Economic development and the WTO: Back to basics?

Conclusion  An effective WTO is critical for developing countries —the alternatives, bilateral and regional agreements, will give rise to trade diversion and discrimination, and most likely exclude sectors such as agriculture and policies such as antidumping. Developing countries have a strong incentive to put together an agenda that offers potential benefits to OECD countries as well as themselves. The Singapore issues are arguably not necessary to move forward on the market access agenda. There is huge scope to trade “concessions” on tariffs — both applied rates and tariff binding. The same is true for access to service markets. A refocused effort centered on market access, complemented by an emphasis on transparency predictability and reciprocity, could help realize the development promise of the Doha round. The views expressed are personal and should not be attributed to the World Bank.     

The protectionist bias of duty drawbacks: evidence from Mercosur

In a political-economy setting where tariffs and duty drawbacks are endogenously chosen through industry lobbying, it is shown that full duty-drawbacks are granted to exporters who use imported intermediates in their production. This in turn decreases their incentives to counter-lobby against high tariffs on their inputs. In equilibrium, higher tariffs will be observed on these goods. The creation of a regional block will change the political equilibrium. Duty-drawbacks will be eliminated on intra-regional exports, which in turn will lead to lower tariffs for goods used as inputs by intra-regional exporters. Evidence from Mercosur suggests that the elimination of duty-drawbacks for intra-regional exports led to increased counter-lobbying by users of intermediate products. In its absence the common external tariff would have been on average 3.5 percentage points (25 percent) higher.     

Outsourcing Operations in Project Management Offices: The Reality of Brazilian Companies

The purpose of this study is to explore the mechanisms that influence decisions regarding outsourcing competencies in the operation of project management offices (PMOs). The exploratory research described here involves the use of a web‐based survey for enterprises in Brazil. In 78 of the survey's valid cases, the PMO is operated using the organization's internal resources. A possible conclusion is that the PMO is unlikely to positively relate to the culture of external services used by the organization and to use outsourcing to operate the PMO.     

Estimating non-linear serial and cross-interdependence between financial assets

This paper proposes an approach based on copula families to determine shape and magnitude of non-linear serial and cross-interdependence between returns and volatilities of financial assets. It is evident the predominance of the student’s t copula in returns relationships. Association in tails is generally larger than the absolute. There is a fast decrease in association along time, but even after 5 days, there is still dependence between returns. For volatilities, Joe copula predominates in estimated bivariate relationships fit. Clayton copula rotated 180° (survival), Gumbel, BB6 and BB8 copulas also fit some relationships. The magnitude of lagged associations is larger for risks than returns. Persistence in the dependences is very high, and decreases very little after the first lag. The tail dependence has larger values than the absolute in most relationships. We present a practical application of the proposed approach, based on optimal investment allocation and risk prediction.     

Cross-listing premium in the US and the UK destination

This paper tests the main hypothesis that firms that cross-list have higher valuations, and provides evidence on the valuation effect of cross-listing on a major non-US market, the UK compared to the US market from source countries in the Asia-Pacific region in 2003–2004. We find evidence that there is a cross-listing premium in both markets. However, the evidence on whether the premium is significantly different in the two countries is mixed. Using univariate, OLS and random effects methods, we find some evidence that the premium in the US is higher, but using a treatment effect methodology we find that the difference is not robust.     

Factors influencing hedging decision: evidence from Brazilian citrus growers

The purpose of this study was to analyse the hedging behaviour of 98 citrus growers from the State of Sao Paulo, Brazil. Marketing behaviour was modelled as a choice between spot market, short and long‐term forward contracts. A multinomial logistic regression model was used to evaluate the role of behavioural, personal and managerial variables in the choice. Results indicated that the factors which explain the use of forward contracts by citrus growers are the following: risk propensity; trade with juice processing companies; farming diversification; overconfidence in management; participation in pools; use of management tools; and technical assistance. The results can be useful for farmers, policymakers, government agencies, traders and extension agents.     

Linear models, smooth transition autoregressions, and neural networks for forecasting macroeconomic time series: A re-examination

In this paper, we examine the forecast accuracy of linear autoregressive, smooth transition autoregressive (STAR), and neural network (NN) time series models for 47 monthly macroeconomic variables of the G7 economies. Unlike previous studies that typically consider multiple but fixed model specifications, we use a single but dynamic specification for each model class. The point forecast results indicate that the STAR model generally outperforms linear autoregressive models. It also improves upon several fixed STAR models, demonstrating that careful specification of nonlinear time series models is of crucial importance. The results for neural network models are mixed in the sense that at long forecast horizons, an NN model obtained using Bayesian regularization produces more accurate forecasts than a corresponding model specified using the specific-to-general approach. Reasons for this outcome are discussed.     

Regime Switches, Biased Expectations, and the Brazilian Inflationary Experience

The paper analyzes how an error in inflation expectations helped maintain high interest rates in the wake of the major stabilization plans launched in Brazil over the past 18 years. Newly implemented low-inflation measures lacked credibility and forced agents to expect a higher inflation rate than the one effectively observed, creating a wedge between ex-post and ex-ante real interest rates. The results also indicate that past failures have helped undermined the credibility of new measures.     

