Did firm age,experience, and access to finance count? SME performance after the global financial crisis

This paper examines the relationships between firm age and entrepreneurs experience on SME performance after the 2008/09 global financial crisis. We find that in general the crisis had a long-lasting scarring effect on the SME sector, but there is evidence of some recovery in performance. Interestingly, the well-established, and negative, firm age-growth relationship still holds, but entrepreneurial experience did not have any substantive effects on small business performance. Our findings suggest that the severity of the crisis meant that previous entrepreneur experiences had little value in this unique and uncertain environment. However, young firms still accounted for a disproportionately high share of growth, especially among the fastest growing firms.     

The importance of product positioning and global branding for sustaining competitive advantage within the companies＇ global marketing strategy

In today＇s globally competitive world, because of the globalization, new business patterns and the changing nature of consumers, the companies feel the necessity to act strategic in the market and to reach up the target markets and sustain maximum customer satisfaction in order to compete and survive. In this context, within the study it is tried to define product positioning in international markets and global branding strategies conceptually and to focus on their contributions to the overall competitive advantage of the company. Initially, the study tries to present the association between product positioning and global branding approaches of the companies and sustaining competitive advantage. Justifications for the examination of the importance of companies＇ international product positioning and global branding orientations as a basis of creating competitive advantage were derived from the literature. It is suggested that the companies＇ product positioning and global branding orientations and sustaining competitive advantage are the important aspects in multinational management and international business areas. Therefore, the purpose of this study is to evaluate the impact of product positioning and global branding strategies of the companies with special references to various industries and global brands.     

Do credit shocks matter? A global perspective

This paper examines the importance of credit market shocks in driving global business cycles over the period 1988:1–2009:4. We first estimate common components in various macroeconomic and financial variables of the G-7 countries. We then evaluate the role played by credit market shocks using a series of VAR models. Our findings suggest that these shocks have been influential in driving global activity during the latest global recession. Credit shocks originating in the United States also have a significant impact on the evolution of world growth during global recessions.     

The global arms trade network 1950–2007

Using SIPRI data on all international transfers of major conventional weapons 1950–2007, we study the relationship between differences in polity and arms trade. To study whether states tend to trade arms within their political vicinity we estimate gravity models of the likelihood of trade at the bilateral level and study the evolution of the global network over time. We find a stable negative relationship between differences in polity and the likelihood of arms trade for the duration of the Cold War, but not in recent years. In line with these results, the global arms trade network changes drastically over the sample period in several respects: it grows more dense, clustered and decentralized over time. The differences between the NATO and Warsaw Pact sub-networks that we find corroborate the common perception that the Warsaw Pact was more strongly centralized around the USSR than NATO around the UK, the US and France.     

Institutional constraints,double imbalances and policy option—global financial crisis and China’s fiscal policy

With the enormous development of China’s economy, we re-implement the proactive fiscal policy not only to response to the global financial crisis, but also to take advantage of the opportunity to resolve the institutional constraints, transform China’s economic growth pattern, keep stability and promote the sustainable growth of the economy. So the goal of fiscal policy should weigh easing the economic crisis against long-term stability and the development of economy. The past experiences of fiscal policy practices in China indicate that the traditional simple counter-cyclical fiscal policy may be able to pull the economy out of recession, but it has little effect on automatic recovery of the economy. Therefore, the fiscal policies need to hang on the entire reform process and the whole economic structure adjustment. This paper firstly reveals the root of “double imbalances” and institutional constraints, then analyzes the paradox between such constraints, and discusses the space of positive fiscal policy.     

Are valuation effects desirable from a global perspective?

Recent studies have emphasized the role of valuation effects due to exchange rate movements in easing the process of adjustment of the external balance of a country. This paper asks to what extent valuation effects are desirable from a global perspective as a mean to achieve an efficient allocation of resources. In a frictionless world, it is desirable to have large movements in prices and exchange rates. But once a small degree of price rigidity is introduced not only should prices be stabilized but also the response of the exchange rate should be muted. There is a minor role for valuation effects that depends both on the size and composition of assets and liabilities.     

How will the related variables change if global imbalances unwind?

Since the US current account deficit (over 6%) is relatively large, many economists have questioned its sustainability.     

Opportunities of manufacture under global economic crisis： The case of Estonia

Because of the smallness of Estonia, its main source of economic growth is export, i.e. successful sales in the world market. It is necessary to shift from branches, activities and value chains where it is difficult to increase value added, to more profitable and promising ones. The present economic situation provides for this an exceptionally good chance. All kinds of development, international relocation of production and reallocation of economic power in the world are gathering speed. It is necessary to rapidly find an opportunity in the ＂declining＂ market, a profitable niche. Manufacturing entrepreneurs and executive managers have for several years already been complaining of shortage of workforce that hinders them carrying out new business plans, increasing production and exports. Increased supply of workforce dismissed from construction is an opportunity for the forced development of the manufacturing export sector and sharp increase in exports.     

