Collaterals, Bank Monitoring and Performance: the Case of Newly Established Wine Farmers

This research aims at identifying the incentives associated to collaterals in an asymmetric information context and when the bank is the main financial partner of the entrepreneurs, which is typically the case for most farms and especially in the wine sector. In one hand, collaterals may reduce the risk of overinvestment by entrepreneurs and so reduce the risk of repayment default. In the other hand, to contract collaterals may lead the bank to reduce the monitoring effort. In this paper we test these two hypotheses in taking into account the fact that entrepreneurs can benefit from a banking relationship or not. Our results confirm that collaterals’ incentives depend on the bank monitoring. Moreover, this emphasizes the uniqueness of land mortgages. Besides, our results confirm that the revenue constraint is binding and thus, make critical the question of financial resources for newly established wine farmers.Collaterals, incentives, bank monitoring, Agricultural Finance, G32, G33, G35,

A second look at the pesticides initiative program : evidence from Senegal

This paper investigates whether the Pesticides Initiative Program has significantly affected the export performance of Senegal'shorticulture industry. The authors apply two main microeconometric techniques, difference-in-differences and matching difference-in-differences, to identify the effect of the Pesticides Initiative Program on exports of fresh fruits and vegetables. They use a unique firm-level dataset containing data on sales, employment, and exports by product and destination markets, as well as firm enrolment year, over 2000-2008. The results suggest that wile the program had no significant effect on exports pooled over all products and destinations, it had a positive effect when considering fresh fruits and vegetables exports to the European Union.E-Business,Economic Theory&Research,Markets and Market Access,Microfinance,Free Trade

Career Concerns and the Acquisition of Firm-Specific Skills

This paper studies compensation schemes that can motivate a worker to acquire nonverifiable firm-specific skills, when the acquisition process is also one of learning about managerial talent. At the beginning of the employment relationship, the worker encounters opportunities to enhance her specific human capital. Greater skills may increase the chances of being promoted; but as more opportunities are taken, more is learned about the worker's talent, and someone displaying low talent is sure not to be promoted. In this context we show that first-best firm-specific skills collection can be implemented with a scheme that combines discretionary promotions, an appropriate wage schedule and subsidies of training at the margin. ZUSAMMENFASSUNG - (Karrierepläne und der Erwerb von unternehmensspezifischen Fähigkeiten) In diesem Beitrag werden Entlohnungssysteme untersucht, die einen Beschäftigten dazu motivieren können nichtverifizierbare unternehmensspezifische Fähigkeiten zu erwerben, wenn es sich darum handelt, in diesem Prozeß auch Managementfähigkeiten zu erlernen. Zu Beginn der Beschäftigung sieht sich der Beschäftigte Möglichkeiten gegenübergestellt, sein spezifisches Humankapital zu vergrößern. Bessere Fähigkeiten können die Wahrscheinlichkeit für eine Beförderung erhöhen. Je mehr Gelegenheiten er wahrnimmt, desto besser wird auch das Talent des Beschäftigten erkannt. Bei geringem Talent wird auch deutlich, daß keine Beförderung ansteht. In diesem Zusammenhang wird gezeigt, daß der erstbeste unternehmensspezifische Fähigkeitserwerb mit einem Entlohnungsschema umgesetzt werden kann, das Beförderungen mit Ermessensspielraum bei einem angemessenem Gehalt und ein Fortbildungsförderungssystem "am Rand" verbindet.personnel management; human capital formation; occupational choice; labor productivity

Banana Splits and Banana Slips:The European and Trans-Atlantic Politics of Bananas

GATT; international trade; liberalization; regulation; WTO; Uruguay round

Contribution to Productivity or Pork Barrel? The Two Faces of Infrastructure Investment

