Social learning,neighborhood effects,and investment in human capital: Evidence from Green-Revolution India

This paper empirically identifies social learning and neighborhood effects in schooling investments in a new technology regime. Social learning implies that learning is most efficient when observed heterogeneity in schooling is greatest. The estimates of learning-investment rule, from farm household panel data at the onset of the Green Revolution in India, show that (i) agents learn about schooling returns from income realizations of their neighbors, and (ii) the speed of learning is high when the variation of schooling is large. Thus, schooling distribution of the parents' generation in a community has externalities to schooling investments in children. Simulations show that the variations in schooling within and across communities generate variations in child enrollment rate and average household income.     

Tariff Revenue Competition in a Free Trade Area: The Case of Asymmetric Large Countries

The striking result has been shown by Richardson that tariff revenue competition between two symmetric member countries of a free trade area (FTA) results in complete elimination of external tariffs if there exists a pure‐strategy Nash equilibrium at all. Richardson also conjectures without building a model that if member countries are asymmetric in market size, there exists a pure‐strategy Nash equilibrium in which both countries set positive external tariffs. We explicitly extend his tariff competition model into the case of asymmetric FTA member countries, and confirm his conjecture. We also show that there exists a mixed‐strategy Nash equilibrium in the case of symmetric countries.     

Japanese nonprofit sector in comparative perspective

Nonprofit organizations have long been less visible in Japan than in most other developed countries. But this does not imply that Japan does not have a sizable nonprofit sector. To the contrary, large numbers of Japanese hospitals, universities, social service organizations, and community groups are essentially not‐for‐profit in form.     

Pricing Options under Stochastic Interest Rates: A New Approach

We will generalize the Black-Scholes option pricing formula by incorporating stochastic interest rates. Although the existing literature has obtained some formulae for stock options under stochastic interest rates, the closed-form solutions have been known only under the Gaussian (Merton type) interest rate processes. We will show that an explicit solution, which is an extended Black-Scholes formula under stochastic interest rates in certain asymptotic sense, can be obtained by extending the asymptotic expansion approach when the interest rate volatility is small. This method, called the small-disturbance asymptotics for Itô processes, has recently been developed by Kunitomo and Takahashi (1995, 1998) and Takahashi (1997). We found that the extended Black-Scholes formula is decomposed into the original Black-Scholes formula under the deterministic interest rates and the adjustment term driven by the volatility of interest rates. We will illustrate the numerical accuracy of our new formula by using the Cox–Ingersoll–Ross model for the interest rates.     

STRATEGIC MANDATORY LABELING OF BIOTECHNOLOGY PRODUCTS IN THE ABSENCE OF QUALITY DIFFERENCE

This article examines the strategic use of mandatory labeling of biotechnology products, such as genetically modified food. A foreign dominant firm produces a biotechnology product and foreign competitive firms produce a conventional one. It is shown that if other trade measures such as tariffs are also available, the government of an importing country may impose mandatory labeling even in the case where there is no quality difference between biotechnology and conventional products. A combination of a discriminatory tariff on the biotechnology product and mandatory labeling shifts rents from the foreign dominant firm to the domestic economy.     

Patent citations, technology diffusion, and international trade: evidence from Asian countries

In this paper, we examine international technology diffusion by using patent citations as a proxy for technology diffusion. We focus on some Asian economies, i.e., Korea, Taiwan, China and India, to investigate the relationship between technology diffusion and their trade experience with the U.S., Japan, and other G7 countries. Our empirical results reveal that trade specialization has a significant correlation with technology diffusion. Some policy implications are discussed.     

Local assimilation of an enterprise system: Situated learning by means of familiarity pockets

Once a new information system is introduced to the workplace, individuals confront it and struggle to make sense of it. Over time, it must be somehow learned and assimilated into everyday work practices. Enterprise systems, because they are complex and integrate work across functions and distance, pose special challenges to learning at the firm's periphery, where local users are distanced from both the centralized system and others elsewhere, and where a community of learning may be thin or lacking. The present study, using direct observations and interviews at a bank in which a new CRM system was introduced across small regional branch offices, explicates the local learning process. Findings suggest that in assimilating the system, bank representatives created familiarity pockets within which they routinely worked with it and outside of which they competently ignored it. Even within familiarity pockets, routine use of the system, while skilled, masked much that was not known by the bank reps. In short, in local assimilation of enterprise systems, knowing in practice may be constituted as much from what can be competently and routinely ignored by users, as from any deep knowledge of the system itself.     

Structural Variations of Agriculture in the Pacific

Agricultural shares of output and employment in thirteen Pacific basin countries are analyzed with reference to a global baseline for 1980. Per-capita output parity ratios are lower in the ASEAN, ANICs, and Japan as compared to their trading partners in North America and Oceania. Wide differences in land-labor ratios influence the directions of technological change, economies of scale, and dynamic comparative advantage. Differential changes in the partial productivities of land and labor between the high and middle income economies suggest that there has been a narrowing of the gap in land productivities and a widening of the gap in labor productivities across the Pacific. The implication is that there has been a regressive international impact on wages for farm labor. Further, since agriculture's share of land resources does not tend to fall as fast as its share of output and labor, increasing structural imbalance in terms of differential land rents to agriculture vis-à-vis non-agriculture results in greater adjustment pressures on the property and derived institutional systems that control natural resource allocation decisions. The results are consistent with the heavy adjustment burdens that agriculture and developing economies have been bearing as a result of expanding trade and capital flows, and the need to focus more attention on the structure, functioning, and performance of the different institutional systems that control resource allocation decisions in these countries.     

International trade and renewable resources under asymmetries of resource abundance and resource management

This paper examines the interaction between relative resource abundance and resource management regimes in determining trade patterns and gains from trade in a two-country model with a renewable resource. A model developed by Brander and Taylor [Brander JA, Taylor MS (1997b) Resour Energy Econ 19:267–297] is extended. It is shown that relative resource abundance determines trade patterns if resource abundance is similar in both countries and the relative demand for the resource good is moderate, or if resource abundance is sufficiently different and the relative demand is not so high. Otherwise, a difference in resource management regimes determines trade patterns. Even under an open-access regime, the resource-scarce country gains from trade unless resource abundance is similar and the relative demand is low.