On the optimal acquisition of foreign capital through investment of oil export revenues

The subject of the paper is the optimal policy for a national monopoly to follow when the product exported is an essential input for production in the importing country and the exporter wishes to invest the proceeds in the purchase of claims on the capital stock of the importer. A number of alternative optimal solutions are compared with the conventional monopoly solution. The focus is on the deviations from this solution that are induced by the actual or desired ownership of capital in the importing country by the exporter.     

Optimal Rules of Origin with Asymmetric Compliance Costs under International Duopoly

We examine the optimal rules of origin (ROO) in a free trade area/agreement (FTA) by employing a stylized three-country partial equilibrium model of an international duopoly. We incorporate compliance costs of the ROO into the model. In particular, compliance costs are higher for a firm located in a non-member country of the FTA than for a firm (an internal firm) located in an FTA member country, whereas marginal production costs are lower for the former. The FTA member countries set the optimal level of ROO to maximize their joint welfare. An importing country within the FTA imposes tariffs on imports that do not comply with the ROO. We show that the optimal ROO may have a protectionist bias in the sense that they are set for only the internal firm to comply. ROO may also cause low utilization of FTAs when they are set such that even the internal firm does not comply with them. These cases arise depending on parameter values.     

自由贸易及跨界污染背景下的国际环境政策协调

文章构建了一个考虑跨界污染损害的福利函数,推导出自由贸易背景下某国的最优污染税,并与世界福利最大化时的最优污染税进行比较,以说明国家间环境政策协调的必要性。文章考虑了四种情况,分析结果表明,只有在该国为小国且污染不跨界时不需要国际协调;当该国为大国或者污染跨界时,单个国家的独立行为通常不会产生合意的世界福利水平,此时需要国际协调以实现世界福利最大化。大国的污染政策具有贸易条件效应,因而出口国有设定过高污染税的激励,而进口国则会设定过低的污染税,双方都寻求转变贸易条件以有利于本方。而污染跨界时单个国家通常会有"搭便车"的激励,此时会实施较为宽松的环境政策。     

The role of processing trade in exporters' responses to exchange rate: Evidence from China

Processing trade is an important exporting mode for many countries developed by the export-oriented industrialisation such as 1960s Japan, 1990s Korea and 2000s China. Exporters who rely on processing trade for foreign profits do not enjoy much market power, and hence care more about exchange rate changes. We develop a model to illustrate how processing trade affects exporters' responses to exchange rate fluctuations. The model suggests that the elasticity of export price with respect to exchange rate for processing-trade exporters is greater than that of the ordinary-trade exporters, while the elasticity of export quantity of processing-trade exporters is smaller compared to their ordinary-trade counterparts. Most developing countries' governments offer processing-trade exporters better tax/tariff reduction policy to encourage exporting, which grants processing-trade exporters additional advantage to adjust more on export price and less on quantity when facing changes in exchange rate and therefore causes their different responses to exchange rate fluctuations. We find strong empirical supports by studying the data from China, which is the largest developing country and biggest processing-trade exporter.     

The effects of cross-regional free trade agreements under a vertical industry structure

This paper examines the effects of a cross-regional free trade agreement (FTA) on tariffs, welfare, and the incentives for multilateral free trade in a three-country model with a vertical industry structure. We show that the FTA induces member countries to reduce their tariffs on nonmember countries. On the other hand, a nonmember country lowers its tariff on final-good imports, but raises its tariff on intermediate-good imports. Also, the FTA makes member and nonmember countries better off. After the FTA is enacted, member and nonmember countries have an incentive to support multilateral free trade, so an FTA acts as a building block for multilateral trade liberalization.     

Pass-Through Elasticity,Substitution and Market Share: the Case for Sheep Meat Exports

This paper empirically examines the exchange rate pass-through elasticity, using sheep meat exports from the two major exporters, Australia and New Zealand. The results show the coexistence of incomplete and complete pass-through in the international sheep meat industry. The Australian sheep meat exporters have a relatively smaller market share than New Zealand and are not able to exercise monopoly power. New Zealand producers, on the other hand, can increase their mark-ups in those destination countries where they have a large market share.     

Market access,supplier access,and Africa's manufactured exports: A firm level analysis

Abstract

In a large cross-country sample of manufacturing establishments drawn from 188 cities, average exports per establishments are smaller for African firms than for businesses in other regions. Based on the estimation of firm level exporting equations, we show that this is mainly because, on average, African firms face more adverse economic geography and operate in poorer institutional settings. One part of the effect of geography operates through Africa's lower ‘foreign market access’: African firms are located further away from wealthier or denser potential export markets. A second occurs through the region's lower ‘supplier access’: African firms face steeper input prices, partly because of their physical distance from cheaper foreign suppliers, and partly because domestic substitutes for importable inputs are more expensive. Africa's poorer institutions reduce its manufactured exports directly, as well as indirectly, by lowering foreign market access and supplier access. Both geography and institutions influence average firm level exports significantly more through their effect on the number of exporters than through their impact on how much each exporter sells onto foreign markets.     

