Financial Markets and Real Ecinomy: Four Essays in International Trade

Financial markets play an important role in an economy performing various functions like mobilizing and pooling savings, producing information about investment opportunities, screening and monitoring investments, implementation of corporate governance, diversification and management of risk. These functions influence saving rates, investment decisions, technological innovation and, therefore, have important implications for welfare. In my PhD dissertation I examine the interplay of financial and product markets by looking at different channels through which financial markets may influence an economy.My dissertation consists of four chapters. The first chapter is a co-authored work with Martin Strieborny, a PhD student from the University of Lausanne. The second chapter is a co-authored work with Melise Jaud, a PhD student from the Paris School of Economics. The third chapter is co-authored with both Melise Jaud and Martin Strieborny. The last chapter of my PhD dissertation is a single author paper.Chapter 1 of my PhD thesis analyzes the effect of financial development on growth of contract intensive industries. These industries intensively use intermediate inputs that neither can be sold on organized exchange, nor are reference-priced (Levchenko, 2007; Nunn, 2007). A typical example of a contract intensive industry would be an industry where an upstream supplier has to make investments in order to customize a product for needs of a downstream buyer. After the investment is made and the product is adjusted, the buyer may refuse to meet a commitment and trigger ex post renegotiation. Since the product is customized to the buyer's needs, the supplier cannot sell the product to a different buyer at the original price. This is referred in the literature as the holdup problem. As a consequence, the individually rational suppliers will underinvest into relationship-specific assets, hurting the downstream firms with negative consequences for aggregate growth. The standard way to mitigate the hold up problem is to write a binding contract and to rely on the legal enforcement by the state. However, even the most effective contract enforcement might fail to protect the supplier in tough times when the buyer lacks a reliable source of external financing. This suggests the potential role of financial intermediaries, banks in particular, in mitigating the incomplete contract problem. First, financial products like letters of credit and letters of guarantee can substantially decrease a risk and transaction costs of parties. Second, a bank loan can serve as a signal about a buyer's true financial situation, an upstream firm will be more willing undertake relationship-specific investment knowing that the business partner is creditworthy and will abstain from myopic behavior (Fama, 1985; von Thadden, 1995). Therefore, a well-developed financial (especially banking) system should disproportionately benefit contract intensive industries.The empirical test confirms this hypothesis. Indeed, contract intensive industries seem to grow faster in countries with a well developed financial system. Furthermore, this effect comes from a more developed banking sector rather than from a deeper stock market. These results are reaffirmed examining the effect of US bank deregulation on the growth of contract intensive industries in different states. Beyond an overall pro-growth effect, the bank deregulation seems to disproportionately benefit the industries requiring relationship-specific investments from their suppliers.Chapter 2 of my PhD focuses on the role of the financial sector in promoting exports of developing countries. In particular, it investigates how credit constraints affect the ability of firms operating in agri-food sectors of developing countries to keep exporting to foreign markets.Trade in high-value agri-food products from developing countries has expanded enormously over the last two decades offering opportunities for development. However, trade in agri-food is governed by a growing array of standards. Sanitary and Phytosanitary standards (SPS) and technical regulations impose additional sunk, fixed and operating costs along the firms' export life. Such costs may be detrimental to firms' survival, "pricing out" producers that cannot comply. The existence of these costs suggests a potential role of credit constraints in shaping the duration of trade relationships on foreign markets. A well-developed financial system provides the funds to exporters necessary to adjust production processes in order to meet quality and quantity requirements in foreign markets and to maintain long-standing trade relationships. The products with higher needs for financing should benefit the most from a well functioning financial system. This differential effect calls for a difference-in-difference approach initially proposed by Rajan and Zingales (1998). As a proxy for demand for financing of agri-food products, the sanitary risk index developed by Jaud et al. (2009) is used. The empirical literature on standards and norms show high costs of compliance, both variable and fixed, for high-value food products (Garcia-Martinez and Poole, 2004; Maskus et al., 2005). The sanitary risk index reflects the propensity of products to fail health and safety controls on the European Union (EU) market. Given the high costs of compliance, the sanitary risk index captures the demand for external financing to comply with such regulations.The prediction is empirically tested examining the export