Does foreign aid really raise per capita income? A time series perspective

Abstract. We analyze the relationship between per capita income and foreign aid. We employ annual data and five‐year averages and carefully examine the time‐series properties of the data. Panel estimations with dynamic feasible generalized least‐squares (DFGLS) show that aid generally has an insignificant or minute negative significant impact on per capita income (particularly in highly aid‐dependent countries). This holds true for countries with different levels of human development and income, as well as for different regions. We also find that aid has a small positive impact on investment, but a significant negative impact on domestic savings (crowding out) and the real exchange rate (appreciation). JEL classification: F35, O11, C23, C51     

What have we learnt about board gender diversity as a business strategy? The appointment of board subcommittees

This paper explores whether a board's gender diversity influences the voluntary formation of its board subcommittees. Female board directorship may become a business strategy for firms if it affects the appointment of board subcommittees. We hypothesize that the voluntary creation of board subcommittees is affected by the presence of female directors on boards; the presence of independent, executive, and institutional female directors; and the proportion of shares held by female directors on boards. Board gender diversity has been measured as a proportion and with Blau's index. The results show that independent female directors are positively associated with the likelihood of voluntarily setting up all or some of the committees and a supervision and control committee. The presence of executive female directors negatively influences the probability of forming all or some of the committees, an executive committee and a supervision and control committee. The percentage of shares held by female directors has a positive effect on the voluntary creation of an executive committee. The findings also report that women directors and institutional female directors do not contribute to the voluntary creation of board subcommittees. Our evidence shows that female board directorship impacts the demand of internal control mechanisms such as board subcommittees, suggesting that firms should take it into account as a business strategy. The main implications derived from this research are relevant for Spanish policymakers and researchers because board gender diversity may play a significant role in the decision‐making processes of firms and may influence firms' outcomes.     

Consumers' perception of and attitudes towards organic food in Galicia (Northern Spain)

Although the organic sector is still relatively small, the demand for organic food is increasing throughout the world. The characterization of consumers' perception of and attitudes towards organic food is important to enable the development of marketing policies aimed at attracting conventional consumers to the sector. Consumers' behaviour studies must be conducted specifically for different regions and countries as perceptions and attitudes vary across the world. In the present study, a questionnaire was designed for administration to consumers in Galicia (Northern Spain). The questionnaire was administered to 830 consumers in 200 establishments to obtain data about the consumers' perception of and attitudes towards organic food. The survey results showed that one‐third of responders consume organic food and that the typical profile of a consumer of organic food is a middle‐aged, medium‐high class, university‐educated female living in a large village, who shops in supermarkets and preferably consume vegetables, fruits and eggs. Most people who declared that they consume organic products confuse these with home and locally produced food, indicating the potential for growth of the organic sector by providing such consumers with appropriate information. Most consumers (including conventional consumers) have a good opinion of organic food and consider that it is better for health, is of better quality than conventional food and avoid pesticide residues. However, price continues to be a barrier to the consumption of organic produce. Most respondents stated that they would consume more organic food if the price was only between 10% and 30% higher than the conventional equivalent. Finally, organic consumers in Galicia showed positive attitudes towards using local breeds in organic agriculture, both for producing food and for ecotourism and educational activities. Such activities could contribute to conserving breed biodiversity and adding value to organic farming.     

The virtuous circle of human resource investments: A precrisis and postcrisis analysis

We propose a dynamic model of positive feedback between human resource (HR) investments and companies' economic performance. The model assumes that HR investment increases profitability through labor productivity and, in turn, profitability improves HR investment through organizational slack. Based on data from a sample of 2,497 industrial companies over a 7‐year period (2005–2011), longitudinal analysis corroborates the existence of a two‐way relationship between HR investment and profitability over time. However, the emergence of an economic crisis weakens this feedback, identifying the effect of organizational slack on HR investment as the weakest causal chain link. In a postcrisis period, HR investment is not such a high priority for managers.     

Race,Quality of Care and Patient Outcomes: What Can We Learn from the Department of Veterans Affairs?

