Can Intellectual Property Rights Affect Multinational Enterprises’ Entry Modes? The Chilean Case

Abstract

Multinational Enterprises (MNEs) can choose between exporting, introducing foreign direct investment (FDI), and licensing to a domestic firm among other modes of entry to a new market. Yet, this decision may be affected by the strength of intellectual property rights (IPR). Thus, this paper analyzes the effect of stronger IPR on the entry modes chosen by MNEs. We propose a theoretical model that predicts that in the presence of stronger IPR, MNEs would choose licensing instead of FDI as an entry mode. We test the predictions of the model using plant-level data for Chile for the period 2001–2007. We exploit the exogenous reform of IPR in 2005, controlling for the activities of industries where high levels of technology transfer and imitation are important factors. The main results show that stronger IPR change the mode of entry chosen by MNEs. In this case, FDI is replaced by licensing. This is explained by Chile’s high absorptive capacity during this period. We test whether this effect differs across high- and low-tech industries and conclude that the displacement of FDI is less severe in high-tech industries.     

Is inflation targeting a good remedy to control inflation?

Since the 1990s inflation targeting (IT) has been adopted by several central banks as a strategy for monetary policy. It is expected that the adoption of this monetary regime can reduce inflation and inflation volatility. This article is concerned with these issues and makes use of the Propensity Score Matching methodology on a sample of 180 countries for the period from 1990 to 2007. For analysis, the sample is split into two sets of countries (advanced and developing). The findings suggest that the adoption of IT is an ideal monetary regime for developing economies and, in addition to reducing inflation volatility, can drive inflation down to internationally acceptable levels. Regarding advanced economies, the adoption of IT does not appear to represent an advantageous strategy. In brief, the empirical results indicate that the adoption of IT is useful for countries that must enhance their credibility for the management of monetary policy.     

Agricultural growth and poverty in an archetypical middle income country: Chile 1987–2003

Is a reduced share of agriculture in the economy an obstacle for the agricultural sector to play an important role in poverty alleviation? What is the key channel, if any, by which agriculture is benefiting the poor in Chile that would be worthwhile to promote in other countries? By answering these questions we expand the literature on poverty and composition of growth by proposing a methodology that allows to disentangle the mechanisms by which agricultural growth can be poverty reducing. We find that in Chile agriculture plays a large role in reducing poverty, and most of this effect is channeled through the labor market.     

Linkages between the farm and nonfarm sectors at the household level in rural Ghana: a consistent stochastic distance function approach

This article explores the effects within households of an expanding rural nonfarm (RNF) sector in Ghana. We ask whether the growing RNF sector allows for economies of diversification within farms, how it affects household input demands, and whether it has measurable effects in overall household production efficiency. We explore the intrahousehold linkages between agricultural and RNF activities, first assuming perfectly competitive input and output markets and then with market failures, in particular missing labor and credit markets. We then measure these linkages using a household level input distance function, finding high levels of inefficiency in Ghanaian farms. Also, there are cost-complementarities between the RNF sector and the agricultural sector, particularly with food crops in which the poorest tend to specialize. The expansion of the RNF sector increases demand for most inputs including agricultural land. Finally, we show that smaller farms tend to be more efficient, and that RNF output is helping the farm household to become more efficient, but the latter result is not robust.     

Problems of consumer protection against unfair advertising under Italian law

The present paper gives a critical survey of the main trends in the correction of unfair advertising under Italian law. From the viewpoint of consumer interest, such trends appear unsatisfactory in so far as they refer to an average consumer standard, a concept that results in too limited legal intervention. Aside from this, consumer associations and groups are still barred from access to legal action under unfair competition law. Thus, the most adequate legal model to date, seems to be the one founded on the administrative authorization of advertising, which embodies a preventive control of advertisements. Discussed also are self-regulation norms and practices, whose recent improvement is nevertheless insufficient to overcome structural defects.

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Probleme des Verbraucherschutzes gegenüber unlauterer Werbung im italienischen Recht

Zusammenfassung In Italien gibt es kein auf die Belange des Verbraucherschutzes zugeschnittenes Werberecht. Täuschende und irreführende Werbeangaben gegenüber Verbrauchern werden unter bestimmten Umständen als »unlauterer Wettbewerb« behandelt. Das italienische Recht regelt dabei nur solche Werbeaussagen, die ganz bestimmte Tatsachen enthalten, womit also Übertreibungen auch täuschenden Inhalts keiner Rechtskontrolle unterliegen. Umgekehrt fehlt ein Grundsatz, daß die Werbung ein Mindestmaß an Informationen enthalten muß; das Unterlassen von Angaben wird nicht als Täuschung angesehen. Die Irreführung wird nicht an den von einer Werbebotschaft betroffenen Verbrauchern gemessen, sondern an einem fiktiven Maßstab des »Durchschnittsverbrauchers«.Der Autor kritisiert diese Voraussetzungen des Irreführungsverbotes im italienischen Recht und weist auf Widersprüche in den Begründungszusammenhängen, aber auch auf neue Tendenzen hin. Das Werbestrafrecht kennt in einigen Bereichen strengere Maßstäbe.Die Rechtsdurchsetzung im italienischen Recht weist viele Lücken auf. So haben Verbraucherverbände kein Klagerecht. Eine präventive Werbekontrolle findet praktisch nicht statt. Es sollte deshalb überlegt werden, die verwaltungsrechtliche Kontrolle der Werbung zu erweitern.Die inzwischen auch in Italien ausgebaute Werbeselbstkontrolle befriedigt vom Verbraucherstandpunkt aus nicht. Die Selbstbeschränkungsabkommen sind rechtlich nicht verbindlich. Nur als Ergänzung, nicht aber als Ersatz einer staatlichen Werbekontrolle erscheinen sie sinnvoll.

