the impact of spatial patterns in road traffic externalities on willingness to pay estimates studying traffic related externalities in the city of gent belgium we find little to no evidence that observed spatial dependencies in actual objective externality levels play a direct role in determining spatial dependencies in the willingness to pay wtp for changes in the city s mobility policy investigating alternative factors that can influence wtp estimates however reveals that higher stated subjective externality levels are positively correlated with higher wtp for reducing exposure to noise air and odor pollution our results suggest complex interactions between housing decisions perceived externality levels and wtp estimates thus allowing for subjective perceptions sorting behavior and patterns in individuals characteristics can result in wtp estimates that are not spatially correlated even though the underlying externalities are spatially correlated

the demand for housing in sweden equilibrium choice of tenure and type of dwelling abstract most studies of housing demand and tenure choice only identify two modes of tenure owner occupied one family houses and rental apartments furthermore they are typically based on a cross section across all households in this study we use recent swedish data to overcome these weaknesses we identify owner occupied apartments coop shares as a third mode of tenure and show that this should be treated separately we also use information about the household s own assessment of its probability of moving during the next year we demonstrate that it makes a large difference if likely movers are eliminated from the sample

the limits of explanation testing the internalization theory of the multinationial enterprise the paper explores the difficulties of testing the internalization approach in the modern theory of the multinational enterprise the structure of the theory is elaborated and the conclusion drawn that testing cannot occur at the most general theoretical level but that the theory requires careful restricting assumptions to be placed on it to allow rigorous testing several empirical circumstances would constitute refutation if they could be shown to hold however the use of unconventional cases or outliers does not constitute disproof more rigour is required in formulating and testing the theory but the current verdict on the theory must be not disproven

a microsimulation model of swedish housing demand abstract this paper presents a microsimulation model of housing demand aimed at analyzing effects of changes in tax schedules like many other countries sweden s income tax laws treat homeowners and renters asymmetrically therefore most changes in tax laws will affect housing demand and tenure choice we develop a microsimulation model which generates consistent estimates of the mean and variance of total housing demand and show that commonly used measures like analytic elasticities evaluated at mean values of the exogenous variables can yield very misleading predictions our model can be used to simulate almost any change in the tax system here we report results of three simple experiments one of which is a change in the rate at which imputed income from owner occupied housing is taxed

distortionary taxes and the provision of public goods economists have long been concerned with finding an efficient level of public expenditure the classic statement of the problem was given by paul samuelson 1954 an optimal level of expenditure is where the sum of the marginal rates of substitution between the public good and a reference good equals the marginal rate of transformation between the public good and the reference good mrs mrt however samuelson s formula assumes that all of the revenue needed to finance public goods can be raised with lump sum taxes since this is not generally possible the formula must be modified to account for the distortionary effects of the tax system an appropriate modification is to multiply the cost side of the equation by a term that is commonly called the marginal cost of public funds mcf in the case of samuelson s formula where government is entirely financed with lump sum taxes the mcf would be exactly 1 0 in the traditional view of economists distortionary taxes cause the mcf to be greater than one thus raising the cost of providing public goods in this paper we discuss some cases where the mcf may be less than one we will illustrate this possibility using numerical examples for labor taxes

why voluntary export restraints are voluntary the paper presents an analysis of the effect upon an oligopolistic equilibrium of introducing a voluntary export restraint ver upon an importing firm a ver set at the free trade level of imports is shown to raise the profits of all firms within the industry the result follows as the imposition of a ver upon a free trade nash price competition forces the domestic firm to become an industry price leader the ver raises industry prices by facilitating collusion and lowers consumer welfare pourquoi les restrictions volontaires d 1 exportation sont volontaires ce memoire presente une analyse des effets de l introduction de restrictions volontaires a l exportation rve sur une entreprise qui importe dans un monde en equilibre oligopolistique on montre que l introduction de rve approximant le niveau des importations en regime de libre echange devrait augmenter les profits de toutes les entreprises dans l industrie cela decoule du fait que l imposition de rve sur un univers de concurrence par les prix a la nash en regime de libre echange force l entreprise domestique a devenir le leader en prix l introduction de rve augmente le niveau des prix de l industrie en facilitant la collusion et de ce fait reduit le niveau de bien etre des consomrnateurs

on the optimality of the nordic system of dual income taxation abstract in recent years the nordic countries have introduced a so called dual income tax which combines a proportional tax on capital income with progressive taxation of labour income the paper argues that this asymmetric treatment of the two types of income can be defended on pure efficiency grounds because the progressivity of the labour income tax serves to reduce the private return to human capital investment thereby offsetting the tendency of a proportional comprehensive income tax to discriminate in favour of such investment the analysis is based on an overlapping generations model of a small open economy where consumers face a trade off between investment in human capital and investment in non human capital extended versions of the model allow for liquidity constraints and an endogenous labour leisure choice

valuing option existence and bequest demands for wilderness to assess the relative importance of current costs and future benefits of nuclear waste storage we develop a simple model of bequest value the basic model of nonparternalistic altruism is extended to account for the uncertain nature of the externality

do urban neighborhoods benefit from homeowners evidence from housing prices homeownership is heavily subsidized in most countries the adverse effects of this policy on economic efficiency and income distribution are well documented in the economics literature the main argument in favor of subsidizing homeownership is that it creates positive externalities that offset these adverse effects in this paper we test whether homeowners create positive externalities that capitalize into housing prices in multi storey buildings using semi parametric hedonic regressions with and without instrumental variables we find no evidence of positive externalities although the results with instrumental variables are somewhat imprecise this result is robust to several sensitivity checks and to a relaxation of the identification assumptions of our instrument using set identification

willingness to pay for land preservation across states and jurisdictional scale implications for benefit transfer in stated preference valuation of farmland preservation respondents are often told that preservation will occur within various jurisdictional scales that is community or state but are not told the specific location of parcels the resultant availability of welfare estimates for different scales and regions provides numerous avenues for benefit transfer this paper provides a systematic assessment of transfer error contrasting different methods for the transfer of farmland preservation values across states and jurisdictional scales results drawn from multistate choice experiments suggest that the choice of across scale versus across state transfer method can have significant implications for transfer validity

