The impact of credit constraints on the performance of Chinese agricultural wholesalers

This article evaluates the impact of credit constraints on the performance of Chinese agricultural wholesalers. We estimate a stochastic frontier function using transaction and credit data of agricultural wholesalers from across China to estimate the efficiency and productivity impacts of credit constraints on sales of affected agricultural wholesalers. Empirical results show that micro- and smaller wholesalers are disproportionally impacted by credit constraints and that eliminating these constraints would increase the sales of affected agricultural wholesalers by approximately 15%. Thus, policies aimed at providing credit access for these wholesalers would significantly boost the performance of smaller agricultural wholesalers while improving the overall performance of the Chinese food supply chain without requiring additional non-credit inputs.     

THE EFFECTS OF LOTTO GAME CHANGES AND LARGE JACKPOTS ON INCOME ELASTICITIES AND SALES

Using daily lottery data from Washington State by zip code from January 2011 through mid‐March 2016, we estimate that Powerball income elasticities range from ?0.16 to 0.16 as the Powerball jackpot increases from its minimum to $1.5 billion, while Mega Millions income elasticities range from ?0.08 to 0.03 as the Mega Millions jackpot increases from its minimum to $640 million. Controlling for jackpot size, each of three major game changes during this time period has a significant effect on own‐game and cross‐game sales. Despite these significant game changes, however, these lotto games are a highly regressive source of revenue for Washington State. (JEL H22, H71, L83)     

Risk management instruments for debt driven conservation efforts: The case of India's Project Tiger

Project Tiger has been India's premier case of conservation success. Since mid 1990s select Project Tiger Reserves in India were chosen for intensive funding by the Global Environment Facility, the International Development Agency (IDA) and the Government of India under the ‘India Eco-Development Project’. This project marked a modest shift towards debt based funding. The GEF Project has become a benchmark for tiger conservation in India both in terms of management outcomes and scale and scope of funding. However in the absence of large-scale budgetary support or self-generating income flows, it becomes difficult for the GEF type of project to be replicated in other tiger reserves of the country. Debt instruments hold promise as enablers of conservation finance. The paper proposes issue of ‘tiger bonds’ to meet the financial requirements of tiger reserves. Though attractive as a debt instrument, a ‘tiger bond’ could nevertheless entail interest rate and default risks.Bioprospecting activities form good revenue sources for tiger reserves to pay off their debts. However bioprospecting activities do not provide assured returns to tiger reserves. Pharmaceutical companies that prospect for genetic resources and practice ‘real options’ approach to R&D investment planning, adopt multi-phased investment systems and sequential searches that gives them the flexibility to abandon R&D projects. From the point of view of genetic resource providing entities like Project Tiger Reserves, the ‘postponement value’ generated by real options, enables a drug company to tap substitutes for the genetic resources that form the subject matter of bioprospecting contracts. To obviate possible repayment risks by tiger reserves, the paper advocates the institution of ‘put bonds’ as a risk management tool for Project Tiger Reserves in order to hedge themselves against loan defaults arising from possible loss in bioprospecting income. The paper also brings out the mechanics of the issue of tiger bonds in the Indian context. It is argued that a put bond not only hedges default risks but would also aid ‘value discovery’ and payment for ecosystem services as far as the Project Tiger Reserves of India are concerned.     

A spatial analysis of R&D: the role of industry proximity

This paper employs individual firm data in order to check the existence of industry-spatial effects alongside other microeconomic determinants of R&D investment. Spatial proximity is defined by a measure of firms’ industry distance based on trade intensity between sectors. The spatial model specified here refers to the combined spatial-autoregressive model with autoregressive disturbances. In modelling the outcome for each location as dependent on a weighted average of the outcomes of other locations, outcomes are determined simultaneously. The results of the spatial estimation suggest that in their R&D decision firms benefit from spillovers originating from neighbouring industries.     

Nonlinear stochastic effects of substitution — an evolutionary approach

Technological innovations have been investigated by means of substitution and diffusion as well as evolution models, each of them dealing with different aspects of the innovation problem. In this paper we follow the well known research traditions on self-organisation models of complex systems. For the first time in the literature we show the existence of a specific niche effect, which may occur in the first stage of establishment of a new technology. Using a stochastic Master equation approach, we obtain analytical expressions for the survival probabilities of a new technology in smaller or larger ensembles. As a main result we demonstrate how a hyperselection situation might be removed in a stochastic picture and thresholds against the prevailing of a new technology in a step-by-step process can be overcome.     

The expectation hypothesis in emerging financial markets: the case of Malaysia

This article deals with the expectation hypothesis of the term structure of interest rates. It is argued that the rapid progress and financial market liberalization that is occurring in emerging financial markets could provide additional evidence for testing the expectation hypothesis. This article employs data from the Malaysian government securities market which represents one of the examples of an emerging financial market. Cointegration and error correction analyses show significant empirical validity for the expectation hypothesis. The long- and short-term interest rates are shown to be cointegrated and subject to a long-run equilibrium path. In addition to shedding some light on the experience of emerging financial market, this article explicitly identifies the process of adjustment towards the long run equilibrium. For the long-run, the results are in favour of the long-to-short version of expectation hypothesis with longer-term interest rates playing a greater role as equilibrium attractor. However, in the short run causal impact runs from short- to long-term interest rates. The empirical findings of the article generally support the proposition of expectation hypothesis.