Why did the terms of payment in international trade change so much?

This article examines factors contributing to the substantial change in the terms of payment, such as letter of credit (LC) and cash terms, in Korean export transactions during the period 1997–2015, using the Autoregressive Distributed Lag bounds test approach. We find that high competition in the world market, the expansion of exports of information technology products and intra-firm trade, and the improvement of information and communication technology (ICT) decrease the share of exports on LC terms in total exports in the long run. However, the increase in exports to developing countries raises the use of LC terms. On the other hand, the increase in intra-firm trade and ICT improvement raise the share of exports settled in cash, and higher trust between trading partners increases the use of cash terms.     

Why do people drink? Tests of the rational addiction model

The rational addiction (RA) model applied to alcoho consumption is tested using 1983 US Health Interview Survey data. The RA model yields refutable hypotheses concerning effects of current, past, and future prices, past and future consumption, time preference and marginal utility of wealth on addictive good consumption. The estimations provide relatively strong support for the RA model. Past and present consumption had strong positive relationship with current consumption. Coefficients on past, present, and future money prices and fines for first oflence drunk driving (as a form of price for alcohol consumption) were significant and of the predical sign.     

Using or hiding private information? An experimental study of zero-sum repeated games with incomplete information

This paper studies the value of private information in strictly competitive interactions in which there is a trade-off between (i) the short-run gain of using information, and (ii) the long-run gain of concealing it. We implement simple examples from the class of zero-sum repeated games with incomplete information. While the empirical value of information does not always coincide with the theoretical prediction, the qualitative properties of the value of information are satisfied in the laboratory: (i) it is never negative, (ii) it decreases with the number of repetitions, (iii) it is bounded below by the value of the infinitely repeated game, and (iv) it is bounded above by the value of the one-shot game. In line with the theory, the empirical use of private information is almost complete when it should be, and decreases in longer interactions.     

Why do People Care about Sea Lions? A Fishing Game to Study the Value of Endangered Species

Previous research proposes that human beings are motivated to protect endangered species for various reasons: consumptive use value, non-consumptive use value, non-use value, and intrinsic value. However, it has been difficult to tease apart these values at the behavioral level. Using an innovative fishing game, we study an important tradeoff between one kind of use value (monetary value) and one kind of non-use value (existence value) of the endangered Steller sea lion. In the fishing game, players make repeated decisions on how much pollock to harvest for profit in each period in a dynamic ecosystem. The population of the endangered sea lion depends on the population of pollock, which in turn depends on the harvesting behavior of humans. The data show that in general, people responded to the financial value (as a tourist resource), but not the existence value, of the sea lion by cutting down commercial fish harvesting to keep more sea lions in the ecosystem. However, not all people behaved the same regarding the existence value. Females displayed a higher existence value than males, as did people who reported stronger pro-environmental attitudes than those with weaker pro-environmental attitudes. Our findings have multiple implications on public opinion elicitation and public policy design.     

Why do regulators regulate? The case of the southern California gas market

Cross-subsidies often accompany entry regulation. Because cross-subsidies may be efficient or inefficient, they make it harder to find out whether regulation is motivated by public interest or public choice considerations. This paper uses case study methods to illuminate the motives and intentions of California state regulators in a battle over bypass of state-regulated gas utilities during the 1980s. Detailed study reveals that wealth redistribution, rather than economic efficiency, dominated regulators' motives.The author would like to thank John Baden, Robert Bradley, Charles Rowley, several anonymous referees, and participants in the Center for Market Processes colloquium for helpful comments; Mike McDonald, Lisa Johnson, Gary Shiu, Bob Baldini, and Don Dempsey for research assistance; and the Center for Market Processes for financial support.     

Learning through games? Evaluating the learning effect of a policy exercise on European climate policy

One of the arguments for the use of simulation-gaming approaches in policy appraisal has consistently been their potential to stimulate learning. Yet few studies seek to ascertain the learning effects of these methods in a systematic manner; on the whole, participants' learning from interactive appraisal processes remains both under-conceptualised and under-evaluated. This paper seeks to contribute to filling this gap by developing a typology of learning effects (cognitive, relational, and normative) that can be expected from policy games. We subsequently present a set of tools for measuring them and test our approach on the case of a policy exercise on burden sharing in future European climate policy involving policy-makers and experts.On the basis of our measurements, we found limited evidence for learning from the policy exercise, mostly in the cognitive and the relational domain. In this context, the use of concept maps is an interesting methodological innovation. Employed as pre- and post-measurements, they proved a useful tool for tracing conceptual change through the exercise among participants. The paper concludes with a plea for more systematic assessment of the learning effects of interactive appraisal exercises, with a view to enabling a deeper discussion on the benefits and limitations of these methods.     

