Small firms and local economic development in South London

A growing body of literature has identified a number of potential constraints on small firm growth. Arguably, the severity of these constraints is closely related to the differing fortunes of industries and firms and the extent of localised external economies or diseconomies. This paper looks at the constraints facing manufacturing and business service firms in a large urban area. The paper draws on findings from a survey of small firms in Croydon. Data from the survey reveal some differences between small manufacturing and service firms in their experience of the urban environment. Physical constraints on expansion and labour shortages appear to be hindering small manufacturing firms in Croydon. Deficiencies in specific niches of the local business service sector may be preventing small business service firms from complementing and enhancing their internal capabilities. The problems facing small firms in Croydon and the sorts of local policy initiatives being developed are likely to be applicable to other large urban areas.     

Endogenous business cycles in a perpetual youth model with financial market imperfections**

An economy in which entrepreneurs and financiers interact with each other through an imperfect financial market is investigated by applying a dynamic general equilibrium theory. In each period, there is a certain probability of each entrepreneur's life ending, and a certain number of entrepreneurs are newly born. Although entrepreneurs are potential capital producers, they receive an idiosyncratic productivity shock in each period. Therefore, entrepreneurs who draw higher productivity become capital producers and those who draw lower productivity become lenders. Financiers do not have an entrepreneurial talent for capital production, and thus they lend their assets in the financial market to acquire an interest income. In equilibrium, deterministic endogenous business cycles can occur at the intermediate level of financial constraints.     

Collective Efficiency and Collective Failure: The Response of the Sialkot Surgical Instrument Cluster to Global Quality Pressures

One of Pakistan's rare examples of consistent export success has been the Sialkot stainless steel surgical instrument cluster. This cluster, consisting mainly of small and medium enterprises (SMEs), has as its main markets the United States and Western Europe. In recent years, access to these markets has become contingent on meeting international quality assurance standards. The hypothesis explored in this paper is that meeting such standards requires greater local cooperation, both among producers as well as between producers and their suppliers and subcontractors. The study draws on quantitative and qualitative data to examine how inter-firm ties, both vertical and horizontal, have changed. The evidence suggests that joint action has increased, but that there remain significant areas of collective failure. Thus, the quality assurance pressures mark a possible turning point for the cluster, raising questions as to whether local sources of competitiveness, captured in the collective efficiency concept, can continue to provide the basis for export success. It also leads directly to an evaluation of the cluster's growth trajectory.     

Will remittances suppress or increase household income in the migrant-sending areas? Modeling the effects of remittances in rural China

There are ongoing debates about whether remittances suppress or increase household income in the migrant-sending areas. The literature has not explained the heterogeneous results in a unified framework. This paper proposes a new concept, remittance capitalization potential (RCP), to conceptualise the possible switch between suppression effect and incentivization effect of remittances in the migrant-sending areas. The theoretical model reveals that remittances suppress household income in the migrant-sending areas when the RCP level is below a certain threshold, while remittances help increase household income in the migrant-sending areas when the RCP level is above a certain threshold. Moreover, the factors that affect the RCP level, such as the level of household human capital, ultimately determine whether remittances exert suppression or incentivization effect in the migrant-sending areas. Using China Family Panel Studies (CFPS) data, this paper adopts the method of instrumental variables to estimate how the level of household human capital alters the effect of remittances on household income from agricultural production in rural China. The models show that in the households with the head agricultural producers who are illiterate or semi-literate, the remittances suppress the agricultural income significantly. In the households with the head agricultural producers who are literate, however, the impact of remittances on the agricultural income switch to be positive significantly. The robustness tests not only support the results from the base models, but also confirm that the level of household human capital works as an influencing factor of RCP and determines whether remittances suppress or increase household income in the migrant-sending areas.     

Enkele opmerkingen over groeimodellen

Summary In this article some aspects of growth models are considered. After an introduction on the subject-matter of growth theory, the standard growth models are discussed at some length from the point of view of equilibrium as well at disequilibrium dynamics. An attemptis made to discover the implicit assumptions that are made with respect to the behaviour pattern of consumers and producers who govern the actual path of a process of economic growth. It appears to be useful to distinguish demand-orientated and supply-orientatated aspects of growth models. The third part of the paper deals briefly with the dynamics of the dynamic models. The reaction pattern of the individuals who cope with a situation of disequilibrium comes to the fore in a more subtle way than in case of equilibrium dynamics. One of the main conclusions of the article is that the growth models under discussion seem to start from a behaviour pattern of producers that is either compatible with perfect competition or based on an investment decision that plays a role in the macro-economic adjustment mechanism but which lacks a microeconomic justification.      

