Child Labor, Child Schooling, and Their Interaction with Adult Labor: Empirical Evidence for Peru and Pakistan

Using data from Peru and Pakistan, this article tests two hypotheses:there is a positive association between hours of child laborand poverty, and there is a negative association between childschooling and poverty. Both of these hypotheses are confirmedby the Pakistani data, but not by the Peruvian data. The reductionin poverty rates due to income from children's labor is greaterin Pakistan than in Peru. The nature of interaction betweenadult and child labor markets varies with the gender of thechild and the adult. In Peru rising men's wages significantlyreduce the labor hours of girls, whereas in Pakistan there isa strong complementarity between women's and girls' labor markets.Both data sets agree on the positive role that increasing adulteducation can play in improving child welfare.     

SOUTH-SOUTH TRADE: Theory, Evidence, and Policy

Recently a number of commentators have argued that trade policyin developing countries should be deployed discriminatorilyto encourage the expansion of trade among southern countries.Such a strategy is seen as being central in the framing of anew international economic order. This article evaluates thearguments in favor of a relative expansion of South-South tradeand reviews the experience of developing countries with discriminatoryregional trading arrangements. It contends that the case forspecific policies to promote South-South trade is not convincingand that experience with discriminatory arrangements is notencouraging. The expansion of South-South trade can be expectedto continue in the context of multilateral trade expansion,and the potential gains are likely to be greater if this processis allowed to evolve freely in a multilateral setting.      

Accounts Receivable Management Policy: Theory and Evidence

This paper develops and tests hypotheses that explain the choice of accounts receivable management policies. The tests focus on both cross-sectional explanations of policy-choice determinants, as well as incentives to establish captives. We find size, concentration, and credit standing of the firm's traded debt and commercial paper are each important in explaining the use of factoring, accounts receivable secured debt, captive finance subsidiaries, and general corporate credit. We also offer evidence that captive formation allows more flexible financial contracting. However, we find no evidence that captive formation expropriates bondholder wealth.     

Labor Earnings in One-Company Towns: Theory and Evidence from Kazakhstan

One-company towns, characterized by the presence of a largeemployer in a local labor market, are a frequent legacy of state-leddevelopment strategies. How will downsizing or closing unprofitablestate-owned enterprises affect these towns?This article developsa simple model combining monopsony power in the labor marketwith a Keynesian closure of the product market and uses it tointerpret the findings of previous studies. The article evaluatesthe impact of the company's employment level on the town's laborearnings in Kazakhstan, where one-company towns are still prevalent.The evaluation is based on data from the 1996 Living StandardsMeasurement Survey. The results show that labor earnings inthe town decrease roughly 1.5 percent when the share of itspopulation working for the company decreases 1 percent. Theresults are robust to changes in the definition of labor earningsand to the inclusion of a variety of other community characteristicsin the analysis. These results and the theoretical model arecombined to evaluate the welfare impact of company downsizingand, consequently, to derive the optimal extent of labor retrenchment.     

Implications of Debt Renegotiation for Optimal Bank Policy and Firm Behavior

This paper analyzes the problems associated with the renegotiation of debt contracts involving a bank (the lender) and a firm (the borrower) when the latter is operated by a risk averse manager. Firms undertake risky projects with loan capital borrowed from the bank. When a firm cannot pay off a loan it is technically bankrupt. Both the borrower and the lender may however experience a Pareto-improvement in their positions by renegotiating the loan. By renegotiating the terms of the debt the financially distressed firm can avoid the stigmatization of bankruptcy and the bank can avoid the costs of seizing the borrower's assets. However, our main finding is that, from the bank's point of view, renegotiating as a policy of recovering loan payments may be inefficient in practice because of false bankruptcy claims and moral hazard problems associated with exposure of the borrowing firm to the risk of default. We present a solution to the false bankruptcy claim problem that involves a mixe d strategy between asset seizure by the bank and debt renegotiation.     

The Determination of the Seniority Structure of Debt: Theory and Evidence

The purposes of this paper are to provide a theory of determining the firm's optimal seniority structure of debt and examine the relation between the firm's seniority structure of debt and its characteristics. Unlike previous studies, we develop a theoretical model which explicitly includes the benefits and costs associated with senior debt financing, corporate taxes, risk-aversion in the capital market, and costs of financial distress. We next show how a value-maximized firm searches for the optimal trade-off among the present values of the tax advantage of debt, loss of tax credits, expected costs of financial distress, costs of senior debt financing, and benefit of limited liability. Numerical analysis results show that the firm's value is not only a strictly concave function of its capital structure (with a unique global maximum), but also a strictly concave function of its mix of senior and junior debts (with a unique global maximum). We then show that a firm's optimal seniority structure of debt (i.e. the market value of senior debt divided by the sum of the market values of senior and junior debts) increases for low levels of asset riskiness and decreases when asset riskiness becomes sufficiently great. Our model also suggests that a firm's optimal seniority structure of debt increases for low levels of growth opportunities and decreases for high levels of growth opportunities. We test the predictions of our model on the relation between the firm's seniority structure of debt and its characteristics by using the data for the firms in COMPUSTAT over the 1972 through 1991 time period. The empirical evidence is consistent with our theoretical predictions.     

