Global Economy Journal

A variety of social and economic institutions have contributed to the decline in poverty and inequality in Latin America. We focus on the bank-SME nexus because of the importance of banks as a source of finance for small and medium enterprises (SMEs), and the potential role that SMEs can play as sources of innovation, employment, and in reducing poverty and inequality. Our regression analysis of data from World Bank (WB) surveys of firms in Argentina, Brazil, Chile, and Mexico shows that firms that are smaller, newer, less technically advanced, and less well-located firms are more likely to report being credit constrained. The factors that did not count are executive characteristics such as gender, education, and experience in the sector, and firm performance or foreign ownership. Firms that worked with several banks, developed affiliations to business groups or were in trade and political associations were less likely to report credit constraint.

This article tests the effect of change in the degree of openness to import of goods and services on a country’s productivity. The idea is that by driving resources to industries in which the country has a comparative advantage, imports contribute to increased productivity in the economy. Countries from three distinct regions (OECD, Latin America and Asia), separately and together, were used to test this proposition. A feasible generalized least square estimation method is applied to determine the effect of the capital to labor ratio, openness to imports and real gross domestic product on labor productivity. A panel vector error correction model as proposed by is also performed in order to determine any causal relationship. The effect of imports on labor productivity is found to be positive and significant for the 1990–2011 period under study, strengthening the case for free trade and leading to important policy implications.

According to . Politics by Principle, Not Interest: Towards Nondiscriminatory Democracy. Cambridge: Cambridge University Press), the generality principle in politics blocks special interests. Consequently, the generality principle should thereby promote economic efficiency. This study tests this hypothesis on wage formation and labor markets, by investigating whether generality defined as state neutrality could explain employment performance among OECD countries during 1970–2003. We identify three types of non-neutrality concerning unemployment. These include the level or degree of government interference in the wage bargaining process over and above legislation which facilitates mutually beneficial wage agreements, the constrained bargaining range (meaning the extent to which the state favors or blocks certain outcomes of the bargaining process), and the cost shifting (which relates to state interference shifting the direct or indirect burden of costs facing the parties on the labor market). Our overall hypothesis is that non-neutrality or non-generality increases unemployment rates. The empirical results from the general conditional model suggest that government intervention and a constrained bargaining range clearly increase unemployment, while a few of the cost shifting variables have unexpected effects. The findings thus give some, but definitely not unreserved, support for the generality principle as a method to promote economic efficiency. One implication may be that the principle should be amended by other requirements if the political process shall indeed be able to promote economic efficiency.

The purpose of this article is to provide a short- to medium-term analysis of the overall performance of the French economy. Unfortunately, this subject is all too frequently discussed in a manner that is perhaps not as clear as it could be. As a French economist trained in the United States, I hope to briefly outline what I feel are the major issues concerning the French economy in a way that I hope carries a few less biases than usual. First, we need to be clear that the performance of the French economy relative to most OECD countries has been less than what the underlying strengths of the country would lead one to expect. This problem is producing ongoing difficulties with the public finances. Without faster growth, paying for the social benefits the population prefers is becoming increasingly difficult. Third, slower growth coupled with structural impediments in the labor market are combining to produce shockingly high levels of unemployment among the young. As in much of Europe such reforms will be difficult but the need for change is pressing. Fourth, French banks are fortunately in rather good shape and problems in the financial system are not a major concern. Putting these factors together illustrates the “paradox” that is the French economy. This is a highly developed country whose economic performance in many ways is disappointing. However, France is, after all, a democracy. Navigating the country out of this paradox can be done, but only in a way that is French. Thinking that France will somehow transform itself into Germany is delusional. On the other hand, France needs to avoid becoming a larger version of Italy.

This study analyses financial liberalisation in Trinidad and Tobago within the context of the McKinnon–Shaw model. The broad objective of this article is to empirically investigate the validity of both the McKinnon complementarity hypothesis and the Shaw debt intermediation model in relation to Trinidad and Tobago. These two models purport that persuasive government intervention and involvement in the financial system through the regulatory and supervisory network, particularly in controlling interest rates and allocation of credit, tend to distort financial markets. Therefore, by the removal of administrative controls on the assets portfolio and pricing behaviour of financial institutions, interest rates will rise to levels that will result not only in increased savings and loanable funds but also in a more efficient allocation of these funds, providing, in turn, stimuli for economic growth. Utilising the cointegration approach, the empirical analysis is conducted with annual data from 1970 to 2001. The empirical results support both the McKinnon complementarity hypothesis and the Shaw debt intermediation hypothesis in the long run. That is to say, real interest rates have a significant influence on savings in the long run. However, the results indicate that the real interest rate plays an insignificant role in the Error Correction Model in the short run for both the McKinnon and Shaw theories. Hence, this article provides empirical validity for the McKinnon–Shaw financial liberalisation theory in Trinidad and Tobago over the long run. Thus policy makers should take explicit account of this result in the formulation of financial policy. The sustainability of this policy, however, depends on the appropriateness of other fiscal, monetary incomes and exchange rate policies.

This article addresses on an aspect of firms internationalization so far little explored, the choice of the number of export destinations and a proxy of the complexity of the export activity. As the outcome variable is a count with an excess of zeros, we use a hurdle regression model for count data that also allow disentangling the aspect of heterogeneity related to the decision to export from those measuring the number of markets served. Some differences arise by the comparison between the estimates regarding the propensity to export model and those of the model describing the number of export destinations. Regarding the propensity to export, the estimated models support the familiar evidences already presented in literature: exporters are larger, more productive, more innovative and invest more. With reference to the number of export destinations, it seems that not only the larger the number of markets served the more productive, large and willing to invest is the firm but also firms engaged in multiple markets seem to be older, financially stable, and willing to support organizational and managerial innovations.