survival of different agri-food products from firms operating in Ghana, Mali, Malawi, Senegal and Tanzania. The results suggest that agri-food products that require more financing to keep up with food safety regulation of the destination market, indeed sustain longer in foreign market, when they are exported from countries with better developed financial markets.Chapter 3 analyzes the link between financial markets and efficiency of resource allocation in an economy. Producing and exporting products inconsistent with a country's factor endowments constitutes a serious misallocation of funds, which undermines competitiveness of the economy and inhibits its long term growth. In this chapter, inefficient exporting patterns are analyzed through the lens of the agency theories from the corporate finance literature. Managers may pursue projects with negative net present values because their perquisites or even their job might depend on them. Exporting activities are particularly prone to this problem. Business related to foreign markets involves both high levels of additional spending and strong incentives for managers to overinvest. Rational managers might have incentives to push for exports that use country's scarce factors which is suboptimal from a social point of view. Export subsidies might further skew the incentives towards inefficient exporting. Management can divert the export subsidies into investments promoting inefficient exporting.Corporate finance literature stresses the disciplining role of outside debt in counteracting the internal pressures to divert such "free cash flow" into unprofitable investments. Managers can lose both their reputation and the control of "their" firm if the unpaid external debt triggers a bankruptcy procedure. The threat of possible failure to satisfy debt service payments pushes the managers toward an efficient use of available resources (Jensen, 1986; Stulz, 1990; Hart and Moore, 1995). The main sources of debt financing in the most countries are banks. The disciplining role of banks might be especially important in the countries suffering from insufficient judicial quality. Banks, in pursuing their rights, rely on comparatively simple legal interventions that can be implemented even by mediocre courts. In addition to their disciplining role, banks can promote efficient exporting patterns in a more direct way by relaxing credit constraints of producers, through screening, identifying and investing in the most profitable investment projects. Therefore, a well-developed domestic financial system, and particular banking system, would help to push a country's exports towards products congruent with its comparative advantage.This prediction is tested looking at the survival of different product categories exported to US market. Products are identified according to the Euclidian distance between their revealed factor intensity and the country's factor endowments. The results suggest that products suffering from a comparative disadvantage (labour-intensive products from capital-abundant countries) survive less on the competitive US market. This pattern is stronger if the exporting country has a well-developed banking system. Thus, a strong banking sector promotes exports consistent with a country comparative advantage.Chapter 4 of my PhD thesis further examines the role of financial markets in fostering efficient resource allocation in an economy. In particular, the allocative efficiency hypothesis is investigated in the context of equity market liberalization.Many empirical studies document a positive and significant effect of financial liberalization on growth (Levchenko et al. 2009; Quinn and Toyoda 2009; Bekaert et al., 2005). However, the decrease in the cost of capital and the associated growth in investment appears rather modest in comparison to the large GDP growth effect (Bekaert and Harvey, 2005; Henry, 2000, 2003). Therefore, financial liberalization may have a positive impact on growth through its effect on the allocation of funds across firms and sectors.Free access to international capital markets allows the largest and most profitable domestic firms to borrow funds in foreign markets (Rajan and Zingales, 2003). As domestic banks loose some of their best clients, they reoptimize their lending practices seeking new clients among small and younger industrial firms. These firms are likely to be more risky than large and established companies. Screening of customers becomes prevalent as the return to screening rises. Banks, ceteris paribus, tend to focus on firms operating in comparative-advantage sectors because they are better risks. Firms in comparative-disadvantage sectors finding it harder to finance their entry into or survival in export markets either exit or refrain from entering export markets. On aggregate, one should therefore expect to see less entry, more exit, and shorter survival on export markets in those sectors after financial liberalization.The paper investigates the effect of financial liberalization on a country's export pattern by comparing the dynamics of entry and exit of different products in a country export portfolio before and after financial liberalization.The results suggest that products that lie far from the country's comparative advantage set tend to disappear relatively faster from the country's export portfolio following the liberalization of financial markets. In other words, financial liberalization tends to rebalance the composition of a country's export portfolio towards the products that intensively use the economy's abundant factors.

