Infant industry protection and industrial dynamics

A perennial case for industrial policy is based on the protection of young or emerging industries. Despite a natural association with concepts of life cycles, industrial policy has not been analyzed in the context of an industry life-cycle model. In particular, an important life-cycle characteristic, the potential for very large changes in the rate of net entry, is ignored. In this paper, we demonstrate how the impact of industrial policy depends critically on the entry and exit dynamics within an industry. We construct a model of technology adoption in which the number of firms is endogenous, and derive a set of novel predictions about the effects of protection on firm technology decisions. Specifically, we show that permanent protection can induce earlier adoption, but also decreases the probability that a given firm adopts the new technology. Likewise, we demonstrate that reducing the duration of protection results in faster adoption than permanent protection, but also reduces a given firm's probability of adoption. Finally, we show that, for industries characterized by flexibility in firm numbers, protection does not change the rate of technology adoption but does increase the size and probability of a shakeout (large scale net exit).     

Competition and product innovation in dynamic oligopoly

We investigate the relationship between competition and innovation using a dynamic oligopoly model that endogenizes both the long-run innovation rate and market structure. We use the model to examine how various determinants of competition, such as product substitutability, entry costs, and innovation spillovers, affect firms’ equilibrium strategies for entry, exit, and investment in product quality. We find an inverted-U relationship between product substitutability and innovation: the returns to innovation initially rise for all firms but eventually, as the market approaches a winner-take-all environment, laggards have few residual profits to fight over and give up pursuit of the leader, knowing he will defend his lead. The increasing portion of the inverted-U reflects changes in firm’s investment policy functions, whereas the decreasing portion arises from the industry transiting to states with fewer firms and wider quality gaps. Allowing market structure to be endogenous yields different results compared to extant work that fixes or exogenously varies the market structure.     

Knowledge distance and R&D collaboration in Cournot oligopoly

A Cournot collaboration game is complemented with the hypothesis that the cost of R&D collaboration depends on firm’s directed knowledge distance with respect to potential R&D partners. The further hypothesis that directed distance may be non‐uniform and pair‐wise asymmetric reconciles theoretical predictions with qualitative evidence about concentration and multiplicity of components in industrial R&D networks. The welfare properties of sparse stable networks are also affected.     

Innovation and intellectual property protection: : The software industry perspective

Digital commerce does not yet exist in a widely available, commercially viable form. Substantial amounts of innovation will be required to improve and customize existing technology and to create necessary new technologies for the digital marketplace. Recent months have witnessed the establishment of a broad array of new enterprises, joint ventures and business alliances aimed at preparing for a digital future. Driven by consumer demand, this trend will accelerate over the coming years. The author points out that a number of factors will be critical, however, in order for electronically harnessed information to become an established norm. For the software industry, the most important factor is strong protection of intellectual property rights. This is essential to the promotion and development of new applications and services. The author views the emergence of a digital marketplace as dependent on the combined advancements in technological safeguards and encryption techniques, and strong national and international legal safeguards for copyrighted materials.     

Trade liberalization,division of labor and welfare under oligopoly

Incorporating explicitly division of labor into a two-country general oligopolistic equilibrium model, we examine the effects of trade liberalization on firm productivity and welfare. We show that a tariff reduction increases the firm productivity of the trading industries but decreases that of the non-trading industries. An expansion of the trading industries, in contrast, decreases the firm productivity of both the trading and non-trading industries. We then find that a tariff reduction necessarily reduces welfare while the welfare effect of expansion of trading industries is ambiguous.     

The importance of intellectual property protection to the American research-intensive pharmaceutical industry

The American research-intensive pharmaceutical industry is the world's most successful and competitive and one of the crown jewels of the U.S. industrial base. Among the principal reasons for its success is an unparalleled commitment to research and development, which in turn yields an impressive array of advanced biomedical therapies. Intellectual property protection is a cornerstone of the industry's existence. Like other industries, such as computer software and audio/video recordings, a major portion of the industry's cost of production is incurred in the development stage, rendering unauthorized copying both easy and profitable. The GATT Uruguay Round and the North American Free Trade Agreement have set high standards for pharmaceutical and other industries' intellectual property protection. Unfortunately, there will be delays until numerous countries implement these standards. These delays harm both the industry worldwide and individual countries where patent protection would attract investment and stimulate research and development.     

如何解决环保产业发展中的问题

现实的环保产业市场处于无序竞争的混乱状态,这十分不利于中国环保产业整体水平的提高,更不利于应对入世后国外环保企业的强有力竞争,开拓国际市场.对此环保人必须有清楚的估计和认识,认清自己,看清形势,通力合作,共同探讨解决办法,增强自身的综合实力.     

如何解决环保产业发展中的问题

现实的环保产业市场处于无序竞争的混乱状态,这十分不利于中国环保产业整体水平的提高,更不利于应对入世后国外环保企业的强有力竞争,开拓国际市场.对此环保人必须有清楚的估计和认识,认清自己,看清形势,通力合作,共同探讨解决办法,增强自身的综合实力.     

