Dynamic Model for Market Competition and Price Rigidity

This article presents a price floor model in which durability, unit costs and production period are factors in explaining price rigidity. This article elaborates that cost structure plays an essential role in resolving the inconclusive relationship between market concentration and price rigidity. When the industry is characterized by decreasing returns of scale, the degree of price flexibility decreases as market competition intensifies. The reverse is true when the industry exhibits increasing returns of scale. The factors that cause price rigidity also foster price adjustment asymmetry and price adjustment lag. During times of recession, the model exhibits upward price flexibility as costs increase, but downward price rigidity as costs decrease. Even under forward-looking expectations, the way in which firms adjust prices could look as though they have adaptive expectations. If price stickiness is a characteristic of market competition, then public policies determined by price level could be too drastic for firms in competitive markets.     

Increasing returns and market efficiency in agricultural trade

Using detailed trader surveys in Benin, Madagascar, and Malawi, this paper investigates the presence of increasing returns in agricultural trade. After analyzing margins, costs, and value added, we find little evidence of returns to scale. Motorized transport is found more cost effective for large loads on longer distances. But transporters appear to pool quantities from multiple traders. Margin rates show little relationship with transaction size. Personal travel costs are a source of increasing returns, but the effect is small. Consequently, total marketing costs are nearly proportional to transaction size. Working and network capital are key determinants of value added. Constant returns to scale in all accumulable factors–working capital, labor, and network capital–cannot be rejected. This implies that policies to restrict entry into agricultural trade are neither necessary nor useful. Governments should focus instead on technological and institutional innovations to upgrade agricultural markets.     

Increasing returns and market efficiency in agricultural trade

Using detailed trader surveys in Benin, Madagascar, and Malawi, this paper investigates the presence of increasing returns in agricultural trade. After analyzing margins, costs, and value added, we find little evidence of returns to scale. Motorized transport is found more cost effective for large loads on longer distances. But transporters appear to pool quantities from multiple traders. Margin rates show little relationship with transaction size. Personal travel costs are a source of increasing returns, but the effect is small. Consequently, total marketing costs are nearly proportional to transaction size. Working and network capital are key determinants of value added. Constant returns to scale in all accumulable factors–working capital, labor, and network capital–cannot be rejected. This implies that policies to restrict entry into agricultural trade are neither necessary nor useful. Governments should focus instead on technological and institutional innovations to upgrade agricultural markets.     

Competition among techniques in the presence of increasing returns to scale

A model of technology diffusion and growth originally proposed by Batten (1987), taking into account the interaction of the supply of and demand for a new product, is modified so as to admit a production technology with increasing returns to scale and the possibility of a competition between two techniques. On the opposite to the case where the production technology of the new technique exhibits decreasing returns, the presence of increasing returns to scale prevent the splitting of the market between two new techniques, and the monopoly position of one technique must obtain. The winning technique may not be the most efficient in terms of its market expansion potential, the outcome of competition depends on initial conditions on production capacity and diffusion.The author wishes to thank Robert Boyer for his helpful advice and remains the sole responsible for all remaining errors and omissions.     

Regional productivity variation and the impact of public capital stock: an analysis with spatial interaction,with reference to Spain

In this article, we examine whether variations in the level of public capital across Spain's Provinces affected productivity levels over the period 1996 to 2005. The analysis is motivated by contemporary urban economics theory, involving a production function for the competitive sector of the economy (‘industry’) which includes the level of composite services derived from ‘service’ firms under monopolistic competition. The outcome is potentially increasing returns to scale resulting from pecuniary externalities deriving from internal increasing returns in the monopolistic competition sector. We extend the production function by also making (log) labour efficiency a function of (log) total public capital stock and (log) human capital stock, leading to a simple and empirically tractable reduced form linking productivity level to density of employment, human capital and public capital stock. The model is further extended to include technological externalities or spillovers across provinces. Using panel data methodology, we find significant elasticities for total capital stock and for human capital stock, and a significant impact for employment density. The finding that the effect of public capital is significantly different from zero, indicating that it has a direct effect even after controlling for employment density, is contrary to some of the earlier research findings which leave the question of the impact of public capital unresolved.     

