Creating Creditworthiness through Reciprocal Trade

The paper investigates how barter can be used to finance imports and restore the creditworthiness of highly indebted countries when reputation as an enforcement mechanism for credit repayment does not work. The authors argue that payments in goods can be used to collateralize a trade credit and thus improve the creditor's incentives to pursue defaulting debtors. Furthermore, it is shown that barter is particularly advantageous if export revenues of the debtor country are stochastic, even in the absence of risk aversion. The predictions of the model are consistent with data on actual barter contracts.     

“I Need You Too!” Corporate Identity Attractiveness for Consumers and The Role of Social Responsibility

The extent to which people identify with an organization is dependent on the attractiveness of the organizational identity, which helps individuals satisfy one or more important self-definitional needs. However, little is known about the antecedents of company identity attractiveness (IA) in a consumer–company context. Drawing on theories of social identity and organizational identification, a model of the antecedents of IA is developed and tested. The findings provide empirical validation of the relationship between IA and corporate associations perceived by consumers. Our results demonstrate that the Corporate Social Responsibility (CSR) contribution to company IA is much stronger than that of Corporate Ability (CA). This may be linked to increasing competition and of decreasing CA-based variation in the marketplace.     

Outward Foreign Direct Investment Patterns of Italian Firms in the European Union's Emission Trading Scheme*

We consider the role played by the European Union's Emissions Trading System (EU ETS) as a possible driver of outward foreign direct investment (FDI) for Italian manufacturing firms. Using a panel dataset of about 22,000 firms covering the first two phases of the EU ETS and the period before the EU ETS, we measure the patterns of FDI towards countries not covered by the EU ETS. The results show that the EU ETS had a weak effect on the number of new subsidiaries abroad (extensive margin), while it had a larger impact on production taking place in foreign subsidiaries (intensive margin), especially in trade-intensive sectors.     

Volatility widens inequality. Could aid and remittances help?

Review of World Economics - We analyse the relationship between income volatility and inequality and the conditional role played by aid and remittances. Using a panel of 142 countries for the...     

Effect of Quality Characteristics on Consumers' Willingness to Pay for Gala Apples

This paper uses individual apple‐level data that include consumer sensory assessments and instrumental measurements of internal quality to analyze willingness to pay for Washington State Gala apples. Three distinct models are estimated: a model that includes destructive internal quality measures of apple characteristics, a model that utilizes only non‐destructive internal quality measures, and a consumer model that includes subjective consumer sensory evaluations and consumer socio‐demographic characteristics. The objective is to identify instrumental measures of internal quality that can be used to inform the apple industry of consumer preferences. The consumer model serves as a benchmark. Finally, we evaluate whether non‐destructive measures of internal quality can substitute for destructive measures. We find that firmness and soluble solids content are significant and can be measured effectively using non‐destructive measures. Implications of the findings for the apple industry in terms of marketing and possible “elite” standards for apples are discussed. Le présent article utilise des données individuelles, notamment des évaluations sensorielles et des mesures instrumentales, pour analyser la volonté de payer des consommateurs pour des pommes Gala de l'État de Washington. Nous avons estimé trois modèles : un modèle comprenant des mesures instrumentales qui affectent la qualité interne des pommes; un modèle qui utilise des mesures instrumentales qui n'affectent pas la qualité interne; un modèle du consommateur qui comprend des évaluations sensorielles subjectives et des caractéristiques sociodémographiques. L'objectif consistait à identifier les mesures instrumentales qui pourraient être utilisées pour renseigner l'industrie pomicole sur les préférences des consommateurs. Le modèle du consommateur a servi de point de référence. Finalement, nous avons examiné si les techniques non destructives de mesure de la qualité interne pouvaient ou non remplacer les techniques destructives. Nous avons trouvé que la fermeté et la teneur en solides solubles sont des caractéristiques importantes et qu'elles peuvent être mesurées efficacement au moyen de techniques non destructives. Nous discutons des répercussions de ces résultats sur l'industrie pomicole sur le plan du marketing et de l'établissement possible de normes ?élite?.     

Assessing structural change: the case of Austria

In recent years in many OECD countries the view became popular that a country has a healthy industrial structure if it has a high share of high-tech industries and a low share of traditional industries like textiles and steel. Therefore, industrial policy in these countries introduces programmes for reallocating from traditional sectors to high-tech sectors in order to increase national welfare. This paper questions this view by taking into account recent insights of international trade theory and shows, in the case of Austria, why conventional concepts of measuring and assessing structural change (used, e.g. by the OECD) are misleading and thus lead to wrong conclusions in the assessment whether structural adjustment has gone in the ‘right’ direction. More specifically, the ‘popular’ criteria ‘share and shift’, ‘high-tech versus traditional products’, and ‘R & D intensity’ are discussed and an alternative interpretation suggested by economic theory is given. Additionally, the paper illustrates the alternatie interpretation of these popular criteria on the example of the textile industry which, as a traditional consumer goods industry, managed to modernize largely without R & D of its own and was able to meet international competition successfully.     

The Impact of the European Emission Trading Scheme on Multiple Measures of Economic Performance

The European Emission Trading Scheme (EU ETS) has introduced a price for carbon, thus generating an additional cost for companies that are regulated by the scheme. The objective of this paper is to provide empirical evidence on the effect of the EU ETS on firm-level economic performance. There is a growing body of empirical literature that investigates the effects of the EU ETS on firm economic performance, with mixed results. Differently from the previous literature, we test the effect of the EU ETS on a larger set of indicators of economic performance: employment, average wages, turnover, value added, markup, investment, labour productivity, total factor productivity and ROI. Our results, based on a large panel of European firms, provide a broad picture of the economic impact of the EU ETS in its first and second phases of implementation. Contrarily to the expectations, the EU ETS did not affect economic performance negatively. Results suggest that firms have reacted to the EU ETS by passing-through costs to their customers on the one hand and improving labour productivity on the other hand.