perishable inventory theory a review this paper reviews the relevant literature on the problem of determining suitable ordering policies for both fixed life perishable inventory and inventory subject to continuous exponential decay we consider both deterministic and stochastic demand for single and multiple products both optimal and sub optimal order policies are discussed in addition a brief review of the application of these models to blood bank management is included the review concludes with a discussion of some of the interesting open research questions in the area

the role of the trade channel in the propagation of oil supply shocks abstract this paper analyzes when and why idiosyncratic oil supply shocks produce large macroeconomic effects in an analytically tractable two country general equilibrium model we focus on a demand driven mechanism the trade channel which transmits oil shocks across economies through changes in the non oil goods terms of trade when the trade channel is operative we have three main consequences on the transmission of oil shocks first the macroeconomic impact of oil shocks may be large and asymmetric across countries second the magnitude of the effects is nonlinear in the size of the oil shock third terms of trade movements never ensure international risk sharing after an idiosyncratic oil supply shock

firms fdi ownership the influence of government ownership and legislative connections the level of ownership in an overseas subsidiary has been an important issue in international business existing literature based on transaction cost theory predicts that firms prefer higher ownership for subsidiaries located in favorable foreign institutional environments we propose two moderating factors to this prediction governments as owners of firms and firms legislative connections we hypothesized that the level of subsidiary ownership was less affected by the heterogeneity of foreign institutional environments for firms with a higher level of government ownership and for firms with legislative connections these two interaction effects were tested using a sample of overseas subsidiaries documented in the 2010 annual reports of listed chinese firms the empirical findings provide robust support for the hypothesized effects this study offers fresh insight on the role of government and political factors in firms internationalization activities

energy taxes and endogenous technological change abstract this paper studies the effects of a tax on energy use in a growth model where market structure is endogenous and jointly determined with the rate of technological change because this economy does not exhibit the scale effect a positive relation between tfp growth and aggregate r d the tax has no effect on the steady state growth rate it has however important transitional effects that give rise to surprising results specifically under the plausible assumption that energy demand is inelastic there may exist a hump shaped relation between the energy tax and welfare this shape stems from the fact that the reallocation of resources from energy production to manufacturing triggers a temporary acceleration of tfp growth that generates a shaped time profile of consumption if endogenous technological change raises consumption sufficiently fast and by a sufficient amount in the long run and households are sufficiently patient the tax raises welfare despite the fact that in line with standard intuition it lowers consumption in the short run

oil price shocks and the macroeconomy this paper examines the impact of oil price shocks and attempts to explain why the rise in oil prices up to 2008 had little impact on the world economy it makes three main arguments first that oil prices have never been as important as is popularly thought second that the most important route through which oil prices affect output is monetary policy when oil prices pass through to core inflation monetary authorities raise interest rates slowing growth based on the second argument the third argument is that high oil prices have not reduced growth in recent years because they no longer pass through to core inflation so the monetary tightening previously seen in response to high oil prices is absent it also argues that oil prices had little impact on the global recession of 20089

restriction of variance interaction effects and their importance for international business research a recent journal of international business studies editorial on interaction effects within and across levels highlighted the importance of and difficulty associated with justifying and reporting of such interaction effects the purpose of this editorial is to describe a type of interaction hypothesis that is very common in international business ib research the restricted variance rv hypothesis specifically we describe the nature of an rv interaction and its evidentiary requirements we also offer several ib examples involving interactions that could have been supported with rv arguments our hope is that ib researchers can use this paper to bolster their arguments for interaction hypotheses by explaining them in terms of rv

energy consumption at business cycle horizons the case of the united states in this paper we propose a simple extension to a keynesian type macro model by augmenting it with energy consumption we show the relationship between energy consumption and output in a macroeconomic setting and ask the question do permanent shocks dominate changes in energy consumption and output at business cycle horizons for the united states to achieve the goal of this paper we undertake a variance decomposition analysis of shocks based on a common trend and common cycle framework within a vector error correction model our main finding is that permanent shocks explain the bulk of the variations in energy consumption and output at business cycle horizons for the united states

down with mne centric theories market entry and expansion as the bundling of mne and local assets both anderson and gatignon and the uppsala internationalization model see the initial mode of foreign market entry and subsequent modes of operation as unilaterally determined by multinational enterprises mnes arbitraging control and risk and increasing their commitment as they gain experience in the target market oli and internalization models do recognize that foreign market entry requires the bundling of mne and complementary local assets which they call location or country specific advantages but implicitly assume that those assets are freely accessible to mnes in contrast to both of these mne centric views i explicitly consider the transactional characteristics of complementary local assets and model foreign market entry as the optimal assignment of equity between their owners and mnes by looking at the relative efficiency of the different markets in which mne and complementary local assets are traded and at how these two categories of assets match i am able to predict whether equity will be held by mnes or by local firms or shared between them and whether mnes will enter through greenfields brownfields or acquisitions the bundling model i propose has interesting implications for the evolution of the mne footprint in host countries and for the reasons behind the emergence of dragon mnes

governments as owners state owned multinational companies the globalization of state owned multinational companies somncs has become an important phenomenon in international business ib yet it has received scant attention in the literature we explain how the analysis of somncs can help advance the literature by extending our understanding of state owned firms soes and multinational companies mncs in at least two ways first we cross fertilize the ib and soes literatures in their analysis of foreign investment behavior and introduce two arguments the extraterritoriality argument which helps explain how the mnc dimension of somncs extends the soe literature and the non business internationalization argument which helps explain how the soe dimension of somncs extends the mnc literature second we analyze how the study of somncs can help develop new insights of theories of firm behavior in this respect we introduce five arguments the triple agency conflict argument in agency theory the owner risk argument in transaction costs economics the advantage and disadvantage of ownership argument in the resource based view rbv the power escape argument in resource dependence theory and the illegitimate ownership argument in neo institutional theory after our analysis we introduce the papers in the special issue that collectively reflect diverse and sophisticated research interest in the topic of somncs

