The magnitude and determinants of capital flight: The case for six sub-Saharan African countries

Summary Most studies treat capital flight as an exclusively Latin American problem. This paper estimates capital flight for six African countries and shows that the emphasis on Latin American capital flight is not correct. It appears that the burden of capital flight is also important for many African countries. Moreover, this paper tries to find some determinants for the African countries' capital flight. The increase of government and government-guaranteed foreign debt and the overvaluation of the real exchange rate appear to be the most important explanatory factors of capital flight for the African countries in this study.The authors would like to thank Peter van Bergeijk, Richard Brown, Nanne Brunia, Richard Gigengack, Ger Lanjouw, the participants of the Development Economics Seminar, March 1992, Institute of Social Studies, The Hague, and an anonymous referee for their useful comments.     

On the determinants of capital flight from Russia

The paper addresses the problem of defining and assessing the scale of capital flight from Russia and of briefly reviewing the channels through which capital, both of legal and illegal origin, illegally leaves Russia. It then highlights the determinants of Russian capital flight, as the traditional view of a reaction to divergences among real domestic and foreign returns and to economic and political risks proves inadequate. More important factors are linked to specific features of the transition process under way, that is macroeconomic instability and variability of government policies, weak protection of property rights and savings, a fragile banking system limiting access to investment finance, high and unevenly enforced taxes, a large share of unofficial activities, and considerable levels of corruption.     

Price dispersion across and within countries: The case of Japan and Korea

This paper analyzes the price difference between Japan and Korea by using goods-level consumer price data. The national border has a large effect on price dispersion in both time-series volatility analysis and cross-sectional difference analysis. By categorizing goods by their perishability, I find that absolute purchasing power parity (PPP) applies to a greater extent for durable goods. Although perishables deviate more from absolute PPP, the difference is due to distance. This implies that the source of price dispersion depends on the characteristics of goods. J. Japanese Int. Economies 21 (2) (2007) 237–259.     

Forecast for GDP energy intensity in 2020: Russia and other developed countries

A forecast of the energy intensity of the Russian GDP in 2020 has been prepared based on a one-factor regression model and using statistical data on the internal consumption of fuel-energy resources and GDP in 2000–2008. According to the obtained regression equation, the bulk of consumption of fuel-energy resources does not depend on the GDP size (i.e., the constant term of regression is 768 tce), while the part of fuel-energy resource consumption depending on the GDP was 214 tce for 2007, or 21.8% of the total consumption. The calculated consumption elasticity coefficient of the GDP primary fuel-energy resources is 0.17. It is shown that the objective of 40% decrease of GDP energy intensity by 2020 against that of 2007 is a challenging task taking into account the economic crisis of 2008–2009 and the difficult process of overcoming it in 2010–2012.     

On black market exchange rate and demand for money in developing countries: The case of Nigeria

This paper examines the hitherto unexplored question of the effects of the black market exchange rate expectations on the domestic demand for money in Nigeria. This study finds that real income and expected inflation rates are the appropriate scale and opportunity cost variables for the demand for money function in Nigeria. The results also suggest that depreciation in black market exchange rate exerts a significant negative impact on the domestic demand for money. A policy implication of this research is that since a depreciation of the black market exchange rate tends to decrease the demand for money, it should be taken into account in the execution of monetary policy. The authors would like to thank an anonymous referee for helpful suggestions which substantially improved the quality of the paper. This research was supported in part by a summer research grant from the College of Business Administration, University of New Orleans.     

The economic benefits and costs of trademarks: Lessons for the developing countries

Trademarks may be credited with social benefits to the extent they identify quality for consumers. In particular, trademarks may reduce purchase errors and the costs people bear when attempting to avoid errors. However, several forms of social costs are associated with trademarks when trademarks (and the persuasive advertising promoting them) provide the sole or major source of quality identification for the product, and when grants of exclusive use to particular product sources protect the goodwill (or monopoly) rents that attach to trademarks. To maximize benefits and minimize costs, it is suggested that identification of quality and source be separated wherever possible.     

