Reliable Estimates of Sovereign Rating

International Advances in Economic Research -     

Comparative Analysis of Thresholds of Non-Revolutionary Institutional Change: China and the United States in the 1980s

Ireland has experienced a series of interlocking banking, fiscal, unemployment, and political crises since 2007. We detail the challenges involved in modeling individual moments of the crisis through the lens of balance sheets and transactions matrices among sectors of the Irish society. We conclude with a series of recommendations for models of small open economies.     

Selling banks is the same as selling soap: Applying fast-moving consumer goods best marketing practices to the banking industry in Central and Eastern Europe

Attempts to market financial services as fast-moving consumer goods products are rather rare in the traditional banking industry. eBanka, a small retail and SME bank in the Czech Republic, applied the FMCG marketing approach with great success. Long-time FMCG marketer, Petr Pistelak, explains the basic principles of FMCG marketing and shows how they were applied to triple the revenue of a small bank in less than three years, while bringing the once struggling bank into profitability.     

Cross-national product value perceptions

Can a psychographic variable, i.e., a value perception of a product, be successfully compared across national boundaries? Using students in four countries, the authors tested for similarity in a two-stage process. Value perception was tested by comparing samples using only the owners of the products first, and then using only the nonowners. Similarities were found that bridge national borders. These similarities are evident where the respondents sampled are owners of the base products or have a high degree of market knowledge regarding these products.     

The international diffusion of biotechnology: the arrival of developing countries

According to conventional economic theory, countries tend to converge in economic and technological terms towards the leader. More recently, empirical approaches by economic historians (Abramovitz, Landes, Madison, Reinert) have found that while some countries are catching up, others are falling increasingly behind. Several theories compete to explain the precise mechanisms that explain how technological diffusion takes place. The paper reviews them and draws testable hypotheses for the study of international biotechnology diffusion. Biotechnologies are one of the leading sets of technologies developed in the late 20th century. They encompass applications in agriculture, chemicals, environment and pharmaceuticals. The United States has led the way in both scientific and industrial development of biotechnologies and these have quickly spread to Canada, Japan and Western Europe. Are the main developing countries adopting biotechnology? A study of the adoption of human health biotechnology in eight developing countries in Asia (China, India, Korea, and Singapore) and Latin America (Argentina, Brazil, Chile and Mexico) was conducted, based on the analysis of in situ interviews, patents and scientific publication. The study shows a marked process of adoption and learning in science: each of the above-mentioned developing countries is increasing its share of world publication between 1996 and 2008. However, their share of biotechnology patents for the same period has barely increased. There are also regional differences in terms of sectoral concentration; Latin America, Argentina and Brazil are eager adopters of agricultural biotechnology and are moving up in the pharmaceutical records. Several Argentinean, Chinese, Indian, and South Korean pharmaceutical companies have been particularly active in the development of biogenerics.     

Profit-shifting from Czech multinational companies to European tax havens

Although tax havens have been affecting other countries for decades, only in recent years have the associated challenges been subject to intensive scrutiny in both research and policy areas. We contribute to the growing evidence of corporate tax base erosion and profit-shifting by testing multinational companies’ ownership links to individual tax havens rather than to groups of them, as is the case with most previous research. Our company-level analysis suggests that profit shifts through debt financing from the Czech Republic to Luxembourg, Switzerland and, to a lesser extent, the Netherlands. We have ascertained that tax havens are not limited to tiny islands and may actually be found among European countries. We also provide rough estimates of the impact of this profit-shifting on tax revenues as well as a policy recommendation.     

Testing for Bubbles in Housing Markets: A Panel Data Approach

We employ recently developed cross-sectionally robust panel data tests for unit roots and cointegration to find whether house prices reflect house related earnings. We use U.S. data for Metropolitan Statistical Areas, with house price measured by the weighted-repeated-sales index and cash-flows by market tenants’ rents. In our full sample period, an error-correction model is not appropriate, i.e. there is a bubble. We then combine overlapping 10-year periods, price–rent ratios, and the panel data tests to construct a bubble indicator. The indicator is high for the late 1980s, early 1990s and since the late 1990s. Finally, evidence based on panel data Granger causality tests suggests that house price changes are helpful in predicting changes in rents and vice versa. CERGE-EI is a joint workplace of the Center for Economic Research and Graduate Education, Charles University, and the Economics Institute of the Academy of Sciences of the Czech Republic.