SME Export Performance in Indonesia After the Crisis

Firms in export-oriented sectors with more exporters and more foreign investment, or firms with more access/use of credit, tend to export a higher share of their output, whether they are small or large. The latter points out that the benefits of size-neutral policies that improve the overall business and foreign investment climate and secure access to formal credit for all enterprises produce benefits for the entire economy. Small firms with higher use of machinery and higher use of domestic inputs displayed a higher likelihood to increase the share of their output exported. SMEs show rising productivity with access and use of appropriate production inputs. Decades of protective size-specific policies, such as the reservation scheme for SMEs still in place in Indonesia’s manufacturing may have distorted, more than supported, adoption of appropriate technologies among SMEs. These policies may need to be revisited and refocused on more size-neutral policies such as improved access to collateral or reduced cost of business registration and licensing.     

A Generalization of the Tree Harvesting Paradigm

The tree harvesting paradigm finds the optimal length of each harvest cycle. Typically, only the extreme cases of one and infinite harvests are considered. We extend the model in two ways. First, we analyze an arbitrary number of harvest cycles and show that the optimal cycle length decreases monotonically with the number of cycles. Second, we relax the restrictive assumption requiring the disappearance of positive net present value opportunities as the final cycle is harvested. Instead, we assume these opportunities disappear after an exogenously fixed horizon. This simple change of assumptions produces solutions that may differ substantially from the traditional solutions.     

THE WEALTH MAXIMIZING ORDERING QUANTITY: AN EXTENSION

This paper derives a simple analytical expression for the value maximizing economic ordering quantity (EOQ). The traditional EOQ formula can be derived from this expression through a second-order Taylor series expansion. This connection explains McDaniel's recent simulation results showing that the EOQ is an accurate estimator of the optimal ordering quantity.     

Graphical Portfolio Analysis

This paper presents a new methodology for portfolio analysis based on the correspondence between the expression for the standard deviation of a two-asset portfolio and the magnitude of the sum of two complex numbers. This approach offers a geometric alternative to traditional portfolio analysis. The pedagogical advantages of the new framework are illustrated by rederiving many efficient set mathematics results. A previously unrecognized fact is uncovered using the graphical technique that the sum of the maximum and minimum betas for efficient portfolios is 1, so knowledge of one extreme beta implies knowledge of the other.     

Welfare-theoretical analyses of the brain drain

The paper reviews and synthesises the theoretical analyses of the brain drain in the earlier literature and in the present symposium in the Journal on the subject. Static analysis and dynamic analysis are distinguished, critical issues are raised relating to how welfare changes should be discussed in the context of migration, and possibilities of fruitful future research are outlined.     

Road Travelers' Motivations and Loyalty: Train Versus Bus Services

ABSTRACT

Railroad and highway travel may differ not only in terms of their nature but also in terms of their appeal to travelers. Travelers may have different motivations to use either transportation mode in either inbound or outbound directions. Travelers may also demand different services or service traits of the provider in order to gain satisfaction in the short-term and/or become loyal customers in the long-term. This study uses a 2?×?2 design to compare train and a bus service between two cities 250 km apart in a country where these two means of transportation are equally essential. The study also compares the outbound and inbound routes in order to acknowledge additional differences in both the travelers' motivations and the customers' loyalty formation. The results show that travelers' motivations for choosing train or bus transportation differ based on whether they are leaving from or returning to the city that was the original point of departure. They also show that customers' long-term relationships with the provider significantly differ according to means of transportation and routes used. Characteristically, customers in the studied sample prefer train transport to leave and bus to return based on their idiosyncratic motivations of seeking value or money savings and their expectations of mutual loyalty. This research suggests practical consequences both for understanding travelers' motivations and customer loyalty formation and for managing policies regarding train and bus services competing for specific segments of travelers.     

The Effects of Ownership Structure and Intragroup Loans on Leverage: Evidence from Family Firms in Chile

This article examines the effects of family control and pyramidal ownership on firms’ capital structure decisions. After studying a sample of listed family and nonfamily firms in Chile, we find that families take a conservative approach to debt and financial risk exposure. We test the hypothesis that family firms restrict the use of debt in order to avoid the monitoring role of creditors, which could limit their enjoyment of the private benefits of control. In keeping with this hypothesis, we find a U-shaped relationship between leverage and the degree of pyramidal ownership that is more pronounced among family firms than nonfamily firms. We do not find any evidence that is consistent with the hypothesis that family-controlled firms have low leverage ratios due to their access to internal capital markets. In fact, conversely, we find that listed family firms provide more loans to related companies than comparable nonfamily firms.     

An empirical analysis of the <Emphasis Type="Italic">Wall Street Journal’s</Emphasis> SmartMoney fund screen

We examine mutual funds that appeared in the Wall Street Journal’s SmartMoney Fund Screen column from September 2004 through July 2009. We find that the majority of funds listed do not have Morningstar’s highest five star rating. Regardless of Morningstar rating, the average prepublication performance of the funds is significantly higher than the benchmarks used to measure performance. Post publication, fund performance declines, and the decline is statistically significant across our performance measures. However, additional tests indicate that the SmartMoney funds which have a three or four star rating from Morningstar are better investment values than corresponding five star Morningstar funds with the same prospectus objective and expense ratio.     

REGIONAL SHORT-RUN EFFECTS OF TRADE LIBERALIZATION IN BRAZIL

We use a single-country multi-regional computable general equilibrium model to evaluate regional short-run impacts of reduction in import tariffs resulting from recent free trade area agreements, on poverty and distribution of income in Brazil. Results show that trade can reduce inter-regional income inequality, but poor urban households lose with trade liberalization. Trade policy alone is not sufficient for achieving more equitable income distribution goals in Brazil. Without greater investment in human and physical capital, incomes in most regions of Brazil are likely to lag behind incomes in the South/Southeast, the most developed regions in the country.