Debt Relief: Implications of Secondary Market Discounts and Debt Overhangs

An efficient rescheduling of the debt must take into accountthe market value of the debt. I argue here that the appropriateapproach is not to write down the debt to its value on the secondarymarket, but to scale the flows of payments on the debt. Thekey to an efficient rescheduling is to offer debt relief reflectingthe market discount, where the relief is contingent upon thecountry's adjustment effort (rather than setting repayment terms"once and for all" as in the Brady plan). I propose, as an example,that stabilization or adjustment programs under the aegis ofthe International Monetary Fund or the World Bank could includeprovisions allowing debt servicing or repurchase for a set durationat the secondary market rate. This would both reflect and provideincentives to increase a country's ability to repay.     

Capital Requirements,Monetary Policy,and Aggregate Bank Lending: Theory and Empirical Evidence

Capital requirements linked solely to credit risk are shown to increase equilibrium credit rationing and lower aggregate lending. The model predicts that the bank's decision to lend will cause an abnormal runup in the borrower's stock price and that this reaction will be greater the more capital-constrained the bank. I provide empirical support for this prediction. The model explains the recent inability of the Federal Reserve to stimulate bank lending by increasing the money supply. I show that increasing the money supply can either raise or lower lending when capital requirements are linked only to credit risk.     

Financial Reporting Quality,Debt Maturity,and the Cost of Debt: Evidence from China

This paper investigates the influence of different financing channels—bond issuance or bank loans—as well as debt maturity and the quality of financial reporting on the cost of debt in China. The authors find that conservative accounting is an important characteristic of high-quality financial reporting that can reduce the cost of longer maturity debt such as bank loans and bonds. Even state-owned enterprises, which have fewer financial constraints than non-state-owned enterprises, benefit from accounting conservatism's ability to reduce financial costs. Moreover, the findings indicate that bond investors are concerned about the issuer's fundamentals, while banks are more likely to focus on the operation and bankruptcy risk of borrowers.     

金融生态环境、负债的治理效应与债务重组:经验证据

本文研究金融生态环境、负债的治理效应与上市公司以债务人身份发生债务重组的关系,利用2001—2004年上市公司的数据研究发现,金融生态环境越差的地区的公司更可能发生债务重组;金融生态环境较好地区的上市公司的财务杠杆水平与债务重组之间的正相关关系更弱。这意味着,切实改善金融生态环境,提高金融机构等的经营独立性和信贷风险控制能力,促进公司负债发挥治理效应是非常重要的。本文还发现,存在机构投资者股东、高管持股比例更高和独立董事比例更高的公司更少可能发生债务重组,上市年龄越长的公司更可能发生债务重组。认为发展机构投资者,提高董事会的独立性和适当提高经理人基于股权的激励,并改进资本市场关于IPO公司质量审核的制度安排,可提高上市公司质量。     

International Trade and Accounting Policy Choice: Theory and Canadian Evidence

The accounting policy choice literature has identified many factors which have been shown to be useful in explaining cross-sectional variation in the accounting methods used by public companies. One relationship which has been relatively unexplored in this literature is the potential effect of international trade on accounting choice. This study proposes that international trading activities may create incentives for firms to choose income increasing accounting policies. This proposition was tested by examining the depreciation choices of a sample of Canadian firms. Results suggest that importers were more likely to choose income increasing accounting methods than non-importers, while exporting was not found to be related to this accounting choice. These diverging results may be caused by the declining value of the Canadian dollar (relative to the US dollar), which tends to benefit exporters, but is of detriment to importers.     

Variable Rate Debt Instruments and Corporate Debt Policy

Sustained high rate of inflation has led to the creation of debt instruments with variable interest rate. The availability of these debt instruments presents management with the problem of the choice of the optimal debt portfolio. This paper deals with this problem assuming a given, and optimal, debt to equity ratio. Given expected monetary value maximization, an efficient frontier is derived in terms of the expected net income and probability of bankruptcy, where net income is defined as operating income minus debt repayment. This efficient frontier is shown to be also mean-variance efficient. It is also shown that in most cases the optimal debt portfolio includes more than one debt instrument. In other words, the firm will avoid the policy of minimizing the expected cost of its debt repayments or the policy of minimizing the costs of bankruptcy. The optimal solution itself is affected by market variables like the relative expected cost of different debt instruments and by firm specific variables like the variability of its operating income stream, and the covariance between the operating income and the debt repayments.     

Land Tenure and Property Rights: Theory and Implications for Development Policy

This article explores the nature of property rights systems,their evolution, and their effect on resource allocation. Itis argued that certain institutional arrangements for land rightshave evolved in order to reduce uncertainty and increase efficiencyin credit as well as in land markets. Of particular relevanceto developing countries, the article emphasizes the contributionof public sector infrastructure to effective land rights systems.An appendix to the article presents a formal model analyzingthe effects of security of land rights on land prices, the intensityof cultivation, and the use of credit. Empirical evidence fromThailand supports several of the propositions derived from themodel.     

