Judicial Reform

A review of the evidence on judicial reform across countriesshows that those seeking to improve economic performance shouldnot focus on judicial efficiency alone but on independence aswell. It also shows that the level of resources poured intothe judicial system and the accessibility of the system havelittle impact on judicial performance. Most of the problem ofjudicial stagnation stems from inadequate incentives and overlycomplicated procedures. Incentive-oriented reforms that seekto increase accountability, competition, and choice seem tobe the most effective in tackling the problem. But incentivesalone do not correct systematic judicial failure. Chronic judicialstagnation calls for simplifying procedures and increasing theirflexibility.      

Government Ownership of Banks

We assemble data on government ownership of banks around the world. The data show that such ownership is large and pervasive, and higher in countries with low levels of per capita income, backward financial systems, interventionist and inefficient governments, and poor protection of property rights. Higher government ownership of banks in 1970 is associated with slower subsequent financial development and lower growth of per capita income and productivity. This evidence supports "political" theories of the effects of government ownership of firms.     

Comparative advantage,demand for external finance,and financial development

This paper analyzes the effect of comparative advantage in international trade on a country's level of financial development. Countries with comparative advantage in financially intensive goods experience a higher demand for external finance, and therefore financial development. By contrast, financial development is lower in countries that primarily export goods which do not rely on external finance. We use disaggregated trade data to develop a measure of a country's external finance need of exports, and demonstrate this effect empirically. In order to overcome the simultaneity problem, we develop a novel instrumentation strategy based on the exogenous geographic determinants of trade patterns.     

Welfare State and Taxation in Russia: the Contradictions of the Unified Social Tax

The Unified Social Tax (UST) was introduced in Russia in 2001 as part of a comprehensive reform of the tax and social security system. Five years on, this article offers a preliminary assessment of the positive effects of UST so far and the problems that remain.     

Legal Regime and Financial Reporting Quality

This article uses the Canadian environment, where French civil law (FCL) in the province of Quebec coexists with common law (CL) in the Rest of Canada (denoted as bijural), to test the thesis of the neutrality of the legal system with regard to financial reporting quality (FRQ). This single‐country design allows for a better control over other factors that influence FRQ. The FCL environment appears to encourage firms to publish accounting data of better quality due to the greater liability risk faced by auditors and corporate directors under that regime. These findings, based on 10 years of data and seven attributes of FRQ, are robust to different matching procedures and model specifications. This research contributes to the current debates in Canada as to whether financial market regulation under FCL and CL jurisdictions should be unified under a single CL national securities regulator. At the broader level, the results support claims that a more in‐depth understanding of the implementation of civil law and CL is needed rather than gross generalization about the two systems. These results especially call into question that CL regimes are unambiguously superior to civil law regimes in encouraging high‐quality financial reports.     

How different are corporate social responsibility motives in a developing country? Insights from a study of Indian agribusiness firms

Against the backdrop of increasing foreign direct investment flows in the developing economies in Asia, the investigation of topical aspects of corporate social responsibility (CSR) in the region increases in importance. We examine the CSR motives of four large indigenous agribusiness firms in India with a view of assessing the validity of the claim that CSR in this country, compared to developed countries, is influenced substantially more by moral, cultural, and religious considerations and less by self‐interest and profit seeking. Unlike numerous other investigations of CSR that rely on questionnaires and company reports, our data are drawn from in‐depth interviews and theme analysis revealing some intricate motives behind CSR behavior and business conditions that inspire them. Our findings challenge some previously reported results and indicate that the degree to which such a behavior is affected by the state of economic development and cultural differences may be smaller than is often argued.     

Financial systems,financing constraints and investment: empirical analysis of OECD countries

This paper investigates the influence of cash flow on corporate investment in 11 OECD countries. We find that the sensitivity of investment levels to internally available funds differs significantly across countries, and is lower in countries with predominantly close bank–firm relationships than in countries with predominantly arm's-length bank–firm relationships. At the same time, we find no relationship of the levels of financial constraints to indicators of overall financial development. Our results are consistent with the view that information and incentive problems in the capital market have important effects on corporate investment, and that close bank–firm relationships can reduce these problems and thus improve the access of firms to external finance.     

‘Sweet deals’: State-owned enterprises,corruption and repeated contracts in public procurement

We show how a price analysis of stable relations between customer and supplier in the public procurement of homogeneous goods can help differentiate opportunistic from honest behaviour among economic agents. We consider two types of stable relations: repeated procurements and connections based on the state ownership of suppliers. On the basis of a large dataset on the procurement of granulated sugar in Russia from 2011 to 2013, we find that for private suppliers, prices of repeated contracts were lower compared to one-time deals when procured through more transparent procedures and higher when procured through non-transparent procedures. For non-transparent procedures, we observe significant overpricing of contracts with state-owned suppliers compared to private suppliers, especially in the case of repeated contracts, whereas for competitive e-auctions, there is only a small difference between the contract prices of state-owned suppliers and private suppliers.     

Forecasting student admissions,graduations, and numbers in institutions of vocational education

This article presents a mathematical model for long-term high-precision forecasting based on statistical data on student admissions, graduations, and numbers in institutions of vocational education for the period until 2020.     

A generalised Gerber–Shiu measure for Markov-additive risk processes with phase-type claims and capital injections

In this paper we consider a risk reserve process where the arrivals (either claims or capital injections) occur according to a Markovian point process. Both claim and capital injection sizes are phase-type distributed and the model allows for possible correlations between these and the inter-claim times. The premium income is modelled by a Markov-modulated Brownian motion which may depend on the underlying phases of the point arrival process. For this risk reserve model we derive a generalised Gerber–Shiu measure that is the joint distribution of the time to ruin, the surplus immediately before ruin, the deficit at ruin, the minimal risk reserve before ruin, and the time until this minimum is attained. Numeral examples illustrate the influence of the parameters on selected marginal distributions.