Evolutionary games on complex networks : the emergence and maintenance of cooperation

Abstract The object of game theory lies in the analysis of situations where different social actors have conflicting requirements and where their individual decisions will all influence the global outcome. In this framework, several games have been invented to capture the essence of various dilemmas encountered in many common important socio-economic situations. Even though these games often succeed in helping us understand human or animal behavior in interactive settings, some experiments have shown that people tend to cooperate with each other in situations for which classical game theory strongly recommends them to do the exact opposite. Several mechanisms have been invoked to try to explain the emergence of this unexpected cooperative attitude. Among them, repeated interaction, reputation, and belonging to a recognizable group have often been mentioned. However, the work of Nowak and May (1992) showed that the simple fact of arranging the players according to a spatial structure and only allowing them to interact with their immediate neighbors is sufficient to sustain a certain amount of cooperation even when the game is played anonymously and without repetition. Nowak and May's study and much of the following work was based on regular structures such as two-dimensional grids. Axelrod et al. (2002) showed that by randomizing the choice of neighbors, i.e. by actually giving up a strictly local geographical structure, cooperation can still emerge, provided that the interaction patterns remain stable in time. This is a first step towards a social network structure. However, following pioneering work by sociologists in the sixties such as that of Milgram (1967), in the last few years it has become apparent that many social and biological interaction networks, and even some technological networks, have particular, and partly unexpected, properties that set them apart from regular or random graphs. Among other things, they usually display broad degree distributions, and show small-world topological structure. Roughly speaking, a small-world graph is a network where any individual is relatively close, in terms of social ties, to any other individual, a property also found in random graphs but not in regular lattices. However, in contrast with random graphs, small-world networks also have a certain amount of local structure, as measured, for instance, by a quantity called the clustering coefficient. In the same vein, many real conflicting situations in economy and sociology are not well described neither by a fixed geographical position of the individuals in a regular lattice, nor by a random graph. Furthermore, it is a known fact that network structure can highly influence dynamical phenomena such as the way diseases spread across a population and ideas or information get transmitted. Therefore, in the last decade, research attention has naturally shifted from random and regular graphs towards better models of social interaction structures. The primary goal of this work is to discover whether or not the underlying graph structure of real social networks could give explanations as to why one finds higher levels of cooperation in populations of human beings or animals than what is prescribed by classical game theory. To meet this objective, I start by thoroughly studying a real scientific coauthorship network and showing how it differs from biological or technological networks using divers statistical measurements. Furthermore, I extract and describe its community structure taking into account the intensity of a collaboration. Finally, I investigate the temporal evolution of the network, from its inception to its state at the time of the study in 2006, suggesting also an effective view of it as opposed to a historical one. Thereafter, I combine evolutionary game theory with several network models along with the studied coauthorship network in order to highlight which specific network properties foster cooperation and shed some light on the various mechanisms responsible for the maintenance of this same cooperation. I point out the fact that, to resist defection, cooperators take advantage, whenever possible, of the degree-heterogeneity of social networks and their underlying community structure. Finally, I show that cooperation level and stability depend not only on the game played, but also on the evolutionary dynamic rules used and the individual payoff calculations. Synopsis Le but de la théorie des jeux réside dans l'analyse de situations dans lesquelles différents acteurs sociaux, avec des objectifs souvent conflictuels, doivent individuellement prendre des décisions qui influenceront toutes le résultat global. Dans ce cadre, plusieurs jeux ont