organizing the global value chain a firm level test in this paper we study the organization of global value chains on a sample of about 4 000 manufacturing parent companies operating more than 90 000 affiliates on a global scale which chose to integrate at least once in the period 2004 2012 assuming a technological sequence of production stages a recent property rights framework antra s and chor 2013 alfaro et al 2015 predicts that a choice of vertical integration is crucially based on both the position of a supplier along the chain and on the relative size of demand elasticities faced by the final producer and the supplier we positively test whether if final demand is sufficiently elastic inelastic producers of final goods integrate production stages that are more proximate to far from the consumers however this is not valid for cases of midstream parents i e for producers of intermediate inputs that can integrate either backward or forward along the chain we document that midstream are at least as common as are downstream parent companies but that existing theory neglects them in these cases we find that demand elasticities do not play a significant role in integration choices interestingly both midstream and downstream parents tend to integrate affiliates that are more proximate in segments of a supply chain our findings point to a role for technological determinants that may be as important as are contracting frictions in organizing global value chains

intra industry foreign direct investment we use a new firm level data set that establishes the location ownership and activity of 650 000 multinational subsidiaries close to a comprehensive picture of global multinational activity a number of patterns emerge from the data most foreign direct investment fdi occurs between rich countries the share of vertical fdi subsidiaries which provide inputs to their parent firms is larger than commonly thought even within developed countries more than half of all vertical subsidiaries are only observable at the four digit level because the inputs they are supplying are so proximate to their parent firms final good that they appear identical at the two digit level we call these proximate subsidiaries intra industry vertical fdi and find that their location and activity are significantly different to the inter industry vertical fdi visible at the two digit level these subsidiaries are not readily explained by the comparative advantage considerations in traditional models where firms locate their low skill production stages abroad in low skill countries to take advantage of factor cost differences we find that overwhelmingly multinationals tend to own the stages of production proximate to their final production giving rise to a class of high skill intra industry vertical fdi

a literature survey on energy growth nexus abstract this paper provides a survey of the recent progress in the literature of energy consumption economic growth and electricity consumption economic growth causality nexus the survey highlights that most empirical studies focus on either testing the role of energy electricity in stimulating economic growth or examining the direction of causality between these two variables although the positive role of energy on growth has become a stylized fact there are some methodological reservations about the results from these empirical studies a general observation from these studies is that the literature produced conflicting results and there is no consensus neither on the existence nor on the direction of causality between energy consumption electricity consumption and economic growth as a policy implication to avoid from conflicting and unreliable results the authors may use the autoregressive distributed lags bounds test two regime threshold co integration models panel data approach and multivariate models including new variables such as real gross fixed capital formation labor force carbon dioxide emissions population exchange rates interest rates etc thus the authors should focus more on the new approaches and perspectives rather than by employing usual methods based on a set of common variables for different countries and different intervals of time

prospective analysis of technological innovation systems identifying technological and organizational development options for biogas in switzerland abstract in this article we put forward a concept for the identification and analysis of future development options of technological innovation systems the key element of our approach the so called variation analysis is a methodology to identify coherent socio technical and organizational variants within a specific innovation field consistent combinations of these two dimensions may be interpreted as nuclei for alternative future developments of innovation systems the method may be used in discursive foresight processes to inform strategy formulation of firms or policy makers who see a utility in furthering the innovation field the paper has a focus on developing the theoretical background and the analytical structure of the methodology empirically we illustrate the method for the innovation system of biomass digestion in switzerland

a figure of merit for evaluating sustainability of renewable energy systems abstract for grading different types of renewable energy based electricity generation systems a figure of merit has been proposed and evaluated the figure of merit has been obtained by analyzing total energy utilization in constructing and installing the systems and by their respective electricity generation the gross carbon emission has also been estimated for evaluation of figure of merit this figure of merit clearly indicates that wind power is the most sustainable source for electricity generation followed by small hydropower and solar photovoltaics

