Location and the theory of production: A review,summary and critique of recent contributions

This paper has two main objectives. First, a generalized version of the Moses-type production- location model is developed where both the input variables and the location variables are allowed to adjust simultaneously. Secondly, the results of the recent articles relating to the Moses framework are discussed in the context of our generalized structure. We conclude that - unless one is willing to assume either the transport rate of output is zero or the location is constrained to be on the Moses arc - if transport rates do not depend on quantities shipped then location is independent of output when the production function is homogeneous of degree one. If transport rates depend on quantities shipped (e.g. quantity discounts), then a production function which is linearly homogeneous is not sufficient to insure that location is independent of output unless the transport rate functions have constant elasticities.     

Location and the theory of production Clarifications and extensions

This paper has attempted to clarify some weaknesses and flaws contained in Miller and Jensen's analysis. In particular, we have demonstrated that in Miller and Jensen's model, if the production function is homogeneous of degree one and the transport rate functions are independent of quantities shipped, it is impossible to have an interior solution. In addition, we have evaluated the role of the generalized transport rate functions in the profit-maximization location model with and without a prescribed level of output and shown that if transport rates depend on quantities shipped and have constant elasticities, then a linearly homogeneous production function is not sufficient to insure that optimum location is independent of output or the demand function. This result clearly invalidates Miller and Jensen's assertion.     

城市空间结构理论——单中心城市静态模型

首先介绍了在西方城市经济理论中被广泛接受的单中心城市空间结构静态模型。然后,利用比较静态分析方法(comparativestaticanalysis),分析区位、居民收入及交通费用(区位,居民收入及交通费用为模型的外生变量(exogenousvariable))对价格和房屋消费量(价格和房屋消费量为模型的内生变量(endogenousvariable))的影响。最后,理论模型通过引进一般住房生产函数,推导出土地价格及资本密度(即建筑高度)的空间变化规律。通过对城市经济模型进一步分析(对极值条件或解的微分解析分析)得出地价(地租),资本密度(或称容积率),人口密度的空间分布规律,这些规律对城市规划,城市政策,引进市场原则和价格机制来提高城市土地利用效率都有理论指导意义。     

Existence of equilibrium in a differential game of spatial competition with advertising

We investigate a differential duopoly game with horizontal product differentiation and advertising efforts aimed at increasing market demand, to show that the standard approach to spatial competition fails to produce a pure-strategy price equilibrium in a dynamic game framework. This holds independently of the shape of the transportation cost function. Then, we introduce an endogenous cost associated with the choice of location and characterise the feedback equilibrium, identifying the necessary and sufficient condition for the existence of the pure-strategy (stationary) price equilibrium. The same condition is singled out for the static game where consumer population is constant. Finally, we show that the static game cannot be viewed as a special case of the dynamic one.     

Hotelling was Right

This paper proves existence of a subgame perfect equilibrium in Hotelling's original (unidimensional city, linear transportation costs, uniform distribution of the consumers, two firms with identical and constant marginal cost, perfectly inelastic demand) location–price game such that in the location subgame the location choices of the firms are pure and identical. The result can be extended to variations of the original setup (multidimensional city, nonlinear transportation costs, nonuniform distribution of consumers, many firms with identical and constant marginal costs, two or more firms with nonidentical but constant marginal costs).     

Bertrand oligopoly in a spatial context: The case of quantity independent transportation costs

The theory of spatial competition [for a review, see Gabszewicz and Thisse (1985)] is usually based on the assumption of transportation costs which are proportionate to distance and quantity. In reality, however, there exist frequently considerable economies of scale, especially with respect to the conveyed quantity of goods. A good case in point is transportation cost incurred by a consumer patronizing a shopping area. Cost economies of scale will in general influence consumers' optimal choice with respect to quantities and best market places. In the extreme, consumers' outlays on transportation can be considered independent of the purchased quantity, but approximately proportionate to distance. In the present paper, the impact of this assumption on spatial competition is analysed. It will be shown, that existence and uniqueness of spatial oligopolistic equilibrium is restored. Furthermore, due to some residual monopolistic power, prices do not converge to the perfectly competitive equilibrium prices when the distance between the firms shrinks to zero. In conclusion the model exhibits a fundamental difference in the market structure, when the spatial aspect is incorporated.     

Patterns of international fragmentation of production and the relative demand for labor

Growing shares of international trade flows consist of intermediate and unfinished goods shipped from one country to another to combine manufacturing or services activities at home with those performed abroad. This configuration of the productive structure has been named “internationally fragmented.” The purpose of our work is to analyze the labor market effects of international fragmentation of production, looking at how it affects relative labor demand. Models of trade due to fragmentation of production suggest that when international fragmentation takes place we might observe changes in factor proportions in the affected industries. We use outward-processing-trade data – specifically related to international fragmentation of production – to test if the shift in the ratio of skilled and unskilled labor employed in Italy and Germany during the 1990s is related to fragmentation.     

