Optimal human capital policies under the endogenous choice of educational types

This study examines optimal human capital policies under nonlinear labor and capital income taxes in the presence of consumption value of education in a two‐period setting. We show that when individuals can choose educational types differing by the relative importance of consumption value and production value, education subsidies for low‐type individuals should not equal an efficient level that offsets distortions induced by nonlinear taxes on labor and capital income. Our findings imply that education policy does not restore efficiency, or the Diamond–Mirrlees production efficiency theorem fails. Moreover, capital income taxation is optimal, which means that the Atkinson–Stiglitz theorem breaks down.     

The Determinants of Foreign Direct Investment in Transition Economies: A Meta‐analysis

In this paper, we conduct a meta‐analysis of studies that empirically examine the relationship between economic transformation and foreign direct investment (FDI) performance in Central and Eastern Europe and the former Soviet Union over the past quarter century. More specifically, we synthesise the empirical evidence reported in previous studies that deal with the determinants of FDI in transition economies, focusing on the impacts of transition factors. We also perform meta‐regression analysis to specify determinant factors of the heterogeneity among the relevant studies and the presence of publication‐selection bias. We find that the existing literature reports a statistically significant non‐zero effect as a whole, and a genuine effect is confirmed for some FDI determinants beyond the publication‐selection bias.     

RADICALISM VERSUS GRADUALISM: AN ANALYTICAL SURVEY OF THE TRANSITION STRATEGY DEBATE

Academic debate on a transition strategy for former socialist economies continues even a quarter century after the collapse of the communism in Central and Eastern Europe and the former Soviet Union. In this paper, through an analytical survey of 137 preceding studies, we present an overall picture of the debate and examine the relationship between the debate attitudes and the literature attributes in related studies. We found that the radicalists maintain a consistent debate attitude from the viewpoints of time speed and policy sequence of economic transition, while the debate attitude of the gradualists is more diversified. We also found that there is another group of researchers that stays within the framework of the radicalism‐versus‐gradualism debate while at the same time keeping at arm's length from both the radicalists and the gradualists. In addition, our regression estimation of qualitative selection models provides interesting findings on the relationship between the debate attitudes and the literature attributes.     

Identifying and bridging networks in regional clusters

Networks within an organization and also among organizations are expected to work as conduits of resources and knowledge for innovation. Previous papers have shown that dense networks are closely related with innovation performance. Tight relationships in a close knit group foment trust among actors in the network and therefore promote collaborations, and diverse connections with the others can open an opportunity for breakthrough. In this paper, we quantitatively evaluate the network structure of an industrial cluster and compare its results with that of a field study, and found that firms in the cluster do not regard it as dense, which means that there are opportunities even in the densest network. This is because it is not so easy to look for business partners beyond a company's current partnerships while tight communication exists among firms having partnerships. Therefore, we propose a system of finding a plausible business partner to span the current boundary and to support the networking.     

Public Debt,Economic Growth and the Real Interest Rate: A Panel VAR Approach to EU and OECD Countries

ABSTRACT

We investigate the causal relationship between public debt ratios and economic growth rates for 31 EU and OECD countries. We estimate a panel VAR model that incorporates the long-term real interest rate on government bonds as a vehicle to transmit shocks in both the public debt to GDP ratio and the economic growth rate. We find no causal link from public debt to growth, irrespective of the levels of the public debt ratio. Rather, we find a causal relationship from growth to public debt. In high-debt countries, the direct negative impact of growth on public debt is enhanced by an increase in the long-term real interest rate, which in its turn decreases interest-sensitive demand and leads to a further increase in the public debt ratio.     

Trade,the Staple Theory of Growth,and Fluctuations in Colonial Singapore, 1900–39

Our paper enquires into the nexus between trade, growth, and fluctuations in the British colony of Singapore during the early twentieth century. Hitherto, little quantitative economic history has been written on this great entrepôt of Southeast Asia due to a lack of data. We overcome this limitation by utilising the gross domestic product series recently constructed for the pre‐war period by Sugimoto. This comprehensive data set enables us to explore the relevance and applicability of the staple theory of export‐led growth to colonial Singapore through cliometric analyses. The results suggest that foreign trade had acted both as an engine of growth and a source of economic instability.     

Evolution of the Government–Business Relationship and Economic Performance in the Former Soviet States – Order State, Rescue State, Punish State

The objective of this paper is to elucidate the relationship between the reform process and economic performance in the states of the former Soviet Union (FSU). There were two strategies used by the former Soviet states to cope with the collapse of the USSR. Some of the FSU countries, in an effort to overcome the institutional vacuum caused by the disintegration of the federal economy, centralized their government authority to manage industry. Others decentralized power in an attempt to regain economic independence for domestic enterprises. To evaluate the essential differences and progress gaps among transition strategies, FSU countries can be divided into three groups, which reflect variations in institutional control of the government-business relationships. The differences in economic performance in FSU countries can be explained to some extent by examining the diversity of institutional patterns that characterize each category. The results of various empirical analyses positively support the validity of such an analytical framework. In this sense, this paper presents a new viewpoint on the transition process in FSU countries that may complement that shown in existing literature.     

Markov chain modeling of the global technological lifetime of copper

Markov chain modeling is applied to the global anthropogenic copper cycle for the year 2000. The lifetime of copper varies from product to product and region to region, as well as through time. Assumptions of average lifetimes are therefore subject to a high degree of uncertainty. A large state transition table is created that encompasses the life-cycle stages of copper (mining, smelting, refining, fabrication, use, waste management, scrap, and final disposal), five end-uses (buildings, transportation, consumer products, electrical equipment, and machinery) in eight world regions, including trade at every stage. The system requires closure by mass balance, so all possible routes of copper trade and recycling are considered. Transitions between each pair of states are calculated using previous material flow analysis data. The main result is that an atom of copper is used 1.9 times by human society before it enters final disposal. Scaling by the lifetime of copper in each life-cycle stage in each region gives a total average technological lifetime of copper of 60 years. A sensitivity analysis is applied to the model in order to test the robustness of the results. Several scenarios are also considered: increasing the recycling rate in each region to 70%, applying European or North American in-use lifetimes to all regions, and increasing the share of the world copper cathode and scrap markets taken in by Asia to 50%. Several limitations of the Markov chain approach are discussed, as are the further research opportunities it affords.     

Global financial crisis,corporate governance,and firm survival:: The Russian experience

Using a unique dataset obtained from large-scale panel enterprise surveys conducted in 2005 and 2009, we clarify the survival status of Russian industrial firms before and after the global financial crisis and empirically examine the determinants of firm survival. The estimation of the Cox proportional hazard model provided evidence that the independence of company’s governance bodies, their human resource abundance, and influence over corporate management are statistically significant factors affecting the survival probability of the surveyed firms. In particular, the board of directors and the audit committee are likely to play a vital role in reducing the potential exit risk. We also found that there is a significant difference in the viewpoints of economic logic for firm survival held by independent firms and group companies.     

Inflation and public debt reversals in advanced economies

This paper quantitatively assesses the effects of inflation shocks on the public debt-to-GDP ratio in 19 advanced economies using simulation and estimation approaches. The simulations suggest that 1 percentage point shock to the inflation rate can reduce the debt-to-GDP ratio by about 0.7 percentage points on average across countries, while the estimated impulse responses are a little larger and more persistent. Additional assumptions taking into account financial repression do not necessarily make these effects substantially larger. These results imply that modestly higher inflation, even if accompanied by some financial repression, could reduce the public debt burden only marginally.