Conservation of biodiversity and economic development: The concept of transferable development rights

For ecological and economic reasons it is more cost effective to conserve habitats rather than species, and hence biodiversity conservation becomes a land use issue. Since in developing countries, land is the most important productive asset, the opportunity costs of conservation are forgone development, while the benefits from conservation are distant and largely external to the host country. The concept of transferable development rights (TDRs), which has been extensively applied to conservation of historical buildings in urban areas, is extended and adapted here to the conservation of biodiversity, both within a country and globally. Creation of a market for TDRs makes effective the latent demand for and supply of biodiversity conservation and generates benefits for both the supplier (developing countries) and the demander (developed countries). The paper explores the conditions and public interventions necessary for the creation of an active market for TDRs. It also proposes a number of mechanisms such as credits and offsets for purchase of TDRs against domestic regulations and conservation taxes in the developed countries.     

Foreign direct investment and vertical integration of production by Japanese multinationals in Thailand

We test the vertical model of foreign direct investment (FDI) empirically using firm level information on Japanese multinational activity in Thailand. These data allow us to investigate the effects of both home country (Japan) and host country (Thailand) characteristics on the inter-industry pattern of FDI. For 85 manufacturing industries over the period from 1985 to 1995, we find a positive influence of industry variation in skill intensity and market size in the host country and a negative effect of transport costs on the amount of FDI. These results provide strong direct econometric evidence of vertical integration of production across the countries. Journal of Comparative Economics 32 (4) (2004) 805–821.     

生物多样性视角下的植物花粉致敏问题 溯源及景观设计对策研究

工业革命后,世界花粉过敏症发病率不断提高。回 溯了大量医学、生态、环境等领域的相关研究,从生物多样性 的视角总结了花粉致敏现象加剧的原因、作用机制和影响路 径。研究发现,伴随着工业革命后普遍的生境退化和生物多样 性丧失,人体免疫调节回路中的重要环节——环境微生物群落 也在改变和丧失,进而引发了人体免疫功能障碍,表现为过敏 等疾病发病率的上升;而部分绿地中致敏植物种植密度高、植 物多样性低,提升了植物花粉致敏原的浓度,更增加了居民罹 患过敏相关疾病的风险。基于上述发现,提出从源头对致敏植 物进行识别和致敏性评估,因地制宜、合理选用,从而控制空 气中的花粉致敏原;在传播过程中利用空间营造阻挡消解一定 的致敏花粉;通过生境修复和再野化环境微生物群落为人体提 供有益的免疫保护,帮促还原人体微生物与环境微生物在长期 互动中形成的平衡状态。为常见的花粉致敏问题提供了景观研 究思路,为健康导向的景观设计提供了创新视角和理论借鉴, 以期促进基于自然的健康干预计划与环境修复相结合,推动生 物多样性保护与人类健康共同发展。     

Who Cares about Biodiversity? Optimal Conservation and Transboundary Biodiversity Externalities

The Convention on Biological Diversity’s (2010) target to reduce the rate of biodiversity loss was achieved by very few countries. Why? We use the theory of conservation implicit in the Hotelling model of non-renewable resource pricing to analyze the problem, distinguishing between the benefits to countries where conservation takes place, and to other countries. We estimate models for three taxonomic groups, and find that while individual countries value conservation within their borders, in poor countries this effect is dominated by the negative impact of income growth. International concessional financial contributions to conservation in poor countries are found to be statistically insignificant. We conclude that countries care about the biodiversity within their national borders, but only when development priorities permit, and only when it becomes scarce enough that its value grows more rapidly than the return on alternative assets. There is little evidence that high income countries yet care sufficiently about biodiversity in the places where it is most threatened to affect conservation outcomes there.     

A prospective on macrocybernetic process management systems

In an editorial in the February 1996 issue of Technological Forecasting and Social Change Professor Linstone noted that “the rapid pace of technology has not been matched by the pace of human change.” Were we to drop our perspective a bit lower, a similarly troublesome imbalance within technology itself becomes apparent: the rapid rate of increase in the complexity of process-related technologies relative to the much slower rate of increase in the sophistication of process control systems. The conclusion at which most technological forecasts seem to arrive is that there will be a continuation—perhaps even an acceleration—of the trend toward more intricate and sweepingly extensive processes (production-related and otherwise). If so, there is the specter of a steadily increasing shortfall between requirements and capabilities, and hence the likelihood of even grander technological embarrassments. This article considers two ways in which this shortfall might be kept in check. Increases in the intricacy of processes can be met, and to a considerable extent are already being met, by exchanging conventional process control facilities for enhanced alternatives. Less certain is how expansions of project scope might best be accommodated. One possibility is to consider exchanging process control systems for broader-purview process management systems. Hence the focus in this article is on prospects for the development of macrocybernetic constructs.     