residual state ownership policy stability and financial performance following strategic decisions by privatizing telecoms we question previous research assuming that privatizing firm performance generally benefits from decreasing state ownership and the passage of time both of which purportedly align principal agent incentives promoting organizational decision making that increases shareholder value when state ownership shifts from majority and controlling to minority and non controlling the performance impact may be positive in the short run particularly where there is instability in the local investment policy environment consistent with this proposition we develop and test hypotheses derived from a minority and non controlling or residual state ownership framework grounded in credible privatization and institutional theory we propose that 1 residual state ownership positively affects shareholder returns after strategic decisions by privatizing firms because it signals state support for managerial initiatives 2 the passage of time since initial privatization negatively affects shareholder returns after strategic decisions by privatizing firms because initial undertakings in support of the privatizing firm are reversed and 3 home country investment policy stability moderates these two effects greater stability obviates the need for residual state ownership and slows policy reversals over time we find empirical support for our residual state ownership framework in event study analyses of cumulative abnormal returns cars associated with 196 major investments announced from 1986 to 2001 by 15 privatizing telecoms from around the world cars are positive at 5 25 state ownership levels but turn negative at higher state ownership levels cars turn sharply negative within 1 2 years from initial privatization dates increasing policy stability diminishes positive ownership and negative time effects on cars results confirm the potential supporting role that residual state ownership can play in enhancing strategic decision making and financial performance by privatizing firms particularly where there is instability in the home country investment policy environment

energy consumption synchronization between europe united states and japan a spectral analysis assessment abstract this paper aims to advance a model able to explain the synchronization tendency in energy consumption under the impact of international technology transfers the key argument is related to the differences in energy consumption efficiency of local and foreign technologies one direct testable consequence of the model is that there might be a certain correlation between the energy consumption between countries and or economic areas where a free movement of capital goods and technologies takes place hence it is further tested in the framework of a multivariate spectrum analysis the case of energy consumption synchronization between europe and respectively united states and japan for a time span between 1981 and 2011 based on the data provided by u s energy information administration there are evidences of a leading behavior of energy consumption in united states and japan in respect to europe as well as of short run phase delays of 2 up to 5 months

bringing corporate governance into internalization theory state ownership and foreign entry strategies we use internalization theory to analyze the establishment and entry mode decisions of state owned soe and privately owned poe enterprises we enrich internalization theory by building on insights from economic theory of corporate governance and taking into account particular characteristics of soes such as non economic motivations long term orientation and different risk preferences we examine foreign entries over a 10 year period in the canadian oil and gas industry this single country and single industry context features foreign soes and poes from a wide range of home countries allowing a focused study of the combined influence of state ownership and home country factors compared to poes soes tend to prefer acquiring stand alone assets rather than firms and to take lower ownership shares we also find that differences between soes and poes diminish when home countries are characterized by high government quality and market orientation and identify differences between types of soes with partially owned soes exhibiting behaviors more similar to poes than fully owned soes we demonstrate how our enrichment of internalization theory strengthens its predictive and explanatory capacity our results also show that soes from strong and market oriented institutional environments are similar to poes and can be studied using the traditional internalization theory

international technology licensing monopoly rents transaction costs and exclusive rights as firms increasingly use licensing to exploit knowledge based assets in global technology markets appropriate structuring of these agreements has become an important line of research inquiry one area that has received less attention is the nature of rights granted in inter firm licensing relationships although it is an important clause that has implications for profit generation from licensing of proprietary assets conceptualizing licensing rights in terms of number of licenses granted and exclusivity rights given to a licensee in a foreign market this paper examines the determinants of these rights based on monopoly rents and transaction costs associated with different types of licensing contracts hypotheses are empirically tested through two studies one based on large us manufacturing firms and the other on a cross national sample of medium sized firms actively involved in international technology licensing results from both studies show a greater propensity to use non exclusive multiple licensing when the licensed technology has greater potential to produce differentiated products or when there is greater threat of substitutive technologies entering the market on the other hand innovative technologies and a higher degree of asset specific investments required of the licensee for the technology are related to the use of single exclusive licensing agreements

the asymmetric impact of oil prices interest rates and oil price uncertainty on unemployment in the us abstract in this study we investigate the presence of asymmetric interactions between oil prices oil price uncertainty interest rates and unemployment in a cointegration framework utilizing the nonlinear auto regressive distributed lag nardl approach we show the asymmetric responses of unemployment to changes in oil prices oil price uncertainty and interest rates in the long run more specifically the results of our analyses suggest that an increase in oil price results in increased unemployment while there is no significant impact of reduced oil prices on the one hand reduced oil price uncertainty leads to a decrease in unemployment whereas an increase in oil price uncertainty does not have an impact we also observe increased unemployment in response to a decrease in interest rates as the impact of increased interest rates is not significant last but not least we find that option implied oil price volatility as a measure of oil price uncertainty outperforms the conditional volatility of crude oil prices in predicting unemployment this study provides valuable implications for policymakers to design sound economic policies

path dependency and input substitution implications for energy policy modelling in most policy oriented energy models the effectiveness of energy policy instruments crucially depends both on the values of the substitution elasticities between the various inputs and on the rates of technological progress in this paper we argue that due to the fixed cost nature of adjustments to relative price changes these technological parameters are affected by past developments failing to account for the role of history will result in biased parameter estimates and hence the implication for energy policy modelling is that the estimation period should be carefully selected we provide an empirical illustration using data for the netherlands

