Trade Creation Effects of Regional Trade Agreements: Tariff Reduction versus Non‐tariff Barrier Removal

This study uses the most disaggregated tariff line‐level trade data in a large number of countries in the world to empirically decompose the trade creation effects of regional trade agreements (RTAs) into those owing to tariff reduction and those owing to non‐tariff barrier (NTB) removal. Specifically, utilizing our detailed dataset, we employ the standard gravity equation and identify those effects by estimating the trade creation effects of RTAs for ineligible and eligible products for RTA preferential schemes separately. Our major findings are as follows. First, for the whole sample, there are significantly positive trade creation effects owing to tariff reduction while the effects for NTB removal are weak. Second, the trade creation effects of tariff reduction and NTB removal are substantially large in the case of trade among low‐income countries but weak among high‐income countries.     

Who values the family‐friendly aspects of a job? Evidence from the Japanese labour market

Women with family responsibilities such as child‐rearing generally prefer jobs with flexible working conditions. According to the theory of compensating wage differentials, women working in such family‐friendly jobs are paid less than those working in family‐unfriendly jobs. The present paper investigates whose wages are more greatly affected by the family‐(un)friendly aspects of their jobs. Based on a longitudinal survey of Japanese women, we found that among several family‐(un)friendly attributes of a job, only commuting time requires a wage premium, and most of the premium is associated with job changes made by part‐time‐working married women.     

Finitely repeated games with monitoring options

We study finitely repeated games where players can decide whether to monitor the other players? actions or not every period. Monitoring is assumed to be costless and private. We compare our model with the standard one where the players automatically monitor each other. Since monitoring other players never hurts, any equilibrium payoff vector of a standard finitely repeated game is an equilibrium payoff vector of the same game with monitoring options. We show that some finitely repeated games with monitoring options have sequential equilibrium outcomes which cannot be sustained under the standard model, even if the stage game has a unique Nash equilibrium. We also present sufficient conditions for a folk theorem, when the players have a long horizon.     

Human capital and FDI: Development process of the developing country in an overlapping generation model

We construct an overlapping generation model with human capital accumulation to analyze the effect of human capital level on foreign direct investment (FDI) in a small open developing country. In particular, we assume that manufactured goods have the human capital intensive technology and young agents choose whether to work or to educate themselves. When the human capital level in the developing country is sufficiently small, manufactured goods firms do not conduct FDI and the economy in the developing country is trapped in poverty. If the government of the developing country levies a tariff on the imports of manufactured goods, manufacturers conduct FDI, and the economy in the developing country can escape from the poverty trap.     

Reputation and turnover

We consider a repeated duopoly game where each firm privately chooses its investment in quality, and realized quality is a noisy indicator of the firm's investment. We focus on turnover equilibria in which a low‐quality realization is penalized by lowering future demand of the firm that delivered this quality. We determine when a turnover equilibrium that gives higher welfare than the static equilibrium exists and how this relates to market fundamentals. We also derive comparative statics properties, and we characterize a set of investment levels and, hence, payoffs that turnover equilibria sustain.     

Bi-objective decision support system for routing and scheduling of hazardous materials

This paper presents a Pareto-based bi-objective optimization of hazardous materials vehicle routing and scheduling problem with time windows and shows its application to a realistic hazardous material logistics instance. A meta-heuristic solution algorithm is also proposed, which returns a set of routing solutions that approximate the frontier of the Pareto optimal solutions based on total scheduled travel time and total risk of whole transportation process. It works in a single-step fashion simultaneously constructing the vehicle route and selecting the optimal paths connecting the routed locations from a set of non-dominated paths obtained in terms of travel time and risk value.     

Saying Sayonara to the Farm: Hierarchical Bayesian Modeling of Farm Exits in Japan

Off‐farm employment opportunities are thought to have an effect on farm exit rates, though evidence on the sign of this effect has been mixed. Examining this issue in the context of Japanese agriculture, we find that farm exits are related to off‐farm income as a share of household income, and more specifically to the nature of off‐farm work. Two econometric models are developed: a hierarchical Bayesian linear model and a hierarchical Bayesian Poisson model. Both models perform well in predicting exit rates across the towns and prefectures of Japan.     

Do environmental,social, and governance activities improve corporate financial performance?

This study investigated the relationship between corporate efficiency and corporate sustainability to determine whether firms concerned about environmental, social, and governance (ESG) issues can also be efficient and profitable. We applied data envelopment analysis to estimate corporate efficiency and investigated the nonlinear relationship between corporate efficiency and ESG disclosure. Evidence shows that corporate transparency regarding ESG information has a positive association with corporate efficiency at the moderate disclosure level, rather than at the high or low disclosure level. Governance information disclosure has the strongest positive linkage with corporate efficiency, followed by social and environmental information disclosure. Moreover, we explored the relationship between particular ESG activities and corporate financial performance (CFP), including corporate efficiency, return on assets, and market value. We found that most of the ESG activities reveal a nonnegative relationship with CFP. These findings may provide evidence about voluntary corporate social responsibility strategy choices for enhancing corporate sustainability.     

Interregional Fertility Differentials and Agglomeration

In this study, we construct an interregional trade model that includes endogenous fertility rates. The presented model shows that the agglomeration of manufacturing firms in a large region causes fertility rates to become lower than in a small region. We also find that a decrease in transportation costs results in the agglomeration of manufacturing firms, which lowers fertility rates in both large and small regions. In addition, comparing the competitive equilibrium with the optimal equilibrium, the fertility rates may be inefficiently small.     

Insights from machine learning for evaluating production function estimators on manufacturing survey data

Journal of Productivity Analysis - National statistical organizations often rely on non-exhaustive surveys to estimate industry-level production functions in years in which a full census is not...