Foreign banks in syndicated loan markets

Foreign banks play a prominent role in syndicated loan markets. In this paper we examine foreign banks’ motives in participating in cross-border deals in 25 European countries. We find that usual explanations of foreign banking activities can only account partly for the high rate of foreign involvement in syndicated loan markets. The usual argument is that foreign banks are at a disadvantage because they lack soft information and thus they tend to lend to more transparent firms compared to their domestic counterparts. We find that this relationship only holds in relatively small financial systems. We illustrate different motivations for the large amount of cross border lending in large developed markets. In these markets foreign banks tend to lend to especially risky borrowers and projects.     

Local inference for locally stationary time series based on the empirical spectral measure

The time varying empirical spectral measure plays a major role in the treatment of inference problems for locally stationary processes. The properties of the empirical spectral measure and related statistics are studied — both when its index function is fixed or when dependent on the sample size. In particular we prove a general central limit theorem. Several applications and examples are given including semiparametric Whittle estimation, local least squares estimation and spectral density estimation.     

CES Production Functions and Economic Growth

We examine inconsistencies and controversies related to the use of CES production functions in growth models. First, we show that not all variants of CES functions commonly used are consistently specified. Second, using a simple growth model, we find that a higher elasticity of substitution leads to a higher steady state and makes the emergence of permanent growth more probable. It is also pointed out that the effect of a higher elasticity of substitution on the speed of convergence depends on the relative scarcity of the factors of production. Finally, we discuss possible explanations of variations in the elasticity of substitution.
JEL classification: O 41; O 11     

How to manage tropical forests more sustainably: The case of Indonesia

Although there is a rationale for a more conservative management of the remaining tropical forests, policy-makers in the tropical countries tend to be reluctant to implement appropriate policy measures, because they fear the short-run economic costs of environmental protection. Taking Indonesia as an example, the following article outlines how it is possible to protect tropical forests more effectively without necessarily foregoing economic gains. This study is part of the Kiel Institute's research project “International and National Economic Policy Measures to Reduce the Emission of Greenhouse Gases by Protection of Tropical Forests” financed under grant II/67 310 by Volkswagen-Stiftung. The author wishes to acknowledge helpful comments received from Rainer Schweickert und Manfred Wiebelt.     

On optimal allocations for estimating the surface of a random field

In general, the construction of optimal designs is apparently a difficult task for the approximation of a random field indexed by more than one dimension. Besides the rate of convergence of the minimum achievable error hardly anything is known until now. However, if there is an immanent structure present in the random field, then, taking this structure into account, improved estimates can be obtained. For this situation we present adequate designs which show, at least, a nearly optimal performance. work supported by 313/ARC/VII/93/151 of the DAAD work supported by Ku719/2-1 of the DFG     

Assessing the predictability of future livelihood strategies of pastoralists in semi-arid Morocco under climate change

This study assesses the predictability of future livelihood strategies of transhumant pastoralists in semi-arid Morocco. A decrease in precipitation due to climate change will likely threaten their traditional livelihood strategy. We examine whether the pastoralists explicitly prefer certain alternative strategies or if their reactions will be contingent. Our analysis uses standardized interviews focussing on two aspects: firstly, which resources are necessary for the pastoralists to be able to choose a livelihood strategy? Secondly, to what degree are expectations of well-being satisfied by alternative strategies? To assign levels of predictability to all investigated strategies, we analyze the interviews using simple methods of partial order theory. We find that under perceived precipitation scarcity, 38% of pastoralists would explicitly opt for sedentarity and localized pastoralism as alternative strategy. Unclear preferences are given for 25% of the cases. Considering a policy scenario of enhanced access to education and capital, our analysis indicates commercial pastoralism as dominant alternative. However, such a scenario would increase the share of unclear preferences to 43%, which increases the likelihood of a contingent development. The method we propose can be considered as a mathematical basis for the concept of historical contingency.     

Economic systems in developing countries – A macro cluster approach

This study is an attempt to close a gap in the comparative capitalism literature. Studies in that field focus mostly on industrialized countries, discuss economic systems in developing regions separately, and do not provide evidence based on a worldwide sample. We use an established macroeconomic cluster approach to identify economic systems in a worldwide sample of 115 developing and industrialized countries. We use an innovative approach to correct for income-related differences that would otherwise distort the cluster results. The major results are (1) that two broad categories of economic systems exist in developing countries (liberal and coordinated), which mirrors the results for industrialized countries, and (2) that economic systems in developing countries are apparently determined by a mixture of colonial heritage—with the transfer of more liberal institutions in the case of British colonialization—and regional affiliation, which explain differences within continents and between continents.     

Foreign assistance and emigration: Accounting for the role of non-transferred aid

Since policymakers increasingly regard foreign aid as a means to manage international flows of migrants, it is important to obtain accurate empirical evidence on the complex link between aid and migration. Recent research has shown that the impact of foreign assistance on migrant flows is highly heterogeneous across aid categories. In this paper, we focus on a dimension of heterogeneity that has so far not been considered in the literature, namely whether or not the delivery of foreign aid is associated with a transfer of resources to the recipient country. We show in a first step that non-transferred aid is quantitatively important, accounting for more than 25% of overall aid given by OECD DAC donors in 2016. Running separate gravity-type regressions for transferred and non-transferred aid, we then find that transferred aid has a much stronger (negative) impact on migration than the previously used total aid variable that includes the non-transferred component. As may be expected, non-transferred aid itself does not appear to affect migrant flows. A high share of non-transferred aid would therefore be at odds with the donors’ stated goal of tackling the root causes of migration.