on real and sticky price theories of the business cycle after presenting some facts about the growth of government in western industrialized countries possible causes of this development are analyzed from a public choice perspective next some empirically tested theories which seek to explain this growth are discussed finally possible consequences for efficiency and individual liberty are examined it is shown that both the number and size of interest groups age of democracy as stated by mancur olson 1982 and the increasing share of government expenditure in gdp seem to exert a negative influence on the growth rate of gdp copyright 1986 by ohio state university press

understanding the large negative impact of oil shocks this paper oers a plausible explanation for the close link between oil prices and aggregate macroeconomic performance in the 1970s although this link has been well documented in the empirical literature standard economic models are not able to replicate this link when actual oil prices are used to simulate the models in particular standard models cannot explain the depth of the recession in 1974 75 and the strong revival in 1976 78 based on the oil price movements in that period this paper argues that a missing multiplier accelerator mechanism from standard models may hold the key

asymmetries in the responses of regional job flows to oil price shocks this paper studies the effect of oil price innovations on manufacturing job flows across u s states first i estimate a nonlinear structural equation model and compute impulse response functions by monte carlo integration i find asymmetries in the responses of job flows to positive and negative oil price innovations yet these asymmetries do not pass a test of symmetry on the impulse responses especially after accounting for data mining third i use a test for the absence of job reallocation to evaluate whether an unexpected increase in the real price of oil price triggers an important change in job reallocation i find that oil price shocks have limited regional allocative effects

oil and the macroeconomy since world war ii all but one of the u s recessions since world war ii have been preceded typically with a lag of around three fourths of a year by a dramatic increase in the price of crude petroleum this does not mean that oil shocks caused these recessions evidence is presented however that even over the period 1948 72 this correlation is statistically significant and nonspurious supporting the proposition that oil shocks were a contributing factor in at least some of the u s recessions prior to 1972 by extension energy price increases may account for much of post opec macroeconomic performance

crude oil and the macroeconomy tests of some popular notions a note perhaps no other economic events in the post world war ii era have generated as much attention as the series of crude oil price shocks that have jolted the world economy since the opec boycott of 1973 a tremendous amount of space in the popular and professional literature has been devoted to analyzing the impacts of these shocks on the developed economies and the adjustments these shocks have induced one residual of this literature has been a general impression that since 1973 the functional relationship between crude oil prices and the developed macroeconomies has been dramatically and fundamentally altered yet to our knowledge no one has formally tested this impression recent evidence of hamilton 1983 suggests that crude oil prices had a strong impact on the u s business cycle well before 1973 further while textbook treatments of oil price shocks tend to highlight cost push inflationary effects the research of berndt and wood 1975 1979 and wilcox 1983 indicates the net complementarity between energy and capital in the u s economy is quite strong both before and after 1973 thus oil price shocks may have stronger real effects than generally believed in this paper we formally test three popular notions associated with the so called

a comparison of the effects of exogenous oil supply shocks on output and inflation in the g7 countries a comparison of the effects of exogenous shocks to global crude oil production on seven major industrialized economies suggests a fair degree of similarity in the real growth responses an exogenous oil supply disruption typically causes a temporary reduction in real gdp growth that is concentrated in the second year after the shock inflation responses are more varied the median cpi inflation response peaks after three to four quarters exogenous oil supply disruptions need not generate sustained inflation or stagflation typical responses include a fall in the real wage higher short term interest rates and a depreciating currency with respect to the dollar despite many qualitative similarities there is strong statistical evidence that the responses to exogenous oil supply disruptions differ across g7 countries for suitable subsets of countries homogeneity cannot be ruled out a counterfactual historical exercise suggests that the evolution of cpi inflation in the g7 countries would have been similar overall to the actual path even in the absence of exogenous shocks to oil production consistent with a monetary explanation of the inflation of the 1970s there is no evidence that the 1973 1974 and 2002 2003 oil supply shocks had a substantial impact on real growth in any g7 country whereas the 1978 1979 1980 and 1990 1991 shocks contributed to lower growth in at least some g7 countries jel e31 e32 q43

the relationship between oil price shocks and china s macro economy an empirical analysis china postdoctoral science foundation 20090460751 ministry of education of the people s republic of china 09yjc790167 09yja820074 national social science funds 09zd050 08ajy031

sectoral shifts and cyclical unemployment a substantial fraction of cyclical unemployment is better characterized as fluctuations of the frictional or natural rate than as deviations from some relatively stable natural rate shifts of employment demand between sectors of the economy necessitate continuous labor reallocation since it takes time for workers to find new jobs some unemployment is unavoidable this paper presents evidence that most of the unemployment fluctuations of the seventies unlike those in the sixties were induced by unusual structural shifts within the u s economy simple time series models of layoffs and unemployment are constructed that include a measure of structural shifts within the labor market these models are estimated and a derived natural rate series is constructed

a data envelopment analysis based framework for the relative performance evaluation of competing crude oil prices volatility forecasting models abstract forecasts of crude oil prices volatility are important inputs to many decision making processes in application areas such as macroeconomic policy making risk management options pricing and portfolio management despite the fact that a large number of forecasting models have been designed to forecast crude oil prices volatility so far the relative performance evaluation of competing forecasting models remains an exercise that is unidimensional in nature to be more specific most studies tend to use several criteria and their measures to assess the relative performance of these models but competing models are always ranked by performance measure thus leading in general to different rankings for different criteria and to a situation where one cannot make an informed decision as to which model performs best with respect to all criteria under consideration the purpose of this paper is to propose a single ranking that takes account of several criteria using a data envelopment analysis framework our empirical results reveal that the unidimensional rankings for different criteria might differ significantly and that the multidimensional ranking of some models could be substantially different from their unidimensional rankings which highlights the importance of the proposed performance evaluation tool

