Physical Investment Research Articles

Capital in the Nineteenth Century by Robert E. Gallman and Paul W. Rhode

Reviewed by: Capital in the Nineteenth Century by Robert E. Gallman and Paul W. Rhode Sean Adams (bio) Keywords Capital, National Bureau of Economic Research, Economics Capital in the Nineteenth Century. By Robert E. Gallman and Paul W. Rhode. (Chicago: The University of Chicago Press, 2019. Pp. 381. Cloth, $65.00.) The National Bureau of Economic Research (NBER) underwrote scholarly activity in several critical areas during the postwar period. Among them was the attempt to employ econometric methods to the historical development of the United States. Although the task of measuring growth and output is straightforward today, the research methods employed in order to find reliable statistics, comparing cycles of growth in diff erent eras, and assessing periods of dynamic change blend a dogged determination to scour the archives for accurate data with the ability to assess the meaning of it through quantitative analysis. The eminent economic historian Robert Gallman devoted five decades to this task; his life’s work in understanding the extent and nature of American economic growth over the long nineteenth century has provided incalculable benefits to scholars in the field. This work was cut short by his passing in 1998, but now, thanks to the NBER, we have a single volume dedicated to Gallman’s research on a critical topic—the nature of American capital formation. Capital in the Nineteenth Century, expertly edited by Paul Rhode, compiles and completes a large share of Gallman’s work, in consultation with former research assistants, colleagues, and unpublished notes. In the end, the reader is offered an insight into the methods and conclusions of one of the giants of the econometric revolution in American history. The concept of capital, of course, is a slippery one that evades simple definition. Does it only represent the physical goods that are used in the creation of other goods? Should it include the skills and knowledge of workers? What about cleared and improved land? Rather than engage in [End Page 516] wide-ranging debates, Gallman and Rhode fall on the cautious side in rebuilding national product. Their view of capital stock is a conservative one, in keeping with Gallman’s reluctance to speculate when reliable data was not forthcoming. There are two notable trends here. First, Capital in the Nineteenth Century does not consider human capital—either the skills and talent provided by free laborers or the uncompensated labor provided by enslaved Americans—in its calculations. Throughout his career, Gallman regarded enslaved African Americans as people, not inputs in the same vein as livestock, when he made his calculations of the South’s capital stock. This distinction might have run counter to those of historical actors, but it reveals the need for value judgments amidst the hard calculations of econometrics, and in that regard Gallman’s opinion was clear. Second, the data here reveal that agricultural land, and in particular improved agricultural land, provided the bulk of American capital gains over the course of the nineteenth century. Of course, the work of both enslaved and free Americans would have shown up in this figure, albeit indirectly. This second point is an important one, as it counters much of what we assumed about the industrial origins of nineteenth-century economic growth. “Much of the investment activity in the long nineteenth century was mundane,” Gallman and Rhode assert, “and did not involve sophisticated new machines or technologies” (13). From 1774 to 1900, American capital stock did increase substantially, by a multiplicative factor of 276, according to Gallman’s conservative and careful estimates. After a careful consideration of how capital stock may be measured by the book value of machinery, improvements, and other physical investments; the market value of the same; or the reproduction cost of them; the volume republishes a series of estimates wrung from the incomplete and sometimes inconsistent data produced by nineteenth-century actors. After 1840, census records improved, but even with that development the kind of measurement undertaken by Gallman required painstaking research, the application of various indices and modifiers to account for inflation and depreciation, and a willingness to abandon lines of inquiry when they lacked empirical verification. Specialists in the field can certainly take a deep dive into the methodology...

An assessment of employees' intention to retire in Kenya

This study aimed to establish a relationship among financial factors, psychological factors, personal factors, entrepreneurial intensity and intentions to retire among employees in Kenyan public universities. The study was guided by the theory of planned behaviour (TPB). A survey of 384 employees from seven public universities in Kenya was done. The findings indicate that collectively financial factors, psychological factors, personal factors, entrepreneurial intensity explain a significant portion of variability in employees' intention to retire. The study also revealed that own investment and social security are significant components of financial factors predicting intention to retire. Also, work attachment is a significant component of the psychological factors predicting intentions to retire. The study recommends that employees should have physical and financial investments before making decisions on intentions to retire. Employers should put in place social security and medical insurance cover for their workforce to enhance financial security and encourage intention to retire.