comparative reliability of the dichotomous choice and open ended contingent valuation techniques abstract the comparative reliability of dichotomous choice and open ended contingent valuation methods cvm is evaluated by resurvey of the same households 9 months after their original survey test retest correlations on willingness to pay are statistically significant at the 1 level and range from 0 57 for the dichotomous choice cvm to 0 62 for the open ended cvm the test retest correlations were not statistically different between dichotomous choice and open ended cvm a likelihood ratio test for temporal stability of each method s willingness to pay functions indicates stability half of the time for both methods

vertically summing public good demand curves an empirical comparison of economic versus political jurisdictions fiscal equivalence for efficient provision of a public good requires perfect correspondence between political and economic jurisdictions however the spatial extent of the economic jurisdiction is an empirical question drawing on four survey based valuation studies we measure the relative public good benefit gradient as a function of residential location from six natural resource public goods the results indicate commonly used state political jurisdictions reflect an average of 13 of total benefits in the economic jurisdiction although with a logarithmic form for distance the upper confidence interval of state benefits can include 100 for some species

optimized quantity within distance models of spatial welfare heterogeneity abstract spatial welfare heterogeneity is frequently modeled within stated preference analysis as a function of discrete or continuous distance between households and affected resources a common example is distance decay analysis although distance based models such as these are easily estimated the ubiquity of this paradigm can lead to analyses that overlook other forms of analysis with equal or greater relevance this paper develops an alternative approach to spatial heterogeneity in stated preference willingness to pay wtp based on the quantity or area of an affected resource surrounding each respondent at an optimized distance band or radius with distance bands optimized using a grid search algorithm that maximizes model likelihood methods and results are illustrated using a choice experiment on riparian land restoration in maine usa the resulting quantity within distance model identifies systematic spatial patterns that are undetectable using distance based analysis and directly relevant for welfare analysis

estimation of distance decay functions to account for substitution and spatial heterogeneity in stated preference research in a site selection choice experiment various hypotheses are tested related to spatial heterogeneity in willingness to pay wtp for environmental improvements spatial heterogeneity is measured through distance decay effects substitute sites inside and outside the experiment s choice set and spatial trend variables we demonstrate that distance decay functions differ between users and nonusers and across study sites also the distance to substitutes outside the choice set explains spatial variation in wtp we show that further extending the model with spatial trend variables reveals additional spatial heterogeneity in choices accounting for spatial heterogeneity patterns results in significantly different wtp estimates for environmental improvements jel q25 q51

nonmarket values of major resources in the korean dmz areas a test of distance decay the demilitarised zone dmz and its adjoining areas serve not only as a geopolitical buffering zone between north and south korea but also as rare refuges for various animals and plants this paper investigates conservation values of major dmz resources and comparatively tests distance decay between contingent valuation and choice modelling the overall conservation value for the dmz resources per person as one off payments was 9 06 or 34 97 respectively from the cvm and cm datasets research findings deny distance decay regardless of elicitation methods when the distance variable is parameterised as part of utility functions conversely a segmentation valuation approach demonstrates conflicting conclusions on distance decay and the wtp anomaly between users and non users depending on elicitation methods the cm results demonstrate that protection of the dmz resources might be less important and attractive to local populations than to those in the distant regions a direct cross method transfer of any distance effect might not be granted

booms and busts in the uk housing market the often volatile behaviour of uk house prices between 1957 and 1994 is analysed in an annual econometric model theory suggests that financial liberalisation of mortgage markets in the 1980s should have led to notable shifts in house price behaviour the evidence supports the predictions of theory suggesting shifts took place in wealth effects as in the consumption function and that real interest rates and income expectations became more important the presence of transactions costs suggests important nonlinearities in house price dynamics the paper also contains an explicit econometric treatment of expectations demography supply spillovers from the rented sector and of composition biases in the official house price index

individualized geocoding in stated preference questionnaires implications for survey design and welfare estimation this paper evaluates the common practice of generic mapping in stated preference valuation in which identical policy area maps are shown to all respondents this is compared to a more information intensive alternative in which individualized maps identify the location of each respondent s home relative to policy effects the evaluation is grounded in a theoretical model clarifying the impact of individualized spatial information on preferences for non market outcomes the model is illustrated using an application of choice experiments to riparian restoration in coastal maine results characterize valuation contexts for which valid preference elicitation likely requires the provision of individualized spatial information

absorptive capacity socially enabling mechanisms and the role of learning from trial and error experiments a tribute to dan levinthal s contribution to international business research the concept of absorptive capacity ac of firms cohen and levinthal 1989 and 1990 is a foundational feature of organizational learning and adaptation that has had enormous influence in international business ib and innovation studies and management research in general in this tribute to dan levinthal we discuss the close connection between ac and learning two areas central to dan levinthal s research in relation to different contexts where ac comes into play in extant ib research we discuss four specific aspects of the nexus of ac and learning in the context of ib 1 bridging between intra and inter firm learning 2 a routine based framing of ac that emphasizes processes and capabilities underlying seeking assimilating and innovation in a global setting 3 the role of socially enabling mechanisms and 4 the logic of learning through trial and error experiments within firms and countries

a satisfactory benefit cost indicator from contingent valuation abstract standard economic concepts are used to develop a model of individual behavior when subject to the constraints of the contingent valuation choice context the model yields refutable consequences that are consistent with previously reported empirical findings including some that have been thought to be anomalous the model is used to show that different contingent valuation formats have predictably different performance characteristics notably the hicksian compensating measures are satisfactory benefit cost indicators when elicited using any one of several formats identified in the text of the formats examined one form of a policy referendum appears to have the most satisfactory characteristics overall we conclude that contingent valuation is a progressing research program

