The Falsification of Four Popular Hypotheses About the Asian Crisis

Various claims have been made about the causes of the Asian crisis and its spread. Here, we use data on the behaviour of capital flows during the crisis to test the strong forms of four such hypotheses, that portfolio investors and hedge funds played a dominant role in initiating and/or spreading the crisis; that moral hazard kept efficient markets from predicting the crisis; and, finally, the common lender hypothesis of Kaminsky and Reinhart. In the process we also test implications of the Calvo-Mendoza model of rational investor ignorance. All are falsified as monocausal explanations. For example, portfolio investments that could not have been subject to substantial moral hazard continued to flow into Asia until very shortly before the crisis. Likewise, banks were a much larger source of capital outflows during the crisis than were portfolio investors. While falsified in their strongest forms, several of these hypotheses in less strong forms should play a role in a more nuanced analysis. It is necessary to move past simple single-factor approaches in order to produce a more complete, synthetic explanation of this episode.     

Neighbourhood Effects in Pesticide Use: Evidence from the Rural Philippines

This study investigates how pesticide use by neighbouring farmers affects a given farmer's pesticide use. Although it is common knowledge that pesticide use has spatial externalities, few empirical economic studies explicitly analyse this issue. Applying a spatial panel econometric model to plot‐level panel data for Bohol, Philippines, this study shows that pesticide use, especially for herbicides, is spatially correlated, although there is no statistically significant spatial correlation in unobserved shocks. This implies that farmers apply pesticides by referring to the behaviour of neighbouring farmers rather than responding directly to the intensity of their own infestation.     

Expertenwissen im politischen Prozess — Nutzen,Grenzen und Gefahren

Since the outbreak of the financial and economic crisis, confidence in politicians as well as the economists in their advisory expert panels seems to be at an all-time low. Why do politicians reject science-based advice unless it fits into their political agenda? Are economists misunderstood by politicians and vice versa? The tension between the ideal of evidence-based policy-making and the reality of policy-based evidence-making is hardly a new phenomenon. Therefore, the expectation that Donald Trump, the Brexiteers and European populists will necessarily disappoint their voters because they simply cannot deliver what they have promised is misleading. Experts would be well advised to use the debate on the post-factual era as an impetus to reflect critically on their profession. One opinion expressed in this Zeitgespräch is that the contested societal and political impact of modern economics is due to its restricted scientific self-concept. A more open, pluralistic and transdisciplinary self-definition of economics would strengthen its societal influence. Another contributor ponders the proper incentives to persuade academic economists to provide economic policy advice. Key is the independence of advisory institutions like the German Council of Economic Experts. The selection of people with the best scientific qualifications will ensure the reputation of such institutions.     

Examining rural income and employment in Bangladesh: A case of structural changes in the rural nonfarm sector in a developing country

This study uncovers some important stylised facts about the structural changes in the rural nonfarm (RNF) economy in Bangladesh for the period 2000–2016 and identifies some broad determinants. Our work uses household-level, secondary sources such as Household Income and Expenditure Survey, Labour Force Survey and Bangladesh Integrated Household Survey. We find that the positive relationship between landownership and rural income has become weaker in recent years, indicating the increasing role of nonland inputs in generating rural income. The share of RNF income in total rural income has increased substantially over the years. The increase in nonfarm income is largely driven by the nonfarm wage income of the richer households, indicating adverse distributional consequences. There are also indications for specialisation in nonfarm activities—the share of income from the ‘mixed’ sources of farm and nonfarm has decreased, and the ‘only nonfarm’ source has increased. Households tend to move away from agriculture and specialise in RNF occupations as the education level increases. Our results offer important insights into rural development strategies and contribute to the broader questions of the development discourse on the structural changes in developing countries.     

Director Tenure Diversity and Board Monitoring Effectiveness

This study examines the impact of director tenure diversity on board effectiveness. We find that tenure‐diverse boards exhibit significantly higher CEO performance‐turnover sensitivity and that firms with tenure‐diverse audit committees are less likely to experience accounting restatements. Furthermore, we document that tenure‐diverse compensation committees also award less excess compensation and are less likely to overcompensate. Even though tenure‐diverse boards seem to exhibit superior monitoring performance, there is limited evidence that their firms exhibit superior financial performance. The findings suggest that recent calls for board renewal, to the extent that it would increase tenure diversity rather than just decrease average board tenure, may help enhance board monitoring.     

Trust Evolvement in Hybrid Team Collaboration: A Longitudinal Case Study

Trust is referred to as a key facilitator in team collaboration as it is an important condition for information sharing. In this paper, we investigate factors associated with the establishment of trust in hybrid teams that collaborate virtually as well as face-to-face. Furthermore, we deliver an instrument to understand trust development in teams. We describe exploratory results of the instrument by running experiments with teams of collaborating students in China and Netherlands. Quantitative and qualitative analysis has been used to analyze these data. Finally, in the analysis of the experiments we describe initial patterns of trust development in groups from both individual and group perspectives, in two different cultural contexts.     

Invisible influence, tangible trap: The clerical conundrum

This paper contends that the contribution made by clerical workers to organisational effectiveness is invisible due in part to the dominant perspective on the clerical sector, and in part to what is seen to be the nature of the workers themselves. In synthesising some of the degradation literature with an examination of elements of clerical subjectivity it is demonstrated that clerical effectiveness is rendered invisible and that this, in turn, essentially traps clerks in low status work. Drawing on ideas emerging from past and recent literature on tacit knowledge and comparable worth, the paper seeks to demonstrate that, by applying the principles of tacitness and its analysis to this non-managerial area of work, we can see where the influence of clerical workers lies. The paper ends with a challenge to organisations which reaps the benefits of a skilful and knowledgeable workforce while doing little to formally acknowledge such expertise.     

Information flows and adaptation in Tanzanian cottage industries

The aim of this research is to identify channels of information flows and their impact on business adaptation and survival. The analysis is set within a theoretical framework of information market failure and information flows. The paper draws on empirical data from a survey comprising approximately 400 small-scale entrepreneurs in dressmaking and woodworking industries at different levels of centrality in four regions in Tanzania. The data reveal that half of the businesses are growing and one-third have increased profitability by significant adaptations last year. Most changes occur in products and design. Customers and the media represent the most important sources of business information, followed by family members and business partners. Independent variables that significantly influence adaptability include customer relations, education, media exposure, social networks, and mobility. Associations are strongly modified by the entrepreneurs’ age and gender and by businesses’ size and location. The paper concludes that cottage industries in Tanzania have a remarkable ability to survive. Garment and woodwork markets are still predominantly local and competition from external businesses is limited. Access to business information and new ideas should be improved, however, to counteract growing competition from the modern sector.