keeping it within bounds regression analysis of proportions in international business international business researchers commonly estimate proportions percentages rates or fractions so called proportional dependent variables in this paper we posit that two regression strategies are particularly pertinent to the international business field tobit and fractional regression reviewing recent international business research we find that while fractional regression is rarely used analyses from tobit regression are often incomplete or erroneously interpreted with consequences for the validity of the reported results accordingly we clarify how researchers should choose between tobit and fractional regression and interpret their results we present insights based on simple simulations and data examples with associated stata code and a decision tree for choosing between types of models for use with proportional dependent variables

the application of queueing theory to continuous perishable inventory systems this paper develops two distinct models for studying inventory systems with continuous production and perishable items the perishable items have a deterministic usable life after which they must be outdated for each of the models analytical expressions derived from queueing theory are found for the steady state distribution of system inventory knowledge of this steady state behavior may be used for evaluation of system performance and for consideration of alternatives for improving system performance both models assume that inventory is replenished by a continuous production process the first model assuming continuous inventory units has poisson demand requests with the size of each request distributed as an exponential random variable the second model has poisson demand requests with all demands being for a single unit the analysis for both models exploits the similarity of the inventory system with a single server queueing system

oil price uncertainty and the u s stock market analysis based on a garch in mean var model abstract this paper uses a bivariate garch in mean var model to examine the effect of oil price uncertainty on the u s real stock returns at the aggregate and sectoral levels estimation results suggest that there is no statistically significant effect of oil price volatility on the u s stock returns the absence of an uncertainty effect might be explained by the fact that companies are likely to hedge against fluctuations in oil prices it could also stem from the ability of most companies to transfer the higher cost of oil to customers moreover the impulse responses indicate that accounting for oil price uncertainty oil price increases and decreases have symmetric effects on the u s aggregate stock returns in that energy price increases and decreases are estimated to have equal and opposite effects on the u s financial market however this symmetric effect doesn t hold across all the sectors studied in this paper

varieties of capitalism and the internationalization of state owned enterprises this article sheds light on how the internationalization of state owned enterprises is influenced by the state involvement in ownership and by the home country s institutional settings integrating international business literature with the debate on the varieties of capitalism we contend that state dominated enterprises internationalize more less than privately owned enterprises in coordinated liberal market economies whereas they exhibit an inconstant behavior in state influenced market economies our analysis on a sample of enterprises pertaining to 20 oecd countries supports our hypotheses this article adds to studies on the influence of institutions on firms internationalization and has implications for both managers and policymakers

state ownership effect on firms fdi ownership decisions under institutional pressure a study of chinese outward investing firms this study investigates the effect of state ownership on chinese firms foreign direct investment fdi ownership decisions it adopts a political perspective to extend the application of institutional theory in international business research specifically it examines firms heterogeneous responses to external institutional processes during foreign market entry while taking into consideration the political affiliation of firms with the external institutions we argue that state ownership creates the political affiliation of a firm with its home country government which increases the firm s resource dependence on home country institutions while at the same time influencing its image as perceived by host country institutional constituents such resource dependence and political perception increase firms tendency to conform to rather than resist isomorphic institutional pressures we tested our hypotheses using primary data for 132 fdi entries made by chinese firms during 2000 2006 and we found that the effects of home regulatory host regulatory and host normative pressures on a firm to choose a joint ownership structure were stronger when the share of equity held by state entities in the firm was high

gasoline prices transport costs and the u s business cycles abstract the effects of gasoline prices on the u s business cycles are investigated in order to distinguish between gasoline supply and gasoline demand shocks the price of gasoline is endogenously determined through a transportation sector that uses gasoline as an input of production the model is estimated for the u s economy using five macroeconomic time series including data on transport costs and gasoline prices the results show that although standard shocks in the literature e g technology shocks monetary policy shocks have significant effects on the u s business cycles in the long run gasoline supply and demand shocks play an important role in the short run

understanding the soft budget constraint we propose a clarification of the notion of a soft budget constraint a concept widely used in the analysis of socialist transitional and market economies our interpretation is broad enough to embrace most existing approaches to soft budget constraint phenomena and provides a classification of their causes and consequences in light of this interpretation we then review the theoretical literature on the subject and compare it with those on other dynamic commitment problems in economics

high level politically connected firms corruption and analyst forecast accuracy around the world the international business ib literature has widely recognized political forces as major factors that complicate the strategic decisions of multinational enterprises mnes analyses by financial intermediaries can help to reduce the risk of information asymmetry caused by such factors using firm level data from 17 jurisdictions between 1997 and 2001 this study investigates the association between a firm s high level political connections and earnings forecasts made by financial analysts an important group of financial intermediaries we find that after controlling for other determinants of forecast accuracy analysts experience greater difficulty in predicting the earnings of firms with political connections than those of firms with no such connections however in jurisdictions in which corruption level is relatively high earnings forecast accuracy is influenced more by a firm s political connections our findings contribute to the ib literature by demonstrating that political connections exacerbate the information asymmetry between investors and managers and also that anti corruption measures can curb the adverse effect of political connections on the corporate information environment these findings bear the practical implication that mnes must consider political issues when making resource allocation decisions

historical energy price shocks and their changing effects on the economy abstract the purpose of this paper is to identify the changes in the impact of energy shocks on economic activity with an interest in assessing if an economy s vulnerability and resilience to shocks improved with economic development using data on the united kingdom over the last three hundred years the paper identifies supply aggregate demand and residual shocks to energy prices and estimates their changing influence on energy prices and gdp the results suggest that the impacts of supply shocks rose with its increasing dependence on coal and declined with its partial transition to oil however the transition from exporting coal to importing oil increased the negative impacts of demand shocks more generally the results indicate that improvements in vulnerability and resilience to shocks did not progress systematically as the economy developed instead the changes in impacts depended greatly on the circumstances related to the demand for and supply of energy sources if these experiences are transferable to future markets a transition to a diversified mix of renewable energy is likely to reduce vulnerability and increase resilience to energy price shocks

