the global award for entrepreneurship research the international award for entrepreneurship and small business research was introduced in 1996 and it is now firmly established as the most prestigious award for outstanding research contributions in this subject area thanks to a generous donation from the swedish entrepreneur rune andersson it has been possible to make a number of changes aimed at strengthening global recognition of the prize even further the name is being changed to the global award for entrepreneurship research the financial side to the prize is being roughly doubled to 100 000 euros and the system for nomination evaluation and selection of future award winners is becoming more structured and transparent we present here the background to and the organization s behind the award briefly categorize the winners in the 1996 2008 period describe the present and the future system for nomination evaluation and selection of award winners and discuss the criteria for the selection of prize candidates and award winning contributions

section 337 and the protection of intellectual property in the united states the complainants and the impact under section 337 of the tariff act of 1930 a firm can challenge imports that infringe its u s intellectual property rights such as patents copyrights and trademarks based on publicly available information this paper examines the characteristics of firms that file complaints under section 337 and also evaluates how firms are affected by the outcomes we find a complaining firm compared with peer firms in the same industry is typically larger produces a more diverse range of products has invested more in intangibles and is no less profitable a finding of no violation significantly depresses the filing firm s profits compared to peers section 337 appears to protect innovators but its effectiveness in promoting more innovation cannot be demonstrated so clearly copyright 1996 by mit press

united states natural gas markets contracts and risks what lessons for the european union and asia pacific natural gas markets the article examines the natural gas markets of the united states the european union and the asia pacific region and their regulation and contractual structures the article s main focus is on the united states natural gas markets the european union and asia pacific markets are compared to this more developed market by comparing the physical and ideological characteristics of and differences between the three main international gas markets the article exposes the limits of regulatory and contractual transplants in this area of law and policy each of these markets is unique which limits the opportunities for modelling certain market institutions on the basis of the more developed markets in the united states this applies for both the eu and the asia pacific region

what drives health care expenditure baumol s model of unbalanced growth revisited the share of health care expenditure in gdp rises rapidly in virtually all oecd countries causing increasing concern among politicians and the general public yet economists have to date failed to reach an agreement on what the main determinants of this development are this paper revisits baumol s baumol w j 1967 macroeconomics of unbalanced growth the anatomy of urban crisis american economic review 57 3 415 426 model of unbalanced growth showing that the latter offers a ready explanation for the observed inexorable rise in health care expenditure the main implication of baumol s model in this context is that health care expenditure is driven by wage increases in excess of productivity growth this hypothesis is tested empirically using data from a panel of 19 oecd countries our tests yield robust evidence in favor of baumol s theory

fishing downstream the political economy of effective administered protection it is common knowledge that consuming downstream industries are harmed by import barriers placed on primary or intermediate upstream products the authors empirically examine th e natural result of these forces the flow of protection winding its way downstream after first discussing the effects of upstream protecti on on the supply and demand for protection downstream the authors exam ine recent trends in u s antidumping and countervailing duty cases in t wo major industry sectors metals and chemicals which between them fil ed more than 70 percent of all such cases in both chemicals and metals the tendency for upstream import protection to spread downstream is observed

russia s natural gas policy toward northeast asia rationales objectives and institutions the article examines the institutional dimensions of russia s gas policy toward northeast asia nea1 during the liberal economic reforms of the 1990s development of natural gas deposits in the russian far east was made possible under the scheme of production sharing agreements psa however new psas were banned in russia even before the advent of state capitalism in the early 2000s this was to a large extent the result of strong anti psa lobbying led by the domestic energy business elite consequently russia s gas policy in the east began evolving from being project specific toward being region specific contemporary russian gas policy toward nea relies upon domestic national and regional and external institutions in 2009 following the completion of a liquefied natural gas lng plant in sakhalin russia entered nea gas markets transformations in the international gas markets facilitated the establishment of a two pattern gas export policy in russia in 2013 under this policy russia s eu oriented pipeline gas export remains monopolised by gazprom while asia oriented lng export is partially liberalised russia has not been experiencing institutional discrepancy in nea gas markets however as the markets evolve toward greater coordination a rational option for russia is to genuinely liberalise its gas policy

the energy and co2 emissions impact of renewable energy development in china the authors are grateful for the support provided by the national key technology r d program from ministry of science and technology of grant no 2012bac20b07 we acknowledge the support of the national key technology r d program and the institute for energy environment and economy at tsinghua university which is supporting tianyu qi s doctoral research as a visiting scholar at the massachusetts institute of technology we acknowledge the support of eni icf and shell initial founding sponsors of the china energy and climate project this consortium of sponsors has provided support for researchers in the mit joint program to engage in a five year program of research focused on china none of the sponsoring organizations played a role in the study design collection analysis or interpretation of the data used for this study nor did they influence our decisions to submit the article for publication and all errors are our own

black hole tariffs and endogenous policy theory political economy in general equilibrium preface acknowledgments list of results 1 a preview of the results 2 endogenous policy theory a diagrammatic approach part i endogenous policy theory with specific factors the theory of industry tariffs in partial equilibrium 3 the probabilistic voting model of political efficiency and powerless politicians 4 endogenous lobbying theory and the contribution specialization theorem 5 endogenous tariff theory 6 the power function model of endogenous industry lobbying 7 three simple tests of the stolper samuelson theorem 8 the invisible foot and the waste of nations lawyers as negative externalities part ii endogenous policy theory in general equilibrium a long run theory of national tariff levels 9 the 2 x 2 x 2 x 2 model of endogenous redistribution theory 10 a prisoner s dilemma theory of endogenous protection the leontief model 11 the compensation effect and the multiple equilibrium trap 12 increasing returns to politics and factor endowments economic development and brazilian vitality versus the indian disease 13 endogenous protection in the united states 1900 88 14 a cobb douglas model 15 black hole tariffs 16 the endowment effect cross national evidence on endogenous tariffs part ii postscript 17 the senile industry argument for protection 18 optimal obfuscation and the theory of the second worst the politically efficient policy mathematical appendices references author index subject index

