Showing papers by "Government of Canada published in 2012"

Financing new venture exporters

Abstract: This paper investigates the demand for, and access to, financing for young small and medium-sized enterprises (SMEs). The work compares, theoretically and empirically, two sets of new firms—those that export and those that do not export—as to the frequency with which they seek and obtain external financing. The work hypothesizes that new growth firms and new exporter firms are especially likely to seek external financing yet less likely to obtain financing. Empirical findings confirm these expectations, demonstrating that young growth firms were more likely than non-growth firms to seek all forms of capital and exporters were particularly likely to apply for equity and trade credit. Commercial lenders were less likely to approve loan applications from early stage growth firms, and especially so for applications from young, growth-oriented SME exporters. The implications of these results for research and public policy are discussed.

Searching for Black Holes in Subways

Abstract: Current mobile agent algorithms for mapping faults in computer networks assume that the network is static. However, for large classes of highly dynamic networks (e.g., wireless mobile ad hoc networks, sensor networks, vehicular networks), the topology changes as a function of time. These networks, called delay-tolerant, challenged, opportunistic, etc., have never been investigated with regard to locating faults. We consider a subclass of these networks modeled on an urban subway system. We examine the problem of creating a map of such a subway. More precisely, we study the problem of a team of asynchronous computational entities (the mapping agents) determining the location of black holes in a highly dynamic graph, whose edges are defined by the asynchronous movements of mobile entities (the subway carriers). We determine necessary conditions for the problem to be solvable. We then present and analyze a solution protocol; we show that our algorithm solves the fault mapping problem in subway networks with the minimum number of agents possible, k=γ+1, where γ is the number of carrier stops at black holes. The number of carrier moves between stations required by the algorithm in the worst case is $O(k \cdot n_{C}^{2}\cdot l_{R} + n_{C}\cdot l_{R}^{2})$, where n C is the number of subway trains, and l R is the length of the subway route with the most stops. We establish lower bounds showing that this bound is tight. Thus, our protocol is both agent-optimal and move-optimal.

Bank stock returns, leverage and the business cycle

Abstract: The returns on bank stocks rise and fall with the business cycle, making bank equity financing cheaper in the boom and dearer during a recession. This provides support for prudential tools that give incentives for banks to build capital buffers at times when the cost of equity is lower. In addition, banks with higher leverage face a higher cost of equity, which suggests that higher capital ratios are associated with lower funding costs.

Field and satellite observations of the formation and distribution of Arctic atmospheric bromine above a rejuvenated sea ice cover

Abstract: Recent drastic reduction of the older perennial sea ice in the Arctic Ocean has resulted in a vast expansion of younger and saltier seasonal sea ice. This increase in the salinity of the overall ice cover could impact tropospheric chemical processes. Springtime perennial ice extent in 2008 and 2009 broke the half-century record minimum in 2007 by about one million km2. In both years seasonal ice was dominant across the Beaufort Sea extending to the Amundsen Gulf, where significant field and satellite observations of sea ice, temperature, and atmospheric chemicals have been made. Measurements at the site of the Canadian Coast Guard Ship Amundsen ice breaker in the Amundsen Gulf showed events of increased bromine monoxide (BrO), coupled with decreases of ozone (O3) and gaseous elemental mercury (GEM), during cold periods in March 2008. The timing of the main event of BrO, O3, and GEM changes was found to be consistent with BrO observed by satellites over an extensive area around the site. Furthermore, satellite sensors detected a doubling of atmospheric BrO in a vortex associated with a spiral rising air pattern. In spring 2009, excessive and widespread bromine explosions occurred in the same region while the regional air temperature was low and the extent of perennial ice was significantly reduced compared to the case in 2008. Using satellite observations together with a Rising-Air-Parcel model, we discover a topographic control on BrO distribution such that the Alaskan North Slope and the Canadian Shield region were exposed to elevated BrO, whereas the surrounding mountains isolated the Alaskan interior from bromine intrusion.