Infant Firm Subsidization in Industries with Dynamic Structure

This paper analyzes time-consistent subsidies in industries with strong learning effects and frequent entry and exit. Structural dynamics create opportunities for strategic behavior: by influencing government policies, infant firms can reduce their tax burden and weaken future competitors. Two balanced-budget subsidy regimes are considered: (1) intra-industry redistribution; and (2) outside funding. We show that the choice of funding method does not affect equilibrium welfare. In both cases, the regulator is able to attain the constrained optimum. This result does not depend on the functional form of payoffs and holds in both price and quantity games. In linear-quadratic examples, we compute the equilibrium strategies. We show that (1) government intervention amplifies transitional price and output fluctuations and (2) the steady-state subsidy rate and infant production are decreasing in the speed of learning.      

Entry liberalization and export performance: a theoretical analysis in a multi-market oligopoly model

This paper is an attempt to demonstrate how the entry (costless) of firms in an industry may have a dramatic effect on exports from an industry in a country. The results have tremendous implications for LDCs suffering from resource and BOP constraints but having reservoirs of cheap labor. The welfare effects of such entry liberalization policy (or subsidy) can be stated from the Bhagwati theorem that a reduction in an only (single) distortion is necessarily welfare improving by reducing monopoly or oligopoly distortions. However, we have shown that the entry liberalization policy is welfare superior to an equivalent subsidy policy where equivalent is defined in terms of the impact on exports. As a by product, we have also shown how one can integrate the oligopoly models of trade with the general oligopoly literature. The results on the limiting behaviour of an open economy oligopoly model extend the standard results in the oligopoly theory in a closed economy.     

Knowledge outflows from foreign subsidiaries and the tension between knowledge creation and knowledge protection: Evidence from the semiconductor industry

This paper analyzes the MNC subsidiaries’ trade-off between the need for knowledge creation and the need for knowledge protection, and relates it to the extent of knowledge outflows generated within the host location. Combining research in International Business with Social Theory, we build a conceptual framework suggesting that subsidiaries that extensively draw on external knowledge sources are also more likely to generate knowledge outflows to local firms. We argue that this may be explained by the subsidiaries’ willingness to build the trust that facilitates the establishment of reciprocal knowledge linkages. However, when the value of the subsidiary's knowledge stock is very high, the need for knowledge protection restrains reciprocity mechanisms in knowledge exchanges, thus reducing the extent of knowledge outflows to the host location. This study contributes to the literature on the firm-level antecedents of FDI-mediated local knowledge outflows, as well as to the broad IB literature on the relationship between subsidiaries and their host regions. The implications for managers and policy-makers are also discussed.     

产业集群与产业链关系的耦合模型

在总结产业集群和产业链理论发展趋势的基础上,运用哈堪森和斯涅何塔的网络模型,分析并证明产业集群和产业链都具备网络的基本形态。以"网络"作为耦合界面,构建产业集群与产业链关系的耦合模型。     

“幼稚产业论”与中国幼稚产业政策的现实优化

正确认识和分析幼稚产业论的理性与非理性因素,以在制定幼稚产业政策和实施保护中趋利弊害,对幼稚产业在保护对象、手段、政策等方面进行优化以提高保护的效率,达到适度保护的效果,这对于中国的经济发展是极其重要的。     

我国幼稚产业发展政策与贸易政策的协调研究

产业政策传统上被认为是一国内部的宏观经济管理政策,但是在世贸组织框架下产业政策已经受到世贸组织多边贸易政策体系的严格约束。我国汽车产业政策案的发生使我国对幼稚产业的促进政策不得不面临诸如世贸组织基本原则及例外、TRIMs协定等诸多方面的检验。以汽车产业为例,我国幼稚产业的发展政策必须考虑贸易政策的协调作用,必须研究和灵活运用世贸组织规则。     

中国移动通信双寡头市场结构及企业行为的博弈分析

随着移动通信业务在整个电信业务中所占的比重日益增加,移动通信业的发展状况也倍受世人关注。运用博弈论的相关基本原理,对中国移动通信市场的双寡头垄断结构以及企业的行为进行微观分析,从而为其培育竞争优势、提高核心竞争力提供理论依据,同时为应对加入世贸过渡期后国际移动通信业巨头的竞争提供政策建议。     

华晨汽车"与中国汽车工业共成长"

在第二届上海国际汽车展上华晨汽车以“与中国汽车工业共成长”为主题展示了旗下中华、金杯海狮两大自主品牌所隆重推出的三款新产品：中华轿车2.0L自动挡、金杯海狮超级领航者豪华型、金杯海狮优越者半高顶豪华型。此外，华晨汽车还展出了中华轿车中华轿车2.0L自动挡顶级版和新近推出的中华轿车2.4L手动档。     

Trade agreements with domestic policies as disguised protection

WTO rules prohibit “disguised protection” in the form of domestic policies. How then do governments cooperate over trade and domestic policies when none can verify whether a nation's domestic tax reduction is a protective measure or a reaction to a production externality? In this paper, each government privately observes whether a production externality associated with its import-competing good is high or low. This paper finds that in an optimal agreement, disguised protection with domestic policies is never used by governments with a high externality, and is never commonly realized. Moreover, in an optimal agreement, tariffs may be conditional on domestic policies.