generalized additive models for nonmarket valuation via revealed or stated preference methods single site recreation demand and dichotomous choice contingent valuation analyses are typically conducted by implementing models containing strong parametric assumptions which are rarely underpinned by theoretical arguments this work illustrates how these assumptions can be relaxed and the estimation conducted semiparametrically by using generalized additive models gams this approach directly estimates the degree of the variables nonlinearities from the data thereby avoiding subjective choices on the smoothing parameters and offering many advantages when compared to the conventional modeling techniques that dominate the environmental economics literature additionally this paper illustrates how gams can be specified to construct theoretically consistent willingness to pay measures jel c14 q51

tenure choice and the demand for housing this paper deals with the estimation by means of nonlinear methods of preference parameters from observation of behaviour in housing markets it differs from previous work on housing market behaviour in several important aspects first it treats the choice of tenure mode that is whether to rent or own and the housing consumption decision as a joint decision second it explicitly uses the same behavioural model in analysing these discrete and continuous elements of housing market behaviour third it allows for an analysis of the role of capital market imperfections and discriminatory practices in constraining housing market decisions

modeling spatial patchiness and hot spots in stated preference willingness to pay stated preference analyses often impose strong assumptions regarding spatial welfare distributions that can influence the validity of welfare analysis and aggregation these include spatial homogeneity and continuous distance decay global assumptions such as these are increasingly questioned by non economics disciplines in favor of approaches that allow for local patchiness drawing from this literature this article proposes methods to identify and evaluate hot spots in stated preference welfare estimates using local indicators of spatial association methods are illustrated using geocoded choice experiment data addressing river restoration results suggest the presence of statistically significant non continuous patterns overlooked by current approaches

human capital and fdi inflow an assessment of the african case summary this study assesses the role of human capital hk on fdi inflows to sub saharan africa it uses panel data for the period 1980 2012 to asses if changing skill needs influence fdi inflows several measures of hk are used to assess whether the quality of labor explains fdi flows over the study period various versions of an fdi model were estimated and the results show that all measures of hk have a significant influence on fdi as are the traditional variables there is no evidence of the increasing importance of hk on fdi over time probably reflecting the type of fdi flowing into ssa

the aggregation of environmental benefit values welfare measures distance decay and total wtp abstract we review the literature regarding the aggregation of benefit value estimates for non market goods two case studies are presented through which we develop an approach to aggregation which applies the spatial analytic capabilities of a geographical information system to combine geo referenced physical census and survey data to estimate a spatially sensitive valuation function these case studies show that the common reliance upon political rather than economic jurisdictions and the use of sample mean values within the aggregation process are liable to lead to significant errors in resultant values we also highlight the fact that for resources with use values then we should expect overall values to reduce with increasing distance from such sites but that changes in the choice of welfare measure will determine whether such distance decay is to be expected within values stated by those who are presently non users the paper concludes by providing recommendations for future improvements to the methodology

environmental inequality and economic valuation i study how the economic value of a heterogeneously distributed environmental public good depends on how the endowment with this good and income are distributed i find that the effect of environmental inequality on the societal willingness to pay wtp for the environmental good is determined both by its substitutability and by the correlation of its provision with income specifically environmental inequality decreases societal wtp for substitutes but this effect is reversed if the environmental good is a complement or distributed strongly in favour of richer households moreover i show that richer households living in places where environmental good endowment is high increases decreases societal wtp if and only if the environmental good is a substitute for complement to consumption goods i propose novel adjustment factors for structural benefit transfer to control for differences in the spatial distribution of environmental goods using forest preservation in poland as an empirical example i find that societal wtp is up to 4 higher for equal access to forests and up to 8 higher for an equal distribution of both income and access to forests

tax subsidies to owner occupied housing an asset market approach inflation reduces the effective cost of homeownership and raises the tax subsidy to owner occupation this paper presents an asset market model of the housing market and estimates how changes in the expected inflation rate affect the real price of houses and the equilibrium size of the housing capital stock simulation results suggest that the accelerating inflation of the 1970s which substantially reduced homeowners user costs could have accounted for as much as a 30 percent increase in real house prices persistent high inflation rates could lead ultimately to a sizable increase in the stock of owner occupied housing

the impact of order and mode of market entry on profitability and market share market share performance and profitability of overseas business activities has long been an important issue in international business in this study we explore the impact of order and mode of market entry into an overseas market we find that early entrants have significantly higher market shares and profitability than late followers we also find that equity joint ventures have a higher profitability than either wholly owned operations or contractual joint ventures a significant interaction exists between order and mode of market entry as expected firm efficiency and size affect the performance of firms these results are based on the business activities of a sample of 14 466 foreign firms in china in 1995

government policies market imperfections and foreign direct investment the internalization eclectic theory of foreign direct investment includes the important insight that government policies create market imperfections which make foreign direct investment an economically rational strategic alternative for firms this paper reexamines the effects of government policies on market imperfections and foreign direct investment fdi it broadens and refines the analysis of the impact of government policies by developing the following arguments 1 there is a wide range of government policies that affect firms fdi decisions via their effects on market imperfections 2 there are numerous dimensions of variability in government policies that need to be identified in order to understand fully the effects of government policies on market imperfections and hence fdi flows 3 some of the effects of government policies on market imperfections and fdi are the opposite of those previously noted in the fdi literature 4 the effects of government policies vary across the several individual components of fdi flows the paper thus examines the following variables and relationships more extensively and precisely than has the previous literature government policy variables as causal factors affecting fdi market imperfection variables as intervening factors in the causal connections between government policies and fdi and the multiple indicators of the various dimensions of fdi as dependent variables