Exports and governance: Is the Middle East and North Africa region different?

This paper aims to analyse whether better governance rewards economic performance and facilitates the integration of the Middle East and North Africa (MENA) region into the world economy. In comparison with other regions in the world economy, MENA countries suffer from important institutional deficiencies, which generate insecurity and difficult international transactions. Despite this fact, the relationship between trade and institutional quality in MENA countries remains unexplored. A gravity model of trade augmented with governance indicators is estimated for the exports of 19 MENA countries, their 189 trading partners and for all exporters in the period from 1996 to 2013. The main results indicate that improvements in five of the six governance indicators increase exports from MENA countries, whereas better governance in destination countries does not affect MENA exports. Instead, each of the six governance indicators used has a positive effect on bilateral trade for the entire sample of exporters (189). Moreover, the effect of country‐pair similarity in governance indicators suggests that a similar level of regulatory quality and rule of law in exporting and importing countries increases exports from MENA countries. Similarities in voice and accountability also foster exports for the average exporter, but not for MENA exporters.     

Export Competitiveness of Botswana’s Beef Industry

We investigate Botswana’s beef export competitiveness for the period 1961–2011 using the Normalized Revealed Comparative Advantage (NRCA) index. Results indicate that Botswana has had a comparative advantage throughout the review period. Overall, the country ranked fifth out of nine leading beef exporters. However, its comparative advantage weakened after 1975, and the country has recently been bypassed by three other key beef exporters which initially had comparative disadvantages. This was largely driven by increasing domestic demand for beef (and stagnant domestic supply). Policymakers should consider removal of the state-trader export monopoly to promote private sector entry and vertical diversification into value-added exports.     

激励性规制在电力行业中的应用

电力产业是国民经济发展的基础性产业,也是关乎国计民生的重要产业。由于电力产业的自然垄断性特点,各国都长期严格管制电力各个环节的运营。当前,我国电力行业规制过程中存在着现有法律滞后,规制机构职能分散,规制成本过高,规制效率偏低,行政垄断现象严重等问题。我国电力行业在运用激励性规制方面,应完善电力法律法规体系,对输配电实行最高限价的价格规制,实行差别电价激励性措施,在发电端引入竞争机制,使用特许投标竞争规制,从而充分发挥市场有效竞争对资源配置的作用,建立更高效率的电力产业。     

Self-Sabotage and Durable-Goods Monopoly

We analyze a simple two-period linear demand durable-goods monopoly model with “self-sabotage.” The firm has the ability to sabotage its own production by increasing its future (period two) manufacturing costs. We find that an uncommitted monopoly seller has an incentive to engage in such self-sabotage, while a committed seller or renter has no such incentive. Unlike the previous papers on self-sabotage, we show this occurs even though the firm faces no rivals in the output market. In our durable-goods setting, the incentive for self-sabotage arises from the seller’s commitment problem with period-one buyers (the so-called Coase conjecture). Interestingly, we also find that this sort of self-sabotage can not only be profit enhancing for the uncommitted firm, but may also increase social welfare (in contrast to the earlier models on self-sabotage.)     

贸易摩擦背景下提单风险及防范探析

经济全球化进程中,国际贸易冲突如影随形,各国贸易保护手段层出不穷,海关政策五花八门,给进出口企业带来大量挑战。在当前全球贸易环境恶化的情况下,出口方在履约过程中通过提单控制物权极为关键,但同时也面临着出口货物被无单放货、被进口国海关拍卖,然而却维权无力等各种不确定因素。从海运实践着手,结合当前贸易环境,以出口方角度分析提单风险及成因,寻找解决途径,从结算方式、贸易术语、提单种类的选择、投保出口信用险等方面提出了防范建议。     

Buy Local? Governmental Incentives to ‘Inform’ Consumers

This paper considers governmental incentives to provide information to local consumers about the relative merits of local versus foreign goods. We construct a model in which a local firm in a small, open economy competes in its domestic market with imports. Consumers are willing to pay an idiosyncratic premium for the local product, drawn from some support that the importing country government can affect through a costly information campaign. We examine incentives to undertake such a campaign in autarky and in the case of trade. We show, inter alia, that while a national welfare‐maximising government will always wish to shift this distribution upwards, it may not wish to reduce the variance of valuations, and that the optimal response of a foreign government will be to increase any support it offers to its exporters. Furthermore, falling world prices generally reduce the attractiveness of such a campaign both to a welfare‐maximising government and to one that cares only for domestic profits.     

