Corporate Debt Maturity Structure: The Role of Firm Level and Institutional Determinants in Selected African Countries

An appropriate debt maturity structure is essential for firms to enable them align asset structure to liabilities to prevent a mismatch. This study investigates the role of firm-level and institutional variables on debt maturity structure in selected African countries. Using panel generalised method of moment that addresses endogeneity problem; our findings reveal a dynamic process of adjustment to optimal debt maturity structure. Furthermore, firm-level variables (leverage, asset structure and firm size) provide support for the contracting cost, signalling and matching principle theories of debt maturity structure. Results of institutional variables suggest that better developed institutions promote long-term debt maturity structures.     

Institutional differences as sources of growth differences

Until recently, most studies investigating the determinants of growth failed to incorporate the importance of institutions into the empirical analysis. This paper highlights the importance of institutions on growth and development and evaluates the empirical results on the effect of institutions on growth and investment. It provides ample evidence that the institutional environment in which an economic activity takes place is an important determinant of economic growth. This paper uses alternative measures of institutional quality to capture the role of institutions in explaining growth differences across countries. When these institutional variables are incorporated into the core regression equations as additional explanatory variables in two different sample periods, both samples yield similar results. The empirical results reveal that countries with high levels of economic growth are characterized by high levels of economic freedom and judicial efficiency, low levels of corruption, effective bureaucracy, and protected private property.     

Institutional systems and catch-up in China

This study examines the effects of institutional systems on the ability of firms to innovate and thereby contribute to the catch-up process in China. The most commonly used model of the effects of institutional systems on economic developed is summarised and employed to reveal that it does not sufficiently focus on the role of the interaction between firms and institutional systems and subsequent implications for the innovations necessary for emerging economies to catch up. A model centred on firms is constructed to enable an analysis of how institutional factors may affect important drivers of catch-up such as access to resource pools, support to help to use resources to develop competencies capable of sustaining innovation and the ability to engage in institutional entrepreneurship to help the evolution of effective institutional systems. The model highlights that innovation compatible with catch-up requires a large number of firms to be able to access appropriate resources. This requires institutional systems that permit and encourage the evolution of complex and extensive network links that can entrench many indigenous firms into foreign direct investment and trade flows and the means to access, at low cost and risk, from suitably developed national resources pools. Most importantly, institutional systems need to enable and support many indigenous and foreign firms (that have good potential to use resources effectively to create the competencies necessary to innovate) and thereby empower such firms so they can deliver innovation compatible with catch-up. Potential institutional impediments to these requirements are explored, especially problems arising from insiders and outsiders that emerge from the nature of informal institutional systems. The study concludes with some suggested research questions that may help to increase understanding of the effects of institutional systems on the ability of firms to innovate to contribute to the catch-up process.     

Institutions, wages, and inequality: The case of Europe and its periphery (1500–1899)

This paper explores the long-run relationship between institutions and wage outcomes in Europe and its periphery. I find that cities that exercised stronger institutional protection of private property experienced: (i) higher levels of both skilled and unskilled real wages, as well as (ii) lower levels of inequality as measured by the skilled–unskilled wage ratio. While the first result corroborates existing work on the positive growth effects of better institutions, the second finding is more novel to the literature. Some explanations are proposed for how stronger institutions can cause an increase in the relative supply of skilled workers, thus lowering wage inequality.     

The Maghribi traders: a reappraisal?1

Previous studies concluded that a private‐order institution based on a multilateral reputation mechanism was particularly important in governing agency relations among the Maghribi traders who operated in the Muslim Mediterranean. The legal system and a bilateral reputation mechanism were particularly important among the Genoese traders. Initial cultural, social, and political factors led to this institutional distinction, while the incorporation of culture in the resulting institutions influenced subsequent institutional developments. In particular, the particularities of the late medieval European institutions contributed to the rise of the modern—impersonal—markets in Europe. The analysis also substantiates the contention that private‐order institutions can support sophisticated exchange and market‐promoting policies should take this into account, particularly in countries lacking an effective court system. An article by Edwards and Ogilvie challenges this analysis. It alleges that the Maghribis, like European traders, relied on court enforcement and a bilateral reputation mechanism in which a narrow social circle responded to opportunism. This article shows that Edwards and Ogilvie's analysis and conclusions are wrong. It refutes each of their empirical claims and presents additional pieces of evidence supporting the institutional distinction conjecture. The discussion is structured around the methodological challenge associated with comparative and historical institutional analysis.     