The large and persistent differences in health outcomes between African Americans and whites have sometimes been attributed to differences in the quality of the facilities in which they receive care. A large body of literature documents systematically worse performance by facilities which serve a larger share of black patients. However, these estimates may be biased by unobserved variables which correlate with the racial profile of the clinic and also affect outcomes. This paper uses a unique dataset from the Department of Veterans’ Affairs system to examine the relationship between the quality of health care and the racial profile of the patient population in an equal-access health care system. An instrumental variable is used to overcome the omitted variable bias in the Ordinary Least Squares (OLS) estimates. Both the OLS and IV estimates show that increasing the proportion of visits by African–American patients results in improved outcomes for all patients treated at the clinic. The OLS results significantly underestimate the effect of increasing the proportion of black patients. Holding the overall clinic load constant and adding one hundred outpatient visits by African Americans in a year would result in a 0.5 percentage point decrease in 1-year mortality for the average patient in the clinic. Thus, contrary to results from the private health care sector, increasing clinic racial integration in an equal access system would benefit all patients.     

The determinants of trade performance: influence of R&D on export flows

A theoretical model is presented, in which supply side differences between countries determine international trade flows. This model is empirically tested at a sectoral level for a group of EU countries, within a framework that focuses on changes through time and differences between countries. The results show that the validity of the theoretical model is limited at sectoral level. However, as expected, we find that the variable representing technological differences is significant and correctly signed for high-technology sectors. The evidence points to the existence of different production functions across countries and to the importance of supply side factors in determining the direction and the terms of trade.     

The effects of education on spouses’ satisfaction in Europe

This article identifies the effects of both own and spouses' education levels on individual economic satisfaction for European households. To that end, it estimates several specifications based on the family collective approach, for each of the 14 EU countries, by using the eight waves of the European Community Household Panel, 1994–2001. After demonstrating that the IV Hausman–Taylor procedure is the selected estimation method in the majority of cases, the empirical results show that male and female income satisfaction significantly increases when the husband achieves higher education qualifications in the majority of European countries. However, the positive effect of the wife's higher education on female income satisfaction only appears in a very limited number of countries. Additionally, increases in individual wage and nonwage incomes generally lead to higher satisfaction levels.     

Economic Growth and Convergence of EU Member States: An Empirical Investigation

The aim of this article is to construct a European production frontier using deterministic methods, and to break down growth and convergence during the period 1980–2001. The results show that EU growth is primarily driven by physical and human capital accumulation, the contribution of which is essential for the cohesion of European countries. We find capital accumulation and efficiency change to be important convergence factors within the EU, while technical change has worked against it. The approach used has also enabled us to analyze the differences in growth performance of Member States and highlight the role of human and public capital, supporting the European cohesion and development policies carried out in this period.     

Does foreign aid promote recipient exports to donor countries?

This paper uses the gravity model of trade to investigate the effect of foreign aid on exports of aid recipients to donor countries. Most of the theoretical work emphasises the possible negative impact of aid on recipient countries’ exports, primarily due to exchange rate appreciation, disregarding possible positive effects of aid in overcoming supply bottlenecks and promoting bilateral trade relations. Using non-stationary panel (cointegration) estimators to control for omitted variable and endogeneity bias, we find that the net effect of aid on recipient countries’ exports is insignificant, both for our sample (of 123 countries) as a whole and for important regional sub-samples. This finding is in line with the small or insignificant macroeconomic impact of aid found in earlier studies and also suggests that exporters in recipient countries are not benefiting from improved trade relations with donors.     

Perception of Health Claims Among Nordic Consumers

Health claim perception was investigated by a web-based instrument with a sample of 4,612 respondents in the Nordic countries (Denmark, Finland, Iceland, Norway, Sweden). Respondents decided which of a pair of claims sounded better, was easier to understand and was more convincing in their opinion. Claims were constructed from an underlying universe combining different active ingredients (familiar, unfamiliar), type of claim (combination of information about ingredient, physiological function and health benefit), framing (positive, negative), and use of qualifier (with, without “may”). Across pairs, the claims differed in the health benefit addressed (cardiovascular health, dementia, bodyweight). Results showed that respondents could be grouped into two roughly equally sized classes that differed in the type of claim preferred: one class prefers “long” claims that give the full story consisting of active ingredient, physiological function and health benefit, whereas the other prefers “short” claims consisting of the health benefit only. Results also showed that the familiar ingredient is preferred to the unfamiliar one, whereas effects of positive versus negative framing depended on the type of health benefit addressed.