Digging in the dirt? Extractive industry FDI and corruption

Does corruption attract or deter foreign investment in the extractive sectors? This article presents an econometric analysis of extractive industry foreign direct investment (FDI) inflows to 81 countries in the period 1996–2009. The results suggest that increased corruption within a country is associated with increased extractive industry FDI, but at a diminishing rate as corruption increases grow larger. For realistic changes in corruption, however, more corruption is associated with more extractive industry investment.     

Trade as an engine of growth: The lewis versus riedel controversy revisited

Is there a stable quantitative relationship between the exports of developing countries and prosperity in developed countries? The controversy between Lewis and Riedel on this question is taken up anew in this paper and examined in the light of ten years of added data and by estimating additional relationships.     

Optimal Feedback Controls: Comparative Evaluation of the Cod Fisheries in Denmark, Iceland, and Norway

The economic efficiencies of the Danish, Icelandic, and Norwegian cod fisheries are examined. For this purpose, nonlinear aggregate models of these fisheries are constructed. Comparing the calculated optimal harvest and biomass quantities with the actual fisheries provides a measure of the degree of efficiency in these fisheries. The comparisons confirm that the cod harvesting policies of these countries have been hugely inefficient in the past. It appears that inefficiency has been increasing over the last three to four decades, even after TAC regulations replaced open access, indicating that the management policies adopted by all three countries have failed to cure overfishing.     

Existence, uniqueness and efficiency of equilibrium in hedonic markets with multidimensional types

We study equilibrium in hedonic markets, when consumers and suppliers have reservation utilities, and the utility functions are separable with respect to price. There is one indivisible good, which comes in different qualities; each consumer buys 0 or 1 unit, and each supplier sells 0 or 1 unit. Consumer types, supplier types and qualities can be either discrete of continuous, in which case they are allowed to be multidimensional. Prices play a double role: they keep some agents out of the market, and they match the remaining ones pairwise. We define equilibrium prices and equilibrium distributions, and we prove that equilibria exist, we investigate to what extend equilibrium prices and distributions are unique, and we prove that equilibria are efficient. In the particular case when there is a continuum of types, and a generalized Spence–Mirrlees condition is satisfied, we prove the existence of a pure equilibrium, where demand distributions are in fact demand functions, and we show to what extent it is unique. The proofs rely on convex analysis, and care has been given to illustrate the theory with examples.     

Agriculture versus fish – Norway in WTO

The Norwegian agriculture is highly protected and subsidised. The opposite is the case for fisheries and fish farming which suffer from foreign market restrictions. Using a computational general equilibrium model, the gain for Norway of a complete elimination of food subsidies and tariffs is estimated to be in the range of 1.2–2.7 per cent of GDP. Most of this gain stems from domestic farm sector liberalisation. The gain from free market access for seafood is estimated to 4.4 per cent of the seafood export value. Consequently, Norway has much to gain from offering other countries market access for agricultural products. By pursuing such a policy, Norway may also strengthen the case for fisheries and fish farming in trade talks.     

Overtourism,optimisation, and destination performance indicators: a case study of activities in Fjord Norway

Abstract

Many global tourist destinations have experienced growth in arrivals. This has triggered various conflicts in destinations and sparked debates as to how to deal with what is increasingly referred to as ‘overtourism’. Most Destination Marketing Organisations (DMOs) pursue strategies to stimulate arrivals even further. Pro-growth discourses are reinforced by lead bodies such as the World Tourism Organisation (UNWTO). However, maximisation strategies based on higher numbers of tourists increasingly cause conflicts with local residents, whereas simultaneously undermining climate change mitigation pledges as negotiated in the Paris Agreement. New approaches to destination management based on optimisation are therefore warranted. Drawing on a survey of international tourists (n?=?5,249) in south-western Norway, this article discusses whether ‘activities’, i.e. the development of local, small-scale and ideally more sustainable experiences, can contribute to economic growth without necessarily increasing numbers of arrivals. Results confirm that destinations should seek to better understand their markets, including length of stay, spending, and/or activity intention, to identify profitable markets. Ultimately, such knowledge may help addressing overtourism conflicts while building tourism systems that are more economically, socially, and environmentally resilient.     

What determines Chinese outward FDI?

Chinese outward foreign direct investment (FDI) has increased substantially in recent years. Though this has generated considerable interest in the motivations and drivers of Chinese investment abroad, there have been few systematic empirical studies of these questions. This paper performs an econometric analysis of the host country determinants of Chinese outward FDI in the period 2003-2006. We find that Chinese outward FDI is attracted to large markets, and to countries with a combination of large natural resources and poor institutions. Disaggregation shows that the former effect is related to OECD countries, whereas the latter interaction effect holds for non-OECD countries.     

A binomial approximation for two-state Markovian HJM models

This article develops a lattice algorithm for pricing interest rate derivatives under the Heath et al. (Econometrica 60:77–105, 1992) paradigm when the volatility structure of forward rates obeys the Ritchken and Sankarasubramanian (Math Financ 5:55–72) condition. In such a framework, the entire term structure of the interest rate may be represented using a two-dimensional Markov process, where one state variable is the spot rate and the other is an accrued variance statistic. Unlike in the usual approach based on the Nelson-Ramaswamy (Rev Financ Stud 3:393–430) transformation, we directly discretize the heteroskedastic spot rate process by a recombining binomial tree. Further, we reduce the computational cost of the pricing problem by associating with each node of the lattice a fixed number of accrued variance values computed on a subset of paths reaching that node. A backward induction scheme coupled with linear interpolation is used to evaluate interest rate contingent claims.     

Agriculture as a provider of public goods: a case study for Norway

A valid argument for support is that subsidies are remedies for market failures. Agriculture contributes positively to public goods as food security, landscape preservation and maintenance of population in remote areas. Using a numerical model we simulate what Norwegian agriculture would look like if the only purpose of supporting agriculture was to provide such public goods. This is compared to the consequences of the Uruguay round in GATT and possible future EU membership for Norwegian agriculture. Although the GATT agreement will change agriculture in the desirable direction, the agreement puts no substantial pressure on the current agricultural policy. EU membership on the lines laid down by the accession treaty between EU and Norway prior to the referendum in 1994 would have given a stronger impetus towards the optimal solution.