IS A GOVERNMENTAL MICRO‐CREDIT PROGRAM FOR THE POOR REALLY PRO‐POOR? EVIDENCE FROM VIETNAM

It is argued that without collateral the poor often face binding borrowing constraints in the formal credit market. This justifies a micro‐credit program, which is operated by the Vietnam Bank for Social Policies to provide the poor with preferential credit. The present paper examines poverty targeting and the impact of the micro‐credit program. It is found that the program is not very pro‐poor in terms of targeting. The nonpoor account for a larger proportion of the participants. The nonpoor also tend to receive larger amounts of credit compared to the poor. However, the program has reduced the poverty rate of the participants. The positive impact is found for all three Foster‐Greer‐Thorbecke poverty measures.     

EXPLORING THE IMPACT OF FOREIGN AID ON CORRUPTION: HAS THE “ANTI‐CORRUPTION MOVEMENT” BEEN EFFECTIVE?

Though many studies have referred to an “anti‐corruption movement” beginning in the 1990s by major international organizations, none has empirically tested its effectiveness on corruption. The data show that from 1997 onward, the impact of multilateral aid is strongly and robustly associated with lower corruption levels, while bilateral aid is shown to be an insignificant determinant. An increase in any official development assistance (ODA) pre‐1997 is associated with higher levels of corruption or has no impact at all. Using panel data from 1986 to 2006, this study reveals a more nuanced relationship between ODA and corruption than previous studies and demonstrates that when disaggregating the time periods, there are sensitive temporal effects of ODA's effect on corruption overlooked by earlier studies, and provides initial evidence of the effectiveness of the international organization anti‐corruption movement in the developing world.     

CAN A RULE‐BASED MONETARY POLICY FRAMEWORK WORK IN A DEVELOPING COUNTRY? THE CASE OF YEMEN

Monetary policy in Yemen is largely rudimentary and ad hoc in nature. The Central Bank of Yemen's (CBY) approach has been based on discretionary targeting of broad money without any clear target to anchor inflation expectations. This paper argues in favor of a new formal monetary policy framework for Yemen emphasizing a proactive and rule‐based approach with a greater direct focus on price stability in the context of a flexible management of the exchange rate. Although, as in many developing countries, institutional capacity is a concern, adopting a more formal framework could impel the kind of changes that are required to strengthen the ability of the CBY in achieving low and stable rates of inflation over the medium term.     

When Does Pre‐IPO Financial Reporting Trigger Post‐IPO Legal Consequences?

Prior research suggests that the fear of litigation precludes most managers from manipulating earnings in the initial public offering (IPO) setting. Yet, managers' restraint is perhaps unwarranted: research has not yet linked instances of aggressive pre‐IPO reporting to increased litigation risk. This paper investigates when aggressive IPO reporting triggers legal consequences. Examining 2,037 IPOs, we find that even when ex post evidence indicates the presence of earnings inflation, litigation is more likely to occur when investors have relied on the suspect earnings during the pricing process. Why might investors rely on some firms' abnormal accruals when valuing the IPO and yet discount the abnormal accruals of other firms? Our analyses suggest that IPO investors incorporate abnormal accrual information into IPO prices in situations where accruals are more likely to reflect information and where other sources of information to help investors make pricing decisions are lacking or are less reliable. In these situations, we find that abnormal accruals do positively correlate with future performance, validating investors' use of this information when pricing these offerings. Yet, when ex post performance reveals that these pre‐IPO abnormal accruals were in fact inflated, we find that litigation emerges to allow harmed shareholders to recover losses incurred dating back to the pricing process—importantly, investors are only harmed if they used those abnormal accruals in pricing the IPO. Collectively, our evidence indicates that litigation in response to earnings inflation does indeed surface in the IPO setting—but only when investors need it to settle the score.     

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.     

