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2731. The Internationalization of Chinese and Indian Firms: Trends, Motivations and Policy Implications

Author:
Sandeep Kapur and Suma Athreye
Publication Date:
01-2009
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
The last two decades have seen a significant rise in the internationalization of firms from developing economies. In addition to their growing participation in international trade, a number of leading emerging economies are contributing to growing outflows of foreign direct investment (FDI) and cross-border mergers and acquisitions. According to the 2008 World Investment Report, outward flows of FDI from developing countries rose from about US$6 billion between 1989 and 1991 to US$225 billion in 2007. As a percentage of total global outflows, the share of developing countries grew from 2.7% to nearly 13.0% during this period.
Topic:
International Relations, Economics, Globalization, International Political Economy, Markets, Foreign Direct Investment, and Financial Crisis
Political Geography:
United States, China, and India

2732. Haiti: Is Economic Security Possible if Diplomats and Donors Do Their Part?

Author:
Robert Perito
Publication Date:
05-2009
Content Type:
Policy Brief
Institution:
United States Institute of Peace
Abstract:
In 2009, Haiti has been the subject of an unprecedented diplomatic initiative led by the United Nations. In rapid succession, Haiti received visits from the UN Secretary General Ban Ki-moon, the UN Security Council, former President Bill Clinton and Secretary of State Hillary Clinton and numerous senior delegations from Caribbean and South American countries. In April, Haiti was the subject of an international donors' conference hosted by the Inter-American Development Bank that reaffirmed previous commitments and pledged $324 million in new economic assistance. The visits and the donors' conference were preceded by a UN sponsored report by Oxford economist and bestselling author Paul Collier on specific steps that could help Haiti achieve economic security.
Topic:
Conflict Resolution, Diplomacy, Economics, Foreign Aid, and Financial Crisis
Political Geography:
South America, Caribbean, and Haiti

2733. Wall Street/Main Street: The Challenge of Building Financial Security in the Obama Era

Publication Date:
04-2009
Content Type:
Working Paper
Institution:
Aspen Institute
Abstract:
The last 18 months have dealt a devastating blow to Americans' sense of financial security. Few have been untouched by the financial crisis. For many, wealth accumulated over years of saving and investing has disappeared almost overnight. For many more, the economic crisis has imperiled their jobs, their ability to provide for their families, and their optimism about the future.
Topic:
Economics, International Trade and Finance, and Financial Crisis
Political Geography:
United States and America

2734. Blunt Instruments: On Establishing the Causes of Economic Growth

Author:
Michael Clemens and Samuel Bazzi
Publication Date:
05-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Despite intense concern that many instrumental variables used in growth regressions may be weak, invalid, or both, top journals continue to publish studies of economic growth based on problematic instruments. Doing so risks pushing the entire literature closer to irrelevance. We illustrate hidden problems with identification in recent prominently published and widely cited growth studies using their original data. We urge researchers to take three steps to overcome the shortcomings: grounding research in somewhat more generalized theoretical models, deploying the latest methods to test sensitivity to violations of the exclusion restriction, and opening the “black box” of the Generalized Method of Moments (GMM) with supportive evidence of instrument strength.
Topic:
Development, Economics, and Political Economy

2735. The Microeconomic Determinants of Emigration and Return Migration and Return Migration of the Best and Brightest: Evidence from the Pacific

Author:
John Gibson and David McKenzie
Publication Date:
05-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
A unique survey which tracks worldwide the best and brightest academic performers from three Pacific countries is used to assess the extent of emigration and return migration among the very highly skilled, and to analyze, at the microeconomic level, the determinants of these migration choices. Although we estimate that the income gains from migration are very large, not everyone migrates and many return. Within this group of highly skilled individuals the emigration decision is found to be most strongly associated with preference variables such as risk aversion, patience, and choice of subjects in secondary school, and not strongly linked to either liquidity constraints or to the gain in income to be had from migrating. Likewise, the decision to return is strongly linked to family and lifestyle reasons, rather than to the income opportunities in different countries. Overall the data show a relatively limited role for income maximization in distinguishing migration propensities among the very highly skilled, and a need to pay more attention to other components of the utility maximization decision.
Topic:
Economics, Migration, Political Economy, and Immigration
Political Geography:
Australia/Pacific

2736. The Impact of Microcredit on the Poor in Bangladesh: Revisiting the Evidence

Author:
David Roodman and Jonathan Morduch
Publication Date:
06-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The most-noted studies on the impact of microcredit on households are based on a survey fielded in Bangladesh in the 1990s. Contradictions among them have produced lasting controversy and confusion. Pitt and Khandker (PK, 1998) apply a quasi-experimental design to 1991–92 data; they conclude that microcredit raises household consumption, especially when lent to women. Khandker (2005) applies panel methods using a 1999 resurvey; he concurs and extrapolates to conclude that microcredit helps the extremely poor even more than the moderately poor. But using simpler estimators than PK, Morduch (1999) finds no impact on the level of consumption in the 1991–92 data, even as he questions PK's identifying assumptions. He does find evidence that microcredit reduces consumption volatility. Partly because of the sophistication of PK's Maximum Likelihood estimator, the conflicting results were never directly confronted and reconciled. We end the impasse. A replication exercise shows that all these studies' evidence for impact is weak. As for PK's headline results, we obtain opposite signs. But we do not conclude that lending to women does harm. Rather, all three studies appear to fail in expunging endogeneity. We conclude that for non-experimental methods to retain a place in the program evaluator's portfolio, the quality of the claimed natural experiments must be high and demonstrated.
Topic:
Development, Economics, Foreign Aid, and Foreign Direct Investment
Political Geography:
Bangladesh, South Asia, and Asia

