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Footloose Capital, Market Access, and the Geography of Regional State Aid AgEcon
Ottaviano, Gianmarco I.P..
The global welfare implications of home market effects in trade models with imperfect competition are little understood. This paper proposes a simple model in which such implications can be easily analyzed. It shows an overall tendency of imperfectly competitive sectors to inefficiently cluster in locations that offer market access advantages. The more so the stronger the market power of firms as well as the intensity of increasing returns to scale and the lower the trade costs. As such features are likely to differ widely across sectors, those results provide theoretical ground to the promotion of regional policies that are also sectorspecific and not only region-specific as currently in the EU.
Tipo: Working or Discussion Paper Palavras-chave: Economic integration; Specialization; Home market effect; Regional disparities; Regional policy; International Relations/Trade; Political Economy; F12; L13; R13.
Ano: 2001 URL: http://purl.umn.edu/26387
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Dynamics and Limited Cooperation In International Environmental Agreements AgEcon
Karp, Larry S.; Sacheti, Sandeep.
The amount of cooperation needed to improve the welfare of signatories of International Environmental Agreements (IEAs), in the presence of market imperfections, depends on the characteristics of pollution. In a dynamic model, the conventional wisdom on the effect of free-riding needs to be modified for certain types of pollution problems. For local pollution problems, a sufficient level of free-riding actually promotes signatories' welfare. For global pollution problems, the conventional wisdom is correct insofar as free-riding makes it more difficult to form a successful IEA. However, for some global pollution problems, free-riding may disappear. A static model may overstate or understate the difficulty of forming a successful IEA. The effect of an IEA...
Tipo: Working or Discussion Paper Palavras-chave: International Environmental Agreements; Environmental stocks; Dynamics; Free-riding; Environmental Economics and Policy; International Relations/Trade; F12; F42; Q28.
Ano: 1997 URL: http://purl.umn.edu/6212
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Who Gains and Who Loses from China's Growth? AgEcon
Cheptea, Angela.
Emerging countries have been winning large market shares since the early 1990s. Among these, China stands out with the most remarkable performance: it almost tripled its world market share since 1994 reaching 16.1% in 2007. The present paper attempts to identify the countries that have profited the most from this increase in the size of the Chinese market. I use an econometric shift-share methodology, that permits to identify for each trade flow the share of growth arising from the capacity to target the products and markets with the highest increase in demand, and the share due exclusively to exporter’s performance.
Tipo: Conference Paper or Presentation Palavras-chave: China; Export Performance; Shift-Share; International Relations/Trade; F12; F15.
Ano: 2011 URL: http://purl.umn.edu/114299
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Second Best Environmental Policies under Uncertainty AgEcon
Antoniou, Fabio; Hatzipanayotou, Panos; Koundouri, Phoebe.
We construct a strategic trade model of an international duopoly, whereby production by exporting firms generates a local pollutant. Governments use environmental policies, i.e., an emissions standard or a tax, to control pollution and for rent shifting purposes. Contrary to their firm, however, governments are unable to perfectly foresee the actual level of demand, the cost of abatement and the damage caused from pollution. Under these modes of uncertainty we derive sufficient conditions under which the governments optimally choose an emissions tax over an emissions standard.
Tipo: Working or Discussion Paper Palavras-chave: Strategic Environmental Policy; Pollution; Choice of Policy Instrument; Uncertainty; Environmental Economics and Policy; F12; F18; Q58.
Ano: 2010 URL: http://purl.umn.edu/59375
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Comparative Advantages, Transaction Costs and Factor Content of Agricultural Trade: Empirical Evidence from CEE AgEcon
Kancs, d'Artis; Ciaian, Pavel; Pokrivcak, Jan.
The present study examines factor content of the CEE transition country agricultural trade. We examine the relative country abundance for labour, capital and land, and test the Heckscher-Ohlin-Vanek (HOV) hypothesis. Our empirical findings suggest that the factor content of agricultural exports and imports is rather similar in CEE and most of the agricultural trade flows do not satisfy the HOV prediction. In order to explain the general lack of agricultural specialisation and the observed paradox in the CEE's agricultural trade, we examine the role of transaction costs and market imperfections. We find that transaction costs and market imperfections distort farm specialisation and hence factor content of agricultural trade.
Tipo: Working or Discussion Paper Palavras-chave: Factor Content; Agricultural Trade; Comparative Advantages; Transaction Cost; Agricultural and Food Policy; F12; F14; D23; Q12; Q17.