Multiplant MRP

Many manufacturing firms have multiple manufacturing plants, located in geographically diverse parts of the world. This situation is becoming more common, as firms establish new plants in foreign countries to take advantage of low labor cost. In such cases, it is not unusual for the firm to retain production capability of certain key parts in a backup plant, with the necessary equipment and trained workforce in place. High volume production could be obtained relatively quickly from the backup plant in case of an emergency at the main supplying plant. In such multiplant settings, the transportation costs are significant. Throughout this paper, we use the term “multisourced parts” to describe parts produced in more than one location.Material Requirements Planning (MRP) is the component of a total manufacturing control system that is designed to manage inventory and plan orders for parts and material with dependent demand (demand derived from the demand of other items). Most of the literature on MRP systems discusses MRP methodology in a single-plant environment. Most MRP software systems in use today are single-plant systems.Currently, it is common for firms with multiple plants treated as cost centers to use an independent single-plant MRP system for each and handle the transshipment problems manually. Because of lack of coordination of production schedules between supplying and demanding plants, those firms hold more inventory and experience longer lead times than necessary to compensate for uncertainties in schedules and supply policies.The purpose of this article is to enhance single-plant MRP systems for coping with multiplant situations in which: the plants are regarded as cost centers, there exist multisourced parts, and the transportation costs are significant. The multiplant MRP system should recognize that parts are produced in different plants, make offset calculations for in-transit lead times, and consider transportation costs when establishing production requirements and shipping routes for multisourced parts. The objective is, beginning with the corporate-determined master schedule for finished products, to communicate in one planning cycle time-phased planned order release schedules and shipping/delivery schedules to each manufacturing plant producing components for the finished products.We first present a simplified framework for the multiplant MRP system, where a transportation algorithm is incorporated into the MRP logic. Then we refine this simplified framework to handle more complex aspects of a multiplant network. These complexities include the treatment of requirements that are not shipped on time and the regeneration of new MRP schedules. We also observe that the solution to the transportation problem described above is affected by the lot-sizing rules employed. In addition, we discuss several important issues and decisions that confront a firm when implementing a multiplant MRP system.     

On pure-strategy Nash equilibria in price–quantity games

This paper examines the existence and characteristics of pure-strategy Nash equilibria in oligopoly models in which firms simultaneously set prices and quantities. Existence of a pure-strategy equilibrium is proved for a class of price–quantity games. If the demand function is continuous, then the equilibrium outcome is similar to that of a price-only model. With discontinuous demand and limited spillover, there are rationing equilibria in which combined production falls short of market demand. Moreover, there might again be an equilibrium reflecting the outcome of a price game. Competition in price and quantity thus yields Bertrand outcomes under a variety of market conditions.     

Location of industry, market size, and imperfect international capital mobility

This paper examines the impact of imperfect international capital mobility on an industrial location when increasing returns are present. When the international capital mobility is perfect, agglomeration of manufacturing firms progresses with a decline in transportation costs of manufactured goods, and full-agglomeration in a large-market country is observed at low transportation costs. In contrast, when international capital mobility is imperfect, agglomeration in a large-market country progresses with capital trade integration. When the transportation costs of manufactured goods are low, all capital holders in two countries invest their capital into a home market.     

浅议铁路运输企业构建物流服务体系过程中注意的几个问题

铁路运输企业发展现代物流、构建物流服务体系具备很多优势，有其必然性。同时，也暴露出很多的问题，其中很多问题非常的尖锐，甚至关系到铁路运输企业这次转型的成败。本文从组织结构设置、效益分配、网络利用、市场服务质量和生产组织之间的协调性、指标考核等五方面，探讨铁路运输企业构建现代物流服务体系应注意的问题。     

Common holdings and strategic manager compensation: The case of an asymmetric triopoly

We study an asymmetric triopoly in a heterogeneous product market where quantity decisions are delegated to managers. The two biggest firms are commonly owned by shareholders such as index funds, whereas the smallest firm is owned by independent shareholders. Under such a common holding owner structure, the owners have an incentive to coordinate when designing their manager compensation schemes. This coordination leads to a reallocation of production and induces a redistribution of profits. The trade volume in the market is reduced so that shareholder coordination is detrimental to consumer surplus as well as welfare.     

