Aid and public sector fiscal behaviour in failing states

This paper looks at interactions between foreign aid and the public sector in developing countries, especially those considered to be fragile or failing states. A model is proposed which employs actual budgetary appropriations and revenue estimates (rather than estimated target variables) and allows for asymmetric preferences. Variants of the model are estimated using time-series data for Papua New Guinea (PNG). PNG is classified as a fragile state by the international community owing to perceived policy and institutional inadequacies. Results obtained suggest that foreign aid increases consumption and investment expenditures and decreases tax revenues and the level of borrowing.     

经济增长与农村反贫困

本文利用中国家庭收入项目(CHIP)调查数据,估计了1988-2002年期间的中国农村绝对贫困、收入差距的变化趋势及收入增长和收入分配变化对农村贫困的影响.根据CHIP调查数据所绘制的贫困发生曲线表明,不论把绝对贫困线确定在哪里,在该时期内中国农村贫困都在显著下降.贫困指数分解和面板数据回归结果均显示收入增长是导致贫困下降的主要原因.     

Die Debatte um die deutsche Exportorientierung

Die in vielen L?ndern gewachsene Einkommensungleichheit wird international zunehmend als eine wesentliche Ursache für die Weltwirtschaftskrise und die globalen Ungleichgewichte im Au?enhandel hervorgehoben. Hingegen ist die Debatte in Deutschland teilweise noch immer durch die Forderung nach weiterer Lohnzurückhaltung und sozialpolitischen Einschnitten gekennzeichnet. Welche Rolle kann die Lohn- und Verteilungspolitik zur mittelfristigen überwindung der deutschen Exportlastigkeit und zur Stabilisierung der deutschen und globalen Wirtschaft spielen?     

Inscribing the American Body Politic: Martin Sheen and Two American Decades

Film and television have been influential in the remaking of the American self since the traumas of Vietnam. We undertake readings of class, gender, ethnicity and race focusing on the roles of Martin Sheen and his two ‘crews’ in Apocalypse Now Redux and in the television series The West Wing. We argue that despite the appearance of a more progressive America as represented by the Bartlet White House it remains within a long tradition that represents the US in discourses of innocence and pureness of will and is largely blind to the kind of violence perpetrated by Willard and his crew in Apocalypse Now Redux. We suggest that the capacity of the US repeatedly to ‘forget’ its use of certain kinds of violence marks the limits of self-sacrifice of the American self and provides the discursive possibility for the eternal return of innocence.     

Mean-reversion properties of implied volatilities

In this paper, we present a new stylized fact for options whose underlying asset is a stock index. Extracting implied volatility time series from call and put options on the Deutscher Aktien index (DAX) and financial times stock exchange index (FTSE), we show that the persistence of these volatilities depends on the moneyness of the options used for its computation. Using a functional autoregressive model, we show that this effect is statistically significant. Surprisingly, we show that the diffusion-based stochastic volatility models are not consistent with this stylized fact. Finally, we argue that adding jumps to a diffusion-based volatility model help recovering this volatility pattern. This suggests that the persistence of implied volatilities can be related to the tails of the underlying volatility process: this corroborates the intuition that the liquidity of the options across moneynesses introduces an additional risk factor to the one usually considered.     

A longitudinal ethnographic study of night‐freight pilots

This paper records the lived reality of night‐freight operations at a UK‐registered airline. Observations were made over an 18‐month period. The paper answers calls for more research into the working and living conditions of night‐freight pilots. Pilots perceived numerous issues. These included cultural cleavage, terms and conditions, roster instability and the impact of night flying on physical and psychological health. Some issues (volatile rosters and deep first nights, for example) had the potential to increase operational risk. Two sub‐cultures were identified within the airline: the quality‐of‐working‐life sub‐culture and competitiveness and corporate survival sub‐culture. A ‘paradox of control’ was observed. While pilots controlled the aircraft in flight, their patterns and conditions of work were decided by roster managers, crewing officers and other office‐based technocrats. Technocrats’ directive power was resented by some pilots. Some claimed that technocrats did not understand the lived reality of the line, resulting in ‘uninformed’ decisions that augmented operational risk. The study involved a single airline. No claims are made for the generalisability of the findings. More studies are required.     

Earnings quality,bankruptcy risk and future cash flows

Prior research suggests that the quality of accruals may be compromised where the magnitude of accruals is abnormally high, due to the presence of errors in the accruals‐estimation process (Dechow and Dichev, 2002; Richardson, 2003). A consequence of this is that abnormal accruals may not map into realised future cash flows to the extent that would normally be expected of accruals data. Indeed, the association may be insignificant if abnormal accruals consist primarily of estimation noise. Our study investigates whether abnormal accruals for UK firms provide incremental insight into future cash flows. In particular, our paper may be viewed as a development of Subramanyam (1996). We find a significant positive association between abnormal accruals and one‐year‐ahead operating cash flows. This provides a rationale for the pricing of abnormal accruals by the market (Subramanyam, 1996; Xie, 2001) and suggests that abnormal accruals are not merely the products of noise in the accruals‐estimation process. However, our results are conditional upon the probability of one‐year‐ahead bankruptcy risk (Charitou et al., 2004). We also find that abnormal accruals possess small but significant explanatory power for future cash flows even when controlling for the disaggregation of accruals into individual items (Barth et al., 2001).     

Legal Institutions,Ownership Concentration,and Stock Repurchases Around the World: Signal Mimicking?

One of the central puzzles of signaling theory is how to assess signal quality, in particular the potential for signal mimicking. Our study provides evidence of signal mimicking in the context of stock repurchases. Employing an ex-ante proxy for the likelihood of mimicking stock repurchases and data on open market stock repurchases from 30 countries, we find that long-term operating and market performance following stock repurchases improve less for suspected mimicking firms. This finding contradicts the conventional characterization that managers use stock repurchases to signal undervaluation and enhanced future performance. We find that mimicking firms have smaller capital investments, need greater external financing, buy back fewer shares, and issue more new shares (and/or resell more treasury shares) in the year of the repurchase. Our analysis further shows that mimicking is more likely in countries with weak investor protections and in firms with higher ownership concentration. Further, mimicking associated with concentrated ownership is mitigated in countries with stronger investor protections and by the adoption of International Financial Reporting Standards (IFRS). Altogether, our findings provide evidence of signal mimicking in stock repurchases in international data that is influenced by market, ownership, legal, and financial reporting characteristics of countries.     

Foreign currency borrowing by small firms in emerging markets: When domestic banks intermediate dollars

This paper investigates what induces small firms in an emerging market economy to borrow dollar credit from domestic banks. Our data are from a unique survey of firms in Lebanon. The findings complement studies of large firms with foreign currency loans from foreign lenders. Exporters, naturally hedged against currency risk, are more likely to incur dollar debt. Firms also partly hedge themselves by passing currency risk to customers and suppliers. Less opaque firms with easily verifiable collateral and higher net worth are more likely to access dollar credit. Firms reliant on formal financing (banks and supplier credit) are more likely to contract dollar debt than firms reliant on informal financing (family, friends and moneylenders). Bank relationships, however, do not increase the dollar debt likelihood. And finally, profitable firms are less likely to have dollar debt. Information frictions and limited collateral, therefore, constrain dollar credit even when it is intermediated domestically.