The Political,Economic, and Social Aspects of Katrina

In this paper, we examine the resiliency of community recovery after a natural disaster. We argue that a resilient recovery requires robust economic/financial institutions, political/legal institutions, and social/cultural institutions. We explore how politically and privately created disaster preconditions and responses have contributed to or undermined institutional robustness in the context of the Gulf Coast's recovery after Hurricane Katrina. We find that where postdisaster resiliency has been observed, private-sector responses contributing to the health of these institutional arenas are largely responsible. Where postdisaster fragility and slowness has been observed, public-sector responses contributing to the frailty of these institutional arenas are largely the cause. In other words, we engage in a comparative institutional analysis of civil society, entrepreneurial commercial society, and government agencies and political actors in the wake of a natural disaster.     

Quality of Institutions and Violence Incidence: a Cross-Country Analysis

This paper utilizes two alternative econometric strategies to test the hypothesis that countries with poor institutional arrangements create an environment with increased impunity, thus providing incentives for potential law-breakers to engage in criminal activities that lead to rapid contagion of violence. Several measures of institutions including legal, political, market, government, and sociocultural institutions are considered in the paper. The empirical analysis provides evidence that the impact of institutional quality on violence is important regardless of income levels. This finding implies that differences in quality of institutions explain why countries with similar levels of income per capita may have different rates of violence and crime. In addition, the results show that quality of institutions matter for a successful long-term strategy to reduce violence.     

Monetary policy and the behaviour of inflation in India: Is there a need for institutional reform?

Inflation rates in a number of developed countries follow a common trend over the past five decades: inflation starts out low in the 1950s, rises for a time before peaking in the 1970s, and then falls back to initial levels. Interestingly the behaviour of trend inflation in India broadly exhibits such a pattern. This similarity in the behaviour suggests that any explanation of inflation ought to apply across countries. To this end we construct a reduced-form inflation model for India that encompasses various well-known policy mistake theories as special cases. The restriction imposed by each of these theories on the behaviour of inflation is tested empirically. Reduced-form estimates lend support to all these theories. Although the reason for the inflation bias differs from one theory to the other, the mechanism at the heart of these theories are in fact quite similar. They all lay responsibility for inflation with the nature of monetary institutions. We use these results to interpret India's inflation experience over the past five decades and discuss the implications for institutional reform.     

Institutional Foundations for Shared Growth in Sub‐Saharan Africa*

Abstract: The paper examines the dynamically evolving triangular relationships between institutions, growth and inequality in the process of economic development, in order to deepen the understanding of institutional conditions for pro‐poor growth and shared growth. In this context, the paper discusses the institutional conditions found in sub‐Saharan Africa, which may have produced the growth pattern that is unequal and against the poor. The analysis shows that sub‐Saharan African countries require transforming institutions for embarking upon and sustaining a development path which would ensure shared growth in years to come. The paper first evaluates the growth‐inequality‐poverty nexus, as found in the recent literature, which increasingly challenges the trade‐off between growth and equity, as postulated in the traditional theories. Various definitions of pro‐poor growth are discussed and a sharper definition of the concept of ‘shared’ growth is provided. Definitions of institutions are then examined, as well as the triangular inter‐relationships between institutions, inequality and poverty. The paper finally analyses specific institutional conditions found in sub‐Saharan Africa that prevent economies from emerging out of low‐equilibrium poverty traps that are characterized by low economic growth, unequal distribution of income and wealth as well as unequal access to resources and power.     

The Impacts of Economic Freedom and Institutional Quality on Migration from African Countries

The previous empirical literature suggests that socio-economic conditions and demographic pressures are triggering factors of migration from Africa. We propose that economic freedom and institutional quality indicators of African countries are also important determinants of out-migration from Africa. Hence, we investigate the effect of economic freedom and institutional quality on migration flow from 44 African countries to major migration destination countries. Aggregate indicators are derived for the quality of institutions and economic freedom using principal component analysis. Controlling for source and destination countries' income levels, population size, cultural, historical and physical distance, our findings provide evidence that migration flow from Africa is significantly determined by the institutional quality and economic freedom indicators in African countries. Our results are strongly robust to different econometric techniques used to control for sample selection bias, zero-valued observations and endogeneity concern. Hence, improving institutional quality and maintaining economic freedom in African countries matters significantly to control out-migration from Africa.     

