The internationalization of business R&D via PSD Blog - World Bank Group
The OECD has recently come out with a new publication, this time on The Internationalisation of Business R&D. A lot of OECD publications provoke a half yawn from me, but this one is worth a look. Here's the main thrust:...non-OECD countries have attracted an increasing amount of R&D investment in recent years. Surveys indicate that China and India, among others, are now considered very attractive locations for future investment both because of their large and rapidly growing markets and their large pools of qualified workers and their relatively low, though rising, labour costs. However, they also indicate important drawbacks, such as inadequate enforcement of intellectual property rights (IPR). While these may not deter companies from investing, they may affect the type of... A simple solution to inflation via PSD Blog - World Bank Group
Governing global FDI flows via PSD Blog - World Bank Group
The rich get richer via PSD Blog - World Bank Group
The global economy may have slowed down in the last year, but that hasn't stopped the rich from getting richer. Merrill Lynch and Capgemini just released their 12th annual World Wealth Report, and the results are stunning. (Hat tip: FT) The wealth of the ultra-rich (those with assets of $30 million or more) grew 14.5 percent between 2006 and 2007. It seems the rich keep getting richer, no matter what the international financial environment looks like. No surprise there, really. The big surprise, at least for me, is how the geographical distribution of the rich is rapidly changing. Brazil, India, and China proved to be powerhouses of wealth production in 2007. India saw a 23 percent increase in the number of high net worth individuals - in other words, millionaires. China and Brazil... What a Long Strange Trip It???s Been (for V??clav Klaus) via PSD Blog - World Bank Group
V??clav Klaus, the president of the Czech Republic, has followed a curious path since his days as an employee of communist Czechoslovakia???s state bank. As the remarkably successful leader of the Civic Democratic Party, Klaus brought Czechoslovakia???subsequently, the Czech Republic???back into Europe. During his tenure as prime minister, Klaus hoped that a quick series of liberalizing reforms would set the Czech Republic apart from its peers in eastern Europe, granting it early entry into the European Union. Just yesterday, however, he penned an op-ed denouncing the euro, one of the cornerstones of the European Union. What explains this about-face from a champion of free markets to a foe of the euro, with its inherent requirement of freer labor and capital markets?To explain this turn... Bright Lights, Big City via PSD Blog - World Bank Group
A recent study by Mastercard indicates that many cities in emerging markets are moving up in the rankings of the Worldwide Centers of Commerce Index (Hat tip: FT). The index ranks 75 cities based on data that cover everything from the ease of doing business to livability. This is the second year Mastercard has produced this index, and London and New York are once again in the first two slots. However, China accounted for five of the cities that made it into the rankings, and India contributed another three. Latin America boasted seven cities in the rankings. Eastern Europe merited the inclusion of six cities, with Prague (pictured) ranked highest for that region.The authors of the study don???t provide much information on the methodology they have developed to rank cities. However, it's... Small Business Finance - What Works, What Doesn’t? via PSD Blog - World Bank Group
May 5 and 6 saw an interesting research conference here in DC on Small Business Finance, looking at which banking practices and government interventions help foster small businesses' access to external finance. Twelve interesting papers and a stimulating panel discussion addressed an array of issues, ranging from banks' lending techniques over competition, government policies to informal and trade credit. Many papers and speakers questioned conventional wisdom on what we know and what policies are helpful.Bank-level surveys show that banks engage more with SMEs than commonly thought, and beyond just offering credit services. Interestingly, differences in banking practices, such as collateral requirements, appraisal techniques and interest rates are more pronounced between developed and... Small Business Finance - What Works, What Doesn’t? via PSD Blog - World Bank Group
May 5 and 6 will see an interesting conference on small business finance here in Washington DC, covering topics from lending techniques, innovations, the impact of market structure, government interventions and alternatives to bank finance....
New directions in the compass of development via PSD Blog - World Bank Group
Emerging markets are becoming important sources of foreign direct investment (FDI), with south-south – investments flowing among emerging markets – playing a bigger role.
According to recent MIGA report, the reasons for the increase in south-south FDI include, rising demand for energy in emerging markets, increase in south-south trade, proximity and cultural affinity, cost competitiveness, and outward FDI support.
The graph below shows global FDI outflows for developed and emerging markets, with a steady growth of both types of FDI since 2003.
... Microfinance’s “two cents” on its own future via PSD Blog - World Bank Group
Microfinance professionals, who responded to a new survey by the Center for the Study of Financial Innovation, identified poor management skills as the main risk the industry faces. Poor corporate governance is also seen as a great risk, but more so by investors and analysts than by practitioners.
According to the report "[m]icrofinance institutions tend to be dominated by 'visionaries' who are strong on charisma but less so on management skills and strategic flexibility."
More than 300 respondents from 74 countries contributed to the survey. It focused on institutions with more than $5m in assets which are profitable and capable of commercial growth.
