Exporting to new destinations and the effects of tariffs: the case of meat commodities

This study uses a random parameter probit estimation to examine the effects of tariff liberalization on the probability of establishing new trading relationships in meat commodities. Our simulation results indicate that the effects of tariff reductions decrease with distance, but increase with the level of development. The probabilities of trade increase at an increasing rate with the size of tariff reductions thus justifying calls for ambitious liberalization schemes. Canada and Mexico are the NAFTA countries that are most likely to export in response to EU tariff reductions on bovine and poultry meats, while Brazil and Argentina emerge as the MERCOSUR countries most likely to penetrate the EU bovine meat market after EU tariff reductions. Uruguay's probability to export poultry meat is most responsive to EU tariff reductions.     

EDI success in small and medium‐sized enterprises: A field study

This research aims to identify empirically the success factors that have allowed small and medium‐sized enterprises (SMEs) to obtain advantages from electronic data interchange (EDI). These advantages can be operational, managerial, and strategic in nature. Results of a field study done in 39 firms indicate that it is the quality of the organizational context of EDI (organizational support, implementation process, and control procedures) that is crucial to the attainment of benefits from this technology. In turn, the quality of the organizational context is higher when the small firm implements EDI voluntarily rather than having it imposed by a major client or supplier. These results are compared with those of a prior study done in a large business context.     

Interest rate rules and global determinacy: An alternative to the Taylor principle

A well‐known determinacy condition on interest rate rules is the “Taylor principle,” which states that nominal interest rates should respond more than 100 percent to inflation. Unfortunately, notably because interest rates must be positive, the Taylor principle cannot be satisfied for all interest rates, and as a consequence global determinacy may not prevail even though there exists a locally determinate equilibrium. We propose here a simple alternative to the Taylor principle, which takes the form of a new condition on interest rate rules that ensures global determinacy. An important feature of the policy package is that it does not rely at all on any of the fiscal policies associated with the “fiscal theory of the price level,” which has so far been the main alternative for determinacy.     

Closed-form solutions to stochastic process switching problems

This paper studies the price of an asset depending on both a fundamental and possible interventions of an authority. Using the martingale approach in continuous time, we provide closed-form solutions to switching problems involving irreversible, state dependent and intramarginal switch policies. The martingale approach provides additional information regarding the switching policy, namely the average time before authority intervention, the conditional probability of intervention, or the total time of intervention. Applications in international and financial economics include exchange rates modelling, corporate claims valuation and capital budgeting decisions.     

Sustaining linkages to high value markets through collective action in Uganda

Uganda’s rapid urbanization offers new market opportunities for smallholder farmers to supply higher value markets such as supermarket chains and fast-food restaurants. Supplying these formal outlets offers higher incomes but accessing and maintaining links to these markets requires significant upgrading in terms of product quality and business management. To meet these conditions farmers need to become more organized which requires increased levels of social capital, to strengthen internal and external relations with group members, service providers and market chain actors. One farmers’ group in south-western Uganda has successfully sustained sales of potatoes to a fast-food outlet in Kampala. Farmers had to learn a series of new skills and integrate multiple technical, organizational, financial and marketing innovations. This paper outlines how collective action combined with strong leadership and an iterative market-led learning process enabled a smallholder farmers’ association to meet the considerable challenges of achieving the stringent quality parameters of a modern food outlet.     

Are Older Workers Harmful for Firm Productivity?

This paper investigates the effects of the workforce age structure on the productivity of large Belgian firms. More precisely, it examines different scenarios of changes in the proportion of young (16–29 years), middle-aged (30–49 years) and older (more than 49 years) workers and their expected effects on firm productivity. Using detailed matched employer–employee data, we find that young workers are significantly more productive than older workers. Yet, results also show that age structure effects on productivity: (i) have substantially decreased over time and (ii) are much stronger in ICT than in non-ICT firms.     

A Case Study of Technological Switching and Technological Lock‐In in the French Fisheries Sector: Why is Sustainable Change so Difficult?