Labor protection and corporate Debt maturity: International evidence

This paper investigates the impact of labor protection on corporate debt maturity structure. We hypothesize that stronger labor protection is conducive to a greater use of short-term debt maturity by firms. Using various country-level indicators as measures of labor protection, and a sample of 114,594 firm-years from 43 countries over the 1990–2010 period, we document robust evidence that firms located in countries where labor enjoys a strong protection tend to borrow more short-term. Our analysis suggests that labor protection is an important institutional factor that plays a role in determining the maturity structure of corporate debt over-and-above economic, legal, and political factors identified in prior research.     

Debt,Equity and Hybrid Decoupling: Governance and Systemic Risk Implications

We extend here our prior work, which focused on equity decoupling ( Hu and Black, 2006, 2007, 2008 ), by providing a systematic treatment of debt decoupling and an initial exploration of hybrid decoupling. Equity decoupling involves unbundling of economic, voting, and sometimes other rights customarily associated with shares, often in ways that may permit avoidance of disclosure and other obligations. We discuss a new U.S. court decision which will likely curtail the use of equity decoupling strategies to avoid large shareholder disclosure rules. Debt decoupling involving the unbundling of the economic rights, contractual control rights, and legal and other rights normally associated with debt, through credit derivatives and securitisation. Corporations can have empty and hidden creditors, just as they can have empty and hidden shareholders. ‘Hybrid decoupling’ across standard equity and debt categories is also possible. All forms of decoupling appear to be increasingly common. Debt decoupling can pose risks at the firm level for what can be termed ‘debt governance’? the overall relationship between creditor and debtor, including creditors' exercise of contractual and legal rights with respect to firms and other borrowers. Widespread debt decoupling can also involve externalities and therefore create systemic financial risks; we explore those risks.     

“价值理性”与福利政策瞄准偏差——基于甘肃省东部农村新农合的调查

21世纪以来,随着全球老龄化浪潮的来临,中国的老龄化速度加快,政府加快了福利政策的推进。福利政策的瞄准偏差影响着福利效率,传统的瞄准研究从技术分析视角、政治过程视角、文化视角三个视角出发进行研究,而文化视角侧重于文化特殊性与福利污名化关系的研究。调查发现甘肃东部农村存在与文化特殊性相关的价值理性,这种价值理性构成了不同于福利污名化的另一个面向新农合政策瞄准的影响。而该价值理性主导的行为选择所形成的新农合政策瞄准偏差的缩小,不仅需要农村地区关于"孝"、"享福"与"善终"的价值观念的转变,从而在个体行为上实现以对患病高龄老人进行及时治疗,而非将大额金钱用于丧事消费;同时制度层面需要进一步优化农村高龄患病老人对医疗资源的可及性。     

“中国债务陷阱论”的挑战和应对

近年来,我国"一带一路"倡议构想在世界范围内落地开花,产生广泛国际影响。美国等部分国家为了实现其遏制中国的目的,在国际上大肆宣传、营造"中国债务陷阱论",试图污名化中国的"一带一路"倡议,破坏中国和相关发展中国家的关系,阻挠这些国家与中国建立更紧密的经贸关系。我们应积极应对"中国债务陷阱论"对我国对外开放和"一带一路"倡议制造的挑战,把握国际话语权,以降低我国"一带一路"倡议实施和走出去的困难和阻力。     

Child Labor: A Normative Perspective

Examining child labor through the lenses of weak agency, distributiveinequality, and harm suggests that not all work performed bychildren is equally morally objectionable. Some work, especiallywork that does not interfere with or undermine their healthor education, may allow children to develop skills they needto become well-functioning adults and broaden their future opportunities.Other work, including child prostitution and bonded labor, isunambiguously detrimental to children. Eliminating these formsof child labor should be the highest priority. Blanket banson all child labor may drive families to choose even worse optionsfor their children, however. Moreover, child labor is oftena symptom of other problems—poverty, inadequate educationsystems, discrimination within families, ethnic conflicts, inadequatelyprotected human rights, weak democratic institutions—thatwill not be eliminated by banning child labor.     

信贷抑制类型识别及政策影响:千村调查证据

本文依据较易获得的银行网点数据,利用异质性随机双边前沿模型,提出了定量识别农村信贷供给非效率的方法。在此基础上,根据“上海财经大学千村调查”的调研数据,按照某一地区受到供给型或需求型信贷抑制的可能性大小将样本进行分类,实证分析了信贷抑制类型对农村信贷扶持政策效果的影响。研究发现,抑制我国农村信贷的主要原因,是风险导致的需求型信贷抑制。信贷抑制类型会显著影响农村信贷扶持政策的效果:降低贷款利率、提高银行风险承担水平对提升需求型信贷抑制地区的信贷扶持效果非常有效;而要提高供给型信贷抑制地区的信贷扶持效果,应以增加银行网点密度、提高涉农贷款比重以提高信贷可获得性为主,降低贷款利率、提高银行风险承担水平难以达到预期效果。本文的研究结论为合理制定农村信贷扶持政策提供了重要依据。