Foreign Direct Investment and the Unionization Rate

Technological innovations improve the welfare of a country facing fixed terms of trade, but may lead to immiserization when the terms of terms of trade are adversely affected. This paper establishes that transport innovation can be immiserizing for a small country when the transport sector exhibits variable returns to scale. The release of resources from the transport sector triggers Rybczynski-like effects, and the resulting expansion (contraction) in the volume of trade and in the demand for transport services raises unit costs of these services, and may reduce welfare in the presence of decreasing (increasing) returns to scale. [411]     

收入差距与公共财政政策:人力资本投资差异的形成与演变

人力资本投资的需求受到经济个体的时间偏好、生产能力与预期收益率等因素的影响。同时,收入差距和公共财政政策都会影响到人力资本投资供给曲线的变动。这造成了不同个体之间在人力资本投资上的差异,产生了他们之间的人力资本差距和收入差距。我国现行的公共财政政策已经成为收入差距快速增长的重要原因。     

Quality Assurance and the Home Market Effect

The home market effect is considered as a distinguishing feature of models of trade with increasing returns to scale in production and imperfect competition. However, some empirical studies found the existence of home market effect even in constant returns to scale industries. This paper builds a model of intra‐industry trade based upon quality assurance and shows the existence of the home market effect without increasing returns in the production technology. This throws into question the rationale of empirical studies attempting to validate the increasing returns model of trade based upon testing the existence of the home market effect.     

Regulating Public Transit Networks: How do Urban‐Intercity Diversification and Speed‐up Measures Affect Firms’ Cost Performance?

Abstract Empirical studies on the cost structure of Public Transit Networks are mainly based on specialized firms providing urban or intercity services. In this study we estimate a translogarithmic variable cost function to assess the behaviour of returns to scale and the impact of network characteristics. The analysis is based on a sample of 45 Italian municipal companies observed from 1996 to 1998 and including both specialized and mixed transit operators. Results confirm previous evidence on the existence of natural monopoly in the industry and support a regulation introducing competitive tenders to access to the market. In addition, we provide insights about the advantages associated with urban‐intercity diversification and with the improvement of network commercial speed. Cost benefits can then be achieved by promoting mergers between neighbouring firms, so as to create new companies operating on integrated local networks and supplying in combination urban and intercity public transport. Implications of such a strategy for the design of tender mechanisms are also underlined, together with the need for a regulatory policy which takes more care of speed‐up measures.     

基于DEA的城市市容环境卫生效率研究

本文选取城市市容环境卫生专用车辆数和从业人员数作为投入变量,道路清扫面积.生活垃圾清运量、粪便清运量作为产出变量,采用数据包络分析方法分析了我国城市市容环境卫生效率.结果发现,我国城市纯技术效率比规模效率低.总体技术效率不高,绝大多数城市处于规模效率递减阶段,城市环境卫生效率与城市所处的地理位置关系不大.环境卫生管理体制已经不适应城市化高速进程.因此,应大力促进环境卫生领域的技术进步,改进管理体制,提高城市环境卫生行业的投入产出水平.     

对几种典型企业组织的规模差异评析

基于从本质到现象的分析路线,我们可以更清楚地认识企业规模：社会合理规模与企业的有效性相对应,取决于企业的组织成本和协调收益;而企业的现实规模则与特定个体的效率相对应,效率不仅取决于协调收益也与转移收益有关。一般地,企业的决策权为不同人所掌握,就会产生不同的收益转移效应,从而产生了多姿多彩的企业形态：（1）不同社会文化伦理中的收益转移效应差异会影响企业规模。一般地,社会信任度越高,企业规模就越合理;而信任度不高的那些社会中,企业规模往往走向两个极端。（2）不同的分配制度中的收益转移效应差异也会影响企业规模。利润分享制企业的剩余索取权往往为所有员工所分享,从而其规模往往小于泰勒制企业。（3）在工人自治型企业中,由于工人主导了剩余索取权的分配,从而使得企业的规模相对较小。（4）中央计划体制下国有企业是极端化的经理管理型企业,经理们所追求的社会收益与企业规模联系在一起,因而这类企业的规模较大。     

