The relevance of Chinese developmental experience to developing countries

The Chinese experience and success in economic development during the past 30 years are seen as a model by many underdeveloped countries. Since 1952 China has followed 2 different strategies: 1) the radical approach, emphasizing self-reliance, autarchy, and very limited foreign trade and bureaucracy, and, 2) the pragmatic approach, giving priority to heavy industry, sophisticated technology, and centralized control. Since Chinese politics became deeply intermingled with these 2 lines of thought, there is a certain degree of uncertainty about the final direction that will emerge with a degree of continuity. Obviously, evaluating China's developmental experiences for other countries' purposes is not the same as evaluating them for China's purposes. However, in its totality China has been able to demonstrate the validity of certain goals; the transplanting of Chinese strategies in foreign countries, or the mechnical imitation of Chinese innovations would not work every time; but the adoption of certain innovations, if the proper environment is available, would have a positive impact on developing societies.     

Purchasing power parity: Evidence from developing Countries

This paper utilizes the dynamic error-correction model (DECM) to examine the issue of purchasing power parity (PPP) for 11 developing countries (Argentina, Bolivia, Colombia, Cote d'Ivoire, Ecuador, Guatemala, Kenya, Nigeria, Peru, South Africa, and Venezuela). For comparison purposes, evidence from the traditional unit root methods of the augmented Dickey-Fuller (ADF) and Phillips-Perron is presented. The results from the conventional unit root tests failed to find evidence of PPP in all of the cases. However, the results from the generalized error-correction model detected evidence of PPP for nine out of the 11 countries under consideration. Based on these results, it was concluded that PPP holds in the long-run for the sample countries and that the implicit restrictions associated with unit root tests prevented earlier studies from finding evidence in support of PPP theory.The views expressed in this paper are those of the authors only. They do not reflect the views of the World Bank.     

Oligopoly models with different learning and production time scales

We propose a modelling approach to study Cournotian oligopolies of boundedly rational firms which continuously update production decisions on the basis of information collected periodically. The model consists of a system of differential equations with piecewise constant arguments, which can be recast into a system of difference equations. Considering different economic settings, we study the local stability of equilibrium, proving the destabilizing role of the time lag between two consecutive learning activities. We investigate some particular families of oligopolies showing the occurrence of both flip and Neimark–Sacker bifurcations, as well as the evidence of multistability with the coexistence between different attractors, occurring when oligopolies consisting of both technologically different and identical firms are studied.     

Social Responsibility and Performance: Does Strategic Orientation Matter for Small Businesses?

This paper examines whether strategic orientation toward corporate social responsibility (CSR) is instrumental in shaping small firms’ social responsibility practices leading to their enhanced financial performance and reputation. Data were collected from 182 small businesses operating in Malaysia based on random sampling technique and analyzed using Partial Least Squares Structural Equation Modeling. Analysis of the findings confirm that small firms’ long‐term strategic approach toward CSR is critical in driving their responsible practices toward environment, customer, community, employees, and suppliers which in turn impact small firms’ financial performance and better reputation building. These findings suggest that customers' and employees’ interests are strategic imperatives that small firms should address in enhancing their financial performance and building better reputation in the community. These findings have important implications for small firms’ strategic policy posture which are highlighted in the paper. The paper also identifies the possible limits of the research and suggests avenues for future studies.     

Corporate governance and long run performance of seasoned equity issuers

This paper examines the effect of corporate governance on the likelihood of issuing Seasoned Equity Offerings (SEO) between 1990 and 2005. It also examines the long-run post-issue performance using operating and stock return measures. Our results suggest that well-governed firms are less likely to issue equity. Nevertheless, when they do so, they outperform both matching non-issuers and issuers with minimal shareholders’ rights from pre- to post-issue—with the highest operating out-performance occurring in the two post-issue years. A negative correlation exists between the post-issue performance and the anti-takeover measures, primarily, the protection associated with management entrenchment. Nonetheless, measures of board structure do not appear to affect the post-issue operating performance. Overall, corporate governance appears to be an effective internal control mechanism that restrains managers’ incentives to either take an SEO issuance decision that does not serve the interests of shareholders or invest the capital raised in value-destroying projects.     

The exchange value of the dollar and the U.S. trade balance: An empirical investigation based on cointegradon and Granger causality tests

This article performs tests of Granger causality in the relationships between the nominal ad real exchange rates of the dollar and the U.S. trade balance as well as its price and quantity components over the period 1973:IIQ–1989:IIIQ. Our results suggest: (i) weak statistical evidence of unidirectional causality running from the nominal exchange rate to import prices and nominal trade balance (ii) no statistical support for the proposition that the real exchange rate simply “accommodates” changes in the real trade balance, and (iii) strong (no) causal links between the nominal and real exchange rates and export (import) volume. We tentatively conclude that movements in the exchange rate have a rather limited effect on the trade balance and that this effect is more likely to materialize on the export side of the trade balance.     

Evaluating the operational and profitability efficiency of a UAE-based commercial bank

This study investigates the operating and profitability efficiency of 15 branches of UAE-based commercial bank utilising the data envelopment analysis method. The results indicate that efficiency levels among the various branches vary and that there is room for improvement. Profitability efficiency appears to be higher than operational efficiency. Regarding the financial ratios analysis, a consistent effect cannot be obtained and it cannot be determined which branch has an overall position in terms of higher performance. The historical analysis of the branch network performance indicates that management should consider major operational improvement efforts to reduce employees' expenses and other operating expenses combined with an increase in the total loans portfolio. Improvement in both interest and non-interest revenues is required to increase profitability efficiency of the whole branch network.     

Causality nexus of exports,FDI and economic growth of the ASEAN5 economies: evidence from panel data analysis

This paper analyzes the causal relationships between exports, FDI and economic growth among the ASEAN5 countries. We have used a three-stage procedure based on unit root, co-integration and causality tests applied to the panel data from 1981 to 2013. The results reveal that there is a bi-directional causal relationship between FDI and growth in the long run, while there is a unidirectional causal relationship from FDI to exports in the short run. Our results also confirm that the export-led growth (ELG) and FDI-led growth hypotheses hold true in the long and short run. To reinforce the FDI inflows, authorities should continue the progressive reduction of barriers, and increase the sophistication of quality exports to compete in the global market. This paper is the first of its kind to analyze the role of both FDI and exports in the ASEAN5 economies using panel analysis.