dunnettreader + smes   28

Mary Hallward-Driemeier and Lant Pritchett - How Business Is Done in the Developing World: Deals versus Rules(2015) | AEAweb: Journal of Economic Perspectives, 29(3): 121-40
Affiliations World Bank and Harvard - What happens in the developing world when stringent regulations characterizing the investment climate meet weak government willingness or capability to enforce those regulations? How is business actually done? The Doing Business project surveys experts concerning the legally required time and costs of regulatory compliance for various aspects of private enterprise—starting a firm, dealing with construction permits, trading across borders, paying taxes, getting credit, enforcing contracts, and so on—around the world. The World Bank's firm-level Enterprise Surveys around the world ask managers at a wide array of firms about their business, including questions about how long it took to go through various processes like obtaining an operating license or a construction permit, or bringing in imports. This paper compares the results of three broadly comparable indicators from the Doing Business and Enterprise Surveys. Overall, we find that the estimate of legally required time for firms to complete a certain legal and regulatory process provided by the Doing Business survey does not summarize even modestly well the experience of firms as reported by the Enterprise Surveys. When strict de jure regulation and high rates of taxation meet weak governmental capabilities for implementation and enforcement, we argue that researchers and policymakers should stop thinking about regulations as creating "rules" to be followed, but rather as creating a space in which "deals" of various kinds are possible. -- downloaded pdf to Note
article  development  institutional_economics  institutional_capacity  regulation  regulation-enforcement  regulation-costs  SMEs  World_Bank  doing_business  business_practices  business-norms  business_influence  investment  business-and-politics  business-ethics  FDI  investor_protection  downloaded 
september 2015 by dunnettreader
Timothy Besley - Law, Regulation, and the Business Climate: The Nature and Influence of the World Bank Doing Business Project (2015) | AEAweb: Journal of Economic Perspectives, 29(3): 99-120
Affiliation LSE - The importance of a well-functioning legal and regulatory system in creating an effective market economy is now widely accepted. One flagship project that tries to measure the environment in which businesses operate in countries across the world is the World Bank's Doing Business project, which was launched in 2002. This project gathers quantitative data to compare regulations faced by small and medium-size enterprises across economies and over time. The centerpiece of the project is the annual Doing Business report. It was first published in 2003 with five sets of indicators for 133 economies, and currently includes 11 sets of indicators for 189 economies. The report includes a table that ranks each country in the world according to its scores across the indicators. The Doing Business project has become a major resource for academics, journalists, and policymakers. The project also enjoys a high public profile with close to ten million hits on its website each year. With such interest, it's no surprise that the Doing Business report has come under intense scrutiny. In 2012, following discussions by its board, the World Bank commissioned an independent review panel to evaluate the project, on which I served as a member. In this paper, I first describe how the Doing Business project works and illustrate with some of the key findings of the 2015 report. Next, I address what is valuable about the project, the criticisms of it, and some wider political economy issues illustrated by the report. -- downloaded pdf to Note
article  institutional_economics  World_Bank  development  SMEs  doing_business  FDI  investment  investor_protection  downloaded 
september 2015 by dunnettreader
Montfort Mlachila, René Tapsoba, and Sampawende Tapsoba - A Quest for Quality [of economic growth] -- Finance & Development, June 2015, Vol. 52, No. 2
Despite consensus in the economics profession that growth alone does not lead to better social outcomes (Ianchovichina and Gable, 2012), quality growth still lacks a rigorous definition or formal quantification. In a recent paper, we develop a quality of growth index (QGI) that captures both the intrinsic nature of growth and its social dimension. Our premise is that not all growth produces favorable social outcomes. How growth is generated is critical to its sustainability and ability to create decent jobs, enhance living standards, and reduce poverty. We aim in our design of the QGI to capture these multidimensional features of growth by focusing on its very nature and desired social outcomes. -- in F&D issue downloaded as pdf to Note
