Effects of aid for trade on extensive and intensive margins of greenfield FDI

Using a panel dataset of 105 developing countries for the period 2003–15, this paper assesses the effects of Aid for Trade (AfT) on greenfield FDI flows to the aid‐recipient countries. Particularly, this paper classifies the total dollar value of greenfield FDI flows to each recipient country in terms of four different layers: the extensive and intensive margins of projects as well as the extensive and intensive margins of source countries. Applying the system GMM estimator, this paper finds that AfT not only increases the dollar value of FDI flows to the recipient countries but also helps diversify the greenfield projects and source countries. In addition, this paper finds that AfT has a greater effect for greenfield FDI from donor (developed) countries than from non‐donor (developing) countries. Among the three components of AfT, aid for trade‐related infrastructure and aid for trade policy regulations are found to have positive links with greenfield FDI, irrespective of source‐country groups, yet their effects are larger for developed source countries. In contrast, aid for building productive capacity hinders greenfield FDI flows from non‐donor countries, while it promotes greenfield FDI from donor countries. We offer some explanations for this finding.     

The contribution of a satellite market to price discovery: Evidence from the Singapore exchange

The Singapore Exchange (SGX), a small satellite market, successfully competes with a large home market, the Osaka Securities Exchange (OSE), in trading the Nikkei 225 futures index. In this paper, we investigate the contribution of the SGX to price discovery and shed light on the reasons for its continued success. Evidence is provided from information revelation and price discovery of three competing but informationally linked markets of the Nikkei 225 index—domestic spot (Tokyo Stock Exchange), domestic futures (OSE), and foreign futures (SGX), which represents the satellite market. Overall, the futures market contributes 77% to price discovery, with the satellite market contributing 42% of the futures and 33% of the total price discovery. These figures, surprisingly, far exceed the satellite market's share of trading volume. Support is provided for the extended trading hours on the SGX for three of the four non‐overlapping trading sub‐periods. © 2004 Wiley Periodicals, Inc. Jrl Fut Mark 24:981–1004, 2004     

A theoretical framework to evaluate different margin‐setting methodologies

The margin system is the first line of defense against the default risk of a clearinghouse. From the perspectives of a clearinghouse, the utmost concern is to have a prudential system to control the default exposure. Once the level of prudentiality is set, the next concern will be the opportunity cost of the investors, because high opportunity cost discourages people from hedging futures, and thus defeats the function of a futures market. In this article, we first develop different measures of prudentiality and opportunity cost. We then formulate a statistical framework to evaluate different margin‐setting methodologies, all of which strike a balance between prudentiality and opportunity cost. Three margin‐setting methodologies, namely, (1) using simple moving averages; (2) using exponentially weighted moving averages; (3) using a GARCH approach, are applied to the Hang Seng Index futures. Keeping the same prudentiality level, it is shown that the one using a GARCH approach by and large gives the lowest average overcharge. © 2004 Wiley Periodicals, Inc. Jrl Fut Mark 24:117–145, 2004     

LABOUR SUPPLY ESTIMATION AND PUBLIC POLICY

Abstract. Economists devote considerable energies towards refining their econometric techniques to overcome difficulties connected with conducting empirical research. Despite advances in technique. it is not clear whether further refinement in this direction is worthwhile for policy purposes. It may be that no further amount of statistical adjustment of inadequate data will increase understanding, and that better data is simply necessary to add to our knowledge. But rarely is sufficient credit paid to new forms of data. In short, econometric technique is emphasized to the neglect of data innovation, as if new data were merely lying about waiting for an ingenious suggestion for use. This paper surveys advances of the last twenty five years in estimating labour supply for policy purposes with a view towards appreciating the relative contribution of both improvements in econometric technique as well as developments of new data.
After briefly detailing the key parameters which economists have sought to estimate, we describe the early 'first generation' research (circa 1970), which is plagued by problems of unobservable variables, measurement errors, truncation and selectivity bias, and non linear budget constraints. 'Second generation' research constitute attempts to resolve one or more of these difficulties, and the respective contribution of econometric technique and new data is acknowledged and assessed, including the contribution of data generated by large scale social experiments in which participants are randomly assigned to different guaranteed income plans and their labour supply behaviour measured.     

The politics of ethnic integration in Singapore: Malay ‘regrouping’ as an ideological construct

