Investment in Africa's Manufacturing Sector: A Four Country Panel Data Analysis

Firm level data for the manufacturing sector in Africa, presented in this paper, shows very low levels of investment. The importance of profit effects on investment is investigated using a flexible accelerator, a specification based on the Euler equation and a simple generalisation of these specificiations. There are controls for firm fixed effects. It is shown that the profit effect is very similar for both the accelerator and Euler equation specifications. A comparison with other studies shows that, for small firms, the effect is much smaller in Africa than for other countries. Reasons for the relative insensitivity of investment to profits in African firms are suggested. For the most general specification tested there are no significant differences in the size of the profit effect across the four countries in the study.     

Strategic and Business Planning Practices of Fast Growth Family Firms

Fast-growth family firms were surveyed about their business and strategic planning practices. Of the 65 fast-growth family firms surveyed, the majority prepare written formal plans. The business plans are in sufficient detail to enable the business to tie planning to actual performance and to adjust management compensation accordingly. The majority of the firms regularly share information with employees regarding comparisons between actual company performance results and goals or planned performance. Further, the majority of the firms describe their business strategy as a high quality producer strategy rather than as a low-cost or time-based strategy. Further, when bringing new products to market, these fast-growth family firms adopt a first mover or early follower strategy. Implications of these findings for growth-oriented family firms are presented.     

The Impact of a Disorderly Resolution of Global Imbalances on Global Wealth

Partly reflecting structural advantages such as liquidity and strong investor protection, foreigners have built up extremely large positions in US (as well as other dollar‐denominated) financial assets. This paper describes the impact on global wealth of an unanticipated shock to US financial markets. For every 10 per cent decline in the dollar, US equity markets, and US bond markets, total wealth losses to foreigners could amount to about 5 percentage points of foreign GDP. Four stylized facts emerge: (i) foreign countries, particularly emerging markets, are more exposed to US bonds than to US equities; (ii) over time US exposure has increased for most countries; (iii) on average, US asset holdings of developed countries and emerging markets (scaled by GDP) are very similar; and (iv) based on their reserves position alone, wealth losses of emerging market governments could on average amount to about 2¾ percentage points of their GDP.     

Operations analysis—the promise and the pitfalls

Operations Analysis comes to education too highly recommended to be ignored, after having grown into wide usefulness in industry and government. Reservations about its use stem from the differences between industry and education. As the practitioners of Operations Analysis grew in numbers and experience, they became recognized agents in the constantly necessary changes in industry. Education, now lacking well-defined roles for Operations Analysis, might well seek the help of the private sector in using its tools. The pitfalls to be avoided, however, are: decision-making when only information is called for; problem definitions which yield triviality or over-generality; and failure to communicate convincingly to decision-makers. Operations Analysis can fail seriously when it starts from bad data or dubious premises, as well as when it uses ready-made methods without adaptation, or-worst of all-performs in a vacuum.     

Structural time series analysis and modelling package: A review

This package performs specialized tasks related to specification, estimation, prediction and diagnostic checking in the context of a particular class of unobserved-components models. It is menu-driven and easy to use. Although the present (first) release suffers from a number of limitations, omissions and bugs, it is nevertheless a useful tool in the hands of a knowledgeable user.