Do Changes in Democracy Affect the Political Budget Cycle? Evidence from Mexico

The previous empirical literature in opportunistic election cycles attempts to identify whether there is a significant impact of the election calendar on economic policy. The econometric analysis implemented in this paper goes a step further, seeking to test whether a country's time-varying degree of democracy affects the way in which economic policy is chosen as elections approach. A simple econometric model is estimated for the case of Mexico's fiscal policy between 1957 and 1997. The estimation reveals the government's strong systematic use of public spending in infrastructure and current transfers as a means to earn votes. Most importantly, we show that the magnitude of the election cycle has been exacerbated during the country's most democratic episodes.     

Business Ethics in The Philippines

The plurality of languages and ethnicities, the geographic fragmentation, the predominant Roman Catholic religion, together with the still relatively short experience in nationhood account for a very peculiar understanding of "business ethics" in the Philippines. The rapid growth and liberalization of the economy, coupled with the inequitable distribution of wealth, the destruction of the environment and corruption are the main ethical concerns. Businesspersons and the academe endeavor to find creative solutions for these unique challenges.     

Assessing impact of regulatory risk on shareholders’ wealth

Research indicates that regulatory risk increases required return on investment by investors and causes underinvestment in industries with high sunk costs. The effects of regulatory changes may be measured by estimating the abnormal returns associated with the event. The results may suggest to regulators what should be encouraged or avoided. This article utilizes a fixed effects regression to examine abnormal returns from changes in Philippine nationalization regulations. The results are consistent with extant literature. Supreme Court decisions, which increased uncertainty and regulatory risk, produced negative abnormal returns. The initial release of draft implementing rules did not produce statistically significant effects, but a succeeding draft favouring liberalization, produced positive abnormal returns.     

Globalization, industrialization and urbanization in Pre-World War II Southeast Asia

This article uses new data to analyze the impact on Southeast Asian urbanization of globalization and industrialization in the world economy's core countries between the 1870s and World War II. Dramatic falls in transport costs and free trade, enforced, if necessary, by colonial rule, combined to open vast frontier areas throughout Southeast Asia to global commerce and create a handful of large urban centres. These cities, through linking Southeast Asian primary commodity exporters to world markets, grew predominantly as part of the global economy. Our econometric analysis shows that measures of globalization — in particular industrial production in the world core and international transport costs — are much better predictors of the size of Southeast Asia's main cities than domestic factors such as total population, GDP per capita, land area or government expenditure.     

Temporary contracts and young women in Spain

In this article we analyse the determinants of temporary employment through a balanced panel of workers from 1995 to 2000. First, we estimate a panel with 1267 individuals with ages ranging from 16 to 65 years. We obtain that the probability of having a temporary contract increases for people younger than 46 years old. Secondly, we estimate separately the sample of people younger than 46 years old and we obtain that the probability of temporality increases for young people with university level of education. More interestedly, the probability of being in a temporary contract is smaller for young women that for young men in Spain.     

Performance of Ethical Mutual Funds in Spain: Sacrifice or Premium?

There is currently much debate in the economic literature about whether ethical investment involves a financial sacrifice or premium. One of the most common methods of testing this compares the financial performance of ethical investment funds with that of other funds not considered “socially responsible” or ethical. The majority of these research studies evaluate the performance of the ethical funds according to classic measures, whereby different financial markets, in different countries and for different periods of time serve as reference for evaluation. The ultimate conclusion of all of these studies is that there are no significant differences between the performance results of one type of funds and the other. In Spain, ethical investment funds are still an incipient sector of investment. To date, the Spanish market has not been included in any type of analysis of these characteristics. Therefore the main objective of this article is to compare the financial performance of ethical investment funds to that of other funds in the Spanish retail market. We propose the aggregate type of analysis as the Spanish ethical investment funds have experienced a weaker development in comparison to those of other developed countries. In the first step we suggest the financial performance to be compared by style analysis since the asset distribution of the Spanish Social Return Investment (SRI) funds differs from the European trend. In particular, we use the multifactor regression model with style benchmarks. We found that their financial performance is in all cases superior or similar to that achieved by the rest of the funds. In the second step, to achieve a more robust and homogeneous comparison, we used the bootstrap method, comparing ethical and non-ethical fund subsamples by homogeneous groups. No significant differences between these two types of funds have been found. Thus, if we assume the positive o neutral effect of ethical investment on investor utility in the retail Spanish market the financial and social performance (FSP) of ethical funds will be, in aggregate, superior to the FSP achieved by conventional funds. In conclusion, the financial performance of ethical mutual funds in Spain is no sacrifice.     

Market efficiency in the Spanish derivatives markets: An empirical analysis

This paper analyzes Granger caUSAlity between daily prices of the Spanish stock index (Ibex 35) and its futures contract using Johansen cointegration methodology. The study differentiates between short-run and long-run caUSAlity. The empirical results prove that, in the short run, the futures price causes the spot price. However, the opposite is not true. On the other hand, long-run caUSAlity is embodied in the response of futures prices after deviations from the long-run equilibrium. These results say that during the period of study, the Spanish futures market behaved as an efficient market.     

SOCIOECONOMIC STATUS MEASUREMENT WITH DISCRETE PROXY VARIABLES: IS PRINCIPAL COMPONENT ANALYSIS A RELIABLE ANSWER?

The last several years have seen a growth in the number of publications in economics that use principal component analysis (PCA) in the area of welfare studies. This paper explores the ways discrete data can be incorporated into PCA. The effects of discreteness of the observed variables on the PCA are reviewed. The statistical properties of the popular Filmer and Pritchett (2001 ) procedure are analyzed. The concepts of polychoric and polyserial correlations are introduced with appropriate references to the existing literature demonstrating their statistical properties. A large simulation study is carried out to compare various implementations of discrete data PCA. The simulation results show that the currently used method of running PCA on a set of dummy variables as proposed by Filmer and Pritchett (2001 ) can be improved upon by using procedures appropriate for discrete data, such as retaining the ordinal variables without breaking them into a set of dummy variables or using polychoric correlations. An empirical example using Bangladesh 2000 Demographic and Health Survey data helps in explaining the differences between procedures.     

Sequential coding of maternal sensitivity: application of nonlinear dynamic analyses and reliability

Quality & Quantity - In infant development, maternal sensitivity is a central construct in the study of the processes involved in the caregiver-infant relationship and child attachment. The...     

The great divergence and the economics of printing†

While China's invention of printing took place several centuries ahead of Europe's, it was in Europe where the more advanced printing technology of movable type took hold and where book production reached far higher levels. This article explores the extent to which China's complex logographic writing system explains these different outcomes. Using an economic analysis, I show how China's preference for block printing technology over movable type can be justified as the rational choice of commercial producers. In addition to this, model simulations also predict that movable type would be used in China under some specific circumstances which closely match the historical record. On the other hand, the use of block printing would not have led to larger printing costs in China, and as such should not be regarded as the reason behind China's modest level of book production when compared to Europe's.