Informative advertising by heterogeneous firms

This paper introduces a model to analyze the role of the cost of information dissemination in large markets where firms have varying degrees of intrinsic efficiency reflected in their marginal costs. Firms enter a market and discover how efficient they are. Those firms with high enough efficiency stay, others exit. Remaining firms then compete to attract consumers by disseminating information about their existence and their prices using a common advertising technology. The properties of the model’s equilibrium are analyzed. The model is then used to study the effect of the cost of information dissemination on the competitiveness of the market and key industry aggregates, such as price distribution and the distribution of firm value.     

Does a “survival-by-exporting” effect for SMEs exist?

The trade literature has long discussed the existence of some benefits attributed to exporting (learning-by-exporting), among others, the improvement in survival chances. This paper examines whether exporting SMEs enjoy better survival prospects than non-exporting SMEs. We investigate the determinants of survival of exporting and non-exporting SMEs and explore whether the exporting behaviour plays a significant role in explaining their probability of exit. For this purpose, we estimate discrete time proportional hazard models that account for unobserved individual heterogeneity. The dataset is a sample of Spanish manufacturing SMEs drawn from the Encuesta sobre Estrategias Empresariales (ESEE) for 1990–2002. After controlling for firm, industry and economy characteristics, we find evidence supporting the existence of a sizeable “surviving-by-exporting” effect. That is, exporting SMEs face a significantly lower probability of failure than non-exporters.     

Economic Growth and Convergence of EU Member States: An Empirical Investigation

The aim of this article is to construct a European production frontier using deterministic methods, and to break down growth and convergence during the period 1980–2001. The results show that EU growth is primarily driven by physical and human capital accumulation, the contribution of which is essential for the cohesion of European countries. We find capital accumulation and efficiency change to be important convergence factors within the EU, while technical change has worked against it. The approach used has also enabled us to analyze the differences in growth performance of Member States and highlight the role of human and public capital, supporting the European cohesion and development policies carried out in this period.     

Compensation payments for habitat heterogeneity: Existence, efficiency, and fairness considerations

Compensation payments for voluntary conservation measures have become an important tool for biodiversity conservation worldwide. Each year substantial financial resources are spent on such measures, particularly in the context of agri-environmental schemes. In Europe, a debate has started on whether this money is spent effectively. In response to this debate it has been suggested that a portfolio of measures leading to habitat heterogeneity be implemented. Although payments for heterogeneous conservation measures have been analysed in the literature, it has never been questioned that payments can be designed in a way that encourages enough land users to carry out each conservation measure within a portfolio of measures. The purpose of this paper is to demonstrate that such payments do not always exist. Moreover, in cases where payments for habitat heterogeneity exist the payment scheme may require overcompensation of the land users, posing a limit to both efficiency and fairness considerations.     

Liquidity traps, learning and stagnation

We examine global economic dynamics under learning in a New Keynesian model in which the interest-rate rule is subject to the zero lower bound. Under normal monetary and fiscal policy, the intended steady state is locally but not globally stable. Large pessimistic shocks to expectations can lead to deflationary spirals with falling prices and falling output. To avoid this outcome we recommend augmenting normal policies with aggressive monetary and fiscal policy that guarantee a lower bound on inflation. In contrast, policies geared toward ensuring an output lower bound are insufficient for avoiding deflationary spirals.     

Exploring technology paths: The development of alternative transport fuels in Sweden 2007-2020

By using socio-technical scenarios, we investigate how present policy choices may affect the development of alternative transport fuels in Sweden. One important choice for policy lies in the balance between general tax exemptions stimulating the market for alternative fuels, and funding of research and development more directly promoting new technology. The implications of this choice are illustrated with four diverging development paths until 2020. In the market-oriented scenarios, we illustrate consequences of breaking the dominance of entrenched technologies and demonstrating a growing market potential for alternatives, but also the risks with a large focus on first generation renewable fuels. In the technology-oriented scenarios, we point out the value of keeping variety among niches in this stage of the transition. In conclusion, if policy is implemented without taking the dynamic forces within the system into account, there is a risk that any measure leads the system into a dead end. But if policy strives to balance the development in different parts of the technological system while making use of various prevailing forces of change, a multitude of different efforts can contribute to the development of a more sustainable transport system.     

