008, hedging with options would have increased the unpredictability of some countries’ maize import bills, due to the combination of erratic import patterns and pronounced market uncertainty.