Influence and inefficiency in the internal capital market

I model inefficient resource allocations in M-form organizations due to influence activities by division managers that skew capital budgets in their favor. Corporate headquarters receives two types of signals about investment opportunities: private signals that can be distorted by managers, and public signals that are undistorted but noisy. Headquarters faces a tradeoff between the cost of attaining an accurate private signal and the value of the information the signal provides. In contrast to existing models of “socialism” in internal capital markets, I show that investment sensitivity to Tobin's Q is higher than first-best in firms where division managers hold equity (a result consistent with evidence presented in Scharfstein, 1998). When managers face high private costs from distorting information (equity holdings), headquarters may commit to investment contracts that place “too little” weight on private signals and “too much” weight on public signals (i.e. Q). This result has implications for managers in the design of capital budgeting processes and incentive compensation systems.     

QUID PRO QUO FOREIGN INVESTMENT*

The paper analyzes the phenomenon of industry-specific direct foreign investment (DFI) which occurs with the view to defusing the threat of future protection by the host country (quid pro quo), under alternative imperfectly competitive market structures. It is established that, even in the absence of government intervention, firms in imperfectly competitive markets change the level of trade and DFI in response to future protectionist threats.     

Foreign Direct Investment,Female Education,Capital Formation,and Economic Growth in Japan and South Korea

ABSTRACT

The influence of foreign direct investment (FDI) on host country‘s economic growth is a widely explored issues in the existing economic literature. This study attempts to examine the role of foreign direct investment, capital formation, and expansion of female education on economic growth of Japan during the period 1971–2014, using time series observations. The study further makes a comparison regarding the association with FDI and economic growth with South Korea, another major OECD economy of Asia The study utilises the auto-regressive distributed lag (ARDL) bounds approach to cointegration to examine the long run causality association among the variables. Today, for sustainable economic development the social and institutional policy issues are important. The paper explores one such social issue, namely gender and economic prosperity. This paper has novel contributions in the current research on time series, econometric analysis for the following reasons: (1) it has investigated the relationship between economic growth, foreign direct investment and capital formation in a gendered differential framework (utilising the role of human capital formation among men versus women; (2) the study covers a long period and more recent time period (till 2014), which concurs with the upsurge of world FDI movements and (3) the study also explores the major structural breaks of the two economies and how economic growth is impacted thereof.     

p-Best response set and the robustness of equilibria to incomplete information

In this paper, we use p-best response sets—a set-valued extension of p-dominance—in order to provide a new sufficient condition for the robustness of equilibria to incomplete information: if there exists a set S which is a p-best response set with , and there exists a unique correlated equilibrium μ^* whose support is in S then μ^* is a robust Nash equilibrium.     

The Value of Biodiversity in Pharmaceutical Research with Differentiated Products

Biologists and conservation advocates have expressed grave concern over perceived threats to biological diversity. ``Biodiversity prospecting' – the search among naturally occurring organisms for new products of agricultural, industrial, and, particularly, pharmaceutical value – has been advanced as both a mechanism and a motive for conserving biological diversity. Economists and others have attempted to estimate the value of biodiversity for use in new pharmaceutical project research. In this paper we apply a new approach to estimating values: we employ two models of competition among differentiated products. Each model confirms previous findings that the value to private researchers of the ``marginal species' is likely to be small. The models can have very different implications with respect to social values, however. These findings underscore the need for a better understanding of the true meaning of diversity.Resources for the Future     

Home country effects of foreign direct investment: From a small economy to a large economy

Previous studies on home country effects mainly focused on FDI from large developed economies to other countries. But today's super recipient is a relatively larger economy than its investors and many of these investors are not classified as “developed economies.” A simple Ak type model implies that a small and more developed country investing in a large and less developed country will experience decreases in both employment and income disparity (compared to the recipient country) as the less-developed recipient country gains the higher technology of production through FDI inflows. The empirical results for the Four Tigers (source countries) and China (recipient country) are consistent with our theoretical model of FDI outflows. We also find that FDI outflows to China decrease the ratio of exports to GDP only for small source countries, even though a higher investment in China raises the share of these countries' exports-to-China to China's total imports.     

