China??s banking system, market structure, and competitive conditions

This paper presents an empirical assessment of the market structure and the competitive conditions of the Chinese banking sector. We applied the Panzar-Rosse H-statistic on the data collected from a panel including 16 most significant Chinese banks for the period 2004–2007. Equilibrium tests and the competitive conditions tests were applied on the data. From the pooled regression in the whole period, we found that the banking sector in China for 2004–2007 was monopolistically competitive. We also show that the Chinese banks were not able to achieve high records of profitability in monopolistically competitive markets.     

Development of accounting regulation in Jordan

This study examines the development of accounting regulation in Jordan with emphasis on the dominant environmental factors that influence it. In order to have a better understanding of Jordan's present accounting practices, and its future development tendencies, we examine the path of accounting in Jordan since the early days of the nineteenth century, and analyze how Jordan's accounting environment — political, economic, legal and cultural — influenced the development of accounting in Jordan. We also examine Jordan's recent move towards full adoption of International Financial Reporting Standards (IFRS) and find that Jordan's colonial past has exerted a strong influence. In addition, we conclude that political and economic factors, through privatization and the resulting accounting reforms, contributed more to the development of accounting practices than other environmental factors. Privatization led to reforming Jordan's disclosure regulation and laying down of the corporate-governance policy framework. Our conclusions could be of interest to other countries, particularly developing countries, who want to improve the quality of their accounting disclosures and practices.     

Embodied Technological Change,Learning‐by‐doing and the Productivity Slowdown*

The productivity slowdown in the US economy since the first oil shock has recently been associated with a larger decline rate of the relative price of equipment investment and a smaller rate of disembodied technical change. We set up a growth model in which learning‐by‐doing is the engine of both embodied and disembodied technological progress. A shift in the relative efficiency of learning‐by‐doing from the consumption to the investment sector is shown to imply a technological reassignment consistent with the above‐mentioned evidence. This result derives from the interaction between the obsolescence costs inherent in embodiment and the learning‐by‐doing engine.     

Vintage Human Capital, Demographic Trends, and Endogenous Growth

We study how economic growth is affected by demographics in an OLG model with a realistic survival law. Individuals optimally chose the dates at which they leave school to work and at which they retire. Endogenous growth arises thanks to the accumulation of generation-specific human capital. Favorable shifts in the survival probabilities induce longer schooling and later retirement but have an ambiguous effect on per-capita growth. The long-term relationship between fertility and per-capita growth is hump-shaped. Increases in longevity can be responsible for a switch from a no-growth regime to a sustained growth regime and for a positive relationship between fertility and growth to vanish. Solving numerically the equilibrium, demographic changes can have important medium-term effects even if long-term changes are very small. Journal of Economic Literature Classification Numbers: 041, I20, J10.     

International mobility of capital,wage indexation,and the cost of policy mistakes under ambiguity: a CGE evaluation

In this paper we focus on the role institutions and structural parameters play in macroeconomic policy design and test the differential effects of tax policies on two structural parameters: the degree of international capital mobility and the rules of wage indexation practiced in the economy. We evaluate counterfactual changes in taxation in the Argentine economy using a Computable General Equilibrium (CGE) Model with unemployment, calibrated with 2006 data, showing that policy mistakes (diagnosis failures) are costlier when the degree of capital mobility is greater and the rules to determine salaries could amplify the losses. Among other taxes, we evaluate the choice of export taxation, historically one of the preferred revenue sources of Argentine governments. We discuss the choice of taxes that an optimistic and a pessimistic policymaker will make under Knightian uncertainty and find that, in the case of our CGE, an optimistic policymaker prefers to tax export goods, while a more pessimistic one tends to tax imports or non-tradable goods.     

The Trickle‐down Effect of the Mining Boom in Australia: Fact or Myth?

This paper examines the relationship between the output levels in the mining sector and various non‐mining sectors in an attempt to understand the role of the mining sector in Australia. The unobserved components time series model is used to estimate the effects of the output gap and the growth regime in the mining sector on the output level of each of several non‐mining sectors. Overall, the estimates obtained do not suggest an overwhelmingly positive effect running from the mining sector to other production and services sectors, implying that the trickle‐down effect of the mining boom may be a myth.     

China and India's insertion in the intellectual property rights regime: sustaining or disrupting the rules?

This paper looks at the insertion of China and India in the contested and highly legalised regime of intellectual property rights (IP). In doing so it pays particular attention at two dimensions, the internal adoption of this regime and external endorsement/contestation of international IP norms. Much has been written about whether emerging countries will challenge or support the maintenance of an open rules-based multilateral trade system. In this context, the differentiated integration of these two countries in the IP regime is notable. Domestically, China despite much criticism for widespread IP infringement has followed a maximalist interpretation of TRIPS. India, on the contrary has followed other emerging countries in pursuing a more critical, minimalist understanding. These positions have also been visible at the multilateral arena. This empirical finding runs contrary to the assumption that defiance results from market power. The divergence is the more surprising given a recent explosion of patent filings in both countries. From a political economy perspective, this should translate into support for stricter rules under TRIPS. In explanaining the two countries’ divertent insertion this paper looks beyond economic (market) power and domestic interests and underlines the role of ideational legacies, domestic interests and regulatory capacity. The paper thus stresses the need to look deep into domestic politics and ideational cleavages, as well as at their evolution over time, in order to better understand the international behaviour of emerging countries.     

Impact of microcredit on borrowers’ expenditures: a fuzzy regression discontinuity design approach

This article uses the data from 69 villages in Bangladesh to estimate the effect of participation in microcredit programmes on household expenditures. A regression discontinuity design (RDD) is used to identify the credit effect. Our results show heterogeneous treatment effect on different types of expenditures. We show that access to credit reduces per capita expenditure on durable goods such as kitchen equipment, furniture, repair and maintenance of house and increases the expenditure on per school-going child. We also show insignificant impact of access to credit on non-durable goods and health care, recreation and gifts. Interestingly, our results indicate a positive impact of microcredit on village-level expenditures.     

Currency depreciation effects on ADR returns: evidence from Latin America

We use seemingly unrelated regressions (SUR) and multivariate regression models (MVRM) in a panel sample of 74 American depository receipts (ADR) programs from Argentina, Brazil, Chile, and Mexico during the period May 1994 to May 2009 to analyze the behavior of ADR returns during the 300-day period surrounding the currency crises breakdown in the originator??s country. Controlling for the underlying stock and local and host country equity indices, we find that ADRs generate significant negative abnormal returns during currency crises, due to translation exposure. Abnormal returns remain statistically significant even in crises triggered by currency depreciations as small as 3.6%. The results persist after including exchange rate returns as a control variable and after an orthogonalization procedure of exchange rate against local country indices. In agreement with ADR literature, our results show that ADR prices are determined primarily by the underlying stock, exchange rates, and host country index, in that order. Moreover, we observe how market integration has become evident in more recent times as the coefficients for the U.S. stock market have increased its contribution to ADR price discovery.