grid connected renewable energy in china policies and institutions under gradualism developmentalism and socialism abstract this communication displays some of our on going research on the incompleteness of china s advances toward best practice in policy making and institution building for renewables in particular this paper 1 summarizes how chinese policies and institutions for the deployment of renewable electricity are only partially compliant with what is internationally recognized as best practice and 2 contextualizes chinese policies and institutions for renewables in the broader picture of china s political economy much as a political economy perspective has aided the understanding of why chinese economic reforms were partial and unique the said contextualization might help explain why china s policies and institutions for renewables diverge from best practice further given that china proved successful in promoting its economic growth with partial and unique reforms the partiality and uniqueness of its renewables policies and institutions need not impede the rapid development of renewable electricity this on going research has so far combined a review of specialized literature and the business press with semi structured interviews held with relevant actors in policy business and research related to renewable energies

economics and politics the case of sugar tariff reform we study congressional voting on sugar tariff reform in 1912 to investigate theories of constituent influence on trade policy in this setting consumer interests enjoyed substantial political efficacy moreover since a variety of producer interests competed in the political marketplace we can evaluate which producer interests were most effective we explore these issues by integrating two techniques drawn from economics and political science overcoming some common problems encountered in political economy research we first conduct an event study to ascertain the relative incidence and importance of legislative events we then conduct a roll call regression on congressional votes to determine legislator responsiveness to different interest groups we find that wealthy and concentrated groups especially shareholders were not influential large unconcentrated groups in particular beet sugar laborers and sugar beet and sugarcane farmers were the most influential producer groups strikingly these la

modeling the experimentally organized economy complex dynamics in an empirical micro macro model of endogenous economic growth abstract the swedish micro to macro model moses is used to show how complex economic behavior emerges from interacting boundedly rational agents the simulation model has been calibrated using business firm data non linearities arise in its specification of technology the distribution of firm characteristics and in the rules that govern entry and exit the model economy is characterized by a restless competitive growth process that is normally robust but that now and then generates phases of local disorderly behavior including for some parameter settings the collapse of entire sectors the model explains why government agents have difficulty predicting the reactions of the economy to policies suggesting that government treads cautiously in order not to do more harm than good

lobbying counterlobbying and the structure of tariff protection in poor and rich countries a political economy model of protection is used to determine endogenously the intersectoral patterns of protection three propositions are derived that are consistent with the stylized patterns of tariff protection in rich and poor countries nominal protection rates escalate with the degree of processing protection is higher on average in poor countries and rich countries protect agriculture relatively more than they protect manufacturing whereas poor countries do the reverse numerical simulations for archetypal rich and poor economies confirm that the endogenously determined structure of protection is broadly consistent with observed patterns of protection

cascading contingent protection and vertical market structure abstract cascading contingent protection may occur when protection of an upstream industry transfers injury to the downstream industry and increases the likelihood that this industry asks and receives protection this paper examines cascading protection within a sequential petitioning model where the upstream industry acts as leader the analysis identifies market structure and the vertical linkage between the upstream and the downstream industry as important determinants of the occurrence of cascading protection it is shown that the circumstances which make cascading protection more likely to occur also make it more likely that this protection has serious negative welfare consequences

safeguards and retaliatory threats abstract this is the first empirical article to analyze the response of shareholders to the threat of retaliatory tariffs authorized by the world trade organization wto we use event study methodology to gauge the impact of european union eu retaliatory threats stemming from the 2002 imposition of u s steel safeguards results indicate that the u s stock returns of firms slated for wto authorized tariffs reacted negatively to the announcements signaling an increased likelihood of retaliation shareholders also generally responded positively to the early cancellation of the safeguards which removed the risk of retaliation industry level analysis indicates that producers of apparel tobacco and transportation equipment were particularly affected by the threat of retaliatory tariffs second stage estimates suggest that retaliatory threats have a more negative impact on firms with a higher export share to the eu greater profit growth and low research and development intensity

williamson s the economic institutions of capitalism there can be no doubt this book is a major contribution perhaps the volume is best characterized as a systematic theoretical examination of those portions of society s economic activities that the market mechanism does not automatically run to perfection but here such activities are not simply listed as market failures and forgotten rather they are treated appropriately as normal and widespread economic phenomena whose anatomy urgently requires examination and understanding vertical integration is an archtypical example if the unaided market mechanism did everything perfectly firms would rarely be able to enhance efficiency by integrating vertically it would usually be optimal for intermediate goods to be bought from independent suppliers on the free market i have more than once enjoyed teasing businesspersons bent on defending the vertical integration of their firms by suggesting that they are soviet central planners at heart and that when push comes to shove they have little use for the market mechanism in practice of course the truth generally lies somewhat in between for any given firm there is presumably an optimal degree of vertical integration determined by the requirements of economy in production and economy in the governance process or as williamson puts it of economizing in transactions costs the point is that a variety of institutions and behavior patterns really make sense primarily in terms of their relative efficacy in dealing with transactions costs that renders each in turn best in different circumstances decentralized and hierarchical organization of firms the vast variety of contractual forms franchising tie ins and many others these are the sorts of institutions to which williamson s analysis is devoted it should be said at once that i can find no major point of disagreement with his analysis on the contrary i enthusiastically accept the substance of all his central conclusions this extends also to williamson s characterization of the contestability literature and its relation to his own analysis which i believe he has done completely correctly as will be spelled out presently i have only two substantive reservations about the book the first is a slight tendency by the author to overstatement of claims for the new analysis a manifestation of enthusiasm which is no doubt commendable in a pioneer and in any event i know i am hardly in a

