Growth and the current account: Malaysia and Singapore

A foreign trade model is estimated for two South East Asian countries, selected because they represent two extremes as far as the current account balance is concerned—Malaysia, deficit, Singapore, surplus. The specification highlights, (a) the simultaneous interdependence of exports and import flows—a result of what Krugman [1995] denotes as the slicing up of the production process—and, (b) the impact of investment on imports as a result of productivity shocks on the current account. The estimation results point to the instability of the market for foreign exchange. Using an intertemporal framework, a methodology to derive the external long run equilibrium is applied to the estimated model. The implied constraint on domestic growth turns out to be mild. This research has been financed by the Dgicyt under grant PB94-1502, and the Junta de C. y L. under grant SA 35/97. The comments and suggestions of the editor of the journal and an anonymous referee are gratefully acknowledged. The paper has also benefited from the comments of the participants at the Fifty-First International Atlantic Economic Conference, March 13–20, 2001, Athens, Greece, and at the AEA conference on New Financial Instruments and Emerging Markets, Paris, 1998. Any possible remaining errors are the authors.     

Using resources in R&D policy planning: Brazil, the Amazon and biotechnology

Brazil's research and development (R&D) policies are examined in light of changes in economic direction especially as it pertains to competition. In a competitive environment, regions should develop industrial applications and expertise in areas that coincide with their resources. These could be human resources but could, as in the focus of this paper, be useful resources that differentiate the region from others in the world. This differentiation provides an advantage to the region. Brazil and its Amazon region has the large majority of the world's rare genes. In biotechnology, genes are “green gold,” and Brazil is slowly developing a biotechnology industry and beginning to tap into the Brazilian Amazon region's economic biotech potential. This region has enormous potential for the development of biotech-related technologies and products. This paper discusses the relationship between resources and an R&D strategy using as an example the recent developments in biotechnology research in Brazil and the role of the Amazon region in the development of a Brazilian biotechnology industry. It recommends a number of policy initiatives that will enhance Brazil's focus on biotechnology.     

Extreme observations and diversification in Latin American emerging equity markets

In this paper, we focus on the tails of the unconditional distribution of Latin American emerging markets stock returns. We explore their implications for portfolio diversification according to the safety first principle, first proposed by Roy [Econometrica (1952) 20, 431]. We find that the Latin American emerging markets have significantly fatter tails than industrial markets, especially, the lower tail of the distribution. We consider the implication of the safety first principle for a US investor who creates a diversified portfolio using Latin American stock markets. We find that a US investor gains by adding Latin American equity markets to her purely domestic portfolio. For different parameter specifications, we find a more realistic asset allocation than the one suggested by the literature based on the traditional mean-variance framework.     

Realism Versus Statistical Efficiency: A Note on Contingent Valuation with Follow-up Queries

This paper shows that we can improve the statistical efficiency of dichotomous choice contingent valuation surveys by asking a second open question (anchored open-ended approach) instead of the traditional double-bounded approach. The former approach is shown to be more efficient than conventional single and double-bounded approaches using a Monte Carlo experiment, even when we allow for strategic behavior from respondents such as protest votes and yea-saying behavior.

Doing business in Brazil: A strategic approach

Brazil has the largest economy in South America, and the second largest in Latin America, offering one of the most promising markets in the world. Along with China and India, Brazil is ranked among the nations with the highest predicted development rates in the next 25 years. In the early 2000s, Brazil accounted for 56% of all foreign direct investment flows to South America and 52.5% of the foreign direct investment stock in South America. Brazil is also a key player in the design and development of the Free Trade Agreement of the Americas (FTAA), which is scheduled to be effective by 2005. The FTAA is expected to be the world's largest regional trading block. In 2002, Brazil was ranked twelfth amongst the largest economies in the world. Brazil is one of the world's “Big Five” emerging markets, along with China, India, Mexico, and Indonesia. In the past decade, Brazil was second to China among emerging economies for received foreign direct investment. This article elaborates on the main aspects of doing business in Brazil and discusses some of the challenges and opportunities facing the Brazilian economy. © 2004 Wiley Periodicals, Inc.     

Volatility and cross correlation across major stock markets

Several papers have documented the fact that correlations across major stock markets are higher when markets are more volatile—this is done by comparing unconditional correlations over sub-periods or by using conditional correlations that are time varying. In this paper we examine the relation between correlation and variance in a conditional time and state varying framework. We use a switching ARCH (SWARCH) technique that does two things. One, it enables us to model variance as state varying. Two, a bivariate SWARCH model allows us to go from conditional variance to state varying covariances and correlations and hence test for differences in correlations across variance regimes. We find that the correlations between the U.S. and other world markets are on average 2 to 3.5 times higher when the U.S. market is in a high variance state as compared to a low variance regime. We also find that, compared to a GARCH framework, the portfolio choices resulting from our SWARCH model lead to higher Sharpe ratios.     

Under Performers and Over Achievers: A Quantile Regression Analysis of Growth

Numerous papers have searched for empirical linkages between long run economic growth and a myriad of economic, socio-political and environmental factors. Most of these studies use ordinary least-squares regression or panel regression analysis on a sample of countries and therefore consider the behaviour of growth around the mean of the conditional distribution. We extend the literature by using quantile regression to analyse long-term growth at a variety of points in the conditional distribution. By using this approach, we identify the determinants of growth for under performing countries relative to those for over achieving countries.     

Marketing Challenges and Opportunities in Emerging Economies: A Brazilian Perspective

This article describes the challenges and opportunities of marketing in an emerging economy, focusing on Brazil as an exemplar. The main features of the Brazilian economy are discussed with special attention given to the changing nature of the country's income distribution. Where Brazil once had a pyramid‐shaped income distribution typical of many less developed countries, this is rapidly giving way to a diamond‐shaped income distribution due to the emergence of a growing middle class. This, in turn, presents marketers with many opportunities ranging from franchise development to e‐commerce. At the same time, however, marketers are challenged by several features of the Brazilian economy, including poor logistics, corruption, and state interventionism, among other threats. © 2016 Wiley Periodicals, Inc.     

The economic and social impact of telecommunications output

Economists, management researchers and sociologists have all examined the impact of the spread of information and communication technologies. There has until now, however, been relatively little interconnectivity and cross-fertilisation of their fi ndings. The following paper attempts to derive a set of integrated “causality frameworks” and tests the resulting hypotheses using data for Spain.