Ano: 2009 URL: http://purl.umn.edu/115421
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Trade Costs and International Strategy of Firms: the Role of Endogenous Product Differentiation AgEcon
Blanchard, Pierre; Gaigne, Carl; Mathieu, Claude.
We study the impact of trade liberalization on the international strategy of firms (to export and/or invest abroad as well as the number of varieties to be produced) when product differentiation is endogenous. By considering product differentiation as a strategic variable, our analysis sheds new light on the impact of trade barriers on the decision to produce abroad and on the choice of product range, in accordance with recent empirical evidence. We show, even though technology exhibits the same productivity for each variety, firms drop some of varieties with trade integration. In addition, our results reveal that, contrary to the standard theoretical literature, the relationship between the decision to export and trade costs is non-linear. When trade...
Tipo: Working Paper Palavras-chave: Foreign direct investment; Exports; Multi-product competition; Endogenuos differentiation product; Trade integration; International Relations/Trade; F12; F23; L11; L25.
Ano: 2012 URL: http://purl.umn.edu/121117
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QUALITY SORTING AND TRADE: FIRM-LEVEL EVIDENCE FOR FRENCH WINE AgEcon
Crozet, Matthieu; Head, Keith; Mayer, Thierry.
Quality sorting and trade: Firm-level evidence for French wine Investigations of the effect of quality differences on heterogeneous performance in exporting have been limited by lack of direct measures of quality. We examine exports of French wine, matching the exporting firms to producer ratings from two wine guides. We show that high quality producers export to more markets, charge higher prices, and sell more in each market. More attractive markets are served by exporters that, on average, make lower rated Champagne. Market attractiveness has a weakly negative effect on prices and a strongly positive effect on quantities, confirming the sign predictions of a simple quality sorting model. Methodologically, we make several contributions to the literature....
Tipo: Working or Discussion Paper Palavras-chave: Industrial Organization; F12.
Ano: 2009 URL: http://purl.umn.edu/53883
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Beyond the Home Market Effect: Market Size and Specialization in a Multi-Country World AgEcon
Behrens, Kristian; Lamorgese, Andrea R.; Ottaviano, Gianmarco I.P.; Tabuchi, Takatoshi.
The standard two-country model of international trade with monopolistic competition predicts a more-than-proportional relationship between a country’s share of world production of a good and its share of world demand for that same good, a result known as the “home market effect”. We first show that this prediction does not generally carry through to the multi-country case, as production patterns are crucially affected by third country effects. We then derive an alternative prediction that holds whatever the number of countries considered. This new prediction takes into account important features of the real world such as comparative advantage due to cross-country technological differences and lack of factor price equalization.
Tipo: Working or Discussion Paper Palavras-chave: Comparative Advantage; Home Market Effect; Hub Effect; International Trade; Monopolistic Competition; Multi-country Models; International Relations/Trade; F12; R12.
Ano: 2009 URL: http://purl.umn.edu/56212
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The Pollution Haven Hypothesis: A Geographic Economy Model in a Comparative Study AgEcon
Kheder, Sonia Ben; Zugravu, Natalia.
Although based on theoretical foundations, the pollution haven hypothesis has never been clearly proven empirically. In this study, we re-examine this hypothesis by a fresh take on both its theoretical and empirical aspects. While applying a geographic economy model on French firm-level data, we confirm the hypothesis for the global sample. Through sensitivity analysis, we validate it for Central and Eastern European countries, emerging and high-income OECD countries, but not for the major part of the Commonwealth of Independent States countries. Finally, we show that the pollution haven hypothesis is confirmed in the strongest manner for emerging economies.
Tipo: Working or Discussion Paper Palavras-chave: FDI; Environmental Regulation; Economic Geography; Pollution Haven Hypothesis; Environmental Economics and Policy; F12; F18; Q28.
Ano: 2008 URL: http://purl.umn.edu/44223
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Strategic Behavior and Trade in Agricultural Commodities - Competition in World Peanut Markets AgEcon
Fletcher, Stanley M.; Nadolnyak, Denis A..
In this paper, we make an attempt to rationalize the strategic behavior of major peanut exporting and importing countries in the framework of imperfectly competitive markets with the focus on the global and inter-American peanut trade. This study is motivated by the fact that liberalizing imperfectly competitive and often distorted markets can have unorthodox effects, in particular increase the incentives to overuse certain trade policies. The results suggest that the South American peanut producers stand to benefit from the reductions in the U.S. peanut production supports but, paradoxically, preservation of a tariff may still be mutually welfare enhancing. In the broader context of global peanut trade, multi-lateral tariff reduction increases the...
