On the Latin American Growth Paradox: A Hindsight into the Golden Age

In 1950, Latin American countries capabilities were promising, and the subcontinent was thought to have a big potential for convergence. In order to understand why this prediction was not fullled, we apply in this paper the framework set by Fagerberg and Srholec (2008). Our study of the economic evolution of Latin America during the Golden Age (1950-1975) is based on historical data on economic, political and social variables from 18 countries. We use a factor analysis to classify our 20 indicators into ve dimensions: the level of "industrialization", "human capital", the "macroeconomic fundamentals", "politics" and "religion". We nd that only the quality of human capital and the presence of Roman Catholics signicantly and positively aected Latin American economic growth in this period, while the determinants traditionally put forward in the empirical growth literature, such as technical change and openness, did not. Finally, the positive correlation between the religion and education variables reveals that this result is partly related to the role of the Catholic Church as an educational institution.Growth; Development; Convergence; Factor Analysis; Latin America;Economic History; Golden Age.

SIGNALLING THROUGH JOINT-LIABILITY: AN ADVERSE SELECTION MODEL

Joint-liability is maybe the most distinctive feature of microfinance contracts in developing countries. Yet, very little evidence exists on the impact of joint-liability contracts as compared to indi- vidual lending contracts. On the one hand, theory claims that joint-liability plays a key role in mitigating agency problems and thus enhancing repayment rates, especially when borrowers lack collateral. On the other, experimental evidence has shown mixed, sometimes contradictory results, highlighting major pitfalls like harsh social sanctions and peer pressure. We contribute to the debate on the relative merits (and weaknesses) of joint-liability by showing that, under certain conditions, joint-liability may not be able to solve adverse selection problems. We build a model in which a risk-neutral lender offers both individually and jointly-liable contracts, but has limited funds and limited knowledge about borrowers’ quality. In this case, joint-repayments can be used as a signalling device of borrowers’ type. Our model shows that if the lender allows for competition among borrowers, risky borrowers may have an incentive to reveal a higher joint-repayment level than safe borrowers. In other words, joint-liability may increase adverse selection. We test our predictions in a small experimental environment

Foreign banks as shock absorbers in the financial crisis? National Bank of Belgium Working Paper No. 322

This paper finds that foreign banks can act as a buffer against negative credit supply shocks, in contexts where the domestic credit market is heavily hit by a country-specific adverse shock. A new dataset is constructed, which combines Belgian Credit Register data with firms and banks’ balance sheets. After 2008, Belgian firms borrowing from domestic banks experienced a stronger credit contraction (minus 1.8 percentage points) than firms borrowing from foreign banks. Also, foreign banks “cherry-picked” new relationships with more profitable firms to a higher extent during the crisis, and turned down existing relationships more frequently than domestic banks. Results from this paper suggest that foreign banks can mitigate negative financial shocks in countries where domestic financial intermediaries unexpectedly experienced the consequences of the financial crisis to a higher extent

Does your neighbour know you better? Local banks and credit tightening in the financial crisis

This paper is a study about the effect of relationship lending on credit availability for Italian firms, with a special focus on the 2008-09 financial crises. According to the conventional wisdom, the central principle of relationship finance is that that personal interaction between bankers and small borrowers creates information efficiency that allow credit to flow more efficiently and commerce to grow more. The recent financial crisis would have revived the role of relationship lending: a natural implication of information asymmetries in credit markets is that, in a period of high risk aversion and borrowers? opaqueness- as it is in a financial crisis-, the comparative advantage of producing soft information should become far more relevant. Against this background, this paper focuses on the supply side of the Italian credit market by testing the prediction that, during the financial crisis, firms relying more on local banks have been less credit rationed than other firms. To this end, first, we develop an index, based on banks' credit concentration across local credit markets, which helps us to identify local financial intermediaries. Second, we develop a sample of 3.281 firms from 2006 to 2009 for which we have full information on credit rationing from the Survey of Industrial and Service Firms from Bank of Italy (INVIND survey), as well as balance sheet data from the Cerved dataset, and relationship lending information from the Credit Register (CR) dataset. Third, we test empirically if firms financed by local banks experienced a lower credit rationing during the 2008-09 crisis than other firms. The main result of the paper is that firms predominantly funded by local banks have been less rationed during the 2008-09 financial crisis. This result holds when we consider also the firm and bank characteristics, the shape of the bank-firm relationship, and the features of the local credit market where the firm is located. Our findings support the view that local banks may address firms' financial needs in a better way than not local banks because of their comparative advantage at collecting local information. This advantage appears to be relevant in a period of high risk aversion as the recent financial crisis