article  development  economic_growth  political_economy  LDCs  emerging_markets  GDP  GDP-alternatives  inequality  participation-economic  inclusion  marginalized_groups  access_to_services  access_to_finance  SMEs  micro-enterprises  Innovation  innovation-government_policy  rent-seeking  informal_sectors  living_standards  poverty  health_care  education  sustainability  unemployment  common_good  statistics  economic_policy  economic_sociology  economic_reform  downloaded 
july 2015 by dunnettreader
Michael Minnis, Andrew G. Sutherland - Financial Statements as Monitoring Mechanisms: Evidence from Small Commercial Loans :: SSRN February 1, 2015
Both at University of Chicago - Booth School of Business -- We examine when banks use financial statements to monitor small commercial firms. Theoretical research offers competing predictions surrounding the use of financial statements as a monitoring device in such settings where reporting between firms and banks is not mandated. Using a proprietary dataset of bank information requests after loan initiation, we examine these predictions and find that financial statements are requested for only half of the loans in the sample. This variation is mediated by borrower credit risk, contracting mechanisms, such as collateral, and alternative information sources, such as tax returns. However, the relations we identify are not straightforward — the relation between borrower risk and financial statement requests is nonlinear and financial statements can be both substitutes and complements to the alternative mechanisms. Collectively, our results provide novel evidence of the fundamental demand for financial reporting in the small commercial loan market and the manner in which banks fulfill their role as delegated monitors. -- PDF File: 50 -- Keywords: loan monitoring, financial contracting, collateral, debt, relationship lending, taxes -- saved to briefcase
paper  SSRN  banking  SMEs  access_to_finance  credit  collateral  relationship_lending  intermediation  risk_management  risk_assessment  accounting  disclosure  credit_ratings 
july 2015 by dunnettreader
Ravi Kanbur, Michael Keen - Rethinking informality | VOX, CEPR’s Policy Portal - 05 June 2015
The ‘informal’ economy presents a key challenge for developing-nation policymakers due to its labour-market and tax-revenue implications. Informality is usually defined as the complement to formality, i.e. any activity that isn’t covered by a clear set of laws. This column argues that such a definition risks obscuring more than it reveals, by failing to understand and address the varieties of informality that exist. Sensible policy should focus on tailored interventions across different categories of taxpayer, not on reducing aggregate informality. -- nice way of looking at policy objectives - it's not just revenue collection, there's interactions with other types of regulation - they highlight labor laws, but lots of the "doing business" projects uncover many other regulatory compliance issues in developing countries that would interact as well
Instapaper  paper  development  regulation  regulation-enforcement  regulation-costs  informal_sectors  Labor_markets  labor_law  labor_standards  tax_policy  tax_collection  SMEs  micro-enterprises  doing_business 
june 2015 by dunnettreader
Niel Jay et al - Financial markets imperfections and the SME investment dearth | VOX, CEPR’s Policy Portal - 29 June 2014
Do all firms have equal access to external financing? -- Neil Kay, Gavin Murphy, Conor O'Toole, Iulia Siedschlag, Brian O'Connell -- Small and medium-size enterprises (SMEs) often report difficulties in obtaining external finance. Based on new research, this column argues that these difficulties are not due to greater financial risks associated with SMEs. Instead, they are the result of imperfections in the market for external finance that negatively affect smaller and younger enterprises. The same research has shown that these types of firms are also the most reliant on external finance to support their investment and growth. -- they had srats on firm-level performance that allowed them, after pulling out country-level differences in economic conditions, to compare access to finance by similarly successful enterprises, differentiated by size -- as expected, the SMEs had a harder time accessing credit (as well as equity, which is a harder problem to fix given information, transaction and liquidity costs that aren't size-invariant are worse for equity) .
