Foreign Direct Investment,Regulations and Growth

The paper explores the linkage between income growth rates and foreign direct investment (FDI) inflows. So far the evidence is rather mixed, as no robust relationship between FDI and income growth has been established. We argue that countries need a sound business environment in the form of good government regulations to be able to benefit from FDI. Using a comprehensive data set for regulations, we test this hypothesis and find evidence that excessive regulations restrict growth through FDI only in the most regulated economies. This result is robust to different specifications of the econometric model.     

Multivariate partial adjustment of financial ratios: a Bayesian hierarchical approach

In this paper we propose a multivariate extension of the partial adjustment model of financial ratios. To that end, we use a dynamic factor model which assumes that financial ratios measuring, essentially, the same economic–financial dimension of the firm evolve in a similar way, reflecting the evolution of the common factor. The proposed model is hierarchical with three levels. The first describes the relationship between each ratio and its common factor; the second describes the evolution of the common factors over time by means of Lev's ( 1969 ) partial adjustment model; and the third analyzes the similarity of firms' adjustment coefficients, taking into account their characteristics. The methodology is applied to the analysis of a set of financial ratios related to the business and financial structure of the firm. Copyright © 2008 John Wiley & Sons, Ltd.     

Income inequality and colonialism

This paper proposes that colonialism is a major explanation behind today's differences in income inequality across countries. We argue that income inequality has been higher in the colonies where the percentage of European settlers to total population was higher, as long as Europeans remained a minority. The countries where Europeans became the majority of the population did not suffer from high inequality. These initial differences continue to hold today. The empirical evidence we provide strongly supports our thesis.     

Semi‐nonparametric competing risks analysis of recidivism

In this paper we specify a semi‐nonparametric competing risks (SNP‐CR) model of recidivism, for misdemeanors and felonies. The model is a bivariate mixed proportional hazard model with Weibull baseline hazards and common unobserved heterogeneity. The distribution of the latter is modeled semi‐nonparametrically, using orthonormal Legendre polynomials on the unit interval, and integrated out to make the two durations dependent, conditional on the covariates. The SNP‐CR model involved corresponds to a Logit model for felony arrest; hence the validity of the SNP‐CR model can be tested by testing the validity of the implied Logit model. The latter will be done by using the integrated conditional moment (ICM) test. In the first instance we have estimated and tested two versions of the SNP‐CR model, without and with fixed state effects. However, the ICM test rejects these models. Therefore, we have estimated and tested the model for each state separately. These state models are not rejected by the ICM test. Indeed, the estimation results vary substantially per state. Copyright © 2007 John Wiley & Sons, Ltd.     

Mozambique Metical Exchange Rate Dynamics: Evidence of Fractional Co‐Integration in the USA and South African Rates

This paper studies the exchange rate dynamics of the Mozambique metical with respect to the US dollar and the South African rand. However, instead of using standard I(0)/I(1) techniques, we use long memory and fractionally integrated and co‐integrated models. Our results indicate that the two exchange rates are highly persistent, with orders of integration equal to or above 1. They also seem to be co‐integrated, with an order of integration close to albeit above 0 but with an AR coefficient very close to 1. Thus, although the two series seem to be fractionally co‐integrated, shocks in the long‐run relationship between the two variables are persistent and take a long time to disappear.     

Exploring The Gender Effect On Europeans’ Retirement Savings

This paper investigates whether European women have the same probability of saving for retirement as European men and if driving factors for this saving behavior differ by gender. The evidence is based on a sample of 6,036 individuals from eight European countries (France, Germany, Italy, the Netherlands, Poland, Spain, Sweden, and the United Kingdom). The results show that European women are less likely to save for retirement than men, although the determinants of this decision are similar for both genders. Moreover, the results suggest that country-level institutional factors play a more important role on the individual's retirement attitudes than gender differences.     

How to encourage social innovations: a resource-based approach

During the last decade, social innovation has emerged as an outstanding topic for scholars, businesses, and public institutions. This growing interest is due to its potential positive effects on well-being and sustainable development. This study analyzes social innovation under the umbrella of the transformative service research framework. Adopting a resource-based perspective, the research attempts to determine whether the deployment in service organizations of two types of factors that support dynamic capabilities, i.e. internal market orientation, and information and communication technology competence, impacts the extent to which these organizations develop different kinds of product, process, marketing, and organizational social innovations. The study also assesses the impact of these innovation activities on the organization's transformational performance in terms of increased access to new targets. Empirical research is based on a two-step survey to a sample of Spanish nonprofits (particularly, a representative sample of foundations), since the nonprofit sector provides services that possess inherent transformational characteristics. Results confirm the expected positive effects of these two factors on social innovation and performance, and provide several guidelines for implementing social innovations in service industries.     

Environmental Reporting of Global Corporations: A Content Analysis based on Website Disclosures

Today, more corporations disclose information about their environmental performance in response to stakeholder demands of environmental responsibility and accountability. What information do corporations disclose on their websites? This paper investigates the environmental management policies and practices of the 200 largest corporations in the world. Based on a content analysis of the environmental reports of Fortune’s Global 200 companies, this research analyzes the content of corporate environmental disclosures with respect to the following seven areas: environmental planning considerations, top management support to the institutionalization of environmental concerns, environmental structures and organizing specifics, environmental leadership activities, environmental control, external validations or certifications of environmental programs, and forms of corporate environmental disclosures.     

Preferential Rules of Origin and the Multilateral Trading System: Pro-Development Policy Options

With the proliferation of regional trade agreements since the late 1980s and early 1990s, preferential rules of origin have also proliferated. The discussion on these rules has gradually shifted from a purely technical discussion (“how to establish the origin of goods not wholly obtained in one country”, and hence, “how to apply trade preferences in these cases”) to a wider discussion also touching upon the transaction costs caused by having a “spaghetti bowl” of rules, and the actual or presumed neo-protectionist use that is being made of them. In the context of the discussion on possible policy options for developing countries simultaneously involved in (or negotiating) regional and multilateral trade agreements, this article will first give a brief overview of the findings of the recent empirical literature. Some indications are then presented as to what such policy options could look like. This paper was first presented at the Ad-hoc Expert Group Meeting on The Development Interface between the Multilateral Trading System and Regional Trade Agreements, Session III Regulatory Provisions in RTAs, Palais des Nations, Geneva, 15-16 March 2007. It is partly based on P. De Lombaerde, L. J. Garay : Preferential Rules of Origin: EU and NAFTA Regulatory Models and the WTO, in: The Journal of World Investment & Trade, Vol. 6, No. 6, 2005, pp. 953-994; and L. J. Garay, P. De Lombaerde: Preferential Rules of Origin: Models and Levels of Rulemaking, in: S. Woolcock (ed.): Trade and Investment Rulemaking: The Role of Regional and Bilateral Agreements, Tokyo 2006, UNU Press, pp. 78-106.     

Regional entrepreneurship capital and firm production

Certain theories suggest that the capacity of a region to generate new firms, called entrepreneurship capital, has positive spillover effects on the production of the firms in that region. Evidence generated with aggregated data at the regional level supports this prediction. This paper argues that, using aggregated data at the regional level, entrepreneurship capital could be correlated with regional production even if entrepreneurship capital has no spillover effects on firm production. This will not be the case when data at the firm level are used. This paper provides evidence from a sample of 11,276 Spanish firms during the 2004–2012 period. Positive spillovers are estimated in between effects models, but such spillovers are only found in technological firms when within effects models have been estimated. Thus, the regional entrepreneurship capital spillovers are unclear when data at the firm level are used. Plausible interpretations and implications are discussed.