Propuesta de un modelo de medición de la competitividad mediante análisis factorial

This article presents a proposal of a model to measure competitiveness at the three geographical levels simultaneously: country, states, and municipalities by using a multivariate factor analysis resulting in the identification of five factors, seven subfactors and thirty variables used to measure and to present the results of an empirical study of several entities: the country, the state of Sonora and nine municipalities that represent 80% of the population and 80% of its Total Gross Production (PBT). The results show that the municipality of Hermosillo was the most competitive in 2010.     

Sigma Convergence versus Beta Convergence: Evidence from U.S. County-Level Data

In this paper, we outline (i) why σ-convergence may not accompany β-convergence, (ii) discuss evidence of β-convergence in the United States, and (iii) use U.S. county-level data containing over 3,000 cross-sectional observations to demonstrate that σ-convergence cannot be detected at the county level across the United States, or within the large majority of the individual U.S. states considered separately. Indeed, in many cases statistically significant σ- divergence is found.     

House prices,bank instability,and economic growth: Evidence from the threshold model

This paper examines the effects of house prices on bank instability when gauged at various levels of income growth. Bank stability may respond differently to house price changes or deviations from fundamental values in an economic boom environment than in a bust circumstance. A threshold estimation technique developed by Hansen (1999) is applied to a panel of 286 U.S. Metropolitan Statistical Areas (MSAs) over the period 1990Q1–2010Q4. We consider two house price indicators: the house price changes and the house price deviations from long-run equilibrium. The results suggest the existence of income growth threshold effects in the relationship between house prices and bank instability. Specifically, there are two income growth thresholds when using the house price changes and one income growth threshold when the house price deviations are applied. Robustness results using the non-MSAs sample from 1995Q1 to 2010Q4 provide further evidence of income growth threshold effects.     

Speculating on home improvements

We develop a speculation-based theory of home improvements. Housing services are produced from a mix of land and structures. Homeowners optimistic about future prices for these services speculate by making improvements, which we model as them increasing their structures holding fixed their land. The recoup value (the difference between the resale value of improvements and construction costs) is simultaneously increasing in home price appreciation and falls with construction cost growth. This prediction stands in contrast to a consumption-cum-financial constraints motive in which rising home prices loosen financial constraints and lead to lower recoup values. We provide evidence consistent with a speculative motive using data on the costs and recoup values of remodeling projects across US cities.     

Determinants of the incidence of U.S. Mortgage Loan Modifications

This paper combines data on the performance of mortgage loans with detailed borrower, neighborhood, and property characteristics to examine the factors that determine the outcomes of seriously delinquent loans. We employ multinomial logit models in a hazard framework to explain how loan, borrower, property, servicer and neighborhood characteristics affect which of the following four outcomes results from a seriously delinquent loan: (1) the borrower cures the delinquency; (2) the borrower and lender agree to modify the loan; (3) the borrower suffers a liquidation (short sale, deed in lieu, foreclosure auction sale or REO); or (4) the loan remains delinquent. In particular, we focus on mortgage modification. We find that the outcomes of delinquent loans are significantly related to: current LTV, FICO scores, especially risky loan characteristics, the servicer of the loan, neighborhood housing price appreciation, and whether the borrower received foreclosure counseling.     

An investigation on the causal relationships between banking concentration and economic growth

This paper explores the causality between concentration in the banking industry and economic growth. Two empirical tests are performed for Italy over the period 1991-2001: the first one is a standard Granger-Sims causality test, the second one studies the direction of causality by taking into account the impact of changes in banks' internal and external factors on their own market shares. The results show that in the short-run economic growth is predominantly caused by banking consolidation, while in the long-run a reverse causation direction emerges, so that economic expansions tend to reduce market shares and thus favour a stronger competition in the industry.     

Portfolio diversification benefits within Europe: Implications for a US investor

This paper investigates the possibility of cointegration between the United States and 11 European equity markets before and after the convergence period of 1995. The results indicate that during the preconvergence and postconvergence periods, some country groups, with and without the US equity market, exhibited cointegration while others did not. For the European Union markets, however, at least one cointegrating vector emerged in either period, but no cointegration among them surfaced during the Euro introduction period of 1999. These results suggest that a US investor can still benefit from country diversification within the European Union markets.     

Annual Reporting and Accountability by Municipalities in Canada: An Empirical Investigation*

Prior research regarding reporting and accountability by local governments in several countries has questioned the value of traditional annual reporting and the level of accountability to the public. This article reports on comparable research for local governments throughout Canada. The disclosure index methodology is used to evaluate the quality and quantity of information published in the annual reports and in the financial statements of Canadian local governments in 2003 with a comparison in 2005. Although all municipalities published audited financial statements, less than one‐third of municipalities published a comprehensive annual report in 2003. The results show an overall low disclosure index with significant improvements in 2005 compared to 2003 and significant differences across the country. The results, largely consistent with previously published international studies, raise questions about local government accountability and about the conceptual framework for local government reporting.     