Information Technology and Organizational Practices: An Exploratory Sectoral Analysis

ABSTRACT

Rapid price declines are likely to facilitate the increasing diffusion of information technology (IT) in industrial firms. Recent contributions by Bresnahan et al. (2002), however, have emphasized the interdependence between IT adoption and workplace organization. The present paper undertakes an exploratory analysis of the complementarities between IT adoption and the utilization of modern organizational practices. The analysis considers 3-digit sectoral data on the Brazilian manufacturing industry in 1996. A multivariate statistical analysis of canonical correlation analysis enabled the investigation of the overall relationship amongst a group of variables reflecting IT adoption (comprising the number of microcomputers per employee (median value), the percentage of firms providing computer training for employees, the percentage of firms with Internet connection and the percentage of firms with intranet (internal data communication network)), and amongst another group of variables reflecting the adoption of modern organizational practices (comprised of the percentage of firms adopting total quality management, statistical control of processes, internal just-in-time and improvement groups (Kaizen)). The results indicated a significant association between the two groups of variables, while the individual variables, in the majority of the cases, displayed positive and significant correlations within their own group. The evidence appears to support the perception that the adoption of IT is favored in an environment characterized by the utilization of modern organizational practices.

RESUMEN. Es bien probable que las vertiginosa bajas sufridas por los precios, faciliten la creciente divulgación de la tecnología de la información (TI) en las empresas industriales. Sin embargo, recientes contribuciones de Bresnahan et al. (2002), han recalcado la interdependencia existente entre la adopción de la TI y la organización del entorno de trabajo. El análisis considera datos sectoriales de 3 dígitos sobre la industria fabril brasileña en 1996. La estadística analítica multivariada del análisis de la correlación canónica permitió investigar la relación general entre el grupo de variables que reflejan la adopción de la TI (considerando el número de microcomputadoras por empleado [valor medio], el porcentaje de firmas suministrando entrenamiento en computación a sus empleados, el porcentaje de empresas con conexión a la Internet y el porcentaje de empresas con intranet (red interna de comunicación de datos)), y entre otro grupo de variables que reflejan la adopción de prácticas organizacionales modernas (abarcando el porcentaje de empresas que adoptan la gestión de calidad total, el control estadístico de los procesos, Just-in-time interno y grupos de mejoría (Kaizen)). Los resultados indican la existencia de una asociación significativa entre ambos grupos de variables mientras que, en la mayoría de los casos, las variables individuales mostraron tener importantes correlaciones positivas dentro de su propio grupo. Las pruebas parecen respaldar la percepción de que, la adopción de la TI, favorece la existencia de un entorno que se caracteriza por el uso de prácticas organizacionales modernas.

RESUMO. Rápidos declínios nos preços tendem a facilitar a difus$aUo crescente da tecnologia da informação (TI) nas empresas industriais. Contribuições recentes de Bresnahan et al. (2002), porém, enfatizaram a interdependência entre a adoção da TI e a organização do local de trabalho. Este artigo realiza uma análise exploratória das complement-aridades entre a adoção da TI e a utilização de práticas organizacionais modernas. A análise considera dados setoriais de 3 dígitos sobre o setor industrial brasileiro em 1996. Uma análise estatística multivariáveis de correlações can$oCnicas permitiu a investigação da relação geral entre um grupo de variáveis refletindo a adoção da TI (incluindo o número de microcomputadores por funcionário (valor mediano), a porcentagem de empresas fornecendo treinamento em informática aos funcionários, a porcentagem de empresas conectadas à Internet e a porcentagem de empresas com intranet (rede de comunicação de dados interna)) e outro grupo de variáveis refletindo a adoção de práticas organizacionais modernas (constituídas da porcentagem de empresas que adotam a gestão da qualidade total, o controle estatístico de processos, just-in-time interno e grupos de melhoria (Kaizen)). Os resultados indicaram uma associação significativa entre os dois grupos de variáveis, enquanto as variáveis individuais, na maioria dos casos, exibiram correlações positivas e significativas dentro de seus próprios grupos. Os dados parecem respaldar a percepção de que a adoção da TI é favorecida num ambiente caracterizado pela utilização de práticas organizacionais modernas.     

Testing for a flexible non-linear link between short-term Eurorates and spreads

This paper investigates the relationship between short-term interest rates and spreads in the Euromarket. Specifically, five Eurocurrency deposit rates are analyzed: the Belgian and French francs, the German mark, the Danish crown, and the British pound. A multivariate test for unit roots is performed and strongly rejects the null hypothesis of integration in the 1-month and 12-months rates of these Eurocurrencies, indicating that the spread cannot be seen as a cointegration vector. Notwithstanding, a codependence analysis shows that the spread can still be interpreted as a long-run relationship between the short- and long-term Eurorates. A flexible non-linear error correction model is then proposed for the short-term rate to take both the short- and long-run adjustments into account. The model fits the data quite well, and seems to provide a slightly better forecast accuracy than the random walk benchmark.