Economic recovery in developing countries

Plans and proposals for stimulating the world economy and thus aiding economic recovery in the developing countries have been many and varied, ranging from massive transfer of resources, whether automatic or discretionary, through the immediate programme of the Brandt Commission to a concentration first of all on recovery in the industrial countries. This article takes a critical look at the most important proposals to date.     

Social capital of venture capitalists and start-up funding

How does the social capital of venture capitalists (VCs) affect the funding of start-ups? By building on the rich social capital literature, we hypothesize a positive effect of VCs?? social capital, derived from past syndication, on the amount of money that start-ups receive. Specifically, we argue that both structural and relational aspects of VCs?? social networks provide VCs with superior access to information about current investment objects and opportunities to leverage them in the future, increasing their willingness to invest in these firms. Our empirical results, derived from a novel dataset containing more than 1,500 first funding rounds in the Internet and IT sector, strongly confirm our hypotheses. We discuss the implications of our findings for theories of venture capital and entrepreneurship, showing that the role and effect of VCs?? social capital on start-up firms may be more complex than previously argued in the literature.     

The impact of agricultural price policy in developing countries

Agricultural price policies are under closer review now in many developing countries. There is a growing tendency to rely more on market forces. What impact have agricultural price policies had on the performance of the agricultural sector in developing countries until now?     

The impact of civil war on foreign direct investment flows to developing countries

We investigate the impact of civil war on foreign direct investment (FDI) flows to developing countries. We employ a new data-set that disaggregates FDI inflows to primary, secondary and tertiary sectors. Second, we control for a richer set of economic and institutional variables that could determine FDI inflows including population, gross domestic product (GDP) per capita, the degree of trade openness, exchange rate variability, inflation, the governance structure of the host country using International Country Risk Guide data and its regime type using the POLITY autocracy–democracy data. We also address the reverse causality between FDI and conflict and the potential endogeneity of explanatory variables by employing dynamic system generalised method of moments (GMM) techniques in estimation. Our results indicate that primary sector FDI flows to developing countries are not significantly affected by civil war, whereas secondary and tertiary sectors FDI are more sensitive to such outbreak, potentially leading to reversals of existing FDI. Among institutional variables, government stability and control of corruption are more significant compared to regime type, law and order, and bureaucratic quality.     

Problems of migrant workers' return to their home countries

Germany's migration statistics for 1982 and 1983 show, for the first time in some years, an excess of out migration over immigration of foreign workers and their families. What are the problems facing the returnees? How can their modernizing influence on their societies be increased?     

The impact of international trade on emigration in developing countries

This paper studies how international trade affects emigration in developing countries. This is a new aspect as previous studies investigated the impact of immigration on trade from host countries perspective. However, there are also reasons to believe that trade may affect the propensity to emigrate in the home countries, leading to potential brain drain in developing countries, especially given the theoretical hypothesis in Stolper–Samuelson (S–S) theorem within Heckscher–Ohlin (H–O) factor-proportion model that more educated workers are more likely to emigrate due to an increase in international trade. When low-skill abundant developing countries liberalize trade, the reward of the scarce factor (skilled labor) is reduced in these countries, but it increases in the high-skill abundant developed countries. Therefore, skilled workers in the developing countries see a strong incentive to migrate to developed countries. To test this hypothesis, this paper utilizes a panel of 133 developing countries for the period of 1980–2010 and finds that high-skilled workers are more likely to emigrate with trade while there appears to be no effect of trade on low-skilled workers.     

Estimating the impact of trade specialization and trade policy on poverty in developing countries

This paper investigates the impact of trade specialization on poverty. The empirical findings show that in developing countries manufacturing exports contribute to poverty reduction. But agricultural exports have a more significant effect on poverty in low-income countries. The analysis also confirms that trade specialization reduces poverty but under specific trade specialization patterns and policy conditions.     

Automatic transfer payments to developing countries

As a more critical view is being taken of traditional development aid concepts, alternative means of advancing the resource transfer between industrialized and developing countries have attracted increasing attention in recent years. A system of tendentially automated transfer payments to developing countries is one of these alternatives. The author of the following article examines whether such a system has a chance of meeting common interests of industrialized and developing countries and how it could be elaborated to make it more effective.     

Encouraging capital flows to developing countries

What policies can encourage the movement of capital from saving-surplus countries to developing countries? Instead of pursuing grandiose schemes of international coordination, industrial countries can reduce government deficits and keep inflation low. Developing countries can adopt policies that attract rather than repel private foreign capital.     