Do Institutional Investors Prefer Near‐Term Earnings over Long‐Run Value?*

This paper examines whether institutional investors exhibit preferences for near‐term earnings over long‐run value and whether such preferences have implications for firms' stock prices. First, I find that the level of ownership by institutions with short investment horizons (e.g., “transient” institutions) and by institutions held to stringent fiduciary standards (e.g., banks) is positively (negatively) associated with the amount of firm value in expected nearterm (long‐term) earnings. This evidence raises the question of whether such institutions myopically price firms, overweighting short‐term earnings potential and underweighting long‐term earnings potential. Evidence of such myopic pricing would establish a link through which institutional investors could pressure managers into a short‐term focus. The results provide no evidence that high levels of ownership by banks translate into myopic mispricing. However, high levels of transient ownership are associated with an over‐ (under‐) weighting of near‐term (long‐term) expected earnings, and a trading strategy based on this finding generates significant abnormal returns. This finding supports the concerns that many corporate managers have about the adverse effects of an ownership base dominated by short‐term‐focused institutional investors.     

Institutional Quality and CO2 Emission–Trade Relations: Evidence from Sub‐Saharan Africa

This paper examines the roles of trade, institutional quality and their interactions in explaining carbon dioxide emissions in a panel sample of 40 Sub‐Sahara African countries using the system generalised method of moments. We find that institutional reforms are unequivocally environmental improving. Meanwhile, the impacts of trade on the environment tend to depend on the institutional setting of a country. More specifically, trade openness is harmful to the environment in countries with low institutional quality and beneficial to the environment in countries with high institutional quality. This means that institutional reforms are a perquisite for the countries with low institutional quality to actualise the beneficial environment effect of trade. As for the countries with adequate institutional quality, trade and institutions are reinforcing each other in bringing down pollution. From these results, we conclude that trade openness implemented in a sound institutional setting potentially brings better trade, more growth and better environment.     

Regulation and facilitation of public‐private partnerships: The MSP policy framework

This article describes the Municipal Services Partnership (MSP) Policy developed by the Department of Constitutional Development (DCD) of the Ministry for Provincial Affairs and Constitutional Development of South Africa to help local authorities respond to the great demand for improvement of municipal services. The MSP policy was developed by the DCD, utilising consultative policy making. It defines municipal services partnerships and typical contractual forms of MSPs, and also identifies gaps and constraints in existing South African law that can make implementation of MSPs unnecessarily difficult or more costly for local authorities and service consumers. The policy creates a framework for competitive procurement of MSP contracts and, finally, it describes the capacity needs of local authorities to deal effectively with MSP planning, procurement and implementation, and identifies new and expanded institutional roles at the local and national levels to support local authorities that wish to engage in MSPs     

Introduction: Development strategies across the public-private divide

Recent movement toward more comprehensive institutional perspectives on development has been stimulated by two distinct challenges to narrow development theories. Theorists of “social capital” have highlighted the degree to which norms of trust and the interpersonal networks on which they are based constitute economic assets. Revisionist theories of the “East Asian Miracle” have emphasized the central role of public institutions in capitalist development. This introduction and the articles that follow attempt to bring these two disparate traditions together by examining the potentially positive role of relations which join state and civil society in shared developmental projects.     

兼容性制度竞争:双层对冲与地区制度的嵌套设计北大核心

地区制度的兴起增加了全球治理机制的复杂性。竞争性多边主义理论强调制度竞争会导致国际机制的碎片化和规则冲突。制度聚合理论则认为制度背景会强化规则的一致性,甚至形成制度服从。这种冲突—聚合的二分法不足以分析地区制度与多边制度之间关系的复杂现实。作者提出一个双层对冲的分析框架,以解释地区制度与核心多边制度间的联系机制;一方面,地区成员要通过建立地区制度寻求外部选项,实现对现有多边制度的制衡。另一方面,地区成员又离不开现有多边制度,需要借用现有的多边制度资源来解决地区制度建设中的机会主义问题。为了实现双层对冲,地区成员国会根据地区制度的系统冲击效应和投资报偿结构,设计不同的制度嵌套。作者比较了金融救助领域的欧洲稳定机制、清迈倡议多边化以及拉美储备基金等地区金融安排,其结果符合预期。双层对冲框架下的兼容性制度竞争有利于推动国际制度的渐进变迁,限制了大国在国际秩序转型中的冲突烈度,为世界政治的和平权力转移提供了可能。     

