What Drives the International Transfer of Climate Change Mitigation Technologies? Empirical Evidence from Patent Data

Technology transfer plays a key role in global efforts to reduce greenhouse gas emissions. In this paper, we characterize the factors that promote or hinder the international diffusion of climate-friendly technologies using detailed patent data from 96 countries for the period 1995–2007. The data provide strong evidence that lax Intellectual Property regimes have a strong and negative impact on the international diffusion of patented knowledge. Restrictions on international trade and foreign direct investment also hinder the diffusion of climate-friendly technologies. Surprisingly, local technological capabilities tend to discourage transfers. While broad indicators of technology capabilities are expected to facilitate transfers, this latter result stems from our technology-specific definition of local capabilities, which makes it possible to capture a substitution effect between local and foreign inventions.     

Long versus short time scales: the rough dilemma and beyond

Decisions in Economics and Finance - Using a large dataset on major FX rates, we test the robustness of the rough fractional volatility model over different time scales, by including smoothing and...     

The setting of voluntary agreements between industry and government: Bargaining and efficiency

This paper aims at providing a preliminary economic analysis of the efficiency of an emerging environmental policy instrument: the so-called voluntary agreement. The use of a data base we have built containing 75 existing agreements in 12 OECD countries allows us to stylise these empirical objects. They are mutually agreed contracts signed between a national administration and a coalition of firms. They include a set of physical pollution reduction objectives to be reached by the firms. According to classical economic categories, they are similar to a traditional policy instrument, i.e. direct regulation, but one which has been devised after an intense negotiation process. As regards efficiency, the key question lies in the impact of such negotiations. In our analytical framework, we distinguish two subjects of negotiation: the collective environmental objective, i.e. the physical amount of pollution to be globally suppressed via the completion of the contract, and the means required to reach the collective objective, i.e. the allocation rule of private pollution reduction objectives. According to these categories a major asymmetry arises in the negotiation structure. When the dominant dimension of the negotiations concerns the environmental objective, firms are clearly opposed to the administration because of their eagerness to obtain as low an objective as possible. In that case, voluntary agreements do not seem to be an original policy approach. They can be compared with classical consultation processes of interested parties when designing new regulations and raise similar questions: the efficiency of information collection and the dangers of regulatory capture. But when the subject being bargained concerns the means to reach environmental objectives which have already been fixed, individual firms become rivals. The logic of such negotiations lies in inter-firm bargaining arbitrated by the administration. Voluntary agreements tend to be an original negotiation-based policy instrument. Decentralised bargaining improves the allocative efficiency.     

Relation between bid–ask spread,impact and volatility in order-driven markets

We show that the cost of market orders and the profit of infinitesimal market-making or -taking strategies can be expressed in terms of directly observable quantities, namely the spread and the lag-dependent impact function. Imposing that any market taking or liquidity providing strategies is at best marginally profitable, we obtain a linear relation between the bid–ask spread and the instantaneous impact of market orders, in good agreement with our empirical observations on electronic markets. We then use this relation to justify a strong, and hitherto unnoticed, empirical correlation between the spread and the volatility per trade, with R ²s exceeding 0.9. This correlation suggests both that the main determinant of the bid–ask spread is adverse selection, and that most of the volatility comes from trade impact. We argue that the role of the time-horizon appearing in the definition of costs is crucial and that long-range correlations in the order flow, overlooked in previous studies, must be carefully factored in. We find that the spread is significantly larger on the NYSE, a liquid market with specialists, where monopoly rents appear to be present.     

Should everybody be in services? The effect of servitization on manufacturing firm performance

The servitization of the manufacturing sector refers to the evolution of manufacturers' capabilities to offer services as complements to or substitutes for the goods that they produce. A vast literature has described these strategies and has shown that this phenomenon is widespread and growing in most developed economies. However, very little systematic evidence of the extent or consequences of servitization based on a comprehensive data set of firms exists. In this paper, we provide such evidence using exhaustive data for French manufacturing firms between 1997 and 2007. We find that the vast majority of French manufacturers sell services in addition to producing goods. The shift toward services is growing steadily but at a slow pace. We also estimate the impact of servitization on firm performance. Controlling for various sources of endogeneity bias, our most conservative results show that firms that start selling services increase their profitability by 0.4%, their employment by 2.1%, and their total sales by 0.6%. For small businesses, we also find a positive impact on the production of goods. We also uncover strong heterogeneity across manufacturing industries.     

Trade costs and the Home Market Effect

Most of the theoretical and empirical studies on the Home Market Effect (HME) assume the existence of an “outside good” that absorbs all trade imbalances and equalizes wages. We study the consequences on the HME of removing this assumption. The HME is attenuated and, more interestingly, it becomes non-linear. The non-linearity implies that the HME is more important for very large and very small countries than for medium size countries. The empirical investigation conducted on a database comprising 25 industries, 25 countries, and 7 years confirms the presence of the HME and of its non-linear shape.     

Rational expectations in the foreign exchange market? Some survey evidence

Although many papers have already proposed empirical models of currency crises, the timing of such crises has received relatively little attention so far. Most papers use indeed a static specification and impose the same lag structure across all explanatory variables. This, by construction, prevents from specifically timing the crisis signals sent by the leading indicators. The objective here is to fill this gap by considering a set of dynamic discrete choice models. The first contribution is to identify how early in advance each explanatory variable sends a warning signal. Some indicators are found to signal a crisis in the very short run while others signal a crisis at more distant horizons. The second contribution is to show that state dependence matters, albeit mostly in the short run. The results have important implications for crisis prevention in terms of the timeliness and usefulness of the envisaged policy response.     

Distributional effects of public transport policies in the Paris Region

This paper examines the distributional effects of alternative scenarios of urban public transport policies in the Paris Region using disaggregated data from the Global Transport Survey 2001–2002. We study two types of scenarios: fare adjustments, as in previous work, but also speed increase scenarios. We find that reducing public transport fares is progressive. Increasing the speed of public transport is also progressive whatever the mode. The most progressive option is to increase the speed of buses in the suburbs, while targeting the metro or the suburban rail are the least progressive alternatives. More generally, low-income individuals benefit more from fare reductions than from increases in public transport speed.     

What Makes Firms Dissatisfied with Their Bank Loans: New Evidence from Survey Data

Journal of Financial Services Research - We use loan-by-loan association between non-financial firms and their banks to disentangle the effects of financial weakness of borrowers and lenders on the...