SMEs  Europe  EU  financial_system  banking  credit  access_to_finance  investment 
may 2015 by dunnettreader
Thorsten Beck, Ralph De Haas, Steven Ongena - Understanding Emerging Market Banks: A new eBook | VOX, CEPR’s Policy Portal - 06 November 2013
New micro-level data sets allow better testing of existing and new hypotheses on how banks operate in the often challenging environment of emerging markets. This column introduces an eBook that reports on the findings of a recent conference in London on using different research methodologies and data sources in banking research the way towards an exciting research agenda. The papers presented in the conference and summarised in this eBook point *-* First, more detailed micro-level data help researchers and practitioners understand the impact of innovative products, lending techniques, and delivery channels. *-* Second, micro-level data allow a more careful analysis of the impact of specific financial-sector policies on banks and customers. *'* Third, the data opens the important area of how demand- and supply-side constraints on entrepreneurs affect access to external finance. Applying lessons from behavioural economics will be critical in the third point. -- didn't download
etexts  financial_economics  banking  microfinance  emerging_markets  financial_innovation  property_rights  rule_of_law  accounting  methodology-quantitative  methodology-qualitative  SMEs  investment  entrepreneurs  access_to_finance  access_to_services  behavioral_economics 
may 2015 by dunnettreader
Thorsten Beck, Asli Demirgüç-Kunt, Maria Soledad Martinez Peria - Foreign banks and small and medium enterprises: Are they really estranged? | VOX, CEPR’s Policy Portal - 01 April 2010
Small and medium enterprises are engines of economic growth. But what kind of market structure is more conducive to financing these enterprises? This column argues that different types of bank, applying different types of lending technology and organisational structures can all play a vital role in financing them. They're working with a big data set they developed -- shows quite different lending technologies as between foreign and domestic, but similar outcomes in volume of lending, conditions, pricing etc. The big differences are cross couhtry, where thoorer, less developed suffer from less access to credit for investment, higher pricing, etc -- which reflects overall economic conditions and business environment. -- nice use of data -- downloaded page as pdf to Note
financial_system  development  emerging_markets  LDCs  SMEs  access_to_finance  banking  financial_instiutions  cross-border  firms-structure  firms-organization  credit_ratings  financial_sector_development  financial_innovation  investment  collateral  downloaded 
may 2015 by dunnettreader
Russell J. Lundholm, George Serafeim, Gwen Yu - FIN Around the World: The Contribution of Financing Activity to Profitability - July 1, 2012 :: SSRN
Russell J. Lundholm, University of British Columbia - Sauder School of Business -- George Serafeim ,Harvard University - Harvard Business School -- Gwen Yu, Harvard Business School -- Harvard Business School Accounting & Management Unit Working Paper No. 2113557 -- We study how the availability of domestic credit influences the contribution that financing activities make to a firm’s return on equity (ROE). Using a sample of 51,866 firms from 69 countries, we find that financing activities contribute more to a firm’s ROE in countries with higher domestic credit. The higher contribution of financing activities is not driven by firms taking greater leverage in these countries, but by firms realizing a higher spread (i.e., a greater difference in operating performance and borrowing cost) when more domestic credit is available. Also, we find that firms partially substitute trade credit for financial credit, with large firms exhibiting the greatest rate of substitution. For small firms, the rate of substitution improves with the country’s available domestic credit, while large firms are insensitive to this friction. The findings suggest that both country and firm-level factors have a significant impact on how financing activities contribute to corporate performance. -- Pages in PDF File: 51 -- Keywords: Domestic Credit, Financial Statement Analysis, Return on Equity, Corporate Performance -- didn't download
paper  SSRN  corporate_finance  profit  interest_rates  financial_sector_development  credit  SMEs  financial_access  trade_finance  leverage  shareholder_value 
april 2015 by dunnettreader
Geoffrey Jones - Entrepreneurs, Firms and Global Wealth Since 1850 - March 2013 | SSRN
