International Growth Spillovers,Geography and Infrastructure

There is significant academic evidence that growth in one country has a positive impact on growth in neighbouring countries. This paper contributes to this literature by analysing the heterogeneous strength of growth spillovers across world regions and by investigating the contribution of transport and communication infrastructure to explain this heterogeneity and promote neighbourhood effects. By defining neighbourhood on the basis of membership of regional trade agreements, we focus on spillovers that work through regional integration and trade. The analysis finds significant evidence for heterogeneity in growth spillovers, which are strong between OECD countries and essentially absent in sub‐Saharan Africa (SSA). We further find strong interaction between infrastructure and being a landlocked country. This suggests that growth spillovers from regional ‘success stories’ in SSA and other lagging world regions will depend on first strengthening the channels through which such spillovers can spread – most importantly connective infrastructure such as transport and telecommunication links.     

Localized Technological Progress And Industry Structure: An Empirical Approach *

Modem innovation theory holds that the choice of production technique and technical porgress are unseparable activities so that technological progress can be described as localized. Based on this conception one has to expect an intra-sectoral firm heterogeneity in the production techniques applied and the technical efficiency achieved which contrasts to the presumption of intra-sectoral homogeneity as suggested by neoclassical theory. For measuring intra-industry heterogeneity an empirical tool is required which does not rest on the assumption of homogeneity, i.e. on a common production function for all firms under consideration. The method which does not require this assumption, Data Envelopment Analysis, is non-parametric, allows for firm-specific production functions and helps to determine differences in both technical efficiency and production technique applied. This tool is introduced in its basic formulation, its main features are discussed on ihe basis of modern innovation theory, and an empirical analysis for the German machinery, electronics and chemical industry is presented.     

Are universal banks bad for financial stability? Germany during the world financial crisis

This case study explores the contribution of universal banking to financial stability in Germany during the recent financial crisis. Germany is a prototype for universal banking and has suffered from a rather small number of banking crises in the past. We review the banking literature and analyze the major institutional and regulatory features of the German financial system to establish a nexus between universal banking and stability. We focus on the following questions. First, which banks failed and did they because they were universal or because of other reasons? Second, which types of distress beside outright bank failures resulted from the crisis and how did German universal banks dealt with them? We show that only few German banks failed and these banks did so not because they were universal banks but because they were publicly owned. Most banks instead contributed to reduce the impact of the recent crisis.     

On Critical Values of Tests against a Change in Persistence*

Kim, Belaire‐Franch and Amador [Journal of Econometrics (2002) Vol. 109, pp. 389–392] and Busetti and Taylor [Journal of Econometrics (2004) Vol. 123, pp. 33–66] present different percentiles for the same mean score test statistic. We find that the difference by a factor 0.6 is due to systematically different sample analogues. Furthermore, we clarify which sample versions of the mean‐exponential test statistic should be correctly used with which set of critical values. At the same time, we correct some of the limiting distributions found in the literature.     

The Use of Performance Appraisal Systems: Evidence from Dutch Establishment Data

Using Dutch data, we examine the characteristics of establishments that operate performance appraisal systems. Our estimates provide a couple of interesting results: (1) Multitasking and teamwork play a role in the use of performance appraisal systems. (2) While a shared corporate culture, the sharing of information, and a professional personnel management emerge as positive determinants, unions appear to play a negative role. (3) Employers fostering career development and promotion opportunities make greater use of performance appraisal. (4) Public sector affiliation plays a negative role.     

GENERALIZATION OF THE DYBVIG–INGERSOLL–ROSS THEOREM AND ASYMPTOTIC MINIMALITY

The long‐term limit of zero‐coupon rates with respect to the maturity does not always exist. In this case we use the limit superior and prove corresponding versions of the Dybvig–Ingersoll–Ross theorem, which says that long‐term spot and forward rates can never fall in an arbitrage‐free model. Extensions of popular interest rate models needing this generalization are presented. In addition, we discuss several definitions of arbitrage, prove asymptotic minimality of the limit superior of the spot rates, and illustrate our results by several continuous‐time short‐rate models.