State ownership, bank loans, and corporate investment

We study the effect of bank loans on Chinese publicly listed firms' investment decisions based on the underinvestment and overinvestment theories of leverage. Evidence from China is of particular importance because China is the world's largest emerging and transitional economy. At first we show that there is a negative relationship between bank loan ratios and investment for Chinese publicly listed firms. And this negative relationship is much stronger for firms with low growth than firms with high growth. Secondly, we find that both short-term and long-term loan ratios are negatively correlated with investment. However, the higher the long-term loan ratios are, the weaker the negative relationship between long-term loan ratios and investment is. Thirdly, firm ownership only matters to the effect of short-term bank loans on investment in our sample. That is, the negative relationship between short-term loan ratios and investment is weaker for SOEs than for non-SOEs. Lastly, we show that the reform of China's banking system in 2003 has not strengthened the negative relationship between bank loans and investment. Our findings suggest that although Chinese state-owned banks are severely intervened by government policies, they still have a disciplining role on firms' investment, especially in firms with low growth.

Seeds of growth? Agricultural productivity and the transitional dynamics of the Ramsey model

A two-sector Ramsey-type model of growth is developed to investigate the relationship between agricultural productivity and economy-wide growth. The framework takes into account the peculiarities of agriculture both in production ( reliance on a fixed natural resource base) and in consumption (life-sustaining role and low income elasticity of food demand). The transitional dynamics of the model establish that when preferences respect Engel's law, the level and growth rate of agricultural productivity influence the speed of capital accumulation. A calibration exercise shows that a small difference in agricultural productivity has drastic implications for the rate and pattern of growth of the economy. Hence, low agricultural productivity can form a bottleneck limiting growth, because high food prices result in a low saving rate.

Money laundering and the shadow economy in Kazakhstan

Purpose The purpose of this paper is to assess and highlight the approach taken towards the legal control of illicit money laundering taken in the Republic of Kazakhstan, in particular, the role played by an amnesty on the legalisation of illicit funds. This is particularly important as a basis for a wider discussion about the proper limits of the “criminalising” approaches commonly taken in anti-money laundering regulations. Design/methodology/approach The discussion and evaluation in the paper is based upon a conceptual analysis of the money laundering regime in Kazakhstan, in particular, the legal framework and policies of implementation adopted. Findings The paper demonstrates that the problems that are posed by the shadow economy in post-Soviet transition societies can make the blanket criminalisation of money laundering a self-defeating approach, unless accompanied by measures which allow for the achievement of “market-constituting” effects. Research limitations/implications The paper draws on experience and practice in one jurisdiction only (Kazakhstan); it also limits its focus to one particular example of a money laundering amnesty policy. Both of these limitations, therefore, suggest avenues for further comparative research. Originality/value The paper’s conclusions about the interactions between the shadow economies of transitional societies and the global anti-money laundering agenda have wider application in assessments of international law in this area.

Nitrogen recycling through the gut and the nitrogen economy of ruminants: An asynchronous symbiosis

The extensive development of the ruminant forestomach sets apart their N economy from that of nonruminants in a number of respects. Extensive pregastric fermentation alters the profile of protein reaching the small intestine, largely through the transformation of nitrogenous compounds into microbial protein. This process is fueled primarily by carbohydrate fermentation and includes extensive recycling of N between the body and gut lumen pools. Nitrogen recycling occurs via blood and gut lumen exchanges of urea and NH3, as well as endogenous gut and secretory N entry into the gut lumen, and the subsequent digestion and absorption of microbial and endogenous protein. Factors controlling urea transfer to the gut from blood, including the contributions of urea transporters, remain equivocal. Ammonia produced by microbial degradation of urea and dietary and endogenous AA is utilized by microbial fermentation or absorbed and primarily converted to urea. Therefore, microbial growth and carbohydrate fermentation affect the extent of NH3 absorption and urea N recycling and excretion. The extensive recycling of N to the rumen represents an evolutionary advantage of the ruminant in terms of absorbable protein supply during periods of dietary protein deficiency, or asynchronous carbohydrate and protein supply, but incurs a cost of greater N intakes, especially in terms of excess N excretion. Efforts to improve the efficiency of N utilization in ruminants by synchronizing fermentable energy and N availability have generally met with limited success with regards to production responses. In contrast, imposing asynchrony through oscillating dietary protein concentration, or infrequent supplementation, surprisingly has not negatively affected production responses unless the frequency of supplementation is less than once every 3 d. In some cases, oscillation of dietary protein concentration has improved N retention compared with animals fed an equal amount of dietary protein on a daily basis. This may reflect benefits of Orn cycle adaptations and sustained recycling of urea to the gut. The microbial symbiosis of the ruminant is inherently adaptable to asynchronous N and energy supply. Recycling of urea to the gut buffers the effect of irregular dietary N supply such that intuitive benefits of rumen synchrony in terms of the efficiency of N utilization are typically not observed in practice.

Shock persistence in a dual economy model of India

This article examines shock persistence in agricultural and industrial output in India. Drawing on the dual economy literature, the linkages between the sectors through the terms of trade are emphasised. However different dual economy models make differing assumptions regarding the categorisation of variables as being either endogenous or exogenous and this distinction is crucial in explaining the pattern of shock persistence. Using annual data for 1955-95, our results show that shocks to both output series are permanent while those to the terms of trade are transient.

Sustaining linguistic diversity within the global cultural economy: issues of language rights and linguistic possibilities

This paper draws on ethnographic case-study research conducted amongst a group of first and second generation immigrant children in six inner-city schools in London. It focuses on language attitudes and language choice in relation to cultural maintenance, on the one hand, and career aspirations on the other. It seeks to provide insight into some of the experiences and dilemmatic choices encountered and negotiations engaged in by transmigratory groups, how they define cultural capital, and the processes through which new meanings are shaped as part of the process of defining a space within the host society. Underlying this discussion is the assumption that alternative cultural spaces in which multiple identities and possibilities can be articulated already exist in the rich texture of everyday life amongst transmigratory groups. The argument that whilst the acquisition of 'world languages' is a key variable in accumulating cultural capital, the maintenance of linguistic diversity retains potent symbolic power in sustaining cohesive identities is a recurring theme.