Reasonable and Risk‐Based? Replacing NFIP Generally Subsidized Rates with a Means‐Tested Subsidy

The National Flood Insurance Program was created to seek two often conflicting goals: (i) shifting risks from federal taxpayers to those who choose to live in flood plains and (ii) ensuring flood insurance is available to everyone at “reasonable” rates. Efforts to accomplish the second goal currently take the form of subsidies based on location and the date a home was constructed. The resulting revenue from subsidized insurance premiums is not sufficient to cover the true cost of flood insurance, and federal taxpayers have paid the difference: $30 billion to date. Based on a detailed survey of households in the high‐risk flood zones of New York City (NYC), we find that replacing existing premium subsidies with risk‐based prices and a subsidy for low‐income housing‐burdened households could better meet both goals by ensuring low‐income individuals have access to affordable flood insurance while still saving the federal taxpayer up to $183 million per year in NYC alone.     

Do Firms Use Tax Reserves to Meet Analysts’ Forecasts? Evidence from the Pre‐ and Post‐FIN 48 Periods

We examine whether firms decrease tax reserves to meet analysts’ quarterly earnings forecasts in the period prior to FIN 48, and whether that behavior changed following FIN 48. We use analysts’ forecasts of pretax and after‐tax income to impute premanaged earnings, or earnings before any tax manipulation. Pre‐FIN 48, we observe that firms reduce their tax reserves (i.e., increase income) when premanaged earnings are below analysts’ forecasts. Specifically, 78 percent of firm‐quarters that would have missed the analyst forecast if not for the tax reserve decrease, meet that target when the decrease is included. Furthermore, we find a significant positive association between the decrease in tax reserves and the deviation of premanaged earnings from analysts’ forecasts. In contrast, post‐FIN 48, we find no evidence that firms use changes in tax reserves to manage earnings to meet analysts’ forecasts. Thus, our results suggest that FIN 48 has, at least initially, curtailed firms’ use of tax reserves to manage earnings.     

HOW REVOLUTIONARY IS THE “NERICA REVOLUTION”? EVIDENCE FROM UGANDA

A new high‐yielding upland rice variety known as New Rice for Africa (NERICA) has been widely recognized as a promising technology for addressing the food shortage in sub‐Saharan Africa. However, there has been no on‐farm yield data to support this optimism. The present study attempts to assess the actual and potential yield of NERICA in Uganda where it has been introduced recently. We found that NERICA's yield is higher (2.5 tons) for farmers who had rice‐growing experience than those who had no previous experience (1.7 tons). These findings strongly indicate that strengthening training, extension, and other supporting systems is the key to the success of the “NERICA revolution” in this country.     

Does Intra‐regional Trade Matter in Regional Stock Markets? New Evidence from the Asia‐Pacific Region

We provide new evidence on the relationship between bilateral trade and stock market returns across the Asia‐Pacific region. Using three country blocs in this region, including the Far Eastern bloc, the Chinese bloc and the Australian bloc, we examine whether trade linkages between countries affect their stock returns. Incorporating two distinct dynamic properties of regime shifting and cointegration in intra‐regional trade and stock market returns, we employ the newly suggested multivariable smooth transition autoregressive vector error correction model (STAR‐VECM). A series of estimations reveals evidence that bilateral trade significantly Granger‐causes stock returns in the Asia‐Pacific region, with effects that are asymmetric depending upon the stock market regime and the country pair. Among the three blocs, the Far Eastern bloc displays a more pronounced positive effect of bilateral trade growth on stock returns than do the other blocs.     

Are Antidumping Duties for Sale? Case‐Level Evidence on the Grossman‐Helpman Protection for Sale Model

Do contributions to politicians affect trade policy? To examine this question, we have compiled a new, unique database containing information on political donations by the specific firms and labor organizations that have petitioned for antidumping protection from imports, as well as data on the outcomes of their requests. Using an empirical framework based on the 1994 “protection for sale” model, we examine the relationship between antidumping decisions and political activism. Our results indicate that money does matter. We find that politically active petitioners are more likely to receive protection and that antidumping duty rates tend to be higher for that group. In addition, the relationship between the import penetration ratio and duties imposed depends on whether or not petitioners are politically active—antidumping duties are positively correlated with the import penetration ratio for politically inactive petitioners but negatively correlated for politically active petitioners, consistent with the Grossman‐Helpman model's predictions.     

