The Developing Economies

Volume 42, Number 3 (September 2004)

■ The Developing Economies Volume 42, Number 3 (September 2004)
■ B5
■ 105pp
■ September 2004

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PDF files can be viewed for articles that were published by 2005.


Interrelational Income Distribution in Brazil (129KB) / Manfred Lenzen and Roberto Schaeffer

Determinants of Angola's Real Exchange Rate, 1992-2002 (401KB) / Enrique Gelbard and Jun Nagayasu

Ownership and Nonperforming Loans: Evidence from Taiwan's Banks (422KB) / Jin-Li Hu, Yang Li, and Yung-Ho Chiu

Book Reviews


Jorge Chami Batista, "Latin American Export Specialization in Resource-Based Products: Implications for Growth," pp. 337-70.

Given Latin America's general specialization in resource-based products, this paper focuses on the question of whether or not a country specialized in resource-based products can have high rates of export and economic growth. To examine this question, an attempt is made to develop and apply a new taxonomy to a sample of resource-based products exported by Latin American countries to the United States. This taxonomy is based on the role played by prices in the mechanism through which countries compete in specific international product markets. Resource-based products are then classified as homogeneous, differentiated, or highly differentiated goods. The paper argues that exports of countries specialized in differentiated or highly differentiated goods tend to be much more dynamic than of those specialized in homogeneous goods.

Manfred Lenzen and Roberto Schaeffer, "Interrelational Income Distribution in Brazil," pp. 371-91.

We extend Miyazawa and Masegi's original idea of disaggregated interrelational income multipliers with regard to three aspects. First, we examine the effect of system closure on the inter-income-group matrix. Second, we formally include inter-household transactions, or the informal economy, into Miyazawa's calculus. Third, we extend the interrelational multiplier to environmental factors. These extensions are applied to the Brazilian economy of 1995. Multiplier matrices excluding and including the informal economy are presented and interpreted, and the redistributive process of transfer payments is traced through consecutive spending rounds for various scenarios. Finally, these redistributive processes are enumerated in terms of transport fuel and electricity use. Our results indicate that, because of the distribution of ownership of productive capital, the income formation process is heavily skewed toward the highest incomes. Whether the existing process and potential redistributive policies alleviate environmental pressure depends on the factors as well as the population segment appraised.

Enrique Gelbard and Jun Nagayasu, "Determinants of Angola's Real Exchange Rate, 1992-2002," pp. 392-404.

This paper estimates Angola's equilibrium parallel market real exchange rate, during the period 1992-2002, taking into account possible structural shifts in the data. Our results fail to support the purchasing power parity hypothesis and indicate that two exogenous variables-the price of oil and the foreign interest rate-explain most of the variation in the equilibrium real exchange rate. These results contrast with the tenet that the exchange rate is mainly influenced by rapid monetary growth, and we suggest that the current flexible exchange rate regime is likely to be more appropriate for Angola than a fixed exchange rate regime.

Jin-Li Hu, Yang Li, and Yung-Ho Chiu, "Ownership and Nonperforming Loans: Evidence from Taiwan's Banks," pp. 405-20.

We first derive a theoretical model to predict that the relation between nonperforming loan ratios and government shareholdings can be downward-sloping, upward-sloping, U-shaped, and inversely U-shaped. An increase in the government's shareholding facilitates political lobbying. On the other hand, private shareholding induces more nonperforming loans (NPLs) to be manipulated by corrupt private owners. We adopt a panel data set of 40 Taiwanese commercial banks during 1996-99 for empirical analysis. The results show that the rate of NPLs decreased as the ratio of government shareholding in a bank rose (up to 63.51 percent), while the rate thereafter increased. Bank size was negatively related to the rate of NPLs. Rates of NPLs are shown to have steadily increased from 1996 to 1999. Banks established after deregulation, on average, had a lower rate of NPLs than those established before deregulation.

Maho Shiraishi and Go Yano, "Efficiency of Chinese Township and Village Enterprises in the 1990s Based on Micro Data for Wuxi City, 1991-97," pp. 421-52

We examine the (technical) efficiency of collective-owned township and village enterprises (COTVEs) in Wuxi City, China, after 1990 to study whether the acknowledged success of township and village enterprises continued in the late 1990s. Our results suggest that COTVEs did not decline in relative efficiency compared with other types of enterprises in the late 1990s, but that their productivity leveled off or declined. Furthermore, we find that COTVEs faced with a more serious shortage of working capital had a lower efficiency after the mid-1990s recession. These findings cast doubt on the view that the vaguely specified property rights of COTVEs are responsible for their declining performance problems during the period just before 1998 when massive privatization began. Privatization of COTVEs without other macroeconomic policy changes may now be insufficient to cope effectively with their declining productivity.