russian energy in the eu market bolstered institutionsand their effects the article examines institutional changes in eu russian energy relations since 2000 the article explores the ability of transformed institutions to limit the politicisation of energy and to reconcile the eu competitive market approach with russian state capitalism more specifically the article focuses on changes in intergovernmental transgovernmental and transnational interactions the article demonstrates that the gradual strengthening of transgovernmental and transnational institutions has inhibited the politicisation of energy relations and facilitated regulative cooperation between the eu and russia however the potential of shared institutions is constrained by internal institutions on both sides in russia these obstacles are insufficient top down delegation of responsibilities in the government and its great power aspirations in the eu key barriers include inter institutional rivalries the eu s propensity to impose its legislation on external partners and the integration of energy policy with foreign policy the article presents several policy implications first it is futile to institutionally impose the regulative paradigm of one partner on the other rather mutual dialogue is needed thus institutions should be structured appropriately second current depoliticisation will require the involvement of not only the eu and russia but also transit countries such as ukraine third transgovernmental and transnational cooperation should be nurtured because this is a useful channel for both information exchange and a regulative convergence of policy implementing mechanisms finally this incremental regulative convergence is the only option available today for the eu and russia this is also a way to further depoliticise energy relations

micro heterogeneity of firms and the stability of industrial growth abstract in the micro macro m m model moses real swedish firms make independent decisions in markets schumpeterian innovative activities and wicksellian capital market disequilibria generate a growth cycle production and investment decisions in firms are dynamically coordinated by markets for products labor and capital under different market regimes as to speed intensity of competitive processes and of innovative activity by varying market regime ceteris par leux long term growth rates of the economy can be generated at cliffe as much as between the industrial countries during the last 50 years high speed market processes increase output growth for long periods but make the model economy sensitive to disturbances that eventually generate a severe depression simulation results suggest the importance for stable macroeconomic growth of a steady input of innovative technical change through new investment new entry and exit to preserve micro diversity of structures

the chilling trade effects of antidumping proliferation advocates of antidumping ad laws downplay their negative effects by arguing that the trade flows that are subject to ad are small and their distortions negligible but while the adverse effect of ad on product level trade has long been established the question remains whether there are trade effects at the aggregate level the recent proliferation wave of ad laws and their use provides us with a unique policy change to estimate the true trade effects of adopting and enforcing ad laws for this purpose we estimate the effect of ad on bilateral trade flows between the new adopters of ad laws and their trade partners using a gravity model of annual observations 1980 2000 our estimates show that ad has trade chilling effects on aggregate import volumes but the impacts are heterogeneous across sectors we find that new tough users experience a chilling of their aggregate imports of 14 billion us a year or 5 9 as a result of ad measures for some countries like mexico and india the dampening effects of ad laws on trade flows are found to substantially offset the increase in trade volumes derived from trade liberalization

corporate lobbying in antidumping cases looking into the continued dumping and subsidy offset act is protection for sale in this research we examine the effect of corporate lobbying on the disbursement of proceeds of the recent antidumping petitions under the continued dumping and subsidy offset act the so called byrd amendment with the use of novel u s customs service data on the disbursements of the antidumping duties to the injured firms we find that the petitioning firms that spend more on lobbying gain larger proceeds we conclude that firms that lobby are the ones that get protection not necessarily the healthy ones

institutions in european and asian energy markets a methodological overview abstract this article introduces a methodological framework to study institutions in european and asian energy markets with a comparative case study on the eu and east asia a distinction is made between informal and three types of formal institutions and their transaction cost reducing order creating and ecological climatic functions the operation of energy markets is explained through the structure of institutions their types and functions it is found that order creating institutions guarantee enough stability mutual trust and solidarity among eu member states to support the competitive markets institution and supranational formal institutions as the underpinnings of trade in the internal energy market which nevertheless retains some corporatist features in the east asian markets the nature of order creating institutions sovereignty energy diplomacy and great power management prevents the emergence of supranational formal institutions and a shared idea of trade the prevailing structure has a large number of sub regional organisations with overlapping tasks and few powers in both markets the functions of institutions signify more than their number transaction cost reducing institutions are dependent on order creating institutions while both of these functions are better realised on the regional level than ecological climatic functions ultimately informal institutions are most influential

managed trade the us mexico sugar suspension agreements under the 1994 north american free trade agreement mexican sugar producers were ultimately granted free access to the us sugar market while all other suppliers including us refiners were subject to supply quotas following a surge in imports of mexican sugar the american sugar coalition initiated anti dumping and countervailing duty adcvd proceedings against mexico in early 2014 in december 2014 the adcvd cases were halted as a result of two suspension agreements negotiated between the us and mexico this paper contributes to a small number of empirical studies that have estimated the impact of suspension agreements we measure the impacts of the adcvd filings and the suspension agreements on us domestic raw and refined prices the raw to refined margin and the quantity and composition of sugar imports from mexico results suggest us raw sugar prices increased by 3 per lb 14 under adcvd proceedings equivalent to an ad valorem tariff between 40 and 50 while the suspension agreements increased us raw sugar prices by 5 70 tariff equivalent us refined sugar prices increased by similar amounts under the adcvd proceedings and the suspension agreements 4 5 per lb ultimately both the adcvd proceedings and the suspension agreements significantly reduced sugar imports from mexico us sugar refiner economic welfare hinges critically on the quantity and composition of raw sugar imports as such refiner revenue following the adcvd filings and suspension agreements is estimated to have declined by 16 relative to a free trade environment

wto tariff commitments and temporary protection complements or substitutes abstract there is a long held notion in the trade policy literature that traditional tariff instruments and temporary protection tp measures are substitutes despite this prediction there is only mixed empirical evidence for a link between tariff reductions and the usage pattern of antidumping safeguard and countervailing duties based on recent theoretical advances i argue in this paper that the relevant trade policy margin for implementing tp measures is instead tariff overhangs the difference between wto bound and applied tariffs lower tariff overhangs constrain countries to raise their mfn applied rates without legal repercussions independent of past tariff changes using detailed sectoral data for a sample of 30 wto member countries during the period 1996 2014 i find strong evidence for an inverse link between tariff overhangs and tp activity this result implies that tariff overhangs and tp measures are substitutes vindicating the importance of existing tariff commitments as a key determinant of alternative protection instruments

