Madina Kukenova

Spatial Dynamic Panel Model and System GMM: A Monte Carlo Investigation

This paper investigates the �finite sample properties of estimators for spatial dynamic panel models in the presence of several endogenous variables. So far, none of the available estimators in spatial econometrics allows considering spatial dynamic models with one or more endogenous variables. We propose to apply system-GMM, since it can correct for the endogeneity of the dependent variable, the spatial lag as well as other potentially endogenous variables using internal and/or external instruments. The Monte-Carlo investigation compares the performance of spatial MLE, spatial dynamic MLE (Elhorst (2005)), spatial dynamic QMLE (Yu et al. (2008)), LSDV, difference-GMM (Arellano & Bond (1991)), as well as extended-GMM (Arellano & Bover (1995), Blundell & Bover (1998)) in terms of bias, root mean squared error and standard-error accuracy. The results suggest that, in order to account for the endogeneity of several covariates, spatial dynamic panel models should be estimated using extended GMM. On a practical ground, this is also important, because system-GMM avoids the inversion of high dimension spatial weights matrices, which can be computationally unfeasible for large N and/or T.

Financial Development and Survival of African Agri-Food Exports

This paper investigates the link between export survival of agri-food products and financial development. It tests the hypothesis that financial development differentially affects the survival of exports across products based on their need of external finance. The authors test whether exports of products that are relatively more reliant on external capital survive longer when initiated in more financially developed countries. The results suggest that agri-food products that require more external finance indeed sustain longer in foreign markets if the exporting country is more financially developed.

OECD Imports: Diversification and Quality Search

This paper explores the evolution of OECD imports over time and as a function of income levels, measuring the concentration of those imports across origin countries at the product level. We find evidence of diversification followed, in the very last years of the sample period (post-2000), by a slight reconcentration. This reconcentration is entirely explained by the growing importance of Chinese products in OECD imports. We also find evidence of relatively more volatile concentration levels for differentiated goods, consistent with a simple model of adverse selection and screening of suppliers by OECD buyers. Finally, we find that “accession” to OECD markets occurs directly (rather than after acquiring prior export experience on other markets) for more than half of the (extra-OECD) exporter/product pairs, but that one to eight years of experience enhances subsequent survival on OECD markets. Exports that reach OECD markets after more than eight years of experience elsewhere tend to survive less.

Financial liberalization and allocative dfficiency of capital

Financial liberalization may have a positive effect on growth not only through the increase in the quantity of the available funds, but also through a more efficient allocation of resources across firms and sectors. Despite this intuitive appeal, there is little empirical evidence on the positive effect of financial liberalization on capital allocation. The main difficulty of investigating the linkage between liberalization of financial markets and capital allocation efficiency lies in the fact that the efficiency of capital allocation is not directly observable. One way to address this issue is to evaluate the effect of financial liberalization within the Heckscher-Ohlin framework. Producing and exporting products inconsistent with a countrys factor endowments constitutes a serious misallocation of the funds, which undermines competitiveness of the economy and inhibits its long run growth. This paper tests the allocative efficiency hypothesis by evaluating the effect of stock market liberalization on the survival of different product categories using export data for 91 countries over the period of 1975-2003. Preliminary results suggest that after liberalization of the domestic stock market, products employing intensively scarce factors exit at a relatively higher rate from a countrys export portfolio. In other words, following liberalization episodes, a country tends to rebalance its export portfolio towards products consistent with its factors endowments.

More than Copper: Toward the Diversification and Stabilization of Zambian Exports

This paper analyzes Zambian export patterns using a new transaction-level trade data set for the period 1999-2011. The data show that, in international comparison, Zambian exports are exceptionally concentrated (on mining products). This reliance has been increasing in recent years. Zambias exports are also characterized by a high level of churning of firms and products. Multivariate models of survival probabilities suggest that exchange rate volatility and difficult access to imported inputs significantly inhibit diversified and stable exports. The econometric analysis is complemented with a qualitative study of the Zambian export sector. The analysis concludes that one of the main policy levers for unleashing Zambias full potential as an exporter is by facilitating access to imported inputs. Additional measures that ease foreign exchange transactions, simplify export and certification requirements, and increase the predictability of Zambias trade regime could be effective to promote Zambias nontraditional exports.

Finance and Export Survival: The Case of MENA Region and Sub-Saharan Africa

The paper looks at unique product-firm data collected by custom authorities in four countries from the Middle East and North Africa (MENA) -- Jordan, Kuwait, Morocco, Yemen as well as in six countries of Sub-Saharan Africa (SSA) -- Ghana, Mali, Malawi, Senegal, Tanzania, Uganda. We use this data to examine the impact of financial development on the long-term success of exports from developing countries. We find that those agricultural exports that face particularly costly implementation of Sanitary and Phytosanitary Standards (SPS) are also the ones that disproportionately benefit from a higher level of domestic financial development. This result confirms the previous findings from a smaller SSA sample (Jaud et al. 2013). It is robustly controlling for heterogeneity at firm and product level as well as for controlling for alternative channels that could shape the relation between finance and international trade in the data.