Intangible Capital and Productivity Growth in Canada

Abstract: This paper develops a measure of intangible capital and examines the contribution of intangibles to labour productivity growth in the Canadian business sector. It applies the methodology developed by Corrado et al. (2005, 2009) for the United States. The paper finds that investment in intangibles totalled an estimated $151 billion in the Canadian business sector in 2008, which represents 13.2% of gross domestic product in that year. Investment in intangibles has increased much faster than investment in tangibles over time, and the ratio of intangible investment to tangible investment increased from 0.23 in 1976 to 0.66 in 2008. The paper shows that intangibles made a significant contribution to labour productivity growth and that the contribution of intangibles to labour productivity growth was only slightly lower than the contribution of tangibles in the Canadian business sector. The contribution of intangibles to labour productivity growth was lower in Canada than in the United States for the post-1995 period, as a result of Canada’s lower investment in intangibles (software as well as research and development) in recent years.More studies related National Economic Accounts and Macro-Economy and to Productivity are available in Update on Economical analysis.

Do Newspaper Articles on Card Fraud Affect Debit Card Usage

Abstract: This paper investigates the impact of newspaper articles about skimming fraud on debit card usage in the Netherlands, using daily transaction data and daily newspaper announcements from January 1st 2005 to December 31st 2008. Key finding is that articles about skimming fraud significantly affect same day debit card usage. The direction and strength of the media effects strongly depend on the specific characteristics of the publications, such as type of fraud addressed and their position in the newspaper, but above all by the frequency with which they come out. The effects, however, are economically small compared to other factors, such as calendar and holiday effects, and do not sustain or accumulate in the long run. Yet, some first cost calculations demonstrate that the impact of media attention on total retail payments efficiency is not to be underestimated.

Effectiveness of Capital Controls in India: Evidence from the Offshore NDF Market

Abstract: This paper examines the effectiveness of international capital controls in India over time by analyzing daily return differentials in the nondeliverable forward (NDF) markets using the self-exciting threshold autoregressive (SETAR) methodology. The paper presents a narrative on the evolution of capital controls in India and calculates a new index of capital account liberalization using cumulative monthly changes in restrictions on inflows and outflows. It employs the de jure indices of changes in restrictions on capital inflows and outflows to identify particular policy episodes, and tests the de facto effects of restrictions by calculating deviations from covered interest parity (CIP) utilizing data from the three-month offshore nondeliverable rupee forward market. The paper estimates no-arbitrage bands for each episode using SETAR where boundaries are determined by transactions costs and by the effectiveness of capital controls. It finds that Indian capital controls are asymmetric over inflows and outflows, have changed at one stage from primarily restricting outflows to effectively restricting inflows; and that arbitrage activity closes deviations from CIP when the threshold boundaries are exceeded in all subperiods. Moreover, the results indicate a significant reduction in the barriers to arbitrage since 2009, suggesting that gradual liberalization of India's capital account has played an important role in integrating onshore and offshore markets. The paper also applies the methodology to the Chinese RMB NDF market and find that capital controls are strictly limiting capital inflows with the exception of two periods of regional and international financial turbulence. The intensity of Chinese controls varies over time, indicating discretion in the application of capital control policy but, unlike India, shows no sign of gradual relaxation or liberalization.

Securitization and the Dark Side of Diversification

Abstract: Diversification by banks affects the systemic risk of the sector. Importantly, Wagner (2010) shows that linear diversification increases systemic risk. We consider the case of securitization, whereby loan portfolios are sliced into tranches with different seniority levels. We show that tranching offers nonlinear diversification strategies, which can reduce the failure risk of individual institutions beyond the minimum level attainable by linear diversification, without increasing systemic risk.

Market Expansion and Productivity Growth: Do New Domestic Markets Matter as Much as New International Markets?

Abstract: This paper asks how market expansion contributes to productivity growth. It investigates whether entry to both new international markets and new domestic markets is associated with greater productivity growth. It also examines whether exit from export markets is necessarily associated with deteriorating performance or whether it too can lead to success if associated with movements to new markets. Finally, the paper drills down into the strategic stance of firms that move to new markets to examine the strategic differences that set them apart from their compatriots that do not find themselves able to adapt.

Firm Dynamics: Firm Entry and Exit in Canada, 2000 to 2008

Abstract: This paper examines firm entry and exit patterns in the Canadian business sector by using the Longitudinal Employment Analysis Program database developed by Statistics Canada. Our primary purpose is to present stylized facts and provide descriptive analysis of the entry and exit patterns in the Canadian economy in order to form a solid foundation for future in-depth theoretical and empirical studies of firm dynamics. In particular, this paper focuses on the relative importance of entrants and exiters in terms of both number and employment, the persistence of entry and exit patterns over time, and the correlation between industry entry and exit rates.