The Strategic Evolution of Value Chains Management and Corporate Reputation in Chinese Logistics Transport Value Market

China started its reform and open policy in 1978. Since then, the country has been transforming itself from a centrally planned economy to a market economy. The concept of ‘logistics’ was imported into China in the 1990s. Since then, logistics in China has witnessed a huge growth along with its fast growing economy. Logistics in China has accelerated since China’s entry to the WTO in November 2001. Prior to China’s entry, foreign logistics participations were regulated in most logistics sectors. Chinese logistics industry had been divided into sub-sectors where logistics activities were strictly regulated. After entry to the WTO, China has committed to a deadline to open its logistics markets. The priority accorded to industry stunted services development-particularly in productivity terms-while the emphasis on physical investment constrained investment in human capital [1].

Technological Changes, Investments, and Unemployment in Indonesia

The vicious circle of poverty in a country could stop if the government was able to solve the problem of unemployment. One way to reduce unemployment is to boost investment. In addition, in the era of the industrial revolution the role of technological development also needs to be considered as a means of reducing unemployment. This study is aiming to analyze the effect of physical investment, educational investment, and technological changes on unemployment in Indonesia. The data used in this study are obtained from Indonesian Central Statistics Agency (BPS). The technological development is proxied by Index of Technology and Communication. The regression method is used to reach the aim of the study. The result of the analysis indicates that the physical investment and technological development have a negative and significant effect on unemployment. Moreover, the findings suggest that the reduction in unemployment in Indonesia is caused by many people who become online motorcycle taxi drivers in the informal sector.
 Keywords: technology development, physical investment, educational investment, unemployment, panel data

Government Investment in The Education Sector for Human Capital Development

An indicator is considered more representative to be used as a benchmark for development, namely the Human Development Index (HDI). The Human Development Index is another alternative to the definition of development that it is not only economic resources as a means to achieve development goals. The government has made various efforts to improve the quality of education to develop quality human resources. One of the components in the education budget is the education budget through transfers to the regions and village funds. Transfers to regions and village funds consist of general allocation funds and special allocation funds. This study aims to examine the effect of the government’s investment in the education sector through the education budget, particularly Special Allocation Funds-Physical (SAF Physical) and Special Allocation Funds-Non-Physical (SAF Non-Physical) on the Human Development Index (HDI). The study consists of two independent variables, i.e., Special Allocation Funds-Physical (SAF Physical) and Special Allocation Funds-NonPhysical (SAF Non-Physical), and one dependent variable: Human Development Index (HDI). The method used is a quantitative method with multiple regression analysis-ordinary least square (OLS). The data used is secondary data from the Central Bureau of Statistics/Badan Pusat Statistik (BPS) in 2010-2018. The results showed that Special Allocation Funds-Physical (SAF Physical) and Special Allocation Funds-Non-Physical (SAF Non-Physical) significantly influence the Human Development Index (HDI). The Special Allocation Funds-Physical (SAF Physical) has a negative and insignificant effect. In contrast, the Special Allocation Funds-Non-Physical (SAF Non-Physical) has a positive and significant effect on the Human Development Index. Therefore, the government is expected to increase educational investment by allocating more budgets on both physical and non-physical investment to improve the quality of Human Resources.

A new global database on agriculture investment and capital stock

This paper introduces a new analytical database on aggregate physical investment flows and capital stock in agriculture, forestry and fishing for 189 countries and territories over the period 1995–2017. Long time series of the agricultural investment-to-value added ratio are employed to obtain agricultural investment flows. These latter are subsequently converted into capital stock series, by applying a variant of the perpetual inventory method. This article describes the database content and the data sources, the methodology used to deal with missing data in the investment-to-value added ratio as well as several measurement issues underlying its development. Lastly, it presents an overview of the main global and regional trends in agricultural gross fixed capital formation and capital stock, drawing some implications and directions for future research.

