Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. In this groundbreaking study, over 50 countries, including emerging market economies (EMEs) and OECD, are examined for the informational quality of their financial systems using nearly 30 microeconomic and institutional indicators. Terms of use: Documents inBy assessing recent institutional and structural reforms against a statistical benchmark, the findings suggest disproportionate gains occur in per capita GDP with improvements in the social infrastructure. The authors also find that better enforcement of law is more important than the origins of legal systems.This new indicator could be used to make more transparent and insightful strategic diagnoses of EMEs' financial systems and to assess and compare systemic risks. ADB Institute Working Paper SeriesNo. 20 PREFACEThe ADB Institute aims to explore the most appropriate development paradigms for Asia composed of well-balanced combinations of the roles of markets, institutions, and governments in the post-crisis period.Under this broad research project on development paradigms, the ADB Institute Working Paper Series will contribute to disseminating works-in-progress as a building block of the project and will invite comments and questions.I trust that this series will provoke constructive discussions among policymakers as well as researchers about where Asian economies should go from the last crisis and current recovery. Masaru YoshitomiDean ADB Institute IV ABSTRACTThe "informational quality of financial systems" (IQFS) and its relation to economic development is assessed for 34 emerging market economies (EMEs) and 21 OECD countries following Asia 's 1997-1998 crisis. Institutional economics suggests that the heart of any financial system is its institutional-informational infrastructure and long-term contracting capabilities.Twenty-seven microeconomic and institutional indicators are used to proxy IQFS for 1995-1998 (with preliminary estimates for 1985).The issue of whether common law systems are inherently superior to civil code legal systems in encouraging financial and economic development is addressed. Our measure of IQFS suggests that better enforcement rather than legal origins are critical. Moreover, countries with Germanic/Scandinavian legal systems have better capital markets and higher per capita GDP than the common law countries in our sample.Our new IQFS indicator permits transparent and objective strategic diagnoses of EME's financial systems over time, status relative to comparators, and...

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There is widespread concern, particularly in Europe, about the possibility of a secular decline in profits and rates of return. The purpose of this study is to assess whether there has been a decline and to quantify it as far as possible, taking measurement problems into account. It also considers summarily the significance of observed trends and the reasons for them. Profits are generally seen as an essential feature of market economies. When they are low, it is feared that enterprise and innovation will falter and the rate of investment decline, leading to sluggish growth in output and capacity. Low growth may also lead to low profits. The precise links between profits and economic performance are, however, theoretically complicated and difficult to establish empirically. This is because both economic and accounting definitions of profit cover heterogeneous phenomena and are calculated as a residual. Conceptual and measurement issues are important in assessing the evolution of ...

This paper extends a previous study of profit trends to consider valuation ratios (Tobin's q) in nine countries. Tobin's q embodies market expectations and is an indicator of expected pure profit rates on the existing capital stock. Since 1982, equity markets have recovered substantially. By end-1985, values of Tobin's q were close to their 1974 levels and close to the symbolic figure of unity. The theoretical and conceptual relevance of q is considered, as well as data and measurement limitations. Real debt and equity costs of finance are considered in the light of buoyant stock markets. The implications of the strong recent recovery in q for investment are also noted ... Prolongeant l'étude sur l'évolution des profits, ce document analyse les rapports d'évaluation (q de Tobin) dans neuf pays. Le q de Tobin traduit les anticipations de rentabilité du marché et est un indicateur des taux de profit pur anticipés sur le stock de capital existant. Depuis 1982, les marchés boursiers se sont sensiblement redressés. En 1985, les valeurs du q de Tobin retrouvaient presque leur niveau de 1974 et approchaient la valeur symbolique de l'unité. On s'interroge sur la pertinence théorique et conceptuel de q ainsi que sur les limites imposées par les données et les systèmes de mesure. La dette réelle et les coûts de financement des fonds propres sont analysés à la lumière d'un marché boursier en pleine ébullition. Sont aussi mises en évidence les implications sur l'investissement de l'important redressement des valeurs de q constaté récemment ...

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