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This paper explores market distortions produced by import protection, export subsidies, labour and exchange rate policies in some countries of Latin America (Argentina, Brazil, Chile and Colombia), Africa (Tunesia and Ivory Coast) and Asia (Indonesia, Pakistan and South Korea), and the interaction of these distortions in respect of the developing strategies applied

Incremental Reform and Distortions in China's Product and Factor Markets Xiaobo Zhang and Kong-Yam Tan The purpose of economic reform is to reduce distortions and enhance efficiency. This could happen, for example, if increased interregional competition as a result of fiscal decentralization led local governments to impose trade protection measures against each other. For permissions, please e-mail: journals.permissions oxfordjournals.org 279 280 THE WORLD BANK ECONOMIC REVIEW panel data set of 32 industries at the two-digit level of aggregation in 29 provinces, Bai and others (2004) find, after an initial decline, an increase in regional specialization of industrial production, suggesting diminishing impediments to regional trade flows. The second approach, drawing from the risk-sharing literature, is to check the degree of consumption smoothing across time and space, which is an important indicator of capital mobility and asset market completeness. As in Young, the analysis uses the following sum of the squared deviations of the sectoral output shares of China's provinces from the group average to the degree of product market integration: Unweighted measure : Weighed measure : XX Sij À j 2 S i j 1 2 XX i j N wi Sij À j 2 S where Sij denotes the share of sector j in province i's output; Sj is the group average Sij across provinces; wi denotes the province's share of total GDP of N 286 THE WORLD BANK ECONOMIC REVIEW TABLE 2. Graphing the unweighted and weighted measures of the composition of output shares for 1978 2001 shows similar results--the composition of output converges up to the early 1990s and diverges thereafter (figure 1). The results are supported by an independent early study by Yang and Zhou (1999), who find gains in aggregate output of 0.7 percent, 3.1 percent, and 5.8 percent based on the same three hypothetical percentage transfers of labor using 1992 as a baseline. This article has examined the changing patterns of distortions during the reform process, how past policies have contributed to these distortions, and the estimated cost to the economy through lower output and greater regional and sectoral disparity. However, in response to the increasing fragmentation in product markets, the government has undertaken measures to remove local protections. While empirical estimates and policy simulations can provide rough order of magnitude estimates of structural problems, policy recommendations on gradual elimination of these distortions need to take into account complex issues of political feasibility, sequencing, implementation problems, downside risks of policy measures, nature of vested interests and how to overcome them, the need to minimize negative side effects, and the effects on equity, regional disparity, and rural-urban inequality.

AbstractWe present an overview of the literature that links capital structure and factor‐product markets. These studies relate some elements of the modern financial theory to the stakeholder theory, industrial organization, and firms' strategic management. Three main points are highlighted. First, the relevant role of non‐financial stakeholders in capital structure design. Second, the interactions between capital structure and market structure. Third, the two‐direction effect between the firm's capital structure and its strategic behavior in product markets. Our study aims to build an index for the existing works to guide researchers for new ideas and possible advances.

AbstractThis paper examines the ramifications of an imperfect product market, with reference to factor growth and foreign investment, for a small Harris–Todaro economy with the agricultural (manufacturing) sector under perfect competition (monopoly protected by an import quota). It is shown that factor growth entails multiple component effects of conflicting signs (i.e. the primary growth effect, the distortionary production effect, and production and employment effects induced by changes in the domestic commodity prices), and, hence, can be welfare‐reducing. Similarly, an inflow of foreign capital can be immiserizing when the foreign capital earnings are repatriated at the domestic rental rate.