China,India and the Commodity Boom: Economic and Environmental Implications for Low‐income Countries

The international role of China has risen steadily for two decades – and has become even more important in the current global recession. The growing supply of labour‐intensive manufactured exports from China has been accompanied by a huge expansion in its imports both of raw materials and of skill‐intensive manufactured parts and components. This ‘offshoring’ of intermediates production by a large, labour‐abundant economy has economic and environmental implications for other developing economies. More recently, the rapid expansion of the Indian economy and trade indicates that it too will soon exert similar effects on global markets. We sketch a model showing how the growth of these developing‐country ‘giants’ generates adjustment pressures on other developing economies. We discuss in particular how differences in relative factor endowments of resource‐rich economies can produce quite different outcomes in the context of product fragmentation and expanding commodity trade. We also explore the effects on production, trade, environment and prospects for future growth in resource‐rich economies, particularly in the context of weak institutions and other market failures. We illustrate these different impacts by considering the cases of Indonesia, Malaysia and Thailand and highlight implications for growth, development and policy.     

Exploring the role of goal theory in understanding training motivation

A model to test conceptions from goal theory within an existing framework of training motivation was developed and tested with employees participating in training in a non‐profit organization. It was hypothesized that goal orientation ('distal factors’) along with self‐efficacy, expectancy and valence (‘proximal factors’) would predict goal intentions as well as training outcomes such as affective responses to training, perceptions of training utility and intention to transfer or use the training provided. Results revealed that goal orientation predicted a significant proportion of variance in the proximal antecedents (valence (33 per cent), expectancy (39 per cent) and self‐efficacy (31 per cent)) whereas the proximal antecedents explained 43 per cent of the variance in goal intentions. In turn, goal intentions were related to training outcomes (affect (b = 0.7), utility (b = 0.6) and transfer intention (b = 0.5)). Goal intentions mediated the relationship between proximal antecedents and training outcomes, providing evidence that goal intentions play a pivotal role in the causal path from proximal factors to training outcomes. Valence alone was found to be a significant mediator of the relationship between goal orientation and goal intentions.     

Moving up the processing ladder in primary product exports: Sri Lanka's "value-added" tea industry

Governments in many developing countries, influenced by the experience of the East Asian newly industrialized countries, have adopted policies to enhance domestic processing of primary commodities as a tool for accelerating employment growth, export revenues, and development. Sri Lanka has traditionally exported tea in the form of bulk (commodity) teas, but “value‐added” teas such as packaged teas, tea bags, etc., have expanded in recent years. This article examines factors affecting the processing of value‐added tea products in Sri Lanka by modeling export supply behavior. Estimates of the long‐run relationship and short‐run dynamics of export supply are presented and discussed. The price of value‐added tea relative to bulk tea, and industry capacity, are identified as the main determinants of export supply, while exchange rate changes have no discernible effect. The policy implications of the analysis for enhancing further expansion of such value‐added teas are presented. These are of interest for both policy makers and development analysts. In particular, the reasons that undermine the effectiveness of exchange rate policy as an instrument to stimulate value addition of primary products have much relevance for similar developing countries.     

INCORPORATING MULTIPLE OBJECTIVES IN PLANNING MODELS OF LOW-RESOURCE FARMERS

Linear goal programming provides a means of formally incorporating the multiple goals of a household into the analysis of farming systems. Using this approach, the set of plans which come as close as possible to achieving a set of desired goals under conditions of land and cash scarcity are derived for a Filipino tenant farmer. A challenge in making LGP models empirically operational is the accurate definition of the goals of the farm household being modelled.     

Stock market correlations between China and its emerging market neighbors

We examine interlinkages of stock return behavior for China and three emerging market neighbors from the Asia Pacific region from November 1993 to July 2008. Results are based on a VAR model. Impulse responses and vector decomposition of VAR are also utilized. Evidence suggests that the aggregate markets are mostly not interrelated. However, we observe relations between China and the other markets when foreign investor returns are specifically accounted for. In addition, a shock originating in China is significantly felt in the other equity markets. Stock market characteristics and macroeconomic conditions of these countries may help explain the observed relations.     

The use of digital footprints in the US mortgage market

We study the rise of digital footprint (DF) users in the U.S. residential mortgage market. The proportion of lenders that use a borrower's DF has witnessed remarkable growth from 6% in 2013 to 34% in 2018 in a short span – according to our analysis. We show that the use of DFs can significantly reduce a lender's overall risk and that the use of DFs can result in considerable societal benefits, by reducing the overall discriminatory forces. In sum, we provide evidence that the informational advantage associated with using a borrower's DF far outweighs that of existing traditional lending methods.