Enhancing Business Relationship Quality Through Cultural Sensitization

An understanding of and adaptation to differences in culture in foreign countries can help exporters to reduce the distance between parties in an export relationship and enhance the quality of the relationship. This research investigates the impact of 2 cultural factors, namely, exporter cultural sensitivity and exporter ethnocentrism, on business relationship quality between transitioning economy–based exporters and their foreign importers and, subsequently, export performance. Using a systematic sample of 297 exporting firms in Vietnam we find that exporter cultural sensitivity has a positive effect, and ethnocentrism has a negative effect, on relationship quality. Furthermore, relationship quality enhances the performance of exporters.     

On the use of profit data to estimate the social cost of monopoly power in an oligopoly

Relatively high estimates of the welfare cost of monopoly power in U.S. manufacturing industries have been obtained by economists who use the Lerner equation to estimate this welfare cost from profit data. These Lerner equation loss estimates are appropriate for a monopoly with constant costs and linear demand. But if the industry is an oligopoly in a Nash-Cournot equilibrium, the Lerner equation loss estimates can be more than twice as large as the actual welfare gain that would result from the elimination of monopoly power. Partial and general equilibrium examples are presented to illustrate the nature of these estimation errors.     

Exporters and Non-Exporters of Manufactured Products:

This article focuses on profiling some differences between exporters and non-exporters of manufactured products in a small developing country. One hundred and nineteen firms were interviewed. On the basis of multiple discriminant analysis results, the majority of the discriminators were characteristics internal to the firm and its management. One implication is that public policy makers can target firms with exporter profiles and attempt to stimulate them to export.     

Parallel imports and piracy in a North–South model

We consider welfare effects of parallel imports under a possibility of piracy, by constructing a model where a monopoly firm sells its product in a developed country and in a developing country. We show that parallel imports do not always make the firm worse off and consumers better off. Sometimes parallel imports benefit both the firm and consumers, irrespective of the existence of piracy. However, piracy makes parallel imports more preferable to consumers and less preferable to the firm. We also suggest that a developing country’s policy on piracy can be internationally coordinated with a developed country's policy on parallel imports, so as to improve the welfare of these countries.     

Using Signals to Initiate Importer-Exporter Relationships: Evidence from Vietnamese Importers

ABSTRACT

Purpose: Realizing the existence of information asymmetry in export markets and the use of signals to distinguish high-qualified sellers from low-qualified sellers, this study investigates the effects of signal consistency and signal clarity on exporter credibility, and subsequently, importer relationship intention.

Methodology: Using a survey data set collected from a systematic sample of 418 Vietnamese importers, the authors tested a model hypothesizing the impact of signal consistency and signal clarity on exporter credibility, and subsequently, on importer relationship intention.

Findings: The authors found that signal consistency and clarity have a positive impact on exporter credibility. Signal consistency also enhances the level of signal clarity. They also found that exporter credibility underlies importer relationship intension.

Research Implications: Under the condition of information asymmetry, importers face difficulties in identifying and evaluating the best supplier among available suppliers in order to make the most appropriate selection decision. The findings confirm that signal clarity and consistency can help exporters to overcome such problems. Exporters should ensure that all signals sent to importers are clear and consistent over time to encourage importers to build long-term business relationships with them.

Contributions: The findings of this study add to the literature on signaling in exporter–importer relationships and can serve as an initiation for further research in the area in transitioning economies.     

Subsidies for FDI: Implications from a model with heterogeneous firms

This paper analyzes the welfare effects of subsidies to attract multinational corporations when firms are heterogeneous in their productivity levels. I show that the use of a small subsidy raises welfare in the FDI host country, with the consumption gains from attracting more multinationals exceeding the direct cost of funding the subsidy program through a tax on labor income. This welfare gain stems from a selection effect, whereby the subsidy induces only the most productive exporters to switch to servicing the host's market via FDI. I further show that for the same total subsidy bill, a subsidy to variable costs delivers a larger welfare gain than a subsidy to the fixed cost of conducting FDI, since a variable cost subsidy also raises the inefficiently low output levels stemming from each firm's markup pricing power.     

Industry Concentration and Strategic Trade Policy in Successive Oligopoly

We study a policy game between exporting and importing countries in vertically linked industries. In a successive international Cournot oligopoly, we analyse incentives for using tax instruments strategically to shift rents vertically, between exporting and importing countries, and horizontally, between exporting countries. We show that the equilibrium outcome depends crucially on the relative degree of competitiveness in the upstream and downstream parts of the industry. With respect to national welfare, a more competitive upstream industry may benefit an exporting (upstream) country and harm an importing (downstream) country. On the other hand, a more competitive downstream industry may harm exporting countries.