Short-Term Forecasting of the Japanese Economy Using Factor Models

Abstract: While the usefulness of factor models has been acknowledged over recent years, little attention has been devoted to the forecasting power of these models for the Japanese economy. In this paper, we aim at assessing the relative performance of factor models over different samples, including the recent financial crisis.

The Embarrassing Preamble? Understanding the 'Supremacy of God' and the Charter

Abstract: The reference to the supremacy of God (the clause) found in the preamble to the Canadian Charter of Rights and Freedoms has been either marginalized or completely ignored by Courts and legal scholars. This leaves the impression that most are either embarrassed by the clause, or just wish to ignore it. Given the importance the Supreme Court of Canada has ascribed to constitutional preambles, it is time to acknowledge the supremacy of God clause and make a good faith attempt to determine its meaning and role in Canadian constitutionalism. This paper constitutes just such an attempt. Our thesis is straightforward. The clause recognizes a fundamental principle upon which the theory of the Charter is based: people possess universal and inalienable rights derived from sources beyond the state, and the Charter purports to enumerate positivist protections for these pre-existing human rights. This understanding of the clause is rooted in the historical development of human rights theory out of the natural law tradition and finds support both in the dicta of the Supreme Court of Canada as well as the thinking of the Charter's framers. This analysis restores meaning and dignity to the clause and, as we will argue, has important normative and practical implications for our understanding of the Charter itself, including the limitation of people's rights under Section 1.

Income Adequacy in Retirement: Accounting for the Annuitized Value of Wealth in Canada

Abstract: Discussions of pension adequacy for elderly Canadians have used the rate at which income falls with age — the income replacement rate or the ratio of post-retirement income to pre-retirement income. Use of income streams to assess post-retirement welfare requires a standard against which adequacy of the replacement rates can be judged. Because some expenditures (for example, work-related expenses) can be expected to fall after retirement, a declining income stream does not necessarily signal financial problems for seniors. More importantly, income as normally measured captures only part of what is available to seniors if households possess assets, which in retirement are not being used to generate measured income.This paper uses a different metric, referred to as "potential" income. Potential income is the sum of realized income and the income that could be realized from owned assets such as mutual funds and housing. Households prepare for retirement by saving and borrowing and investing the proceeds. The assets accumulated over a lifetime may or may not be drawn down in later years. If they are not, income streams underestimate the “potential” income available to support retirement. This paper takes this potential into account when comparing the pre- and post-retirement financial status of Canadian households.Based on data from the 1999 Survey of Financial Security, this analysis shows that when “potential income” is considered, households headed by seniors (aged 65 or older) compare much more favorably with younger households than when normally measured income is utilized. Indeed, when after-tax estimates are used, the potential income per adult-equivalent in senior households exceeds the income of households headed by younger adults.

Fault-Tolerant exploration of an unknown dangerous graph by scattered agents

Abstract: Black hole search (Bhs) is the problem of mapping or exploring a network where there are dangerous sites (black holes) that eliminate any incoming searcher without leaving a discernible trace. Dangerous graph exploration (Dge) extends the Bhs problem to include dangerous links (black links). In the literature, both problems have only been studied under the assumption that no faults occur in the network during the exploration. In this paper, we examine the impact that link failures can have on the exploration of dangerous graphs. We study the Dge problem under the following conditions: there are multiple black holes and black links, the network topology is unknown, the searchers are initially scattered in arbitrary locations, and the system is totally asynchronous. In this difficult setting, we assume that links can fail during the computation. We present an algorithm that solves the Dge in the presence of such dynamic link failures. Our solution to the problem works with an optimum number of searchers in a polynomial number of moves. This is the first result dealing with fault-tolerant computations in dangerous graphs.

Finding good coffee in paris

Abstract: Finding a good cup of coffee in Paris is difficult even among its world-renowned cafes, at least according to author David Downie (2011). We propose a solution that would allow tourists to create a map of the Paris Metro system from scratch that shows the locations of the cafes with the good coffee, while addressing the problem of the tourists losing interest in the process once they have found good coffee. We map the problem to the black hole search problem in the subway model introduced by Flocchini et al. at Fun with Algorithms 2010. We provide a solution that allows the tourists to start anywhere and at any time, communicate using whiteboards on the subway trains, rely on much less information than is normally available to subway passengers, and work independently but collectively to map the subway network. Our solution is the first to deal with scattered agents searching for black holes in a dynamic network and is optimal both in terms of the team size and the number of carrier moves required to complete the map.