Modern economic growth diffused from its origins in the North Sea region to elsewhere in western and northern Europe, across the Atlantic, and later to Japan, but struggled to get traction elsewhere. The societal and cultural embeddedness of the new technologies posed significant entrepreneurial challenges. The best equipped to overcome these challenges were often entrepreneurs based in minorities who held significant advantages in capital-raising and trust levels. By the interwar years productive modern business enterprise was emerging across the non-Western world. Often local and Western managerial practices were combined to produce hybrid forms of business enterprise. After 1945 many governmental policies designed to facilitate catch-up ended up crippling these emergent business enterprises without putting effective alternatives in place. The second global economy has provided more opportunities for catch up from the Rest, and has seen the rapid growth of globally competitive businesses in Asia, Latin America and Africa. This is explained not only by institutional reforms, but by new ways for business in the Rest to access knowledge and capital, including returning diaspora, business schools and management consultancies. Smarter state capitalism was also a greater source of international competitive advantage than the state intervention often seen in the past. -- downloaded pdf to Note
economic_history  development  industrialization  institutional_economics  19thC  20thC  21stC  post-WWII  competition-interstate  globalization  industrial_policy  emtrepreneurs  diaspora  SMEs  technology_transfer  trust  access_to_finance  modernization_theory  business_history  firms-organization  downloaded  SSRN  Industrial_Revolution 
april 2015 by dunnettreader
Rajiv Sethi: Perspectives on Exchange-Traded Funds - December 2010
Are ETFs good or bad for the market? That was the title of a lively and interesting session at Markets Media's third annual Global Markets Summit last Thursday. The session was organized as an old-fashioned debate between two teams. On one side were David Weild and Harold Bradley (joined later by Robert Litan on video), who argued that heavily traded funds composed of relatively illiquid small-cap stocks were responsible, in part, for the sharp decline in initial public offerings over the past decade, with devastating consequences for capital formation and job creation. Responding to these claims were Bruce Lavine, Adam Patti and Robert Holderith, all representing major sponsors of funds (WisdomTree, IndexIQ and EGShares respectively). The sponsors argued that they are marketing a product that is vastly superior to the traditional open-end fund, provides investors with significant liquidity, transparency and tax advantages, and is rapidly gaining market share precisely because of these benefits. From their perspective, it makes as little sense to blame exchange-traded funds for declining initial public offerings and the sluggish rate of job creation as it does to blame them for hurricanes or influenza epidemics. -- quite interesting discussion especially in comments -- brings in the issue of HFT as well -- liquidity (a mirage), correlation among stocks that looks excessive, reducing ability to diversify, insufficient diversity of trading strategies, disappearance(?) of market makers, general issues re indexing, benchmarkings, small caps markets too thin to support research, information arbitrage to improve valuations etc
capital_markets  markets-structure  liquidity  IPOs  capital_formation  HFT  NBFI  ETFs  institutional_investors  indexing  SMEs 
march 2015 by dunnettreader
Special Issue: Microfinance -- AEAweb: American Economic Journal: Applied Economics Vol. 7 No.1, Jan 2015
Abstract of introductory article -- Causal evidence on microcredit impacts informs theory, practice, and debates about its effectiveness as a development tool. The six randomized evaluations in this volume use a variety of sampling, data collection, experimental design, and econometric strategies to identify causal effects of expanded access to microcredit on borrowers and/or communities. These methods are deployed across an impressive range of locations—six countries on four continents, urban and rural areas—borrower characteristics, loan characteristics, and lender characteristics. Summarizing and interpreting results across studies, we note a consistent pattern of modestly positive, but not transformative, effects. We also discuss directions for future research. -- broad conclusion to be expected contra the hype -- but focus still seems to be on *credit* (with assumptions re micro and SME entrepreneurs and business formation) rather than access to services -- also question whether the former Yugoslavia study really dealt with "micro", likely the sort of labeling of SMEs as micro like Aftab's programs
journals-academic  article  paywall  microfinance  access_to_finance  development  economic_growth  economic_sociology  development-impact  RCT  econometrics  causation  causation-social  financial_sector_development  financial_economics  financial_access  institutional_economics  banking  credit  financial_innovation  SMEs  access_to_services  EF-add 
january 2015 by dunnettreader
Bill Gale and David John - Retirement Security a Priority in the 2015 State of the Union | Brookings Institution - Jan 2015
