Domestic violence and women's autonomy in developing countries: theory and evidence

Abstract This paper sets out a simple non‐cooperative model of resource allocation within the household in developing countries that incorporates domestic violence as a vehicle for enhancing bargaining power. We demonstrate that the extent of domestic violence faced by women is not necessarily declining in their reservation utilities, or necessarily increasing in their spouses’. Using the National Family Health Survey data of India for 1998–99, we isolate the effect of domestic violence on female autonomy, taking into account the possible endogeneity of domestic violence through the choice of appropriate instruments. We provide some evidence for the evolutionary theory of domestic violence, which argues that such violence stems from the jealousy caused by paternity uncertainty in our evolutionary past. The findings have strong policy implications suggesting that it will take more than an improvement in women’s employment options to address the problem of spousal violence.     

The impact of foreign direct investment on productivity: New evidence for developing countries

We provide new empirical evidence on the relationship between inward foreign direct investment (FDI) and total factor productivity (TFP) growth using cross-country data for 51 developing countries over the period 1984–2010. Our results suggest a weak direct effect of FDI on TFP growth but, after accounting for the roles of human capital and institutions as contingencies in the FDI-TFP growth relationship, we find a robust FDI-induced productivity growth response dependent on these ‘absorptive capacities’. However, the relevance of the human capital contingency effect diminishes when the effect of institutions is also considered, which suggests that improving institutions is relatively more important than human capital development for developing countries to realise productivity gains from FDI.     

Measuring subjective expectations in developing countries: A critical review and new evidence

The majority of economic decisions are forward-looking and thus involve expectations of future outcomes. Understanding the expectations that individuals have is thus of crucial importance to designing and evaluating policies in health, education, finance, migration, social protection, and many other areas. However, the majority of developing country surveys are static in nature and many do not elicit subjective expectations of individuals. Possible reasons given for not collecting this information include fears that poor, illiterate individuals do not understand probability concepts, that it takes far too much time to ask such questions, or that the answers add little value. This paper provides a critical review and new analysis of subjective expectations data from developing countries and refutes each of these concerns. We find that people in developing countries can generally understand and answer probabilistic questions, such questions are not prohibitive in time to ask, and the expectations are useful predictors of future behavior and economic decisions. The paper discusses the different methods used for eliciting such information, the key methodological issues involved, and the open research questions. The available evidence suggests that collecting expectations data is both feasible and valuable, suggesting that it should be incorporated into more developing country surveys.     

Devaluation,stabilization policies and the developing countries: A macroeconomic analysis

This paper analyzes the short-run effects of traditional balance-of-payments policies for a small developing country. The country is assumed to be running persistent payments deficits under a fixed exchange rate regime. This paper illustrates how conventional results are affected by the presence of (a) imported intermediate inputs, (b) partial wage indexation, and (c) a large initial trade deficit. Stagflationary effects of a currency devaluation are particularly noteworthy. A tariff/subsidy policy that leaves the price of imported inputs unaffected is shown to be likely to achieve the payments objectives without creating significant adverse supply-side effects.     

The dynamic impact of macroeconomic factors on initial public offerings: evidence from time-series analysis

This article examines the explanatory power and the dynamic impact of macroeconomic conditions on Initial Public Offering (IPO) activities in US during the period from 1970 to 2005. Applying time-series econometric techniques, we find the existence of long-run equilibrium relationships between IPO activities and selected macroeconomic variables. Stock market performance and volatility are shown to play the most important role in the timing of IPOs. The Fed funds rate and the 10 year US Treasury Bond (TB) yield play a comparable role in determining the amount of proceeds raised in the IPOs. There also exist different short-run dynamic adjustment mechanisms between IPOs and macroeconomic factors towards the long run equilibrium path and they are mostly completed within the period of 6 months to 1 year. The results have some useful implications for forecasting IPO activities.     