Online and on Point: Broadband Usage in Canada and the United States

Abstract: Despite the pervasiveness of the Internet, more than one in five Canadian and American households did not go online by 2010. Furthermore, demographic and geographic disparities in Internet use, known as the “digital divide,” led to lower adoption rates among rural, low-income, less-educated, and older individuals from both countries. While the magnitude of these disparities has recently decreased, policymakers seek to eliminate such gaps in an economically sustainable and politically acceptable fashion.This paper examines the patterns of broadband Internet adoption and usage in Canada and the United States. Data used in this report were collected through the Statistics Canada Canadian Internet Use Survey (CIUS) and the U.S. Census Bureau’s Current Population Survey (CPS) Computer and Internet Use Supplement, as well as the Canadian Radio-television and Telecommunication Commission’s (CRTC) annual Communications Monitoring Report, the Federal Communications Commission’s (FCC) periodic collections of broadband data, and U.S. National Broadband Map. We examine the characteristics of those Canadians and Americans who are not online, assessing in particular their stated reasons for not using the Internet, and discuss the implications of their reasons. Contemplated policy responses will necessarily differ based on these varying underlying reasons. For example, the inability to access the Internet based on the unavailability or high cost of broadband requires a different policy response than that required to address the reluctance to use it due to lack of perceived utility, lack of digital skills, or fear of technology [Neogi and Brocca, 2011].

Decommissioning and Reclamation of Mine Sites

Abstract: Environmental decision making continues to increase in complexity due to the growing number of environmental laws and regulations pertaining to mining operations, the rising environmental concerns ...

Designing an Ethical Structure for Social Influence Marketing (SIM)

Abstract: Unprecedented advances in media technology have created the need to define ethics for a media-age ontology that combines the dynamics of physics and psychology. This unprecedented human reality has been called the media-sphere, and it appears to have all the dimensions and dynamics of dreams as defined by Carl Jung. Because of the dreamlike dynamics and structural dimensions of the media sphere, its psychological dynamics may be contemplated in terms of Jungian dream analysis which is intrinsically ethical. The Jungian model for dream analysis is structurally and dynamically consistent with the most recent discoveries in cognitive research. Because of its subjective, emotive, interactive integrity as defined by Aristotle’s dramatic unities, dramatic structure is a common denominator for the study of conscious-unconscious cognitive states. This chapter explores the ethics of social influence marketing (SIM) relative to the dynamics and standards of morality implied by cognitive principles of Analytical Psychology. DOI: 10.4018/978-1-61350-168-9.ch013

Using Strategic Environmental Assessments to Guide Oil and Gas Exploration Decisions: Applying Lessons Learned from Atlantic Canada to the Beaufort Sea

Abstract: Strategic Environmental Assessments have been used on the Atlantic Coast of Canada to inform oil and gas exploration decisions. Both the Newfoundland and Nova Scotia offshore petroleum boards have about a decade of experience with strategic environmental assessments. In the Beaufort Sea, there is no such process currently in place to guide decisions about oil and gas exploration. In the wake of the Deep Horizon spill in the US, this article considers the lessons learned from the Atlantic Canada experience, and makes recommendations for the design of an oil and gas strategic environmental assessment process for exploration in the Beaufort Sea.

Wage Growth Over the Past 30 Years: Changing Wages by Age and Education

Abstract: This article in the Economic Insights series examines two questions: (1) Which groups of Canadian workers have experienced stronger real wage growth over the past three decades?; and (2) To what extent do individuals’ acquisition of education, general work experience, and seniority within firms, as well as their movements into higher-wage or lower-wage occupations and industries, account for differences in real wage growth observed across groups of workers? This article uses data from various Statistics Canada surveys and focuses on the real (hourly or weekly) wages earned by full-time workers. It is based on research carried out at Statistics Canada aimed at providing information on how wage rates of Canadian workers have changed over the past three decades. Wages are expressed in 2010 dollars. Since the early 1980s, real wages of various groups of workers have grown at markedly different rates in Canada and in many industrialized Western countries. Technological changes, growth in international trade, institutional factors (e.g., de-unionization, changes in minimum wages, and changes in the incidence of pay-for-performance), movements in group-specific labour supplies, and changes in social norms have been cited as potential drivers of this differential wage growth. To help shed some light on this matter, the article examines how real wages of Canadian workers evolved across age groups and education levels from 1981 to 2011.

