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1032. Credit-constrained in Risky Activities? The Determinants of the Capital Stocks of Micro and Small Firms in Western Africa
- Author:
- Jann Lay, Michael Grimm, and Simon Lange
- Publication Date:
- 01-2012
- Content Type:
- Working Paper
- Institution:
- German Institute of Global and Area Studies
- Abstract:
- Micro and small enterprises (MSEs) in developing countries are typically considered to be severely credit constrained. Additionally, high business risks may partly explain why the capital stocks of MSEs remain low. This article analyzes the determinants of the capital stocks of MSEs in poor economies focusing on credit constraints and risk. The analysis is based on a unique, albeit cross-sectional but backward-looking, micro data set on MSEs covering the economic capitals of seven West-African countries. The main result is that capital market imperfections indeed seem to explain an important part of the variation in capital stocks in the early lifetime of MSEs. Furthermore, the analyses show that risk plays a key role in capital accumulation. Risk-averse individuals seem to adjust their initially low capital stocks upwards when enterprises grow older. MSEs in risky activities owned by wealthy individuals even seem to over-invest when they start their business and subsequently adjust capital stocks downwards. As other firms simultaneously suffer from capital shortages, such behaviour may imply large inefficiencies.
- Topic:
- Development, Economics, International Trade and Finance, Markets, and Foreign Direct Investment
- Political Geography:
- West Africa
1033. Nation states and nationality of MNEs
- Author:
- Seev Hirsch
- Publication Date:
- 01-2012
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- The purpose of this Perspective is to explore the relationship between multinational enterprises (MNEs) and their home countries. I use the term “nationality” when discussing a home country, to stress the contrast with “multinationality” which refers to business enterprises. The question I seek to address is whether, ceteris paribus, nation states have an economic interest in becoming home countries to MNEs. This is not a trivial question, bearing in mind that in many countries -- especially those with emerging markets -- outward foreign direct investment (FDI) has been frowned upon long after incoming FDI was generally welcome by local governments and academic scholars.
- Topic:
- Development, Economics, Emerging Markets, International Trade and Finance, Political Economy, and Foreign Direct Investment
1034. Towards the successful implementation of the updated OECD Guidelines for Multinational Enterprises
- Author:
- Tadahiro Asami
- Publication Date:
- 01-2012
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- The Business and Industry Advisory Committee to the OECD (BIAC) has accepted the updated OECD Guidelines for Multinational Enterprises (Guidelines), adopted on May 25, 2011 after a series of negotiations and consultations among members of the Organisation for Economic Cooperation and Development (OECD), adhering governments, BIAC, the Trade Union Advisory Committee to the OECD, and OECD Watch, an international network of civil society organizations. The Guidelines are the most comprehensive government-endorsed code of responsible business conduct. The Update upheld the voluntary and non-legally binding character of the Guidelines, and while the new text introduces important new elements, the Update is very carefully formulated and its changes are accompanied by extensive conditionalities.
- Topic:
- Development, Economics, International Cooperation, International Trade and Finance, Markets, and Foreign Direct Investment
1035. FDI stocks are a biased measure of MNE affiliate activity: A response
- Author:
- Mira Wilkins
- Publication Date:
- 01-2012
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- In a recent Perspective, Beugelsdijk, Hennart, Slangen, and Smeets warned readers about biases in the measure of FDI stock. They are to be congratulated for pushing readers to be careful in the use of data.
- Topic:
- Development, Economics, Emerging Markets, International Trade and Finance, and Foreign Direct Investment
1036. Pacific Island Nations: How Viable Are Their Economies?
- Author:
- Francis X. Hezel
- Publication Date:
- 01-2012
- Content Type:
- Policy Brief
- Institution:
- East-West Center
- Abstract:
- The Pacific is receiving a fair share of attention today from many quarters. Even as the parade of economic consultants continues, others are coming to explore concerns that have more recently claimed the attention of western nations. These concerns cover a broad range, including food security, global warming, elimination of illegal drug traffic in the region, prevention of AIDS or even drug-resistant tuberculosis, protection from spouse abuse, and public-school improvement. These are legitimate interests, but none of them addresses the central concern that vexes each of the island nations of Micronesia, and perhaps the islands elsewhere in the Pacific: How will the country grow its economy to ensure its survival in the future?
