Defense and Welfare Under Rivalry

Two small countries facing a constant probability of war with each other import arms for consumption goods from the rest of the world. The defense good, produced by combining arms and army, is a public good. The reaction curve depicting the optimal supply of the defense good turns out to be backward-bending. Nevertheless, at least one of the reaction curves is positively sloped at the unique Nash equilibrium. Several comparative statics results are derived. For example, if one country's reaction curve is negatively sloped, military aid to the rival leads to a decline in its optimal supply of the defense good.     

Effect of deep‐fat frying of potato chips and chicken on the quality of soybean oil

The type of products may affect the quality of oil during deep‐fat frying. The quality changes in pure soybean oil during frying of potato chips and chicken drumsticks were evaluated and compared. The oil was subjected to continuous frying at 180°C for a period of 315 min. The parameters used to assess the oil quality were peroxide value (PV), iodine value (IV), free fatty acids (FFA), refractive index (RI) and colour. The percentage of oil absorbed by the two products was determined. The oil was also assessed visually for any change in colour, viscosity, turbidity, flavour and deposit. Results showed that, for both products, PV, IV, FFA, RI and colour changed significantly with time (P < 0.05). Potato absorbed oil during frying (6.9%), whereas chicken released fat into the frying medium (2.4%). When the rates of change of the various parameters in the oils were compared for the two products, significant differences (P < 0.05) were noted for PV and colour only. The oil used during the frying of chicken appeared visually to be at a more advanced stage of deterioration.     

Miracles and Debacles: In Defence of Trade Openness

The central theme of this paper is that sustained rapid growth cannot be achieved without rapid growth in trade. A review of the experience during the past four decades offers virtually no examples of countries achieving sustained rapid growth – called miracles in this paper – without simultaneously experiencing sustained rapid growth in trade in the presence of low or high but declining barriers to trade. Simultaneously, the claim that opening to trade leads to sustained income losses is unfounded. A review of the experience of the countries that have faced stagnation or declining per‐capita incomes on a long‐term basis – called debacles in this paper – reveals no connection to a sustained surge in imports.     

Analysis of Canadian and Mexican banking strategies in the U.S.

This article reviews regulations and commercial banking structures in Mexico, Canada and the U.S., and examines the comparative operations of Canadian and Mexican bank affiliates in the U.S. vis-a-vis each other and also with U.S. commercial banks of comparable size serving the same markets. Results obtained regarding significant differences in the operations of these banks appear to be consistent with the nascent FDI theory of multinational banking. International survey results regarding bank managers' perceptions and decision criteria suggest that this variable should also be incorporated in the evolving theory.     

Inequality and endogenous trade policy outcomes

An enduring puzzle in international economics is why trade interventions are biased in favor of import-competing rather than export sectors and therefore restrict trade. In this paper, we show that if the government's objective reflects a concern for inequality then trade policy generally exhibits an anti-trade bias. Importantly, under neutral assumptions, the mechanism that we analyze generates the anti-trade bias independently of whether factors are specific or mobile across sectors. The mechanism also generates an anti-trade bias between large countries even after they sign reciprocal trade agreements that eliminate any terms-of-trade motivation for the use of trade protection.     

FIRM PERFORMANCE AND SECURITY TYPE IN SEASONED OFFERINGS: AN EMPIRICAL EXAMINATION OF ALTERNATIVE SIGNALING MODELS

In this paper we examine the long-term performance of publicly traded firms that issue straight debt, convertible debt, or common stock. Declines in firm performance following issuance are consistent with declines in firm value at announcement and issuance, and suggest that convertible debt and common stock are substantially equivalent. This study is consistent with the pecking-order and Miller-Rock models, but inconsistent with the leverage-signaling model. Despite a significant decline following issuance, firms issuing common stock or convertible debt perform better, on average, than the industry before, at, and after issuance. This is consistent with younger, riskier, higher-growth firms being the predominant issuers of common stock and convertible debt.