renewable energy an efficient mechanism to improve gdp abstract this article analyzes the effects of renewable energy on gdp for 116 economies in 2003 through structural equation modeling sem approach in order to decipher the mechanism of how the use of renewables improves macroeconomic efficiency we decompose gdp by the expenditure approach although previous theory predicts positive effects of renewables on capital formation and trade balance the sem results show that renewables have a significant positive influence on capital formation only the result that renewables do not have a significant impact on trade balance implies that renewables do not have an import substitution effect thus we confirm the positive relationship between renewable energy and gdp through the path of increasing capital formation but not for the path of increasing trade balance

incomplete contracts and the theory of the firm what have we learned over the past 25 years incomplete contracts and the theory of the firm what have we learned over the past 25 years

religion liberty and economic development an empirical investigation the empirical investigations conducted for this paper show that one can not accept the null hypothesis that religion and liberty are not related to development judeo christianity in particular appears to an important determinant of economic development this is explained in part by its fostering of the private ownership of property nations with the judeo christian values are more likely to have political democracies that are conductive to economic development capitalist economies with judeo christian democracy are more likely to have higher levels of economic development

the global value chain under imperfect capital markets this paper develops a model to study how suppliers financial constraint interact with suppliers position in a global value chain i embed financial frictions into the property rights model of the global value chain as in antras and chor econometrica 2013 81 2127 to derive the optimal allocation of ownership rights along the global value chain the model predicts that multinational firms are more likely to integrate downstream intermediate input suppliers in countries with weak financial institutions when the production process is sequential complements using us intrafirm trade data for the years 2000 10 together with a triple interaction term between downstreamness of an industry demand elasticity of an industry and financial development of a country i provide empirical evidence that supports the key prediction of the model

the distribution of income in a despotic society a distribution of income between rulers and subjects can be derived as an equilibrium of violence rather than from considerations of marginal products of owned factors of production society is organized in ranks and the occupants of each rank are provided with incomes just sufficient that obedience is preferable to rebellion to incorporate such considerations into a model it is necessary to recognize phenomena that are normally excluded from economic analysis combat the mortality rate from natural causes and from violence as a component of the utility function and a rudimentary technology of control

foreign assistance investment and defense a methodological study with an application to israel 1960 1979 this paper develops a method for examination of the relations among outlays on capital formation and national defense and receipts of foreign assistance in developing and other aid receiving countries this model and its results should be of interest to any policy analyst concerned with the effects of aid on the indigenous allocation choices by recipients since it allows one to trace out the effect of aid on these allocative decisions the essence of the method and its novelty is to exploit the price changing feature of foreign aid as seen from the recipient s viewpoint to obtain an estimate of the price responsiveness of the recipient country with the response to prices so determined ownand cross price elasticities with respect to defense investment consumption and so forth can be calculated and the corresponding complementarities or substitutabilities among these categories of demand inferred as will become clear this question is closely related to the question of the extent to which there is a de facto diversion of military or nonmilitary foreign aid to other uses 1 this method is applied to israel chosen because of the urgency of its security and development objectives the availability of data and the magnitude of its foreignassistance receipts however the method is applicable to ldcs in general many of which in a struggle to improve living standards and simultaneously guard against perceived security threats turn increasingly to developed states for assistance the effect of aid on investment and growth has concerned economists for a generation and the possibility that aid might be diverted into consumption has long been recognized as well 2 but trade offs between development and defense especially have concerned economists in recent years e benoit found strong positive relations be

can repressive regimes be moderated through foreign aid in what circumstances should foreign aid be given to less developed countries with repressive rulers repressive rulers are assumed to control the national income and to trade it against the probability of staying in office which is assumed in turn to depend positively on popular wealth and repression a foreign donor aware of this process of optimization will pursue his international objectives by attaching conditions to his aid that alter the relative price of repression and popular wealth in the calculations of the tyrant the effectiveness of direct and in kind aid and the desirability of a carrot an stick aid policy depend on the direct and the interactive effects that popular wealth repression and the parameters of economic growth exert on the regime s stability and its level of income

