The Mistreated Model: Some Technical Comments on Porojan's Paper on 'Trade Flows and Spatial Effects'

The paper by Porojan on 'Trade flows and spatial effects' in a recent issue of this journal is criticized on three methodological grounds: it includes two of the gravity model independent variables as relative rather than absolute numbers; the dummy variables included are not binary but interval; and the 'sample' of countries creates a non-normal distribution of inter-country distances, undoubtedly creating heteroscedasticity problems. Because of these three problems, the model is mis-specified, and the results thereby obtained are unreliable.     

Currency risk and the safe-haven hypothesis

It has been argued that the dollar's role as a safe currency may affect its value over and above what can be justified fundamentally. This view stresses the role of the dollar as a safe-haven currency whose demand increases during periods of uncertainty. Applying a generalized autoregressive conditional heteroskedasticity framework to data on four bilateral exchange rates versus the dollar, the results show that uncertainty strengthens the dollar.     

Reverse Diffusion in US Multinationals: Barriers from the American Business System

abstract    This paper addresses the issue of 'reverse diffusion' of employment practices in multinational companies, which is defined as the transfer of practices from foreign subsidiaries to operations in the country of origin. It adds to the literature by examining the influence of the parent business system in multinationals. Specifically, it addresses how the dominant institutions and established organizational structures and practices in the home country affect the extent and impact of reverse diffusion of employment practices. Drawing on fresh evidence from American-owned multinationals in the UK we argue that there is considerable potential for reverse diffusion to occur among this group of firms. However, we highlight a number of barriers to reverse diffusion that the American business system presents, demonstrating that these constrain both the prevalence and the impact of it in practice.     

Conflict in Africa: The Cost of Peaceful Behaviour

War provides economic opportunities, such as the capture ofvaluable natural resources, that are unavailable in peacetime.However, belligerents may prefer low-intensity conflict to totalwar when the former has a greater pay-off. This paper thereforeuses a two-actor model to capture the continuum from total warto complete peace that often characterises Africa's conflicts.This is in contrast to the existing literature, with its focuson mutually exclusive states of total war or complete peace,an assumption which is more relevant to Europe's inter-statewars than to Africa's civil wars. The paper also discusses waysto change the economic incentives of belligerents so that theirbehaviour becomes more peaceful.     

Indigenous accumulation in the Kimberley during the early years of ‘self‐determination’, 1968–1975

This article — using empirical data gathered from, among other sources, the Western Australian State Records Office, National Archives, and Hansard — traces the trajectory of indigenous owned businesses in the Kimberley region of Western Australia. As part of the analysis, the article investigates the main reasons for a shift to the development policy of ‘self‐determination’ during the early 1970s. As well, there is recognition of the major contribution made by an emerging Aboriginal leadership to the evolving policy regime. In doing so, there is a critical re‐evaluation of the origins of, and support for, successful indigenous owned business enterprises.     

Understanding Pensions: Cognitive Function,Numerical Ability and Retirement Saving*

In a world of declining state pension provision, it is becoming increasingly important that individuals are able to understand the financial choices they face and can choose savings products, portfolios and contribution rates accordingly. In this paper, we look at numerical ability and other dimensions of cognitive function in a sample of older adults in England and examine the extent to which these abilities are correlated with various measures of wealth and retirement saving outcomes. As well as finding that relatively large fractions of the older population can be seen to have low levels of numeracy, we show that numeracy levels are strongly correlated with measures of retirement saving and investment portfolios, even when controlling for other dimensions of cognitive ability as well as educational attainment. Numeracy is also related to knowledge and understanding of pension arrangements, and with perceived financial security. In the short run, there may be a role for targeting simple retirement planning information at low‐numeracy, low‐education groups; a longer‐run goal for retirement saving policy might be to improve numeracy levels more generally.