In the 2015 State of the Union Address, President Obama made retirement security a priority for his Administration by promoting the Automatic IRA, a retirement savings plan that originated at the Retirement Security Project. The proposals would increase the ability of part-time workers to join their employer’s plan and improve tax incentives for businesses that either start an Automatic IRA or other type of retirement plan or add automatic enrollment to an existing plan
Obama_administration  tax_policy  retirement  savings  middle_class  SMEs  labor_standards 
january 2015 by dunnettreader
Secured Transactions Reform in the Anericas | Institute of the Americas
Diwnloaded to iPhone report of conference co-sponsored by Institute of the Americas and IFC in 2013 -- url is for general page dealing with STR program -- Secured Transactions Reform in Latin America and the Caribbean 2013 - What is one of the single largest barriers to growth for SMEs in the developing world? The lack of access to finance at reasonable rates in the formal banking market. Access to credit promotes productive capacity, competitiveness, job creation and ultimately poverty alleviation
website  paper  downloaded  financial_innovation  access_to_finance  financial_sector_development  Latin_America  SMEs  securitization  banking  legal_system  reform-legal  credit  collateral 
january 2015 by dunnettreader
Oct 2014 - OECD - Heads of Tax Administration agree global actions | Tax administration - OECD
24/10/2014 - The OECD/G20 Base Erosion and Profit Shifting (BEPS) Project and the move to automatic exchange of financial account information took centre stage when Heads of Tax Administration met on 23-24 October in Dublin, Ireland. Nearly forty delegations, including international and regional tax organisations, participated in the Ninth Meeting of the OECD Forum on Tax Administration (FTA) and agreed that ever greater co-operation will be necessary to implement the results of the BEPS project and automatic exchange of information. Specifically they agreed: ** A strategy for systematic and enhanced co-operation between tax administrations; ** To invest the resources needed to implement the new standard on automatic exchange of information; and ** To improve the practical operation of the mutual agreement process. The communiqué contains links to the following publications that have just been released by the FTA: ** Increasing Taxpayers’ Use of Self-service Channels ** Working Smarter in Tax Debt Management ** Tax Compliance by Design – Achieving improved SME Tax Compliance by Adopting a System Perspective ** Measures of Tax Compliance Outcomes – A Practical Guide -- The FTA is the leading international body concerned with tax administration, bringing together the heads of tax administrations from the OECD, members of the G20 and large emerging economies.
OECD_economies  emerging_markets  OECD  G20  BEPS  international_political_economy  global_governance  taxes  tax_havens  tax_collection  MNCs  SMEs  fiscal_policy  sovereign_debt  public_finance  regulation-harmonization  regulation-enforcement  regulation-costs  transparency  cross-border  governments-information_sharing  government_finance  government_agencies  administrative_law 
november 2014 by dunnettreader
Oct 2014 - Tax Compliance by Design: Achieving Improved SME Tax Compliance by Adopting a System Perspective Tax administration - OECD
This study introduces the concept of “Tax Compliance by design”. It describes how revenue bodies can exploit developments in technology and the ways in which modern SMEs organise themselves to incorporate tax compliance into the systems businesses use to manage their financial affairs. - Report can be read online or downloaded for $
OECD  OECD_economies  taxes  tax_collection  SMEs  business_processes  accounting  regulation-costs  regulation-enforcement 
november 2014 by dunnettreader
Guonan Ma - Tweaking China’s loan-deposit ratio rule | Bruegel.org - 3 September 2014
Article highlights the need to revamp the country’s outdated banking regulatory framework ahead of full interest rate liberalisation -- In the wake of the latest easing of Chinese monetary policy, the CBRC, China’s banking regulator, has recently modified a few details of how it calculates the bank loan/deposit ratio, which is currently capped at 75 percent by the country’s banking law. This move, in combination with an easier monetary policy stance, aims to ease the tight Chinese financial conditions, allocate more credit to Chinese agriculture and SMEs, and adapt China to its rapidly changing financial landscape. The newly announced changes to the computation formula of the loan/deposit ratio fall into three categories, all in an apparent attempt to make the 75% cap less of a constraint on bank lending. -- comments on perverse incentives for big banks lending to large enterprises (probably continued issues around reducing state-owned enterprises)
China  banking  NBFI  shadow_banking  SMEs  financial_regulation  concentration-industry  competition-financial_sector  financial_sector_development 
september 2014 by dunnettreader