India’s national health insurance scheme: Analysis using the Growth Diagnostics Framework

Abstract The world's largest health assurance scheme, Ayushman Bharat-Pradhan Mantri Jan Suraksha Yojana (AB-PMJAY) was launched in India in 2018 to achieve universal health coverage aspired in the National Health Policy 2017. Our objective was to critically analyse AB-PMJAY through the lens of Growth Diagnostics Framework developed by Hausmann, Rodnik et al using secondary data. The framework analysed the scheme on five aspects: physical investment, knowledge/application/productivity, productive livelihood, skill set and cooperative federalism in terms of demand and supply side problems. The analysis was conducted for six months. The results highlighted issues relating to supply side such as availability of beds, equipment, manpower, information systems, deficient rural public health facilities, health insurance governance, scaling technological capabilities, improving procurement of drugs, equipment, technical training of staff in IT; highly skewered ratio of public and private sector hospital beds and manpower. Demand side issues include high demand of services, requirement of research and development related to premium rates, maturity of the scheme, pay outs, increased demand of specialists/technicians/health administrators in government sector and willingness of federal states to enroll in the scheme. Our recommendations highlight the importance of gaining the trust and confidence of citizens in public sector, reducing asymmetric information, mandating a formulary policy in hospitals, measures to prevent private hospitals from indulging in cream skimming and dumping patients, increasing package amounts for chronic conditions like dialysis, more health technology assessments, strengthening referral levels of care, focusing on outcome based standards for facilities, creating demand for preventive and promotive care using innovative ICT tools and coordination with different systems of medicine, addressing social determinants of health through inter-sectoral convergence. Key messages Growth Diagnostics Framework is a novel way to study a national health insurance scheme. India's national health insurance scheme is dynamic and aspirational that requires multi sectoral co-ordination.

Economic Growth Theories, And the Managing of Oil Curse; The Effect of Corruption

The paper discusses that Corruption, resources, private investment and economic growth are related. The inference is that the potential benefits of rising corruption in deeply authoritarian nations are practically greater than any other government intervention. Corruption awareness is essential in policy decisions that accelerate the policy platform. Emerging economies, notably the Middle East and North African countries with ample resources, can make a major contribution. further, the impact of corruption on the accumulation of human capital across two channels. It occurs on the first channel. It has the impact of corruption in public education spending and the second path. Corruption in spending on physical capital and investment. The paper argues that the pace of the reform initiatives is crucial and that the success of the policies is affected by corruption and affirms the existence effect in human resources and corruption.

FIXING FIVE FLAWS OF THE TAX CUTS AND JOBS ACT

The tax legislation commonly referred to as the Tax Cuts and Jobs Act (Public Law 115-97) came into effect in 2018. The new tax law was flawed in five important ways. First, the law generates large deficits that will reduce the ability of the government to fund important priorities in the future; these deficits also risk justifying a more tepid fiscal response to the next recession. Second, after more than 35 years of increasing income inequality, the tax law moves the tax system in a regressive direction. Third, while the legislation increases economic efficiency in some ways, it decreases economic efficiency in other ways, moving the tax system away from optimal design principles. Fourth, the legislation misses an opportunity to combat profit shifting by multinational companies, changing the character of the problem but leaving its scale largely undiminished; also, the law provides new incentives for the offshoring of physical investment. And fifth, the legislation introduces new sources of complexity. This paper explains these five flaws in detail, setting the analysis within the context of relevant literature and facts. Thereafter, the paper suggests both short term and more fundamental ways to reform the tax code. Nearly immediately, simple fixes can address most of the TCJA flaws. Moving forward, a true tax reform can modernize the tax system to better handle the challenges posed by economic inequality, climate change, and the global nature of business activity.

The Effect Of Quality Of Document Service To Customer Satisfaction In PT. Mediterranean Shipping

Mediterranean Shipping Company, is one of the major multinational companies in Indonesia, multinational companies can communicate with customers and sell to customers abroad without the need for a lot of physical investment in foreign markets (United Nations Conference On Trade, UNCTAD, 2017), through its market reach so large and with business relationships that are spread everywhere, then this company has a pretty good rating in the international business arena. PT. Mediterranean Shipping Company Indonesia develops its business as a shipping company in the field of International container transportation (export import) and offers various facilities for export to exporters.

R&D부문을 고려한 최적 실물투자 보조금 산정

R&D부문을 고려한 최적 실물투자 보조금 산정

Socially Responsible Customers and Intangible Investment

Intangible capital has become an increasingly important factor for production in the knowledge economy. We use a large sample of U.S. firms and their major customers to test whether the presence of socially responsible customers can have an influence on suppliers’ intangible capital investment decisions. Our findings suggest that the social performance of major customers has a positive impact on the suppliers’ intangible investment, but the effect on their physical investment is marginal. When suppliers gain a new major customer with better social performance than their existing customers, they invest in more intangible assets. The results are robust when controlling for industry and year fixed effects, customer-base concentration, and the firm characteristics of both suppliers and customers, including Tobin’s q, total assets, financial leverage, sales growth rate, and profitability. Our findings are consistent with the implicit contract theory, which suggests that customers’ social performance affects how trustworthy their implicit commitments are perceived to be by their suppliers and thus has an impact on the suppliers’ intangible investment.

