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The purpose of this paper is to explore the effect of globalization and credit market imperfections on child labour.

Analysis is based on cross-country regression framework, incorporating 129 developing countries for the period 1970-2010.

The findings indicate that countries that are more open to trade and having higher foreign direct investment inflow have lower incidence of child labour. As child labour in export-related industries is hard to find, trade sanctions may not have a significant effect on child labour. Further study concludes that income of the bottom quartile of the population is the best representation of the income of the poor when studying child labour.

The study uses the data compiled by International Labour Organization (ILO). Though much of the variation in the data is because of the adjustments made by ILO, this is the only comparable cross-country estimates available. Hence in the absence of the cross-country comparable estimates, many empirical studies have used this data set (e.g. Cigno et al., 2002; Dehejia and Gatti, 2002; Rogers and Swinnerton, 2001). This study acknowledges this limitation but again in the absence of any comparable estimates, the assessment is also based on this data set.

Study contributes in the literature by comparing the effect of export and trade and by exploring the effect of an alternate measure of the income, estimated by using Gini coefficient, on child labour. Further studies exploring the effect of globalization did not explore the presence of imperfect credit market, however, this study has explored the effect of credit market imperfections as well.

This study aims to focus on the role of labor regulation and credit market imperfections, in addition to that of factor endowments, in determining capital intensities in Indian manufacturing.

The paper considers an alternative approach to identifying the effects of India ' s labor regulations on industrial performance. In particular, the paper uses a measure of the stringency of labor regulations across countries – one that is completely independent of the India-specific measures used by earlier studies – and examines its relationship with capital intensities across manufacturing industries. Additionally, since labor regulations are unlikely to be the only reason for imperfections in factor markets, the paper also examines whether and to what extent capital market imperfections affect capital intensities across manufacturing industries. The paper then presents a case study that seeks to ascertain whether actual capital intensities prevailing in Indian manufacturing in major industry groups from 1989 to 1996 were larger than predicted capital intensities for these industry groups based on relative factor demand functions estimated for the USA (a country with relatively less restrictive labor laws and a more developed financial system) evaluated at Indian wages. Finally, the paper uses a recently available dataset to compare capital intensities in Indian and Chinese manufacturing to investigate the behavior of these two emerging Asian economies since 1980, when they started out with relatively similar socio-economic conditions.

The paper finds that India uses more capital-intensive techniques of production in manufacturing than countries at similar levels of development (and similar factor endowments), including China. For a majority of manufacturing industries, labor freedom and capital market development are, in addition to factor endowments, important determinants of capital intensity of production techniques used. Results reveal that, controlling for factor prices, India specializes in more capital-intensive varieties within broad industry groups relative to the USA, a more capital-abundant economy.

To the best of the authors ' knowledge, such a study has not been done for any other country. The paper sheds light on the important issue regarding the use of capital-intensive techniques in manufacturing in India, which is a labor-abundant country. The role of labor regulation has been extensively debated and the paper also investigates its role along with the role played by credit market imperfections.

Purpose – To discuss, from the perspective of developing countries, recent proposals for reforming international standards for bank capital requirements.

Methodology/approach – After evaluating, from the viewpoint of developing countries, the effectiveness of capital requirements reforms and progress in implementing existing regulatory accords, the chapter discusses the procyclical effects of Basel regimes, and suggests a reform proposal.

Findings – Minimum bank capital requirements proposals in developing countries should be complemented by the adoption of an incremental, size-based leverage ratio.

Originality/value of chapter – This chapter contributes to enlarge the academic and policy debate related to bank capital regulation, with a particular focus on the situation of developing countries.

This chapter builds up a simple general equilibrium trade model where, in the absence of a credit market for human capital formation, initial distribution of capital endowment and relevant factor prices determine the size of the three income classes. The poor, with little capital, invests in traditional manufacturing, the middle-income group invests solely in human capital and the rich invests in both. Chances are that such an economy will export both high- and low-skilled goods, importing the middle one. Conventional wisdom suggests that greater skill premium encourages skill formation. In contrast, we show that higher unskilled wage and lower degree of income inequality are consistent with greater skill formation. We also show that protection discourages skill formation and may aggravate inequality.

This study examined the impact of the Input Credit Scheme (ICS) by the Integrated Water Management and Agriculture Development (IWAD) on the productivity and food security of smallholder rice farmers in Ghana.