The ‘inventor balance’ and the functional specialization in global inventive activities

Inventors and organizational assets are inputs of inventive activities which are often provided at a global scale, where countries might specialize in the provision of one or the other type of inputs. We introduce a new patent-based metric, the ‘inventor balance’, to quantify this type of functional specialization, which we discover to be considerable, and we propose a conceptual framework to explain it. We observe a progressive ‘decoupling’ of national sub-systems providing respectively inventors and organizational assets. Moreover, we find that countries with a high level of innovativeness relative to their economic development, high technological specialization, and strong individualistic cultural traits, contribute relatively more inventors than organizations to the global production of inventions.     

African farmers’ market organizations and global value chains: competitiveness versus inclusiveness

Abstract

This conceptual paper discusses the challenges smallholder producer cooperatives in developing countries face while trying to access agricultural global value chains. We assess the problem of competitiveness related to lack of commitment and improper selection. Prioritization of open membership over selection is generally taken for granted in the policy debate on farmers’ market organizations (FMOs). We argue that open membership may work in community-driven organizations, however, it becomes a major threat for entrepreneurial FMOs. Inclusion facilitates free riding, which forms a barrier for investments of members. This is one of the major reasons why so many of these organizations are so much resource constrained, i.e. are not able to compete in the market without external support. FMOs should take targeting and selection serious if entrepreneurial activities are intended. Otherwise, they miss the opportunity to create a committed member base willing to invest in a potentially competitive organization.     

Can economic causes of tropical deforestation be identified at a global level?

This paper contributes to the literature on the macro-scale economic determinants of the increase in global forest depletion, by performing a regression analysis based on a panel dataset for fifty tropical countries over an eighteen-year period. While the initial findings appear at first to confirm a common causality pattern of selected macroeconomic variables in influencing tropical deforestation, subsequent statistical tests question the significance of the results. More specifically, testing for autocorrelation, which has been downplayed in previous studies, appears to represent a critical issue. When the initial results are corrected for autocorrelation, the significance of the parameters declines substantially below statistically acceptable levels. The implications are twofold. First, regression analyses that seek to explain deforestation at the global level need to be carefully scrutinised and checked to ensure that they meet standard statistical tests. Second, tropical deforestation might ultimately depend upon case-specific factors and further research may render more effective policy suggestions if conducted at a more disaggregated, local level.     

Better to give than to receive? Altruistic provision of a global public good

Developed countries may gain more than developing countries from the provision of a global public good: the greater their valuation of the good, the higher the productivity of developing countries’ contributions and the more developed countries derive satisfaction from altruism.     

How strong is the global integration of emerging market regions? An empirical assessment

This paper attempts to evaluate the time-varying integration of emerging markets from a regional perspective based on a conditional version of the International Capital Asset Pricing Model (ICAPM) with DCC-GARCH parameters that allows for dynamic changes in the degree of market integration, global market risk premium, regional exchange-rate risk premium, and local market risk premium. Our findings reveal several interesting facts. First, the time-varying degree of integration of four emerging regions under consideration, satisfactorily explained by the regional level of trade openness and the term premium of US interest rates, has recently tended to increase, but these markets still remain substantially segmented from the world market. Second, the local market risk premium is found to explain more than 50% of the total risk premium for emerging market returns. Finally, we show that conditional correlations usually underestimate and overstate the measure of time-varying market integration. The empirical results of this study have some important implications for both global investors and policymakers with respect to dedicated portfolio investments in emerging markets and policy adjustments.     

Do sunspot numbers cause global temperatures? Evidence from a frequency domain causality test

This article applies the causality test in the frequency domain, developed by Breitung and Candelon (2006), to analyse whether sunspot numbers (used as a partial approximation to solar irradiance) cause global temperatures, using monthly data covering the time period 1880:1–2013:9. While standard time domain Granger causality test fails to reject the null hypothesis that sunspot numbers do not cause global temperatures for both full and sub-samples (identified based on tests of structural breaks), the frequency domain causality test detects predictability for both the full-sample and the last sub-sample at short (2–2.6 months) and long (10.3 months and above) cycle lengths, respectively. Our results highlight the importance of analysing causality using the frequency domain test, which, unlike the time domain Granger causality test, allows us to decompose causality by different time horizons, and hence, could detect predictability at certain cycle lengths even when the time domain causality test might fail to pick up any causality. Further, given the widespread discussion in the literature, those results for the full-sample causality, irrespective of whether it is in time or frequency domains, cannot be relied upon when there are structural breaks present, and one needs to draw inference regarding causality from the sub-samples, we can conclude that there has been an emergence of causality running from sunspot numbers to global temperatures only recently at cycle length of 10.3 months and above.     

How have global financial institutions responded to the challenges of the post-crisis era?

