Why has China’s vertical specialization declined?

Vertical specialization (VS) is quantified by the VS share, which measures the average import content per dollar of exports. A characteristic of China’s export trade is its strong dependence on assembly and processing activities. To take proper account of this, China’s VS shares should explicitly distinguish processing export production from other production. We estimate China’s annual VS shares from 2000 to 2012—the latest year for which a special input–output table is available that makes such an explicit distinction. We find that VS shares increased from 2000 to 2004 and subsequently started to decrease. To explore why it has declined, we introduce a new structural decomposition approach. We find that the decrease of the VS share appears to have been driven mainly by the substitution of imported intermediates by domestic products. This occurred in particular in the production of exports, which implies an upgrading of China’s position in global value chains.     

On an optimal consumption problem for p-integrable consumption plans

A generalization is presented of the existence results for an optimal consumption problem of Aumann and Perles [4] and Cox and Huang [10]. In addition, we present a very general optimality principle. Received: July 14, 1999; revised version: September 9, 1999     

Bayesian–Walrasian equilibria: beyond the rational expectations equilibrium

In general rational expectations equilibrium (REE), as introduced in Radner (Econometrica 47:655–678, 1978) in an Arrow–Debreu–McKenzie setting with uncertainty, does not exist. Moreover, it fails to be fully Pareto optimal and incentive compatible and is also not implementable as a perfect Bayesian equilibrium of an extensive form game (Glycopantis et al. in Econ Theory 26:765–791, 2005). The lack of all the above properties is mainly due to the fact that the agents are supposed to predict the equilibrium market clearing price (as agent’s expected maximized utility is conditioned on the information that equilibrium prices reveal), which leads inevitably to the presumption that agents know all the primitives in the economy, i.e., random initial endowments, random utility functions and private information sets. To get around this problematic equilibrium notion, we introduce a new concept called Bayesian–Walrasian equilibrium (BWE) which has Bayesian features. In particular, agents try to predict the market-clearing prices using Bayesian updating and evaluate their consumption in terms of Bayesian price estimates, which are different for each individual. In this framework agents maximize expected utility conditioned on their own private information about the state of nature, subject to a Bayesian estimated budget constraint. Market clearing is not an intrinsic part of the definition of BWE. However, both in the case of perfect foresight and in the case of symmetric information BWE leads to a statewise market clearing; it then becomes an ex post Walrasian equilibrium allocation. This new BWE exists under standard assumptions, in contrast to the REE. In particular, we show that our new BWE exists in the well-known example in Kreps (J Econ Theory 14:32–43, 1977), where REE fails to exist. This work was done in the Spring of 2005, when EJB was a visiting professor at the University of Illinois.     

The Impact of Land-Use Change on Ecosystem Services,Biodiversity and Returns to Landowners: A Case Study in the State of Minnesota

Land-use change has a significant impact on the world’s ecosystems. Changes in the extent and composition of forests, grasslands, wetlands and other ecosystems have large impacts on the provision of ecosystem services, biodiversity conservation and returns to landowners. While the change in private returns to landowners due to land-use change can often be measured, changes in the supply and value of ecosystem services and the provision of biodiversity conservation have been harder to quantify. In this paper we use a spatially explicit integrated modeling tool (InVEST) to quantify the changes in ecosystem services, habitat for biodiversity, and returns to landowners from land-use change in Minnesota from 1992 to 2001. We evaluate the impact of actual land-use change and a suite of alternative land-use change scenarios. We find a lack of concordance in the ranking of baseline and alternative land-use scenarios in terms of generation of private returns to landowners and net social benefits (private returns plus ecosystem service value). Returns to landowners are highest in a scenario with large-scale agricultural expansion. This scenario, however, generated the lowest net social benefits across all scenarios considered because of large losses in stored carbon and negative impacts on water quality. Further, this scenario resulted in the largest decline in habitat quality for general terrestrial biodiversity and forest songbirds. Our results illustrate the importance of taking ecosystem services into account in land-use and land-management decision-making and linking such decisions to incentives that accurately reflect social returns.     