An ecological economic simulation model for assessing fire and grazing management effects on mesquite rangelands in Texas

In the southern Great Plains of North America, fire exclusion has contributed to many rangelands converting from native grassland to woody shrublands dominated by mesquite (Prosopis glandulosa Torr.) and cactus (Opuntia spp.), threatening ecosystem health and human livelihoods in the region. Prescribed fire is the least expensive method of treating mesquite and other undesirable plants, but its role is as a maintenance treatment to prolong the life of more expensive brush control treatments. Using a simulation model of a hypothetical 1000 ha ranch, we evaluate the biological and economic implications of management scenarios involving the regular application of summer fire to reduce mesquite and cactus over a 30-year time period. We compared the model output with experimental data to corroborate model output before evaluating various management scenarios over a range of stocking rates. Scenarios included (a) varying initial range condition, (b) different frequencies of summer burning, and (c) different initial amounts of mesquite brush. Model simulations corroborated field data sufficiently well to give confidence in the output of the model. In our simulations the option of not treating to reduce brush and cactus had a major negative impact on range condition, secondary productivity and profitability. In contrast, all simulated fire treatments improved range condition, productivity and profitability except when initial range condition was poor. Initial range condition and stocking rate were the major factors affecting both productivity and profitability. Compared to other factors over which managers have short-term control, frequency of burning and the initial amount of mesquite cover, had a relatively minor impact. Simulations indicated that the highest level of profit consistent with maintaining or improving range condition was attained when individual animal production was 92-95% that of the maximum production per animal, a situation invariably associated with relatively low stocking rates.     

Mining landscape: A cultural tourist opportunity or an environmental problem?: The study case of the Cartagena-La Unión Mining District (SE Spain)

Abandoned industrial sites have traditionally constituted an important source of environmental problems. However, such sites are considered in many cases a historic heritage, and in this way, have been protected with different legal dispositions. Mining activities can be considered a special type of industrial site in that they encompass not only architectural but also landscape elements related to geology or topography. The necessity of developing new economic opportunities in these places, whose economy has been traditionally based on the “mining monoculture”, has resulted in the creation of a cultural revival in some mining sites. Nevertheless, these new economic potentials must be compatible with the obligation to maintain a low environmental risk in sites where the heavy metal concentrations are very high. The Cartagena-La Unión Mining District in Southern Spain is an example of such a case. This paper reviews the environmental situation in that area and the initiatives for establishing a cultural tourism. The goal of this paper is to incite the public debate about the balance between environmental risks, cultural safeguarding and economic development.     

The college-to-work transition during the 1990s: evidence from Sweden

This article analyses the time it takes for Swedish college graduates to start a full time job that lasts for 6 months or more. The focus is on the transition over time during the period 1991 to 1999. This period covers both upturns and downturns of the business cycle, providing a unique opportunity to consider the importance of the timing of graduation. The results show that the risk of unemployment and the unemployment duration have varied considerably with the business cycle, both within and between cohorts. For example, the field of education is of more importance for the outcomes during recessions. Further, the relative risk of unemployment has decreased over time for individuals with the highest degree of education whereas the unemployment duration has increased, indicating that the selection into unemployment for this group may have changed over time. This is interesting, not least in the light of the sharp expansion of the higher educational system during the study period.     

Price convergence in US cities: a cointegration approach with two structural breaks

This article investigates how the price indices of major cities of the US respond to the shock from a city and from monetary policy. We find that the crisis of Bretton Woods system in 1968 and the oil crisis in 1974 should be incorporated as structural breaks in monetary policy variables and price indices. Using cointegration technique with structural break in our aggregated data, we find that the average half-life is 1.75 years, which is closer to what some of others found in disaggregated data, and that the interest rate is an effective tool for controlling cities’ price in short run.