partner selection and venturing success the case of joint ventures with firms in the people s republic of china it has been hypothesized in the international joint venture ijv literature that partner selection affects interpartner fit which in turn influences a synergistic effect on ijv performance this study investigates the relationship between ijv success and the strategic and organizational traits of local partners we address this issue in the context of an emerging economy p r china newly emerging economies have in recent years become major hosts of direct investment by multinational corporations mncs because these rapidly expanding economies characterized by an exploding demand previously stifled by ideologically based government intervention provide tremendous opportunities which mncs can preempt mncs in such economies however face the challenges of structural reform weak market structure poorly specified property rights and institutional uncertainty right local partners can help mncs boost market expansion obtain insightful information mitigate operational risks and provide country specific knowledge the analysis of the data obtained from china suggests that both strategic and organizational traits of local partners are significantly associated with some individual dimensions of ijv performance among strategic traits absorptive capacity product relatedness and market power are favorable to ijvs market and financial outcomes market power and experience significantly reduce ijvs operational uncertainties of organizational traits international experience and organizational collaboration are important for ijvs not only profitability and stability but also local market expansion and export growth organizational form and size influence ijvs local market performance the findings provided by this study can help mncs determine what criteria they should use in opting for local partners and what criteria are vital to their goal accomplishment those investors seeking local market expansion should select those local partners that have rich market experience superior market position high absorptive capacity and related product diversification with the ijvs those seeking profitability and stability should select local firms that have superior international experience longer organizational collaboration and greater market power while mncs should use appropriate strategic and organizational criteria to select local partners the host government or local firms can try to make these traits available to attract more stable and profitable foreign direct investment

dynamic aspects of consumer decisions in housing markets abstract in this study we estimate a model of the joint tenure length of stay and consumption level choices of families in the housing market this is the first attempt we know of to do this type of estimation the data pertain to a single residence spell per household from the panel study of income dynamics wealthier and better educated families were found to be more mobile in terms of housing consumption after accounting for tenure choice and controlling for planned length of stay renters and owners were found to have similar demand function relationships in terms of the impacts of socioeconomic variables this confirms the notion that renters and owners are not differentiated by housing choice but simply in life cycle circumstances as to when it is optimal to own or rent

the eclectic paradigm of international production a restatement and some possible extensions this article reviews some of the criticisms directed towards the eclectic paradigm of international production over the past decade and restates its main tenets the second part of the article considers a number of possible extensions of the paradigm and concludes by asserting that it remains a robust general framework for explaining and analysing not only the economic rationale of economic production but many organisational and impact issues in relation to mne activity as well

testing the influence of substitute sites in nature valuation by using spatial discounting factors this paper investigates the effect of nearby nature substitute sites on preferences for nature restoration contrary to prior studies we use a respondent centric approach to control for substitute sites we assess each respondent specific spatial context by computing densities of nature substitute sites within various ranges from each respondent s home this approach considers the use and non use values of nature together data from three similar discrete choice experiments carried out in flanders belgium are compared different spatial discounting factors are tested to explore how the substitution effect behaves with regard to distance latent class analyses are performed to account for preference heterogeneity among respondents we observe divergent behaviours across groups of respondents the distance to substitutes affects how respondents gauge substitute sites we find a significant influence of the squared average buffer distance but this effect varies in sign across case studies and classes of respondents our results demonstrate that individual specific gis data can significantly improve the representation of the spatial context and the transferability of value functions however the roles played by preference heterogeneity and nature perception on respondents capacity to value nature still deserves further attention in future research

the multinational enterprise under the threats of restriction on profit repatriation and exchange control abstract this paper models and analyzes the effects of uncertainties about restriction on profit repatriation and exchange control faced by the multinational enterprise in the host country on its international investment trade and sales the former uncertainty constrains investment in the host country its effects on exports to the host country and sales there depend on transfer pricing by the multinational enterprise by contrast the threat of exchange control on overall exchange transactions is neutral with respect to international investment but it decreases exports and sales in the host country and hence are detrimental to its consumers

the optimal timing of a foreign direct investment analyses of the optimal timing of foreign direct investment fdi decisions have been curiously lacking in the general literature on multinational enterprises cf buckley 1979a b although comparative static analyses exist comparing exporting to the host country with market servicing from a production unit sited in the host country horst 1971 hirsh 1976 the only attempt to predict the timing of the switch from exporting to foreign based production is that of aliber 1970 although vernon 1966 gives a cost based rationale for the switch this chapter attempts to fill this gap in the theory of fdi section 2 1 outlines and criticises previous attempts to deal with the problem sections 2 2 4 present a simple model which ignores set up costs and sections 2 5 and 2 6 give a more detailed analysis including such costs further extensions of the theory are considered in section 2 7 and the conclusions are summarised in section 2 8 the problem emerges as being more complex than had previously been appreciated

equity ownership in international joint ventures the impact of source country factors this study examines the impact of four source country factors on the equity ownership in international joint ventures ijvs these factors are exchange rate cost of borrowing export capability and management orientation based on a sample of 8 078 ijvs in china this study shows that equity ownership tends to be higher for parent firms from a source country with strong currency low cost of borrowing strong export capability and high uncertainty avoidance

setting the record straight hymer internationalization theory and transaction cost economics along with the rise and development of transaction cost economics stephen h hymer s works have recently become a matter of some controversy this note clarifies the main issues in the controversy and explores the contributions of hymer s theory of the mne a review of hymer s works reveals that he had incorporated a coasian theory of firms and markets in his theory as early as 1968 this note suggests that the genesis of transaction costs as applied to the mne can be traced to hymer

continuous attribute values in a simulation environment offshore energy production and mid atlantic beach visitation abstract there is a large and growing offshore energy distance siting disamenity literature we offer a new approach to understanding public preferences for renewable wind turbine and conventional oil platform siting which uses an original stated preference response choice in the form of distance rather than referendum style willingness to pay distance preference data are collected from beach visitors and analyzed in part by adapting a duration model where time is modeled as distance at which utility indifference occurs the results show that the public consists of two highly contrasting groups one large group that views wind turbines as a substantial disamenity while another large group views them as an amenity when pooled these groups tend to wash out their impacts revealing that average preference results suggesting that wind turbines might not be amenities or disamenities however when viewed in this new model one finds that policy is much more complicated and no single siting strategy far or close will satisfy the public because the two main groups have largely irreconcilable preferences

the indexation of interest depreciation and capital gains and tax reform in the united states abstract the treasury s 1984 tax plan suggests features of a comprehensive income tax including the indexation of interest depreciation and capital gains the 1985 president s proposal retains some of these indexing provisions but the tax reform act of 1986 does not this paper looks at the incentives under these tax regimes to make marginal investments in the corporate sector noncorporate sector and owner occupied housing it finds that inflation in the old system caused effective tax rates to rise for some assets and fall for others under the treasury or president s proposals the interference of inflation is virtually eliminated also the effects of inflation are substantially reduced by the 1986 act because mismeasured depreciation and interest deductions are taken at much lower rates