The study examines the largely unexplored effect of changes in the competitive landscape for large, global financial institutions on their ability to take risks, as well as deploy capital and labour in an efficient manner based on a novel measure of inefficiency. The analysis shows during 2001–2013 that inefficiency peaked during the 2008 crisis period and has fallen back to levels close to pre-crisis periods. The model also performs well in out-of-sample forecasts of the financial firms’ future market values. These results suggest that large financial firms have been adjusting to the ‘new normal’ of the post-crisis period and thus are able to use capital and labour more efficiently within the constraints of current market conditions. In addition, a non-linear pattern between inefficiency and a firm’s asset size suggests that there might be an optimal scale for such firms in the $450–650 billion range.     

Could the global financial crisis improve the performance of the G7 stocks markets?

Financial crises are normally associated with negative effects on financial markets. In this article, we investigate whether the most recent global financial crisis (GFC) had any positive impact on the G7 (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States) indices. To conduct the analysis we employ the mean–variance (MV) analysis, CAPM statistics, Hurst exponent, runs test, multiple variation ratio test and stochastic dominance (SD) tests. Our MV and CAPM results conclude that most of the G7 stock indices are significantly less volatile. The results from Hurst exponent, run tests and multiple variation ratio confirm that efficiency improved in the post-GFC period. Finally, our SD results conclude that there is no arbitrage opportunity and the markets are efficient due to the GFC, and, in general, investors prefer investing in the indices after the GFC. Overall, we conclude that the GFC led to markets that are more efficient and mature, confirming that crises can also have positive impacts on stock markets. These findings provide important information for investors and market regulators.     

The role of economics in global management of whales: re-forming or re-founding IWC?

The global management of whale species, identified as an economic mixed good, is addressed by means of economic theory of bargaining and institution making. I will analyse (i) why it is important to take into account explicitly both (consumptive) use and non-use values within international conventions on global mixed goods; (ii) the role and nature of institutions dealing with global issues; (iii) the role of bargaining between conflicting interests as a focal feature of the institution-making process; and, (iv) the role of economic thinking in international conventions. Co-operative and non co-operative solutions are discussed, and instruments aimed at achieving co-operative bargaining, analysed. The study has both positive and normative implications, with insights on social welfare enhancing institutional reforms. Although the study is broad yet special focus is given to the International Whaling Commission (IWC). This paper concludes that we should make economic theory operational within the realm of global institutions. On the basis of the bargaining model, the conclusion is that IWC should necessarily be re-founded or at least re-formed, changing the convention from ‘whaling’ to a ‘whale’. It is suggested that the possibility of introducing compensatory side payments into the bargaining arena in order to increase social welfare and enforceability with respect to a ‘ban’ scenario be investigated. Ethical implications of monetary compensations are considered in parallel with economic efficiency. The limits and potentialities of economics and economic instruments are also tested globally with respect to the whale and other environmental issues.     

Do we need a global VAR model to forecast inflation and output in South Africa?

This study determines whether the global vector autoregressive (GVAR) approach provides better forecasts of key South African variables than a vector error correction model (VECM) and a Bayesian vector autoregressive (BVAR) model augmented with foreign variables. The article considers both a small GVAR model and a large GVAR model in determining the most appropriate model for forecasting South African variables. We compare the recursive out-of-sample forecasts for South African GDP and inflation from six types of models: a general 33 country (large) GVAR, a customized small GVAR for South Africa, a VECM for South Africa with weakly exogenous foreign variables, a BVAR model, autoregressive (AR) models and random walk models. The results show that the forecast performance of the large GVAR is generally superior to the performance of the customized small GVAR for South Africa. The forecasts of both the GVAR models tend to be better than the forecasts of the augmented VECM, especially at longer forecast horizons. Importantly, however, on average, the BVAR model performs the best when it comes to forecasting output, while the AR(1) model outperforms all the other models in predicting inflation. We also conduct ex ante forecasts from the BVAR and AR(1) models over 2010:Q1–2013:Q4 to highlight their ability to track turning points in output and inflation, respectively.     

Sand in the wheels or spanner in the works? The Tobin tax and global finance

This paper presents a radical critique of the Tobin tax—atax on currency transactions—by undercutting certain assumptionsabout the size and character of the world's foreign exchangemarkets which furnish the tax with its basic rationale. Whileit is acknowledged that only a fraction of the massive volumesof FX transactions relate directly to trade in goods and servicesor to cross border investments, it is denied that all the residualtransactions are motivated purely by exchange rate considerations(speculative or hedging activities). Rather, the argument isthat a significant proportion of FX trades have money marketcharacteristics and that these trades, together with domesticmoney market transactions, play an important role in the dayto day operation of the global financial system. This perspectiveis used to show that the imposition of a Tobin tax would causeextensive material damage to the system, with consequences thatmay run counter to the expectations of supporters of the tax.