été inventés afin de saisir l'essence de divers dilemmes rencontrés dans d'importantes situations socio-économiques. Bien que ces jeux nous permettent souvent de comprendre le comportement d'êtres humains ou d'animaux en interactions, des expériences ont montré que les individus ont parfois tendance à coopérer dans des situations pour lesquelles la théorie classique des jeux prescrit de faire le contraire. Plusieurs mécanismes ont été invoqués pour tenter d'expliquer l'émergence de ce comportement coopératif inattendu. Parmi ceux-ci, la répétition des interactions, la réputation ou encore l'appartenance à des groupes reconnaissables ont souvent été mentionnés. Toutefois, les travaux de Nowak et May (1992) ont montré que le simple fait de disposer les joueurs selon une structure spatiale en leur permettant d'interagir uniquement avec leurs voisins directs est suffisant pour maintenir un certain niveau de coopération même si le jeu est joué de manière anonyme et sans répétitions. L'étude de Nowak et May, ainsi qu'un nombre substantiel de travaux qui ont suivi, étaient basés sur des structures régulières telles que des grilles à deux dimensions. Axelrod et al. (2002) ont montré qu'en randomisant le choix des voisins, i.e. en abandonnant une localisation géographique stricte, la coopération peut malgré tout émerger, pour autant que les schémas d'interactions restent stables au cours du temps. Ceci est un premier pas en direction d'une structure de réseau social. Toutefois, suite aux travaux précurseurs de sociologues des années soixante, tels que ceux de Milgram (1967), il est devenu clair ces dernières années qu'une grande partie des réseaux d'interactions sociaux et biologiques, et même quelques réseaux technologiques, possèdent des propriétés particulières, et partiellement inattendues, qui les distinguent de graphes réguliers ou aléatoires. Entre autres, ils affichent en général une distribution du degré relativement large ainsi qu'une structure de "petit-monde". Grossièrement parlant, un graphe "petit-monde" est un réseau où tout individu se trouve relativement près de tout autre individu en termes de distance sociale, une propriété également présente dans les graphes aléatoires mais absente des grilles régulières. Par contre, les réseaux "petit-monde" ont, contrairement aux graphes aléatoires, une certaine structure de localité, mesurée par exemple par une quantité appelée le "coefficient de clustering". Dans le même esprit, plusieurs situations réelles de conflit en économie et sociologie ne sont pas bien décrites ni par des positions géographiquement fixes des individus en grilles régulières, ni par des graphes aléatoires. De plus, il est bien connu que la structure même d'un réseau peut passablement influencer des phénomènes dynamiques tels que la manière qu'a une maladie de se répandre à travers une population, ou encore la façon dont des idées ou une information s'y propagent. Ainsi, durant cette dernière décennie, l'attention de la recherche s'est tout naturellement déplacée des graphes aléatoires et réguliers vers de meilleurs modèles de structure d'interactions sociales. L'objectif principal de ce travail est de découvrir si la structure sous-jacente de graphe de vrais réseaux sociaux peut fournir des explications quant aux raisons pour lesquelles on trouve, chez certains groupes d'êtres humains ou d'animaux, des niveaux de coopération supérieurs à ce qui est prescrit par la théorie classique des jeux. Dans l'optique d'atteindre ce but, je commence par étudier un véritable réseau de collaborations scientifiques et, en utilisant diverses mesures statistiques, je mets en évidence la manière dont il diffère de réseaux biologiques ou technologiques. De plus, j'extrais et je décris sa structure de communautés en tenant compte de l'intensité d'une collaboration. Finalement, j'examine l'évolution temporelle du réseau depuis son origine jusqu'à son état en 2006, date à laquelle l'étude a été effectuée, en suggérant également une vue effective du réseau par opposition à une vue historique. Par la suite, je combine la théorie évolutionnaire des jeux avec des réseaux comprenant plusieurs modèles et le réseau de collaboration susmentionné, afin de déterminer les propriétés structurelles utiles à la promotion de la coopération et les mécanismes responsables du maintien de celle-ci. Je mets en évidence le fait que, pour ne pas succomber à la défection, les coopérateurs exploitent dans la mesure du possible l'hétérogénéité des réseaux sociaux en termes de degré ainsi que la structure de communautés sous-jacente de ces mêmes réseaux. Finalement, je montre que le niveau de coopération et sa stabilité dépendent non seulement du jeu joué, mais aussi des règles de la dynamique évolutionnaire utilisées et du calcul du bénéfice d'un individu.