How do lending relationships affect access to credit and loan conditions in microlending?

A key problem facing microlenders is the high level of information asymmetry between them and their borrowers. In this paper, we analyze whether the relationship intensity between microlenders and borrowers helps to overcome existing information asymmetries and how this impacts access to credit and loan contract terms. Using a rich loan-level data set provided by a microlender in Mozambique for the years 2000-2006, we find that access to credit improves and that the loan approval process takes less time when relationships become more intense. Borrowers further profit from a more intense relationship through lower guarantee requirements. All effects are more pronounced the more opaque the borrowers are. These results suggest that longer lending relationships indeed help to reduce information asymmetries and that this is beneficial for microborrowers.     

House prices, non-fundamental components and interstate spillovers: The Australian experience

Using Australian capital city data from 1984Q3--2008Q2, this paper utilizes a dynamic present value model within a VAR framework to construct time series of house prices depicting what aggregate house prices should be given expectations of future real disposable income - the “fundamental price” - and continues by comparing capital city fundamental prices with actual prices. The extent to which revealed capital city “non-fundamental” components spillover from state to state, as well as their long-term impact is also investigated. Results provide evidence of periods of sustained deviations of house prices from values warranted by income for all state capitals with the greatest deviations arising in the NSW market and starting around 2000. In general NSW is relatively more susceptible to spillovers transmitted from other states while ACT and WA are most isolated from the rest of the country.     

Nobody's business but my own: Self-employment and small enterprise in economic development

In most poor countries, small firms and self-employment are the dominant forms of business enterprise—even in the manufacturing sector. For rich countries, in contrast, self-employed people account for very small shares of manufacturing employment and output. This paper builds on Lucas [1978. On the size distribution of business firms. Bell Journal of Economics 9(2), 508-523] to ask whether structural changes of this kind are driven by productivity differences. A model, calibrated to Japanese time-series data, is shown to mimic key features of cross-country and time-series data. The results support the idea that changes in aggregate productivity account for much of the cross-country variation in establishment size and self-employment rates.     

Competition from Large, Multimarket Firms and the Performance of Small, Single-Market Firms: Evidence from the Banking Industry

We offer and test two competing hypotheses for the consolidation trend in banking using U.S. banking industry data over the period 1982–2000. Under the efficiency hypothesis , technological progress improved the performance of large, multimarket firms relative to small, single-market firms, whereas under the hubris hypothesis , consolidation was largely driven by corporate hubris. Our results are consistent with an empirical dominance of the efficiency hypothesis over the hubris hypothesis—on net, technological progress allowed large, multimarket banks to compete more effectively against small, single-market banks in the 1990s than in the 1980s. We also isolate the extent to which technological progress occurred through scale versus geographic effects and how they affected the performance of small, single-market banks through revenues versus costs. The results may shed light as well on some of the research and policy issues related to community banking.     

Population Ageing,Fiscal Pressure and Tax Smoothing: A CGE Application to Australia*

This paper analyses the fiscal pressure from population ageing using an intertemporal CGE model, applied to Australia, and compares the results with those of a recent government‐commissioned study. The latter study uses an alternative modelling approach based on extrapolation rather than optimising behaviour of consumers and firms. The deadweight losses from the fiscal pressure caused by population ageing are equivalent to an annual loss of consumption of $260 per person per year in 2003 dollars in the balanced‐budget scenario. A feasible degree of tax smoothing would reduce this welfare loss by an equivalent of $70 per person per year. Unlike the extrapolation‐based model, the CGE approach takes account of feedback effects of ageing‐induced tax increases on consumption and labour supply, which in turn impact on the ultimate magnitude of fiscal pressure and therefore tax increases. However, a counterfactual simulation suggests that the difference in terms of deadweight losses between the two modelling approaches is modest, at about $30 per person per year.     

Corruption in bank lending to firms: Cross-country micro evidence on the beneficial role of competition and information sharing

Building on the important study by Beck, Demirguc-Kunt, and Levine [2006. Bank supervision and corruption in lending. Journal of Monetary Economics 53, 2131-2163], we examine the effects of both borrower and lender competition as well as information sharing via credit bureaus/registries on corruption in bank lending. Using the unique World Bank data set (WBES) covering more than 4,000 firms across 56 countries with information on credit bureaus/registries, assembled by Djankov, McLiesh, and Shleifer [2007. Private credit in 129 countries. Journal of Financial Economics 84, 299–329], and bank regulation data collected by Barth, Caprio, and Levine [2006. Rethinking Bank Regulation: Till Angels Govern. Cambridge University Press, New York] to measure bank competition and information sharing, we find strong evidence that both banking competition and information sharing reduce lending corruption, and that information sharing also helps enhance the positive effect of competition in curtailing lending corruption. We also find that the ownership structure of firms and banks, legal environment, and firm competition all exert significant impacts on lending corruption.     

