Infrastructure,returns to scale and sovereign debt

This paper explores the nexus between the issue of sovereign debt and investment in infrastructure, emphasizing the case of economies of scale. The focus is on debt contracts that are incentive compatible. It is shown that public and private financial institutions may need to lend amounts above some threshold to force the borrowing sovereign to take full advantage of any economies of scale that may be present. Low levels of lending may or may not result in default. Sufficiently high amounts of lending may be needed to ensure repayment and may prove to be mutually beneficial.     

Gains from trade under variable returns to scale,commodity taxation,tariffs and factor market distortions

This paper examines the effect on welfare of improvements in the terms of trade and movement from autarky to free trade in the presence of variable returns to scale, production and consumption taxes, tariffs and factor market distortions. By expressing welfare in terms of a social welfare function and by considering infinitesimal changes in prices, sufficient conditions for the nonharmfulness of trade and improvements in the terms of trade are obtained which substantially weaken those obtained by Kemp and Negishi (1970).     

A generalization of the Samuelson reciprocity relation,the Stolper-Samuelson theorem and the Rybczynski theorem under variable returns to scale

Assuming the Marshallian externalities, a generalization of the Samuelson reciprocity relation, the Stolper–Samuelson theorem and its dual Rybczynski theorem is demonstrated with n commodities and n inputs. Further it is shown that the ‘weak’ Stolper–Samuelson property does not coincide with the ‘strong’ property even when n=2. Then the effect of an own or other commodity price change on a commodity output is examined.     

Seeking greener pastures: a theoretical and empirical investigation into the changing trend of foreign direct investment flows in response to institutional and strategic factors

A generic theoretical model is proposed that provides a holistic conceptualization of the phenomenon of changing trend of FDI flows. Integrating both institutional and strategic factors, a rationale for such a change is provided, and the circumstances under which future shifts might take place are identified. A collection of criteria and incentives that various host governments and their agencies must provide to attract FDI are outlined. Several propositions that lead to empirically testable hypotheses are developed from this model. Statistical evidence is then provided of a shift in FDI flows, and the change in their determinants, by empirically analyzing investment by US multinational enterprises into Western Europe and Asia over the 20-year period, 1981–2000.