Cross-sectional data from 250 rice farming households in the Mamprugu Moagduri district of the North East Region obtained from a multi-stage sampling technique were used for the study. Inverse Probability Weighted Regression Adjustment (IPWRA), Propensity Score Matching (PSM) and Kendall's coefficient of concordance were the methods of analysis employed.

Empirical results show that education, rice farming experience, dependency ratio, FBO membership, farm size and farm age were the significant factors influencing participation in the input credit scheme (ICS). Also, participants had an average rice productivity of 1,476.83 kg/ha, whereas non-participants had 1,131.81 kg/ha implying that participants increased their productivity by about 30%. In addition, the study revealed that participant households increased their household dietary diversity (HDDS) by 0.45 points amounting to about 8% diversity in their diets. High-interest rates associated with credit received, the short periods of credit repayment and the high cost of inputs provided under the scheme were the most challenging constraints associated with partaking in the ICS.

The available literature on agricultural interventions have predominantly emphasized input credit as a key factor for improving cropt productivity and food security of smallholders. This study provides compelling evidence that participation in ICSs can result in substantial benefits for agricultural development, as evidenced by increased productivity leading to improved food security. The significance of these findings is highlighted by the fact that, through participation in input credit schemes, smallholder rice farmers in many developing countries see substantial improvement in their capacity to access productive resources, thereby improving their productivity, while simultaneously reducing food insecurity.

Leveraging on the improved productivity of participants in the ICS, this study advocates that such input credit schemes should scale up to more food-insecure farming communities in Ghana.

The study uses a doubly robust econometric approach to evaluate the impact of ICS on smallholder rice farmers' productivity and food security in Ghana, making it the first of its kind. The findings offer a solid basis for future research and provide guidance for policymakers looking to boost agricultural development in Ghana.

The purpose of this paper is to examine farmers’ access to credit, credit constraint, and productivity in the Northern Savannah ecological zone of Ghana.

Secondary data from the Ghana Feed the Future baseline survey involving a total sample of 2,968 farm households were used. The conditional mixed process (CMP) framework was applied to estimate access to credit, credit constraint, and productivity simultaneously. As a system estimator the CMP corrects for possible heterogeneity and sample selection bias.

The results from the estimations revealed that age, literacy, farm non-mechanized equipment, and group membership were the variables influencing farmers’ access to credit. Credit constraint conditions were determined by household size, locality, group membership, and household durable assets. Finally, the results showed that productivity of farmers was dependent on marital status, household size, locality, farm size, commercialization, farm mechanized equipment, group membership, and household durable assets.

This paper is the first, to the best of the authors’ knowledge, to use the CMP framework to jointly estimate access to credit, credit constraint, and productivity. The results indicate that estimating credit access and constraint models separately would have yielded biased estimates. Thus, this paper informs future research on farmers’ credit access, credit constraint, and productivity for informed policymaking.

The purpose of this paper is threefold. The paper aims to explore and present empirical evidence of microeconomical perspective of credit rationing phenomenon with special emphasis on the small and medium‐sized enterprise (SME) sector in the Republic of Croatia. In addition, the intention of this paper is to discuss SMEs' (ir)relevance in economic recovery and growth. Thus, macroeconomical implications of credit rationing problem are indirectly underlined.

Empirical analysis of credit rationing in the corporate bank loan market was carried out on a sample from the Croatian financial market which included data on approximately 4,300 small, medium‐sized and large companies in the period from the end of 2008 to the first quarter of 2010. Multiple linear regression model was developed in order to examine enterprise's size and borrowing costs nexus as well as borrowing costs' determinants. Descriptive statistics provided certain evidence on magnitude of credit rationing and pointed out different levels of interest rates after which credit rationing and credit discouraging appears for various sizes of enterprises.

In comparison to the large enterprises, SMEs continuously encounter higher borrowing costs, upon which this discrepancy enlarges in the aftermath and presence of financial crisis. Credit spread which is used as a proxy of borrowing costs is statistically significantly determined with enterprise's size, collateral and internal credit rating of a borrower, whereas enterprise's size evidenced the highest explanatory power. Descriptive statistics showed that market cleaning of the SMEs credit applications evolves on the level of higher interest rates.

The paper recommends thorough reexamination of economic importance of SMEs in Croatia and calls upon more efficient support strategy and fund allocation. Precisely, government actions should stimulate more inclusive bank finance of creditworthy SMEs.