家族治理与企业战略导向:基于制度逻辑理论的实证研究

家族-企业双元系统叠加是家族创业过程的一个重要特征，由于家族涉入带来了更多非经济考量，已有研究强调家族企业的战略导向更为保守。而从制度逻辑理论出发，文章认为家族企业的战略选择不仅取决于组织内部双元系统，更取决于其与外部复杂制度环境之间的互动过程。基于2012-2017年A股上市制造业企业的实证研究表明，受家族逻辑影响越深的企业采用保守型战略的可能性越高。进一步研究发现，在市场化程度较高的区域，家族治理与保守战略倾向的相关性更高；而在较高传统文化的地区内，家族治理企业的战略保守倾向并不明显。文章研究表明，家族系统与外部制度环境的不匹配性是导致其保守战略倾向的主要原因。研究结论对于理解制度复杂性下的家族企业战略导向有一定的贡献，也为拓展制度逻辑理论具有一定的学术价值。     

Urban water security in Africa: The face of climate and development challenges

ABSTRACT

Resilience has been promoted as an important objective for the global development community, in part, as a response to concern about the potential impacts of climate change and related risks. A review of the challenges of achieving water security in urban areas of developing countries suggests that a specific focus on resilience may distract communities from more effective interventions. It would be more useful to support relevant institutions to address current service delivery priorities. This will better enable them to manage future climate change and the challenges that this may bring.     

Why are there so many civil wars in Africa? Understanding and preventing violent conflict

Contrary to popular belief, Africa's civil wars are not dueto its ethnic and religious diversity. Using recently developedmodels of the overall incidence of civil wars in 161 countriesbetween 1960 and 1999, we draw lessons with special referenceto Africa, showing that the relatively higher incidence of warin Africa is not due to the ethno-linguistic fragmentation ofits countries, but rather to high levels of poverty, failedpolitical institutions and economic dependence on natural resources.We argue that the best and fastest strategy to reduce the incidenceof civil war in Africa and prevent future civil wars is to institutedemocratic reforms that effectively manage the challenges facingAfrica's diverse societies. To promote inter-group cooperationin Africa, specially tailored political governance and economicmanagement institutions are needed, and we advance some hypotheseson the nature of such institutions. We suggest that Africa'sethnic diversity in fact helps - rather than impedes - the emergenceof stable development as it necessitates inter-group bargainingprocesses. These processes can be peaceful if ethnic groupsfeel adequately represented by their national political institutionsand if the economy provides opportunity for productive activity.     

Dynamic effects of institutions on firm-level exports

The gap between theoretically predicted trade patterns and actual trade suggests that our understanding of what shapes trade patterns is incomplete. Institutional barriers may be one factor behind this gap, and recent research suggests that institutions are a greater obstacle to trade than tariffs. Using detailed firm-level data, we analyze how institutional quality in recipient countries affects exports by Swedish firms. Our results suggest that weak institutions in recipient countries make exports to these countries less likely and that exports to countries with weak institutions are characterized by relatively short duration and small volume. Analyzing long-term trade flows, we identified a learning process where exporters become less dependent on institutional quality in the target economy over time. More specifically, in addition to previous research that emphasize learning related to knowledge about the contracting partner and rule of law, we extend this notion and show that there is also a learning process where firms acquire knowledge about the general business climate. When learning about the contractual partner and business institutions in recipients countries takes place, exports increase relatively quickly during the first 2 years of exports and thereafter levels out. Hence, firms that are initially sensitive to weak institutions, start small, and learn how to handle foreign institutions are likely to be most successful in maintaining long-term relationships with foreign markets.     

商业银行形态开发性金融机构发展模式研究

国家开发银行改制转型与中国改革开放同呼吸、共命运,有很强的探索性、艰巨性和长期性。在社会主义初级阶段,开行作为国家开发性金融机构,承担大量政策性任务,在经济社会发展中的作用十分重要。积极探索商业银行形态的开发性金融机构发展模式是必要的、也是可行的。开行未来的发展,应当坚持“债券银行”,坚持以中长期政策性业务为主,不断改进和完善市场化运行机制,走与传统商业银行不同的发展路子,实现与商业银行差异化发展。当前迫切需要建立健全商业银行框架下开展开发性业务的区别监管政策、激励机制和法律保障。