Lahore School of Economics

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Lahore Journal of Economics (January - June 2015)

In the first article published in this issue of the Lahore Journal of Economics, titled “Private School Participation in Pakistan, Quynh T. Nguyen and Dhushyanth Raju of the World Bank look at the extent and nature of private school participation at the primary and secondary levels in Pakistan. The authors find that private school students tend to come from urban, wealthier, and better-educated households than government school students. They also find that the characteristics of private school students relative to their government school peers and the former’s composition differ in important ways across Pakistan’s four provinces. Also, private school participation among children varies largely from one household to another rather than within households, and to a greater extent than government school participation. Private schooling is spatially concentrated, with a few districts (situated mainly in northern Punjab) accounting for most private school students. The spatial distributions of private school supply and participation are strongly correlated. In the 2000s, private school participation rates grew in Punjab, Sindh, and Khyber Pakhtunkhwa and across socioeconomic subgroups, contributing in particular to the growth in overall school participation rates for boys, urban children, and rich children. Nevertheless, the composition of private school students has become more equitable, driven mainly by Punjab, where the shares of private school students from rural and nonrich households have risen.

In the second article, “Migration, Remittances, and Household Welfare: Evidence from Pakistan,” Masood Sarwar Awan, Mohsin Javed, and Muhammad Waqas conducted a survey to examine the transaction costs and household-level benefits of overseas remittances in Toba Tek Singh, Pakistan. The authors find that overseas migration has substantial benefits as measured by migrants’ consumption levels, their expenditures on health, education, and vehicles, and the level of household savings.

In the third article by Sadia Shabbir and Hafiz M. Yasin, title “ Implications of Public External Debt for Social Spending: A Case Study of Selected Asian Developing Countries," the authors his examine the behavior of seven developing Asian countries and analyze the impact of public external debt on social sector spending. Their analysis includes data on Pakistan, India, Bangladesh, Sri Lanka, Nepal, the Philippines, and Indonesia, and spans the period 1980–2010. The authors confirm the common wisdom that outstanding external debt and its servicing liability have an adverse impact on public spending, particularly on social sector spending.

In the fourth article, titled “Relative Factor Abundance and Relative Factor Price Equality in Punjab,” Resham Naveed tests whether there is relative factor price equality across districts in Punjab using data from the Census of Manufacturing Industries for 2000/01 and 2005/06. The paper finds that an absence of relative factor price equalization due to the uneven distribution of factors in the province. The author finds that non-production (white-collar) workers) are relatively scarce in Punjab, which results in a wage premium for this type of labor. The author also adjusts her analysis for worker quality and finds similar results, implying that factors are distributed unevenly across the districts of Punjab.

In the fifth article by Aysha S. Latif and Fahad Abdullah, titled “The Effectiveness of Corporate Governance in Constraining Earnings Management in Pakistan,” the authors investigate the effectiveness of three attributes of corporate governance in constraining earnings management practices. The authors include board characteristics, audit committee characteristics, and ownership structure in their analysis. Using a sample of 120 nonfinancial firms listed on the Karachi Stock Exchange during 2003–12m the authors find that audit committee independence is negatively associated with earnings management, while CEO duality and institutional shareholding is positively associated with earnings management. The authors also find that the effectiveness of governance mechanisms in constraining earnings management practices differs across high and low growth firms.

In the final article of the January-June 2015 issue of the Lahore Journal of Economics, Khurram Shahzad looks at the Pakistani textile sector. In his paper, titled “An RCA Analysis of Textiles and Clothing in Pakistan, India, and Bangladesh,” the author performs a revealed comparative advantage analysis for Clothing and Textile sectors of Pakistan, India and Bangladesh. The author’s results show Pakistan’s highest revealed comparative advantage for textiles over both India and Bangladesh. The author also finds that India has a revealed a comparative disadvantage in textile in competition of Pakistan and Bangladesh. Furthermore, for clothing, Bangladesh has very dominant revealed comparative advantage when competing with Pakistan and India. The author’s results also show that Pakistan has been gaining a comparative advantage in textiles since 1980 but with a declining percentage of textile exports and that Bangladesh has significantly gained a comparative advantage in clothing since the 1980s.

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posted by S A J Shirazi @ 7/29/2015 09:56:00 AM,

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