Franco Fiordelisi, Davide Salvatore Mare - Competition and financial stability in European cooperative banks | Journal of International Money and Finance, July 2014, Vol.45:1–16 — ScienceDirect
doi:10.1016/j.jimonfin.2014.02.008 Highlights • We investigate competition and financial stability in European cooperative banks. • We assess the dynamic relationship both in the short and long run. • Higher competition increases bank stability. • No impact of the recent financial crisis on the competition and stability link. • Herding behaviour affects positively bank stability. **--** Cooperative banks are a driving force for socially committed business at the local level, accounting for around one fifth of the European Union (EU) bank deposits and loans. Despite their importance, little is known about the relationship between bank stability and competition for these small credit institutions. Does competition affect the stability of cooperative banks? Does the financial stability of banks increase/decrease when competition is higher? We assess the dynamic relationship between competition and bank soundness (both in the short and long run) among European cooperative banks between 1998 and 2009. We obtain three main results. First, we provide evidence in line with the competition-stability view proposed by Boyd and De Nicolò (2005). Bank market power negatively “Granger-causes” banks' soundness, meaning that there is a positive relationship between competition and stability. Second, we find that this fundamental relationship does not change during the 2007–2009 financial crisis. Third, we show that increased homogeneity in the cooperative banking sector positively affects bank soundness. Our findings have important policy implications for designing and implementing regulations that enhance the overall stability of the financial system and in particular of the cooperative banking sector.
paper  paywall  financial_economics  financial_sector_development  financial_system  competition  banking  SMEs  Eurozone  financial_regulation 
september 2014 by dunnettreader
The Reshoring Initiative Blog: The Reshoring Initiative's Recommendations for the Federal Government
The economic bleeding due to increasing offshoring has stopped. The rate of new reshoring is now equal to the rate of new offshoring. The challenge is now to reshore the 3 to 4 million manufacturing jobs that are still offshored. Recent reshoring announcements and successes by Apple, Caterpillar and GE and analysis of the economics of reshoring suggest that we could raise the net reshoring rate from the current zero jobs/year to 50,000. For the U.S. to achieve its full reshoring potential requires a continuation of offshore cost trends, improvement in U.S. competitiveness and changes in companies’ sourcing decision metrics. The U.S. government can influence all of these factors with minimal expenditure -- most recommendations for Dept of Commerce, especially integrating their reshoring tools and materials in their programs - also some Dept of Education extending encouragement of community college training initiatives - extend use of tool for calculating full costs of off-shoring as e.g. condition of federal contracts -- big issue currency manipulation by e.g. China at end of list is different in kind from the sorts of reorientation or extension of government programs or public-private_partnerships
US_government  US_economy  manufacturing  Labor_markets  exports  off-shoring  business  SMEs  unemployment 
august 2014 by dunnettreader
About MEP
The National Institute of Standards and Technology’s Hollings Manufacturing Extension Partnership (MEP) works with small and medium-sized manufacturers to help them create and retain jobs, increase profits, and save time and money. The nationwide network provides a variety of services, from innovation strategies to process improvements to green manufacturing. MEP also works with partners at the state and federal levels on programs that put manufacturers in position to develop new customers, expand into new markets and create new products. As a program of the Dept of Commerce, MEP is a nationwide network of more than 1,200 technical experts, - located in every state - serving as trusted business advisors, focused on transforming U.S. manufacturers to compete globally, support supply chain integration, and provide access to technology for improved productivity. MEP is built around manufacturing extension centers locally positioned throughout 50 states and Puerto Rico. MEP Centers are a diverse network of state, university-based, and non-profit organizations, offering products and services that address the critical needs of their local manufacturers. Each center works directly with area manufacturers to provide expertise and services tailored to their most critical needs, ranging from process improvement and workforce development to business practices and technology transfer. Additionally centers connect manufacturers with government and trade associations, universities and research laboratories, and a host of other public and private resources to help them realize individual goals.