the effects of oil price shocks on job reallocation we investigate the effect of oil price innovations on u s manufacturing job flows using a simultaneous equation model that nests symmetric and asymmetric responses we find no evidence of asymmetry in the response of job flows to positive and negative oil price innovations we then inquire whether firms when facing positive shocks shed jobs faster than they create jobs we show that positive innovations lead to a decline in net employment and an increase in job reallocation possibly due to search and matching issues yet the latter effect becomes statistically insignificant when we control for data mining we demonstrate that the cumulative one year effect of oil price shocks on job creation and destruction was smaller during the great moderation but it was larger for gross job reallocation these variations were caused by a change in the transmission channel and not by smaller oil price shocks

malthus in the light of climate change abstract to reconsider the malthusian predictions of natural limits to economic development the paper develops a multi sector growth model with exhaustible resource extraction investments in physical and knowledge capital climate change and endogenous fertility economic growth is driven by endogenous innovations which increase in the availability and productivity of research labour poor substitution of natural resources triggers sectoral change climate change is the result of polluting resource use which is like consumption and investments based on the intertemporal optimization of the households highlighting the importance of bounded resource supply and of rational extraction decisions i show that climate change is independent of population growth in steady state and there is no causal relationship between climate and population during transition to steady state the consumption per capita growth rate rises in the innovation rate and the output elasticities of labour and capital in the different sectors unlike climate policy population policy is not warranted it may be counterproductive because labour is crucial for the research sector

the impact of oil prices on gdp in european countries an empirical investigation based on asymmetric cointegration this paper investigates the existence of a long term relationship between oil prices and gdp in 12 european countries to account for the fact that economic activity responds asymmetrically to oil price shocks we propose an approach based on asymmetric cointegration our results show that while standard cointegration is rejected there is evidence for asymmetric cointegration between oil prices and gdp in the majority of the considered european countries

oil price uncertainty in canada bernanke bernanke ben s irreversibility uncertainty and cyclical investment quarterly journal of economics 98 1983 85 106 shows how uncertainty about energy prices may induce optimizing firms to postpone investment decisions thereby leading to a decline in aggregate output elder and serletis elder john and serletis apostolos oil price uncertainty http ssrn com abstract 908675 2009 find empirical evidence that uncertainty about oil prices has tended to depress investment in the united states in this paper we assess the robustness of these results by investigating the effects of oil price uncertainty in canada our results are remarkably similar to existing results for the united states providing additional evidence that uncertainty about oil prices may provide another explanation for why the sharp oil price declines of 1985 failed to produce rapid output growth impulse response analysis suggests that uncertainty about oil prices may tend to reinforce the negative response of output to positive oil shocks

heterogeneity and unemployment dynamics many previous articles have studied the contribution of inflows and outflows to the cyclical variation in unemployment but ignored the critical role of unobserved heterogeneity across workers thi

a neoclassical model of unemployment and the business cycle this paper investigates a general equilibrium model of unemployment and the business cycle in which specialization of labor plays a key role a rational expectations equilibrium with fully flexible wages and prices can exhibit unemployment in which the marginal product of employed workers exceeds the reservation wage of those who are without jobs workers are unemployed either because they are in the process of relocating for a better job or because they are waiting for conditions in the depressed sector to improve moreover seemingly small disruptions in the supplies of primary commodities such as energy could be the source of fluctuations in aggregate employment and can exert surprisingly large effects on real output

oil and the macroeconomy since the 1970s economists have long been intrigued by empirical evidence that suggests that oil price shocks may be closely related to macroeconomic performance this interest dates back to the 1970s the 1970s were a period of growing dependence on imported oil unprecedented disruptions in the global oil market and poor macroeconomic performance in the united states thus it was natural to suspect a causal relationship from oil prices to u s macroeconomic aggregates since then a large body of work has accumulated that purports to establish this link on theoretical grounds and to provide empirical evidence in its support we do not attempt a comprehensive survey of this literature but rather provide an idiosyncratic synthesis of what we view as the key issues in this debate and the insights gained over the last 30 years the timing seems right for such an account although the experience of the 1970s continues to play an important role in discussions of the link between oil and the macroeconomy there have been a number of new oil price shocks since the 1970s notably the 1986 collapse of oil prices and the 2000 boom in oil prices as well as the oil price increases associated with the 1990 1991 gulf war and the 2003 iraq war given this richer case history we are arguably in a better position than two decades ago to distinguish the idiosyncratic features of each oil crisis from the systematic effects increases in oil prices have been held responsible for recessions periods of excessive inflation reduced productivity and lower economic growth in this paper we review the arguments supporting such views first we highlight some of the conceptual difficulties in assigning a central role to oil price shocks in explaining

what happened to the oil price macroeconomy relationship abstract strong evidence is found that oil prices no longer granger cause many u s macroeconomic indicator variables in data after 1973 a number of potential explanations are explored that sample stability issues are responsible that oil prices are now endogenous and that linear and symmetric specifications misrepresent the form of the oil price interaction none of these hypotheses are supported by the data the opec price increases do appear to have had significant impacts while the effects of the price declines of the 1980s are smaller and harder to characterize these results have potentially important implications for the large body of research which utilizes oil prices as an instrumental or explanatory variable

transforming disadvantages into advantages developing country mnes in the least developed countries we analyze the advantages and disadvantages of developing country multinational enterprises mnes in comparison with developed country mnes developing country mnes tend to be less competitive than their developed country counterparts partly because they suffer the disadvantage of operating in home countries with underdeveloped institutions we argue that this disadvantage can become an advantage when both types of mne operate in countries with difficult governance conditions because developing country mnes are used to operating in such conditions the empirical analysis shows that although developing country mnes rarely appear among the largest mnes in the world they are more prevalent among the largest foreign firms in the least developed countries ldcs especially in ldcs with poorer regulatory quality and lower control of corruption