an incentive compatible approach to the transfer pricing problem abstract this paper offers an alternative approach to regulating certain types of transfer pricing if the multinational enterprise s transfer price decision is not regulated it will manipulate the transfer price in order to maximize net global profit traditional approaches argue for ad hoc penalty schedules to mitigate manipulative transfer pricing in contrast this paper offers an incentive compatible approach which explicitly incorporates the informational asymmetries that encourage misreports the model has the desirous feature that the optimal regulatory policy has self enforcing properties that is the firm will find it profit maximizing to report true costs

enhanced geospatial validity for meta analysis and environmental benefit transfer an application to water quality improvements meta regression models are commonly used within benefit transfer to estimate willingness to pay wtp for environmental quality improvements theory suggests that these estimates should be sensitive to geospatial factors including resource scale market extent and the availability of substitutes and complements valuation meta regression models addressing the quantity of non market commodities sometimes incorporate spatial variables that proxy for a subset of these effects however meta analyses of wtp for environmental quality generally omit geospatial factors such as these leading to benefit transfers that are invariant to these factors this paper reports on a meta regression model for water quality benefit transfer that incorporates spatially explicit factors predicted by theory to influence wtp the metadata are drawn from stated preference studies that estimate per household wtp for water quality changes in united states water bodies and combine primary study information with extensive geospatial data from external sources results find that geospatial variables are associated with significant wtp variations as predicted by theory and that inclusion of these variables reduces transfer errors

housing taxation and capital accumulation this paper studies the impact of the preferential tax treatment of housing capital in a dynamic general equilibrium life cycle economy populated by heterogeneous individuals the model includes the main housing tax provisions currently in place in the u s and a minimum downpayment requirement upon purchasing non divisible houses the tax code makes the return on housing capital larger than that on business capital which distorts the lifetime profile and composition of individuals savings the wedge between the two rates of return emanates from the failure to tax imputed rents and is amplified by the presence of mortgage interest deductibility simulations show that individuals at all income levels would rather live in a world where imputed rents are taxed or one where mortgage interest payments are not deductible furthermore distributional effects are much smaller than conventionally believed

the contingent valuation debate why economists should care t he contingent valuation method involves the use of sample surveys questionnaires to elicit the willingness of respondents to pay for generally hypothetical projects or programs the name of the method refers to the fact that the values revealed by respondents are contingent upon the constructed or simulated market presented in the survey a spirited and occasionally mean spirited battle over such methods is currently being waged involving competing factions within the federal government economists and lawyers representing business and environmental groups and interested academics as well at issue is a seemingly quite specific question should environmental regulations currently under development at both the department of the interior and the department of commerce sanction the use of the contingent valuation method in estimating the damage done by spills of oil chemicals or other substances covered by federal law more generally the debate raises broad questions about what economists have to say about the values that individuals place on public or private goods the two papers that follow this one make cases for and against the use of the contingent valuation method my aim here is to provide an overview of the technique and the debate surrounding it i also want to suggest why this debate should matter to economists both professionally and in their roles as citizens and consumers

taxing residential housing capital this paper discusses the main aspects of the taxation of housing drawing on general principles of optimal taxation it focuses on the role of the property tax in achieving neutrality between rental and owner occupied housing assuming that landlords are taxed according to a neutral profits tax it follows that the property tax should be based on the rate of interest the paper discusses how the tax rate could be adjusted to account for the lack of effective taxation of capital gains the double taxation of dividends and the differences in the cost of labour between rental and owner occupied housing in most oecd countries the combined effect of the different housing taxes amounts to a tax subsidy to owner occupied housing it is demonstrated how this subsidy has been reduced in sweden as in many other countries in the past decade as a result of tax reforms and a lower rate of inflation the subsidy has effects on consumption patterns saving capital accumulation the distribution of welfare across gener

tenure neutral and equitable housing taxation equity and neutrality are distinct concepts in housing taxation and weak and strong tenure neutrality should be distinguished when a tax system is tested for those criteria the taxes paid by landlords must be included as they affect the rents renters pay this paper defines appropriate tests applies them to a stylised tax system and proposes tax changes designed to restore tenure equity and or neutrality it shows how the homeowner s implicit income should be computed for taxes to be fundamentally tenure neutral or equitable or both it also shows the key role played by the cost differential in producing housing services under owner occupation and renting

housing investment in the united states a supply determined model of housing investment is estimated from quarterly data over the 1963 83 period the model is built on dynamic marginal cost pricing considerations and allows short and long run supply elasticities to differ these are estimated as 1 0 and 3 0 respectively but most of the long run response occurs within 1 year rapid adjustment speed and the sizable long run elasticity of supply are important factors in understanding the volatility of housing investment the data also suggest some anomalies in the expected present value theory of asset pricing for housing capital

imputed rental income taxation and income distribution in finland in most western countries owner occupied housing is tax favoured compared with other investments and housing tenure modes this paper analyses the effects of imputed rental income and its tax treatment on income distribution in finland using household data from the 2004 wealth survey produced by statistics finland it is found that imputed rental income has a major effect on homeowners well being as it constitutes on average almost 10 per cent of homeowner households disposable income furthermore including imputed rental income in household disposable income decreased overall inequality measured by the gini index the tax subsidy resulting from non taxation of imputed rental income is skewed towards high income households however the effects of a new tax on imputed rental income on overall inequality would depend vitally on the way the increased government tax revenue is transferred back to the households

timing of investment and international expansion performance in china this study examines the multivariate and univariate performance effects of timing of fdi in an emerging economy at the business unit level a longitudinal analysis of industry wide firm specific data on fdi timing and foreign venture performance in china reveals that timing has a significant influence on overall as well as on individual aspects of venture performance it is observed that early entrants outperform late movers in terms of local market expansion and asset turnover whereas late movers are superior to early entrants with regard to risk reduction and accounting return during the initial period of international expansion factor analysis confirms that the importance of timing in affecting fdi decisions is as significant as that of internalization ownership or location factors