Production Efficiency in the South African Banking Sector: A Stochastic Analysis

Econometric estimates of the level of efficiency at bank branches are likely to provide detailed insight into the overall level of efficiency in banking. Therefore this paper uses Bayesian stochastic frontier analysis to assess the production efficiency of 61 bank branches in the nine provinces of the Republic of South Africa. We find that every branch is operating at increasing returns to scale and that the level of production efficiency of bank branches is lower than it could be. We also find that at current levels of output, on average, bank branches can reduce their costs by about 17% if they improve the level of efficiency. In addition, we find that Gauteng Province has the lowest average level of returns to scale, while the Free State Province has the highest average level of the nine provinces. In addition, via estimates of the posterior mean for shares and price elasticities, we find that the price of capital is the largest predicted proportion of costs. These findings suggest that bank branches could also obtain cost reductions by increasing the level of output. Regulatory policy reforms and competitive incentives to enable banks to meet this objective should be encouraged.     

The Reform of Local Public Utilities in Italy

The Italian system of local public utilities has recently undergone an important reform process. The first round of reforms, introduced in the 1990s, represented a remarkable change in the social welfare function with regard to the management of local public utilities. The legislation was specifically designed to cut costs and reduce deficits. A second round of reforms, required by European directives, started around the mid-1990s. Several laws were passed introducing important innovations and regulating specific sectors: public transport; electricity; and gas. Article 35 of the 2002 Financial Law was the final step in a comprehensive reform of the whole local public utility sector. The main innovations of the Financial Law concerns liberalization. Article 35 states that the general rule for awarding service provision contracts is competitive tendering; the rationale is obviously that of competition for the market. The general rule as expressed by Article 35 is nevertheless limited during the transition period. In the long run, competitive tendering will become the normal way of awarding contracts for local public utility provision. Even if there are doubts that full competition will be introduced into the sector, liberalization does appear to be having an effect, forcing many local public utilities to become more efficient. The changes introduced have brought about a better and a more efficient system with a greater number of large size enterprises and on the average a more active management.
In the future, the liberalization process may come to a standstill due to an insufficient number of competitors. Strong public administrations are therefore needed to prevent opportunistic behaviour by private firms.     

Heterogeneity, returns to scale, and collective action

Abstract .  I analyze the effects of resource inequality and valuation heterogeneity on the provision of public goods with increasing or decreasing returns to scale in production. The existing literature typically takes the agents' characteristics as given and known to the researcher. In contrast, this paper compares collective action provision across groups of agents with resources and valuations for the public good drawn from different known joint distributions. Specifically, I characterize the expected equilibrium public good level as function of various distributional properties and moments. A resource-valuation distribution that first-order stochastically dominates another distribution always results in higher expected public good provision level, independent of the production technology. With decreasing returns to scale in the public good production, higher resource inequality results in higher expected provision. With increasing returns the same result holds when the mean resource level is relatively low, but expected provision decreases in inequality when the mean resource level is high. A parallel result holds for agents' valuations.     

Economies of scale in the Australian tourism industry

The measurement of economies of scale in the tourism industry has not been done to this point, as tourism is not a specific industry according to international statistical standards. Among many industries related to tourism, four sectors (accommodation, transport, retail trade and recreational services) across six states and two territories from 1997 to 2007 are studied as they contribute nearly 70% of tourism output in Australia. By comparing regression results from the Cobb–Douglas (C–D) production function and the translog production function, we find that there is evidence of increasing returns in transport, retail trade and recreational services at the industry level. However, accommodation is characterized by constant returns to scale at the industry level. As accommodation is responsible for the biggest share of tourism output, this suggests that overall the tourism sector is not characterized by increasing returns. We also find that the degrees of returns to scale from the C–D and translog production functions are different and that the imposition of input share also influences the empirical results. Both of these factors stress the importance of model specification to the measurement of economies of scale.     