On the Latin American growth paradox: A hindsight into the Golden Age

In 1950, Latin American countries capabilities were promising, and the subcontinent was thought to have a big potential for convergence. In order to understand why this prediction was not fulfilled, we apply in this paper the framework set by Fagerberg and Srholec (2008(24)). Our study of the economic evolution of Latin America during the Golden Age (1950-1975) is based on historical data on economic, political and social variables from 18 countries. We use a factor analysis to classify our 20 indicators into five dimensions: the level of industrialization, human capital, the macroeconomic fundamentals, politics and religion. We find that only the quality of human capital and the presence of Roman Catholics significantly and positively affected Latin American economic growth in this period, while the determinants traditionally put forward in the empirical growth literature, such as technical change and openness, did not. Finally, the positive correlation between the religion and education variables reveals that this result is partly related to the role of the Catholic Church as an educational institution

P–458 A computational biology approach to improve in-vitro folliculogenesis

Study question Considering the complexity of mechanisms involved in mammalian ovarian folliculogenesis, how about improving the current in-vitro folliculogenesis (ivF) protocols to prolong individual reproductive chance? Summary answer Computational modelling approach based on network theory was used to manage complexity, improve ivF knowledge and discover new molecules to be targeted for innovating assisted-reproductive-technologies. What is known already: Over the past decades, based on the large ovarian-pool of immature-gametes availability, ivF systems were developed in several mammalian species to support oocyte growth in order to preserve human-fertility and contrast endangered species extinction. Only mouse live-births were obtained when primordial/primary follicles were cultured in-vitro, instead the oocyte differentiation is extremely slow in medium-sized mammals. Moreover, the degree of meiotic-competence is quite incomplete if compared to mice, because oocytes must proceed until late antral-follicle stage to acquire a complete developmental competence. These observations denote the importance to adopt further investigations for establishing a complete ivF protocol in translational mammal model. Study design, size, duration Two researchers expert on reproductive biology generated the Web of Science-Mammals-Made in-vitro folliculogenesis (WoS_MMivF) database including 1111 manuscripts published in peer-reviewed international papers indexed selected in Advanced Search of WoS “Core-collection” by carrying out an independent analysis. Two additional researchers verified the correctness of the records. Participants/materials, setting, methods WoS_MMivF network was built up using Cytoscape 2.6.3 software. The network was analyzed for topological parameters (closeness-centrality, betweenness-centrality and edge count) and to identify key controllers (Hub.BN). Bidimensional-kernel-density-estimation (2D KDE) identifies Hub.BN controllers; Search-Tool-for-the-Retrieval-of-Interacting-Genes/Proteins (STRING) were used to enrich the network with new proteins. Main results and the role of chance The analysis of topological parameters demonstrated that the network is scale-free according to Barabási-Albert-model with a high-degree of robustness-against-random-damage, great controllability and navigability. The network reproduces a coherent framework identifying cross-talking molecules playing a key role in the inter-follicular/intra (somatic and germinal compartment) dialogue. The network allows to organize signalling transduction events/molecules by stratifying them in three layers: input-layer recognizes molecules generating the information flux working as systemic endocrine (pituitary/chorion/enteric-related endocrine hormones) and local paracrine-factors (TGFbeta-superfamily-members and growth-factors) exerting either intrafollicular control or remote feedback on reproductive-cycle. Processing-layer presents molecules able to elaborate/amplify the endocrine/paracrine controllers of ovarian functions, including components of codified intracellular-signaling-pathways like PI3K, KIT and MAPK and second messengers cAMP and Ca2+. These cascades are necessary to promote in-vitro reproducible follicular functions and modulate steroidogenesis, representing molecular events stratified in the output-layer. STRING analysis allowed to extend the regulatory flow of information towards two major biological action contexts: metabolic-control (paracrine-factors and signal-transduction) and angiogenesis. Metabolic-control mediated by mTOR and its interactor cognates FOXO1, FOXO3/SIRT1 plays a key role for ivF, representing the energy sensors of the reproductive cells in hypothalamic-pituitary-ovarian-axis first regulating the status of follicle quiescence/activation and then fate of the structure (specialization or apoptosis). Limitations, reasons for caution - Wider implications of the findings: STRING identified mTOR as key pathway of folliculogenesis, which might act as a molecular-switch to be pharmacologically targeted for potential new in-vitro strategies modulating follicular fate. These results suggest that computational approach in biology might offer perspective in identifying unknown signals, implementing research questions and innovative protocols to face female-fertility. Trial registration number Not applicabl