Development pattern of the industry form in mountains area： a case study of the Three Gorges Reservoir area

The mountainous areas （mountain, plateau and hilly area ） cover than 85% of total land territory of China.Nature and humanity in very mountainous ares has its own geographic characteristics.In the process of industrialization and urbanization in China, realizing the sustainable development of the mouniainous areas, optimizing man-land system, and adopting and continuously developing corresponding economic modes of the mountainous areas with multi-functions of economy, ecalogy, culture and society to chararacterize production content, mode of production. mode of operation is not only helpful to econonty, society and ecological value and is of great aesthetic value,but also solve the technological problems of the subject of starting undertaking to finally transform the regional resource advantage of the mountainous area into the advantage of capital and technology for economic development and to get rid of the contradiction between underdeveloped economy and abundant resources. This paper takes the Three Gorges Reservoir（TGR） area for example to show that it＇s of great practical and theoretical significance ,regional distribution,variety structure and quality structure.     

How do dimensions of proximity relate to the outcomes of collaboration? A survey of knowledge-intensive networks in the Dutch water sector

There is a growing body of literature on the importance of proximity for innovation and other knowledge-related outcomes. We examine the impact of geographical, social, organisational, and cognitive proximity for a heterogeneous population, including people from academia, knowledge institutes, industry, and government. We analyse data on 1020 ego–alter relationships, derived from a survey among water professionals in the Netherlands. The use of survey data allows for more refined indicators of proximity and more diverse collaboration outcomes than those common in the literature. Social and cognitive proximity have a positive effect for all outcomes examined. Geographical and organisational proximity have a negative effect on hard (tangible) outcomes yet a weak positive (if any) effect on soft (intangible) outcomes. We do not find evidence for the suggestions in the conceptual literature that proximity follows an inverted U-curve where most outcomes are achieved in relations with some but not too much proximity.     

Drinking under communism: Why do alcohol consumption habits in Eastern Europe differ from the west in the long-run?

This paper looks into possible explanations for differences between Eastern and Western Europe alcohol consumption behaviour even twenty years after the collapse of the Soviet regime. It suggests these differences can be viewed as an expression of cultural habits. We explore different ways of defining exposure to the communist regime: using number of years a person spent under the regime and also a dummy indicator for spending formative years (18–25) in it. We find both to be strong factors in explaining alcohol consumption behaviour. We consider differences in frequency of alcohol consumption and binge drinking using European Health Interview Survey (EHIS) micro data from Eurostat. Estimations are run with ordered probit model for men and women separately. Evidence suggests a statistically significant effect of experiencing communist regimes, which is larger for women's alcohol consumption frequency than for men's. It is also the most important factor in explaining more frequent male binge drinking. These effects hold after controlling for socio-economic, country level and time characteristics. This suggests the attitudes towards alcohol consumption could be more permissive in the Eastern Bloc countries.     

Is attack the best form of defence? A competing risks analysis of acquisition activity in the UK

The primary purpose of this paper is to investigate whethercompanies can use acquisition as a strategy to reduce theirlikelihood of take-over. The determinants of making an acquisitionand being taken over are modelled for the first time withina competing risks framework using two large samples of UK manufacturingcompanies which together cover most of the post-World War IIperiod up to 1990. Our results indicate that, ceteris paribus,companies which make acquisitions can significantly reduce theirconditional probability of being taken over by around one-third,largely through the impact that acquisition has on corporatesize. In this sense, attack, through acquisition, is the bestform of defence against take-over.     

Does it really pay to do better? Exploring the financial effects of changes in CSR ratings

Previous literature on the link between corporate social responsibility (CSR) and financial performance has focused mainly on the financial implications of a firm’s level of CSR without considering the potential effects on financial performance of variations in CSR rating. We try to fill this gap by studying whether variations in a firm’s CSR rating affect systematic risk, firm value, and portfolio performance. First, our results show that an increase in firms’ CSR efforts, as reflected by an increase in their CSR ratings, significantly reduces systematic risk. Second, a positive variation in CSR ratings significantly improves firm value. Finally, from a portfolio perspective, a strategy that consists of buying stocks that have experienced a CSR ratings increase and selling stocks that have experienced a CSR ratings decrease (or remain stable) leads to lower financial performance. Taken together, our findings provide new evidence and financial implications for firms and portfolio managers.     