2737. Crossing the Natural Gas Bridge

Author:
Matthew Frank, Jenna Goodward, Sarah Ladislaw, and Kate Zyla
Publication Date:
05-2009
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
While natural gas can play a critical role during the transition to a secure, low-carbon economy, there are both climate and energy security risks associated with a dramatic shift to natural gas. This paper explores the current role of natural gas in the United States' energy mix, reasons that climate change and energy security policies might increase demand for natural gas, and the implications of such a shift. It concludes with several recommendations for policymakers looking to craft a rational role for natural gas in the U.S. energy sector.
Topic:
Economics, Energy Policy, and Natural Resources
Political Geography:
United States

2738. Reforming and Reinforcing the Revolution: The Post-TRIPS Politics of Patents in Latin America

Author:
Kenneth Shadlen
Publication Date:
04-2009
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
National policies toward intellectual property (IP) were revolutionized in the 1990s, as countries adopted new systems to conform to the World Trade Organization's (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). TRIPS-style IP regimes make patents available for more types of knowledge, grant long periods of patent protection, and endow patent owners with strong rights of exclusion. This paper analyzes two contrasting patterns of political mobilization and pressures for change that newly-introduced, TRIPS-style regimes became subject to by the early 21st Century. Most governments faced pressures to address aspects of their IP systems regarding pharmaceutical patents; governments came under pressure to reform their new patent systems, calling into question the appropriateness and utility of broad and strong private rights of exclusion as tools for disseminating knowledge. Most governments also faced pressures to modify aspects of their patent systems more broadly related to science, technology, and indigenous innovation (STI); governments came under pressure to reinforce their new patent systems, buttressing the role of private rights of exclusion as mechanisms to incentivize the creation and distribution of knowledge and technology. I provide a political explanation for the contrasting trajectories of reform and reinforcement by examining how different policy arrangements generate and mobilize interests for continuity and discontinuity. The focus is on asymmetric patterns of interest mobilization: those actors who benefit from policy interventions tend to mobilize more than those who suffer; those actors who suffer retain the capacities for mobilization and resistance more in the area of health-drugs than STI.
Topic:
Economics, International Trade and Finance, Political Economy, and Intellectual Property/Copyright
Political Geography:
Latin America

2739. Economic Writing on the Pressing Problems of the Day: The Roles of Moral Intuition and Methodological Confusion

Author:
Julie A. Nelson
Publication Date:
04-2009
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
Economists are often called on to help address pressing problems of the day, yet many economists are uncomfortable about disclosing the values that they bring to this work. This essay explores how an inadequate understanding of the role of methodology, as related to ethics and human emotions of concern, underlies this reluctance and compromises the quality of economic advice. The tension between caring about the problems, on the one hand, and writing within the existing culture of the discipline, on the other, are illustrated with examples from U.S. policymaking, behavioral economics, and the economics of climate change and global poverty. Potential steps towards a more responsible, "strongly objective," and policy-useful economics are discussed.
Topic:
Climate Change, Economics, Globalization, and Poverty
Political Geography:
United States

2740. The Environmental Impacts of Soybean Expansion And Infrastructure Development in Brazil's Amazon Basin

Author:
Maria del Carmen Vera-Diaz, Robert K. Kaufmann, and Daniel C. Nepstad
Publication Date:
05-2009
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
For decades, the development of transportation infrastructure in the Brazilian Amazon has been the government's main social and economic development policy in the region. Reductions in transportation costs have not only opened the agricultural frontier to cattle ranching and logging but have also caused more than two-thirds of Amazonian deforestation. Currently, soybean cultivation is a new economic force demanding improvements to roads in the region. Profitable soybean crops have spread over the Mato Grosso's cerrados and now head toward the core of the Amazon rain forest. One of the main constraints for soy expansion into the Amazon has been the poor condition of roads. In this study, we analyze the effect Amazon transportation infrastructure programs have on soybean expansion by lowering transport costs. The analysis is based on spatial estimates of transportation costs for the soybean sector, first using current road networks and then projecting changes based on the paving of the Cuiabá-Santarém road. Our results indicate that paving the Cuiabá-Santarém road would reduce transportation costs by an average of $10 per ton for farmers located in the northern part of Mato Grosso, by allowing producers to reroute soybean shipments to the Santarém port. Paving the road also would expand the area where growing soybeans is economically feasible by about 70 percent, from 120,000 to 205,000 km2 . Most of this new area would be located in the state of Pará and is covered largely by forests. A Cost-Benefit analysis of the road project indicates that the investments in infrastructure would generate more than $180 million for soybean farmers over a period of twenty years. These benefits, however, ignore the project's environmental impacts. If the destruction of ecological services and products provided by the existing forests is accounted for, then the Cuiabá-Santarém investment would generate a net loss of between $762 million and $1.9 billion. This result shows the importance of including the value of the natural capital in feasibility studies of infrastructure projects to reflect their real benefits to society as a whole.
Topic:
Agriculture, Development, Economics, Environment, and Infrastructure
Political Geography:
Brazil, Latin America, and Amazon Basin