This paper should induce and actualize better understanding of pitfalls, blunders and potentials of SMEs in fostering economic growth. More specifically, conclusions should be helpful to policy makers, national prudential authorities and students of economics.

Inclusion of borrowing costs in the analysis that presents a cut‐off point of demand and supply driven credit rationing could be a useful method for future empirical research on credit rationing.

Evidence suggests that unorganized manufacturing units are extremely credit-starved. The purpose of this paper is to study the effect of such credit unavailability for small firms, and to see if it has altered the erstwhile production organization in a way which has led to the withdrawal of the small firms from both input and output market, leading to increased production outsourcing between the formal and informal firms.

Based on data collected from two textile clusters in Maharashtra, India, the study shows that credit unavailability has led small firms to increasingly work for bigger firms as outsourced units. The paper uses a measure of technology and productivity to undertake logistic regression and sub-sample regressions to confirm production reorganization resulting from credit unavailability. This would provide additional insights for standard measures of intra-country intra-industry trade

The exclusion of the unorganized production units from the formal lending process has, over the years, led to a reorganization of the existing production structure, whereby the small firms are forced to work for bigger formal firms on piece-rate basis. To circumvent their credit issues, the small unorganized sector firms have increasingly started to work for bigger firms as outsourced units.

This is an original research work. The paper fulfils the identified need of addressing how the plaguing social issue of financial exclusion of unorganized firms has led to production reorganization.

European Union (EU) central and eastern economies have gone through a process of structural change since 1989, when the post-communist transition started. This process was afterwards reinforced by the three EU enlargement waves that took place in 2004, 2007 and 2013. Though exhibiting low levels of aggregate productivity, this group of countries joined the EU with higher levels of human capital than the southern member states, an advantage that should have accelerated real convergence towards the EU15. However, evidence to date suggests that the convergence process came to a halt in 2007–2008 when massive capital inflows stopped, highlighting the fragilities of the growth strategies implemented so far. In these peripheral countries, structural change has been characterised by an expanding services sector alongside growing income inequality. The two strands of literature on these issues highlight that: (a) an expanding services sector may not be detrimental for growth, quite the opposite, depending on services composition and on the capacity of services sub-sectors to incorporate information and communication technologies (ICTs); and (b) inequality is negatively related to growth through the fiscal policy, socio-political instability, borrowing constraints to investment in education and endogenous fertility channels and positively through the savings channel and incentives. We analyse the nexus between structural change, inequality and growth in this group of countries highlighting income inequality as a potential mechanism that connects the other two variables. We provide a descriptive quantitative analysis of the profiles of structural change and income inequality in our sample and apply dynamic panel methods to investigate the existence of causality among services sector expansion, inequality and aggregate productivity considering a maximum period between 1980 and 2010.

The purpose of this paper is to analyse how farm production and input use (land, variable inputs, labour, and capital) is related to farm access to credit in the Central and Eastern Europe (CEE) transition countries.

Drawing on a unique farm level panel data set with 37,409 observations and employing a matching estimator, this paper analyses how farm access to credit affects farm input allocation and farm efficiency in the CEE transition countries. The large size of the FADN data set has an additional advantage. It allows the authors to employ a semi‐parametric estimator based on the propensity score matching. Using more than 37,409 observations assures that the loss in efficiency of semi‐parametric estimates, as compared to parametric ones, is not a problem. This is important for at least two reasons. First, applying a semi‐parametric propensity score matching (PSM) estimator allows to control for any heterogeneity in the relationship between farm performance and their observable characteristics (in particular access to credit). Second, matching estimators are robust in situations where farms having access to credit systematically differ from those that do not.

It is found that farms are asymmetrically credit constrained between inputs. The use of variable inputs and capital investment increases up to 2.3 percent and 29 percent, respectively, per 1,000 EUR of additional credit. The authors' estimates suggest also that farm access to credit increases the total factor productivity up to 1.9 percent per 1,000 EUR of additional credit, indicating that an improved access to credit results in adjusting the relative input intensities on farms. This finding is further supported by a negative effect of better access to credit on labour, suggesting that these two are substitutes. Interestingly, farms are found not to be credit constrained with respect to land.

To the best of the authors' knowledge, the present paper is the first to investigate the importance of access to credit for farm performance in the CEE region as a whole.