exploring welfare implications of resource equivalency analysis in natural resource damage assessments abstract resource equivalency analysis rea has become the dominant method for calculating natural resource damages for biological injuries from pollution incidents this methodology compares resources lost as a result of an incident to benefits that can be gained from a habitat or wildlife restoration project compensation is evaluated in terms of resource services instead of market currency recently this approach has been questioned regarding its ability to provide adequate compensation based on economic welfare principles the following paper examines these critiques and develops a model to quantify the welfare implications of using rea when some of its implicit assumptions are violated we focus on the situation where compensatory restoration projects provide services that are comparable to those lost as a result of an incident we examine simulation scenarios where the public has heterogeneous preferences for resources and where resource values change over time using the hicks kaldor criterion we find that the traditional rea provides an acceptable approximation of aggregate compensation for a reasonably wide range of economic and biological parameter combinations

substitution effects and spatial preference heterogeneity in single and multiple site choice experiments a novel discrete choice experiment dce design allows testing of substitution effects based on the framing of and distances to substitute sites the same ecosystem services and biodiversity provided at different sites are valued independently in single site dces and simultaneously in a multiple site dce using an identical experimental design site specific utility functions are estimated with and without controlling for spatial preference heterogeneity framing choices as alternative projects at single or multiple sites significantly influences substitutability between sites choice behavior and welfare estimates distance decay displays significant heterogeneity in different directions from the valued sites and between urban and rural areas

political aspects of mne theory political behavior by mnes has usually been ignored downplayed or passively treated in dominant economic models of the multinational enterprise in order to remedy this lacuna dunning s eclectic paradigm is expanded to integrate political dimensions in the analysis of ownership internalization and location advantages

diaspora interest in homeland investment this paper examines four diaspora communities resident in the united states that were targeted by their homelands as foreign investors during the 1990s the homelands comprise armenia cuba iran and palestine we pose the question what are the determinants of interest in homeland investment and can they be generalized across the four communities the paper explores concepts of ethnic advantage altruism homeland orientation and perceptions of business impediments as well as investigating the role of demographic factors regarding investment interest

directional heterogeneity in wtp models for environmental valuation many studies in the stated preference literature on environmental valuation do not include the effects of substitutes and distance in willingness to pay wtp models in spite of the relevance of these effects in aggregation and benefit transfer heterogeneity in the availability of substitutes over space may cause multidirectional distance effects in wtp as a result disregarding this spatial heterogeneity may lead to biased estimators of the distance effect and associated wtp values cameron 2006 in this paper we demonstrate that distance decay is subject to significant directional effects which tend to be related to differences in the availability of substitutes across the study area we apply a straightforward methodology to account for such spatial heterogeneity in choice experiments and assess the effect on wtp for improvements in ecosystem services in a lake district we model distance decay effects whilst controlling for heterogeneity between users and non users and non use related wtp reasons the directional effects result in significantly different wtp estimates different market sizes reflecting the population with positive wtp and differences in total wtp up to 32

effects of the swedish 1983 85 tax reform on the demand for owner occupied housing a microsimulation approach the effects of the swedish 1983 85 tax reform are analyzed with respect to the housing market a microsimulation model is used which takes into account the household s tenure choice owning vs renting as well as the quantity demanded conditional on the tenure choice the reform consists of a reduction in marginal tax rates and limitations on the deductibility of mortgage interest the simulations show that this will cause a general reduction in demand for owner occupied houses on a disaggregated level there will be an increase in the demand for small and medium sized houses while the demand for large units will fall sharply

international expansion of telecommunication carriers the influence of market structure network characteristics and entry imperfections this paper examines the internationalization process of telecommunication carriers in this industry early entrants gain substantial first mover advantages due to the transient nature of the windows of market opportunity and the potential to influence the regulatory process as an incumbent to capture these strategic and economic advantages firms follow a strategy of preemption both of markets and partners the authors argue for the need to augment prevailing theory with contextual idiosyncrasies that characterize specific industries

the impact of iso 9000 diffusion on trade and fdi a new institutional analysis the effects of iso 9000 diffusion on trade and foreign direct investment fdi have gone understudied we employ panel data reported by oecd nations over the 1995 2002 period to estimate the impact of iso adoptions on country pair economic relations we find iso diffusion to have no effect in developed nations but to positively pull fdi i e enhancing inward fdi and positively push trade i e enhancing exports in developing nations

the state as strategist in international business research no matter what strategy managers choose cross national differences in states strategic capabilities and objectives affect multinational corporations capabilities to manage interdependent operations in this paper we develop four attribute dimensions along which states strategic economic capabilities vary we then apply these dimensions to show how they contribute to familiar international business models of managerial process mnc strategy and organizational structure and country competitiveness

dyadic military conflict security alliances and bilateral fdi flows although multinationals operate under cross border jurisdictions the relevance of interstate security relations to international business has received little attention despite the impressive accumulation of knowledge in international business and international relations the two intellectual communities have largely ignored the insights from each other in this article we seek to bridge this gap we argue that interstate military conflict and security alliances as two central features of interstate security relations often change both government policies toward international business and investor expectations of political risk from the perspectives of both states and investors military conflict should reduce bilateral investment whereas security alliances increase it our empirical analysis applies the system gmm estimator to a gravity model of bilateral investment flows for 1117 directed dyads among 58 countries from 1980 to 2000 among 18 countries whose per capita real incomes remain consistently above 12 000 constant dollars the security factors do not affect bilateral investment in the high income low income dyads interstate military conflict and security alliances significantly influence bilateral investment as expected the findings depict two separate realms in which international politics does and does not interfere with international business helping us improve political risk assessments and understand the interactions between states and firms