铁路客运系统提速的空间经济影响

从1997年到2007年我国先后进行了六次铁路客运提速,有效地解决了铁路交通运营存在的问题,促进了国民经济的发展和和谐社会的建设.文章从经济地理学的视角探讨了铁路客运系统提速的空间经济影响,研究结果显示,一方面交通条件的改善在微观层面上影响经济活动的区位选择.通过选取以北京、上海为第一增长极的大城市圈进行分析,得到结论:铁路客运提速在空间上促进了产业结构的调整和升级,同时也为大城市圈的形成创造了有利条件;在宏观层面,首先对整个系统提速效果进行了评价,然后选取若干主要铁路枢纽城市进行个案研究,我们发现:交通业的发展可以通过降低交通成本促进资源的流动,为区域协调发展战略奠定交通基础,从而对区域经济发展和区域空间结构产生重大影响.最后提出根据交通条件的变化及时调整城市和区域经济发展战略,合理进行产业布局和调整是十分必要的.     

WELFARE ENHANCING COORDINATION IN CONSUMER COOPERATIVES UNDER MIXED OLIGOPOLY

The recent globalization of world economies has led the retail markets of developed countries towards increasing levels of integration and strategic interdependence. A non negligible share of retail and food markets is currently served by co‐operative societies. Consistently with this trend, the consumer cooperatives have recently experienced increasing levels of integration. The main aim of this paper is to study the welfare effects of coordination among consumer cooperatives competing in quantities in a mixed oligopoly against profit‐maximizing firms. We show that, in absence of agency problems, under increasing or constant returns to scale a higher output coordination of the consumer cooperatives does not affect the total welfare as long as a nonnegative profit constraint holds in these firms. On the other hand, under decreasing returns to scale, the consumer cooperatives contribute more to social welfare when acting on behalf of all consumers. This is because, by coordinating consumers’ preferences, these firms can reduce their market output, thus helping the market to come closer to the first best. All together these results seem to provide an argument in favour of the recent process of integration involving consumer cooperatives in many developed countries.     

External Economies of Scale and Optimal Plant Location

This paper departs from earlier work on location theory by introducing external economies of scale into the Weber–Moses location model. It is shown that under Cournot–Nash competition, when external economies prevail, constant returns to scale at the firm level is not a sufficient condition for ensuring the invariance of the firm's optimal location with respect to a change in market demand, regardless of whether or not free entry is allowed. Moreover, when free entry is allowed and the production function exhibits decreasing returns to scale, but with very strong external economies, the optimal location moves towards or away from the market as demand increases according to whether the demand function is convex or concave. These results are different significantly from the conventional wisdom.     

The Internet and other networks: utilization rates and their implications

Costs of communications networks are determined largely by the maximal capacities of those networks. On the other hand, the traffic those networks carry depends on how heavily those networks are used. Hence, utilization rates and utilization patterns determine the costs of providing services and, therefore, are crucial in understanding the economics of communications networks. A comparison of utilization rates and costs of various networks helps disprove many popular myths about the Internet. Although packet networks are often extolled for the efficiency of their transport, it often costs more to send data over internal corporate networks than using modems on the switched voice network. Packet networks are growing explosively not because they utilize underlying transport capacity more efficiently but because they provide much greater flexibility in offering new services. Study of utilization patterns shows there are large opportunities for increasing the efficiency of data transport and making the Internet less expensive and more useful. On the other hand, many popular techniques, such as some Quality of Service measures and ATM, are likely to be of limited usefulness.     

The Voluntary (Private) Production of Public Goods,the Gains From Trade,and Comparative Advantage*

Any (finite) number of privately produced public goods are incorporated into a general trade-theory model of private goods and factors. Postulating Cournot-Nash behavior, a necessary condition for gainful trade is derived. Potential trade gains are related to the law of comparative advantage in private goods and the change in the underproduction of public goods. A sufficient condition is also proven. Trade gains/losses are compared for more or less populous economies. All the results have analogues in the literature on imperfect competition and/or increasing returns to scale.