Many sectors such as the fishery show classic examples of technological lock‐in and path dependence, even though some economists might predict smooth switching toward technologies that are more cost effective and sustainable. We use ideas from the evolutionary economics and public choice literatures to explain why trajectories of technological change, especially in fisheries, may not be smooth at all, but rather punctuated. The interest of technological change and switching behavior for fisheries economists and managers stems from the fact that control of effective effort, often necessary for sustainable management of the resource, remains a central management problem for that sector worldwide, even in developed countries. However, various policies put in place by governments to support the fishing sector, and often put in place to “correct” for certain market failures, may inadvertently produce other “nonmarket” failures, which result in technological lock‐ins which are unsustainable. For example, the trawling technique was widely promoted in France in the 1970s and 1980s. Path dependency developed in such a way that the preferred choice of new entrants into the fishery was this technology. Technological lock‐in occurred on the trawling technique as the trawling sector also became more politically active, making it ultimately the most widely used technique in the French fisheries sector in the Atlantic. Switching away from this technology has not taken place even with poorer economic performance of that technology. This paper also discusses the influence of state subsidies on the adoption of trawling. Even if trawling was a major innovation in fisheries in the past, its potential for technological adaptations or minor innovations is limited now. These limitations are more obvious during periods of increasing energy prices, especially in the absence of state aid. However, due to collective choice phenomena, switches to more sustainable technologies will occur more slowly. Plusieurs secteurs, tel que celui des pêcheries, offrent des exemples de verrouillage technologique et de dépendances au sentier, alors même que les économistes s’attendent à un changement régulier vers une technologie plus efficace en termes de coûts et plus soutenable. Nous nous appuyons sur la littérature évolutionniste et des choix publics afin d’expliquer pourquoi les trajectoires du changement technologique, en particulier dans les pêcheries, peuvent ne pas être régulières, mais au contraire discontinues. L’intérêt des économistes et des gestionnaires pour le changement technologique et le comportement face au retour des techniques est lié au contrôle de l’effort réel, souvent nécessaire pour une gestion durable de la ressource. Le contrôle de l’effort reste le problème essentiel de la gestion des pêches à l’échelle mondiale, y compris dans les pays développés. Toutefois, de nombreuses mesures publiques mises en place par les gouvernements pour soutenir le secteur des pêcheries, afin de «contrecarrer» certaines défaillances du marché, peuvent déboucher involontairement sur d’autres défaillances «non marchandes», se traduisant par des verrouillages technologiques non‐soutenables. Par exemple, la technique du chalutage fut largement diffusé en France dans les années soixante‐dix et quatre‐vingt. Un sentier de dépendance s’est développé tel que les nouveaux entrants dans la pêcherie optaient pour cette technologie. Un verrouillage technologique s’est produit sur la technique du chalutage rendant ce secteur politiquement important, et finalement la technique la plus répandue parmi les pêcheries françaises de l’Atlantique. Un changement de technologie n’a donc pu survenir, même en présence de faibles performances économiques. L’article traite de l’influence des subventions étatiques liées à l’adoption du chalutage. Même si cette technologie fut une innovation majeure dans les pêcheries par le passé, les adaptations techniques potentielles ou les innovations mineures sont désormais limitées. Ces limites apparaissent clairement dans les périodes de coûts énergétiques croissants, notamment en l’absence d’aides étatiques. Toutefois, en raison du phénomène de comportements collectifs, les changements vers des technologies plus soutenables se déroulent avec lenteur.     

Gender implications of current social security reforms

This paper examines some current reforms to social security benefits / tax credits and changes to employment provisions from a gender perspective. It analyses tensions between the trend towards ‘individualisation’ and growing emphasis on the couple/household as a policy focus. New tax credits change the distribution of resources within many couples. Incentives to work for some second earners should improve; but extending in‐work subsidies to childless couples raises questions. Payment of child tax credit to the ‘main carer’ has been welcomed, though the implications of joint ownership of tax credits are unclear, and joint assessment will be extended. Many claimants' partners can now access employment services. However, this is aimed at reducing the number of workless households rather than expanding individuals' opportunities. Joint claims for jobseeker's allowance, and work‐focused interviews, involve increased responsibilities for partners but no right of access to individual income. A more consistent critical analysis of reform from a gender perspective is required.