Assistance circulatoire chronique: le point en 2013 [Long-term mechanical circulatory support: where do we stand in 2013?].

With the advent of new technologies, experience with long-term mechanical circulatory support (MCS) is rapidly growing. Candidates to MCS are selected based on concepts, strategies and classifications that are specific to this indication. As results drastically improve, supported by stronger scientific evidence, the trend is towards earlier implantation. An adequate pre-implant follow-up is mandatory in order to avoid missing the best window of opportunity for implantation. While on chronic support, the hemodynamic profile of patients with continuous-flow ventricular assist devices is unique and remarkably influenced by the hydration status. Optimal management of these patients from the pre-implant phase to the long-term support phase requires a multidisciplinary approach that is similar to that already long validated for organ transplantation.

Infections pulmonaires : le point de vue du radiologue

La place de l'imagerie est essentielle au cours des infections pulmonaires. La TDM doit être effectuée en cas de forte suspicion clinique de pneumonie avec aspect radiographique normal, équivoque ou non spécifique, ce qui concerne particulièrement les sujets immunodéprimés. Elle permet de détecter les anomalies associées ou une affection sous-jacente, d'orienter un lavage broncho-alvéolaire ou de guider une biopsie pulmonaire percutanée ou transbronchique. Les expressions d'un germe peuvent varier selon le degré d'immunodépression. Il en est ainsi pour la tuberculose au cours du sida. Les germes impliqués varient selon le type d'immunodépression, certaines infections pouvant engager rapidement le pronostic vital. Le spectre radiologique de l'aspergillose pulmonaire, complexe, doit être connu, ce diagnostic devant être proposé dans des conditions particulières.

Avaliação de Desempenho no Sector Bancário em Cabo Verde

Presentemente, o controlo de gestão está vocacionado para agir antes de os factos indesejáveis ocorrerem, assegurando que os objectivos estabelecidos pela gestão são atingidos dentro do timing fixado. Além disso, o controlo de gestão deve ser o motor que permita alcançar as melhores performances nas áreas críticas da empresa, não só no domínio económico e financeiro, mas também nas áreas do crescimento, segurança e produtividade. Um dos mais importantes objectos das administrações actuais, é determinar se o desempenho da organização está de acordo com o que foi estabelecido previamente, ou seja, seus objectivos e metas. O meio através do qual se verificaria este desempenho seria a utilização de métodos e sistemas de avaliação de desempenho eficazes. Neste contexto, o presente estudo consiste em fazer um estudo exploratório descritivo identificando e averiguando de que forma as instituições bancárias de Cabo Verde efectuam a gestão de alguns aspectos, especialmente a avaliação de desempenho e o controlo estratégico, e que indicadores utilizam. Não obstante os objectivos específicos do trabalho serem outros, também damos especial atenção às características do mercado cabo-verdiano e à importância do sector bancário para a economia. Finalmente, apresentamos o Balanced Scorecard como uma ferramenta capaz de suprir as dificuldades da avaliação de desempenho e o conjunto de indicadores que vemos como o mais adequado. Neste ponto, concentramos nas quatro perspectivas básicas e no mapa estratégico, referindo o papel do Balanced Scorecard no alinhamento estratégico e na avaliação do desempenho organizacional. Para concluir, reforçamos o estudo, entrevistando um especialista (Director Financeiro) de um dos bancos da praça, cujo nome prometemos não publicar. Dessa forma, esperamos contribuir para uma melhor percepção da realidade em estudo, tanto do ponto de vista teórico, quanto da verificação das práticas no sector. Presently, the management control is oriented to act before the undesirable facts happen, assuring that the management established objectives are being achieved in the fixed timing. Besides, the management control must be an engine that permits to achieve the best performances at critical company areas, not only in the economic and financial areas, but at the growth, security and productivity areas too. One of the most important administration objects nowadays is to know if the organization performance is according to the fixed targets. The performance measurement could be done through effective methods and performance measurement systems. That’s why this assignment consists in doing an exploratory and descriptive study, identifying and investigating how the bank institutions of Cape Verde manage some things, particularly the performance measurement and the strategic control, and to know which indicators they use. Although the specific objectives of this assignment are others, we also give special attention to the Capeverdean market characteristics, and to the relevance of the banking industry to the economy of the country. Finally, we present the Balanced Scorecard as a competent tool to supply the measurement performance difficulties and a number of indicators that we find appropriate. In this point, we focus in the four basic perspectives and the strategic map, referring to the role of the Balanced Scorecard in the strategic alignment and organization performance measurement. We conclude this study with an interview to an expert (A Financial Manager) of a bank working in Cape Verde, whose name we promise to preserve. In this way, we hope to contribute to a better perception of this reality, in the theoretical point-of-view as much as in the practical check of this industry’s labour.

Audit report on the City of Center Point, Iowa for the year ended June 30, 2006.

Audit report on the City of Center Point, Iowa for the year ended June 30, 2006.