climate policies for road transport revisited ii closing the policy gap with cap and trade current policies in the road transport sector fail to deliver consistent and efficient incentives for greenhouse gas abatement see companion article by creutzig et al in press market based instruments such as cap and trade systems close this policy gap and complement traditional policies that are required where specific market failures arise even in presence of strong existing non market policies cap and trade delivers additional abatement and efficiency by incentivizing demand side abatement options this paper analyzes generic design options and economic impacts of including the european road transport sector into the eu ets suitable points of regulation are up and midstream in the fuel chain to ensure effectiveness cover all emissions and avoid double counting efficiency incentivize all abatement options and low transaction costs based on year 2020 marginal abatement cost curves from different models and current eu climate policy objectives we show that in contrast to conventional wisdom road transport inclusion would not change the eu ets allowance price hence industrial carbon leakage induced by adding road transport to the eu ets may be less important than previously estimated

bioenergy in ukraine possibilities of rural development and opportunities for local communities this review paper deals with colligated aspects of the bioplus project era ard implemented by institute of technology and life sciences poland and lithuanian university of agriculture institute of agro engineering lithuania in cooperation with national university of life and environmental sciences of ukraine institute of ecobiotechnologies and bioenergy ukraine the drawn inferences intended to be an auxiliary material for policy makers and can briefly indicate on direction of the regional development of rural ukraine focusing on i country s specific and sub regional assessments of renewable energy potentials and spheres of its application ii identification of major barriers for the expansion of renewable energy technologies and policy guidance to overcome those barriers iii recommendations for future actions and strategies concerning renewable energy in ukraine the article concludes that low contribution of bioenergy towards rural development is to a large extent driven by energy policy that inhibits the delivery and use of modern energy sources in rural ukraine consequently an incentive for achieving bioenergy s future that has greater relevance to development of the ukraine s regions requires a mix of policy tools and institutional actions briefly summarized in this paper

how to pay for the peace a theoretical framework with references to african countries this paper analyses a simple game theoretic model to highlight the choice of the government between raising its defence expenditures or giving away some gifts to his opponents as a means to defend his position in power if the government is a cournot nash player then there is no gift in equilibrium and any increase in the budget will lead to more inefficient defence expenditures however if the government is a stackelberg leader then he will use the gift as a tool in his policy for staying in power

spiders and snakes offshoring and agglomeration in the global economy abstract global production sharing is determined by international cost differences and frictions related to the costs of unbundling stages spatially the interaction between these forces depends on engineering details of the production process with two extremes being snakes and spiders snakes are processes whose sequencing is dictated by engineering spiders involve the assembly of parts in no particular order this paper studies spatial unbundling as frictions fall showing that outcomes are very different for snakes and spiders even if they share some features both snakes and spiders have in common a property that lower frictions produce discontinuous location changes and overshooting parts may move against their comparative costs because of proximity benefits and further reductions in frictions lead these parts to be reshored predictions for trade volumes and the number of fragmented stages are quite different in the two cases for spiders a part crosses borders at most twice the value of trade increases monotonically as frictions fall except when the assembler relocates and the direction of parts trade is reversed for snakes the volume of trade and number of endogenously determined stages is bounded only by the fragmentation of the underlying engineering process and lower frictions monotonically increase trade volumes

effects of changes in italian bioenergy promotion schemes for agricultural biogas projects insights from a regional optimization model italy has witnessed an extraordinary growth in biogas generation from livestock effluents and agricultural activities in the last few years as well as a severe isomorphic process leading to a market dominance of 999 kw power plants owned by entrepreneurial farms under the pressure of the economic crisis in the country the italian government has restructured renewable energy support schemes introducing a new program in 2013 in this paper the effects of the previous and current support schemes on the optimal plant size feedstock mix and profitability were investigated by introducing a spatially explicit biogas supply chain optimization model which accounts for different incentive structures by applying the model to a regional case study homogenization observed to date is recognized as a result of former incentive structures considerable reductions in local economic potentials for agricultural biogas power plants without external heat use are estimated new plants are likely to be manure based and due to the lower energy density of such feedstock wider supply chains are expected although optimal plant size will be smaller the new support scheme will therefore most likely eliminate past distortions but also slow down investments in agricultural biogas plants

