Global Linkages of Subnational Regions: Coastal Exports and International Networks

This article explores the determinants of exports of the two coastal regions of the continental United States and the differences between them. The authors evaluate the contribution of international sociocultural and business networks to exports of the two major coastal regions of the United States, the West Coast and the East Coast, and examine their geographic trading affinities. The article finds that although transnational business ties play a significant positive role in boosting overall exports of both coasts, social networks of foreign-born immigrants play a similar role only for the West Coast. The study also suggests that the significance of distance as a proxy for transportation costs is somewhat diminished once these networks are taken into account. Both regions seem to share a propensity for exports to the Asia-Pacific region. (JEL R0 , F10 , F20 )     

Post–Uruguay Round price linkages between developed and developing countries: the case of rice and wheat markets

The Uruguay Round Agreement on agriculture attempted to lower distortions in global agricultural markets. However, the significant fall in commodity prices in the late 1990s may have reduced the incentives for both developed and developing countries to better integrate into world markets. This study analyzes price linkages and adjustment between developed and developing countries during the post–Uruguay Round period. Prices of two key commodities, long‐grain rice and medium‐hard wheat, are assembled for major exporters and producers. Results of multivariate cointegration analysis suggest partial market integration between developed and developing countries in the post–Uruguay Round period. Developed countries are found to be price leaders in these two markets, and in most cases, changes in their prices have relatively large impacts on those of the developing countries. Developing countries (e.g., Vietnam and Argentina) have faced considerable price adjustment due to changes in the developed countries' prices.     

Stock pledging and firm risk: Evidence from India

Pledging of personally held common stock is widespread in India, where pledging often serves as lender collateral for large shareholder and promoter personal debt acquisitions. This practice is exacerbated by high ownership concentrations in India, as promoters, often firm founders, control, on average, 51% of their firms’ equity. We examine promoter stock pledging impacts on stock volatility, capital investment decisions, and firm performance, using a sample of 1,452 Indian firms. We find that pledging relatively large proportions of outstanding shares and substantial proportions of shares held by promoters exacerbates stock volatility, fosters lower risk capital investments, adversely affects firm values, and impedes longer‐term performance.     

Water wars: fact or fiction?

It is often said that future wars will be fought over water, not oil. These water wars are predicted to take place over the sharing of international rivers. Recently, the world has witnessed several inter-state river-sharing disputes, but almost all of them have not crossed the critical threshold of becoming violent. Rather, most of these river disputes are being addressed through bilateral riparian cooperative arrangements. These agreements are primarily coming up on the rivers, which have potential for further water exploitation. However, to find a lasting solution and to strengthen the river sharing arrangements, this article argues for the water issue to be addressed comprehensively in the basin, by taking into account both the demand as well as the supply side of the scarce resource.     

Human capital,age structure and growth fluctuations

This article assesses the empirical relationship between per capita income growth fluctuations and the age-structured human capital variations across four groups of geographically clustered developed and developing countries from spatial perspective. We estimate a spatial Vector Autoregressive (VAR) model of income dynamics where the distance between countries is defined on relational space based on their similarity in appropriation tendency of human capital in the production processes. These distances are computed using a newly developed human capital data set which fully characterizes the demographic structure of human capital, and thus underlines the joint relevance of demography and human capital in economic growth. Spatial effects on growth interdependence and complementarity are then explored with respect to the proposed distance metrics. Our results imply that significant cross-country growth interdependence based on human capital distances exists among defined country groups suggesting the need for a cooperative policy programme among them. We also find that the relationship between economic growth and human capital is highly nonlinear as a function of the proposed human capital distance.     

The Zilcha criteria for dynamic inefficiency reconsidered

We reconsider necessary and sufficient conditions for dynamic inefficiency given in Zilcha (J Econ Theory 52:364–379, 1990, J Econ Theory 55:1–16, 1991) and a critique by Rangazas and Russell (2005). First, we show that the characterization given in Zilcha (1990) for nonstationary economies is correct and correct Zilcha’s proof. Second, using this insight, we complement Rangazas and Russell’s (Econ Theory 26:701–716, 2005) discussion of the counterexamples to Zilcha (J Econ Theory 55:1–16, 1991). Third, we discuss consequences of our results for applied tests of (in-)efficiency based on the Zilcha criteria. We would like to thank Itzhak Zilcha, and in particular Peter Rangazas and Steve Russell for detailed and very helpful comments.     

Mena Stock Markets Integration: Pre and Post Global Financial Crisis

This paper examines the short‐ and long‐run linkages in pre and post global financial crisis among Middle East and North Africa (MENA) stock markets, between MENA and Chinese stock markets and also between MENA and developed (United States and United Kingdom) stock markets. Results indicate that both long‐run co‐integration relationships and short‐run causal linkages among MENA stock markets increased in post‐crisis than that in pre‐crisis sub‐period. The degree of integration between MENA and Chinese stock markets increased in post‐crisis than pre‐crisis. We also find that the degree of integration between MENA and developed (United States and United Kingdom) stock markets increased in post‐crisis than that in pre‐crisis. The presence of increased linkages among MENA markets, and between MENA and Chinese stock markets and also between MENA and developed (United States and United Kingdom) markets has important implications for portfolio investors and policy makers.     

Preemptive bribery and incomplete information: Does prior knowledge matter?

This paper studies bribery between a firm and a supervisor who monitors the firm for regulatory compliance. Bribery occurs preemptively, that is before the supervisor exerts costly effort to discover the firm's level of noncompliance and collect evidence for successful prosecution. In contrast to previous papers, preemptive bribery is modeled as a Bayesian signaling game because the supervisor is uninformed about the firm's level of noncompliance. We show that under normal informational assumptions, some (possibly all) firms always engage in preemptive bribery. However, if knowledge of the firm's level of noncompliance has implications for the supervisor's ability to collect evidence and prosecute (prior knowledge), preemptive bribery can be completely eliminated. Results which apply to preemptive bribery under complete information do not apply here.