business cycles and the relationship between concentration and price cost margins using a newly constructed panel data base we examine changes in price cost margins in 284 manufacturing industries between 1958 and 1981 a key finding is a dramatic narrowing of the spread between the margins of concentrated and unconcentrated industries over this period we provide evidence that this narrowing is a result of the greater sensitivity of price cost margins in more concentrated industries to demand fluctuations this finding is robust to the inclusion of other industry variables and to measures of import competition the results indicate that cross sectional estimates of the concentration margins relationship are likely to be both biased and misleading

an examination of the impact of the garn st germain depository institutions act of 1982 on commercial banks and savings and loans this paper evaluates the effects of events leading to the passage of the garn st germain depository institutions act of 1982 the evidence suggests that the call for reform by president reagan s housing commission and the senate passage of the bill produced positive abnormal returns to stockholders of large savings and loans and commercial banks stockholders of small s ls and banks on the other hand generally experienced negative abnormal returns furthermore when hopes of passage of the act faded significant negative positive abnormal returns were experienced by stockholders of large small s ls and banks this study examines the impact of the passage of the garn st germain depository institutions gsgdi act of 1982 on commercial bank and savings and loan stockholder returns the gsgdi act represents one of two major revisions of the financial system over the last twenty years the other being the depository institutions deregulation and monetary control act of 19801 the proposal for such a change reflected the growing inadequacy of the regulatory structure of financial institutions to adapt to rapid changes in technology shifting consumer demands for financial services and extremely volatile interest rates efforts to reform the financial system resulted in passage of the gsgdi act of 1982 which included provisions seeking to improve both the implementation of monetary policy and the degree of equity in the regulation of financial institutions such improvements were intended to reduce the operational and financial risk of financial institutions a central issue in the economics of regulation is whether regulatory actions benefit the economic agents they are intended to benefit a large body of literature exists which examines the economic effects of regulation much of this literature has utilized the concepts and methods of welfare economics to assess the extent

thinking big politics progress and security in the management of asian and european energy megaprojects this article examines four energy megaprojects two in europe and two in asia for each region a large natural gas pipeline project and an international project involving solar power from the desert is studied the natural gas projects are the nabucco project in europe and the trans asean gas pipeline network in asia the solar power from the desert projects are desertec in europe and gobitec in asia the article probes explanations of megaproject failure along social technical economic political and psychological dimensions we find that these projects though they are very different in nature and pertain to different regions all suffer from a similar set of problems too many stakeholders and stakeholder fragmentation cost overruns and the risk of accidents and attacks massive externalization of costs to third party stakeholders concentration of wealth and corruption and inflated expectations and biased projections we conclude by reflecting on lessons for not only the involved institutions and investors but energy analysts and the public at large

cyclical fluctuations and coordination in the us steel industry the model developed uses a measure of the discrepancy between price and marginal cost to estimate the effects of domestic demand fluctuations on the degree of oligopoly coordination in the us steel industry due to the importance of imports however domestic demand fluctuations occur whenever market demand and or import supply shift consistent with several recent game theoretic models our results show that coordination among us steel producers tends to be weakest when market demand is high and import supply is low

austrian and neoclassical economics any gains from trade austrian economics has been important to the development of modern economics but its role in current practice is much diminished the neoclassical approach dominates today s thinking many austrians bemoan this state of affairs most neoclassical economists just ignore it but austrian and neoclassical economics aren t mutually exclusive each represents a distinctive point of view although with little meaningful intellectual exchange between them these days this is unfortunate many different concepts are associated with both austrian and neoclassical economics to concentrate on where the most exchange of ideas might occur i am concerned about those aspects of austrian economics primarily dealing with the process of competition and that portion of neoclassical economics primarily dealing with the determination of economic equilibrium this in a nutshell is the main intellectual difference between them some consequences of this difference are discussed in what follows i hope to show that mutually advantageous gains from trade exist austrian economics offers a valuable perspective of the economy as an evolutionary process akin to biological evolution with entrepreneurial activities representing the main instruments of change it is primarily a macroeconomic theory of the economy as a whole with keen insights on the nature of decentralization and the process of competition that deserve more attention neoclassical economics offers a microeconomic theory of economic behavior that is especially useful for analyzing specific economic problems and for orienting analysis around more sharply described empirical phenomena and data

overview of the northeast asia energy situation abstract rapid economic growth in northeast asia has vastly increased regional needs for energy services in several countries of the region this ongoing growth has been accompanied by significant environmental problems the countries of the region already constitute the largest import market for liquefied natural gas lng the region has accounted for a progressively larger share of world primary energy use its share has risen from under 19 in 1999 to over 25 in 2007 though the region as a whole possesses resources that could contribute substantially toward its future energy needs many major energy resources are far from population centers as such major infrastructure investments will be required to bring these resources to market this article provides a description of the current situation of energy demand and supply in northeast asia summarizes recent trends in energy supply and demand and of the drivers that underlie energy use in the region also presented are projections of energy use and of key impacts of energy use such as greenhouse gas emissions in the region other impacts of continued growth in energy supply and demand in northeast asia are reviewed qualitatively

steel safeguards and the welfare of u s steel firms and downstream consumers of steel a shareholder wealth perspective this paper analyses the steel safeguards applied during 2001 3 results reveal that for shareholders of u s steel companies safeguards generated positive abnormal returns of approximately 6 the cancellation of the safeguards resulted in wealth gains of about 5 steel shareholders experienced negative abnormal returns of 5 in response to the wto ruling that the u s had violated wto law our results are consistent with the neoclassical view that producers gain at the expense of consumers also findings indicate that downstream consuming firms that diversify production in nafta countries avert some trade policy risk associated with higher steel costs caused by safeguard protection ce texte analyse l effet de la protection des acieries americaines au cours de la periode 2001 03 les resultats montrent que pour les actionnaires des societes americaines cette protection a engendre des profits anormaux de l ordre de 6 l annulation de cette protection a resulte en des gains de richesse d environ 5 les actionnaires des acieries ont subi des rendements anormaux negatifs de l ordre de 5 a la suite de la decision de l omc a savoir que les etats unis avaient enfreint la loi ces resultats sont consistants avec le point de vue neo classique qui suggere que les producteurs gagnent au detriment des consommateurs de plus les resultats indiquent que les entreprises consommatrices d acier en aval qui ont diversifie leur production dans les pays de l alena se sont premunies contre certains risques associes a la politique commerciale et aux hauts couts de l acier engendres par la protection