This paper proposes a simultaneous-equation approach to the estimation of the contribution of transport infrastructure accumulation to regional growth. We model explicitly the political-economy process driving infrastructure investments; in doing so, we eliminate a potential source of bias in production-function estimates and generate testable hypotheses on the forces that shape infrastructure policy. Our empirical findings on a panel of France’s regions over 1985-92 suggest that electoral concerns and influence activities were, indeed, significant determinants of the cross-regional allocation of transportation infrastructure investments. By contrast, we find little evidence of concern for the maximization of economic returns to infrastructure spending, even after controlling for pork-barrel. ZUSAMMENFASSUNG - (Beitrag zur Produktivität oder Pork-barrel? Die zwei Seiten von Infrastrukturinvestitionen) In dieser Untersuchung wird ein simultanes Gleichungssystem zur Schätzung des Beitrags von Verkehrsinfrastrukturinvestitionen zu regionalem Wachstum verwendet. Es wird explizit der politische Prozeß modelliert, der Infrastrukturinvestitionen determiniert; dadurch wird eine mögliche Ursache einer verzerrten Parameterschätzung vermieden, die eintreten kann, wenn Produktionsfunktionen einzeln geschätzt werden. Gleichzeitig fließen in das Modell weitere empirisch überprüfbare Hypothesen über die Determinanten von Infrastrukturpolitik ein. Die empirischen Ergebnisse für einen Paneldatensatz mit 21 französischen Regionen im Zeitraum 1985-1991 zeigen, daß unterstützende Aktivitäten in der Tat einen signifikanten Einfluß auf die regionale Allokation von Verkehrsinfrastrukturinvestitionen haben. Darüber hinaus werden nur wenig empirische Hinweise dafür gefunden, daß auch erwartete Produktivitätseffekte von Infrastruktur bei der regionalen Allokation in Frankreich von Bedeutung sind.Growth, Infrastructure, Political Economy, Lobbying, France

Export Diversification:What’s behind the Hump?

The paper explores the evolution of export diversification patterns along the economic development path. Using a large database with 159 countries over 17 years at the HS6 level of disaggregation (4’998 product lines) we look for action at the “intensive” and “extensive” margins (diversification of export values among active product lines and by addition of new product lines respectively) using various export concentration indices and the number of active export lines. We also look at new product introduction as an indicator of “export-entrepreneurship”. We find a hump-shaped pattern of export diversification similar to what Imbs and Wacziarg (2003) found for production and employment. Low and Middle income countries diversify mostly along the extensive margin whereas high income countries diversify along the intensive margin and ultimately re-concentrate their exports towards fewer products. Such hump-shaped pattern is consistent with the conjecture that countries travel across diversification cones as discussed in Schott (2003, 2004) and Xiang (2007).Export diversification, international trade, Latin America

The elimination of Madagascar's Vanilla Marketing Board, ten years on

This paper explores how the elimination of Madagascar's Marketing Board in 1995 affected prices paid to farmers, incentives, and regional indicators of poverty and inequality. After steadily losing market share, Madagascar has been able to regain some of the lost ground since the mid-1990s. Margins between freight on board (FOB) and farmgate prices have spectacularly narrowed down, but this effect is dwarfed by that of world-price volatility. A counterfactual analysis based on a model of Cournot competition between vanilla traders suggests that whatever limited competition there is among them has contributed to raise purchase prices and the cash income of vanilla farmers. But the effect on farmers'consumption remains small because a large part of it is self-consumed. The effect on aggregate measures of poverty and inequality is even smaller, even at the regional level. After taking into account the reduction in Madagascar's monopoly power on the world vanilla market implied by the elimination of the Marketing Board, the induced rise in producer prices is estimated to have lifted about 20,000 individuals out of poverty.Markets and Market Access,Access to Markets,Economic Theory&Research,Crops&Crop Management Systems,Food&Beverage Industry

Trade Diversification, Income, and Growth: What Do We Know?

Export diversification, international trade, Growth and employment

OECD imports : diversification of suppliers and quality search

This paper explores the evolution of OECD imports over time, measuring their concentration across origin countries at the product level. The authors find evidence of diversification followed, in the very last years of the sample period (post-2000), by a slight re-concentration. This re-concentration is entirely explained by the growing importance of Chinese products in OECD imports. They also find evidence of relatively more volatile concentration levels for goods with high quality heterogeneity, with temporary phases of re-concentration on goods with higher unit values. Both findings are consistent with a simple model of adverse selection and quality screening by OECD buyers predicting that diversification happens by"bouts"rather than continuously, with temporary re-concentration on higher-quality suppliers.Markets and Market Access,Microfinance,Labor Policies,E-Business,Agribusiness&Markets

Success and failure of African exporters

Using a novel dataset with transactions level exports data from four African countries (Malawi, Mali, Senegal and Tanzania), this paper uncovers evidence of a high degree of experimentation at the extensive margin associated with low survival rates, consistent with high and middle income country evidence. Consequently, the authors focus on the questions of what determines success and survival beyond the first year and find that survival probability rises with the number of firms exporting the same product to the same destination from the same country, pointing towards the existence of cross-firm synergies. Accordingly the evidence is consistent with the hypothesis that those synergies may be driven by information spillovers. More intuitively and consistently with multi-product firms models, the analysis also finds that firms more diversified in terms of products, but even more in terms of markets, are more likely to be successful and survive beyond the first year.Markets and Market Access,Microfinance,Economic Theory&Research,Debt Markets,E-Business