The size and development of the shadow economy: An empirical investigation from states of India

Using the state level data from India, this paper investigates the size of the hidden economy in Indian states over the period 1974/75 to 1995/96. Our analysis has shown that after liberalization of the Indian economy in 1991/92, the growth in the size of the hidden economy has decreased on an average. Our results show that the growth in the size of the hidden economy is approximately 4% less in scheduled election years than in all other years. We also demonstrate that the growth is significantly lower in those states where the coalition government is in power. An increased growth of newspapers and the literacy rates translate to cleaner governance, e.g. to fewer amounts of shadow economy activities in the economy.     

Anti‐immigration policy in the destination country and skilled–unskilled wage inequality in a source economy with or without unemployment

This paper is aimed at theoretically examining the consequence of the anti‐immigration policy adopted in the destination country on the skilled–unskilled wage inequality in a source nation using a couple of two‐sector, specific‐factor general equilibrium models in both the presence and absence of unemployment. Emigration requires incurring some capital cost for professional skill formation on the part of every prospective emigrant that adds to the opportunity cost of emigration. The authority of the destination country determines the number of visas to be granted and hence directly controls the magnitude of skilled emigration from the source country. In the migration equilibrium, the expected skilled wage income abroad is equal to the opportunity cost of emigration. In both the presence and absence of unemployment of unskilled labor, the outcome of the policy on the wage inequality crucially hinges on both the magnitude of the fixed cost of emigration and the technological factors. In the specific‐factor Harris–Todaro model, the degree of imperfection in the unskilled labor market is an additional factor. Finally, some policy recommendations have been made for protecting the interest of the poor unskilled workforce.     

Kenya's focus on urban vulnerability and resilience in the midst of urban transitions in Nairobi

ABSTRACT

Addressing urban vulnerability requires an understanding of the underlying determinants of resilience for individuals, households, communities and institutions – to withstand shocks, to adapt and to change. Analysing urban resilience utilises the results of five rounds of the Indicator Development for Surveillance of Urban Emergencies surveys conducted in three informal settlements of Nairobi. Results show a significant deterioration in food security and household hunger in marginalised urban populations, with other deprivations including insecurity, negative coping behaviour and inadequate access to water and sanitation. Within slum populations, there was a significant variation in income and expenditure (p?<?0.05) with lowest income quintiles spending over 100% of their income on food. Significant gender disparities have been shown in lowest income quintiles, with female breadwinners earning 62% compared with male breadwinners (p?<?0.05). Recommendations from this analysis include establishing thresholds for vulnerability and concrete dimensions for measuring resilience that can initiate and guide related interventions.     

An empirical assessment of the value of irrigation water: the case study of Murrumbidgee catchment*

Evaluation of value of irrigation water is essential for supporting policy decision making relating to investments in the irrigation sector, efficient allocation of irrigation water and water pricing and for crafting policies to compare the variable impacts of water reform within and across sectors of the economy. This paper asks the question of how much an established irrigator would pay for water and at what price farmers planning to expand the area they have under irrigation would consider paying for the right to access water. An analytical framework is developed to estimate the net present value of both annual and perennial agricultural activities in the Murrumbidgee catchment. Using these estimates the total value of water used in Murrumbidgee catchment is estimated. An aggregate water supply curve is derived for the catchment from where water may be acquired from irrigators for environmental flows.     

Regional foreign direct investment and technology spillover: evidence across different clusters in India

This paper examines whether there exist productivity spillovers from foreign direct investment (FDI) to domestic firms at the regional level, using firm-level panel dataset covering 22 manufacturing industries in India from 2000 to 2012. In order to estimate the productivity spillovers from FDI at the regional level, we select 10 industrial clusters across 4 regions in India. In estimating productivity, we control for a possible simultaneity bias by using semi-parametric estimation techniques. We find that local firms benefit from horizontal and vertical FDI, but the benefits from the latter are found to be substantially stronger. The absorptive capacity of domestic firms is highly relevant to harvest the spilled technology from foreign-owned firms. Furthermore, we find that domestic firms belonging to high-technology industries benefit more from FDI at the regional level. We also find that market concentration is a crucial conduit for firm innovation, technological upgradation, and having a direct effect on local firm total factor productivity.     

Foreign Direct Investment and Domestic Child Labor

Empirical evidence suggests that use of child labor as domestic help has increased significantly in recent years although the overall incidence of child labor across the globe has declined satisfactorily. This should draw the attention of economists and policymakers because domestic child labor is considered as exploitative and in many cases hazardous. This paper purports to explain this apparently perplexing finding theoretically in terms of a three‐sector general equilibrium model with a nontraded sector where only child labor is used to render services to the richer section of the society. The analysis shows how FDI‐led economic growth increases the size of the services sector although it lowers the overall incidence of child labor in the economy and improves the welfare of the poor families that supply child labor. Finally, a composite policy has been recommended that can deal with all three aspects favorably.     

Recommended play and performance bonuses in the minimum effort coordination game

We use experiments to investigate the efficacy of recommended play and performance bonuses in resolving coordination failures in a stag-hunt type coordination game with multiple Pareto-ranked equilibria, often referred to as a “weak link” game. Participants routinely find it difficult to coordinate to the payoff-dominant outcome in such games. We look at performance in both fixed and randomly re-matched groups. A recommendation to the payoff-dominant outcome is successful in resolving coordination failures with fixed groups but only when this recommendation is “common knowledge” in the sense that all members of the group receive the same message and it is read out loud for everyone to hear. Resolving coordination failures is harder with randomly re-matched groups and the greatest success is achieved only upon payment of a performance bonus.     

Offshoring and unemployment: The role of search frictions labor mobility

In a two-sector, general-equilibrium model with labor-market search frictions, we find that the wage increases and sectoral unemployment decreases upon offshoring in the presence of perfect intersectoral labor mobility. If, as a result, labor moves to the sector with the lower (or equal) vacancy costs, there is an unambiguous decrease in economywide unemployment. With imperfect intersectoral labor mobility, unemployment in the offshoring sector can rise, with an unambiguous unemployment reduction in the non-offshoring sector. Imperfect labor mobility can result in a mixed equilibrium in which only some firms offshore, with unemployment in the offshoring sector rising.     

Responsibility Cost Control System in China: The Han Dan Experience

This study undertakes a longitudinal analysis of the ethical management practices of Sri Lankan companies by comparing the results from a survey conducted in 2003. During this period regulatory developments have taken place within Sri Lanka and internationally aimed at improving the level of corporate governance. Based upon this survey data we conclude that progress has been made in ensuring that ethical management practices are more homogenous and standard practice across companies. Internationalized companies remain the ones that are more aware of the environmental consequences of their actions, although few companies, unfortunately, recognize this as an issue of concern.     

Analysis of the Awareness of Green Products in the City of Kolkata

ABSTRACT

In this study, the author analyzed the awareness of the people regarding green products. Green products are available from the retail market. A questionnaire survey was conducted of people in three different places in Kolkata, India. The questionnaire contained “yes/no” answers, and a ranking of the questions were modified for the different venues. Ranking was done by using the coefficient of variation method. Because of the variation in the answers, the central tendency of the feedback changed the questions. The survey was administered to 315 people from each area. After statistical quantification of the feedback from the survey questionnaire, using Spearman's correlation coefficient, the variability was tested, to identify the true comments of the people. It was found that the North Kolkata people from the Shyambazar area are most aware of green products.