contestable markets an uprising in the theory of industry structure presents a transcript of the presidential address delivered at the 94th meeting of the american economic association on december 29 1981 discussion of developments in the theory of industry structure welfare attributes of contestable markets behavior characteristics of oligopoly equilibrium intertemporal vulnerability to inefficient entry ebsco

the empirical measurement of rent seeking costs this survey focuses on the efforts carried out mainly by public choice scholars to measure the social cost of rent seeking the concept introduced by gordon tullock in 1967 and coined by anne krueger in 1974 is well known and accepted by the profession but its empirical measurement has fallen behind with respect to its theoretical formulation an often criticized lack in the literature although there are good general surveys none has specifically focused on reviewing the empirical efforts made to measure the phenomenon the purpose of this paper is to provide such a survey it could be said that the rent seeking concept has been fully integrated into economic jargon it is commonly used when some agent seeks to obtain an artificial transfer usually from government and covers all the actions efforts or expenses that the agent has to carry out to obtain the prize the key issue however is the possible social waste that arises in these situations the empirical efforts to measure such waste constitute the main purpose of this survey the concept of rent seeking was introduced by tullock 1967 although the term was first coined by krueger 1974 in a paper not related to the former in a recent paper tullock himself wrote of the history of the concept and the intellectual context within which it arose tullock 2003 starting with the pioneering work by harberger 1954 several studies were conducted during the 1950s in which the calculation of the social cost of monopolies and tariffs always gave the result of very modest figures the first response to these results was made by leibenstein 1966 and his x efficiency which refers to a hypothetical loss in efficiency due to the absence of competition shortly after leibenstein s paper appeared tullock argued that the deadweight costs of monopoly and tariffs understate the true social cost because the expenditures made to capture related rents have to be included so rectangles as well as harberger s triangles have to be included in the calculations let us see this argument once more figure 1 depicts the iconic tullock graphic analysis of rent seeking it represents the demand schedule d for a monopolized good where pm is the monopoly

the heterogeneous impact of brexit early indications from the ftse abstract the uk s decision to leave the eu is surrounded by several studies simulating its potential effects we take an alternative approach by examining how news of brexit affected expectations as embodied in stock returns using a two stage estimation process while most firms had negative returns following news of the referendum s result with nearly 3 trillion wiped off global markets there was considerable heterogeneity in their changes relative to expectations we show that this heterogeneity can be explained by the firm s global value chain with firms heavily exposed to the eu and uk doing worse in addition we find that firms reliant on imported intermediates also perform worse this however is partially offset via intra firm trade in intermediates when sterling fell relative to host currencies these changes were primarily in the first two trading days and highly persistent understanding these movements gives a better understanding of brexit s potential effects

william j baumol an entrepreneurial economist on the economics of entrepreneurship william j baumol is the 2003 winner of the international award for entrepreneurship and small business research throughout his career baumol has urged the profession to pay attention to the instrumental role of entrepreneurship in economic renewal and growth at the same time he has insisted that economists continue to use their usual tool box when the purview of analysis is extended to entrepreneurship hence baumol can be characterized as a revolutionary from within in this article we present and discuss baumol s research contribution in the areas of entrepreneurship and small business economics notably from a growth perspective in addition to placing his work in these areas into the wider context of his full contribution we emphasize baumol s findings that growth cannot be explained by the accumulation of various factors of production per se human creativity and productive entrepreneurship are needed to combine the inputs in profitable ways as a result an institutional environment that encourages productive entrepreneurship and human experimentation becomes the ultimate determinant of economic growth

firm participation in steel industry lobbying firm participation in steel industry lobbying i introduction what are the causes of recent protectionist pressure exerted by u s import competing firms studies by coughlin terza and khalifah 1989 feigenbaum and willett 1985 and takacs 1981 examine the empirical relationship between macroeconomic conditions and the aggregate frequency of escape clause petitions file by u s manufacturing firms although the results are mixed as to whether international macroeconomic performance influences the demand for protection the studies indicate that domestic macroeconomic conditions significantly influence the frequency of escape clause petitions 1 as important as these are to understanding the underlying sources of protectionist pressure they do not address another equally important aspect of protectionist pressure the determinants of a single industry s demand for protection the fact that most protectionist pressure results from actions taken by individual industries underscores the importance of understanding the determinants of industry pressure indeed most trade legislation is designed to respond to the problems of individuals sectors of the economy in this paper we empirically examine the microeconomic determinants of the protectionist pressure exerted by the u s steel industry in antidumping and countervailing duty cases from 1982 after the trigger price mechanism was abolished to 1986 the steel industry is a particularly attractive subject for empirical analysis since no other industry pushed more aggressively for protection during the 1980s in recognizing that the degree of pressure exerted by an industry is the aggregate result of decisions made by individual firms to contribute to a collective action the microeconomic approach offers two advantages over previous studies 2 first to explain industry pressure we model the decision of the representative firm taking into account the incentives that a firm faces in a collective setting for example we recognize that the benefits of antidumping and countervailing duties have characteristics of a public good so that individual firms may have an incentive to free ride a proposition supported by the empirical results second we specify microeconomic variables that reflect the economic conditions facing the representative firm in the steel industry rather than macroeconomic variables which may not accurately measure the economic performance of specific industries or the international pressures they face in contrast to previous studies which found a significant relationship between macroeconomic performance and aggregate pressure we do not find that the steel industry s economic performance influences the degree of industry pressure our second objective is to examine the policy implications of free riding by testing the relationship between the effectiveness of a coalition of firms and the degree of protection actually received if an effective coalition of firms can influence the policy outcome then antidumping and countervailing duties are more likely to be provided to segments of the steel industry that can minimize the free rider problem since these segments are not necessarily those that absorb the greatest injury u s trade policy may not be meeting its goal of providing greater relief to firms most injured by dumped or subsidized imports the results confirm the proposition that segments of the steel industry which are injured by dumped or subsidized imports and which can organize an effective coalition do in fact receive greater protection than those segments that are merely injured ii the representative firm s decision to contribute to a less than fair value action to obtain protection from alleged less than fair value lfv imports imports that are either dumped by foreign firms or subsidized by foreign governments firms representing a domestic industry must file a complaint of foreign dumping or export subsidization with the international trade administration ita which then determines the magniture of dumping or subsidization