The Political Economy of Middle‐Income Traps: Is South Africa in a Long‐Run Growth Trap? The Path to “Bounded Populism”

The current literature on middle‐income traps has been dominated by economists who have relied on economic explanations mainly around stages of development and the structural transformation of economies. But there is an equally vigorous literature from political science which speaks to the political economy of transitions. We look at the dynamics of how economic modernisation triggers structural changes with winners and losers and how this is reflected in the polarisation of the political sphere amongst middle‐income countries. This paper asks the question of whether South Africa is an archetypical example of a country stuck in a trap and how this has affected the policy choices that it has made. South Africa needs to move up the value chain with a viable value proposition, and this requires a very different policy set and human capital plan.     

Should China Join the New Trans‐Pacific Partnership?

After President Donald Trump's ill‐advised pullout from the Trans‐Pacific Partnership (TPP) and despite the absence of the US, the remaining 11 Asian and Pacific countries agreed on a deal, renamed the Comprehensive and Progressive Agreement for Trans‐Pacific Partnership (CPTPP). The accord took effect on 30 December 2018 and provides rigorous, up‐to‐date rules for Asia‐Pacific trade, but excludes the region's two biggest economies: the US and China. In this paper, we calculate that Chinese membership in the CPTPP would yield large economic and political benefits to China and other members. The CPTPP, in its current form, would generate global income gains estimated at US$147bn annually. If China were to join, these gains would quadruple to US$632bn, or a quarter more than in the original TPP with the US. But to join the CPTPP, China would have to undertake unprecedented reforms and manage complex political challenges.     

2010中国城市榜南益地产·济南城市名片活动启动

2010年7月23日，瞩目已久的“2010中国城市榜-南易地产·济南城市名片”活动庆典晚会在济南名土豪庭会所顺利开幕。虽然傍晚的一场阵雨给外场带来了些许不便，但却为参会的人们送上了整晚的清凉。     

What moved share prices in the nineteenth‐century London stock market?†

Using a new weekly blue‐chip index, this article investigates the causes of stock price movements on the London market between 1823 and 1870. We find that economic fundamentals explain about 15 per cent of weekly and 34 per cent of monthly variation in share prices. Contemporary press reporting from the London Stock Exchange is used to ascertain what market participants thought was causing the largest movements on the market. The vast majority of large movements were attributed by the press to geopolitical, monetary, railway‐sector, and financial‐crisis news. Investigating the stock price changes on an independent list of events reaffirms these findings, suggesting that the most important specific events that moved markets were wars involving European powers.     

Middle‐income countries: trapped or merely slowing?

Since the turn of the century, growth has slowed in a number of middle income economies, giving rise to fears ‐ exacerbated by the financial crisis of 2008‐09 ‐ that they were entering a low growth equilibrium. A survey of the literature on the middle income trap suggests that it is difficult to rigorously identify countries that might be trapped; that in most cases growth appears to be regressing to a longer term normal and in East Asian economies remains at a respectable 5 percent to 7 per cent rate; that the research on the trap has yet to come up with a new growth model for middle income economies; and that policy recommendations on offer are of the generic variety applicable to virtually all economies, developed and developing.     

DO FOREIGN CURRENCY DEPOSITS PROMOTE OR DETER FINANCIAL INTERMEDIARY DEVELOPMENT IN LOW‐INCOME COUNTRIES? AN EMPIRICAL ANALYSIS OF CROSS‐COUNTRY DATA

Foreign currency deposits (FCD) are prevalent in many low‐income developing countries, but their impact on bank lending has rarely been examined. An examination of cross‐country data indicates that a higher proportion of FCD in total deposits is associated with more private credit only in inflationary circumstances. FCD can lead to a decline in private credit below a certain threshold level of inflation. Given that FCD exhibit persistence, deregulating them in low‐income countries could cause more harm than good to financial intermediary development in the long term.     

跨过海峡的握手——2010台湾·浙江经贸文化合作交流活动侧记

飞机在台北桃园机场上空掠过，印入眼帘的是碧绿的田野，错落的民居，好一派江南田园的景色。