the growth of multinational firms in the great recession abstract using a large firm level dataset this paper studies multinational firms performance during the great recession foreign multinationals grew faster than local firms outside of the crisis but slower during the crisis industry and size differences between domestic and foreign owned firms account for much of this slowdown however multinationals from different countries performed differently during the crisis the paper then assesses the role of multinationals in the global recession using a quantitative model had multinationals relative performance remained unchanged during the crisis the median country s aggregate growth would have been 0 12 higher with a range of 0 13 to 0 5 across countries

incomplete contracts and the boundaries of the multinational firm a b s t r a c t using data on u s intra firm and arm s length imports for 5705 products imported from 220 countries we examine the determinants of the share of u s imports that are intra firm we examine two predictions that arise from antras 2003 antras and helpman 2008 and antras and helpman 2004 first we find that consistent with the implicit logic of antras 2003 and the explicit predictions of antras and helpman 2008 vertical inte gration is increasing in the importance of non contractible headquarter inputs relative to non contractible supplier inputs in other words we show that only non contractible head quarter inputs affect the firm s make or buy decision second we also provide empirical support for the antras and helpman 2004 prediction that intra firm trade is largest where non contractible headquarter inputs are important and productivity is high

prospects for expanded utilization of biogas in germany the prospects for expanded utilization of biogas systems in german was analysed by identifying the operational and policy factors affecting the complete chain of processes from implementation process for biogas plants through to biogas production and utilization it was found that the renewable energies act eeg and energy tax reliefs provide bases for the support of expanded utilization upgrading of biogas to natural gas quality for utilization in the transportation sector was arguably the most promising technology that could support rapid utilization expansion sustainable deployment of biogas systems in light of the unstable feedstock prices and availability and the need for subsidy free operation in the long term requires enhancement of feedstock flexibility and quality characteristics to maximise gas yield and optimisation of the anaerobic digestion process management assessment of energy balance and potential environmental impacts of the integrated process chain provides a holistic assessment of sustainability the results also support the development and foster of policies and framework for development of biogas as environmentally friendly energy resource among a mix of renewable energy sources hence compete favourably with fossil fuels to enhance the prospects for expanded utilization

power sector renewable energy integration for expanding access to electricity in sub saharan africa abstract a looming energy supply crisis in sub saharan africa ssa raises concerns about a long lasting energy shortage this energy crisis is expected to persist for an indefinite period in the region unless immediate actions are taken to reverse the trend although global aspiration to reduce greenhouse gas ghg emissions into the atmosphere is high such desire is low in ssa regional stakeholders are more worried about increasing power generation capacity to enhance better access to different sorts of development to progress in line with advanced patterns of energy development globally to increase the availability of electrical energy and to sustain emissions reductions exploitation of local renewable energy re resources is inevitable consequently this paper presents a comprehensive review of re integration for expanding access to electricity in ssa the review covers the sustainability of re resources in ssa the regional status of re applications and the necessity of re power generation integration planning from a management aspect finally the benefits of re integration into the power sector of ssa and some conceptual challenges affecting its integration in the region are highlighted

the institutional framework and economic development the compound growth rates of per capita output and farrell type efficiency measures for 115 market economies over the period 1960 80 were compared with measures of political civil and economic liberty it was found that the institutional framework has significant and large effects on the efficiency and growth rate of economies politically open societies which subscribe to the rule of law to private property and to the market allocation of resources grow at three times the rate and are two and one half times as efficient as societies in which these freedoms are abridged

internalizing global value chains a firm level analysis a key decision facing firms is the extent of control to exert over the different stages in their production processes we develop and test a property rights model of firm boundary choices along the

