Does global value chain participation improve firm productivity? A study of selected ASEAN developing countries

This paper examines the impact of local firms’ participation in global value chains (GVCs) on productivity by considering three different patterns of GVC participation. We conducted a DID-PSM estimation involving three countries, Indonesia, the Philippines, and Vietnam, and 17 manufacturing sectors in 2009 and 2015 in a panel framework. We found an endogenous relationship between firm productivity and GVC participation: firms that enter GVCs have high productivity before participating in the GVCs (selection effect), and only Indonesian firms that entered GVCs had high productivity growth after joining GVCs (learning effect). These two effects were only found for firms that both import intermediate goods and export output and not for firms that only either import or export. We also found that indirect exporting does not improve a local firm's productivity. Several recommendations are made to help firms and governments facilitate the participation of firms in GVCs.     

The British ‘failure’ that never was? The Anglo‐American ‘productivity gap’ in large‐scale interwar retailing—evidence from the department store sector1

Interwar British retailing has been characterized as having lower productivity, less developed managerial hierarchies and methods, and weaker scale economies than its US counterpart. This article examines comparative productivity for one major segment of large‐scale retailing in both countries—the department store sector. Drawing on exceptionally detailed contemporary survey data, we show that British department stores in fact achieved superior performance in terms of operating costs, margins, profits, and stock‐turn. While smaller British stores had lower labour productivity than US stores of equivalent size, TFP was generally higher for British stores, which also enjoyed stronger scale economies. We also examine the reasons behind Britain's surprisingly strong relative performance, using surviving original returns from the British surveys. Contrary to arguments that British retailers faced major barriers to the development of large‐scale enterprises, that could reap economies of scale and scope and invest in machinery and marketing to support the growth of their primary sales functions, we find that British department stores enthusiastically embraced the retail ‘managerial revolution’—and reaped substantial benefits from this investment.     

The ‘light touch’ of the Black Death in the Southern Netherlands: an urban trick?

Although the fanciful notion that the Black Death bypassed the Low Countries has long been rejected, nevertheless a persistent view remains that the Low Countries experienced only a ‘light touch’ of the plague when placed in a broader European perspective, and recovered quickly and fully. However, in this article an array of dispersed sources for the Southern Netherlands together with a new mortmain accounts database for Hainaut show that the Black Death was severe, perhaps no less severe than other parts of western Europe; that serious plagues continued throughout the fourteenth and fifteenth centuries; and that the Black Death and recurring plagues spread over vast territories—including the countryside. The previous conception of a ‘light touch’ of plague in the Low Countries was created by the overprivileging of particular urban sources, and a failure to account for the rapid replenishment of cities via inward migration, which obscured demographic decimation. We suggest that the population of the Low Countries may not have recovered faster than other parts of western Europe but instead experienced a greater degree of post‐plague rural–urban migration.     

Is social capital eroded by the state-led urbanization in China? A case study on indigenous villagers in the urban fringe of Beijing

In the rapid urbanization process, indigenous villagers' social capital might be affected by the flooding-in of rural migrants and more importantly by the government's urbanization policies. Based on survey data collected from fifteen Beijing villages in 2011 and 2012, we study the relationship between social capital and urbanization for indigenous villagers in the urban fringe of Beijing. We find that the bottom-up urbanization measured by migrant-local ratio weakened social networks and social trust. However, the top-down urbanization measured by designating policy zone promoted social networks and social trust.     

What are the Determinants of Large‐scale Farming in China?

The Chinese Government has increased its focus on expanding farm scale to promote agricultural development since 2010. A series of favorable polices has been adopted to support large‐scale farming. Using a multivariate probit model and 2015 and 2016 rural household survey data, the present paper examines the factors that influence small farmers' decision to become large‐scale farmers. The empirical regression results suggest that the decision to become a large‐scale farmer is significantly influenced by household human capital, cooperative membership, marketing channels, land‐transfer contracts and government policies. However, the influence of these factors differs with respect to becoming large‐scale grain and non‐grain farmers. These results imply that policy tools should target these factors and the appropriate group of small‐scale farmers. Generally, both central and local governments should promote large‐scale farming by enhancing rural households' human capital, improving marketing channels and providing agricultural social services, as well as encouraging returning migrant workers to engage in large‐scale farming.     

