Showing papers on "Individual capital published in 1992"
TL;DR: In this article, the authors analyze a differential game in which all interest groups have access to a common capital stock and show that the introduction of a technology that has inferior productivity but enjoys private access may ameliorate the tragedy of the commons.
Abstract: We analyze a differential game in which all interest groups have access to a common capital stock. We show that the introduction of a technology that has inferior productivity but enjoys private access may ameliorate the tragedy of the commons. We use this model to analyze capital flight: in many poor countries, property rights are not well defined; since "safe" bank accounts in rich countries (the inferior technology) are available to citizens of these countries, they engage in capital flight. We show that the occurrence of capital flight does not imply that opening the capital account reduces growth and welfare.
400 citations
TL;DR: In contrast to the assumptions of standard economic theory, ecological economists regard human-made capital and natural capital as fundamentally complementary and emphasize that the three types of capital are strongly interrelated and form the basis for guiding society towards sustainability as discussed by the authors.
181 citations
106 citations
TL;DR: A study of 318 private entrepreneurs who have sought equity capital in amounts of $100,000 or more found that only 59% of those surveyed actually acquired funding as discussed by the authors, and that the most successful entrepreneurs are those who are prepared to surrender a larger percentage of equity and who are very aggressive in going directly to a number of potential equity providers at an early stage.
67 citations
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TL;DR: In this paper, the authors find that attractive human capital traits at business entry for entrepreneurs include high educational attainment, owners who lie in the middle of the tail of the age distribution, and family business background.
Abstract: Using a nationwide sample of 14,424 new firms, we find that attractive human capital traits at business entry for entrepreneurs include high educational attainment, owners who lie in the middle of—as opposed to the tails of—the age distribution, and family business background. Attractive firm traits are purchase of an existing firm rather than starting a firm de novo, and larger amounts of starting capital. Recent research has found that certain ethnic minorities are differentially restricted from obtaining commercial bank financing. Our statistical tests indicate that when we control for differences in human capital and firm traits, the venture capital market also differentially restricts minority entrepreneurs from obtaining venture capital. Thus public policy seeking to reduce the resulting financing gap for minority entrepreneurs may have economic justification. Except for the ethnic trait, the venture capital market’s use of owner and firm information is consistent with selecting those firms which have more survival potential.
28 citations
TL;DR: In this article, human capital theory is recommended as a fertile theory to explain many aspects of family time use behavior and investment of parental time in children is urged as a fruitful area of time use research.
Abstract: Human capital theory is recommended as a fertile theory to explain many aspects of family time use behavior. Some examples are given of the potential usefulness of the concepts of general and specific human capital. Investment of parental time in children is urged as a fruitful area of time use research.
27 citations
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TL;DR: In this paper, the authors survey the existing literature on opening up domestic capital markets, much of which was written prior to the debt crisis and revisits the question of sequencing the liberalization of the current and capital accounts, to provide a background for programs to liberalize the capital account.
Abstract: The increase in trade, the increasing internationalization of production and the improvements in communications, together with the legalization of foreign currency instruments in a growing number of countries, have led to a de facto liberalization of the capital account. In line with the greater reliance on open goods markets and a de facto opening of the capital account, developing country governments are raising questions about fully opening the capital account. As a background to answering these questions, this paper surveys the existing literature on opening up domestic capital markets, much of which was written prior to the debt crisis. This survey begins with a brief summary of the costs and benefits of capital account liberalization, paying particular attention to the issue of the loss of policy effectiveness and noting the new theories of capital flows based on international portfolio diversification of risky assets, which raise the possibility of benefits from capital account liberalization that are not linked solely to higher investment rates. The survey then reexamines the evidence on the results of open capital accounts. Finally, the survey revisits the question of sequencing the liberalization of the current and capital accounts, to provide a background for programs to liberalize the capital account.
27 citations
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TL;DR: In this paper, Jorgenson and Fraumeni (hereafter JF) defined the difference in quality as investment in human capital by discounting earnings profiles and defined the opportunity cost as the difference between the time spent in school times the after-tax market wage as its opportunity cost.