Investment Incentives of a Regulated Dominant Firm

We study the investment incentives of a regulated, incumbent firm in a deregulation process. The regulator cannot commit to a long-term regulatory policy, and investment decisions are taken before optimal regulatory policies are imposed. We characterize the regulated incumbent's incentive to invest when a deregulation process is initiated and an unregulated firm enters the market as a result. The change in the marginal return to investment depends on how the investment changes the firm's virtual cost—the sum of its physical production and information costs. When the marginal return to investment increases due to deregulation, social welfare increases as a result of higher investment and more competition. Otherwise, the change in social welfare depends on the total of the effects in the fall of investment and increased competition. We also present conditions under which deregulation enhances welfare.     

Knowledge interaction towards inclusive learning: Promoting systems of innovation and competence building

This paper draws on recent conceptual approaches to economic growth, in which the accumulation of knowledge is the fundamental driving force behind growth. This fact is reflected in the trend in developed economies towards an increasing investment in advanced technology, R&D, education, and culture. Concepts such as learning ability, creativity, and sustained flexibility gain greater importance as guiding principles for the conduct of individuals, institutions, nations, and regions. It is thus legitimate to question the traditional way of viewing the role that contemporary institutions play in the process of economic development and to argue for the need to promote systems of innovation and competence building based on learning and knowledge networks. This broad concept has motivated the work behind the present work, which reviews the strongest themes of the 4th International Conference on Technology Policy and Innovation (ICTPI), which was held in Curitiba, Paraná, Brazil, in August of 2000. Under the broad designation of “learning and knowledge networks,” the conference brought together a range of experts to discuss technology, policy, and management in a context much influenced by a dynamics of change and a necessary balance between the creation and diffusion of knowledge. While the idea of inclusive development developed in previous conferences entails a process of shared prosperity across the globe following local specific conditions, it is crucial to understand the dynamics of the process of knowledge accumulation, which drives a learning society. Thus, this special issue includes a set of extended contributions to the Curitiba conference that are largely grounded on empirical experiences of different regional and national contexts. The aim of this introductory paper is to set the stage for these contributions, with an original contribution on possible views for the learning society.     

Planning for the Australian information economy

This study spotlights the inadequacy of the sectoral modeling used hitherto to analyse structural change in Australia. Although the multiplier and key-sector results demonstrate that contemporary Australia is predominantly an industrial economy, in the next decade the growth of the information intensiveness of economic activity or informatization will accelerate. A sectoral model clearly identifying the information sector is proposed to study the implications of the growing information intensiveness of the Australian economy. A methodology to identify the primary information economy or information commodities traded in the market is explained. The macroeconomic scenarios—income and price implications—of programming for various targets of information sector activities are analysed. Three plausible informatization targets are hypothesised: Luddite or zero growth; laissez-faire or continuing the status quo and sunrise or accelerated performance. The significance of Leontief accounting prices based on competitive equilibria and the shadow prices connoting opportunity costs of the linear programming dual are examined. Fiscal policies to subsidise positive externalities generated by informatization, in the fase of intractability of the Pigouvian ideal taxes are briefly reviewed. Finally, the need for anticipatory policy decisions in Australia to harness the full benefits of informatization is emphasised.     

Large Scale Marine Protected Areas for Biodiversity Conservation Along a Linear Gradient: Cooperation, Strategic Behavior or Conservation Autarky?

In this paper we investigate effects of overlap in species between ecosystems along a linear gradient on the location of marine protected areas (MPAs) under full cooperation, strategic behavior and conservation autarky. Compared to the full cooperation outcome, both strategic behavior and conservation autarky lead to under-investment in biodiversity protection. Under strategic behavior, however, we observe the additional problem of ??location leakage?? i.e. countries invest less in species protected by others. Conservation autarky eliminates location leakage; in ecosystems with partly overlapping species compositions at country borders it even induces MPAs that are too large from a global perspective. We also find that, in our setting of a linear gradient without migrating species, countries focus their conservation efforts on species unique to their own country and that these species are relatively well protected compared to common species.     