What causes changes in the effects of fiscal policy? A case study of Japan

In the past two decades, the Japanese government has spent a considerable amount of money to counteract the severe recessions that have recurred since the early 1990s. Numerous studies have pointed out that the effects of these expenditures have diminished since around the 1990s. However, none of these studies has statistically explored the reasons for this diminution, which they implicitly or explicitly mention. The purpose of this study is to statistically investigate these reasons, using a threshold vector autoregression (VAR) in which the causes pointed out in the literature are adopted as the threshold. If the null hypothesis that the estimated parameters are equal under each regime is rejected, we can conclude that a given cause does affect the macroeconomic structure and, in turn, the fiscal policy effects. We then estimate the impulse response functions in both sample periods, as constructed on the basis of threshold estimates, and compare the effects of fiscal policy in each period.The following are the main results of the study. First, we found that the diffusion index of the attitudes of financial institutions toward lending and the yearly change in the annual average of the quarterly ratios of the structural primary budget balance to potential GDP significantly reject the null hypothesis; therefore, we concluded that these variables have a definite impact on fiscal expansion effects. Second, the resulting impulse response functions show that the effects are traditional, although there are some notable differences. In particular, when banks’ attitude toward lending is tight and the financial condition of the government is bad, the demand-enhancing effects of government expenditure should be considered weak. In this regard, the traditional accelerator effects of private investment, the existence of liquidity-constrained households, and non-Keynesian effects are key operative concepts.     

Effects of financial reform on business entry in sub‐Saharan African countries: Do resource dependence and institutional quality matter?

This paper examined the effects of the financial liberalization strategy adopted on the African continent over 25 years ago in promoting new business entry using data from 22 sub‐Saharan African (SSA) countries in 2006–2017. Results from the dynamic generalized method of moments models show that: financial development via a policy of financial liberalization does not have a uniform effect on entrepreneurship; the interest rate gap significantly undermines the entrance of new firms; the ratio of broad money/gross domestic product (GDP) was positive and statistically significant while real interest rate had mixed findings; interactive effects of interest rate spread and real interest rate with regulatory quality was negative; the interaction of interest rate spread and real interest rate with natural resources confirms its destabilizing effect, although there was evidence suggesting that natural resources do not directly undermine entrepreneurship growth. Other results show real GDP and private credit have a significantly positive effect, and the cost of getting electricity significantly undermines entrepreneurship. The study calls for the need to deepen the financial sector though targeted reforms across SSA countries to reap its growth‐inducing effects on economic outcomes, while promoting institutional quality and efficient use of natural resources to achieve a non‐declining infusion of SMEs on the continent.     

Can the HOSS framework help shed light on the simultaneous growth of inequality and informalization in developing countries?

Using simple, modified versions of the factor proportions framework, and focusing on structural features within developing economies, this paper attempts to reconcile puzzling developments observed in many post-reform, post-liberalization countries whereby increasing income inequality has emerged side-by-side with informalization of the economy. Measures undertaken to enhance public sector efficiency and attract investment in an import-intensive export sector may increase rental–wage and skilled–unskilled wage gaps, contra the predictions of the simple Heckscher–Ohlin–Stolper–Samuelson (HOSS) framework regarding skill- and capital-scarce countries. The common thread generating our interesting results is the presence of sectors that are even more labor-intensive than those producing traded goods.

Has education led to secularization? Based on the study of compulsory education law in China

Has education led to secularization? Using microdata from the Chinese General Social Survey (CGSS), we take the implementation of the Compulsory Education Law (CEL) in 1986 in China as the instrumental variables (IV) for personal educational attainment. We study the causal effect of education on personal religious beliefs and explore the potential mechanisms. The empirical results show that education can lead to secularization. More precisely, individual religious belief decreases by 1.5% with one additional year of personal education. In addition, the increase in regional urbanization significantly affects religious beliefs by replacing the insurance function of religion and reducing information acquisition costs. Moreover, there is an alternative relationship between religious activities and social activities, and women affected by the CEL experience a higher negative impact on religious beliefs than men.     

How did women count? A note on gender‐specific age heaping differences in the sixteenth to nineteenth centuries1

The role of human capital in economic growth is now largely uncontested. One indicator of human capital frequently used for the pre-1900 period is age heaping, which has been increasingly used to measure gender-specific differences. In this note, we find that in some historical samples, married women heap significantly less than unmarried women. This is still true after correcting for possible selection effects. A possible explanation is that a percentage of women adapted their ages to that of their husbands, hence biasing the Whipple index. We find the same effect to a lesser extent for men. Since this bias differs over time and across countries, a consistent comparison of female age heaping should be made by focusing on unmarried women.     

