International Portfolio Investment Flows

This article develops a model of international equity portfolio investment flows based on differences in informational endowments between foreign and domestic investors. It is shown that when domestic investors possess a cumulative information advantage over foreign investors about their domestic market, investors tend to purchase foreign assets in periods when the return on foreign assets is high and to sell when the return is low. The implications of the model are tested using data on United States (U.S.) equity portfolio flows.     

Book Reviews

Books reviewed:
E. Wayne Nafziger and Juha Auvinen, Economic Development, Inequality, and War: Humanitarian Emergencies in Developing Countries.
Steve Striffler and Mark Moberg (eds), Banana Wars. Power, Production and History in the Americas.
Stefano Ponte, Farmers and Markets in Tanzania: How Policy Reforms Affect Rural Livelihoods in Africa.
Catherine Boone, Political Topographies of the African State: Territorial Authority and Institutional Choice.     

The ‘Global’ in the City Economy: Multicultural Economic Development in Birmingham

This article draws on critiques of ‘global cities’ to conceptualize Birmingham, the UK's second largest metropole, as a ‘global’ city by highlighting forms of economic globalization that draw on the city's residents, their histories and their social and cultural networks. The article illustrates some of the diversity and significance of minority ethnic economic activity within Birmingham and the potential this holds for its future economic development, focusing on examples from three transnational networks (Chinese business networks, ethnic food manufacturing and the Bhangra music industry). The article signals a rather different understanding of ‘global’ as it relates to economic advantage, transnationalism and ethnic diversity within cities in general, and Birmingham in particular. We suggest that this different understanding of the global has important policy implications, not simply in terms of economic representations of the city, but also in terms of developing the possibilities of such transnational networks and engaging with the constraints facing them. We argue that encouraging a more relational way of thinking about cities like Birmingham has the potential for advancing social wellbeing by influencing socio‐economic policy and practice. We use the example of Birmingham, therefore, to engage broader debates about alternative paths of ‘global’ economic, social and cultural investment for UK (and other) cities. A partir de critiques des ‘villes planétaires’, cet article conceptualise Birmingham (deuxième métropole britannique) en tant que ville ‘planétaire’ en soulignant les formes de mondialisation économique qui s’appuient sur les citadins, leurs histoires et leurs réseaux sociaux et culturels. Pour illustrer en partie la diversité et la place de l’activitééconomique ethnique des minorités à Birmingham, ainsi que le potentiel afférent pour son essor économique futur, ce travail s’intéresse à des exemples issus de trois réseaux transnationaux (réseaux d’affaires chinois, fabrication d’alimentation ethnique et secteur de la musique indienne Bhangra). Il repère une compréhension assez différente de ‘planétaire’, selon que le terme est liéà un avantage économique, au transnationalisme et à la diversité ethnique au sein des grandes villes, et de Birmingham en particulier. Cette perception multiple a d’importantes implications politiques, à la fois au plan des représentations économiques de la ville et en termes de création de possibilités pour ces réseaux transnationaux et de prise en compte des contraintes à affronter. Encourager un mode de réflexion plus relationnelà l’égard de villes comme Birmingham permettrait de promouvoir le bien‐être social en influant sur la pratique et la politique socio‐économique. Le cas de Birmingham sert donc à lancer des débats plus larges sur les options d’acheminement de l’investissement économique, social et culturel ‘planétaire’ pour les grandes villes britanniques (et étrangères).     

Australian Economic Growth: Nonlinearities and International Influences

This paper considers the extent to which fluctuations in Australian economic growth are affected by domestic and overseas economic performance. We investigate the performance of a range of nonlinear models versus linear models, comparing the models using Bayes factors and posterior odds ratios. The posterior odds ratios favour nonlinear specifications in which fluctuations in economic activity in the US affect Australia's economic performance. Our results suggest that an exogenous negative shock will be more persistent, lead to greater output volatility, and have a greater impact on growth, than a positive shock of equal magnitude.