Are bilateral and multilateral aid‐for‐trade complementary?

Using the first comprehensive estimates of ad valorem tariff equivalent bilateral trade costs spanning the time period 2002–10, we examine whether the aid‐for‐trade (AFT) inflows reduce bilateral trade costs facing aid recipients. If so, we ask whether the trade costs reduction effects of AFT from bilateral and multilateral sources are complementary. By showing the extent to which the observed trade cost reduction effects of AFT from bilateral (multilateral) sources correlate with the magnitudes of AFT disbursements from multilateral (bilateral) sources, we present plausible explanation for the cross‐country variations in the extent to which AFT promotes trade flows. Our findings have, thus, important policy implications for shaping future discourses on the coordination of disbursements for enhancing the effectiveness of AFT.     

International Trade and Volume Patterns under Quasilinear Preferences

We formally analyze the pattern and volume of trade by embedding quasilinear preferences in the standard perfectly competitive, two‐factor, two‐good, two‐country trade model. Quasilinear preferences deliver a natural partition of the two goods into a luxury and a necessity, and preserve the validity of the Heckscher–Ohlin and Heckscher–Ohlin–Vanek theorems. In addition, the predicted factor content of trade under quasilinear preferences is smaller (larger) than the predicted factor content of trade under homothetic preferences if and only if the luxury good is capital (labor) intensive. This result offers a novel explanation for the “missing‐trade” mystery.     

Intraindustry trade and the skill premium: Theory and evidence

We explore theoretically and empirically the relationship between intraindustry trade and the skill premium. Our model features a Chamberlinian-type mechanism of income distribution based on quasi-homothetic consumer preferences, non-homothetic production, and factor-biased scale economies at the firm level. The analysis focuses on a two-country, one-sector model of intraindustry trade with two factor inputs consisting of high-skilled and low-skilled labor. We find that a move from autarky to free trade (a) raises the output of the representative firm and its level of total factor productivity, and (b) reduces (raises) the relative wage of high-skilled workers under the hypothesis of output-skill substitutability (output-skill complementarity). Plant-level evidence from Mexico supports the empirical relevance of the proposed income-distribution mechanism.     

Cooperative research and development agreements (CRADAs) as technology transfer mechanisms

Cooperative Research and Development Agreements (CRADAs) between Federal R&D laboratories and private companies in the US are intended, in large part, to transfer technologies developed at Federal R&D laboratories to private companies. We surveyed the Federal laboratory and private CRADA partners involved in CRADAs at Los Alamos National Laboratory in New Mexico in order to identify certain difficulties inherent in CRADAs as mechanisms for technology transfer. Company partners do not share a common organizational culture with their Federal laboratory counterparts, and are critical of the length of time and complexity of government administrative arrangements necessary to form a CRADA.     

QUID PRO QUO FOREIGN INVESTMENT*

The paper analyzes the phenomenon of industry-specific direct foreign investment (DFI) which occurs with the view to defusing the threat of future protection by the host country (quid pro quo), under alternative imperfectly competitive market structures. It is established that, even in the absence of government intervention, firms in imperfectly competitive markets change the level of trade and DFI in response to future protectionist threats.     

The Impact of Professional Commitment and Anticipatory Socialization on Accounting Students’ Ethical Orientation

The accounting profession has emphasized the need for ethics education in the accounting curriculum. The current study examines professional commitment and anticipatory socialization, operationalized by perception of financial reporting, as possible determinants of Accounting students’ ethical perceptions and intentions. Accounting students with higher levels of professional commitment and higher perception of the importance of financial reporting were more likely to perceive questionable actions as unethical and less likely to engage in such actions compared to those students with lower commitment and lower perception of financial reporting. The results have implications for accounting instructors and accounting employers as they socialize students in the accounting profession at this early stage.     

BRITISH MANAGERS: A STUDY OF THEIR EDUCATION,TRAINING, MOBILITY AND EARNINGS

This study uses information from the National Training Survey to investigate the education, qualifications, mobility and earnings of persons with managerial responsibilities. From this analysis, we conclude that there is a need for both private and public organisations to increase the quantity and improve the quality of the training available to their managers and potential managers. More important though is the need to monitor the impact of training programmes and reward managers accordingly.     

Pricing and hedging contingent claims using variance and higher order moment swaps

This paper suggests perfect hedging strategies of contingent claims under stochastic volatility and random jumps of the underlying asset price. This is done by enlarging the market with appropriate swaps whose pay-offs depend on higher order sample moments of the asset price process. Using European options and variance swaps, as well as barrier options written on the S&P 500 index, the paper provides clear cut evidence that hedging strategies employing variance and higher order moment swaps considerably improves upon the performance of traditional delta hedging strategies. Inclusion of the third-order moment swap improves upon the performance of variance swap-based strategies to hedge against random jumps. This result is more profound for short-term out-of-the money put options.     

Optimism and the perceptions of new risks

While many risks, especially new ones, are not objectively quantifiable, individuals still form perceptions of risks using incomplete or unclear evidence about the true nature of those risks. In the case of well known risks, such as smoking, individuals perceive risks to be smaller for themselves than others, exhibiting ‘optimism bias’. Although existing evidence supports optimism bias occurring in the case of risks about which individuals are familiar, evidence does not yet exist to suggest that optimism bias applies for new risks. This paper addresses this question by examining the gap in perceptions of risks individuals have for themselves versus society and the environment, conceptualised as social and/or environmental optimism biases. We draw upon the 2002 UEA‐MORI Risk Survey to examine the existence of optimism bias and its effects on risk perceptions and acceptance regarding five science and technology‐related topics: climate change, mobile phones, radioactive waste, GM food and genetic testing. Our findings provide evidence of social and environmental optimism bias following similar patterns and optimism bias appearing greater for those risks bringing sizeable benefit to individuals (e.g. mobile phone radiation) rather than those more acutely affecting society or the environment (e.g. GM food or climate change). Social optimism bias is found to reduce risk perceptions for risks that have received large amounts of media attention, namely, climate change and GM food. On the other hand, optimism bias appears to increase risk perceptions about genetic testing.     

Household borrowing and metropolitan housing price dynamics – Empirical evidence from Helsinki

This article argues that, especially in the absence of sufficient direct data on credit constraints, it is reasonable to add a household debt variable in an empirical model studying housing price dynamics. This is because household borrowing is likely to reveal information regarding the credit constraints faced by households. Moreover, debt may also give information on expected income growth and interest rate movements. The aim of this study is to examine empirically if household borrowing data, indeed, is of importance in a dynamic housing price model. In line with the prior expectations, it is found that housing appreciation in the Helsinki Metropolitan area is Granger caused by the household debt-to-GDP ratio both in the short and in the long run. Causality from the housing market to credit, in turn, seems to run only through a cointegrating long-run relation. While the estimated long-run relation between housing prices, income and debt-to-GDP ratio appears to have remained stable through the sample period (1975Q1-2006Q2), the short-run dynamics changed somewhat due to the financial liberalization in the late 1980s. The stability of the long-run relation implies that the loan data are able to cater, at least to a notable extent, for the effect of the changes in Finnish households’ liquidity constraints on housing demand. In line with previous literature, it is also found that housing price adjustment is sluggish and includes notable backward-looking features.