On the impact of trade openness on growth: further evidence from OECD countries

This study attempts to examine empirically the implications of the degree of openness for total and individual factor productivity growth in a group of 19 OECD countries over the last three decades. The study combines both time series and cross-sectional data. The model employed is a generalization of the commonly used, growth-accounting model based on the concept of an aggregate production function in which the rate of economic growth is a function of capital and labour accumulation and total factor productivity. It is explicitly assumed that total factor productivity depends, in turn, upon the rate of export expansion. The model is then estimated using the random coefficients approach. While results generally indicate that the relative importance of trade openness on economic growth varies significantly across countries, they also indicate that the role of capital and labour accumulation in fostering economic growth varies with the degree of openness, cross-sectionally as well as across time.     

Macroeconomic volatility and anti-refugee violence in developing countries: Evidence from commodity price shocks

I investigate the effect of macroeconomic (output) volatility on anti-refugee violence in developing countries. Opportunity cost, rapacity, and state capacity theories predict ambiguous effects. For causal inference I leverage output volatility caused by plausibly exogenous commodity price shocks. I find that adverse commodity price shocks increase both violence of natives against refugees and violence between refugees. My results suggest that anti-refugee violence increases during recessions and decreases during economic booms.     

The equilibrium real exchange rate and macroeconomic performance in developing countries

This article presents first estimates of the growth impact of the equilibrium real exchange rate (ERER) for a sample of 63 developing countries over 1970–2007. The results suggest that real exchange rate misalignment, not the level of the ERER, matters for macroeconomic performance in these countries.     

Nonlinearities in the real exchange rates: new evidence from developed and developing countries

This paper investigates nonlinearities in the dynamics of real exchange rates. We use Monte Carlo simulations to establish the size properties of the Teräsvirta-Anderson test, when the dynamics of the real exchange rate is influenced by an exogenous process. In addition, we show that a modified nonlinearity test, which includes additional right-hand-side variables, performs much better than the original in both Monte Carlo exercises and in the actual data on 1431 bilateral real exchange rate series. Finally, we investigate the dynamics of the real exchange rate for both developed and developing countries using the modified test for the recent floating period. In general, the results find a greater incidence of nonlinear dynamics for developing country real exchange rates.     

The effects of foreign direct investment on private domestic investment: evidence from developing countries

The main objective of this study is to make a contribution to the empirical literature of investment by examining the effects of FDI inflows on private investment in developing host countries. We employ panel data for 91 developing host countries over the period 1970–2000 and estimate our model by a means of system generalized method of moments. The results show that FDI stimulates private domestic investment which supports the “crowd-in-hypothesis”. Moreover, after grouping countries based on their level of income, we find that the positive effects of FDI on private investment in low-income countries depend on the availability of human capital.     

Joint venture instability in developing countries under entry

We explain the rationale for share adjustment in an international joint venture (JV) and opening up of a wholly owned subsidiary by the foreign JV partner. If the cost difference between the JV and other firms is small, the foreign firm opens a wholly owned subsidiary and completely sells-out its shares in its previously formed JV. If the cost difference is intermediate (large), the foreign firm adjusts (increases) its shareholding in the JV and opens (does not open) a competing subsidiary. JV instability may be the outcome of a friendly separation. There may also be situations with no share adjustment.     

The impact of public employment on labour market performance: evidence from African countries

Using census data for Ghana, Mali and Mozambique, we study the long-term impact of public sector employment on local labour markets. We find that the public sector crowds out private employment and induces skilled workers to queue for a public job, thus increasing their unemployment rate. In addition, a growing public sector fosters employment in the tradable and nontradable sectors, remarkably for the unskilled, and the reallocation of unskilled workers away from agriculture.     

Corporate debt and output pricing in developing countries: Industry-level evidence from Turkey

The present study is an application of capital structure theory to developing economies where markets are commonly imperfect. The industry-level data of Turkey is used as a benchmark case to investigate the effects of corporate debt on output pricing, which in return, might have critical implications for stabilization theory. The panel estimations on the major two-digit industries reveal two basic findings. First, short-term debt leads to an increase in output prices while long-term debt has the opposite effect, and short-term but not long-term debt has a cyclical influence on prices. Second, the inflationary effect short-term debt implies a lower capital gain and induces higher prices, while the effect long-term debt implies a higher capital gain and induces lower prices. Given the predominant share of short-term debt in most developing countries, these findings suggest an explanation for inflation inertia on the side of corporate sector.     