The role of culture in firm-bank matching

We assemble a unique dataset containing population-level information on loan applications in a region hosting two cultural groups to study the role of culture in firm borrowing decisions. We find that firms are more likely to apply for loans from culturally close banks. This effect is stronger for opaque firms, but not for less performing firms, indicating that firms do not expect preferential treatment from same-culture banks. Loan applications to culturally distant banks increase sharply with firms’ size and age, suggesting a role of information asymmetry in firm-bank matching. In contrast, we find no effect of cultural proximity on loan supply. Overall, our results show that demand-side factors play a key role in the formation of same-culture lending relationships

In vitro folliculogenesis in mammalian models: a computational biology study

In vitro folliculogenesis (ivF) has been proposed as an emerging technology to support follicle growth and oocyte development. It holds a great deal of attraction from preserving human fertility to improving animal reproductive biotechnology. Despite the mice model, where live offspring have been achieved,in medium-sized mammals, ivF has not been validated yet. Thus, the employment of a network theory approach has been proposed for interpreting the large amount of ivF information collected to date in different mammalian models in order to identify the controllers of the in vitro system. The WoS-derived data generated a scale-free network, easily navigable including 641 nodes and 2089 links. A limited number of controllers (7.2%) are responsible for network robustness by preserving it against random damage. The network nodes were stratified in a coherent biological manner on three layers: the input was composed of systemic hormones and somatic- oocyte paracrine factors; the intermediate one recognized mainly key signaling molecules such as PI3K, KL, JAK-STAT, SMAD4, and cAMP; and the output layer molecules were related to functional ivF endpoints such as the FSH receptor and steroidogenesis. Notably, the phenotypes of knock-out mice previously developed for hub.BN indirectly corroborate their biological relevance in early folliculogenesis. Finally, taking advantage of the STRING analysis approach, further controllers belonging to the metabolic axis backbone were identified, such as mTOR/FOXO, FOXO3/SIRT1, and VEGF, which have been poorly considered in ivF to date. Overall, this in silico study identifies new metabolic sensor molecules controlling ivF serving as a basis for designing innovative diagnostic and treatment methods to preserve female fertility

Signalling through joint-liability : an adverse selection model

Joint-liability is maybe the most distinctive feature of microfinance contracts in developing countries. Yet, very little evidence exists on the impact of joint-liability contracts as compared to individual lending contracts. On the one hand, theory claims that joint-liability plays a key role in mitigating agency problems and thus enhancing repayment rates, especially when borrowers lack collateral. On the other, experimental evidence has shown mixed, sometimes contradictory results, highlighting major pitfalls like harsh social sanctions and peer pressure. We contribute to the debate on the relative merits (and weaknesses) of joint-liability by showing that, under certain conditions, joint-liability may not be able to solve adverse selection problems. We build a model in which a risk-neutral lender offers both individually and jointly-liable contracts, but has limited funds and limited knowledge about borrowers' quality. In this case, joint-repayments can be used as a signalling device of borrowers' type. Our model shows that if the lender allows for competition among borrowers, risky borrowers may have an incentive to reveal a higher joint-repayment level than safe borrowers. In other words, joint-liability may increase adverse selection. We test our predictions in a small experimental environment