Software Provision and the Impact of Market Integration

Both deeper market integration and advances in digital technology have driven particularly large decreases in the costs of intermarket software provision. This study first explains the mechanism of how trade costs influence the software provision decisions of software firms. Then the transformation of production/trade patterns is investigated given gradually decreasing trade costs for software products. It is shown that if two incompatible types of hardware exist, deeper market integration may reduce the variety of hardware technologies. It is also shown that, if the variety of hardware technologies is reduced by deeper integration, some consumers are made worse off.     

Time Zones as a Source of Comparative Advantage

This note proposes a three-country model of monopolistic competition that captures the role of time zones in the division of labor. The connectivity of business service sectors via communications networks (e.g. the Internet, satellite communications systems) is found to determine the structure of comparative advantage. That is, two countries with connected service sectors have a comparative advantage in the good that requires business services. It is also shown that the third unconnected country inevitably specializes in the good that does not require business services.     

Relative Performance of U.S. and Japanese Electricity Distribution: An Application of Stochastic Frontier Analysis

Journal of Productivity Analysis -     

Strategic investments in Japanese corporations: do foreign portfolio owners foster underinvestment or appropriate investment?

This paper investigates the effect of foreign ownership on strategic investments in Japanese corporations. Foreign owners are typically portfolio investors who frequently buy and sell shares and hold diversified portfolios of small stakes in many firms. Prior research has presented two conflicting perspectives on the role of such investors: (a) their frequent trading leads to pressure for short‐term returns that fosters underinvestment; (b) their active trading fosters appropriate investments. We investigated the relationship between foreign ownership and strategic investments using dynamic panel data analysis of a sample of 146 Japanese manufacturing firms from 1991 to 1997. We found that foreign ownership enhances strategic investments (in R&D and capital intensity) to a greater extent when firms have growth opportunities than when they lack such opportunities. We conclude that foreign ownership fosters appropriate investment. Copyright © 2006 John Wiley & Sons, Ltd.     

Street markets as tourist attractions—Victoria Market,Auckland, New Zealand

The paper reports findings from a qualitative study of 25 respondents visiting Victoria Market, New Zealand as to their motives for visiting a market, and their perceptions of this specific market. Open‐ended questioning based on semi‐structured conversation created data analysed using the neural network program CATPAC. The findings note three forms of shopping, the role of cultural components in the market and an appreciation of the market's colourful ambience. However, visitors from Europe still tended to look for value for money when buying objects and had concerns over perceived ‘authenticity’ while Asian shoppers tended to value more the overall ambience. Copyright © 2007 John Wiley & Sons, Ltd.     

Indirect network effects and the impact of trade liberalization: A note

In this note, we examine how trade liberalization affects production structure in the presence of indirect network effects (hardware/software systems). For these purposes we construct a simple two-country model of trade with two incompatible hardware technologies. It is shown that, given that both types of hardware exist before trade liberalization, liberalization and increased intra-industry trade in software products may reduce the variety of hardware technology via intensified network effects. It is also shown that, contrary to the findings of previous studies on intra-industry trade, some consumers may become worse off as the result of trade.     

Market Price Response of World Rice Research

Using the total number of research publications as a proxy, the output of rice research in the world is estimated to be highly responsive in the short run to price fluctuations in the international rice market. The results suggest a danger of the inducement mechanism of public investment in the agricultural production infrastructure being misguided by cyclical price changes, thereby leading to recurrent food shortages and oversupplies in a cobweb-like manner.     

On the de-facto convex structure of a least square problem for estimating the term structure of interest rates

We will show that the objective function of a constrained least square problem for estimating the term structure of the interest rates discussed in [4] is in fact convex in the feasible region defined by a set of linear constraints. This means that the algorithm developed in [4], which uses a linear or quadratic approximation to the objective function, generates a globally optimal solution of a constrained least square problem.     

Relative Performance of U.S. and Japanese Electricity Distribution: An Application of Stochastic Frontier Analysis

This paper estimates and compares the technical efficiency of the U.S. and Japanese electric utilities during the period 1982–1997 using a stochastic frontier analysis. Our focus is on electricity distribution services of major investor-owned utilities. We employ translog input distance functions to represent the technology of electricity distribution. Empirical results show that after controlling for environmental variables, on average, the Japanese electric utilities are more efficient. It is shown, however, that some U.S. utilities are as efficient as the most efficient Japanese utilities, indicating that the estimated frontier is not necessarily dominated by Japanese utilities.An erratum to this article can be found at     

Agricultural Productivity,Business Services,and Comparative Advantage

By explicitly incorporating both the intermediate business service sector and non-homothetic preferences, this study develops a two-good (the agricultural good and the manufactured good) model of trade that captures the role of agricultural productivity, which deepens the division of labor in the manufactured good sector. The level of agricultural productivity is found to determine the structure of comparative advantage: the country that has an absolute advantage in the agricultural sector also has a comparative advantage in the manufactured good sector.