Tourism and developing countries

The expansion of the tourist industry in developing countries is seen by both the countries themselves and international development organisations as a promising route towards boosting economic development. However, once the benefits and costs to society have been carefully weighed up this route appears very problematic in many cases.     

The transfer of technology to developing countries

Although both the industrialised countries and the developing countries have an interest in the transfer of technology, there is a considerable amount of disagreement as to how the gains from the transfer should be apportioned. Professor Hoffmann offers a theoretical analysis of the mechanisms involved in technology transfer and in the determination of the transfer's price, and makes some suggestions as to the policies to be followed by the countries involved.     

Oil prices and the developing countries

Many of the present difficulties of the world economy have been blamed on the two oil-price explosions of the 1970s. Professor Chichilnisky shows that, at least in the case of the oil-importing developing countries, the negative effects have been overestimated. In fact, in some respects the oil exporters among the developing countries fared worse than the oil importers.     

国际服务贸易自由化对发展中国家的影响及对策

国际服务贸易自由化是当今世界经济领域中引起发达国家与发展中国家普遍关注的一个重大问题.所谓国际服务贸易自由化就是要使各国取消服务贸易的壁垒,最大限度地实现服务的国际间自由交换.对于发展中国家来说,国际服务贸易自由化会为发展中国家一些具有优势的服务行业的发展带来机遇,但是,在服务业越来越含有靠技术知识进行国际竞争的今天,发展中国家仅依靠廉价的劳动力资源的"比较优势"在国际服务市场上已难以进一步实现服务贸易量的扩大和结构的改善.面对国际服务贸易自由化的浪潮,发展中国家遇到的更是严峻的挑战.     

Conditionality and the needs of developing countries

The principal cause of the balance of payments deficits of the non-oil developing countries has altered since 1973: exogenous factors now play a far more important role than previously. The appropriateness of the conditions conventionally attached to IMF drawings needs to be re-examined in this light.     

Incremental impact of venture capital financing

This paper investigates the differences in the return generating process of venture capital (VC)-backed firms and their peers that operate without VC financing. Using a unique hand-picked database of 990 VC-backed Belgian firms and a complete population of Belgian small and medium-sized enterprises (SMEs), we focus on the extent to which the presence of a VC investor affects the sensitivity of a firm’s returns to the changes in the capital structure, in the operating cycle, and in the industry dynamics. The differences may stem from the (self-) selection of better companies into VC portfolios, from the venture capitalists’ (VCs) value-adding activities, and/or from both. We examine these factors in the context of a complex simulation procedure which allows separating selection from value-adding when traditional approaches are difficult to implement. Our results indicate that VC-backed firms are able to extract more rent from the changing industry conditions and from the optimizations in their capital structure. The presence of VCs in the firm’s equity seems to have only a marginal effect on the operating cycle efficiency. Overall, the results are suggestive of the value-adding being the main driver of the VC-backed firm’s performance.     

Geo-politics and the impact of China's outward investment on developing countries: evidence from the Great Recession

Using a novel dataset on Chinese large-scale overseas investment and project contracts by sector and mode of entry, we analyze whether Chinese outward activity (COA) before the Great Recession worsened or alleviated the contractionary phases in developing countries. We find that, on average, COA did not increase recessionary vulnerability. Both sectoral targeting and the size of pre-crisis engagement matter. While COA in financial market sectors implies an aggravation, substantial pre-crisis investment in energy, metals and transportation industries tends to attenuate the slump. Additionally, the mode of entry, i.e. through either greenfield investment or mergers and acquisitions, also matters.     

The supply of international liquidity to developing countries

The gravamen of the comments by the developing countries on the problem of the supply of international liquidity is that since 1970 they have been at a great disadvantage as far as the distribution of the newly created international liquidity is concerned. At the annual IMF meeting in Manila in early October 1976 they therefore put forth a demand for a fresh allocation of SDRs¹. The question that has to be asked in this connection is whether the developing countries are justified in their criticism concerning the supply of liquidity and whether another SDR allocation is needed in order to solve their liquidity problems if any exist.     

Problems of integration theory in relation to the developing countries

The opportunities for the integration of developing countries and the limitations to such integration have not received enough attention in the scientific discussion on the reform of the international economic order, with the result that a considerable research backlog has been accumulating in this field. The following article shows that the established integration theory which has been evolved primarily with the problems of the European integration movement in mind is not able to evolve adequate criteria for decisions on integrations of developing countries.