the management of political risk we explore a long standing prediction in the international business literature that managers subjective perceptions of political risk not just the level of risk are important for how firms manage political risk the importance attributed to political risk by corporate executives has increased over the last 15 years and our results show that political risk is now considered more important than commodity input risk our analysis suggests that nearly 50 of firms avoid not simply reduce foreign direct investment because of political risk using a unique survey based psychometric evaluation of manager risk aversion we show that firms with risk averse executives are more likely to avoid investment in politically risky countries a key implication of behavioral models this relation is economically stronger when agency problems are more likely to be severe for example when executives are less aligned with shareholder value maximization and when executives are younger and therefore might put their personal career concerns in front of shareholders interests while numerous studies have shown that political risk affects foreign direct investment using objective measures of such risk electoral uncertainty conflicts etc our study documents that executives subjective perceptions of political risk are also important for political risk management

strategic alignment and performance of market seeking mncs in china this study explores the environment strategy performance relation of foreign firms especially those with a market seeking mandate in china the results indicate that the analyzer orientation is best suited to the turbulent chinese market which has been undergoing an economic transition in recent years there is also a significant difference in financial performance among market seeking mncs depending on strategic orientations with the analyzer orientation producing the highest performance the prospector and the defender orientations lead to poor financial performance because of the mismatch with china s market which is highly dynamic and complex our findings reiterate the importance of understanding local market traits and opportunities and developing proper strategic configurations for market seeking mnc subsidiaries especially in an emerging economy like china copyright 2001 john wiley sons ltd

foreign investor reactions to risk and uncertainty in antitrust u s merger policy investigations and the deterrence of foreign acquirer presence motivated by the potential for antitrust and competition policies to be protectionist in effect we formulate the theoretical prior that merger policy deters foreign acquirer participation in local m a markets the policy risk and policy uncertainty characteristic of merger review may negatively affect foreign acquirers more so than domestic acquirers thereby disadvantaging foreign acquisitions of local firms and deterring future cross border investment activities we test this prior by employing sector level data on u s merger policy investigations and foreign acquirer presence in u s m a markets over the 2002 2017 period our panel data methodological approach indicates that the risk and uncertainty characteristic of u s merger policy disproportionately deters the acquisition activities of foreign investors the empirical results also suggest that the application of competition and merger policies in other national jurisdictions where there is less of a strong commitment to antitrust principles might also be effectively protectionist

financial performance and survival of multinational corporations in china this study investigates the impact of entry timing mode of entry market focus and location advantages on the financial performance and survival of multinational corporations mncs in china three major results were found first mncs that entered china in an earlier year had a higher level of profit than those that entered in a later year second equity joint ventures ejvs had a higher profit level than cooperative operations or wholly foreign owned subsidiaries third mncs that utilized well the location advantages in china had a higher profit we also found that ejvs were more likely to survive compared to cooperative operations while wholly owned subsidiaries did not differ from ejvs the findings are based on a 2 year study of about 1000 mnc operations in china copyright 1999 john wiley sons ltd

housing and financial wealth financial deregulation and consumption the swedish case the effects of using wealth disaggregated as housing and net financial wealth are investigated in an error correction function model data for sweden 1970 92 are used in the analysis unit root tests indicate that consumption income and wealth are all integrated of order one and that the variables cointegrate if wealth is disaggregated financial wealth is crucial in explaining consumption and wealth in disaggregated form improves the models significantly household debt is an important determinant of short run behavior indicating credit rationing there is also evidence that the observed dramatic increase in savings is a consequence of the recent tax reform copyright 1995 by the editors of the scandinavian journal of economics

consumption down payments and liquidity constraints one frequently cited explanation for the empirical failure of the orthodox life cycle permanent income hypothesis lc pih is the presence of binding liquidity constraints households inability to borrow and lend at the same interest rate or to borrow the desired quantity can distort household consumption profiles depressing consumption during periods when constraints bind whether or not liquidity constraints bind has important implications for the sensitivity of consumption to fluctuations in income the neutrality of government debt and the structure of taxation despite the potential importance of liquidity constraints in understanding macroeconomic behavior there has been comparatively little research into the effect of specific constraints on consumption one area of consumer behavior where liquidity constraints arguably may be important is in housing decisions and mortgage markets households wishing to own a first home must accumulate a down payment in order to qualify for a mortgage loan currently for conventional mortgages in the united states most lending institutions require between s percent and 20 percent of the purchase price of the home put down in advance of the purchase 2 without access to private gifts or loans many

spatial aggregation and the value of natural capital abstract location matters for the value of capital assets the value of changes in natural capital wealth can depend on whether natural capital asset prices are measured locally and then aggregated or whether average values are applied over aggregate representative areas spatial heterogeneity of resource characteristics and institutions impact approximations of the intertemporal welfare function and accounting price function because when spatial aggregation precedes valuation it implies greater arbitrage opportunities leading to more inelastic shadow accounting price functions than when valuation is done locally and then aggregated aggregation of observed values across varying resource and institutional characteristics can lead to omitted variables bias we illustrate these results in the context of groundwater in the kansas high plains aquifer and demonstrate that the accounting price function is less elastic when the accounting price is measured locally failure to measure locally and then aggregate could lead to undervaluing scarce resources and overvaluing plentiful ones which biases wealth accounts in favor of passing the non declining wealth sustainability test

patterns in the expansion of u s banks foreign operations combining foreign direct investment theory with data on 32 countries from the federal reserve board we examined u s banks patterns of foreign operations including their levels of banking services and choice of organizational forms in host countries results generally supported predictions but only in developed countries the lack of support in rapidly growing markets of asia and latin america raises serious theoretical concerns and presents fresh research opportunities into the global banking industry

the global economy as instituted process the case of central and eastern europe i argue that economic globalization indicated by the tremendous rise in world foreign direct investment fdi in recent decades is not driven simply by investor considerations of economic risk and return but is significantly shaped by the construction of demand for foreign capital by receiving states states signal this demand through the levels of formal and substantive legitimacy they grant to fdi they institutionalize globalization in formal rule as a normatively desirable development strategy states substantiate this commitment by providing domestic and foreign actors with ideational and organizational resources to facilitate fdi to illustrate this argument i use the case of central and eastern europe which was largely closed to global capital before the collapse of communism analyses of quantitative and qualitative data show that substantive legitimacy granted to fdi by host states more than formal regulations determined the size of foreign capital flows into postsocialist countries in the

