Starting Positions, Reform Speed, and Economic Outcomes in Transitioning Economies

At the end of the 1980s and beginning of the 1990s 26 countries in Eastern Europe, the former Soviet Union and Mongolia initiated market reform policies. During the 1980's the average annual growth in real GDP for these countries was about 2.9%, while for the period 1990-1997, the average growth rate was -5.7%. During the same period China was implementing a relatively slow and gradual policy of economic reform and their economy responded with very high real GDP growth. From these experiences it was commonly concluded that rapid economic reform led to (at least) a short-term economic decline and that the more gradual implementation of reforms is more appropriate for countries starting with a long legacy of central planning. However, the above statistics and analysis ignore some interesting variations among the 26 CEE/FSU/Mongolian economies. The reform experience within this sample varies considerably from the rapid implementation observed in Slovenia and Poland to the very slow reforms observed in Belarus and Ukraine. And the results have varied as well. Average real annual GDP growth (1990/1997) for Slovenia was 1.4%, for Poland 4.1% while for Belarus it was -6.1% and for Ukraine it was -13.1%. The World Bank has constructed indices of reform speed for these 26 transitioning economies and the relation between reform speed and economic growth rates, as shown in the above figure, is positive. The conclusion drawn is that these countries all started with unfavorable "starting positions", were about to suffer economic decline even with no change in economic policy, and those countries implementing more rapid market reforms suffered from less of a decline. One could point to the economic declines in Cuba and North Korea during this period as "control cases" of what would have happened if no economic reforms had been implemented.http://deepblue.lib.umich.edu/bitstream/2027.42/39664/3/wp280.pd

SPEED AND SEQUENCING OF MARKET REFORMS: THE CASE OF BANKING IN LATVIA

After gaining its independence from the former Soviet Union, Latvia's banking sector initiated free market reforms. Initially, severál apparent disequilibria existed in the market for banking services. This paper reports on the processes that generated these disequilibria as well as on the events that transpired as the market approached equilibria over time. Copyright 1997 Western Economic Association International.

Polymorphic Equilibrium in Advertising

This article is concerned with the possibility that natural selection can lead to an evolutionarily stable equilibrium where otherwise identical profit maximizing firms follow distinctly different strategies. In biology such occurrences are called polymorphic equilibrium. We develop a model of nonprice competition and from this model two classes of polymorphic equilibria arise. In the first class, advertising by expanding market demand can create a niche large enough to sustain entry by nonadvertising firms. Thus, otherwise identical firms following advertising and no advertising strategies can coexist with equal profits in a polymorphic equilibrium The second class of polymorphic equilibria includes the case where advertising does not expand market demand and instead only affects market shares. The article concludes with a discussion of the implications that polymorphism has for empirical work in economics.

Exposure to Residual Concentrations of Elements from a Remediated Coal Fly Ash Spill does not Adversely influence Stress and Immune Responses of Nestling Tree Swallows

Anthropogenic activities often produce pollutants that can affect the physiology, growth and reproductive success of wildlife. Many metals and trace elements play important roles in physiological processes, and exposure to even moderately elevated concentrations of essential and non-essential elements could have subtle effects on physiology, particularly during development. We examined the effects of exposure to a number of elements from a coal fly ash spill that occurred in December 2008 and has since been remediated on the stress and immune responses of nestling tree swallows. We found that nestlings at the site of the spill had significantly greater blood concentrations of Cu, Hg, Se and Zn in 2011, but greater concentrations only of Se in 2012, in comparison to reference colonies. The concentrations of elements were below levels of significant toxicological concern in both years. In 2011, we found no relationship between exposure to elements associated with the spill and basal or stress-induced corticosterone concentrations in nestlings. In 2012, we found that Se exposure was not associated with cell-mediated immunity based on the response to phytohaemagglutinin injection. However, the bactericidal capacity of nestling plasma had a positive but weak association with blood Se concentrations, and this association was stronger at the spill site. Our results indicate that exposure to these low concentrations of elements had few effects on nestling endocrine and immune physiology. The long-term health consequences of low-level exposure to elements and of exposure to greater element concentrations in avian species require additional study

Effects of firm resources on growth in multinationality

Multinationality refers to the extent to which firms' business activities span across national borders. Moving beyond prior emphasis on the consequences of multinational expansion, this study sheds light on the antecedents by analyzing how firm resources influence changes in multinationality. Building on the resource-based view of the firm, we propose a framework that consists of resource determinants in two categories: knowledge-based and property-based resources. Empirical results obtained from a sample of publicly held US manufacturing companies show that knowledge-based resources generate faster and longer-lasting influences on international growth than property-based resources. Specifically, resources related to technological and marketing knowledge, and property-based resources related to organizational slack and internally generated profits, are found to be significant driving forces behind growth in multinationality. This study not only advances our understanding of the antecedents of multinational expansion, but also provides implications and avenues for future research. Journal of International Business Studies (2007) 38, 961–974. doi:10.1057/palgrave.jibs.8400305