Doing business in Malaysia

The importance of international trade to the Malaysian economy can hardly be exaggerated. Trade represents a lifeline for the Malaysian economy. Export‐oriented industrialization in the 1990s converted the labor‐surplus economy into a labor‐deficit one and then back to a labor‐surplus one in 2000 and beyond. The incidence of poverty has fallen by half since the early 1980s. Trade has also contributed much to the structural transformation and modernization of the economy. Had Malaysia been a closed economy, Malaysia would have shared the same fate as some other less developed countries that remain economically backward. Its external trade policy has paved the way for greater inflows of foreign direct investment, as foreign direct investors are not so much interested in serving the small domestic market as serving the vast external market. The large inflows of foreign direct investment have conferred positive effects on the domestic economy. This has meant significant improvements in the overall living standards for the Malaysians. Internationalization has provided employment opportunities, thereby raising their living standards through higher and more stable earnings. © 2009 Wiley Periodicals, Inc.     

Credit Conditions in Pakistan: Supply Constraints or Demand Deficiencies?

This paper attempts to pin down the key drivers of demand for and supply of real private sector credit in Pakistan. I use both the equilibrium and disequilibrium econometric frameworks, specifically tackling the issue of lack of consistency and/or efficiency of joint estimators in the former via the three‐stage least squares technique. On the demand side, I find that higher economic activity provides stimulus to credit whereas inflation dampens it. The stock market seems to play a dual role: as a source of alternative financing, a bullish market negatively impacts credit while, as an indicator of economic expectations, it provides a positive impetus. On the supply side, banks' lending capacity is found to be the major driver of credit while government borrowing has a crowding‐out effect. Pakistan currently faces supply constraints, which might put an additional check on capacity utilization by firms, thus damaging growth prospects. The results have important policy implications.     

Structural models of complementary choices

This article reviews the rapidly growing literature on structural models of complementary choices. It discusses recent modeling developments and identifies promising areas for future research.     

Multinationals from emerging economies: Strategies,challenges, and the way forward

Multinationals from emerging economies are relatively new players in the global economy. This Special Issue includes five articles that cover several important aspects of the market and nonmarket strategies pursued by emerging market multinational corporations (EMNCs). Given that only a few firms from emerging markets embrace the possibilities and challenges of going global, we highlight the need to examine country, industry, and firm level antecedents of the emergence of EMNCs. We also draw attention to the need to study the role played by immigrant populations in EMNC internationalization.     

Can medium-scale farms support smallholder commercialisation and improve welfare? Evidence from Nigeria

In spite of mounting evidence about the growth of medium-scale farms (MSFs) across Africa, there is limited empirical evidence on their impact on neighbouring small-scale farms (SSFs). We examine the relationships between MSFs and SSFs, with particular focus on the specific mechanisms driving potential spillover effects. First, we develop a theoretical model explaining two propagating mechanisms: learning effects (training) and cost effects (reduced transactions cost). An empirical application to data from Nigeria shows that SSFs with training from MSFs tend to use higher levels of modern inputs (have higher productivity), and receive higher prices and income. The results also show that purchasing inputs from MSFs reduces the costs of accessing modern inputs and is associated with higher inorganic fertiliser use by SSFs. Our results suggest that the benefits of receiving training and purchasing inputs from MSFs are particularly important for very small-scale producers, operating less than 1 hectare of land. This implies that policies which promote the efficient operation of MSFs and encourage their interaction with SSFs can be an effective mechanism for improving the productivity and welfare of smallholder farms, hence reducing their vulnerability to extreme poverty.     

External military threat and the response of the member states of the Gulf Co-operation Council (GCC)

The study shows that procurements of traditional arms by two countries have the possibility of moving together over time. This is demonstrated with reference to Iran and the member states of the Gulf Co-operation Council (GCC) for the period 1961- 1996. Acquiring arms by the member states of the GCC is shown to be only a response to the perception of their leaders to the external threat posed by Iran throughout the varying regimes that have ruled Teheran. In the light of the recent emergence of macroeconomic problems such as unemployment in the economies of the GCC coupled with the ineffectiveness of the financially exhausting build-up of arms as a military deterrent policy, one important implication of the study is that the priority of the GCC leaders will have to turn to a more effective deterrent policy such as acquiring nuclear technology rather than engaging in a costly and unsuccessful Arab military alliance as experienced in the 1970s.     

The Intertemporal Causal Dynamics Between Fixed Capital Formation and Economic Growth in The Group-Of-Seven Countries *

The debate between De Long and Summers (1991, 1992) and Blomstrom, Lipsey and Zejan (1996) who reported conflicting results on the relationship between fixed capital formation and economic growth raised doubts on whether changes in a country's capital formation shares in GDP have an influence on its future growth rates. This paper addresses the issue again by examining the causal patterns between the share of fixed investment in GDP and the growth rate of per capital real GDP on an individual country basis, using time series on each of the group-of-seven countries. The empirical results suggest that the causal relationship between these variables may vary significantly across the major industrialized countries that presumably belong to the same growth group. Most importantly, no consistent evidence is found that causality is running in only one direction. Rather, causality between fixed investment and growth seems to have a country-specific nature and may run in either directions.     

Cervical cancer prevention in Morocco: a model-based cost-effectiveness analysis

Abstract

Objective: Cervical cancer is a huge public health issue in Morocco which represents the second most frequent and fatal cancer among women. Countries that have not yet introduced the HPV vaccine could benefit greatly, but before implementation it is necessary to perform country-specific economic assessments that include current screening practices.

Methods: A Markov model was developed to simulate the natural history of HPV and cervical cancer so as to calculate the long-term health benefits and costs of HPV vaccination and current screening by visual inspection with acetic acid (VIA). Starting from a previous transition probability matrix used for a model from Spain, the present model was calibrated to cervical cancer incidence from Morocco. Cost survey data was used to estimate the cost of screening and clinical procedures from the public healthcare perspective. Incremental cost-effectiveness ratios were calculated as 2018US$ per additional year of life saved (YLS) and both costs and health outcomes were discounted at 3%.

Results: The expected reduction in lifetime risk of cervical cancer for current screening would be 14% at a cost of US$551/YLS compared with no intervention, assuming VIA every 3 years in women aged 30–49 at 10% coverage. HPV vaccination of pre-adolescent girls at 70% coverage would reduce the lifetime risk of cervical cancer by 62% at a cost of US$1,150/YLS, compared with no intervention. When implementing HPV vaccination in combination with current screening, vaccination would be dominated, and the combined strategy would provide a 69% reduction at a cost of US$2,843/YLS, compared with screening alone. Current screening would be dominated by vaccination when screening coverage is higher than 15%, whereas the combined strategy rapidly exceeds US$4,000/YLS.

Conclusions: HPV vaccination could be highly effective and cost-effective in Morocco. Current screening would be good value for money compared with no intervention, but scaling-up screening coverage would make it inefficient compared with vaccination.     

Kernel method to estimate nonlinear structural equation models

Quality & Quantity - The purpose of this paper is to provide a nonparametric kernel method to estimate nonlinear structural equation models involving the functional effects between the latent...