China Achieves Success in Reforming Foreign Aid

Chinabegangivingforeignaidin1950.Inthe28years(1950-1978)beforethereformandopening-up,themainformofChina'sforeignaidwasloans,generallyinterest-free,torecipientcountrics,includedwholeplants,technicalaid,materialsaswellascashandsoon.Chinaprovidedassistancetoatotalofsixty-sixnationsandestablishedeighthundredandeightywholeplants,winninghighappraisalfromtherecipientcountriesandpeople.Sincetheintroductionofthereformandopening-up,China'sworkofforeignaidhasbeenreasonablyreadjustedandinnovated.Whilecon…     

Determinants of the European Commission’s State Aid Decisions

We study whether the European Commission’s State aid decisions are in line with the goals of the State Aid Action Plan (2005–2009). Next, we explore the determinants of these decisions using data for 2007 on 600 cases. We find by means of logit and probit regressions that authorization is more likely when notification took place recently. Furthermore, ad hoc aid measures have a higher risk to end up in a negative decision, whereas schemes are more positively evaluated. Being in the objective category of firms or sectors in difficulties can reduce the probability of a positive outcome. Our results indicate that most of the Commission decisions are, on average, in line with the Action Plan.     

Should Variable Cost Aid to Attract Foreign Direct Investment be Banned? A European Perspective

The purpose of this paper is to analyze the European Commission’s approach to state aid to attract foreign direct investment (FDI) in a competition policy framework. The Commission considers variable cost aid (VCA) to be more distortive than start-up or fixed cost aid (FCA). This paper addresses that issue and checks whether allowing FCA while banning VCA is an optimal strategy for a supranational Competition Authority maximizing welfare. The model shows that a domestic government maximizing welfare always prefers VCA to FCA if both the incumbent and the entrant are foreign firms and if granting VCA does not cause the incumbent firm to exit the market. The model shows that banning VCA may lead to sub-optimal equilibria where welfare is not maximized.     

Compensating Competitors or Restoring Competition? EU Regulation of State Aid for Banks During the Financial Crisis

We contrast the theory underpinning state aid for failing banks with that for failing firms in the non-financial sector. We argue that there is little justification for measures to ‘compensate’ rivals when the bank has been saved for reasons of systemic stability. The Commission’s approach to bank restructuring aid takes insufficient notice of this. Furthermore, the use of punitive divestitures is not the best way of addressing moral hazard. Worse, such divestitures can impede competition by creating weak rivals. We provide four detailed case studies to illustrate the problems. We conclude that the Commission provided a useful constraint in the midst of a crisis of unprecedented scale and complexity, but its approach could have been improved by more systematic attention to effective competition relative to the appropriate counterfactual.     

Can Divine Intervention Aid in Domestic Violence Prevention? An Analysis of Bystanders' Advertising Attitudes and Reporting Intentions in India

The research explores how religious symbols can be used in advertising to encourage bystander intervention in the context of domestic violence. Using symbolic interactionism as the theoretical framework, a 4 (Ad type: Control vs. Visual vs. Verbal vs. Visual/Verbal) × 2 (Religiosity: Low vs. High) between-subjects experimental design was conducted to assess impact on attitudes toward the ad and intention to help. A national sample (N = 402) of Hindu adults from India was recruited. The findings suggest level of religiosity is critical to the process with highly religious individuals displaying higher levels of involvement, concern for others and willingness to report abuse. No significant differences were found across visual and verbal religious symbol conditions. Implications for advertisers and government agencies are presented.