diplomatic and corporate networks bridges to foreign locations firms and governments operate in broad networks in which the home government and its diplomatic service are a critical node or a referral point between firms and potential partners in foreign locations thus diplomatic relations between countries matter for the choice of foreign investment location using a network perspective we argue that the extent to which good diplomatic relations induce firms to invest in friendly host countries depends on their political connections to home governments those with stronger ties to home governments can better access and leverage intergovernmental diplomatic connections thus benefiting potentially from enhanced access to information reduced political risks and increased legitimacy such ability of politically connected firms is more useful where weak institutional impartiality in the host country inhibits neutral treatment of foreign investors empirically using overseas investment location decisions by chinese firms we find that the types of home government ties i e whether they are organizational or personal and whether those relationships are with central or local goverments and the impartiality of host institutions are both important contingencies affecting firms utilization of diplomatic relations we discuss the implications of our study to research on network theory political ties and internationalization of emerging market firms

do lenders favor politically connected firms rent provision in an emerging financial market corruption by the politically connected is often blamed for economic ills particularly in less developed economies using a loan level data set of more than 90 000 rms that represents the universe of corporate lending in pakistan between 1996 and 2002 we investigate rents to politically connected rms in banking classifying a rm as political if its director participates in an election we examine the extent nature and economic costs of political rent provision we nd that political rms borrow 45 percent more and have 50 percent higher default rates such preferential treatment occurs exclusively in government banks private banks provide no

effects and mechanism of influence of china s resource tax reform a regional perspective abstract china s resource tax reform beginning with xinjiang as a pilot area in june 2010 marked a new stage in the progression of china s resource tax system based on the 2007 social accounting matrix sam for xinjiang constructed by ourselves this paper takes a regional perspective on china s resource tax reform to quantitatively calculate its degree of influence and qualitatively analyze its mechanism of influence by adopting an energy computable general equilibrium cge model and a sam price model the results show that the main significance of the reform lies in bolstering local government finances rather than energy conservation or carbon reduction this is because revenue will be transferred from resource enterprises and the central government to the local government while simultaneously the low tax rate narrow tax scope and unreasonable price mechanism will combine to prevent the reform from reaching its environmental goals promoting resource price mechanism reform and deepening resource tax reform will be two key elements of china s future energy strategies because resource enterprises will bear the increased burden caused by the reform the degree of sectoral price increases will be limited therefore the fear that resource tax reform will push up inflation is unnecessary and should not be a barrier to reform

equity joint ventures and the theory of the multinational enterprise this paper extends the internalization approach to the theory of the multinational enterprise mne to include an expanded role for equity joint ventures using the transaction cost paradigm of williamson this paper explains why joint ventures may sometimes be preferred over wholly owned subsidiaries also presented is empirical work on joint venture performance in developing countries which demonstrates that under certain conditions joint ventures can be the optimal mode of foreign direct investment

the effect of fossil energy and other environmental taxes on profit incentives for change in an open economy evidence from the uk this paper argues that the underlying supply and demand analysis of fossil energy and other environmental taxes needs further elaboration when a country a introduces national fossil energy or environmental taxes and b is open to international trade at given world prices we provide evidence that such conditions are plausible for many sectors in the uk a key implication is that the short run effects of such taxes should not be felt in final good prices since these are determined in world markets but in terms of underlying profitability these changes in underlying profits provide two key incentives for producers to change to more environmentally friendly production techniques and to switch resources to production of less environmentally harmful goods using input output techniques we provide evidence for the uk to show how existing fossil energy and other green taxes have affected underlying profitability the evidence shows quite strong profit incentives to shift resources from a small number of energy intensive industries to others

risk aversion and co2 regulatory uncertainty in power generation investment policy and modeling implications abstract we consider a simulation of risk averse producers when making investment decisions in a competitive energy market who face uncertainty about future regulation of carbon dioxide emissions investments are made under regulatory uncertainty then the regulatory state is revealed and producers realize returns we consider anticipated taxes grandfathered permits and auctioned permits and show that some anticipated policies increase investment in the relatively dirty technology beliefs about the policy instrument that will be used to price carbon may be as important as certainty that carbon will be priced more generally a failure to consider risk aversion may bias policy analysis for the power sector

analysis of a sampling control scheme for a perishable inventory system we consider an inventory system in which both the arrival of items and the demand for those items are poisson processes the stored items have two phases of shelf life if the item has not been taken by a demand during the first phase it is inspected with probability q it is removed and with probability p 1 q it is transferred to the second phase the blood bank model inspired this study we compute ergodic limits for the number of items in the system the lost demands and the two types of outdating

oil prices and economic downturns the case of spain abstractwe address the macroeconomic effects of an oil price shock in spain we apply a vector autoregression model var analysis to quarterly data for the spanish economy since 1986 to elucidate the effects of variations in the oil price on the economy considering the three main causes of disruptions in the oil markets oil supply shocks oil demand shocks and oil specific precautionary demand shocks we conclude that the effects in spain strongly depend on the type of shock the consumer price index cpi has mainly been influenced by oil demand shocks output has only reacted to oil supply shocks and monetary policy has mainly reacted after precautionary shocks second round effects caused by the behaviour of nominal wages have not been found additionally we discuss two facts the ability of firms to increase markups in a context of rising demand and the procyclical role of monetary policy when faced with oil demand shocks

climate change and uneven development in this paper using a theoretical model with endogenous capital depreciation we study the effects of climate change and adaptation on long run development we show that climate change affects economic growth depending on climate exposure and adaptation efficiency which are asymmetric between different countries poor countries are likely to be hurt more because of the negative effects of climate change on the rate of depreciation of the assets that represent the engine of growth these asymmetries generally induce growth deficits and unsustainability traps in less developed economies