Financial development and innovation: Cross-country evidence

We examine how financial market development affects technological innovation. Using a large data set that includes 32 developed and emerging countries and a fixed effects identification strategy, we identify economic mechanisms through which the development of equity markets and credit markets affects technological innovation. We show that industries that are more dependent on external finance and that are more high-tech intensive exhibit a disproportionally higher innovation level in countries with better developed equity markets. However, the development of credit markets appears to discourage innovation in industries with these characteristics. Our paper provides new insights into the real effects of financial market development on the economy.     

The international transmission of bank capital requirements: Evidence from the UK

We use data on UK banks? minimum capital requirements to study the impact of changes to bank-specific capital requirements on cross-border bank loan supply from 1999Q1 to 2006Q4. By examining a sample in which each recipient country has multiple relationships with UK-resident banks, we are able to control for demand effects. We find a negative and statistically significant effect of changes to banks? capital requirements on cross-border lending: a 100 basis point increase in the requirement is associated with a reduction in the growth rate of cross-border credit of 5.5 percentage points. We also find that banks tend to favor their most important country relationships, so that the negative cross-border credit supply response in “core” countries is significantly less than in others. Banks tend to cut back cross-border credit to other banks (including foreign affiliates) more than to firms and households, consistent with shorter maturity, wholesale lending which is easier to roll off and may be associated with weaker borrowing relationships.     

Competition among regulators and credit market integration

We analyze the incentives for independent bank regulators with financially integrated jurisdictions to form a regulatory union. Externalities lead competing regulators to choose suboptimally low standards. Centralized regulation, however, entails a loss of flexibility if equal standards must be applied across jurisdictions. We find that, first, centralized regulation will more likely emerge among relatively homogeneous jurisdictions/countries. Second, centralized regulation will be unanimously preferred to independence only if it entails standards higher than those of the country with the highest individual standards. Third, financial integration among more than two jurisdictions may prevent partial unions, which, in turn, may prevent more comprehensive agreements.     

Geographical segmentation of US capital markets

Demographic variation in savings behavior can be exploited to provide evidence on segmentation in US bank loan markets. Cities with a large fraction of seniors have higher volumes of bank deposits. Since many banks rely heavily on deposit financing, this affects local loan supply and economic activity. I show a positive effect of local deposit supply on local outcomes, including the number of firms, the number of manufacturing firms, and the number of new firms started. The effect is stronger in industries that are heavily dependent on external finance. The deregulation of intrastate branching reduced the effect of local deposit supply by approximately a third.     

Global demographic trends and social security reform

How sustainable are the current social security systems in the developed economies, given the projected demographic trends? The most recent literature has answered this question through dynamic general-equilibrium models in a closed-economy framework. This paper provides a new quantitative benchmark of analysis for this question represented by a two-region model (South and North) of the world economy where capital flows across regions. The timing and the extent of the demographic transition—and the associated economic forces shaping capital accumulation and equilibrium factor prices—are very different in the two regions. Thus, the projected paths of interest rate and wage rate in the North diverge substantially between closed and open economy. We perform a wide range of policy experiments under both scenarios. Our main conclusion is that if one is interested in quantifying the path of the fiscal variables (e.g., the value of the payroll tax) needed to keep the social security system viable or to finance a transition towards a fully funded system, then these two benchmarks yield similar results. However, if the focus is on quantifying the path of factor prices, aggregate variables and, ultimately, welfare, then the two approaches can diverge significantly.     

Industrial Loan Companies: Where Banking and Commerce Meet

Should commercial firms be prohibited from owning banking institutions? Should the United States remain the only G20 country opposed to the “mixing of banking and commerce”? These questions have assumed new urgency as the Dodd Frank Act of July 2010 imposed a moratorium on the commercial ownership of industrial loan companies (ILCs), which was the last remaining entry point for commercial firms into banking. This paper specifically examines the role of ILCs in America's financial system from its beginnings in 1910 to the present. Special attention is paid to the performance of commercially owned ILCs prior to, during and after the most recent financial crisis. The examination is based upon both survey data and Federal Deposit Insurance Corporation (FDIC) data, which represents a database of the ILC industry that is the most comprehensive one available to date. The paper also reviews the laws and regulations regarding the mixing of banking and commerce, and discusses the advantages and disadvantages of allowing commercial ownership of banks.