Did financing constraints cause investment stagnation in Japan after the 1990s?

Has investment by Japanese firms been affected by financing constraints since the collapse of the asset price bubble? This study answers the question while improving on the weaknesses of the models used in previous studies. It employs panel data for Japanese listed firms in four R&D-intensive industries. We divide our sample by firm size and examine three periods with different economic environments: the first half of the “two lost decades” from 1991 to 2000, the second half of the ‘two lost decades’ from 2001 to 2009, and the period following the ‘two lost decades’ from 2010 to 2016. We construct new investment functions based on the Euler equation by considering both physical and R&D investment factors to remove estimator bias, thus enabling us to determine whether firms face financing constraints accurately. The estimation results indicate that there were financing constraints on both R&D and physical investments by large listed firms from 1991 to 2000 and from 2010 to 2016. Conversely, the weak growth of both R&D and physical investments by small listed firms from 2010 to 2016 was not attributed to financing constraints but the lack of productive investment opportunities. Different policy measures are needed depending on whether the investment is stagnant due to financing constraints or the lack of investment opportunities.

Inequality and Economic Growth: a Method-Dependent Relationship Driven by the Measure of Income Inequality?

This study re-examines the much studied inequality-growth relationship. An empirical analysis that covers over a hundred countries finds no clear evidence for inequality to boost or dampen the growth of per capita GDP. Furthermore, evidence is found for inequality to promote growth through physical investments and hurt economic development via lower accumulation of human capital. These two mechanisms seem to balance out one another. The conclusions are based on a thorough investigation using the World Income Inequality Database maintained by UNU-WIDER and considering different measures of inequality, various estimation techniques, different specifications of the growth regression, allowing for non-linearities in the relationship and separating the OECD members from the non-OECD countries. The properties of the much-used system GMM estimator are investigated in detail. Even though its use is motivated by disentangling causality from correlation, the technique is found to suffer from weak instrument variables and sensitivity to small changes in the econometric specification. The results from simpler panel techniques follow a predictable pattern, where the use of cross-country (time) variation is associated with negative (positive) estimates. More profoundly, a strong result stemming from a data set that combines information from several countries would be of limited use for policy purposes because the actions to curb or promote income inequality are controlled by national policy-makers.

Intensive and Extensive Margins of Capital and Labor

What role do the intensive and extensive margins of capital and labor play in macroeconomic fluctuations? To answer this question, we construct a real business cycle model that considers both intensive and extensive margins of capital and labor. While the importance of these two margins in terms of the aggregate economy is recognized, the treatment of these margins in much of the literature is insufficient. We estimated our model using Japanese data to obtain the impulse response functions and variance decomposition. We find that in response to a positive productivity shock, firms increase their effective capital by increasing their capital utilization rate and their physical investment, while they adjust their total hours worked by changing working hours rather than the number of employees. Additionally, we find that the capital depreciation and labor supply shocks, which are the main drivers of the capital utilization rate and working hours, have a significant influence on output fluctuations. Our results indicate the importance of considering adjustments along the intensive and extensive margins when we discuss the effect of a temporary reduction in corporate income tax rate.

The Effects of Physical and Non-physical Investments of Government Expenditure in Education and Health Sectors on Human Development Index in Pekanbaru City