Japan’s GDP estimates: a critical review

The depressed state of the Japanese economy, especially in the late 1990s, makes the GDP gap of practical interest. Surprisingly, the official estimates of the GDP gap assert that it was no less than −4% in 1998. This seems to be too optimistic a view. Dissatisfied, Niwa 2000, Shishido 2000 presented strikingly different estimates for the GDP gap, according to which the gap was as large as −35% at 1998. Why such a large difference? This paper reviews how they arrived at such different results from the same set of basic data and the same production function approach. We show that, in the final analysis, the difference is in how to treat the technology input in the production function. The optimistic view changes the rate of technical change so that the potential growth path never deviates away from the actual growth path. By contrast, the pessimistic view keeps the rate of technical change constant so that the potential growth path can deviate away from the actual growth path. Hence, the GDP gap in the late 1990s is kept small in the optimistic estimate and very large in the pessimistic estimate. Each obtains what it wants from its own assumption. The true GDP gap lies between these two extremes.     

Sri Lanka’s Rural Non-Farm Economy: Removing Constraints to Pro-Poor Growth

We use a survey of rural enterprises from Sri Lanka to explore characteristics of the informal non-farm sector and identify obstacles to its expansion and productivity. Value added in this sector amounts to 80% of agricultural GDP participating households’ incomes are significantly higher than those of households who do not participate. Barriers to entry are low and the impact of non-farm development on inequality modest, implying a large potential contribution to growth and poverty reduction. Infrastructure constraints negatively affect new startups, investment in, and productivity of existing enterprises, with small enterprises being particularly affected.     

Promoting farm/non‐farm linkages for employment of the poor in South Africa: A research agenda focused on small‐scale farms and agroindustry

This article presents a policy research agenda for the promotion of farm/non‐farm linkages in South Africa. Our premise is that promoting the participation of small farms and small agroindustrial businesses in these linkages will have a strong impact on employment and income for the poor. We argue that there is potential for growth in linkages. The first question of the policy research agenda concerns the current status of linkages, and we note the dearth of research on this. The second question concerns the constraints on and prospects for promoting linkages from the demand side, and the third question treats the same concerns from the supply side. The fourth question is rooted in the duality in South Africa's non‐farm and farm sectors, and asks whether, and how, small and large agroindustrial businesses and farms will compete or relate in ‘business linkages’ that can benefit intersectoral linkages. The final question concerns the impacts of and alternatives for policies and programmes to spur linkages.     

Empirical information on beef production in regions of Namibia as an aid to restructuring the livestock farming industry along equitable lines

The paper considers the regional influence of prices and access to markets on beef numbers in Namibia, given the present inequalities, by using econometric analysis of time‐series data. This is relevant because Namibia is in a process of structural adjustment following independence in 1990. and in view of the livestock industry's importance in the Namibian economy. The results accentuate the role of access to markets in beef production in Namibia. Where access is severely restricted due to lack of infrastructure, such as processing facilities and adequate transport for example in the communal regions, beef producers do not act on price incentives, or cltmatological and ecological variables. However, beef producers with limited access to markets, mainly due to high transport costs, do react to environmental changes, but not to price incentives. Only producers with easy access to markets react to both environmental changes and price incentives. The major conclusion is that the present production and marketing structure in Namibia with respect to beef is probably not optimal. The results highlight the need for an overall policy which accounts for all related industries, producers, consumers and other relevant factors simultaneously.     

Identity and the Self-Reinforcing Effects of Norm Compliance

When making political and economic decisions (e.g., voting, donating money to a cause), individuals consider the expectations of groups with which they identify. These expectations are injunctive norms, shared beliefs about appropriate behavior for identity group members, and individuals' choices reflect trade-offs between adherence to these norms and other preferences. We show that when those who identify moderately/strongly with the group pay a cost as a consequence of avoiding a norm violation, they subsequently view the norms as stronger than those that paid no cost. This is evident in their greater willingness to pay an additional cost to punish/reward other group members for violating/complying with the norm. They also view other norms associated with the identity as stronger. In this way, costly norm compliance may be self-reinforcing.     

Connecting to global markets in the Internet age: The case of South African wooden furniture producers

This article assesses the extent to which Internet connectivity and electronic commerce have the capacity to assist South African wooden furniture producers (SAWFPs) in securing improved access to international markets. The current pressures of globalisation and the challenge to direct overseas market expansion underscore the importance of e-commerce for the local wooden furniture sector. The article argues that while e-commerce capabilities are not a substitute for a systematic export strategy, they are nonetheless important for SAWFPs, as they are struggling to compete in a globalised and interconnected world that is organised around integrated trading systems and networked communication and information flows. However, participation in e-commerce by SAWFPs is currently very limited owing to a variety of factors, such as lack of infrastructure and awareness, high costs of Internet connectivity and inadequate skilled human resources. The article discusses the implications of the findings for policy.     