Better-reply dynamics and global convergence to Nash equilibrium in aggregative games

We consider n-person games with quasi-concave payoffs that depend on a player's own action and the sum of all players' actions. We show that a discrete-time, stochastic process in which players move towards better replies—the better-reply dynamics—converges globally to a Nash equilibrium if actions are either strategic substitutes or strategic complements for all players around each Nash equilibrium that is asymptotically stable under a deterministic, adjusted best-reply dynamics. We present an example of a 2-person game with a unique equilibrium where the derivatives of the best-reply functions have different signs and the better-reply dynamics does not converge.     

Strong equilibrium in cost sharing connection games

We study network games in which each player wishes to connect his source and sink, and the cost of each edge is shared among its users either equally (in Fair Connection Games—FCG's) or arbitrarily (in General Connection Games—GCG's). We study the existence and quality of strong equilibria (SE)—strategy profiles from which no coalition can improve the cost of each of its members—in these settings. We show that SE always exist in the following games: (1) Single source and sink FCG's and GCG's. (2) Single source multiple sinks FCG's and GCG's on series parallel graphs. (3) Multi source and sink FCG's on extension parallel graphs. As for the quality of the SE, in any FCG with n players, the cost of any SE is bounded by H(n) (i.e., the harmonic sum), contrasted with the Θ(n) price of anarchy. For any GCG, any SE is optimal.     

A dynamic approach to PES pricing and finance for interlinked ecosystem services: Watershed conservation and groundwater management

A theory of payment for ecosystem services (PES) pricing consistent with dynamic efficiency and sustainable income requires optimized shadow prices. Since ecosystem services are generally interdependent, this requires joint optimization across multiple resource stocks. We develop such a theory in the context of watershed conservation and groundwater extraction. The optimal program can be implemented with a decentralized system of ecosystem payments to private watershed landowners, financed by efficiency prices of groundwater set by a public utility. The theory is extended to cases where land is publicly owned, conservation instruments exhibit non-convexities on private land, or the size of a conservation project is exogenous. In these cases, conservation investment can be financed from benefit taxation of groundwater consumers. While volumetric conservation surcharges induce inefficient water use, a dynamic lump-sum tax finances investment without distorting incentives. Since the optimal level of conservation is generated as long as payments are correct at the margin, any surplus can be returned to consumers through appropriate block pricing. The present value gain in consumer surplus generated by the conservation-induced reduction in groundwater scarcity serves as a lower bound to the benefits of conservation without explicit measurement of other benefits such as recreation, biodiversity, and cultural values.     

DETERMINANTS OF PRIVATE INVESTMENT IN MALAYSIA: WHAT CAUSES THE POSTCRISIS SLUMPS?

This paper examines the determinants of private investment in Malaysia, with an emphasis on the postcrisis investment slumps. A static private investment function is derived from the neoclassical framework, with appropriate modifications to account for the structural features observed in the country. To introduce dynamics into the model, we adopt a cost minimization problem, which assumes firms optimize investment levels with respect to a quadratic loss function. The results suggest that the availability of financial resources in the economy has a significant positive impact on private investment. Macroeconomic uncertainty exerts a negative influence on the investment climate in the private sector. Both foreign direct investment and public investment are found to have a complementary effect on private investment. Consistent with the prediction of the neoclassical model, a higher level of aggregate output raises private investment, whereas the user cost of capital has the opposite impact. (JEL O16, O53)     

Do we really care about Biodiversity?

This paper addresses from an economic perspective the issue of global biodiversity conservation. It challenges the perception that the world really cares a great deal about biodiversity and is prepared to pay the full cost of maintaining this stock of natural capital. Despite the existence of a plethora of international agreements there still seems to be a global ‘deficit of care’ surrounding efforts to combat challenges such as those posed by global warming and biodiversity conservation. More light can be thrown on the degree of care by measuring both the actual expenditures and the stated willingness to pay for biodiversity conservation. However, actual expenditures are much lower than willingness to pay estimates recorded in the published literature. Using the criteria that the ‘right’ amount of conservation effort is one where the marginal economic benefits from conservation just equal the marginal costs of conservation, the paper explores the biodiversity conservation conundrum and concluded that, on the available evidence, the world does not care too much about this natural capital stock and bequests to future generations. An erratum to this article can be found at