Small-Scale Industry in the Asian-Pacific Region

Small-scale industry has been important in the successful development of many of the economies of East and Southeast Asia, both in cases like Japan, Korea and Taiwan where import-substitution preceeded and/or accompanied the manufactured exporting phase, and in Hang Kong, the only essentially laissez faire economy in the region. An important general characteristic of the small-scale sector, and one long commented upon in the Japanese case, is the prevalence of subcontracting relationships either with larger manufacturing firms or with traders. There is considerable evidence of economic efficiency in the sector, especially perhaps in the medium-size range. Although some types of policy support appear to have paid off well, others appear not to have, so it is clear that such support must be both well thought out and carefully implemented if it is to have the hoped-for result.     

Public sector health insurance trusts

Public sector associations have successfully developed and run employee health insurance pools for almost 30 years, providing members with savings and flexibility not available from commercial health insurance carriers. This article looks at the models, technical tools and governance philosophy that have contributed to their success in a very challenging business environment.     

Der prognostische Gehalt der Nachrichtenwert-Theorie

In this article, news value theory is reformulated in a way that allows for predicting the length of news stories by the news value of news factors, and by the news factors of single stories. From a part of a sample, the news value of news factors is determined, and the expected length of stories is calculated for another part of the sample. Calculated length is then compared with measured length. There is a correlation of r =.54 between theoretical and empirical values. Theoretical and methodological conclusions are drawn from the results of the various analytic steps.     

The informativeness of domestic and foreign investors’ stock trades: Evidence from the perfectly segmented Chinese market

This paper uses the perfect market segmentation setting in China's stock market to compare the information content of the stock trades of domestic and foreign investors. We study 76 firms that issue both A-shares (for domestic investors) and B-shares (for foreign investors) and compare the price discovery role of the two segmented markets in China. Before Feb 19, 2001, the A-share market led the B-share market in price discovery, as the signed volume and quote revision of the A-share market had strong predictive ability for B-share quote returns, but not vice versa. After Feb 19, 2001, because some domestic investors were allowed to invest in the B-share market, we find evidence for a reverse causality from the B-share to the A-share market. Nevertheless, the [Hasbrouck (1995). One security, many markets: determining the contributions to price discovery, Journal of Finance 50, 1175–1199.] information share analysis reveals that A-shares continue to dominate the price discovery process.     

Incomplete markets, labor supply and capital accumulation

Endogenous labor supply decisions are introduced in an equilibrium model of limited insurance against idiosyncratic shocks. Unlike in the standard case with exogenous labor (e.g. [Aiyagari, S.R., 1994. Uninsured idiosyncratic risk and aggregate saving. Quarterly Journal of Economics 109, 659-684; Huggett, M., 1997. The one-sector growth model with idiosyncratic shocks: steady states and dynamics. Journal of Monetary Economics 39, 385-403]), labor supply is likely to be lower than under complete markets. This is due to an ex post wealth effect on labor supply (rich productive agents work fewer hours) that runs counter the precautionary savings motive. As a result, equilibrium savings and output may be lower under incomplete markets. It is also found that long-run savings remain finite even when the interest rate equals the inverse of the discount factor.     

Investment in Africa's Manufacturing Sector: A Four Country Panel Data Analysis

Firm level data for the manufacturing sector in Africa, presented in this paper, shows very low levels of investment. The importance of profit effects on investment is investigated using a flexible accelerator, a specification based on the Euler equation and a simple generalisation of these specificiations. There are controls for firm fixed effects. It is shown that the profit effect is very similar for both the accelerator and Euler equation specifications. A comparison with other studies shows that, for small firms, the effect is much smaller in Africa than for other countries. Reasons for the relative insensitivity of investment to profits in African firms are suggested. For the most general specification tested there are no significant differences in the size of the profit effect across the four countries in the study.