adam smith s analysis of joint stock companies we defend adam smith s theory of the firm from the standpoint of positive economics we argue that his evaluation of the joint stock firm was not moralistic but instead based on available empirical evidence the record showed that joint stock companies had a poor survivorship record even when granted legal monopoly status his analysis contained an explanation of the role of agency costs within the firm finally he did not discuss the east india company as an ordinary joint stock firm but rather as an aberrant form created by government

market responses to antidumping laws some evidence from the u s chemical industry in this paper the authors provide empirical evidence of the effects of the u s antidumping law using monthly product specific macroeconomic data from the u s chemical industry over the 1976 88 period they analyze import responses highlighting the differences between allegedly dumped and nondumped import behavior at the various stages of an antidumping investigation the authors find a wide range of behavioral responses that do not necessarily appear to be dependent upon the final outcome of the investigations and in some cases contradict the accepted wisdom of the impacts these cases have upon import behavior

optimal cartel equilibria with imperfect monitoring abstract there exist optimal symmetric equilibria in the green porter model 4 8 having an elementary intertemporal structure such an equilibrium is described entirely by two subsets of price space and two quantities the only production levels used by firms in any contingency the central technique employed in the analysis is the reduction of the repeated game to a family of static games

perspective explaining influence rents the case for an institutions based view of strategy research in strategy has identified and tried to explain four types of rents monopolistic rents efficiency rents quasi rents and schumpeterian rents building on previous work on political and institutional strategies we add a fifth type of rent influence rents influence rents are the extra profits earned by a firm because the rules of the game laws regulations and informal rules are designed or changed to suit it to aid the analysis of the relationship between institutional context and firm performance and to provide a structure to guide research we develop a framework with five key components a an identification of the five fundamental problems of a market economy b a typology that describes the five different types of institutions that emerge to solve these problems c the market ordering mechanisms used by institutions to solve these problems d the common causes of weak institutional performance and e generic strategies used by firms to exploit these weaknesses of an institutional context to enhance firm performance we highlight potential applications of the framework as well as an illustrative research agenda that can advance the development of theory to explain the emergence and persistence of influence rents

stock price effects of u s trade policy responses to japanese trading practices in semi conductors over much of the last decade the united states and japan have been embroiled in a trade dispute over access to japanese markets for semiconductors and downstream products this study examines stock price reactions for firms affected by a subset of events commencing with the filing of a section 301 petition by the u s semiconductor industry association alleging unfair practices by the japanese and culminating in the 1986 trade agreement the evidence suggests that u s semiconductor consumers as well as producers benefited from these events

institutional change in european natural gas markets and implications for energy security lessons from the german case this article focuses on institutional change in the german gas market driven by eu internal market and climate policies it argues that institutional change has functional externalities for energy security the german gas market provides a useful case study as germany is the biggest continental gas market a major hub and transport country which has largely privatised unbundled and separated its natural gas undertakings transition is ongoing tending towards an internal market inter national natural gas economics is in flux institutional evolution has repercussions for corporate and market structures the operating of the system and the realization of transactions changes in the institutional framework crucially affect energy security which is often associated with institutional stability on the basis of this case study it is argued herein that the security of natural gas supplies should be reexamined in the context of the developments described above since overall the institutional changes in natural gas security lag behind the eu s internal natural gas market development

energy market integration and regional institutions in east asia abstract this article assesses the case made for energy market integration in east asia by comparing the role of institutions in south east asia and north east asia the types and functions of institutions and their overall structure are examined in light of global energy market trends in south east asia the shift attempted by asean towards more competitive markets is hampered by the remaining statist variants of the trade institution and bilateral energy diplomacy which as regards transaction cost functions are sub optimal as for institutions with order creating functions the unresolved status of sovereignty within asean hampers regulatory harmonisation the great power management institution has since asean s establishment reduced conflicts without providing decisive leadership conducive to integration north east asia s dependence on global energy markets overshadows the regional integration potential of the diverse liberalisation efforts and interconnection projects bilateral energy diplomacies new trilateral institutions combined with track two institutions and remaining great power competition co exist in both regions the institutional structure allows for step wise technical infrastructure integration the environmental stewardship institution co exists with statist energy security and development objectives while it supports cooperation on green energy the overall structure of informal institutions constrains deeper energy market integration in several ways

rent seeking protectionism and innovation in the american steel industry trade protection in a declining industry can cause damages beyond those revealed in the usual trade diagram analysis using data on the us steel firms we show that trade protection in that industry rewards poor performance reduces incentives to innovate and frustrates the normal schumpeterian process of creative destruction free trade gives consumers the lowest prices nonetheless protectionism in various guises is pervasive this we show is probably due to political rentseeking by groups that expect to lose as trade patterns adjust to innovation and altered economic conditions these groups invest in political lobbying to secure future returns in trade protection we find empirical evidence that trade protection returns private benefits to the shareholders senior workers and ceo s of lobbying firms perhaps more disturbingly trade protection also appears to reward less innovative firms and may thus frustrate the schumpeterian development of an industry we examine us steelmakers among the most active lobbyers in recent decades steel firms that lobby congress for protection tend to be larger older less diversified and less profitable than non lobbyers they pay their workers and ceos more and their ceos have longer tenure and are more likely to have risen through the ranks of their companies this suggests the owners managers and workers of less dynamic steel firms stand to lose from free trade the announcement of protection raises the stock prices of us steelmakers but by much more for lobbyers than non lobbyers when comprehensive and enduring protection was finally announced lobbyers more than non lobbyers cut jobs while maintaining or possibly increasing wages once comprehensive protection is in place protection also leads to large pay increases for lobbyers ceos this seems consistent with rent seeking and inconsistent with protection helping lobbyers mitigate social consequences of downsizing like unemployment our most striking finding is that high past r d spending is negatively correlated with stock price changes when proteption is announced and positively correlated with subsequent exit from the industry this seems inconsistent with protection providing a hiatus for retooling rather it suggests