the influence of hymer s dissertation on the theory of foreign derect investment the great contribution of stephen hymer s seminal dissertation 1960 was to escape from the intellectual straightjacket of neoclassical type trade and financial theory and move us towards an analysis of the multinational enterprise mne based upon industrial organization theory the magnitude of this breakthrough can be put into perspective by considering the state of the art when hymer wrote twenty five years ago in 1960 the prevailing explanation of international capital movements relied exclusively upon a neoclassical financial theory of portfolio flows in this frictionless world of perfect competition with no transaction costs capital moves in response to changes in interest rate or profit differentials see carl iversen 1936 according to this arbitrage theory capital is assumed to be transacted between independent buyers and sellers that is there is no role for the mne at the time there was no separate theory of foreign direct investment fdi the work did not even ask the question of why is there fdi despite the evidence of sectoral cross investments and the existence of large mnes with intra industry trade if anything the early work on fdi focused upon the where of investment in a particular nation or industry for example dunning 1958 was chiefly interested in explaining u s fdi in britain there was little interest in understanding the reasons for the mne or the nature of its operations the pioneering conceptual insight of hymer was to break out of the arid mold of international trade and investment theory and focus attention upon the mne per se this permits us to treat fdi as a modality by which firms extend their territorial horizons abroad the unique feature of fdi is a mechanism by which the mne maintains control over productive activities outside its national boundaries that is fdi means international production in this view fdi is more than a process by which assets or claims are exchanged internationally see robert aliber 1970 1983 hymer s great insight was in focusing attention upon the mne as the institution for international production rather than international exchange until hymer articulated the process of fdi as an international extension of industrial organization theory it was not possible to understand why the mne transfers intermediate products such as knowledge or technology among its units across different nations while still retaining property rights over such assets today it is widely recognized that the theory of fdi i e international production is primarily about the transfer of nonfinancial and ownershipspecific intangible assets by the mne which needs to appropriate and control the rate of use of its internalized advantage s see rugman 1981 david teece 1981 1982 richard caves 1982 and mark casson 1983 in this paper we first acknowledge hymer s contribution to the theory of fdi and then move on to reinterpret his dissertation in the light of the modern theory of the mne we tdiscussants raymond vernon harvard university robert z aliber university of chicago paul streeten boston university

governance infrastructure and us foreign direct investment this paper examines the statistical importance of governance infrastructure as a determinant of us foreign direct investment fdi in broad terms governance infrastructure represents attributes of legislation regulation and legal systems that condition freedom of transacting security of property rights and transparency of government and legal processes our econometric analysis uses a two stage estimation procedure in the first stage the probability that a country is an fdi recipient is estimated the results indicate that countries that fail to achieve a minimum threshold of effective governance are unlikely to receive any us fdi countries that receive no us fdi are typically countries that do not promote free and transparent markets that have ineffective governments and that often have legal systems that are not rooted in english common law in the second stage the analysis is restricted to those countries that did receive fdi flows the estimated equations focus on the determinants of the amount of fdi received given that a country is a recipient of us fdi governance infrastructure including the nature of the legal system is an important determinant of the amount received

multinational enterprise internal governance and industrial organization abstractthe following sections are included monopoly vs efficiency interpretations of the multinational enterprisehost country controlsdynamic considerationsconclusionreferences this abstract was borrowed from another version of this item

the dynamic efficiency cost of not taxing housing traditional welfare cost estimates of tax subsidies for owner occupied housing are less than 0 5 of gnp in the united states and canada this paper argues that these static measures understate the true cost of the tax subsidy increasing the capital income tax makes untaxed housing more valuable delivering a windfall bonus to existing homeowners at the expense of future generations this intergenerational transfer has real efficiency effects in the presence of pre existing tax distortions when housing is in fixed supply the dynamic efficiency cost of preferential tax treatment for housing is as much as 2 2 of gnp or 120 billion dollars in 1990

the hierarchical model of market entry modes in this study we propose and test a hierarchical model of market entry modes entry modes can first be viewed as equity based versus non equity based within equity based modes the choice is between wholly owned operations and equity joint ventures while within non equity based modes the choice is between contractual agreements and export empirically we demonstrate that there are factors that exert substantial influences at the equity versus non equity level but rather weak influences at the lower level of choice hierarchy the empirical results are based on a sample of over 10 000 foreign entry activities into china between 1979 to 1998 the findings provide supportive evidence for the hierarchical model of market entry modes

analysis of the dynamics of housing tenure choice in britain abstract the study uses data from the 1958 birth cohort collected in the british national child development study to model the dynamics of people s first entry to either owner occupation or tenancy in social housing the two major tenures in britain the effects of lifetime earnings prospects family background a person s own spells of unemployment the regional unemployment rate and regional relative house prices on the timing and pattern of first entry are estimated in the context of a competing risk hazard model it also shows that given the observed matrix of subsequent tenure transitions these impacts on the timing and destination of first major tenure also have important effects on the number of years which a person spends in each tenure over his her life

timing of entry in international market an empirical study of u s fortune 500 firms in china this study attempts to explain the timing of entry of firms in international markets based on the existing literature we propose a framework that consists of firm specific factors industry market factors and host country factors empirical results based on the entry information of u s fortune 500 firms in china between 1979 and 1996 show that larger firms with greater level of internalization and scope economies are likely to enter this foreign market earlier in addition non equity modes competitors behavior in the product market and lower levels of country risk are significantly associated with early entry

a contingent valuation estimate of the benefits of wolves in minnesota in this paper we estimate the willingness topay for a wolf management plan and a wolfdamage plan in minnesota using the contingentvaluation method the theoretical definition ofwillingness to pay for wolf protection iscomposed of use and non use values weincorporate a don t know response option in thedichotomous choice valuation questions a largenumber of respondents answered don t know themultinomial logit model is used todifferentiate between don t know and noresponses non use motives are importantfactors that explain willingness to pay we usethese benefit estimates in combination with twoalternative cost estimates to consider theefficiency of the wolf management and damageplans both plans have estimated benefitsgreater than costs