虚拟ADSL网络技术与体育院校网络建设、运管新模式探讨

本文就虚拟ADSL网络技术的特点、接入方式等进行了介绍。指出电信营运商与体育院校合作运管虚拟ADSL,能发挥充分优化体院学院现有网络结构、节约学校投资、保证网络安全等作用。电信营运商与体育院校合作运管虚拟ADSL可向广大师生提供优质的网络服务,促进体育院校教学、管理等效率的提高,促进体育院校快速发展。     

Retail market structure and the threat by the manufacturer to sell goods directly to the consumer

When a manufacturer and its retailers and consumers are spatially separated, the retailers’ market size may be limited by the manufacturer who provides consumers with an option to purchase goods directly from them. The manufacturer uses this tactic to increase profit when a few retailers dominate the market. The mill price of a manufacturer, that is, the price of the good at delivery from a manufacturer’s factory, is critical under these circumstances.If the manufacturer charges a franchise fee, thus absorbing the retailer’s profit, this fee is a function of the mill price. Mill price policy can be used to maximize profit on the sale of goods and collection of the franchise fee. The resulting retail market structure becomes preferable for the manufacturer and consumers since the manufacturer’s profit is larger, as is the quantity purchased, compared with a competitive equilibrium in which every firm entering the market area is assumed to move its location instantly without cost.     

Foreign direct investment and financial markets influences: Results from the United States

This paper investigates the linkages among Foreign Direct Investment (FDI-greenfield and mergers and acquisitions (M&A)) decisions and equity market returns and volatilities. The central premise is that FDI decisions by Multinational Enterprises (MNE) are influenced, among other factors, by risk and uncertainty indicated by equity market returns and volatilities in the destination (host) countries. This is because of the events on the stock markets in general, and their volatilities, in particular, signal the vitality of the investment climate of the target country. Including capital market variables among the determinants of FDI is important for assessing the cost of capital and for evaluating direct investment and asset allocation decisions.Secondary time-series data (quarterly) were used on incoming US FDI from 1994 to 2018 along with data on independent variables such as exchange rates, inflation, market size, equity market returns, and equity market volatilities. Thus, the paper endeavors to contribute to the International Business literature by highlighting the role played of equity returns and volatilities in FDI decisions and therewith attempts to integrate finance (capital markets) with International Business/Strategic Decision making. Several different regression specifications (OLS, Fixed, and random-effects and VAR) were utilized to analyze the data, and capital market variables (stock returns and volatilities) were found to influence the location of production facilities by a multinational enterprise (MNE). In other words, the share of production capacity optimally located abroad, as well as M&A decisions, are influenced by capital market returns and volatilities.     

带有订单量和运输量折扣的供应链三方企业协调

考虑由供应商、运输服务提供商和购买商三者构成的供应链,市场需求是依赖于产品销售价格的随机变量,建立带有订单量和运输量双重折扣下供应链中三方企业的优化决策和协调模型。通过理论分析得到：提供订单量和运输量双重折扣可以促进供应链协调,同时提高供应商、运输服务提供商和购买商三方企业的利润。最后用算例验证了相关结论。     

Production-location decision and free entry oligopoly: A correction

This paper shows that there is no interior solution in Mai–Hwang's 1992 oligopolistic location model with free entry when the production function exhibits constant or decreasing returns to scale. The comparative static results of the impact of a demand change on the location decision only apply to the case where the production function exhibits increasing returns to scale. It re-examines the impact of a demand change on the location decision of an oligopolistic firm and corrects the propositions derived by [C.C. Mai, H. Hwang, Production-location decision and free entry oligopoly, Journal of Urban Economics 33 (1992) 252–271. Reprinted in: M.L. Greenhut, G. Norman (Eds.), The Economics of Location, vol. I: Location Theory, Edward Elgar, Aldershot, 1995].     

Transaction Costs and the Structure of the Market: A Case Study

A bstract Drawing upon the development of fish markets in a Chinese fishery community, this paper investigates the impact of transaction costs on the institutional structure of exchange. Fish markets in this region are connected and organized into a hierarchical network. This structure of fish markets dramatically reduces the cost for geographically distanced fishermen and consumers to execute trades. However, the provision of the market itself requires entrepreneurial el forts. In this study, the market is conceptualized as a continuum of middlemen, whose entrepreneurial efforts of buying and selling make the market work. When the middleman makes profits, the market is at work. Otherwise, the market fails to emerge. Comparing the different ways of organizing fish transportation at two distinct villages, this paper shows that the choice of the market or the firm to organize fish transportation is determined by the cost of putting the market to work.     

Optimum,market and second-best land use patterns in a von Thünen city with congestion

This paper constructs a von Thünen type model with traffic congestion and two production inputs. A comparison between optimum and market land use patterns is presented. The second-best problem in which congestion tolls are not allowed is also considered. The policy variable in the analysis is the allocation of land between production and transportation. The result is examined in a cost-benefit analysis based on market rent.     

Monopsony and the production-location decision of the firm

This paper incorporates monopsony power in one of the input markets within the context of the Weber-Moses triangular framework and examines the effect of an increase in monopsony power on the production-location decision of the firm. In particular, this paper shows that the optimum location of the firm is independent of monopsony power if the production funstion is homogeneous of degree one. However, if the production function is not homogeneous of degree one, the firm possessing monopsony power will have an incentive to move its location away from the monopsonized input market towards other markets under certain reasonable assumptions. Finally, some important policy implications are generated from the analysis.