Short-time work—Some long-run implications

This paper outlines a simple model to examine some long-run implications of short-time work schemes (STWs) on labor market performance and welfare. It is not clear that STWs reduce unemployment as the induced wage push discourages job creation.     

Information Exchange and Transnational Environmental Problems

This paper analyzes information exchange in a model of transnational pollution control in which countries use private information in independently determining their domestic environmental policies. We show that countries may not always have an incentive to exchange their private information. However, for a sufficiently high degree of predictability of domestic environmental policy processes, the expected welfare from sharing information is greater than the expected welfare from keeping it private. The minimum degree of policy predictability for which information sharing occurs increases with the level of environmental risk. Intuitively, information exchange can help mitigate the perception of global uncertainty (both political and scientific) that surrounds transnational environmental problems and potentially improve welfare if policymaking processes are sufficiently aligned with evidence-based approaches (predictable).     

New Service Development: An Analysis of 27 Years of Research *

This study examines the state of the art in new service development (NSD) research published in the period between 1982, when the first NSD article appeared in an academic journal, and 2008. First, a multisource search was conducted, which resulted in the identification of 145 NSD‐related articles. Then, a content analysis was performed of these articles using multiple classifier variables with regard to general publication characteristics, focus of the research, and the research methodology that was employed. By examining the results, a number of developments in and patterns of scholarly research in NSD are revealed. More specifically, it appears that the greatest attention in the early writings was on a narrow set of NSD topics like critical success factors and the NSD process, which were predominantly investigated through large‐scale surveys with single respondents in the U.S., Canadian, and U.K. financial services industry. The analytical techniques that were used at that time were rather simple. In contrast, in recent NSD works there is an expansion of research topics (such as customer involvement and the organization of NSD) that are increasingly investigated in high‐tech service industries in Europe through qualitative research designs. Also, multiple respondent studies have started to appear in NSD investigations, while analytical techniques have also become more advanced. This pattern clearly uncovers signs of increasing maturation for the NSD discipline. In addition, some underresearched areas are identified, leading to suggestions for future research into this growing and important field.     

Managing international supply: The balance between total costs and customer service

Many trading companies have taken a global approach to their supply markets, sourcing from low-cost foreign countries in order to achieve cost reductions. There remains, however, a lack of evidence that sourcing internationally actually leads to improved economic performance. This can be explained by two key challenges in terms of how to achieve a balance between: (1) purchasing and logistics costs, and (2) customer service. The purpose of this paper is to examine the organisation and management of international supply from a total cost perspective, taking into account both purchasing and logistics costs, as well as customer service and agility. Previous research into a number of Norwegian companies that have sourced from China has identified four configurations for managing international supply. This paper utilises the supply management literature and an example of a Norwegian retail and wholesale company to analyse and discuss these configurations and their effects on total costs and customer service. The paper's theoretical contribution is the conceptualisation of a total cost perspective on international supply management and the discussion of such costs in relation to customer service. This contribution may, in turn, aid companies that source from foreign, low-cost countries.     

The anatomy of fragile states in Sub‐Saharan Africa: Understanding the interrelationship between fragility and indicators of wellbeing

According to most classifications, Sub‐Saharan Africa is the region of the world with the highest presence of fragile states. In this paper we examine the relationship between fragility and poverty, suggesting that countries may become trapped in a vicious circle of fragility and low levels of wellbeing. We consider fragility as a continuum and begin by reviewing available measures. These show the high presence of fragility in Sub‐Saharan Africa and allow the more fragile countries to be identified. There is seen to be a strong association between fragility, poor growth performance, and lower wellbeing in Sub‐Saharan Africa. Building on the strong evidence for the two‐way relationship between economic growth and poverty, we present an analysis of how the vicious circle linking poorer welfare outcomes and fragility may be able to be broken. We argue that building successful institutions is key here, and this can be enabled by specific policy interventions that are both poverty reducing and productive.