Do you have any insights to share? Feel free to leave your own "two-cents".... Gemloc Program selects PIMCO and Markit via PSD Blog - World Bank Group
2006 – the year of Chinese IPOs via PSD Blog - World Bank Group
Our privatization database – listing transactions of at least $1 million from 2000 to 2006 - has been updated again. In 2006, 48 developing countries carried out 249 privatizations for a total value of $105 billion – a figure comparable to the record year 1997.
The graph below depicts the value of privatization transactions in developing countries between 1990 and 2006. The figure excludes the IPOs of the Industrial and Commercial Bank of China and the Bank of China, which combined accounted for $35 billion - one-third of all proceeds in 2006:
Russia and Turkey followed China into the second and third place, while Poland bucked the general trend toward privatization that year.
Our interactive map has the full picture.... Winning at the bottom of the pyramid via PSD Blog - World Bank Group
Partial credit guarantee scheme via PSD Blog - World Bank Group
Financial liberalization can make your economy more resilient if… via PSD Blog - World Bank Group
Not so green after all via PSD Blog - World Bank Group
Ceres, a coalition of investors, environmental groups and other public interest organizations, believes that the financial services industry – with nearly $6 trillion in market capitalization – should play a role in combating climate change.
Most recently, Ceres released a first comprehensive assessment of how the world's 40 largest banks fulfill their commitments to the reduction of greenhouse gas emissions.
The study found that, despite an overall widespread positive trend, only 12 banks made climate change a governance priority; only 6 said they were calculating carbon risk in their portfolio and "no bank has set a policy to avoid investments in carbon-intensive projects such as coal-fired power plants." Cares' recommendations:
Elevate climate change as a governance priority... Foreign bank entry and outreach via PSD Blog - World Bank Group
Microloans get bad credit via PSD Blog - World Bank Group
According to David Satterthwaite, the editor of MicroCapital Monitor, in South Asia alone microlenders have reached so for only about 2 percent of potential customers. As needs as well as opportunities for access to finance continue to grow, so does the debate on the social and commercial aspects of microlending.
Most recently on the "con" side BusinessWeek has published a special on the problems that some poor borrowers in Mexico encounter.
The FT and Nextbillion have the other side of the story.... Location, location, location via PSD Blog - World Bank Group
IPOs anyone? via PSD Blog - World Bank Group
New planet in the World Bank universe via PSD Blog - World Bank Group
Our most requested databases: the Doing Business, Enterprise Surveys, Financial Indicators, Private Investment in Infrastructure Projects and the Privatization Database, can all now be browsed from a one convenient location - the Business Planet.
The filters allow for exploration by topic, region or a country.... Emerging markets’ top challengers via PSD Blog - World Bank Group
In a new study the Boston Consulting Group warns established industry leaders against the competition from emerging markets. Since 2004 the 100 New Global Challengers grew their revenues three times faster than the S&P 500 and now, says David Michael, the report's co-author, they will become potential acquirers: Never before have so many potential competitors and customers arisen so quickly on a global scale. Moreover, the challengers have completely different approaches to competition, taking advantage of their bases in emerging markets. Many established industry leaders are frankly unprepared for these new types of competitors The challengers brought over $1.2 trillion in total revenues in 2006. The report predicts that their combined revenues will reach $3.3 trillion by 2010 and... Privatization in Africa via PSD Blog - World Bank Group
Windstorm bonds breeze through markets via PSD Blog - World Bank Group
Following a successful placement of flood and earthquake cat bonds in April, a new tranche, this time covering windstorm risks in seven European countries, is launched. By transferring the risks from insurance companies to willing market investors, these bonds provide an additional instrument for risk management.
The parametric index trigger in those bonds is linked to objective measurements of wind speed at various locations rather than on estimated losses, which helps speed up disbursement and lower costs of damage assessment.... Microfinance congress in New York via PSD Blog - World Bank Group
What can government do to foster branchless banking? via PSD Blog - World Bank Group
More and more research shows the positive impact that mobile technology has on economic development. The Economist has a short piece of advice for governments on how to maximize this mobile momentum: […] do away with state monopolies, issue new licenses to allow rival operators to enter the market and slash taxes on handsetsThe recommendation is timely. Western Union, which handled nearly 17 percent of world’s remittances in 2006, announced last month it would make it possible to wire money via cell phones.... JPMorgan joins the pack via PSD Blog - World Bank Group
Déjà vu in Africa? via PSD Blog - World Bank Group
Finance for all? Policies and pitfalls in expanding access via PSD Blog - World Bank Group
Fresh from the press, this Policy Research Report takes stock of our current knowledge of access to financial services. It analyzes indicators and determinants of access to finance and discusses the role of government. Be ready to see some of your priors confirmed and others questioned.
In many developing countries, 50 to 80 percent of the population has limited access to finance (the graphic below shows the fraction of households with a banking account).
Finance is not only pro-growth, but also pro-poor. Greater access to credit, through indirect effects in product and labor markets, also benefits the poor who are able to obtain better quality savings and payments services. But where to start and what should governments do?
Governments should build the necessary contractual and...