a tale of two property rights knowledge physical assets and multinational firm boundaries abstract the theory of multinational firm boundaries has been shaped by two major paradigms an earlier one emphasizing the role of integration in preventing the dissipation of knowledge and a more recent one stressing the role of firm boundaries in mitigating underinvestments into relationship specific assets in the face of contractual incompleteness this paper develops a novel model encompassing both approaches in a unifying framework the model predicts that the attractiveness of integration increases in the importance of the parent firm s knowledge capital and decreases in the importance of the affiliate s physical capital in a joint production process furthermore stronger intellectual property rights ipr protection in the affiliate s country is predicted to mitigate the effect of knowledge intensity on the attractiveness of integration i test these hypotheses using unique panel data on more than 100 000 firm pairs worldwide in line with the model s predictions knowledge intensive parent firms choose higher ownership shares in their affiliates yet this relationship is less pronounced the stronger the ipr protection in the affiliate s country in addition higher physical capital intensity of the affiliate is associated with lower ownership shares these findings are robust to controlling for unobserved heterogeneity across countries industries and firms providing strong support for the unifying theory of multinational firm boundaries

offshoring along the production chain recent contributions on offshoring often assume that firms can freely split their production process into separate steps which can be ranked according to the cost savings from producing abroad we replace this assumption by the notion of a technologically determined sequence of production steps in our model cost savings from offshoring fluctuate along the production chain and moving unfinished goods across borders causes transport costs we show that in such a setting firms may refrain from offshoring even if relocating individual steps would be advantageous conversely small variations in model parameters may lead to a large increase in offshoring activities

estimation of limited dependent variable models with dummy endogenous regressors applied economists have long struggled with the question of how to accommodate binary endogenous regressors in models with binary and nonnegative outcomes i argue here that much of the difculty with limited dependent variables comes from a focus on structural parameters such as index coefcients instead of causal effects once the object of estimation is taken to be the causal effect of treatment several simple strategies are available these include conventional two stage least squares multiplicative models for conditional means linear approximation of nonlinear causal models models for distribution effects and quantile regression with an endogenous binary regressor the estimation strategies discussed in the article are illustrated by using multiple births to estimate the effect of childbearing on employment status and hours of work

trends and sustainability criteria of the production and use of liquid biofuels abstract environmental impacts associated with the use of fossil fuels rising prices potential limitations in supply and concerns about regional and national security are driving the development and use of biomass for bioenergy biofuels and bioproducts however the use of biomass does not automatically imply that its production conversion and use are sustainable conflicts between various ecosystem services economic production of food fodder and fuels biodiversity social and cultural values etc that are provided by fertile land are increasing as well hence a developed thinking on how to balance between these services is desirable there is a significant amount of information available on biofuels and their sustainability in this paper different initiatives and sustainability criteria for biofuels are presented and assessed 35 criteria were found in emerging sustainability assessment frameworks the majority of 12 criteria were focused on environmental issues 4 were social and only 1 was economic energy balance and greenhouse gas balance were perceived as especially critical social criteria ranked generally low although being perceived as important food security ranked very low

vertical integration as a source of hold up while vertical integration is traditionally seen as a solution to the hold up problem this article highlights instead that it can generate hold up problems for rivals we consider a successive duopoly where downstream firms invest and then secure support from an upstream supplier we first show that vertical integration generates ex ante incentives to create hold up problems an integrated supplier is willing to pre commit itself to appropriating or dissipating part of its customer s profits to expose the independent rival to being held up by the other supplier and discourage in this way the rival s investment we then show that even in the absence of any pre commitment vertical integration also creates hold up problems ex post when degrading the quality of the support provided to one downstream firm benefits its rival we also provide illustrations in terms of standard industrial organization models and of antitrust cases and discuss the robustness of the insights

firm size and foreign operations of multinationals the standard literature on multinationals emphasizes the importance of firm size in explaining foreign direct investment a typical statement for example by caves is that t he relation between direct investment and firm size with other factors held constant has been established statistically 1974 p 280 however descriptions of the role of firm size are often ambiguous as pointed out by hufbauer 1975 and swedenborg 1979 such descriptions do not make a clear distinction between the probability or likelihood that a firm would be a foreign investor and the extent of such investment or as expressed by swedenborg a firm s propensity to operate abroad the share of its production carried on outside its home country a study by horst 1972 which has become the basis for most statements about the importance of firm size dealt only with the probability that a firm would be a foreign investor or more specifically the probability that it would meet the criteria for being considered a multinational firm according to the definition used in the harvard studies including that of having a certain number of overseas operations cf vernon 197 1

