Foreign entry,quality, and cultural distance: product-level evidence from US movie exports

This paper investigates the effect of quality on foreign entry using data on international movie exports and direct and revealed measures of movie quality. Strict quality sorting is predicted by a model of firm heterogeneity. An alternative model is random entry, in which entry decisions are independent of the movie’s quality. I develop a discrete choice model that allows for both of these extremes as special cases, and use graphical techniques and simulations to compare their predictions to the data. I then use regression analysis to estimate the effect of quality on the propensity to enter foreign markets. A one-standard-deviation increase in quality increases the probability of entry by 25–50 %. Systematic differences in taste for different genre types are used to estimate a measure of cultural distance between countries. Movies in “culturally dependent” genres are less likely to enter foreign markets and their probability of entry is less sensitive to quality. The cultural distance measure enters a gravity equation of US bilateral trade significantly.     

CONGESTION MODELS WITH CONSISTENT CONJECTURES

This paper demonstrates that, in situations in which a cumulative externality exists, the basic nature and extent of resource misallocation may be substantially less than we imagine. This conclusion stems from deriving consistent conjectures in a unified framework in which congestion is present. Experiments support the conclusion that, when numbers of agents are small, when there is little heterogeneity among them, and when they have the opportunity to observe each other during repeated experiment, the market allocation may be efficient.     

Singapore—An Asian economic miracle

The island’s rapid industrialisation over the past decade and its development as the main trade and financial centre of South-East Asia, supported by a phenomenal growth in tourism, constitute yet another Asian economic miracle.     

Bayes estimates of distance‐to‐market: transactions costs,cooperatives and milk‐market development in the Ethiopian highlands

Rationalizing non‐participation as a resource deficiency in the household, this paper identifies strategies for milk‐market development in the Ethiopian highlands. The additional amounts of covariates required for positive marketable surplus—‘distances‐to market’—are computed from a model in which production and sales are correlated; sales are left‐censored at some unobserved threshold; production efficiencies are heterogeneous; and the data are in the form of a panel. Incorporating these features into the modeling exercise is important because they are fundamental to the data‐generating environment. There are four reasons. First, because production and sales decisions are enacted within the same household, both decisions are affected by the same exogenous shocks, and production and sales are therefore likely to be correlated. Second, because selling involves time and time is arguably the most important resource available to a subsistence household, the minimum sales amount is not zero but, rather, some unobserved threshold that lies beyond zero. Third, the potential existence of heterogeneous abilities in management, ones that lie latent from the econometrician's perspective, suggest that production efficiencies should be permitted to vary across households. Fourth, we observe a single set of households during multiple visits in a single production year. The results convey clearly that institutional and production innovations alone are insufficient to encourage participation. Market‐precipitating innovation requires complementary inputs, especially improvements in human capital and reductions in risk. Copyright © 2008 John Wiley & Sons, Ltd.     

Agroindustrialization through institutional innovation Transaction costs, cooperatives and milk-market development in the east-African highlands

Some small-holders are able to generate reliable and substantial income flows through small-scale dairy production for the local market; for others, a set of unique transaction costs hinders participation. Cooperative selling institutions are potential catalysts for mitigating these costs, stimulating entry into the market, and promoting growth in rural communities. Trends in cooperative organization in east-African dairy are evaluated. Empirical work focuses on alternative techniques for effecting participation among a representative sample of peri-urban milk producers in the Ethiopian highlands. The variables considered are a modern production practice (cross-bred cow use), a traditional production practice (indigenous-cow use), three intellectual-capital-forming variables (experience, education, and extension), and the provision of infrastructure (as measured by time to transport milk to market). A Tobit analysis of marketable surplus generates precise estimates of non-participants' 'distances' to market and their reservation levels of the covariates — measures of the inputs necessary to sustain and enhance the market. Policy implications focus on the availability of cross-bred stock and the level of market infrastructure, both of which have marked effects on participation, the velocity of transactions in the local community and, inevitably, the social returns to agroindustrialization.     

A revised Tobit procedure for mitigating bias in the presence of non-zero censoring with an application to milk-market participation in the Ethiopian highlands

Fixed transactions costs that prohibit exchange engender bias in supply analysis due to censoring of the sample observations. The associated bias in conventional regression procedures applied to censored data and the construction of robust methods for mitigating bias have been preoccupations of applied economists since Tobin [Econometrica 26 (1958) 24]. This literature assumes that the true point of censoring in the data is zero and, when this is not the case, imparts a bias to parameter estimates of the censored regression model. We conjecture that this bias can be significant; affirm this from experiments; and suggest techniques for mitigating this bias using Bayesian procedures. The bias-mitigating procedures are based on modifications of the key step that facilitates Bayesian estimation of the censored regression model; are easy to implement; work well in both small and large samples; and lead to significantly improved inference in the censored regression model. These findings are important in light of the widespread use of the zero-censored Tobit regression and we investigate their consequences using data on milk-market participation in the Ethiopian highlands.