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.     

Developing Decentralized Capacity for Development Policy Analysis: Lessons for Agricultural Development from Food Security and Nutrition Monitoring in Malawi*

Abstract: Lack of sufficient analytical capacity in most of the developing countries in sub-Saharan Africa has been suggested frequently as a major factor determining the appropriateness of development policy interventions. This paper documents an approach implemented in Malawi for the past three years to develop decentralized capacity to analyze development policies and programs. A conceptual framework for identifying the areas of capacity strengthening in development policy analysis is developed. Generalizable lessons from Malawi's experience in decentralized capacity strengthening arc presented. Various issues that relate to enhancing the efficiency of capacity building programmes in sub-Saharan African are addressed. It is argued that continuous dialogue between development researchers and policy decisionmakers and between the trainers in academic institutions and donor agencies is fundamental for achieving the goals of improved capacity for development policy analysis. Résumé: On avance souvent que l'absence de capacité d'analyse suffisante dans la plupart des pays en développcment d'Afrique subsaharienne constitue l'un des facteurs qui conditionne l'opportunité des interventions en matière de politique de développement. Ce document présente unc approche mise en ocuvre au Malawi au cours des trois dernières années en vuc de développer la capacité décentralisée à analyser les politiques et programmes de développement. Il met au point un cadre conceptuel pour l'identification des domaines nécessitant un appui institutionnel au niveau de 1'analysc des politiques de développement. Des leçons susceptibles d'être généralisées sont tirées de l'expérience du Malawi en matière de renforcement de la capacité décentralisée. Diverses questions ayant trait à l'amélioration de l'efficacité des programmes de renforcement des capacités en Afrique subsaharienne sont abordées. Il est avancé que le dialogue permanent entre chercheurs s'intéressant au développcment et décideurs, et entre formateurs des institutions académiques et organismes d'aide est essentielle pour atteindrc l'objectif d'amélioration de la capacité d'analyse des politiques de développement.     

Opening prices on the New York Stock Exchange

The prices of opening transactions on the New York Stock Exchange are determined quite differently from prices of subsequent transactions. This paper tests the null hypothesis that opening prices are as representative of contemporaneous equilibrium stock values as subsequent intra-day transactions prices. With one possible exception, there is no basis for rejecting this hypothesis, despite the very different trading mechanisms used in opening trades and intra-day trades.     

An Investigation of Stock Price Declines Following Corporate Financing Events: Further Evidence

Prior research documents a large downward drift in stock prices following issuances of debt and equity by US firms. We conduct tests based on both stock price and trading volume to provide evidence on the reasons for this apparent market anomaly. We document evidence of earnings management through accruals prior to external financing and lower operating performance afterward that is associated with the amount of capital raised. The earnings management that precedes external financing and the amount of capital raised are associated with both the post-financing decline in stock price and trading volume around earnings announcements that follow for a period of three years. This evidence is consistent with the proposition that firms raise external capital prior to predictable declines in their operating performance and they release upward biased earnings before these events to manage investor expectations. The failure of many investors to incorporate this information into their trading decisions in a timely manner consistent with limited attention and over-confidence appears to drive stock mispricing. Our evidence does not support the conjecture that the financing anomaly is primarily a statistical artifact or that it is a manifestation of the accrual anomaly.     

Multiproduct firms and antidumping duties: Evidence from India

ABSTRACT

With the growing availability of high-quality higher-dimension data in international trade, many new stylized facts have also emerged. One such stylized fact is that multiproduct firms play a significant role in international trade. In this paper, we investigate the effect of US antidumping duties on the exports of Indian multiproduct firms. In particular, we study whether US antidumping duties lead the Indian exporter to alter their product-scope to third country markets (aka to trade partners other than the US). Using a unique transaction-level data from India, we find that firms affected by US antidumping duties increased the number of products exported to other destinations by about 0.7 products, on average. This translates to a substantial 40% increase in the product-scope of these firms because a typical Indian exporting firm exported an average of 1.8 products to a given destination in our sample. We also find that firms whose products spanned multiple sectors drove most of this increase. However, we do not find any difference in the product-scope response of firms producing differentiated vs. those producing homogenous products. We find our results to be robust across various specification and sample size changes.     

世界LPG市场分析及预测

1985－2000年，世界LPG（液化石油气）需求迅速增长，2000年，苏伊士运河以东地区从长期的净出口地区变为净进口，而且这种状况将持续到2005年，预计到2005年，亚洲LPG总需求量将达到近7000万吨，亚洲将超过北美，成为LPG需求量最大的地区。随着亚洲地区LPG需求的增加和中东地区出口的减少，西非和阿尔及利亚LPG供应量的增加将弥补亚洲地区的供应短缺。从LPG的终端消费变化来看，民用方面增长量大的地区将是印度和中国，化工需求的增长主要出现在中东和西欧，而而受环保因素的强大推动，汽车燃料对LPG的利用将在中东、非洲、原苏联和东欧地区以年均6％以上的速度增长。据估计，到2005年，世界LPG需求将接近2．37亿吨，而总产量为2．37亿吨，供需基本平衡。