Bilateral Investment Treaties, Political Risk and Foreign Direct Investment

The study constructs a linear model to evaluate the significant impacts of bilateral investment treaties (BITs) on foreign direct investment (FDI) and the possible consequences of BITs. The results show that BITs have significantly promoted FDI, and their effects are substitute for the level of political risk in a country. Another interesting finding is that BITs signed with non-OECD countries should not be overlooked. By estimating the growth of FDI resulting from an additional BIT ratified, the finding further indicates that BITs are more potential for most Asian countries to promote FDI. On average, a BIT ratified by a country in South, East, and South-East Asia can raise FDI by around 2.3 percent.Bilateral investment treaties, foreign direct investment, political risk

An Analysis of Cambodia’s Trade Flows: A Gravity Model

This paper aims at investigating the important factors affecting Cambodia’s trade flows to major 20 trading countries from 1994 to 2004. The analysis employs a gravity model with some modifications. Assuming that other factors are constant, the results indicate that the trade flows significantly depend on the economic sizes of both the exporting and importing countries and Cambodia appears to trade more with neighboring countries. In addition, the tests also detect the significant negative impact of exchange rate volatility on the trade flows as well as aggregate exports; however, there is little evidence that the depreciation of Cambodia’s currency, the riel, affects its exports. Nonetheless, the tests using sub-period samples suggest that the positive impacts of bilateral exchange rate depreciation are found significant in sub-period I (1994-1998), but not in sub-period II (1999-2004). Finally, the paper also shows consistent findings that ASEAN membership play little role in boosting trade flows in the region; however, the results in sub-period II suggest that ASEAN membership helps improve border trade which suffered from Asian financial crisis.Trade flows, gravity model, exchange rate volatility, aggregate exports, bilateral exchange rate depreciation, ASEAN, Asian financial crisis

Policy to promote overseas migrant work: A macro-dynamic framework

Could the policy to promote overseas migrant work be to blame for the sluggish development in some South Asian countries? I employ a macro-dynamic model of two small open economies to examine the policy of the developing, labor-exporting country to promote migrant work in a rich, labor-importing economy. The results from calibration exercises show that remittances received from migrant workers are expansionary through its collateral impact. However, the loss of labor due to the policy hinders capital accumulation in the poor country; as a result, it reduces income in the long run. Welfare, however, increases due to the increase in consumption stimulated by the increase in remittances. The impacts are more pronounced for a poorer country such as Nepal whose remittance receipts amounted to more than 30 percent of GDP

Productivity and market participation: Cambodian rice farmers

Rice is the staple food in many Asian countries. The study attempts to understand the underlying issues of low rice farm productivity and whether progress made on this front will lead to greater market participation. Employing a control function to address the endogeneity issue and using the latest survey of Cambodia’s agriculture sector, the paper finds that rice farmers are more likely to commercialize their crops when productivity rises. The probability rises by about 20 % with a ton increase in rice yields. This has an important implication; policies and reforms targeting farm productivity not only boost rice production, but also promote commercialization and possibly exports. In addition, enhancing productivity hinges, among others, on improvement in general education, expansion of irrigation, and pesticide usage, as well as increased adoption of aromatic paddies, sticky paddies, and modern varieties

Gender Bias and U.S. International Adoptions

An earlier study shows that there are no gender preferences among U.S. adoptive parents of international adoption. Yet, every year the U.S. adopts more girls than boys from various countries in the world. Thus, this paper investigates the effect of gender bias in 178 nations on skewed gender composition of U.S. adoptions over the last decades. Using female to male infant mortality rate as a proxy for postnatal discrimination against daughters, we find that the degree of discrimination in sending countries positively affects the excess of female to male adoptions. A one percentage point increase in the relative mortality rate of female to male infants in a sending country leads to U.S. adoptions of two more girls than boys. In addition, we show that the income of the sending country matters for the impact of gender discrimination on the gender difference of U.S. adoption

Culture and Income across Countries: Evidence from Family Ties,

Purpose – The purpose of the paper is to examine how much difference in income can be explained by familial culture that persists in different societies. Design/methodology/approach – We employ a two-step methodology to evaluate the impact of familial culture on income across countries. In the first step, we construct the macro measures of familial culture from micro survey data. In the second step, the growth model is estimated.Findings – First-step micro regression results show that family is more important to female, richer, highly educated, unemployed and married individuals. Male, poorer, less educated and unemployed individuals are more likely to respect and love parents unconditionally. The same group is also more likely to think that parents must do the best for their kids. Finally, the macro results show that the strength of national familial ties explains significant differences in income across countries. Research limitations/implications – We show that countries with weak family ties are richer than those with strong family ties. These results are useful for policymakers who design public policies that accommodate the type of familial culture that persists in their society. Originality/value – We construct the macro measures of familial culture from the micro survey data. The paper adds to the literature on the effect of culture on income at the macro level

Exchange rate pass-through into Japanese import prices: Evidence at both bilateral and product levels

This study investigates the degree of the exchange rate pass-through to Japanese bilateral import prices at the product level for major Japan\u27s trading partners (US, EU, and Asian NIEs) for a period (1998:1-2010:12) dubbed as Japan\u27s lost decade and marked by a gradual the exchange rate appreciation against the US dollar. By considering both country and product dimensions in a unified framework, this study makes one of the first attempts to analyze the responsiveness of Japanese import prices to exchange rate movement. The empirical analysis suggests a declining exchange rate pass-through to Japanese import prices at the bilateral level in some product categories but increasing in others. However, we find no evidence of the changes in exchange rate pass-through for manufacturing, machinery, and overall product level for each of these partners. Our finding sheds light on the recent decline in exchange rate pass-through to Japanese multilateral import prices and helps calibrate its trade relationship with its partner countries

Exchange Rate Pass-Through into Japanese Import Prices: Evidence at Both Bilateral and Product Levels

This study investigates the degree of the exchange rate pass-through to Japanese bilateral import prices at the product level for major Japan\u27s trading partners (US, EU, and Asian NIEs) for a period (1998:1-2010:12) dubbed as Japan\u27s lost decade and marked by a gradual the exchange rate appreciation against the US dollar. By considering both country and product dimensions in a unified framework, this study makes one of the first attempts to analyze the responsiveness of Japanese import prices to exchange rate movement. The empirical analysis suggests a declining exchange rate pass-through to Japanese import prices at the bilateral level in some product categories but increasing in others. However, we find no evidence of the changes in exchange rate pass-through for manufacturing, machinery, and overall product level for each of these partners. Our finding sheds light on the recent decline in exchange rate pass-through to Japanese multilateral import prices and helps calibrate its trade relationship with its partner countries

WHY DO U.S. PARENTS PREFER PRIVATE TO FOSTER CARE ADOPTIONS? THE ROLE OF ADOPTION SUBSIDIES, GENDER, RACE, AND SPECIAL NEEDS

We analyze the demand behavior of adoptive parents in the U.S.A. For the theory, we apply vertical product differentiation to characterize the demand for domestic private, foster care and international adoptions. Then, we use the 2007 U.S. National Survey of Adoptive Parents and apply the control-function approach to a mixed logit model. We find interesting insights into the relationship between adoption choices and an adoptive parent\u27s preferences over gender, race, and special needs. The government needs to pay an additional $735 ($506) a month to make a parent feel indifferent between international (domestic private) and foster care adoptions