Making unilateral trade liberalisation beneficial to the poor

In this paper, we investigate the impacts of unilateral import liberalisation by a representative South Asian developing economy, Nepal, and demonstrate those conditions required to make the impacts ‘pro-poor.’ Applying the Computable General Equilibrium model to Social Accounting Matrix data, we conclude that import liberalisation is growth-enhancing but that, unfortunately, the rich benefit more than do the poor. We envisage a restructured but plausible model economy that requires a transformational period of ten years, and simulate unilateral trade liberalisation but, in the context of a dynamic model. We conclude that improvement in efficiency parameters, reorganisation of investment patterns, along with reallocation of factors of production by both household group and activity type are required to make growth accrued by import liberalisation ‘pro-poor’ in developing economies such as that of Nepal.     

Trade liberalisation and inequalities in Nepal: A CGE analysis

In this paper we examine the effects of trade liberalisation on inequality in the small developing country of Nepal. We use a Computable General Equilibrium approach applied to a newly developed social accounting matrix, simulating three liberalisation scenarios: (i) import liberalisation; (ii) export liberalisation; and (iii) import and export liberalisations implemented together under different exchange rate regimes. Outcomes reveal that industry reallocation following liberalisation does not respond to classical trade theory expectations about factor intensity and abundance. On the distributive side, liberalisation seems to increase the high-skilled/low-skilled gap and favour rich households relatively more. However, since under fixed exchange rate also the two poorest household groups increase their income levels, liberalisation may also expected to be beneficial for poverty alleviation.     

Commentary: A proposal for theoretical models of stakeholder perceptions of a new financial reporting system

This commentary explores the article by Fontes et al. published in this issue of Accounting Forum. They argue that the scope of IFRS continues to widen across the world, using a number of social science disciplines to discuss stakeholder perceptions of change. The commentary uses Hegel's Science of Logic to situate their arguments through four key theoretical approaches that are prominent in the accounting literature. Ultimately, this has the potential to position IASB frameworks in such a way as to challenge the economic and neoliberal logic on which modern accounting is based.     

The emergence of Third World multinationals: Indian joint ventures overseas

The more industrialized LDCs are emerging increasingly as exporters of capital (or of technology in several forms). This paper draws on the recent experience of Indian MNCs to reexamine the factors which give rise to Third World multinationals. The author summarizes the current state of research in the analysis of LDCs MNCs, drawing upon specific MNC literature and other related literature on trade and technology. He deals with the evidence on Indian capital exports, placing it in the broader context of technology exports, discussing some examples of interest and drawing comparisons with foreign investment by some other LDCs. He assesses the Indian experience, using the distinctions drawn by Dunning's ‘eclectic’ theory but concentrating on the processes of technical change that underline the growth of its MNCs. The final section draws some tentative conclusions.     

Fulfilling the Export Potential of Small and Medium Firms. Edited by Brian Levy,Albert Berry and Jeffrey B. Nugent. Boston: Kluwer Academic Publishers, 1999.

Small Business Economics -     

Dissemination and institutionalization of public sector accounting reforms in less developed countries: A comparative study of the Nepalese and Sri Lankan central governments

One of the major issues in the developing world today is the alleviation of poverty and it is acknowledged that public sector accounting has a key role to play in this through the effective allocation of resources. Implementing public sector accounting changes in developing nations has been a key agenda of international organizations since the 1980s. This study, drawing on the ideas of new institutionalism, strives to explore the implementation of public sector accounting reforms in two less developed countries (LDCs), namely Nepal and Sri Lanka. The empirical findings of the study demonstrate that, while internationally propagated public sector accounting reform ideas have not gone beyond the trial/proposal stage in Nepal, colonialism has bequeathed on Sri Lanka the promotion of accounting education and training, enabling the country to implement some of these reform ideas. However, increasing resistance to accounting changes at the lower administrative level, witnessed in both countries, indicates a need to understand the contexts of LDCs and to fulfil basic preconditions prior to disseminating/embarking on reforms there.     

Potential impacts of the devaluation of Nepalese currency: A general equilibrium approach

This paper measures the potential impacts of the devaluation of domestic currency of the small, developing, landlocked and transition South Asian economy of Nepal, which is lagging behind in policy studies. The impacts on growth, distribution, price changes in factor and product markets, and on selected macroeconomic features are measured. Using a computable general equilibrium model applied to social accounting matrix data, we conclude that devaluation is expansionary but mostly benefits the rich, thus leading to a more uneven income distribution. In general, the expansion of economic activities occurs in agricultural and industrial sectors, whereas services activities contract. However, when the rate of devaluation is high, the agricultural sector also starts contracting. To this typical developing economy, devaluation causes an improvement in saving investment and export/import ratios, whereas the budget deficit widens.     

External and internal influences on R&D alliance formation: Evidence from German SMEs

Relying on relational capital theory and transaction cost economics (TCE), this study identifies factors that impede or promote alliance formation in small to medium-sized enterprises (SMEs). Environmental uncertainty and knowledge intensity impede firms' R&D alliance formation; the focal firm's overall trust in partners enhances alliance formation. Trust interacts positively with environmental uncertainty and knowledge intensity to affect alliance formation in SMEs. The findings reflect data from a longitudinal sample of 854 German SMEs, captured over eight years from 1999 to 2007.