the excess supply pure demand approach to international commodity trade the case of japanese steel exports to the united states the purpose of this paper is twofold 1 to develop a theoretical framework for the analysis of export supply which is empirically more fruitful than existing approaches and 2 to present an empirical application of the theory to the market for japanese steel thereby quantifying important export supply elasticities not dealt with in the past evidence is presented which indicates that the supply of japanese steel exports to the u s is price elastic and sensitive to japanese and rest of world demand conditions

contestability vs competition analyzes the ultra free entry as normative contribution to industrial organization ultra free entry in context of the evolving field of industrial organization assessment of the conceptual validity of william baumol elizabeth bailey john panzar and robert willig s analysis in representing the nature of competition empirical issues in measuring and testing ultra free entry ebsco

foreign subsidization and excess capacity abstract the u s steel industry has long held that foreign subsidization and excess capacity has led to its long run demise yet no one has formally examined this hypothesis in this paper we incorporate foreign subsidization considerations into a model based on staiger and wolak s 1992 cyclical dumping framework and illustrate testable implications of both cyclical excess capacity and structural excess capacity stemming from foreign subsidization we then use detailed product and foreign country level data on steel exports to the u s market to estimate these excess capacity effects while the full sample results provide evidence of both cyclical and structural excess capacity effects for exports to the u s market these effects are confined to such a narrow range of country product combinations that it is unlikely that such effects were a significant factor in the fortunes of u s steel firms over the past decades

imports as a threat to cartel stability abstract it is an old story that increased imports may have competitive effects on a domestic market the usual effect is felt through a reduction in demand for the products of the domestic industry what is more subtle is the effect that imports in particular an unexpected surge in imports from a new source country may have on the stability of a domestic cartel and more generally on the conduct of a domestic oligopoly implying a further competitive influence of international trade this paper discusses the issue in the context of several models and presents some relevant evidence from a recent case brought before the u s international trade commission

natural gas in asia trade markets and regional institutions natural gas trade in asia has been dominated by long established market structures under which liquefied natural gas lng has remained indexed based on the price of crude oil high transaction costs in the region in recent years imply that the regional market is sub optimally organized since 2010 the continued prevalence of oil indexation has had the most adverse effect on japan the world s largest lng importer in response japan implemented several strategies to challenge traditional lng pricing mechanisms in the region and ultimately reduce transaction costs japan s efforts include an increase in the share of spot and short term purchases sourcing new supplies from the united states under alternative pricing arrangements and driving regional buyer cooperation this paper evaluates the potential effect of japan s lng strategy on regional pricing in the broader institutional context arguing that lng pricing in the region will only partially shift away from oil indexation by the end of the decade while recent cooperation among regional lng importers indicates that there may be scope for change in the regional institutional setting the degree of cooperation is insufficient to have a profound effect on regional pricing

contestable markets and the theory of industry structure alreview articleo phe new book by william j baumol john c panzar and robert d willig is the culmination of several years of research on the related problems of understanding multiproduct cost structures and their implications for competition and market performance it is a significant book for several reasons the empirical reality that forms the starting point for the theoretical work is i think widely recognized to be important cost structures constitute one of the foundations of competitive strategy and strongly influence industry structure notwithstanding this fact the amount of microeconomic theory directed toward competitively relevant attributes of costs has been if not minimal then certainly more limited than the subject deserves in fact prior to the work of our authors economists and business strategists did not have a language or a set of concepts with which to talk precisely about scale economies in a multiproduct setting we now have at least the beginnings of such a language and a body of theory that provides a grammar for using it the theory of contestable markets was the subject of baumol s presidential address at the american economic association meetings in washington in december 1981 both the theory and its presentation have generated controversy useful controversy i think because it helps clarify issues that need attention i shall have remarks to offer later in this review concerning the normative and descriptive relevance of the contestable markets hypothesis my plan for this review is as follows i begin by outlining some of the principal definitions and propositions of the theory this outline should not be mistaken for a complete summary of the book but the economist who has not yet read the book needs a reasonably detailed picture of the approach few of the propositions require long proofs in fact once they are stated the proofs are often simple exercises having outlined some of the principal concepts i comment upon their usefulness for understanding markets and finally i conclude by suggesting some ways in which the general subject may be pursued from this point forward

do announcements of wto dispute resolution cases matter evidence from the rare earth elements market abstract rare earth elements rees have gained increasing attention recently for several key reasons 1 they are vital to many strategic industries 2 they are relatively scarce 3 they frequently exhibit high price fluctuations 4 china holds a quasi monopoly on their mining and 5 china s ree policy which was overly restrictive and led to a formal complaint from the u s japan and the eu at the world trade organization wto in 2012 this paper investigates whether the announcement of a wto dispute resolution case has the power to fundamentally change market dynamics we find empirical support for this notion because ree prices exhibit a structural break around the announcement of the wto dispute and show lower variance ratios for all tested rees afterward this indicates a tendency toward efficiency although ree prices still do not follow a random walk similarly we find that stock price informativeness of companies in the ree industry increases after the announcement reflecting more firm specific than marketwide information and less governmental influence finally we show that model uncertainty for option pricing models decreases which we measure by the lower pricing differences among them