- Topic:
- Development, Economics, Poverty, and Foreign Aid
- Political Geography:
- Asia, Australia, and Island
1037. When do ruling elites support productive sectors? Explaining policy initiatives in the fisheries and dairy sectors in Uganda
- Author:
- Fred Muhumuza, Anne Mette Kjær, Mesharch Katusiimeh, and Tom Mwebaze
- Publication Date:
- 02-2012
- Content Type:
- Working Paper
- Institution:
- Danish Institute for International Studies
- Abstract:
- This paper explains the differences in ruling elite support for the fisheries and dairy sectors in Uganda. Although production in Uganda has not generally been promoted in any sustained way, ruling elites have to varying degrees supported the dairy and fisheries sectors. The paper shows that the ruling elite initially supported the fishing industry because of industry pressure. They have failed to enforce fisheries management because there are big political costs associated with such enforcement. The dairy sector in the southwestern milk region was initially supported because the ruling elite wanted to build a coalition of support in this region. Coming from the region himself, the president had a keen interest in dairy cattle. The sector was subsequently regulated because the biggest processor put pressure on the ruling elite to do so. Even when the ruling coalition is fragmented, promoting production is possible if there is strong industry pressure and when the initiatives to promote the sector are also seen to help build or maintain the ruling coalition.
- Topic:
- Development, Economics, Industrial Policy, Poverty, and Social Stratification
- Political Geography:
- Uganda and Africa
1038. The political economy of the fisheries sector in Uganda: ruling elites, implementation costs and industry interests
- Author:
- Fred Muhumuza, Anne Mette Kjær, Mesharch Katusiimeh, and Tom Mwebaze
- Publication Date:
- 02-2012
- Content Type:
- Working Paper
- Institution:
- Danish Institute for International Studies
- Abstract:
- This paper sets out to explain policies, implementation arrangements and results (PIRs) in Uganda's fisheries sector. Industry actors wanted to be able to keep up with European standards in order to survive in the chilled and frozen fillet export industry. They put pressure on ruling elites to support the establishment of effective hygiene and testing procedures. This helped the fishing industry succeed to an extent that helped create interests in the status quo. Fishermen, their dependents, and the fish processors all wanted to maintain a high level of fish catches. It was politically costly for ruling elites to enforce fisheries management because strict enforcement was unpopular with fishermen, as well as with many fishermen and security agents who benefitted from illegal fishing. Therefore, the success was not maintained: a pocket of efficiency was established with regard to hygiene and testing, but not with regard to enforcing fisheries management. Overfishing and the near collapse of the fishing sector were the results.
- Topic:
- Development, Economics, Government, Industrial Policy, International Trade and Finance, Poverty, and Social Stratification
- Political Geography:
- Uganda, Africa, and Europe
1039. Coalition-driven initiatives in the Ugandan dairy sector: Elites, conflict, and bargaining
- Author:
- Fred Muhumuza, Anne Mette Kjær, and Tom Mwebaze
- Publication Date:
- 02-2012
- Content Type:
- Working Paper
- Institution:
- Danish Institute for International Studies
- Abstract:
- The dairy sector is one of the only agricultural sectors in Uganda that has enjoyed sustained high growth since the late 1980s. Milk and the cold dairy chain developed especially in the south-western part of the country. This paper explains why this is so by the sector's relation to the ruling coalition. We argue that the dairy sector was relatively successful because the south-western based ruling elite wanted to build a support base in its home area. In addition, the elite had a special interest in dairy since key elite members owned dairy cattle themselves. As milk production grew, the ruling elite wanted to regulate the sector as this would help the big processor, the state owned and later privatized Dairy Corporation. Regulation was relatively successful and a pocket of bureaucratic efficiency was established in an agency called the Dairy Development Authority. The reason why regulation was enforced to a considerable extent was the organization of dairy farmers and traders and the bargaining and compromise with the Dairy Development Authority this organization of industry actors enabled.
- Topic:
- Agriculture, Development, Economics, Government, and Infrastructure
- Political Geography:
- Uganda and Africa
1040. Somalia: An Opportunity that Should Not Be Missed
- Publication Date:
- 02-2012
- Content Type:
- Policy Brief
- Institution:
- International Crisis Group
- Abstract:
- The next six months will be crucial for Somalia. The international community is taking a renewed interest in the country; the mandate of the feeble and dysfunctional Transitional Federal Government (TFG) expires in a half-year; and emboldened troops from the African Union Mission in Somalia (AMISOM), Kenya and Ethiopia are keen to deal the weakened (though still potent) extremist Islamist movement Al-Shabaab further defeats. This confluence of factors presents the best chance in years for peace and stability in the south and centre of the country. To achieve that, however, requires regional and wider international unity of purpose and an agreement on basic principles; otherwise spoilers could undermine all peacebuilding efforts.
- Topic:
- Conflict Resolution, Development, Islam, Terrorism, War, and Insurgency
- Political Geography:
- Africa and Somalia