Abstract: In his Presidential Address, Griliches (1977) wrote that it is almost impossible to attain an "output" measure of schooling. Each job and each person are multidimensional. It seems that Jorgenson and Fraumeni (hereafter JF) have now accomplished this impossible task. For analytical purposes, they have reduced the broad concept of human capital to school education. The reason for isolating formal schooling from other related forms of human capital is to extend national accounts by measures of all economic activities related to welfare. Their basic contribution to productivity measurements and national accounting is to illustrate the critical importance of the interrelationship between national accounting and economic theory. The major innovation in JF's paper is in the measurement of investment in human capital. Education is a service that transforms inputs (individuals) into individuals with different qualities. The difference in quality as investment in human capital is measured by discounting earnings profiles. In JF's view, the value of a year of formal schooling is the difference between the present value of projected labor earnings of a person with and without schooling. It is therefore not imputed as the time spent in school times the after-tax market wage as its opportunity cost. However, I do not know why there is no deduction for living costs or human maintenance. JF's method of treating investment in human capital as the sum of gross lifetime incomes for all individuals born in the same year plus imputed future gross labor compensation for formal schooling for all individuals enrolled in school results in huge estimates of investment. Such figures would be significantly lower if depreciation of human capital, like deterioration in health and erosion or obsolescence of skills, were subtracted. Without depreciation of knowledge and education, Jorgenson and Fraumeni (1989, p. 228) found that the value of wealth in the form of human capital is more than 11 times the value of physical or nonhuman capital. However, whereas their calculation of physical capital
TL;DR: In Marx's political economy "capital" is the subject and is in the unfolding process, a series of unity-contradiction-unity, from the most abstract-simple categories of commodity, value, and labor as capital implicit to the most concrete-complex categories of a pure capitalist economy as capit al explicit as mentioned in this paper.
Abstract: In Marx's political economy "capital," like "the spirit" in Hegel, is the subject and is in the unfolding process, a series of unity-contradiction-unity, from the most abstract-simple categories of commodity, value, and labor as capital implicit to the most concrete-complex category of a pure capitalist economy as capit al explicit. All categories in Capital together constitute an organic whole in which the starting-point, the commodity and value, and the finishing point, the pure capitalist economy, presuppose each other, and form a self-determined system of political economy. Capital mus t then be approached as an organic whole which cannot be broken down i nto a series of unrelated analytical propositions. Copyright 1992 by Oxford University Press.
TL;DR: In this article, goods are differentiated with respect to the medium of exchange associated with their acquisition, which is endogenously determined as a consequence of explicit trading frictions, and the response of the economy to endowment, production, and payments system shocks, including financial innovations, is examined.
Abstract: Capital is required to support the payments system in modern economies with well developed financial markets. Financial innovations raise the marginal product of capital in this usage. This suggests that there are general equilibrium consequences associated with an optimal selection of a payments system that includes barter, money, and a capital-based accounting system. In this paper, goods are differentiated with respect to the medium of exchange associated with their acquisition, which is endogenously determined as a consequence of explicit trading frictions. The response of the economy to endowment, production, and payments system shocks, including financial innovations, is examined. Copyright 1992 by The London School of Economics and Political Science.
TL;DR: The authors found that dropout students can be expected to earn about $237 million less over a lifetime and pay $70 billion less in taxes than high school graduates, and that this problem of underachievement has consequences for the future of our nation that are now and will continue to be devastating.
Abstract: American students, more so than at any other time in history, have the intellectual potential and opportunity to become educated, but are failing to achieve. This problem of underachievement has consequences for the future of our nation that are now and will continue to be devastating: Each class of dropouts can be expected to earn about $237 million less over a lifetime and pay $70 billion less in taxes than high school graduates (Mitgang, 1991).
TL;DR: In this article, the authors introduce property researchers to the principles of Marxist analysis and demonstrate their relevance for understanding the dynamics of property development, and define office activities as a function essential to the accumulation of capital and the containment of inherently associated contradictions in advanced capitalist countries.
Abstract: Summary This is the first of two papers attempting to introduce property researchers to the principles of Marxist analysis and to demonstrate their relevance for understanding the dynamics of property development. This paper first sets out the basic principles of a Marxian approach, including an outline of the historical‐dialectical method of analysis. It then focuses upon the analysis of property as a form of commercial capital (development) as well as interest‐bearing capital (investment). Rent is shown to be the crucial link between both types of capital and the lynchpin around which the relations of those participating in the development process are structured. Finally, office activities are defined as a function essential to the accumulation of capital and the containment of inherently associated contradictions in advanced capitalist countries. The following paper, ‘Capital accumulation and office development in Leicester, 1967–1990’, interprets the concrete conditions of office development in Leices...
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TL;DR: A detailed case analysis of the experience of the venture capital experience in India is presented in this article, which is intended to draw lessons and implications for the development of venture capital in developing countries.
