Potentials of Village
and Small
Enterprise Sector in the North Eastern Region of India
- -S
K Mishra
The
Village and Small Enterprise (VSE) sector not only has tremendous
potential of development in the North Eastern Region (NER)
of India, but also suits most to this region's natural endowment,
human resources and sociological conditions. This sector also
provides a great scope for women empowerment and thus reduction
in gender-based inequalities in the society. This paper examines
the prospects and constraints of development of the VSE sector
in the NER with special reference to social, technological
and infrastructural aspects.
©
2008 IUP . All Rights Reserved.
R&D
and the Persistence of
Profits
- - Johan
E Eklund and Daniel Wiberg
Economic
theory tells us that abnormal firm and industry profits will
not persist for any significant length of time. Any firm or
industry making profits in excess of the normal rate of return,
will attract entrants and this competitive process will erode
their profits. However, a substantial amount of research has
found evidence of persistent profits above the norm. Barriers
to entry and exit, is an explanation often put forward to
this anomaly. In the absence of, or with low barriers to entry
and exit, this reasoning provides little help in explaining
why these above-norm profits arise and persist. This paper
explores the links between the systematic search for knowledge
and the persistence of profits. By investing in R&D (Research
and Development) firms may succeed in creating products or
services that are preferred by the market and/or find a more
cost efficient method of production. Corporations that systematically
invest in R&D may, by doing this, offset the erosion of
profits and thereby have persistently high profits, which
diverge from the competitive return. The paper argues that
even in the absence of significant barriers to entry and exit,
profits may persist. This can be accredited to a systematic
search for knowledge through R&D.
©
2008 IUP . All Rights Reserved.
On
R&D Investment
- -Massoud
Khazabi
The
paper presents a theoretical model of R&D (Research and
Development) investment and extensively studies the expensing
policy of the development-related costs. Basing itself on
an analytical discussion as well as a study of the optimal
rate of expensing, the paper shows that a firm's R&D investment
policy and expensing-related costs are influenced by a set
of variables; inter alia the stock market effects and
corporate income tax rates. Interest rates, tax rates, marginal
production costs, stock market indices and the speed of development
benefits' revelation, would also alter the firm's disclosure
and innovation policies conspicuously.
©
2008 IUP . All Rights Reserved.
An
Econometric Analysis of
Personal Consumption Expenditure in Ethiopia
- -Ch.
Paramaiah and Oman Amulu Akway
This
paper examines the determinants of personal consumption expenditure
in Ethiopia by incorporating other variables, in the consumption
expenditure function based on both the traditional Keynesian
absolute income and permanent income hypotheses. The analysis
begins with the determination of the non-stationarity and
stationarity of the variables to be included in the two alternative
specifications of the personal consumption expenditure function.
Using augmented Dickey-Fuller and Phillips-Perron tests, all
the variables were found to be integrated of order one. In
order to make them stationary, the variables were differenced
once, and an advanced time series econometric technique was
applied to avoid spurious regression associated with the time
series data. The Engle-Granger two-step procedure was used
to test cointegration among the variables. According to this
test, all the variables in both Keynesian absolute income
hypothesis and permanent income hypothesis specifications
were found to be cointegrated. The error correction models
were estimated to take into account the short-run dynamics
in the relationships among the variables in the two specifications.
In Ethiopia, real disposal income and inflation were found
to explain personal consumption expenditure pertaining to
the Keynesian absolute income hypothesis, whereas permanent
income, inflation and real tax revenue were found to be economically
and statistically significant in the permanent income hypothesis
specification.
©
2008 IUP . All Rights Reserved.
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