区域性经济型连锁酒店的扩张与收缩——基于南苑e家的案例研究

本文以宁波南苑e家商务连锁酒店为例,分析区域性经济型连锁酒店扩张行为。从扩张模式、地域范围、经营方式以及品牌发展角度,将南苑e家的扩张划分为:单品牌单模式地区性扩张、单品牌多模式跨区域扩张和双品牌战略收缩3个阶段。在此基础上总结南苑e家的扩张规律,指出其扩张以接触扩张为主,伴有等级扩张。认为坚守核心业务,坚持自创品牌,坚持因时因势而变是其在竞争日趋激烈的经济型连锁酒店市场中,站稳脚跟并健康发展的三个关键。     

Recession, inflation and the international monetary system

The difficult circumstances being faced by the world economy and its uncertain prospects for the 1980s make it necessary to take a new look at the present financial mechanisms and international institutions for monetary cooperation, with a view to adapting them to current needs and to developments in the near future. The industrial countries will have more modest rates of growth than in earlier decades, and this will have significant consequences for the developing countries: (a) stagnation of official development aid flows; (b) possible intensification of protectionist trends; (c) slow growth of producers of raw materials whose export markets will be seriously limited; (d) gradual shift of world economic and political activity toward oil-producing developing countries and, to a lesser extent, toward the exporters of manufacturers; (e) industrial countries and raw materials producers will become increasingly interdependent; (f) oil-producing and other higher income developing countries will increase their participation in regional economic cooperation and official development aid efforts. Some of the more specific problems which require attention from the international community are inflation and recession; structural disequilibria, recycling and external debt; adjustment process; creation of liquidity and transfer of resources; and participation of the developing countries in the monetary system.     

资源基础观视角下新疆小微企业成长的途径

本文从资源基础观的视角分析了新疆小微企业成长中存在的问题。本文认为新疆小微企业成长滞缓的原因是由于其所掌握的资源不足以及企业能力欠缺,其中,资源的不足与政府政策支持不足和小微企业自身各项制度不健全有着直接的关系;能力的缺陷则体现在对已有资源利用不足以及企业缺乏知识与经验的积累。因此,本文提出应通过政府政策支持、小微企业自身建立健全各项制度和在日常经营中加强知识和经验积累来促进新疆小微企业的健康成长。     

中国本土企业出口增长之谜的再思考——基于企业财务视角的分析

本文利用1999～2007年中国制造业企业微观数据系统考察了企业财务约束对企业出口行为的影响。通过运用面板Probit模型我们发现,财务约束是导致中国本土制造业企业出口扩张的重要因素之一,外资制造业企业出口行为则不受财务约束的影响。目前中国本土企业出口的高速增长是畸形且不可持续的,不仅不利于我国本土企业自主创新的开展与自主品牌的构建,而且可能限制其有效利用本土市场效应来获得发展的空间,从而固化本土企业与外资企业间竞争力的差距。     

No Successor,No Success? Impact of a Little Son on Business Performance

The dynasty model, which assumes the presence of intergenerational altruism, implies that business owners will have more incentive to improve the firm’s performance if they expect their children to take over the firms. This study empirically examines how top managers’ expectations about future family succession affect the performance of small family firms. Exploiting the sex of the top manager’s first-born child as an instrumental variable for the manager’s expectations about business succession by his child, we find that the existence of a potential family successor has a positive effect on profit. We also find that the presence of a potential family successor induces business expansion and the managers’ actions to enhance performance, such as improving operational efficiency and investing in information technology.     

Japan's elderly small business managers: Performance and succession

We investigate the effects of succession from an elderly to a nonelderly small business manager using firm-level data for Japan. The number of elderly small business managers has increased in Japan with the aging of the population; therefore, succession to younger managers has become an important policy issue. We make use of data for 2001–2015 for 188,021 small businesses, of which 77,773 at some point have a manager aged 60 or older and 8711 of these transition to a manager of under age 60. First, we investigate the relationship between firm performance and manager age. Performance is found to be lower for firms with elderly managers. Second, we estimate the determinants of succession in small businesses with elderly managers, showing that larger, less leveraged, more cash-rich, and profitable firms are more likely to transition to younger managers. Our results imply that more poorly performing firms are less likely to replace elderly managers, suggesting that such firms are not selected by young managers. Third, we examine post-succession performance using propensity score matching. Succession from elderly to young managers is shown to have positive effects on sales, employment, assets, return on assets, capital investment, and cash holdings. These results imply that succession improves firm growth. Furthermore, young successors tend to accumulate cash holdings implying that they are more risk averse and/or face tighter credit constraints than their predecessors.     

The Dynamics of Intra-industry Trade in ASEAN*

The decision to establish the ASEAN Free Trade Area (AFTA) by the year 2008 has resulted in producers in all ASEAN countries except Singapore raising concerns relating to potential loss of market share and adjustment pressures. Underlying these concerns is the view that the expected growth in intra-ASEAN trade will be dominated by inter-industry or net trade (NT) rather than intra-industry trade (IIT). If most of the expected growth in trade is intra-industry, however, then the short-run resource re-allocation costs are likely to be lower. In this study, we employ a new methodology to analyse the dynamics of IIT in ASEAN. We overcome problems associated with using movements in the value of the Grubel-Lloyd (GL) index by deriving a formula that decomposes the growth in trade into the contributions of growth in IIT and NT. Our results suggest that the role of IIT in trade growth has been increasing in importance, and thus much of the recent concern that threatens the viability of AFTA may be misplaced.     

中小房地产企业成长的困境与突破

在当前房地产业快速发展的背景下,我国许多中小房地产企业尚处在发展初期,处在规模驱动阶段,成长过程中面临着制度的约束、市场的局限。必须完成自我突破,提升自身的核心竞争力。