the internationalization of small and medium sized enterprises a policy perspective small and medium sized firms play an impor tant role in the process of creative destruction the focus of the paper is on the international diffusion of small and medium sized firms innovations small and medium sized firms face two challenges in globalization property rights protection and barriers to entry we suggest that these barriers can frequently be circumvented by using existing multinationals as interna tional conduits for small and medium size firms innovations however such intermediated modes of expansion is adversely affected by transaction difficulties and intermediator s rent extraction we raise two categories of questions i is the private sector systematically making the wrong choice between the direct and intermediated mode of international expansion and ii what should be the policy guidelines to improve the overall rate of international diffusion of innova tion by small and medium sized enterprises

the value of administered protection a capital market approach the focus of this paper i s on the escape clause petitions filed under the trade act of 1974 section 201 first the capital marketevent study method is used to analyze the effects of protection decisions then cross section regressions are performed to examine the influence of key variables on the observed market reaction the authors conc lude that while protection is beneficial to beleaguered industries the extent o f such benefits is quite narrowly circumscribed and is conditional on internal v ariables for each firm protection is thus not the panacea that its advocates cl aim copyright 1986 by mit press

the impact of cyclical demand movements on collusive behavior recent work by rotemberg and saloner 1986 investigates the effect of the business cycle on optimal collusive pricing by specifying that demand is subject to i i d shocks an implication of the i i d assumption is that firms expectations on future demand are unrelated to the current level of demand we put forth a model that allows for both the level of current demand and firms expectations on future demand to change over time thus it captures two important properties of the business cycle our analysis reveals that while the gain to deviating from a collusive agreement is greatest during booms firms find it most difficult to collude during recessions as the forgone profits from inducing a price war are relatively low an implication of this effect for pricing behavior is that at the same level of demand price is lower when demand is declining than when demand is rising consistent with previous theoretical work we find that firms price countercyclically for a range of values for the discount factor however numerical simulations reveal a greater tendency for firms to price countercyclically during recessions than during booms

event studies in economics and finance the event study is an important research tool in economics and finance the goal of an event study is to measure the effects of an economic event on the value of firms event study methods exploit the fact that given rationality in the marketplace the effects of an event will be reflected immediately in security prices thus the impact can be measured by examining security prices surrounding the event in this paper event study methods are described including some of the potential complications an example is included to illustrate the approach

import competition product quality reversal and welfare abstract we investigate product quality in an import competing country using the framework of vertical product differentiation comparison of three polices suggests that the quality based r d subsidy brings quality reversal leading to a win win win equilibrium in consumer surplus domestic profit and social welfare

antidumping signaling and cheap talk abstract in the united states there is evidence that domestic non filing firms do not always support dumping countervailing duty investigations absent other factors domestic firms have an unambiguous incentive to support petitions filed by other domestic producers we argue that in cases where the non complainant firm is not a significant importer or exporter the most plausible explanation is that non support acts as a costly signal of private information extending the model to allow firms to engage in cheap talk such signaling can take place even in the absence of an investigation this result provides an explanation for the puzzling observation that fewer antidumping investigations are filed than one would expect

habitual and occasional lobbyers in the u s steel industry an em algorithm pooling approach bernard yeung using u s steel firm data we find that lobbying for import protection appears to be habit forming to identify heterogeneity in lobbying behavior among firms we use an expectation maximization algorithm to sort our firms into groups with different propensities to lobby and estimate the determinants of lobbying in each group a two pool model emerges occasional lobbyers lobbying depends on their market performance and habitual lobbyers lobbying only depends on past lobbying the latter tends to be larger steel firms whose business is more focused in steel our evidence is consistent with dynamic economies of scale in protection seeking breeding protection dependent firms jel f13 1 introduction rent seeking activities plausibly have dynamic economies to scale past rent seeking experience should reduce the cost of further rent seeking and increase its return thus rent seekers may over time become more prone to further rent seeking and even become dependent on it given the large welfare losses theoretically associated with rent seeking e g bhagwati 1982 1988 and magee et al 1989 a better understanding of actual rent seeking behavior is required in particular empirical verification of the self sustaining nature of rent seeking is of fundamental importance lobbying for protection from import competition is a form of rent seeking this article uses data on lobbying for protection by firms in the steel industry in the 1970s and 1980s to show that a habit forming effect does exist in a preliminary investigation we pool all firm level data and find that past lobbying increases the current tendency to lobby however not all firms have the same propensity to lobby to allow heterogeneity among firms dependence on past lobbying we apply an expectation maximization em algorithm approach dempster et al 1977 to a lagged dummy model heckman 1982a 1982b this lets our firms sort themselves into groups according to the determinants of their lobbying activity our statistical results suggest that an acceptable division of our data is a division into two groups occasional lobbyers whose lobbying depends on the firm s market performance and habitual lobbyers whose lobbying is essentially unrelated to the firm s business situation and depends mainly on past lobbying firms that never lobby for protection end up in the first group greater firm size and greater focus in steel production are associated with increased lobbying in both groups but the influence is stronger for occasional lobbyers past sales growth and spending on modern equipment are associated with curtailed lobbying by occasional rent seekers but are unrelated to lobbying by habitual rent seekers changes in cash flow have no influence in either generally habitual lobbyers are larger firms whose business is more concentrated on steel they are naturally more inclined than occasional lobbyers to initiate lobbying however their lobbying appears to have become a habit divorced from their market pe rformance these results are consistent with the presence of economies of scale in rent seeking and with rent seeking being habit forming e g magee et al 1989 in the next section we describe the intensive lobbying for protection in the u s steel industry in the 1970s and 1980s we justify our contentions that lobbying for protection by steel firms in the sample period may be habit forming and that different groups of firms should have dissimilar propensities to lobby for protection in section iii we explain the em algorithm approach we explain the data in the fourth section and report our results in section v section vi concludes ii habitual and occasional lobbying in the u s steel industry in the united states domestic firms under import competition pressure often complain to the government about unfair foreign practice