Export revenue and quality: Firm‐level evidence from developing countries

I combine firm‐level export data from eight low‐income and middle‐income countries to test the relation between export price and export revenue. Across‐firm estimations show a strong positive association between export price and export revenue. Within‐firm estimations show that firms generate larger export revenue from their high‐price products. The positive correlation between export price and export revenue is strong for manufactures, weak for primary commodities, and nonexistent for extractables. Results are robust to using an alternative quality measure and controlling for exporters’ market power.     

On macroeconomic instability from a monetarist policy rule

In macroeconomic models that include government budget restraints, following a monetarist policy rule will often result in instability. Here, that result is shown to be crucially dependent upon the assumption that government bonds represent private wealth.     

The impact of macroeconomic factors on income inequality: Evidence from the BRICS

In this paper we investigate how the evolution of income growth, real interest rates, and inflation have driven income inequality across a variety of countries with particular focus on the BRICS economies (Brazil, Russia, India, China, and South Africa) during the period 2001 to 2015. Our work suggests that, when central banks of the BRICS economies use monetary policy for macroeconomic stabilization, they need to consider the impact monetary policy changes have on the distribution of income in their nations. Our estimates reveal that the unintended consequence of policies that induce economic growth and higher prices is higher income inequality. We find that the positive relationship between the three macroeconomic variables and income inequality for the BRICS economies is stronger during the post-2008 period.     

The impact of urbanization on CO2 emissions: Evidence from developing countries

This paper analyzes the impact of urbanization on CO₂ emissions in developing countries from 1975 to 2003. It contributes to the existing literature by examining the effect of urbanization, taking into account dynamics and the presence of heterogeneity in the sample of countries. The results show an inverted-U shaped relationship between urbanization and CO₂ emissions. Indeed, the elasticity emission-urbanization is positive for low urbanization levels, which is in accordance with the higher environmental impact observed in less developed regions. Among our contributions is the estimation of a semi-parametric mixture model that allows for unknown distributional shapes and endogenously classifies countries into homogeneous groups. Three groups of countries are identified for which urbanization's impact differs considerably. For two of the groups, a threshold level is identified beyond which the emission-urbanization elasticity is negative and further increases in the urbanization rate do not contribute to higher emissions. However, for the third group only population and affluence, but not urbanization, contribute to explain emissions. The differential impact of urbanization on CO₂ emissions should therefore be taken into account in future discussions of climate change policies.     

A re-examination of the impacts of macroeconomic and financial shocks on real exchange rate fluctuation: evidence from G7 and Asian countries

ABSTRACT

This paper aims to investigate the sources of real exchange rate fluctuation by utilizing sign restrictions in structural vector autoregressive (SVAR) method. Under an agnostic identification scheme, the empirical results show that the delayed overshooting puzzle still exists in response to monetary shock even if price puzzle is ruled out by construction. In contrast, all countries experience a significant initial real depreciation, and then gradually appreciate in response to currency risk premium (CRP) shock. This finding is consistent with Dornbusch’s overshooting model. In addition, I examine the importance of investors’ expectations in determining the short-term variations in the real exchange rate. The results indicate that the CRP and expectation shocks obviously outperformed the demand, supply and monetary shocks in terms of explaining the real exchange rate fluctuation.     

How do income and education affect health inequality: evidence from four developing countries

Using household survey data from four countries ? Albania, Nepal, Tajikistan and Tanzania ? this article calculates income-related inequality in health care utilization. We measure health disparity separately for generally and chronically ill individuals by constructing two models: one for the probability of a visit to a physician and another for the number of visits. Following model-based measurements, we decompose inequality into two major parts: one accounted for by identity-related factors and another by socioeconomic and other factors such as education, geography and distance to a clinic. We propose a new method to quantify the effect of changes in income and education on health disparity. One of our important findings suggests that health disparity is pro-rich in all our sample countries. The pro-rich disparity is prevalent among generally ill as well as chronically ill patients, in both visit probability and visit frequency models. Health inequality seems primarily driven by income differences followed by nonidentity factors. Further, the principle of equal treatment for equal need is not fulfilled in any of our countries. Among policy implications, increasing average income and education in a way that also reduces disparity in income and education, respectively, will substantially shrink inequality in health care utilization.