The determinants of trade credit use: the case of the Tanzanian rice market

Most small businesses in the developing economies suffer from a lack of access to formal external finance. One important alternative source of finance for these entrepreneurs is trade credit. Applying a unique data-set containing data on specific trade relations between rice wholesalers and rice retailers in Tanzania, we analyse the determinants of trade credit demand and supply in this market, using a simultaneous equation modelling approach. The analysis shows that while the demand for trade credit is primarily determined by the extent to which retailers need external funds, supply is mainly driven by wholesalers’ incentives to attract and keep clients. Moreover, wholesalers’ willingness to provide credit increases if they have better information about the possibility that the customer will fail to repay the credit.     

Regulating securities analysts

We examine the effects of regulations designed to address the potential conflict of interest that arises when sell-side analyst research is not independent of investment banking. We focus on two types of regulation: (1) internal barriers between equity research and investment banking that restrict communication; and (2) disclosure requirements relating to analyst compensation. We find that information barriers can increase research effort and improve report quality by limiting an investment bank's ability to distort its analyst's incentives. However, this type of regulation can also reduce information production and lower the quality of reports if an investment bank benefits directly from research activity. Disclosure requirements, on the other hand, unambiguously lead to more informative prices and a higher report quality relative to either information barriers or no regulation.     

The effects of tariffs on coalition formation in a dynamic global warming game

The prospects for cooperation on climate protection beyond 2012 are currently uncertain. Thus policy instruments which foster participation in International Environmental Agreements (IEA) are in demand. Among the instruments under discussion are trade sanctions. Multi-region optimal growth models are a state of the art tool for integrated assessment, but introducing trade sanctions distorts the competitive equilibrium, making it difficult to compute numerically. We introduce trade and trade sanctions into a model of coalition stability to assess the potential of trade sanctions to support an IEA. Trade is modeled by having all countries produce a generic output good, but adopting national product differentiation (Armington assumption). Coalitions are free to impose tariffs on imports from non-cooperating countries. We solve the model numerically using a refined version of Negishi's [Negishi, T., 1960. Welfare economics and existence of an equilibrium for a competitive economy. Metroeconomica 12, 92–97] basic algorithm. We then apply the model to analyze the influence of tariffs on international cooperation. The model suggests that there is indeed a significant potential to raise participation through trade sanctions, even when goods from different countries are nearly perfect substitutes. Furthermore we investigate the effect of trade sanctions on global welfare, environmental effectiveness, and the credibility of the tariff mechanism.     

Trade and business cycle synchronization in OECD countries—A re-examination

This paper re-examines the relationship between trade intensity and business cycle synchronization for 21 OECD countries in the period 1970-2003. Instead of using instrumental variables, we estimate a multivariate model including variables capturing specialization and similarity of economic policies. We confirm that trade intensity affects synchronization, but the effect is much smaller than previously reported. Other factors, like specialization and convergence in monetary and fiscal policies, have a similar impact on business cycle synchronization as trade intensity. The effect of trade on synchronization is not driven by outliers. However, the impact of trade on synchronization is not robust across deciles.     

The Dilemmas of Technology: A Review Article

During the 1990s, all of the European transition economies (TE) experienced a major recession and suffered from the explosion of income inequality. However, distribution of income between labor and capital differed greatly from one group of post-communist countries to another. The paper discusses and analyzes linkages between models of capitalism that emerged in former communist countries in the 1990s and the outcome of capitalist transition for labor in terms of income distribution and inequality. It is based on the estimates of the Marxian rate of exploitation and other indicators of labor income performance during the reform period.     

The healthy development of economies: A strategic framework for competitiveness in the health industry

Applying a strategic decision-making perspective on the economics of business, we suggest that a competitive locality in the health industry is one that, relative to other localities, is effective in: (1) providing the healthcare that enables everyone to participate fully in the democratic development of the locality; (2) providing the healthcare that is democratically identified as a direct objective of this development; (3) contributing through the health industry to any other democratically determined objectives of the locality's development. The paper hypothesizes that strategic decision-making in organizations is an especially significant determinant of the impacts of the health industry. We conclude that: (i) a locality that suffers concentration in the power to determine the objectives of its health industry could not be strictly competitive in that industry; (ii) the first best way to achieve competitiveness in the health industry would be to democratize its strategic decision-making. What this would entail in practice is discussed in some detail.     

Improving Environmental Performance: A Challenge for Romania

The transition process in Central and Eastern Europe was associated with growing environmental awareness. This paper analyses the determinants of pollution abatement and control expenditure at plant level in the case of Romania using survey data and a multilevel regression model. Our findings suggest that, although Romania has improved its environmental performance, formal and informal regulations are still only partially developed owing to the difficulties of economic transition, and heterogeneity across regions remains considerable.     

Connecting strategic orientation,innovation strategy,and corporate sustainability: A model for sustainable development through stakeholder engagement

This paper aims to enhance our understanding of the relationship between organizations' strategic orientation (i.e., instrumental, equidistant, and stewardship) and their innovational strategy (i.e., organizational ambidexterity and open innovation), and this relationship's influence on their sustainability performance. We expected organizations' strategic orientation to influence their innovational strategy and exhibit better corporate sustainability. We focused on 12 different multinational organizations in the Eurozone and found that inbound open innovation acts as a driver for corporate sustainability while simultaneously positively enabling organizations to pursue both financial and social initiatives. After suggesting open innovation as a new corporate sustainability antecedent, we only found empirical evidence of inbound open innovation. However, we would suggest that if organizations incorporated outbound open innovation in their strategy, they could likely improve their corporate sustainability. Also, we found that achieving an equidistant or stewardship orientation paves the way for sustainability to become an integral part of an organization's innovational culture and actualizes the organization's strategic behavior. Our findings further contribute to a deeper understanding of organizations' characteristics as their sustainability commitment grows and as they move from an instrumental to a stewardship orientation and implement an open innovational strategy.     

AN EXTENDED MEASURE OF GOVERNMENT PRODUCT: PRELIMINARY RESULTS FOR THE UNITED STATES, 1946–76

Expanded measures of government output include imputed values of the services of government capital, uncompensated factor services of military draftees and jurors, and net revaluations, as well as the usually included compensation of employees. The government output is allocated to consumption, capital formation and product intermediate to other sectors, on the basis of its classification in ten broad functions: defense, space research, education, health, sanitation, transportation, parks and recreation, natural resources, welfare, and general administration. Final government product in 1976, including $116 billion in defense and $125 billion in education, amounted to $450.5 billion, which was 26.5 percent of the 1976 GNP. This final government product corresponded to the BEA measure of $191.6 billion.
Total capital formation related to government is defined to include both government product which enters into capital formation in other sectors and government expenditures for its own capital accumulation. After a more rapid rate of growth in previous years, this total government capital formation in the United States in 1976 is found to exceed gross private domestic investment. A significant but only minor portion was found to be constituted by government expenditures for capital goods and change in government inventories. Investment in research and development, health and, particularly, education and training, were dominant components in capital formation related to government.