Does the Confucius Institute Network Impact Cultural Distance? A Panel Data Analysis of Cross‐Border Flows in and out of China

This paper examines the impact of cultural distance in general and the Confucius Institute Network in particular on cross‐border flows of tourists, goods and investment in and out of China. We estimate a panel gravity model of inbound and outbound flows between 2004 and 2012. We find that the presence of Confucius Institute(s) in the source country increases inbound tourism and equity flows and outbound export and FDI flows for China, while other measures of cultural distance have less of an impact.     

What explains the intention to bring mobile phones for recycling? A study on university students in China and Germany

The analysis investigates the determinants of the intention to bring mobile phones for recycling. The paper is based on data regarding the determinants of bringing mobile phones for recycling collected from university students in Autumn 2016 (N = 1013) in both the Chinese and German academia. Using structural equation modeling, we examine the direct and indirect effects of social norms, knowledge about the environmental benefits of recycling and a pro-environmental attitude on the intention to recycle mobile phones. We find confirmation that attitude, social norms, and knowledge contribute positively and significantly to the intention to bring phones for recycling. As for three mediating effects tested, attitude mediates the relationship between knowledge and intention, as well as between social norms and intention. Knowledge as a mediator between social norms and attitude does not have a highly significant effect. Looking at the results of the Chinese and German sub-samples, we find that social norms have no direct effect on intention for the German sub-sample, but an indirect one through attitude. Knowledge has no significant effect for the German sub-sample. Results for the Chinese sub-sample indicate an indirect effect of social norms on attitude via knowledge, while knowledge itself has an indirect effect on intention through attitude.     

Impact of Public Investment on Private Investment in Sub‐Saharan Africa: Crowding In or Crowding Out?

This paper investigates the possible crowding‐in or crowding‐out effect of public investment on private investment in sub‐Saharan Africa. While this relationship has been theoretically and empirically studied in the literature, most studies used traditional panel fixed effects or Generalized Method of Moments estimators which can potentially lead to biased and inconsistent estimates. We employ heterogeneous parameter models, including the Mean Group, the Common Correlated Effects Mean Group Model, and the Augmented Mean Group estimators, to incorporate the possibility of slope heterogeneity and the presence of cross‐sectional dependence. Using a large sample of 44 sub‐Saharan African countries over the period 1960–2015, we find that on average public investment crowds in private investment in sub‐Saharan Africa. We also find that the impact differs between countries and is higher in countries with a strong private sector.     

Is the Distance to Default a good measure in predicting bank failures? A case study of Japanese major banks

This paper examines the movements of the Distance to Default (DD), a market-based measure of corporate default risk, of major failed Japanese banks in order to evaluate the predictive power of the DD measure for bank failures. The DD became smaller in anticipation of failure for most cases. Both the DD and DD spread, defined as the DD of a failed bank minus the DD of sound banks, were better indicators for deterioration of a failed bank's health than other traditional indicators. A probit model yielded that the quality of the DD was surely better than other measures. For a bank which window-dressed its financial statements, neither the DD nor the DD spread predicted the failure. However, the result was partly due to lack of transparency in financial statements and disclosed information.     

The Growth Effects of the Bulging Economically Active Population in Sub‐Saharan Africa: Do Institutions Matter?

This paper examines the importance of good institutions in harnessing the growth effects of the bulging economically active population in sub‐Saharan Africa (SSA). The paper utilizes a panel dataset comprising 39 countries over the period 2002–13. Based on the system generalized method of moments estimator, this paper finds that an increase in the relative size of the working‐age population has no direct significant impact on growth, except through the presence of strong and high‐quality institutions. The paper also finds that control of corruption, rule of law and political stability are the specific aspects of institutions that matter the most in reaping the dividend. These results do not only highlight the primacy of strong institutions but also shed light on the key institutional pillars that need to be strengthened to rake in the positive effects of an increasing working age population on economic growth in SSA.     

A Note on the Labor Market Effects of Remittances in Latin American and Caribbean Countries: Do Thresholds Exist?

The labor market effects of remittances have long been examined in the empirical literature. To date, the results have been mixed: some authors observe a negative association between remittances and unemployment while others report that remittances increase unemployment. This study empirically examines the impact of remittances on unemployment using macroeconomic data for a sample of 18 Latin American and Caribbean countries. Specifically, the study tests whether there is a nonlinear relationship between the variables. Results suggest that when the remittance‐to‐GDP ratio is low, remittances have a positive and significant impact on unemployment. However, as they increase, remittances are negatively associated with unemployment. This suggests the possibility that estimations based on the assumption of a linear relationship between remittances and labor may mask the true relationship between the variables.