Timing of Entry under Externalities

Received August 23, 2000; revised version received May 14, 2001     

Real wages,real interest rates,and the Phillips curve

This article argues that any analysis of a Phillips curve should include the real interest rate in addition to inflation and real wages as any changes in the interest rate changes the labour–capital input mix in the production process leading to a change in the level of employment in the economy. To justify this argument a Phillips curve model is developed, which includes the real interest rate in addition to inflation and real wages. After the diagnosis of the time series properties of the data, an error correction model is developed and estimated using a set of US annual data from 1948 to 1996. The estimated parameters of the model do suggest that one should really take into consideration of the real interest rate while analysing the Phillips curve. A non-nested test (F-test) also suggests that the Phillips curve model with real interest rate as an additional variable performs better than the conventional method that does not include the real interest rate.     

Foreign Direct Investment, Licensing, and Incentives for Innovation

In a two-period duopoly model, this paper considers a foreign firm's choice between licensing and FDI and studies the relative impact of these modes of technology transfer on the incentives for innovation of that firm and its domestic rival. Relative to licensing, FDI limits technology spillovers to the domestic firm but dissipates more rents in the product market. Internalization allows the foreign firm to build on an existing technological advantage. While the local firm develops its best technology if initial licensing is followed by FDI, the foreign firm transfers the most efficient technology under FDI in both periods.     

Ownership Structure and Technological Upgrading in International Joint Ventures

In a model of a joint venture between a local and a foreign firm who provide complementary inputs, this paper derives optimal ownership structures under different sharing rules. The local firm's profits may be maximized by assigning a majority share to the foreign firm. Efficiency (i.e., the minimization of double moral hazard) requires that the firm with the more productive input should get majority ownership. When only the foreign firm can upgrade its input, it should receive a larger share than what it receives in the absence of upgrading. The analysis implies that a blanket policy of prohibiting majority foreign ownership is theoretically unfounded.     

Inflows of Foreign Technology and Indigenous Technological Development

This paper explores the effects of inflows of foreign technology on technological development in developing countries. It evaluates the existing literature exploring this issue and indicates directions for further research. In particular, it is argued that the implications of the theory of foreign direct investment (the dominant channel of international technology transfer) for technological development have not been fully explored. Dynamic analyses of technology transfer that accommodate the salient features of developing countries have also begun to appear only recently. Further work along these lines is likely to yield rich dividends.     

NATIONAL TREATMENT AT THE WTO: THE ROLES OF PRODUCT AND COUNTRY HETEROGENEITY*

This paper analyzes the World Trade Organization's (WTO's) national treatment (NT) clause in a two‐country model where quality of goods and/or market size are heterogenous across countries. When market size is symmetric across countries, a reciprocal NT agreement (i) benefits the high‐quality country, (ii) hurts the low‐quality country, and (iii) delivers higher aggregate world welfare. However, such an agreement can arise in equilibrium if the high‐quality country's market is relatively bigger and the quality gap between goods is small (i.e., goods are sufficiently alike). The qualitative nature of these results does not change when quality is endogenously determined.     

ASSESSING THE RELATIVE IMPACTS OF ECONOMIC EDUCATION SCHOLARSHIP: AN APPLICATION OF THE HARZING DATABASE

Despite the rising prominence of economic education scholarship, little work has been done to document how economic education scholarship is faring in the academic world. Unlike prior research in this genre, this study assesses the relative impacts of economic education scholarship by examining published research in (strictly) economic education journals. In order to do so, we use the Harzing database of citations to articles published in (strictly) economic education journals from 1990 to the present. Supporting some of the measures found in prior research, we find that the Journal of Economic Education (JEE) is unambiguously the dominant source of influential scholarship in the field of economic education. Interestingly, the JEE's closest competitors among active economic education journals are the International Review of Economics Education and Computers in Higher Education Economics Research, both of which are published under the auspices of the Economics Network, which is located in the UK. Following these two journals in our ranking is the Journal of Economics and Finance Education, a relatively new journal launch.