Expectations and the Dynamic Feedback between Foreign Direct Investment and Economic Growth

This paper seeks to analyze the dynamic feedback between Foreign Direct Investment (FDI) and economic growth – larger FDI promotes higher GDP, while higher GDP can be achieved with higher levels of FDI. We use panels and a sample of 19 Latin American countries to estimate a dynamic FDI and a dynamic GDP equation that jointly characterize the evolution of both variables. We find that the dynamics of GDP and FDI are mostly driven by the expectations. Shocks of GDP or FDI were found to play no role affecting the dynamics.     

Local government efficiency: determinants and spatial interdependence

We analyse the determinants of local government efficiency taking into account the presence of spatial interactions among neighbouring municipalities. To do so, first we estimate an efficiency index using the robust order-m methodology in Valencian municipalities (Spain). Second, we examine the socio-economic, political and budgetary factors that might influence efficiency levels. Finally, we analyse the spatial interactions present in our data. The results of estimating a spatial autoregressive model show that government efficiency in neighbouring municipalities positively affects the local government’s own efficiency. This highlights the importance of considering spatial dependence structures in studies on efficiency in the public sector.     

An Experimental Study of Communication and Coordination in Noncooperative Games

This paper reports the results of an experiment designed to test the usefulness of alternative solution concepts to explain players' behavior in noncooperative games with preplay communication. In the experiment subjects communicate byplain conversationprior to playing a simple game. In this setting, we find that the presumption ofindividualisticandindependentbehavior underlying the concept of Nash equilibrium is inappropriate. Instead, we observe behavior to becoordinatedandcorrelated. Statistical tests reject Nash equilibrium as an explanation of observed play. The coalition proof correlated equilibrium of the game, however, explains the data when the possibility of errors by players is introduced.Journal of Economic LiteratureClassification Numbers: C72, C92.     

Customer perceptions of “McService”’: Relationship with return intention

The fast-food restaurant segment has been a dominant player in the restaurant industry since the 1960s. The recent changes in the needs and wants of guests have affected fast-food restaurants' ability to keep up with the trends regarding healthy and high-quality food options served at reasonable prices. The service quality perceptions assessed in this study were divided into the following constructs: overall experience, employees, ordering process, receiving order, and food quality. The results determined that the construct that influenced repeat intention was food quality, specifically the individual items “fresh food” and “food taste.” The study also found that males tended to evaluate employees more positively than females. Moreover, frequent fast-food diners only tended to have favorable perceptions with regard to the overall ordering process. Implications for practitioners and suggestions for future studies are discussed.     

The impacts of tourism on poverty alleviation: an integrated research framework

This paper aims to contribute to the academic research on tourism and poverty alleviation, by providing an integrated research framework on the impacts of tourism on poverty. First, a conceptual discussion is presented in order to understand the potential of tourism to reduce poverty, as well as different approaches to promoting a direct link between tourism and poverty alleviation. Second, empirical studies published between 1999 and July 2014 were critically analysed in order to generate an empirical research framework that embraces the following issues: geographical scope, level of analysis, tourism context, study methods and poverty measure. Moreover, an integrative discussion of the empirical evidence regarding the contribution of tourism to poverty reduction is included. The proposed framework, which is intended to be useful for guiding future empirical research in this field, suggests associations between tourism initiatives, the poverty rate and the economic, socio-cultural and environmental conditions of the poor.     

Agglomeration and Economic Development: Import Substitution vs. Trade Liberalisation

This paper analyses a model of economic development in which international differences in industrial structure and income are caused by the agglomeration of industry in a subset of countries. Economic development may not be a gradual process of convergence by all countries, but instead involve countries moving sequentially from the group of poor countries to the group of rich countries. The role of trade policy in promoting industrialisation is studied. While both import substitution and unilateral trade liberalisation may be 'successful' in attracting industry, they attract different sectors and welfare levels are higher under trade liberalisation.     

Soil-specific agro-ecological strategies for sustainable land use – A case study by using MicroLEIS DSS in Sevilla Province (Spain)

To reverse the negative environmental impacts of agriculture, a land evaluation decision support system (DSS) known as MicroLEIS-DSS was used to design the most sustainable land use and management practices for selected Mediterranean benchmark sites in Sevilla Province, Southern Spain. This DSS is based on the multifunctional evaluation of soil quality, using input data collected in standard soil surveys, and with particular reference to the peculiarities of the Mediterranean region. Specific agro-ecological strategies to prevent soil degradation in the benchmark sites were designed within two major topics: (i) strategies related to land use planning at a regional level: segregation of agricultural lands, restoration of marginal areas, diversification of crop rotation, and identification of vulnerability areas; and (ii) those related to land management planning at a farm level: organic matter restoration, formulation of tillage practices and workability timing, optimum machinery use, and input rationalization. The predicted results of applying the 12 agro-ecological land evaluation model constituents of MicroLEIS DSS are presented and discussed for each application site. The main conclusion of this paper is that using soil type information in decision-making is at the heart for sustainable use and management of agricultural land. This agro-ecological approach can be especially useful when formulating soil-specific agricultural practices to reverse environmental degradation, based on the spatial variability of soils and related resources.     

Beyond Altruism and Self-interest: The Growing Importance of External Factors in the Determination of Remittances Flowing to Latin America

Remittances have become an important and reliable source of funds for many developing countries, affecting the well-being of its population and the performance of their economies. However, challenging conditions in the economies were migrant workers reside has unveiled the increasing importance of external factors in determining their ability to send money back home. This study relies on migration patterns to create migration and distance-weighted measures of external condition, and uses the Arellano and Bond dynamic panel methodology to gauge the relevance of these external macroeconomic conditions during the 1995–2015 period for a set of 18 Latin American countries. The results indicate that external conditions, irrespective of the way in which they are measured, have a positive and statistically significant effect on the amount of remittances flowing into the region, and that such effect go beyond differences in levels, as relative differences prove to be important as well. While the results also show that remittances are inversely related to the income level of receiving countries and that these flows respond positively to better economic performance and higher interest rates in the receiving country, such altruistic and self-interest factors are less consistent than the one found for foreign economic activity.     

Valuing recreational water clarity and quality: evidence from hedonic pricing models of lakeshore properties

This study extends the economics literature on the relationship between recreational water quality and residential property pricing by separately testing the relationships between both water clarity and quality and the price of lakeshore residential properties in Ontario, Canada. Our econometric approach includes objective measures of both attributes: Secchi disk readings for water clarity and phosphorus concentrations for water quality. Econometric results presented in this study suggest that a one-metre improvement in water clarity results in an 8 per cent residential property price premium, while a one standard deviation improvement in water quality boosts lakeshore residence prices by 32 per cent.