Ago\ra Partnerships Nicaragua: A micro venture capital fund

Agora Partnerships is a micro venture capital fund founded by Benjamin Powell in the US and Ricardo T. Teran in Nicaragua. Agora started operations in 2005 with the goal of identifying and supporting entrepreneurs and business plans with high potential for success. The fund faces some unique challenges. First, the size of the businesses that is investing in does not allow for a traditional “management fee” structure. Secondly, traditional investment exits are nearly impossible in Nicaragua. This teaching case includes analysis on sources of investment capital, deal structures, and expected returns. The unresolved dilemma remains how to structure an investment proposal attractive to both investors and entrepreneurs. The case also allows discussing how to adapt the venture capital model to an emerging country like Nicaragua.     

Stock picking,market timing and style differences between socially responsible and conventional pension funds: evidence from the United Kingdom

As far as we are aware, this study presents the first comparative analysis of the stock picking and market timing abilities of managers of conventional and socially responsible (SR) pension funds, and of their use of superior information. For the United Kingdom, the results obtained show a slight stock picking ability on the part of SR pension fund managers (although it disappears if multifactorial models are considered), and a negative market timing ability on the part of both SR and conventional pension fund managers (these results hold for multifactorial models controlled by home bias). In relation to the management styles, both conventional and SR pension funds usually invest in small cap and growth values, although it is the SR pension funds that are the most exposed to these styles. We also observed that, while conventional pension fund managers make certain use of superior information to follow stock picking strategies, managers of SR pension funds use superior information to follow market timing strategies.     

A conceptual framework for public-private interplay in the telecommunications sector

Public activity in the telecommunications industry has experienced important transformations in the last decade: “reinvolvement” in infrastructure deployment, “innovative” boosting measures, and decentralisation of some decisions. Conceptually, even more important than the measures themselves is the fact that private agents often participate in their realisation and execution. This paper reviews how justifications for public action that would apply to any economic activity area have modelled the public-private relationship in the telecommunications sector. Subsequently, it focuses on the analysis of the new spaces for public-private collaboration that are currently opening up.     

Optimal Portfolio Choice for Long-Horizon Investors with Nontradable Labor Income

This paper examines how risky labor income and retirement affect optimal portfolio choice. With idiosyncratic labor income risk, the optimal allocation to stocks is unambiguously larger for employed investors than for retired investors, consistent with the typical recommendations of investment advisors. Increasing idiosyncratic labor income risk raises investors' willingness to save and reduces their stock portfolio allocation towards the level of retired investors. Positive correlation between labor income and stock returns has a further negative effect and can actually reduce stockholdings below the level of retired investors.     

An International Carbon Tax to Combat Global Warming: An Economic and Political Analysis of the European Union Proposal

A bstract An international carbon tax has been the subject of considerable recent discussion as an economic incentive instrument to combat the perceived threat of global warming lesuking, primarily, from the use of the carbon emitting fossils–coal, oil, and natural gas–in the production of energy. During 1991, the European Union proposed the adoption of such a tax to be imposed by each member nation. The economic merits as well as the problems associated with the proposed European carbon tax are discussed along with the political prospects for its adoption. It is concluded that even though early adoption of the tax is unlikely, the economic merits of this tax instrument for the alleviation of global warming accompanied by changing political parameters may lead to its adoption in the long run.     

On the performance of the Chow-Lin procedure for quarterly interpolation of annual data: Some Monte-Carlo analysis

Most of the countries of the OECD offer quarterly estimates of their national growth or of their Gross National Product. Official Statistical Agencies in western countries have to deal with the problem of estimating Quarterly National Accounts series congruently with Annual National Accounts. In Spain, the Instituto Nacional de Estadística uses the Chow-Lin disaggregation method, which is based on information provided by a group of high-frequency related variables, to estimate the quarterly components of National Accounts from annual components. In this paper, we analyse the relative quality of the estimates obtained through the Chow-Lin procedure, under different sets of hypotheses.JEL Classification: C15, C43, M40We are grateful to Maria Amparo Ripoll for her assistance. The authors also wish to thank three anonymous referees and an editor for their constructive suggestions and comments. This research was partially made during the stay of the first author at the Universidad Carlos III de Madrid. It has been partially supported by the research project DGCYT PB98-1460.     

Saving in Developing Countries: An Overview

This article reviews the current state of knowledge on the determinantsof saving rates, presenting the main findings and contributionsof the recently completed World Bank research project, ‘SavingAcross the World.’ The article discusses the basic designof the research project and its core database, the World SavingDatabase. It then summarizes the main project results and placesthem in the context of the literature on saving, identifyingthe key policy and nonpolicy determinants of private savingrates. Special attention is paid to the relationship betweengrowth and saving and the impact of specific policies on savingrates. The article concludes by introducing the studies includedin this special issue.     

Advantages of assembly lines in Sheltered Work Centres for Disabled. A case study

Current practices for the treatment of the physically and/or mentally handicapped prescribe meaningful job activity as a means towards both a more fulfilling life and societal integration. In many countries, these practices have facilitated the development of many Sheltered Work Centres for Disabled.In the case study presented, a reengineering process is done starting from individual workplaces where only certain workers were capable of assembling the entire product, and finishing with an assembly line implementation. It is revealed how the traditional division of work in single tasks, typical in assembly lines, becomes a perfect tool for making certain worker disabilities invisible, providing new jobs for disabled people; always taking into account certain special constraints that are analysed.     

Household Determinants of the Adoption of Improved Cassava Varieties using DNA Fingerprinting to Identify Varieties in Farmer Fields: A Case Study in Colombia

We examine factors affecting the adoption of improved cassava varieties of 217 households in the Cauca Department in southwest Colombia. Using DNA fingerprinting through Single Nucleotide Polymorphisms (SNPs), we identified different cultivars in farmers fields. We also used this information to remove possible bias in the adoption model that could have resulted from a misclassification of improved varieties (IVs). As a result, we found that farmers substantially overestimate their use of IVs and there are important differences in the determinants of adoption between farmer self‐identification and DNA fingerprinting. This finding implies that the incorporation of DNA fingerprinting in IV adoption studies is important to ensure the accuracy of future agricultural economic research and the relevance of subsequent policy recommendations.     

National levels of corruption and foreign direct investment

We model the relationship between bilateral foreign direct investment (FDI) and the level of corruption in multinational firms’ (MCNs’) home and host countries. We construct and test a model of bilateral FDI between countries that differ in their levels of corruption. FDI is affected negatively both by the level of corruption in the host country and by differences in home- and host-country corruption. Our model emphasizes that MNCs develop skills for dealing with home-country corruption, and these skills become a competitive advantage in similarly corrupt host countries. We test the model using data on bilateral FDI stocks among a large number of home and host countries, using a variety of specifications and estimation strategies to provide robustness. Our results show that the effects of host-country corruption and of differences in corruption levels between home and host countries are statistically and economically significant.