The New Investment Paradigm

Abstract: This article in the Economic Insights series summarizes results from current Statistics Canada research on investment and capital stock accumulation. It reports on the study, Intangible Capital and Productivity Growth in Canada. Compiling information on wealth accumulation has been central to Statistics Canada’s activities since its inception. The wealth of the nation is a measure of its financial strength, international standing, and economic power. In 1915, Canada’s first Chief Statistician, Robert H. Coats, compiled Canada’s initial estimate of national wealth at the behest of the Borden Conservatives. He set the value of Canada at $16.3 billion. Since then, the practice of compiling national wealth estimates has continued, with current national balance sheet estimates placing Canada’s 2011 wealth at $6.9 trillion. Over time, the accuracy with which national wealth is estimated has improved, and the scope of assets examined has expanded. This process involved debate about which assets should be included, and how they should be measured.

Capital Structure Decisions: Insights from Private Firms

Abstract: A large body of empirical literature shows that firm size, profitability, tangibility and growth opportunities help explain cross-sectional differences in leverage ratios. Due to data limitations, little attention has been given to determinants of leverage for private firms. Using a new data set of the whole population of 560,256 Canadian corporate firms, we fill this gap by studying leverage choices of both private and public firms. We find that leverage ratios are lower for public firms, which indicates that access to the public equity market provides a substitute for debt in the firms financing choice. The leverage difference is almost entirely driven by higher short-term debt rather than long-term debt for private firms. We find that under poor macroeconomic conditions private firms have lower long- term and higher short-term leverage than public firms. However, when economic conditions are good both short and long-term leverage are higher for private firms than for public firms. Higher economic uncertainty associates with lower short- and long-term leverage for private firms but higher leverage for public firms. These results support the hypothesis that firms with larger information asymmetries rely on short-term debt financing. Economic conditions play a crucial role in the maturity structure of debt financing for private firms which are precisely the ones subject to greater information asymmetries.

Recent Trends in Measures to Manage Capital Flows in Emerging Economies

Abstract: This paper reviews recent trends in the imposition of capital flow management measures in emerging market economies (EMEs). We find that since the crisis, there has been a shift in the balance of new measures towards net capital inflow reducing measures. However, this is not driven primarily by an increase in inflow tightening measures (e.g. taxes on inflows) relative to pre-crisis periods of inflow surges, but rather by significantly slower inflow liberalization trends (i.e. existing capital controls remaining in place). In addition, there has been a compositional shift in net capital inflow reducing measures: outflow liberalizations were the predominant tools for reducing net capital inflows pre-crisis, but such measures have become less important post-crisis. Overall, the pre-crisis trend towards capital account openness has stalled. The use of capital flow management measures is motivated by macroeconomic as well as financial stability concerns. The IMF recently endorsed use of capital controls as “last resort” measures in macroeconomic management. We also find that by IMF criteria, capital flow measures have not been introduced as a last resort since 2004 – alternative macroeconomic policies to deal with the surge in net capital inflows were available to the majority of countries. Moreover, most capital flow measures introduced by EMEs since 2004 are pure capital controls rather than currency based and/or prudential type measures, suggesting that they were not directly targeted to promote financial stability. However, since the crisis, there has been a small shift towards prudential-type measures.