Tipo: Conference Paper or Presentation Palavras-chave: Trade; Peanuts; Strategic behavior; Tariffs; TRQs; Subsidies; Crop Production/Industries; International Relations/Trade; F12; F13; Q17.
Ano: 2006 URL: http://purl.umn.edu/25362
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Are Compact Cities Environmentally (and Socially) Desirable? AgEcon
Gaigne, Carl; Riou, Stephane; Thisse, Jacques-Francois.
There is a wide consensus among international institutions and national governments in favor of compact (i.e. densely populated) cities as a way to improve the ecological performance of the transport system. Indeed, when both the intercity and intra-urban distributions of activities are given, a higher population density makes cities more environmentally friendly as the average commuting length is reduced. However, when we account for the possible relocation of activities within and between cities in response to a higher population density, the latter may cease to hold. Because changes in population density affect land rents and wages, firms and workers re-optimize and choose new locations. We show that this may reshape the urban system in a way that...
Tipo: Working Paper Palavras-chave: Greenhouse gas; Commuting costs; Transport costs; Cities; Environmental Economics and Policy; D61; F12; Q54; Q58; R12.
Ano: 2012 URL: http://purl.umn.edu/121692
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Market Access and Regional Disparities: New Economic Geography in Europe AgEcon
Niebuhr, Annekatrin.
New Economic Geography (NEG) has reached a theoretical consolidation while related empirical tests are still scarce. The present paper aims at providing some evidence on the validity of forces emphasised by NEG. The analysis starts from the nominal wage equation derived from the Krugman "core-periphery model" and focuses on one of the main propositions of NEG that access advantages raise factor prices. The paper investigates the significance of market access for regional wages and the geographic extent of demand linkages for a cross section of European regions, also taking into account the effects of national borders. The regression analysis covers the period between 1985 and 2000. The results are consistent with the implication of NEG that demand linkages...
Tipo: Working or Discussion Paper Palavras-chave: New economic geography; Market access; Europe; International Relations/Trade; C21; F12; R12.
Ano: 2004 URL: http://purl.umn.edu/26148
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Eastern Enlargement of the EU: A Comprehensive Welfare Assessment AgEcon
Kohler, Wilhelm.
This paper takes a welfare-view on eastern enlargement of the EU, focusing on incumbent countries. Enlargement is decomposed into three elements: Single-market integration on commodity markets, budgetary costs from EU-expenditure policies, and single market- induced migration from new to present member countries. I first use an analytical model to derive a welfare equation that identifies the principle channels for incumbent country welfare gains and losses from enlargement, including product differentiation, capital accumulation, and unemployment due to search-costs. I then propose a method that allows to extend welfare results obtained from a detailed calibrated version of this model for Germany to other incumbent countries. The approach relies on model...
Tipo: Working or Discussion Paper Palavras-chave: EU Enlargement; Economic Integration; Commercial Policy; Migration; Welfare Analysis; Computable General Equilibrium; Search Unemployment; International Relations/Trade; Political Economy; F02; F12; F13; F15; F22.
Ano: 2004 URL: http://purl.umn.edu/26377
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IS 'GETTING THE PRICES RIGHT' ALWAYS RIGHT? HOW TRADE LIBERALIZATION CAN FAIL AgEcon
Gaitan, Beatriz; Pavel, Ferdinand.
We present a general equilibrium model with oligopsonistic market structure in one of the sectors. Buyers of inputs can set the price of inputs by being involved in rent seeking activities. The framework developed is applied to the Bulgarian economy in particular to the agro-food chain. From the application to the Bulgarian economy we find that if there are market imperfections, such as oligopsonistic behavior in the economy, there are no significant welfare gains from free trade. Significant welfare gains from trade are observed only when a competitive structure prevails. We show that eliminating this market imperfection can bring important welfare implications and an efficient reallocation of resources.
Tipo: Conference Paper or Presentation Palavras-chave: Imperfect Competition; Oligopsony; International Trade; Growth and Development; Transition Economies; International Relations/Trade; D34; E13; F12; L16.
Ano: 2000 URL: http://purl.umn.edu/21881
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Competition and Dynamics in Trade Patterns: Hungarian and Slovenian Agri-Food Trade with the European Unions' Trading Partners AgEcon
Bojnec, Stefan; Ferto, Imre.
