Market Access Asymmetry in Food Trade

Using a bilateral trade equation derived from a monopolistic competition model, we investigate market access reciprocity in food trade among the United States, Canada, the European Union and Japan. We explore country- and industry-specific market access asymmetry through a border effect approach. Our findings reveal marked asymmetries in reciprocal border effects, both across countries and industries. Trade policy measures, particularly non-tariff barriers (NTBs), the degree of product differentiation and a ‘home bias’ in preferences, are important factors in explaining levels in border effects. Asymmetries in border effects are mainly explained by trade policies. JEL no.  F13, F14, Q17     

Agricultural market integration in the OECD: A gravity-border effect approach

This paper uses the border effect estimate from a gravity model to assess the level of agricultural market trade integration among 22 OECD countries for the 1994–2003 period. Empirical analysis confirms that the use of a gravity equation derived from theory, in the estimation of border effect, matters. A representative estimate of the border effect shows that crossing a national border within the OECD induces an average trade-reduction effect of a factor 13. This average value masks differences that are quite substantial in market integration, with value for intra-EU trade being higher while that for trade between the Central and Eastern European Countries (CEECs) is lower. The data show a process of strong integration in all the country-trade combinations involving CEECs. However, quite surprisingly, the intra-CEEC and OECD-CEEC integration processes are almost twice as strong as those in the EU-CEEC combination. Finally, the equivalent tariffs implied by the estimated border effects are not implausible compared to the actual range of direct protection measures.     

Explaining National Border Effects in the QUAD Food Trade

Using a ‘structural’ gravity‐like model, this paper first provides estimates of bilateral ‘border effects’ in food trade among the QUAD countries (the US, Canada, Japan and the EU) at the ISIC (International Standard Industrial Classification) four‐digit level (18 food sectors). It then investigates the underlying reasons for border effect, assessing the role played by policy barriers (tariffs, non‐tariff barriers to trade (NTBs) and domestic support) with respect to barriers unrelated to trade policy, such as information‐related costs, cultural proximity and preferences. In contrast to several previous findings, our results show that policy trade barriers, especially in the form of NTBs, are part of the story in explaining national border effects. Interestingly, in all country pair combinations, NTBs significantly dominate the trade reduction effect induced by tariffs. However, results show that elements linked to information‐related costs and consumer preferences matter a great deal in explaining the magnitude of border effects. These findings have implications for the economic and welfare‐related significance of national borders.     

Patterns and Determinants of International Trade Costs in the Food Industry

This paper documents patterns in international trade costs in processed foods for a large cross‐section of developing and developed countries, during the 1976–2000 period. A trade costs index is inferred from a micro‐founded gravity equation that incorporates bilateral ‘iceberg’ trade costs. For 2000, the trade costs, expressed as weighted average tariff equivalent, range from 73% for the north to 134% for the south countries. The time patterns show an average reduction of about 13% in the observed period that rises to 26% for the emerging countries. However, the same does not occur for south countries. On ranking the trade costs determinants, we find that, on average, geographical and historical factors seem to dominate those of infrastructure and institutions. However, trade policy emerges as an important determinant of the trade costs between north and emerging countries.     

Local variety and innovation performance in the EU textile and clothing industry

ABSTRACT

A large body of the literature showed that related variety at local level is more relevant than unrelated variety for explaining the innovation performance of firms. Knowledge relatedness is usually measured by considering activities within the same industry (i.e. the same two-digit code) while activities in different industries are associated with unrelated variety. This approach is challenged by the increasing relevance of transversal technologies, i.e. technologies that are developed and applied in rather different sectors. As a result, between industry variety (i.e. unrelated variety) is expected to be more important than within industry variety (i.e. related variety). We test this hypothesis by examining the innovation activities of firms in the textile and clothing industry. The innovation model of these firms is characterized by low investment in R&D, little capabilities for autonomous innovation and dependence from knowledge suppliers belonging to different sectors. The empirical analysis, carried out over the 1996–2014 period at the EU NUTS2 level, shows that between industry variety has a greater impact than within industry variety for the innovative performance of firms.     

The Impact of Conflict Types and Location on Trade

This article investigates the impact of interstate and intrastate conflict on trade. Analyses rely on a pooled time-series cross-sectional dataset with observations for 134 countries from 1979 to 2000. Results show that intrastate conflict has a larger negative impact on trade than interstate conflict; conflict in the exporting country has a more negative impact on trade than conflict in the importing country; and, finally, conflict's destructive effects go beyond the borders of the countries that directly experience it, as trade flows are also negatively influenced by conflict in neighboring countries.     

Apple's changing business model: What should the world's richest company do with all those profits?

Apple Inc. stands out as the world's most famous, and currently richest, company. To the general public, Apple is known for three things: its intriguing CEO Steve Jobs, who has achieved iconic status in death as in life; its amazing iOS products, especially the iPhone and the iPad, and their predecessor the iPod, which have literally placed sophisticated technology in the hands of the masses; and its stratospheric stock price, which even when in March 2013 it had dropped to 63 percent of its September 2012 peak, gave Apple the highest market capitalization of any company in the world. As a result of its phenomenal success, at the end of fiscal 2012 Apple had $121 billion in liquid assets. In April 2013 the company committed to distributing as much as $100 billion to shareholders in stock buybacks and cash dividends by the end of calendar 2015. By employing the theory of innovative enterprise to analyze how over the course of its 37-year history Apple became so profitable, we argue that there is no economic justification from a risk-reward perspective for this distribution to Apple's shareholders. Taxpayers and workers have superior claims on these profits. In analyzing by whom value is created as a basis for considering for whom value should be extracted, we raise the implications of Apple's changing business model for the future of innovation at this heretofore exceptional American company and even in the U.S. economy as a whole.     

Relationship lending and innovation: empirical evidence on a sample of European firms

This paper investigates the impact of relationship lending on innovation (the probability to innovate and the intensity of innovation). Using a unique dataset providing detailed information on bank–firm relationships across European firms, we relate different proxies of relationship lending (soft information, long-lasting relationships, number of banks and share of the main bank) to innovation. We find a very strong and robust positive effect of ‘soft-information-intensive’ relationships, a less robust positive effect of long-lasting relationships and a negative effect of credit concentration as measured by the number of banking relationships. We also find that ‘soft-information-intensive’ relationships reduce credit rationing for innovative firms, while long-lasting relationships seem to favour innovation via other relational channels. These results raise some concern on the impact of screening processes based on automatic procedures, as those suggested by the Basel rules, on firms' capability to finance innovative activities in Europe.     

Environmental Strategies,Upgrading and Competitive Advantage in Global Value Chains

The literature is increasingly focusing on how firms are improving their environmental performances and promoting green strategies to transform environmental constraints into new drivers of competitive advantage. This paper contributes to the literature by expanding knowledge about environmental management at the value chain level by exploring the concept of environmental upgrading and its implications in terms of economic upgrading and greening of industries. Leveraging on the global value chain and environmental managerial literature, the paper develops an integrated theoretical framework to analyse environmental upgrading trajectories and their implications in terms of firms' green strategies based on case studies in the Italian home‐furnishing industry. Empirical evidence suggests that firms develop green strategies to reduce environmental impacts while achieving economic benefits and competitiveness, which may be internal to the firm but also apply to value chains, with different implications in terms of bargaining power and value appropriation. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.