La sécession et les vertus de la clarté (Secession and the Virtues of Clarity)

Abstract: French Abstract: Le phenomene de la secession est considere avec une mefiance certaine par la communaute internationale, voire avec une veritable aversion lorsqu’elle est faite de facon unilaterale. Cette mefiance transparait dans le droit interne des Etats, dans le droit international et dans la pratique des Etats. Meme quand la secession ressort comme une solution logique et pratique – Kosovo, Sud-Soudan – elle n’est envisagee qu’avec beaucoup de precaution. L’avis rendu en 1998 par la Cour supreme du Canada relativement a la secession du Quebec pourrait aider la communaute internationale a etablir dans quelles circonstances et selon quelles modalites la delimitation de nouvelles frontieres internationales entre des populations pourrait devenir une solution juste et applicable. En ce sens, cet avis de la Cour supreme du Canada, en plus d’influencer pour le mieux le debat d’aujourd’hui sur l’unite canadienne, a une portee universelle qui pourrait aider a resoudre pacifiquement les situations complexes et delicates de rupture nationale, sur la base de la clarte, de la legalite et de la justice pour tous.English Abstract: The phenomenon of secession is considered with mistrust, even aversion when effected unilaterally. This mistrust can express itself at three levels: domestic law, international law and state practice. Even in circumstances when secession can be considered as a logical and practical solution – Kosovo, South Sudan – it is envisaged only with the utmost caution. The 1998 opinion rendered by the Supreme Court of Canada concerning the reference on the secession of Quebec could have a positive impact in this regard. It may help the international community clarify under what circumstances, and by what means, the delineation of new international borders between populations could be a just and applicable solution. In addition to influencing – for the best – today’s debate on Canadian unity, the Court’s opinion has a universal scope and significance that may help peacefully solve complex and delicate national breakup situations along the principles of clarity, the rule of law and justice for all.

Who does Collaborative Learning Help? The Pedagogical Efficacy of Student Learning Through Collaborative Learning Sessions

Abstract: The effectiveness of voluntary training programs is inherently difficult to measure due to the issue of selection bias. Random assignment is suggested as a method to ameliorate this bias. We construct our own randomization experiment to gain insight into this question by utilizing a structured platform. In this study, we investigate the efficacy of Collaborative Learning (CL) recitation sessions on student outcomes in large introductory microeconomics sections. We address the selection issues by using a quasi-randomization experiment and measure the treatment effects by programme evaluation methods. We find that the average treatment effect of CL is 4.6-4.9 percent of the final grade or in qualitative terms, a grade change i.e. B to B plus. We also investigate the distributional effects via quantile treatment effects. We find that CL participants at the bottom 40 percentile showed the greatest improvement. Finally, we apply a nonparametric sensitivity analysis and confirm that the sign of the treatment effects is robust to potential violations of the underlying assumptions. Therefore, this voluntary training is effective.

What are the Impacts of Late-Life Widowhood or Divorce on Income Replacement Rates?

Abstract: This article in the Economic Insights series examines the income replacement rates achieved in old age by Canadians who experienced marital dissolution, through either widowhood or divorce, after age 55. It is based on results published in the research paper Income Replacement Rates Among Canadian Seniors: The Effect of Widowhood and Divorce.There has long been concern regarding the financial security of seniors as they age, particularly among those experiencing marital dissolution in later life. It is often hypothesized that older individuals, particularly women, who experience marital dissolution are more likely to face financial challenges than those who remain married. Do late-life changes in marital status have an impact on the financial well-being of older Canadians? And are women more likely to be affected by such changes?Although financial well-being can have many dimensions, this paper focuses on the income replacement rates of a cohort of individuals aged 54 to 56 in 1983 to examine such a notion. The replacement rate can be defined as the extent to which family income during the working years-here, income at age 54 to 56-is being replaced by other sources of income when people reach a certain age-in this case, when the cohort reached age 78 to 80 (24 years later).

Accounting for Real Exchange Rates Using Micro-Data

Abstract: The classical dichotomy predicts that all of the time series variance in the aggregate real exchange rate is accounted for by non-traded goods in the CPI basket because traded goods obey the Law of One Price. In stark contrast, Engel (1999) found that traded goods had comparable volatility to the aggregate real exchange rate. Our work reconciles these two views by successfully applying the classical dichotomy at the level of intermediate inputs into the production of final goods using highly disaggregated retail price data. Since the typical good found in the CPI basket is about equal parts traded and non-traded inputs, we conclude that the classical dichotomy applied to intermediate inputs restores its conceptual value.

Environmental R&D with Permits Trading

Abstract: This paper models the simultaneous investments in cost-reducing and environmental RD in the latter case, firms fully share information about technologies. In a 3-stage game, firms first invest in RD the allocation of permits between firms matters for social welfare in the presence of environmental RD when the constraint is binding, firms underinvest more in standard R&D than in environmental R&D.