In this current globalization era, human resources investment is necessary for each country to improve the index of human development and economic growth, many countries have succeeded in economic growth by relying on human resources despite not having abundant natural resources. However, the success of resource investment is also strongly influenced by the availability of supporting facilities and infrastructure. Based on data of physical and non-physical investments of government expenditure in education and health sectors from 2007-2017, shows a positive trend with relatively increasing value. Meanwhile, based on data of human development index progress in Pekanbaru city in recent years showed a relatively declining value. This contradicts the theory of endogenous romer which explained that when the government or private sectors invest in human resources, it will encourage the improvement of human resources quality that reflects the progress of human development index. This study uses secondary data, namely government physical and non-physical expenditure data in the field of education and health in Pekanbaru City on Regional Budget in 2010-2017. The independent variable is government physical and non-physical expenditure in education and health sectors. While the dependent variable is the Human Development Index. The analysis method used is OLS (Ordinary Least Square) method where the data used are analyzed quantitatively using statistical analysis, namely multiple linear regression equations. Based on the results of research, government physical expenditure in education and government non-physical expenditure in the health sector does not significantly influence the human development index in Pekanbaru City. While government non-physical expenditure in education and government physical expenditure in health significantly affect the human development index in Pekanbaru City. Furthermore, for physical investment where in this research is the government physical expenditure in education and health sectors simultaneously has a significant effect on the human development index in Pekanbaru City. Whereas for non-physical investment where in this study is government non-physical expenditure in education and health sectors simultaneously has a significant effect on the human development index in Pekanbaru City.

Financialisation and the ‘supply-side’ face of the investment-profit puzzle

The high level of profits along with low levels of gross physical investment has been characterized as a puzzle in heterodox economics. One of the most extended answers at the firm level is that changes in corporate governance have altered the objectives of the firm toward profits, rather than growth. However, once it is acknowledged that investment becomes the basis upon which companies supply commodities as well as compete with other firms, an ever decreasing rate of investment should not be compatible with permanent high levels of profits. This is what we call the ‘supply-side’ face of the investment-profit puzzle. The article builds on the post-Keynesian theory of the firm and its investment decision and explores different answers already linked to the financialisation literature such as changes brought about by production outsourcing, increased market power, the attack on labor conditions and financial accumulation. Once these solutions are critically assessed, an extension to the theory is proposed in order to show that firm’s profitability has been detaching from its physical investment decisions.

Place-based policies, state-led industrialisation, and regional development: Evidence from China's Great Western Development Programme

This study evaluates the effects of a prominent place-based policy in China—the Great Western Development Programme. In 2000, China's central government targeted inland provinces in Western China for considerable investment and preferential treatment to accelerate their industrialisation. Using a spatially discontinuous design, we find that the programme has succeeded in accelerating industrialisation, raising the annual GDP growth rate by 1.6 percentage points in the targeted regions. However, no such effects are observed on nonfarm employment or wages. Moreover, the GDP growth effects primarily result from massive physical investment rather than the growth of total factor productivity.

Can providing safe cycling infrastructure encourage people to cycle more when it rains? The use of crowdsourced cycling data (Strava)

Abstract Many local authorities in the UK and other developed countries have spent a substantial amount of time and money providing safe cycling infrastructure to improve cycling environments. However, it is not clear whether these expensive physical investments are an effective strategy to encourage people to cycle more in cities where there is a high level of precipitation. The evidence is limited, partly due to data limitations. We used crowdsourced cycling data (taken from the Strava activity-tracking app) and fixed-effects panel regression models to investigate whether providing safe cycling infrastructure could be an effective way to overcome adverse weather conditions. We selected the city centre of Glasgow, Scotland because of the current size and scope of investments. We found that providing safe cycle paths could encourage people to cycle more, especially on dry days. However, findings suggested that rainy cities like Glasgow may not have realised the full benefits of safe cycling infrastructure because there are larger reductions in the volume of cycling on rainy days on these routes. Planners, especially from cities with a high level of precipitation, should consider how to improve cycle paths to overcome adverse weather and other policies (e.g., providing shower facilities at workplaces, incentives to cycle, etc.) to increase cyclists’ resilience to bad weather.

Shariah Compliance and Investment Behavior: Evidence from GCC Countries

ABSTRACT The literature is largely silent on questions pertaining to the long-term physical asset investment behavior of Shariah-compliant (SC) firms. In this paper, using a unique dataset of SC firms constructed from the S&P’s Compustat Global database, we examine the investment patterns of Shariah-compliant (SC) versus non-Shariah-compliant (NSC) firms in six Gulf Cooperation Council (GCC) countries during the period of 2000 to 2014. We show that SC firms invest significantly less than NSC firms and the effect of reduced investment is stronger among firms with higher investment opportunities. This investment behavior is partly attributable to SC firms’ relatively limited access to capital given the tendency to keep leverage at a low level. This robust empirical finding continues to hold when we use various model specifications, alternative definitions of long-term physical investment, and different subsamples, and even when we factor in the endogenous nature of the choice to comply with Shariah.