US_government  business  SMEs  Innovation  exports  technical_assistance  productivity  manufacturing  technology_transfer  public-private_partnerships  nonprofit  supply_chains  education-training 
august 2014 by dunnettreader
JW Mason - The Slack Wire: Wealth Distribution and the Puzzle of Germany - April 2014
In other words, one reason household wealth is low in Germany is because German households exercise their claims on the business sector not via financial assets, but as workers. -- It’s not a coincidence that Europe’s dominant economy has the least market wealth. The truth is, success in the world market has depended for a long time now on limiting dependence on asset markets, just as the most successful competitors within national economies are the giant corporations that suppress the market mechanism internally. Germany, as with late industrializers like Japan, Korea, and now China, has succeeded largely by ensuring that investment is not guided by market signals, but through active planning by banks and/or the state. There’s nothing new in the fact that greater real wealth in the sense of productive capacity goes hand hand with less wealth in the sense of claims on the social product capitalized into assets. Only in the poorest and most backward countries does a significant fraction of the claims of working people on the product take the form of asset ownership. The world of small farmers and self-employed artisans isn’t one we can, or should, return to. Perhaps the world of homeowners managing their own retirement savings isn’t one we can, or should, preserve.
economic_history  economic_growth  political_economy  20thC  21stC  development  wealth  inequality  investment  capital_markets  labor  wages  profit  SMEs  Germany  EU  corporate_governance  corporate_finance  working_class  EF-add 
may 2014 by dunnettreader
Irene van Staveren and Peter Knorringa - Unpacking Social Capital in Economic Development: How Social Relations Matter | JSTOR: Review of Social Economy, Vol. 65, No. 1 (MARCH 2007), pp. 107-135
Social capital is a contested concept, embraced by the mainstream as "the missing link" in economic analysis. This article suggests a way to turn it into a more meaningful understanding of how social relations matter in the economy. It will do so by unpacking the concept into various elements, distinguishing what social relations are from what they do, and by recognizing power in social relationships. We will illustrate our alternative approach with two case studies on the Small and Medium scale Enterprises (SME) footwear sector in Ethiopia and Vietnam. We conclude with suggestions on how this more contextual approach to the understanding of the economic influences of social relations may contribute to social economics. -- good bibliography -- didn't download
article  jstor  economic_history  social_history  social_theory  economic_sociology  economic_culture  social_capital  SMEs  development  bibliography  EF-add 
january 2014 by dunnettreader
Frances Coppola - Zombie alert! | Pieria Dec 2013
There is a prevalent view that part of the reason for the UK’s slow recovery and poor productivity is the existence of large numbers of companies that should have died in the recession. “Zombie firms in danger of strangling the economy”, screams one newspaper headline. And another warns of the “Zombie businesses spreading like a virus”..... Papworth expresses some puzzlement that the rate of corporate insolvency appears low. His puzzlement is understandable. It is not low. He is looking at the wrong data. And because of this, the rest of the paper is seriously flawed. I am not going to argue with his use of Austrian business cycle theory, or Schumpeter’s theory of “creative destruction”. But since he is using the wrong data, he has not put together a convincing case for the existence of the zombies he says need to be cleared out....... Also, because it is widely believed that zombies are kept alive not just by low interest rates, but by damaged banks unable to take losses, there are calls for banks to “end forbearance” even if it means they fail themselves. This is madness. Every bank and building society in the UK has corporate debt on its books, and almost every bank and building society in the UK has a damaged balance sheet which could not cope with large amounts of insolvencies. So banks cannot “end forbearance”. Nor do we wish them to do so. Widespread losses across the entire UK banking sector would catapult the UK back into deep recession. I am no fan of damaged banks – indeed I have called for them to be bypassed so that the UK economy can get the credit it desperately needs. But that doesn’t mean that it would be sensible to bankrupt them all.