influences on foreign equity ownership level in joint ventures in china this study examines the determinants of foreign equity ownership in joint ventures in china drawing upon duning s ownership locational and internalization paradigm and the literature on bargaining power eleven variables that impact foreign ownership preferences and concessions are examined these variables are advertising intensity foreign capital input country risk of china ejv investment amount ejv contractual duration cultural distance competitive intensity local partner state ownership local partner alignment foreign partner alignment and ejv location the empirical findings are largely consistent with the hypotheses the empirical findings are largely consistent with the hypotheses further interesting differences were found among u s european and japanese firms with respect to the impact of these determinants

energy price shocks and the macroeconomy the role of consumer durables so far the literature on dynamic stochastic general equilibrium models with energy price shocks uses energy on the production side only in these models energy shocks are responsible for only a negligible share of output fluctuations we study the robustness of this finding by explicitly modeling private consumption of energy at the household level in addition to energy use at the firm level to account for total energy use in the economy additionally we distinguish between investment in consumer durables and investment in capital goods the model economy is calibrated to match total energy use and durable goods consumption as observed in the u s data simulation results indicate that despite higher total energy use this economy has an even smaller proportion of output fluctuations attributable to energy price shocks productivity shocks continue to be the primary force behind business cycle fluctuations the driving force behind our results is that the household now has the flexibility to rebalance its investment portfolio specifically the energy price hike is absorbed by reducing durable goods investment more than investment in capital goods thereby cushioning the hit to future production at the expense of current consumption hence our model better matches the consumption volatility observed in the data jel classification e32 q43

oil and energy price volatility it is commonly believed that since the 1973 oil crisis oil and energy prices have been more volatile than other commodity prices this study examines monthly producer prices for thousands of products over the period january 1945 through august 2005 the results show that crude oil refined petroleum and natural gas prices are more volatile than prices for about 95 of products sold by domestic producers relative to crude commodities however crude oil prices are currently more volatile than about 65 of other products and oil price volatility first exceeded the median for crude commodities following the 1986 drop in oil prices

a crude shock explaining the short run impact of the 2014 16 oil price decline across exporters abstract the sharp long lasting decline in oil prices in 2014 16 tested the resilience of oil exporters we examine the degree to which economic fundamentals entering the oil price decline explain the impact on economic growth across oil exporting economies and derive policy implications as to what factors help to mitigate the negative effects we find that pre existing fundamentals account for about half of the cross country variation in the impact of the shock oil exporters that weathered the shock better tended to have a stronger fiscal position higher foreign currency liquidity buffers a more diversified export base a history of price stability and a more flexible exchange rate regime within this group of countries the impact of the shock is not found to be related to the size of oil exports or the share of oil in fiscal revenue or economic activity

the determinants of mne subsidiaries political strategies evidence of institutional duality in this study we develop and test a model of the determinants of political strategies used by foreign subsidiaries of multinational enterprises mnes using recent theoretical advances in institutional theory that recognize that mne subsidiaries are confronted with pressures for isomorphism within the corporation internal legitimacy and within the host country external legitimacy we integrate international business and political strategy literatures to create a multilevel model of subsidiary host country and parent determinants of political strategy our hypotheses are tested using survey and archival data from western european subsidiaries of us mnes

a macroeconomic analysis of energy subsidies in a small open economy we construct a dynamic model of a small open economy to analyze the effects of large energy subsidies the model includes domestic energy production and consumption trade in energy at world market prices as well as private and public sector production the model is calibrated to egypt and used to study reforms such as reductions in energy subsidies with corresponding reductions in various tax instruments or increases in infrastructure investment we calculate the new steady states transition paths to the new steady state and the size of the associated welfare losses or gains our main results for a 15 cut in energy subsidies are 1 steady state gross domestic product drops in most of our experiments as less energy is used in production 2 steady state consumption rises in most of our experiments 3 welfare can rise by as much as 0 6 in consumption equivalent terms 4 the largest gains in terms of output and of welfare can be obtained when savings from energy subsidy cuts are used to fund additional infrastructure investment jel e21 e63 h55 j26 j45 to understand the effects of subsidies and taxes on an energy sector and on consumption in a given country requires establishing a complete picture of the market in which it operates and of the various policies past and present that have applied to it iea 2010c 11 1 introduction a report by the international energy agency iea 2010a in 2010 identified 37 countries that together account for 95 of global subsidized fossil fuel consumption and found that total fuel consumption subsidies were about 557 billion in 2008 a stark increase from 342 billion in 2007 countries with the highest subsidies for energy turn out to be smaller oil producing countries like iran 65 billion in subsidies in 2009 20 of gross domestic product gdp saudi arabia venezuela and egypt iea 2010b the underpricing of energy can lead to excess consumption of energy that together with the need to finance these subsidies can have adverse economic effects both intra and intertemporally energy subsidies may therefore have large adverse effects on capital accumulation economic growth and hence welfare especially for future generations the iea estimates that many countries forgo faster growth of up to 2 6 by subsidizing energy iea 2010c since 2008 many major oil subsidizing countries have started to bring their prices in line with world market prices among them china russia india and indonesia many of the concerns about the inefficiency of energy subsidies have focused on environmental aspects and green house gas ghg emissions in particular the iea 2010c estimates that a world wide reduction of fuel subsidies could decrease ghg emissions in the long run by around 10 there are relatively few studies of the short term and long term macroeconomic effects of reductions in energy subsidies these effects are complex and require an explicit dynamic modeling approach there are many interrelated effects 1 phasing out energy subsidies alters the price of energy relative to other consumption goods and hence not only the quantity demanded for energy but also the demand for other goods 2 the degree of complementarity substitutability between these consumption goods together with the expectations of the time path for the phase out influences savings behavior and thus capital accumulation of households 3 changing energy subsidies influences use of energy in production whether energy is a complement or a substitute to other factors of production influences total output and marginal products of all factors of production 4 changes in factor payments influence household income and thus consumption and savings behavior 5 phasing out energy subsidies allows for other changes in the government budget such as changes in tax rates or other government expenditures which in turn will influence firm and household behavior

