Costly investment, complementarities and the skill premium

We propose a new framework to analyse the relationship between the relative high-skilled labour endowment, the skill premium and economic growth. Building on Acemoglu and Zilibotti (2001), we introduce physical capital; internal costly investment in both capital and R&D; and complementarities between intermediate goods. We only find a positive relationship between the relative labour endowment and both the skill premium and economic growth within determined intervals of relative labour endowment values, which vary with the absolute productive advantage of high over low-skilled labour. The model thus accommodates theoretically mixed empirical results on the relative labour endowment-skill premium relationship. We further find that the impact on both the relative labour endowment and the skill premium of a rise in investment costs or in the complementarities degree depends on: (i) the absolute productivity advantage of high over low-skilled labour; and (ii) the relative labour endowment.     

Complementarities and costly investment in a growth model

We develop a one-sector growth model whose key aspect is the combination of the assumptions of internal costly investment in capital and complementarities between capital goods in the production function. Despite the nonlinearity generated by these assumptions, the model delivers a single equilibrium.      

外商在华投资产业结构特徵

本文围绕外商直接投资（FDI）与产业结构变动展开,重点放在1992—2007年期间。首先回顾了外商直接投资在中国经济建设申的作用,并验证了国际投资理论在中国的适用性。接着系统分析了在外资产业结构和地区产业分布非均衡发展的情况下,分别分析了外资在第一、二、三产业的特点和变动趋势、产业内部特徵,外资产业变动与中国三次产业变动的关联性。最後分析了物资进入中国的地区分布差异,外商投资在东部、中部和西部地区产业结构特徵,以及外资产业与中国产业结构在不同地区变动的关联性和相互作用。     

Tradeoffs between costly capacity investment and risk of regime shift

There is mounting evidence that increasing natural resource exploitation (e.g., fossil fuel extraction and consumption) could trigger irreversible dramatic ecological events like global warming. While capacity investment costs and the possibility to produce at full capacity are two factors that critically affect the exploitation rate, little is known about their effect on management. I generalize standard models of pollution control under the threat of dramatic regime shifts to investigate how optimal management changes with both factors. My analysis reveals that accounting for such factors gives rise to investment and emissions policies that challenge conventional wisdom. For instance, I find that under reasonable conditions, an exogenous threat of a doomsday event induces a cautious management strategy. Using parameters estimated from climatic data, my analysis shows that raising the discount rate can induce lower emissions, highlighting the complex interplay between the threat and both factors.     

Optimal debt contracts under costly enforcement

We consider a financing game where monitoring is costly, non-contractible and allowed to be stochastic. The optimal contract, which is debt, induces creditor leniency and strategic defaults on the equilibrium path, consistent with empirical evidence on repayment and monitoring behavior in credit markets. Our paper is the first where the optimal contract is debt and default is not synonymous with bankruptcy.     

The equilibrium allocation of investment capital in the presence of adverse selection and costly state verification

Summary We consider credit rationing in an environment with adverse selection and costly state verification. The presence of costly state verification permits debt contracts to emerge under conditions that we specify. When debt contracts are observed, so is credit rationing. This rationing occurs even if it is possible for rationed borrowers to bid up expected returns to lenders and hence is voluntary. We also show how the adverse selection and costly state verification problems interact and investigate how improvements in information gathering technology impact on the extent of credit rationing.The views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of Minneapolis or the Federal Reserve System. We have benefitted from comments on an earlier draft of this paper by Franklin Allen, Charlie Calomiris, V. V. Chari, Ed Green, Craig Holden, Jeff Lacker, George Pennachi, Neil Wallace, Anne Villamil, and an anonymous referee and from discussions with Edward Prescott.     

The capital structure and investment of regulated firms under alternative regulatory regimes

This paper explains how regulated firms choose their capital structure and examines the effects of this choice on investment and on regulated prices. It is shown that in equilibrium, firms have an optimal debt level and that given this debt level, the regulated price is set high enough to ensure that firms never become financially distressed. The analysis of the equilibrium yields testable hypotheses concerning the effects of changes in cost parameters and in the regulatory climate on the equilibrium investment level, capital structure, and regulated price. The analysis also shows that a regulatory restriction on the ability of the firm to issue securities may have an adverse effect on investment and consequently may harm consumers.     

Modelling profits and industrial investment in postwar Greece

This article examines the two contrasting phases of the industrial capital accumulation in postwar Greece. It is argued that the phase of rapid accumulation can be explained by the emergence and consolidation of institutionalized power relations that comprised the Greek social structure of accumulation (SSA). The deindustrialization process that followed can be explained as the result of the demise of the very same institutional setting. A recursive system of two equations models the SSA-profitability-accumulation nexus. The profit rate is found to be highly sensitive to changes in the (quantified) dimensions of the power relations. The capital accumulation rate, in turn, is found to be sensitive to expected profitability, capital cost, and volatility of international trade.     