Trade balances and unit values in Hungarian and Slovenian bilateral agri-food trade with Austria, Germany and Italy, respectively, to distinguish types of the one-way and the two-way trade flows, categories of price competition and categories of quality competition in the twoway trade flows, their dynamics and stability over time are analyzed. The two-way matched trade flows prevail among trade types. In the matched two-way bilateral agri-food trade there is prevalence of categories of price competition over categories of non-price competition, but varies across trading partners. In Hungarian agri-food trade the first category of successful price competition and the third category of successful non-price or quality competition prevail, suggesting...
Tipo: Conference Paper or Presentation Palavras-chave: Competition; Trade types; Dynamics; Mobility index; F12; Q17; Q18; International Relations/Trade.
Ano: 2006 URL: http://purl.umn.edu/25760
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Trade Complexity and Productivity AgEcon
Altomonte, Carlo; Bekes, Gabor.
We exploit a panel dataset of Hungarian firms merged with product-level trade data for the period 1992-2003 to investigate the relation between firms' trading activities (importing, exporting or both) and productivity. We find important self-selection effects of the most productive firms induced by the existence of heterogeneous sunk costs of trade, for both importers and exporters. We relate these sunk costs of trade to the relationship-specific nature of the trade activities, entailing a certain degree of technological and organizational complexity. We also show that, to the extent that imports and exports are correlated within firms, failing to control for the importing activity leads to overstated average productivity premia of exporters.
Tipo: Working or Discussion Paper Palavras-chave: Trade Openness; Firms' Heterogeneity; Productivity; International Relations/Trade; F12; F14; L25.
Ano: 2009 URL: http://purl.umn.edu/54170
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Factor Content of Agricultural Trade AgEcon
Kancs, d'Artis; Ciaian, Pavel.
Replaced with revised version of paper 08/25/09.
Tipo: Conference Paper or Presentation Palavras-chave: Factor content; Heckscher-Ohlin; Factor abundance; Agricultural trade; International Relations/Trade; F12; F14; D23; Q12; Q17.
Ano: 2008 URL: http://purl.umn.edu/44458
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O pass-through das variações da taxa de câmbio para os preços dos principais produtos exportados pelo Brasil AgEcon
Tejada, Cesar Augusto Oviedo; Silva, Agnaldo Gomes da.
The aim of the present paper is to analyze the relationship between exchange rates changes and prices of main Brazilian exports, the exchange rate pass-through. A varying-parameter model was used to estimate the coefficients of pass-through. The results suggest that incomplete pass-through of exchange rate changes is a pervasive phenomenon. These results are in line with other estimates presented in the literature.
Tipo: Journal Article Palavras-chave: Exchange rate pass-through; Export prices; Brazil; Political Economy; C22; C50; F12.
Ano: 2008 URL: http://purl.umn.edu/61279
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Vertical Differentiation and Credence Goods: Harmonized Labeling and Gains from International Integration AgEcon
Sheldon, Ian M.; Roe, Brian E..
Using a model of vertical product differentiation, we show under what institutional circumstances welfare gains will be maximized as economies integrate and harmonize labeling and certification policies for credence goods. Specifically, we show that harmonized mandatory, exclusive discrete labeling will not maximize the gains from economic integration, i.e., the choice of labeling regime can have a negative effect on market structure if firms choose to exit, reducing the range and quality of goods in the integrated market.
Tipo: Conference Paper or Presentation Palavras-chave: Vertical differentiation; Credence goods; Harmonized labeling; Economic integration; International Relations/Trade; F12; F21; L13.
Ano: 2008 URL: http://purl.umn.edu/6340
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Tradable Permits vs Ecological Dumping AgEcon
Antoniou, Fabio; Hatzipanayotou, Panos; Koundouri, Phoebe.
In this paper we examine an alternative policy scenario, where governments allow polluting firms to trade permits in a strategic environmental policy model. We demonstrate, among other things, that with no market power in the permits market, governments of the exporting firms do not have an incentive to under-regulate pollution in order to become more competitive. This strategic effect is reversed and leads to a welfare level closer to the cooperative one and strictly higher to that when permits are non-tradable. Allowing for market power in the permits market, the incentive to under-regulate pollution re-appears regardless of whether permits are tradable or not. With tradable permits, however, the incentive to under-regulate pollution is comparatively...
Tipo: Working or Discussion Paper Palavras-chave: Strategic Environmental Policy; Tradable Permits; Race to the top; Environmental Economics and Policy; Q58; F12; F18.
Ano: 2010 URL: http://purl.umn.edu/59374
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