So it seems there is little evidence for the existence of zombie companies. But there is considerable evidence for the existence of zombie banks. Indeed the very term “zombie” was originally used about banks. During the American Savings & Loan Crisis of the 1980s & 90s,
UK_economy  banking  credit  SMEs  debt  creative_destruction  interest_rates  leverage  risk  bankruptcy 
december 2013 by dunnettreader
Simon Wren-Lewis - mainly macro: UK banks and the productivity puzzle: it may not just be about limited lending
However there may be another process behind the UK's productivity puzzle that has to do with banks, but not the volume of bank lending. About a third of bank lending to SMEs is accounted for by one bank: the Royal Bank of Scotland. (At the time of the financial crisis its market share was 40%: see the Independent Lending Review commissioned by RBS, page 25.) It has become increasingly clear that the RBS has been a seriously mismanaged bank. At the end of 2011 the Financial Services Authority issued a report which was extremely critical of the quality of management at RBS. Part of that poor management included a huge expansion in property based loans before the financial crisis. When those loans went bad, it was many of their SME customers who took the hit, according to a report just issued by Lawrence Tomlinson, the "entrepreneur in residence" at the Business, Innovation and Skills Department. Among other things the report alleges that RBS has been forcing viable businesses with short-term cash flow problems into its corporate restructuring arm with the aim of forcing foreclosure and then making a profit from selling off property assets.. ... Hamish McRae argues that gradually this ‘duty of care’ that banks once had with their customers has been replaced by a desire to flog products. And as the PPI scandal illustrates, banks seem not to worry about whether their customers need these products, as long as the sale is made. In terms of SMEs, some of the major damage may have been done by interest rate swaps: often complex hedging products which buyers may have not understood, or may have been missold. RBS appears to be heavily exposed to compensation claims involving these products.
UK_economy  banking  financialization  financial_regulation  SMEs  productivity 
december 2013 by dunnettreader
PayPal who? Dwolla is the most daring digital payment startup you've never heard of | The Verge
"Dwolla is a fascinating company, because they are trying to build a whole new set of rails for moving money," says Mark Egerman, who ran the mobile payments division at the Consumer Financial Protection Bureau. "The ACH system is completely broken, and it's amazing to watch someone take that on." Working at the CFPB, Egerman saw firsthand how hard merchants were hit by the credit card system. "Restaurants were losing huge amounts of money and having to wait weeks to get their funds. Whoever can solve that problem will have a huge impact and a huge business"

But while Egerman is excited about Dwolla's mission, he remains skeptical about their chances. "In order for it to be really useful you need a ton of supply and demand. They are trying to build a two-sided market, and that is very tough, because you can't attract one without the other. It's a chicken and egg problem."
financial_system  banking  tech  consumers  SMEs 
november 2013 by dunnettreader
Stiglitz: 6 Lessons of the Credit Crisis | The Big Picture
17 min video from YouTube plus a list of Stiglitz references (books and papers) and a summary of main points. Range from loss of notion of just what financial system is supposed to be good for (hint, should include funneling credit to SMEs and entrepreneurs); finance and credit missing from macroeconomics; credit is more important than "money" for practical and theoretical applications, including understanding and managing financial crises; term structure as important as short term interest rates and should be incorporated into goals and tools of central banks.
financial_system  financial_crisis  financialization  capital_markets  banking  SMEs  macroeconomics  monetary_policy  central_banks  video  EF-add 
august 2013 by dunnettreader

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