Learning investment and industrial diversity in urban growth

This paper studies an urban growth model where learning through personal contacts could be more effective in a denser locale, whereas the effectiveness of learning through impersonal means of communications depends principally on the technology of communications rather than on the locale in which learning takes place. As a result of advances in communications technology, cities would be larger, and workers would spent more time on learning through personal contacts but may cut time on impersonal learning if the two kinds of learning investment are complements. Otherwise, cities could become smaller, while workers would spend more time on impersonal learning at the expense of time on learning through personal contacts. In a multi-sector economy, urban industrial diversity tends to increase or fall together with city size.     

Investment and deposit contracts under costly intermediation and aggregate volatility

This paper examines how volatility affects investment and the form of deposit contracts in a three-period model where capital formation is financed by bank credit and lenders face state verification and enforcement costs. Firms face both idiosyncratic and aggregate shocks, and agents are initially risk neutral. We show that intermediation costs magnify the incidence of macroeconomic volatility on banks' expected losses and have an adverse effect on investment. With risk-averse consumers, the impact of banks' expected losses on investment is mitigated because the equilibrium deposit contract provides partial insurance against adverse macroeconomic shocks.     

我国医药产业集群风险投资

资金成为制约我国医药产业集群发展壮大的瓶颈。本文剖析国内外医药产业集群及其融资情况,以及我国医药产业集群中风险投资所面临的问题,在此基础上从投融资体系、政府作用和企业的角度提出对策与建议。     

Extensive-form games and strategic complementarities

I prove the subgame-perfect equivalent of the basic result for Nash equilibria in normal-form games of strategic complements: the set of subgame-perfect equilibria is a nonempty, complete lattice—in particular, subgame-perfect Nash equilibria exist. For this purpose I introduce a device that allows the study of the set of subgame-perfect equilibria as the set of fixed points of a correspondence. My results are limited because extensive-form games of strategic complementarities turn out—surprisingly—to be a very restrictive class of games.     

Foreign direct investment,industrial restructuring and the upgrading of Polish exports

This paper poses a central question in relation to the economic-structural effect of Foreign Direct Investment (FDI) with Polish manufacturing as an empirical case: how FDI coincides with the technology intensity of Polish exports. A short review of the available literature discusses critically the possibility of establishing one-sided cause-effect relationships between trade and FDI. Subsequently the empirical analysis investigates what role incoming FDI appears to have played in relation to Polish export specialization over the period 1989–1996. Results indicate that FDI has affected positively the technology intensity of the Polish export base.     

Foreign direct investment, competition and industrial development in the host country

This paper analyses the impact of foreign direct investment (FDI) on the development of local firms. We focus on two likely effects of FDI: A competition effect which deters entry of domestic firms and positive market externalities which foster the development of local industry. Using a simple theoretical model to illustrate how these forces work we show that the number of domestic firms follows a u-shaped curve, where the competition effect first dominates but is gradually outweighed by positive externalities. Evidence for Ireland tends to support this result. Specifically, applying semi-parametric regression techniques on plant level panel data for the manufacturing sector we find that while the competition effect may have initially deterred local firms’ entry, this initial effect has been outpaced by positive externalities making the overall impact of FDI largely positive for the domestic industry.     

Dynamics of technology sharing cartels and industrial structure under a rule of thumb

We analyse the market effects of different degrees of knowledge transfer in a duopoly in which firms act following a rule of thumb. Three regimes are compared: the technology sharing cartels, the duopoly with spillovers, and the proprietary regime. We show the industrial structure evolution of these three regimes under different cost configurations when firms behave myopically, revising their production plan in each period according to the marginal profit previously gained. The analysis is conducted in a discrete setting using numerical simulations of finite difference systems. We show under which conditions knowledge transfer is beneficial to the system and can prevent market monopolisation.     

产业结构调整背景下推行绿色信贷政策的思考

绿色信贷是我国银行业贯彻可持续发展战略、将经营活动与改善环境结合在一起的一项重大举措,是实施节能减排的有力金融杠杆。通过阐述了绿色信贷的含义,进而探讨在我国产业结构调整的背景下,我国商业银行推行绿色信贷政策的意义、实践及不足,并针对绿色信贷的建设提出了相关的建议。     

Foreign investment and industrial transformation: A Brazilian case study

The causes and consequences of ‘denationalization’, that is, the shift from local to foreign ownership, are examined for the case of the Brazilian pharmaceutical industry. The negative consequences that have been attributed to denationalization by 'dependency theory' are substantiated, but only in part. It is argued that the most interesting contrasts are not between the behavior of foreign and local firms in the industry but between the private sector and a recently created state enterprise, and that future analysis of dependent capitalist development should focus on the interaction of the state and foreign capital.