Trade integration and business cycle co-movements: the case of Korea with other Asian countries

As Korea increases its trade within Asia, it is becoming more and more integrated with the other economies in the region. Theoretically, increased trade can lead business cycles across trading partners to be patterned in either direction, towards convergence or divergence. By using data for 12 Asian economies, this paper finds that intra-industry trade is the major channel by which the business cycle of Korea becomes synchronized with that of other Asian economies, although increased trade itself does not necessarily lead to close business cycle coherence.     

Decomposing polarisation across developing countries: case study of China,India, and Indonesia

We investigate the contributions of various factors in the differences in polarisation across China, India, and Indonesia using micro‐simulation and decomposition methods. Using household expenditure from harmonised data from these countries, China was found to have the highest polarisation, while India has the lowest. Using India as the base country, the differences in the labour market structures in India and Indonesia have a slightly decreasing effect on polarisation. The effects of the differences in demographic composition and expenditure structures/parameters, however, are uncertain. Further, the differences in polarisation between China and Indonesia can be explained mostly by the differences in the expenditure structures. China's expenditure structure tends to increase polarisation, as evidenced by the resulting reduction in the size of the middle class.     

Pension reforms in developed countries: The latest tendencies and conclusions for Russia

The paper considers the evolution of the conceptual approaches to the pension system and the stages of the reforms themselves. Particular attention is devoted to the parametric perfection of mature solidary distribution systems, which is of great significance for Russia, because the universal scheme is being reformed.     

发展中国家资本项目开放与汇率制度选择

开放资本项目是实现一国金融自由化的一个重要层面.西方发达国家已于20世纪80年代末陆续完成了资本项目开放的进程,发展中国家有的已经完成了开放,其他的或正在或将要实行资本项目可兑换.而汇率制度的选择往往是各个国家在开放资本项目进程中要慎重考虑的一个环节.浮动汇率和固定汇率孰优孰劣是一个很难抽象地加以判别的问题,其选择是由一系列条件和因素所决定的.本文着重从资本项目开放的角度来探讨发展中国家汇率制度选择的问题.     

The costs and benefits of inward investment: The case of Plymouth

Inward investment has long been regarded in the UK as the major method of restructuring the economies of depressed regions. The value of such investment has long been contentious. Those in favour argue that inward investment provides a number of benefits including the provision of good employment opportunities, diversification of local economies, demand for local raw materials, components and services, improved R & D and productivity and support of local communities. Those against tend to argue that inward investment provides the wrong sort of jobs in the wrong sort of production units and question whether many of the above alleged benefits are realised. This article examines these issues through a detailed analysis of the impact of inward investment in one city, Plymouth. The evidence suggests that the benefits of inward investment have been considerable though there have been some disadvantageous aspects. In any event, it is argued that there are no credible policy alternatives. What must be done is to increase the benefits by, for example, stipulating the local content of production.     

Accumulation and consumption of fixed capital in Russia: An alternative estimate

Official statistical figures of the availability and utilization of fixed capital in the Russian economy are reviewed. The reasons for unauthenticity of these figures are revealed. An alternative estimate of the macroeconomic indicators of capital consumption and accumulation is made based on a comparison of wear and tear and investment volumes. An estimate of the reproduction of fixed capital in 2001 is made by which the amount of consumption is much in excess of accumulation. The case is made for increasing investment in fixed capital and the scale of increase is calculated.     