renewable energy sector in belarus a review abstract belarus by faces broad needs for energy security enhancement energy diversification and improvements in the state of the environment being the 13th largest importer of natural gas for energy by has very limited energy resources of its own maximum reduction of energy imports is among the strategic tasks of raising the efficiency of belarus economy the task fulfillment is possible through creation of a national infrastructure conductive to increasing the share of local and renewable sources of energy res in heat and power energy production by s geographic location has several advantages for extensive use of most of the renewable energy re and bioenergy sources however information on existing re sector for the second largest landlocked country in europe is still hardly awailable for a wider audience of researchers working in the field of economic environmental political planning and social aspects of energy supply in global proportions the review on the renewable energy sector in by so far has tried to give the background for res to describe their occurrence and conditions for using them leading up to a discussion of the role of renewable energy in current and future energy systems depending on a path of economic transition social values availability and economic rules used to judge the viability of competing solutions to ensure a simple comprehensible and transparent presentation of the different available options of using re for the provision of heat and power the individual chapters describing the various renewable energy potentials and contribution options have been similarly structured whenever possible and sensible

energy demand until 2010 in ukraine abstract the economic development and environmental soundness of ukraine is hampered and even threatened today by an outdated energy system which delivers energy to the customers at high internal and external costs painful changes are necessary to adapt this system to the requirements of a market economy and international competition realistic projections of future energy consumption may help to clarify the amount of necessary changes and counter official projections which often belong to the realm of utopia in this context the german institute for economic research diw has been commissioned by the german advisory group on economic reform in ukraine with an evaluation of energy projections for ukraine in 1998 in this article i present an updated version of this study to get a feeling for the growth potential of energy consumption in ukraine an international comparison of specific energy consumption is made some rough scenarios of energy demand in ukraine until 2010 are also sketched in scenario i assumptions were made concerning gdp growth in each sector income elasticity of energy consumption price elasticity of energy consumption and effects of technical progress in scenario ii we assumed the development of specific energy consumption in eastern germany may provide a suitable guideline for ukraine each approach is applied to a case with low and a case with high economic growth the results of international comparisons are ambiguous for ukraine energy consumption per gdp unit is extremely high in ukraine even in comparison to russia and other transition countries to this result contribute technical inefficiencies but also structural factors high share of basic industry as well as the persistent economic crisis energy consumption per capita in ukraine is relatively high in relation to gdp per capita electricity consumption per capita in contrast nearly corresponds to the low average income in ukraine the results of our scenario calculations indicate that in contrast to official projections energy consumption in 2010 will probably be lower than in 1995 even with high economic growth in view of the slow growth prospect of overall energy demand it will not be necessary to expand coal production and electricity generation with nuclear energy in order to reduce energy imports this conclusion would even be strengthened if the government stimulated energy efficiency improvements by special programmes that are not taken into account in our scenarios

dynamics of energy technologies and global change technological choices largely determine the long term characteristics of industrial society including impacts on the natural environment however the treatment of technology in existing models that are used to project economic and environmental futures remains highly stylized based on work over two decades at iiasa we present a useful typology for technology analysis and discuss methods that can be used to analyze the impact of technological changes on the global environment especially global warming our focus is energy technologies the main source of many atmospheric environmental problems we show that much improved treatment of technology is possible with a combination of historical analysis and new modeling techniques in the historical record we identify characteristic l such network e ects yield high barriers to entry even for superior competitors these simple observations allow three improvements to modeling of technological change and its consequences for global environmental change one is that the replacement of long lived infrastructures over time has also replaced the fuels that power the economy to yield progressively more energy per unit of carbon pollution from coal to oil to gas such replacement has d they also include endogenous generation of s we show that doing so can yield projections with lessened environmental impacts without necessarily incurring negative e ect on the economy arriving on that path by the year 2100 depends on intervening actions such as incentives to promote greater diversity in technology and lower barriers to entry for new infrastructures that could accelerate historical trends of decarbonization 1999 elsevier science ltd all rights reserved