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Gustavo Ghidini is Professor of Law at the University of Modena, Italy. His address is: Via C. Battisti 8, I-20122 Milan, Italy. In 1973 he became a founder of the Comitato Difesa Consumatori, an association now member of Bureau Européen des Unions de Consommateurs (B. E. U. C.).     

Intraregional Spillovers in South America: Is Brazil Systemic After All?

The high business cycle correlation between Brazil (the large neighbour in South America) and other countries in the region has been a frequent source of concern for policymakers, as it has been viewed as evidence of the large influence of the former country on its neighbours. This paper studies the importance of such influence, documenting trade linkages over the last two decades and quantifying spillover effects in a vector autoregression setting. We find that, after controlling for common external factors, spillovers from Brazil are only relevant for Southern Cone economies (especially Mercosur's members) and Peru, but not for the rest of South America, and these findings are consistent with the extent of trade linkages between these countries. We find also that spillovers can take two different forms: the transmission of Brazil‐specific shocks and the amplification of global shocks – through their impact on Brazil's output. Finally, we also find suggestive evidence that depreciations of Brazil's currency may not have significant impact on output of its key trading partners.     

Job Search Channels,Neighborhood Effects,and Wages Inequality in Developing Countries: The Colombian Case

This paper analyzes the relationship between social networks and the probability of finding a job. We explore geographic closeness as the social interaction to explain the job search function. Using data from Colombia in 2009, we calculate how neighborhoods have an effect on the channel used to find a job (social network versus no social network). In addition, we study how wage premium relates to using a social network in finding a job, exploring the inequality that can arise using a different job search method. Our results show that neighborhood affects the individual's job search method and that referred workers earn less at the bottom of the wage distribution with respect to non‐referred workers. Colombia presents persistent high levels of informality and inequality with the existence of spatial clusters that impose important social and economic costs with strong informational asymmetries on the job market.     

Taxes and Marriage: A Two‐Sided Search Analysis*

This article analyzes the effects of differential tax treatment of married and single individuals in the United States on marriage formation and composition, divorce, and labor supply. We develop a marriage‐market model with search frictions and heterogeneous agents that is sufficiently rich to capture key elements of the problem under consideration. We then calibrate the model and use it to evaluate the quantitative effects of several tax reforms aimed at making the tax law neutral with respect to marital status. We find that these reforms (i) systematically increase the labor supply of married females, with changes ranging from 0.3 to 10.1 percent; (ii) have substantial effects on the correlation of spouses’ incomes, which changes from 0.2 to values between 0.185 and 0.334; (iii) can lead to either an increase or decrease in the fraction of people married, with changes that range from ?0.6 to 2.4 percent.     

Toward farm-based policy analysis: concepts applied in Haiti

Many policies – on the delivery of inputs or on marketing systems, credit, or extension – influence the potential utilization of new technologies. Through 'farm-based policy analysis' it is possible to use data generated in on-farm research (OFR) to identify policy constraints to the use of new technologies, and to effectively communicate that information to policy makers. This paper describes a tentative framework for farm-based policy analysis and suggests a sequence of five steps for the analysis: (1) identify the policy-induced constraints; (2) determine the rationale behind the policy; (3) identify the decision makers to whom the results should be communicated; (4) identify solutions or policy options; and (5) communicate results to decision makers. A case of farm-based policy analysis from Haiti illustrates the concepts and methods described in the first part of the paper. On-farm experiments in Les Cayes, Haiti, confirmed a response to nitrogen in maize, but adoption of the recommended practice and consequent gains in productivity and income were constrained by the scarcity of urea in the local market. An analysis of local supply and potential local demand for urea and the potential benefits of urea application was conducted, and results communicated to two target groups of decision makers: representatives of the Ministry of Agriculture responsible for fertilizer distribution policy, and representatives of private fertilizer enterprises. These groups responded by making larger supplies of urea available to local farmers. Adoption of the fertilizer recommendation and urea sales increased. The case demonstrates the potential value of farm-based policy analysis building upon data from OFR.     

Análisis del servicio de Urgencias aplicando teoría de líneas de espera

Those responsible for making decisions in hospitals are increasingly aware of the need to efficiently manage hospital systems. An option for analysis is done by queuing models. In this paper is analyzed the service area ER, in a public hospital applying the concepts and relationships of waiting lines. From the model results, it is concluded that in the emergency department does not have the required minimum number of doctors to allow a steady flow of patients. With the model, the minimum required number of doctors is calculated to meet current and future demand for service with the same service time and the same discipline of service. Analytical models, allowing direct understand the relationships between service demand, number of doctors and patient care priority viewed as a queuing system. The work is useful for administrators and managers of hospital systems.