Determinants of intra-industry trade: Among countries and across industries

Zusammenfassung Determinanten des intraindustriellen Handels: Eine internationale und interindustrielle Querschnittsanalyse. — In der vorliegenden Untersuchung werden in einem kombinierten Ansatz die Hypothesen empirisch überprüft, da\ (i) die Intensit?t des intraindustriellen Handels zwischen L?ndern systematisch mit bestimmten Charakteristika der Handelspartner und (ii) die Intensit?t des intraindustriellen Handels in einzelnen Branchen systematisch mit bestimmten Industriecharakteristika zusammenh?ngt. Als Stichprobe werden bilaterale Handelsstr?me der Jahre 1972 und 1973 zwischen den OECD-L?ndern auf der Basis dreistelliger Positionen der SITC-Gruppen 5–8 herangezogen. Die Untersuchungsergebnisse lassen darauf schlie\en, da\ es in der Regel zu einer Zunahme von intraindustriellen Handelsstr?men kommt, wenn Handelspartner im wirtschaftlichen Entwicklungsniveau oder in der (heimischen) Marktgr?\e aufholen, die heimischen M?rkte von Handelspartnern simultan wachsen und natürliche oder künstliche Handelshemmnisse abgebaut werden. Im Branchenquerschnitt sind intraindustrielle Handelsstr?me insbesondere in jenen Industrien ausgepr?gt, in denen Transaktionskosten eine vergleichsweise geringe Rolle spielen; gewisse Anhaltspunkte deuten überdies darauf hin, da\ die Intensit?t des intraindustriellen Handels mit abnehmendem Standardisierungsgrad des Sortiments zunimmt.

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Résumé Déterminants du commerce intra-industriel: Une analyse transversale internationale et interindustrielle. — Dans cette analyse nous testons empiriquement à l’aide d’une approche combinée les hypothèses que (i) l’intensité du commerce intra-industriel entre des pays dépend systématiquement des certains caractéristiques des partenaires commerciaux et que (ii) l’intensité du commerce intra-industriel dans les branches dépend systématiquement des certains caractéristiques de líndustrie. Comme échantillon nous utilisons le commerce extérieur bilatéral des années 1972 et {dy1973} entre les pays de l’OCDE au niveau des groupes 3-digit de la CTCI 5–8. Les résultats démontrent qu’il y a une augmentation du commerce intra-industriel en général, si les partenaires gagnent du terrain en niveau de développement économique ou en dimension du marché local, si les marchés locaux des partenaires croissent simultanément et si les obstacles commerciaux naturels ou artificiels sont diminués. En section transversale des branches, le commerce intra-industriel est particulièrement prononcé dans les branches oú les frais de transaction jouent un r?le comparativement faible; de plus, certains signes indiquent que l’intensité de commerce intra-industriel augmente si le degré de standardisation diminue.

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Resumen Determinantes del comercio intra-industrial: entre países e industrias. — Este trabajo examina conjuntamente, determinantes especificos de naciones y bienes, que pueden influir sobre la intensidad del comercio intra-industrial, basándose en flujos bilaterales desagregados de comercio entre países pertenecientes a la OCDE. Los resultados son consistentes con las hipótesis de que una equiparación en el nivel de desarrollo o en tama?o del mercado, o crecimiento simultáneo en los mercados nacionales de los países que comercian entre si, o una disminuciń de barreras naturales o artificiales contra el comercio, tienden a ser acompanadas de un incremento en el comercio intra-industrial entre países. A lo largo de las diferentes industrias, este comercio parece ser especialmente intenso cuando los costes de transacción son bajos. Finalmente existe evidencia positiva aunque no definitiva, de que el comercio intra-industrial disminuye con el aumento en la uniformidad de los productos.

     

The role of foreign capital in the economies of regions of Russia: Possibilities of assessments and interregional differences

The article deals with methodological approaches to assessing the role of foreign capital in regional economy. Interregional differences in the structure of organizations with foreign capital by countries are analyzed, including the scale and factors of regional differentiation by the role of the organizations with Cypriot capital. The dependence of regions on the activities of organizations with foreign capital by the indicators of employment, organizations’ turnover, and fixed capital investments have been assessed.     

