Measuring the Transaction sector in the Australian economy, 1911–1991

Following Wallis and North's pioneering attempt to estimate the size of transaction costs in the United States over the period 1870 to 1970, we seek to augment this seminal study by applying their methodology to the Australian economy for the period 1911 to 1991. Broadly speaking, our results support the Wallis and North finding with comparable magnitudes and growth rates in both the private and public transaction sectors.     

The Impact of the Asian Economic Crisis on Southern African Economies

Although southern African economies appear to have escaped the initial phase of the East Asian economic crisis relatively unscathed, the second stage of the contagion was somewhat less benevolent in its influence on southern African economies. This paper seeks to investigate the impact of the Asian contagion on southern African economies within a general equilibrium framework. We use the GTAP (Global Trade Analysis Project) model to examine the implications of the Asian crisis for southern African economies. Bien que les économies des pays du sud de l’Afrique semblent avoir échappées à la première phase de la crise économique de L’Asie de l’est, l’effet de la deuxième phase a été plus néfaste envers les économies des pays sud africains. Cet article cherche à enquÁter sur l’impact qu’a eu la contagion asiatique sur les économies des pays sud africains dans un cadre d’équilibre général. Nous utilisons le modèle du GTAP (Global Trade Analysis Project) afin d’interpréter les implications de la crise asiatique sur l’économie des pays sud africains.     

The potential impact of abolishing company tax in Ciskei

The purpose of this paper is to examine the likely effect of the abolition of company tax on the Ciskeian economy. After considering the case for and against a corporate tax exemption, the issues involved are analysed on two levels. Using aggregate data, drawn from available census data, we find that most firms seem likely either to prefer the existing package of industrial concessions to the tax holiday, or to be indifferent to either option. Similarly, a recent survey of manufacturing enterprises in Ciskei indicated that the majority would prefer the incentive package. Firms that might be attracted by the tax‐free option are likely to be relatively profitable, subsidiaries of multinational companies, and enjoying a higher turnover per worker than firms opting for the incentive package.     

Enhancing Vertical Efficiency Through Horizontal Licensing

This paper examines the role of patent licensing in the age of outsourcing. When firms rely on outsourced inputs, a patent holder’s decision to license has both competitive and supplier pricing effects. By issuing a license, the firm increases competition in the product market. At the same time, the need to make royalty payments “weakens” the firm’s rival, making it more sensitive to supplier pricing. The supplier responds by softening pricing terms, and the firm benefits by siphoning some of these gains via the license fee. Not only can the licensor gain, but all other parties (the licensee, supplier, and consumers) can also benefit. This role of licensing presents additional considerations for regulators shaping patent laws. We thank Michael Crew, John Fellingham, Sharon Oster, David Sappington, Doug Schroeder, and two anonymous referees for helpful comments. Anil Arya acknowledges support from the John J. Gerlach Chair.