Trade and Specialisation in Pollution Intensive Industries: North–South Evidence

Abstract

The pollution haven hypothesis (PHH) and the capital-labour hypothesis (KLH) state that the relative level of a country's environmental regulations and capital and labour endowments determines its comparative advantage respectively. Since these hypotheses lead to conflicting predictions as to whether the North or the South will specialise in pollution-intensive production, this paper examines whether changes in trade and specialisation patterns allow us to distinguish between pollution haven and factor endowment effects. We employ a methodology that enables us to present North-South trade patterns over time and to identify those periods when trade patterns were consistent with either the PHH and/or the KLH as a foundation for undertaking more detailed econometric studies.     

Credit constraints and smallholder dairy production in the East African highlands: application of a switching regression model

Accurate assessment of farmers' credit constraint condition is important in order to understand the circumstances under which credit would have its greatest impact. In this study a switching regression model was used to determine the impact of credit on smallholder dairy farms in the East African highlands using farm level data from Ethiopia and Kenya. Farmers were classified as credit constrained or credit non-constrained based on their responses from the farm level surveys. No consistent relationship was found between farmers' credit constraint condition and their borrowing status. Most of the variation in milk output per farm was explained by the number of crossbred milking cows in the dairy herd. As credit is likely to facilitate investment in crossbred dairy cows it will have substantial impacts on smallholder dairy farms especially if it is targeted to credit constrained farms.     

An empirical study of voluntary transfer pricing disclosures in China

This paper empirically investigates the factors that affect the management’s voluntary disclosures of the transfer pricing details of related-party transactions. Using Chinese data from 2004 and 2005, we hypothesize and find that firms that make voluntary disclosures of the pricing methods of related-party transactions are negatively associated with (i) a higher level of earnings management (as captured by abnormal related-party transactions) and (ii) its underlying incentives (as captured by the management’s performance-linked bonuses and the firm’s incentives to achieve earnings targets); further, they are positively associated with (i) a higher percentage of independent directors and (ii) a higher percentage of government ownership. Overall, our findings suggest that earnings management and its incentives, board composition, and ownership structure significantly influence the voluntary disclosure decisions of managers.