The impact of financial liberalization on bank efficiency: evidence from Latin America and Asia

This article investigates the impact of financial liberalization on bank efficiency, using data for a sample of over 4000 bank-year observations from ten emerging economies for the period 1991–2000. We use Data Envelopment Analysis (DEA) to calculate bank efficiency at the individual bank level. Bank efficiency measures are then aggregated at the country level to investigate the relationship between financial liberalization and bank efficiency, using a panel least square fixed-effects model. Overall, we find strong support for the positive impact of financial liberalization programmes on bank efficiency.     

Enterprise‐level training in developing countries: do international standards matter?*

Several studies have examined the determinants of training in developing countries but few have paid attention to the potential importance of international standards such as ISO 9000 or ISO 14000 on the firm's training decision. This article examines training determinants using recent employer surveys for five developing countries: Ethiopia, Honduras, Indonesia, Morocco and Nicaragua. It finds that ISO certification status is an important determinant of training, even after controlling for other characteristics such as workers’ formal schooling, firm size, industry and foreign ownership. This points toward the importance of international standards, including product quality and production standards, for firm training. The article also discusses policy implications related to the findings and provides directions for further research.     

Knowledge Spillovers and Growth in the Disagglomeration of the Us Advertising-Agency Industry

We investigate knowledge spillovers and externalities in the disagglomeration and growth of the advertising-agency industry. A simple model of high demand, low wages, and externalities associated with clusters of related industries can explain the dispersion of advertising agency employment across states. Other factors affected the industry growth rate within states. Consistent with Jacobs and Porter but contrary to Marshall, Arrow, and Romer, competition, but not specialization, enhanced growth. In accord with Porter (1990), growth increased with buyer cluster size. Diversity had no effect on growth. Despite improvements in telecommunications and transportation reducing effective distances, location still matters.     

Does the Group Leader Matter? The Impact of Monitoring Activities and Social Ties of Group Leaders on the Repayment Performance of Group‐based Lending in Eritrea

Abstract: This paper analyses whether the effects of monitoring and social ties of the group leader and other group members on repayment performance of groups differ, using data from an extensive questionnaire held in Eritrea among participants of 102 groups. We hypothesize that the monitoring activities and social ties of the group leader have a stronger positive impact on the repayment performance of groups. The results show that social ties of the group leader do have a positive effect on repayment performance of groups, whereas this is not true for social ties of other group members. We do not find evidence for the hypothesis that monitoring activities of the group leader have a stronger positive impact on group repayment performance. All variables measuring monitoring activities, either of the group leader or the other group members, are found to be statistically insignificant.     

Semi-analytical MBS Pricing

This paper presents a multi-factor valuation model for fixed-rate callable mortgage backed securities (MBS). The model yields semi-analytic solutions for the value of MBS in the sense that the MBS value is found by solving a system of ordinary differential equations. Instead of modelling the conditional prepayment rate (CPR), as is customary, the pool size is the primary modelling object. It is shown that the value of a single MBS payment due at time t _n can be found by computing two expectations of the pool size at time t _n–1 and t _n respectively. This is a general result independent of any interest rate model. However, if the pool size is specified in a way that makes the expectations solvable using transform methods, semi-analytic pricing formulas are achieved. The affine and quadratic pricing frameworks are combined to get flexible and sophisticated prepayment functions. We show that the model has no problem of generating negative convexity as the spot rate falls, and still be close to a similar non-callable bond when the spot rate rises.     

Lead Firms and Competition in 'Bi-polar' Commodity Chains: Grinders and Branders in the Global Cocoa-chocolate Industry

Like most global agro-industrial commodity chains today, the global cocoa - chocolate industry is buyer-driven. However, the chain is characterized by the lead role of a few transnational companies in two different segments: the grinders (processors of cocoa)and the branders (manufacturers of chocolate), a structural pattern identified in other so-called turn-key industries consisting of contract manufacturers and brand-name firms. The paper examines two important spatial sub-systems of the chain: the national cocoa bean supply system in Ghana and the regional cocoa trading-storing-grinding complex in the Zaanstreek, Amsterdam. The structural patterns and relationships in these sub-systems suggest that the dynamics of 'bi-polar' buyer-driven chains is best comprehended in terms of various types of containment strategies of the leadfirms, i.e. efforts to defend and improve their positions on the global market by creating competition among their suppliers and expanding their customers.     

Comprehensiveness versus Pragmatism: Consensus at the Japanese–Dutch Interface

abstract    By comparing the views of managers working at the interface of two consensus-oriented societies, Japan and the Netherlands, we show important differences between the consensus decision-making processes as seen by Japanese and Dutch managers. These differences relate to how complete the agreement of opinion should be in order to speak of consensus, with the Japanese managers demanding a more complete consensus than the Dutch. The processes and conditions that Japanese and Dutch managers see as leading to consensus also differ. Japanese consensus is based on a more ordered, sequential process than Dutch consensus. Our respondents differed deeply regarding the role of the hierarchy in their own and the others' consensus processes, with both Japanese and Dutch managers seeing their own consensus process as less hierarchical. Our findings show that the concept of consensus is interpreted quite differently by Japanese and Dutch managers. This is an important warning for companies operating at the interface of these two societies. More in general our research illustrates the usefulness for international management research of detailed comparative studies focusing not on stark contrasts but on more subtle differences between management practices.     

The empirics of microfinance: what do we know?

Microfinance has received a lot of attention recently, both from policy makers as well as in academic circles. Two of the main topics that have been hotly debated are explaining joint liability group lending and its implications for reducing information asymmetries, and the trade-off between the financial sustainability and outreach of microfinance programmes. This Feature contains three novel empirical contributions providing new insights with respect to why and how joint liability group lending works. It also contains the first large-scale systematic analysis of the trade-off between financial performance and outreach of microfinance institutions.     

Social class, social mobility and mortality in the Netherlands, 1850–2004

This study uses data from a random sample of births in the Netherlands during the period 1850–1922 to examine the relationships between social class, social mobility and mortality at middle and old age. Population registers and personal cards covering the period from 1850 to 2004 for all Dutch provinces were used to reconstruct individual life histories of 14,900 births. For men we did not find an effect of the social class of origin (using two different SES-classifications) on mortality in age group 18 to 35. We also did not observe an effect of own social class on mortality after age 35. For women effects of social class of origin and social class of husband were generally absent as well. Our conclusion is that the standard ideas about the negative effects of processes of industrialization and urbanization on the duration of life do not seem to apply to the Netherlands. Where one lived mattered more for survival than the social class one belonged to.