Research on ethnic residential patterns is overwhelmingly empiricist in focus. The discursive context surrounding the socio‐spatial phenomenon needs to be acknowledged since it can have concrete impacts on the practice of urban social planning as well as the spatial behaviour of individuals and groups. Using Henri Lefebvre's insights into the production of social space, this article looks at how a dominant representation of space is constructed, with its implications for ‘lived’ spaces and the spatial practices which circumscribe them. The case of Singapore is examined, where the government has appropriated the discourse surrounding ‘ethnic regrouping’ in an attempt to legitimize the unpopular policy of ethnic quotas in public housing. Alleging that ‘ethnic regrouping’ had been taking place during the 1980s, this was portrayed as undesirable and contrary to the ideal of integration. The imposition of ethnic quotas was thus justified as necessary and appropriate. Systematic analysis using the index of dissimilarity, however, problematizes this representation of space. The rhetoric surrounding ethnic regrouping is revealed to be a means of social discipline whereby the government imposes a particular representation of space and seeks to manipulate the social landscape via technocratic means. Les recherches sur les modèles résidentiels ethniques débordent d'empirisme. Or, le contexte discursif du phénomène socio‐spatial doit être reconnu puisque celui‐ci peut avoir des incidences tangibles sur l'exercice de l'urbanisme social, ainsi que sur le comportement des individus et groupes dans l'espace. A partir des idées d'Henri Lefebvre sur la production de l'espace social, l'article analyse comment s'élabore une représentation dominante de l'espace, avec ses implications sur les espaces ‘vécus'et les pratiques spatiales qui les délimitent. Dans le cas de Singapour, le gouvernement s'est approprié le discours autour du ‘regroupement ethnique’ dans le but de légitimer la politique impopulaire des quotas ethniques dans les logements publics. Sous le prétexte que le ‘regroupement ethnique’ s'était déroulé dans les années 1980, il a été présenté comme indésirable et contraire à l'idéal d'intégration. Les quotas ethniques ont donc été justifiés comme nécessaires et pertinents. Cependant, une analyse systématique utilisant l'indice de dissemblance remet en cause cette représentation de l'espace. La rhétorique entourant le regroupement ethnique apparaît comme un outil de discipline sociale grâce auquel le gouvernement impose une représentation particulière de l'espace, cherchant à manipuler le paysage social par des moyens technocratiques.     

Public Sector Capital and the Production Efficiency of U.S. Regional Manufacturing Industries

This paper applies a stochastic frontier production model with time-varying technical efficiency to investigate the relationship between public capital and technical efficiency. It is based on the proposition that public capital has an effect on actual output by enhancing technical efficiency, thereby reducing the gap between maximum potential output and actual output. Empirical results using panel data from U.S. state manufacturing industries during 1969–86 show that technical efficiencies varied substantially, both between states and between years; variations in technical efficiency are significantly explained by variations in public-sector capital.
JEL Classification Numbers: O20, H54, C23.     

Reinterpreting the performance of immigrant wages from panel data

Immigrants differ from the native born in terms of unobserved factors, such as motivation, and observed factors, including those related to the interruption of labour market activity and earning capacity, which may bias estimates of immigrant integration. Using panel data from the Survey of Labour and Income Dynamics, we show that using potential experience, rather than actual experience, exaggerates estimates of the disruption and recovery caused by immigration. More importantly, we find support for omitted variables bias, arising from unobserved fixed effects. Instrumental variable estimates for both pooled and separate samples of immigrant and native born men demonstrate a wage disadvantage for immigrants upon entry that persists through their lifetime. Standard estimates of a modest wage advantage for the children of immigrants also suffer from omitted variables bias arising from unobservables. Contrary to most of the literature to date, our instrumental variable estimates which allow for unobservable fixed effects suggest that immigrants never catch up to otherwise comparable native born workers, but their children do just as well. We would like to thank Statistics Canada for permitting access to the data and solving associated technical problems, the Prairier Centre for Research on Immigration and Integration for financial assistance, and Peter Schnabl for excellent research assistance. An earlier version of this paper was presented to the 10th International Conference on Panel Data in Berlin, July 5–6, 2002. The authors take sole responsibility for errors, omissions and interpretation of the data.     

The Usefulness of Direct and Indirect Cash Flow Disclosures

We investigate the ability of disclosed operating cash flow and indirect accruals components to explain annual returns for a sample of Australian firms. Consistent with claims made by accounting standard setters, we find evidence of significant explanatory power for disclosed operating cash flow components beyond aggregate operating cash flows when they also have significant incremental predictive power for future (one year ahead) operating cash flows. Accrual components also have incremental explanatory power for returns. In addition, we find evidence of significant explanatory power for operating cash flow components beyond estimates of the components (based on other financial statement disclosures) for firms with large differences between disclosed and estimated components.     

Gentrification in Hong Kong? Epistemology vs. Ontology

This article examines the transferability of the concept of gentrification away from its Anglo‐American heartland to the cities of Asia Pacific and specifically Hong Kong. An epistemological argument challenges such theoretical licence, claiming that conceptual overreach represents another example of Anglo‐American hegemony asserting the primacy of its concepts in other societies and cultures. Past research suggests that if gentrification exists in Asia Pacific cities it bears some definite regional specificities of urban form, state direction and, most surprising from a Western perspective, a potentially progressive dimension for some impacted residents. Closer examination of urban discourse in Hong Kong is conducted through analysis of English and Chinese language newspapers. In both instances, gentrification is barely used to describe the pervasive processes of urban redevelopment, which otherwise receive abundant coverage. Interviews with local housing experts confirm the marginality of gentrification in academic and public discourse, and the power of a local ideology that sees urban (re)development unproblematically as a means of upward social mobility. However, in the decade‐long housing bust after 1997, growing inequality has encouraged a nascent class analysis of the property market, an ontological awakening that may prove more favourable to the identification of gentrification in an Asia Pacific idiom.