Currency substitution and the demand for money: The argentine case, 1960–1976

Zusammenfassung W?hrungssubstitution und Geldnachfrage: Der Fall Argentinien 1960–1976. - Das Ziel dieser Arbeit ist es festzustellen, ob W?hrungssubstitution eine empirisch signifikante Erscheinung in Argentinien im Zeitraum zwischen 1960 und 1976 war. Um zu ermitteln, ob es ein solches Ph?nomen m?glicherweise gab, wurden verschiedene Geldnachfragefunktionen gesch?tzt. Für Politiker ist es wichtig, die Extistenz eines W?hrungssubstitutionseffekts zu prüfen, weil dann, wenn er vorhanden ist, eine strenge W?hrungspolitik in der Regel nicht ausreichen wird, um die Inflation einzuschr?nken. Es ist au\erdem notwendig, da\ die Beh?rden gleichzeitig eine glaubwürdige Wechselkurspolitik und eine konsistente Zinspolitik durchführen. Die ?konometrischen Ergebnisse liefern deutliche Hinweise für eine W?hrungssubstitution in der argentinischen Volkswirtschaft, insbesondere dann, wenn der Geldbegriff eng definiert wird.

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Résumé Substitution de monnaie et demande de monnaie: Le cas argentin, 1960–1976.- Le but de cet article est de déterminer si la substitution de monnaie était un phénomène empiriquement significatif en Argentine pendant la période 1960–1976. L’auteur estime quelques fonctions de demande de monnaie pour établir l’existence possible d’un tel phénomème. Il est important pour les politiciens de vérifier l’existence d’un effet de substitution de monnaie parce qu’en cas de l’existence une politique monétaire restrictive sera généralement insuffisante de réduire l’inflation. Il est aussi nécessaire que les autorités simultanément poursuivent une croyable politique de taux de change aussi bien qu’une politique “consistante” de taux d’intérêt. Les résultats économétriques démontrent une forte évidence de la substitution de monnaie en Argentine, particulièrement si la masse monétaire est étroitement définie.

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Resumen Substitución de monedas y la demanda de dinero: el caso argentino, 1960–1976. - El objetivo de este artículo es determinar si la substitución de monedas fue un hecho empírico importante en Argentina en el periodo 1960–1976. Para establecer la posible existencia de tal substitución, varias funciones de demanda de dinero son estimadas. Es relevante que las autoridades verifiquen la existencia de substitución de monedas porque en su presencia, una política monetaria restrictiva no será por lo general suficiente para reducir la inflación. También es necesario que se implemente simultáneamente una política de cambio creíble y una consistente política de tasa de interés. Los resultados econométricos respaldan la presencia de tal substitución en la economía argentina, en especial cuando dinero si define como moneda en circulación y/o depósitos a la vista.

     

State,capital, and the transformation of dependence: The Brazilian computer case

Brazil's policy of reserving the lower end of the computer market for indigenous firms has been controversial since its introduction 10 years ago. This paper examines the implications of the Brazilian computer case for the “dependency approach” and for current thinking on the role of the state in development. The case is considered to demonstrate that dependence is a dynamic condition whose character is continually being transformed and that the state, while it may play a crucial role in the initiation of new industries, is limited in its ability to act autonomously once an industry is established.     

Learning and the capital goods sector under free trade: The case of Hongkong

Attention is focused on technological change and attendant learning processes in the more industrialized Third World countries. The importance of relatively simple learning processes is stressed and the conditions necessary for facilitating more complex forms of learning - particularly protection and promotion - are examined. Here it is shown that the capital goods sector is of central importance. The case-study material deals with the machine- producing sector in Hong Kong, chosen as the representative case of free trade and minimal government intervention, and comparison is made with learning processes in a number of other more industrialized Third World Countries including India, Argentina and Taiwan. In the final section the implications of the discussion of learning for theories and techniques of investment allocation - including social cost-benefit analysis, the effective rate of protection and the related domestic cost of foreign exchange - are examined.     

The demand for money in a small open economy: The case of Switzerland

The paper uses cointegration analysis to investigate the demand for money in Switzerland in the context of an open economy. It considers the general process of financial asset substitution and tests for the relevance of an exchange rate and a foreign interest rate variable in a conventional money demand equation. The results show that the variables entering into the demand for either monetary base or narrow money equation may not form a cointegrated system unless the exchange rate or foreign interest rate variable is included. This provides support to both the currency substitution and capital mobility hypotheses.