Is the stock market sticker shocked? A study of market response to recent CAFE regulations in the US

In response to increasing environmental concerns, to improve energy security and to conserve energy use, the US government has proposed a new round of Corporate Average Fuel Economy (CAFE) standards. Many studies have focused on how the CAFE standard can be met by various automakers that have sales in the US market, and the costs and benefits of the companies meeting the standard. However, the stock markets’ view on the impact of the standard on automakers’ profitability is largely absent. We study the more recent episode of the CAFE regulation in an effort to try to detect the market response using the standard event study method. Our empirical findings suggest that while the stock market had some responses to the regulation, the large-scale and systematic reaction to the regulation is absent. In addition, the market response pattern to the regulation appears to be tied to the individual company’s compliance condition if there is any significant response at all.     

Does monetary integration lead to income convergence in Africa? a study of the CFA monetary area

Portuguese Economic Journal - The CFA franc area is one of the oldest currency unions, but it has come under intense criticism recently for failing to promote economic growth and income convergence...     

Spillover effects of fiscal policy in a monetary union: Why do fiscal instruments matter?

Using a two‐country DSGE model, we analyse the spillover effects of fiscal policy in a monetary union. Based on a non‐Walrasian labour market with a labour force participation decision and involuntary unemployment and a detailed fiscal sector, we focus on the relative cross‐border effects of different kinds of fiscal shocks (government expenditure and tax shocks). Among the major lessons from this analysis, five general and striking results are worth highlighting : (1) spillover effects differ widely according to the fiscal instrument, (2) all fiscal instruments produce positive spillover effects on foreign GDP except a rise in government consumption, (3) the response of unemployment is not always negatively correlated with the response of output (4) the different fiscal shocks trigger different effects on foreign inflation and the term of trade, which implies heterogeneous interest‐rate and trade channels, and (5) a more accommodative monetary policy and a scenario of ‘fiscal dominance’ alter greatly the effects of fiscal policy shocks.     

Have the returns to education really increased in Vietnam? Wage versus employment effect

Many studies have analyzed changes in the returns to education in globalizing economies using the Mincerian framework. These studies have typically estimated the returns to education in terms of changes in wages rather than employment, effectively ignoring the fact that during globalization not only wages but also employment patterns are affected. In this paper we use four large-scale representative household surveys from the transition economy Vietnam for the period 1998–2006 to estimate the returns to education taking into account both changes in wages and employment. The results show that the estimated increases in returns to education are lower once changes in employment patterns are taken into account.     

Aging faster in office? the effect of extended service in political office on longevity

Politicians’ health problems are often publicly related to occupational stress. We investigate the effect of serving longer time in office on US governors’ life expectancy. Results indicate that health problems are relevant for the decision to continue a political career. We find no evidence that serving longer in political office is detrimental to health.     

Why do immigrant workers in Australia perform better than those in Canada? Is it the immigrants or their labour markets?

Research comparing the labour market performance of recent cohorts of immigrants to Australia and Canada points to superior employment and earnings outcomes in Australia. Examining Australian and Canadian Census data between 1986 and 2006, we find that this performance advantage is not driven by differences in broader labour market conditions affecting all new labour market entrants. Rather, the results from comparing immigrants from a common source country – either the U.K., India, or China – suggest that Australian immigrants perform better, particularly in average earnings, primarily because of a different source country distribution. Moreover, the recent tightening of Australian selection policy, most notably its use of mandatory pre‐migration English‐language testing, appears to be having an effect, primarily by further shifting the source country distribution of immigrants away from non‐English‐speaking source countries, rather than in identifying higher‐quality migrants within source countries.     

Why is it so difficult to outperform the random walk in exchange rate forecasting?

A simulation exercise is used to demonstrate the difficulty to outperform the random walk in exchange rate forecasting if forecasting accuracy is judged by the Root Mean Square Error (RMSE) or similar criteria that depend on the magnitude of the forecasting error. It is shown that, as the exchange rate volatility rises, the RMSE of the model rises faster than that of the random walk. While the literature considers this finding to be a puzzle that casts a big shadow of doubt on the soundness of international monetary economics, the results show that failure to outperform the random walk, in both in-sample and out-of-sample forecasting, should be the rule rather than the exception. However, the results do not imply that the random walk is unbeatable, because it can be easily outperformed if forecasting accuracy is judged according to criteria such as direction accuracy and profitability.     

Why do bank loans react with a delay to shifts in interest rates? A bank capital explanation

We advance an explanation for the delay in the response of the volume of bank loans to innovations in monetary policy. Capital requirements may effectively tie the evolution of bank credit to the evolution of bank equity. By uncovering a new mechanism by which shifts in interest rates affect the profitability of the banking sector, and in turn its equity, we find that the resulting movements in the amount of aggregate loans are consistent with the regularities observed in the data.