Abstract: Venture capital has developed in the Western countries on account of the need to provide non-conventional, risky finance for new ventures based on innovative entrepreneurship. There are not many empirical studies of the impact of venture capital. However, a few studies do exist in context of the developed countries. Because of the paucity of information, there is hardly any comprehensive study of the results of venture capital in developing countries. There is thus a need for systematic review of the venture capital experiences in selected developed and developing countries in order to understand the developmental role of venture capital and the process underlying the success of venture capital. This study is a detailed case analysis of the venture capital experience in India. It is intended to draw lessons and implications for the development of venture capital in developing countries. The study examines: The strategic role venture capital in the development of technology, innovative entrepreneurship and small enterprises in India; The development process of venture capital by a systematic analysis of venture capital practices and policies in India; and The policy initiatives necessary for the success of venture capital in developing countries based on the Indian experience. The study is based on primary information gathered through extensive interviews with a large number of managers of various venture capital companies and published material. The study is divided into five sections. Section 1 provides background of venture capital and a review of its development in some developed and developing countries. Section 2 explains the context of venture capital in India and its role in the technology and entrepreneurial development. Section 3 examines the practices and policies of the venture capital firms in India. Section 4 review the policy initiatives necessary for the growth of the venture capital industry in a developing country like India. Section 5 summarises the findings of the study.
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01 Jan 1992
TL;DR: Hogan as discussed by the authors discusses the uses and sources for capital in the steel industry in the 1990s, arguing that the massive capital investment of the 1980s will continue, and identifies areas where this capital will be spent, including pension schemes, anti-pollution measures, and joint ventures between steel companies, both domestically and internationally.
Abstract: The author discusses the uses and sources for capital in the steel industry in the 1990s. Arguing that the massive capital investment of the 1980s will continue, he identifies areas where this capital will be spent, including pension schemes, anti-pollution measures, and joint ventures between steel companies, both domestically and internationally. Additionally, as privatization continues in the 90s, more capital will shift from government-owned facilities to private individuals. Hogan asserts that capital which was readily available in the 1980s, will be more difficult to obtain in the recessionary 1990s, but available for projects deemed necessary to prepare the industry for the 21st century.
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01 Jan 1992
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TL;DR: The Marshallian system as discussed by the authors was designed to serve two main purposes: an integration of the theory of income distribution into a general theory of value and the closing of the gap between economic theory and business practice.
Abstract: Marshall's theory of capital was designed to serve two main purposes: an integration of the theory of income distribution into a general theory of value and the closing of the gap between economic theory and business practice. For the first purpose, capital was considered the reward for the services of a specific factor of production; for the second, a generic source of income, "all things other than land which yield income". This implied a certain ambiguity, because the two notions of capital were clearly inconsistent with each other. The final setting of the Marshallian system was characterized by the presence of three different theories of capital, kept together by a demand-and-supply determination of the rate of interest, which provided a link with the theory of money. Everything was granted a role - productiveness and prospectivess, efforts and waitings, real and subjective costs - but the result was still highly controversial. The principal merit of Marshall's theory of capital was the establishment of a functional link between the theory of value and the theory of money. As a quantity-theorist, Marshall held a "real" theory of the long-period determination of the rate of interest, in the absence of monetary policy; but he thought that the current level of the rate of interest could be influenced by monetary factors. An active monetary policy would both affect the "real" interest norm and produce occasional deviations from it. This position, quite new, was a significant advance towards an integration of real and monetary theory.
TL;DR: In this paper, the authors make a reconstruction of the received traditions in the theory of the firm is required if meaningful account is to be taken of the realities of what I had termed the money capital availability constraint.
Abstract: The point that Professor Joaquin makes in the preceding paper on my earlier argument regarding the firm's money capital investment and factor usage decision is, of course, quite correct. His analysis confinns my proposition, as the quotation at the beginning of his paper indicates, that a reconstruction of the received traditions in the theory of the firm is required if meaningful account is to be taken of the realities of what I had termed the money capital availability constraint. The important point at issue is that the firm's factor use decision, whatever it tums out to be, requires and generates the employment of money capital. The costs incurred in acquiring money capital need therefore to be, as I put it, imputed to the factors whose employment makes the raising of money capital necessary. That raised the concept that I labeled the factors' effective marginal costs. Professor Joaquin has recognized precisely that in his final equations, and has in effect brought out the point I had originally emphasized. This was that the factor use decision depended on what I had termed the money capital intensity of the factors, and that, that being given, the firm's expansion path, to refer to a neoclassical textbook proposition, would in general be twisted away from the more money capital intensive factor axis if money capital availability and costs were cognized. The details of the analysis and many of its implications can be inspected in other places. Sidney Weintraub recognized that the entire argument "detect[ed] a soft spot in the conventional theory of the firm [and] developed ideas which constitute an indispensable microfoundation consistent with the post-Keynesian theory of money" (1977, p. 182). The fundamental point that the availability and cost of money capital constitutes a constraint on the firm's production structure and factor use had been noted much earlier. Oscar Lange had raised the issue in an important paper in 1936, although its influence at that time was