volatility spillovers and cross hedging between gold oil and equities evidence from the gulf cooperation council countries the paper examines the return and volatility spillovers between crude oil gold and equities and investigates the usefulness of the two commodities in hedging equity portfolios using daily data from january 20043 to may 2016 for the gulf cooperation council countries a dcc garch model is used to estimate dynamic correlations and hedge ratios we find significant spillovers from oil to equities highlighting the heavy dependence of the local economies on oil moreover the spillovers of gold on the stock markets are insignificant suggesting that gold price fluctuations do not necessarily influence equity investment decisions in the opposite direction we find that equities do not exert significant influence on the two commodities which we attribute to the relatively small capitalisation of the exchanges our results reveal low dynamic correlations and hedge ratios with a few spikes during crises indicating that oil and gold are cheap hedges for stocks albeit not good ones while they could be considered as weak safe havens but at a considerable cost

the role of selective job search in uk unemployment selective search where unemployed job losers confine their job seeking efforts to matches in the pre separation sector has attracted consid erable attention as a possible source of high and persistent unemployment however this idea is questionable those opting for selection may do so because this strategy is more effective at gener ating an acceptable offer using uk microdata i find evidence in support of the latter view selective searchers cannot account for the persistence of high unemployment since the early 1980s

automobile externalities and policies this paper discusses the nature and magnitude of externalities associated with automobile use including local and global pollution oil dependence traffic congestion and traffic accidents it then discusses current federal policies affecting these externalities including fuel taxes fuel economy and emissions standards and alternative fuel policies summarizing insofar as possible the welfare effects of those policies finally we discuss emerging pricing policies including congestion tolls and insurance reform and summarize the appropriate combination of policies to address automobile externalities

slow oil shocks and the weakening of the oil price macroeconomy relationship abstract many papers have been documenting and analysing the asymmetry and the weakening of the oil price macroeconomy relationship as off the early eighties while there seems to be a consensus about the factors causing the asymmetry namely adjustment costs which offset the benefits of low energy prices the debate about the weakening of the relationship is not over yet moreover the alternative oil price specifications which have been proposed by mork 1989 lee et al 1995 and hamilton 1996 to restore the stability of the relationship fail to granger cause output or unemployment in post 1980 data by using the concept of accelerations of the oil price we show that the weakening of this relationship corresponds to the appearance of slow oil price increases which have less impact on the economy when filtering out these slow oil price variations from the sample we manage to rehabilitate the causality running from the oil price to the macroeconomy and show that far from weakening the oil price accelerations gdp relationship has even been growing stronger since the early eighties

unemployment in regional labor markets using structural theories to understand local jobless rates in west virginia the author uses a range of structural labor market models to understand differing regional jobless rates in a state affected by pockets of structural unemployment four theories of regional structural unemployment are presented and their hypotheses are statistically evaluated using west virginia county panel data the author then presents case study evidence to compare these statistical results with the realities of the county labor markets both types of empirical evidence suggest that a segmented non market clearing model in which structural unemployment stems from queuing for above market clearing wages in both a high wage primary sector and a lower wage secondary sector can shed the most light on regional unemployment rates in west virginia

population growth and natural resource scarcity long run development under seemingly unfavorable conditions in this paper i consider an economy that is constrained by the use of natural resources and driven by knowledge accumulation resources are essential inputs in all sectors i show that population growth and poor input substitution are not detrimental but on the contrary are even necessary to obtain a sustainable consumption level i find a general rule to define the conditions for a constant innovation rate the rule does not apply to capital but to labor growth which is the crucial input in research furthermore the rule relates to the sectoral structure of the economy and to demographic transition the results continue to hold with a backstop technology and are extended for the case of minimum resource constraints

institutional cultural and transaction cost influences on entry mode choice and performance in this study we examine foreign market entry mode choice and firm performance for a sample of european union firms examining both financial and non financial performance measures we attempt to determine if firms that select their entry mode based on transaction cost institutional context and cultural context variables perform better than firms that make other mode choices we found that mode choice did matter firms whose mode choice could be predicted by the extended transaction cost model performed significantly better on both financial and non financial measures than did firms whose mode choice could not be predicted by the extended transaction cost model implications for future research are discussed

s 1 s policies for perishable inventory we consider s 1 s policies for a single item whose lifetime is fixed and known with certainty demands are generated by a stationary poisson process and there is a positive leadtime for replenishment we believe this study gives the only analysis for perishables with a positive order leadtime the analysis involves the derivation of the stationary distribution of the s dimensional stochastic process corresponding to the time elapsed since the last s orders were placed this distribution is then used to obtain an expression for the expected cost rate of operating the system in steady state as a function of s a computer program has been developed to compute optimal s values and expected annual costs we report a computation for a variety of system parameters which show some of the unusual features of the problem finally we show how this model can be used in the context of a problem of optimizing availability of operating equipment subject to scheduled maintenance as well as random failure

politicians and banks political influences on government owned banks in emerging markets abstract government ownership of banks is very common in countries other than the united states this paper provides cross country bank level empirical evidence about political influences on these banks it shows that government owned banks increase their lending in election years relative to private banks this effect is robust to controlling for country specific macroeconomic and institutional factors as well as bank specific factors the increase in lending is about 11 of a government owned bank s total loan portfolio or about 0 5 of the median country s gdp per election per government owned bank

sectoral shifts labor market sorting and aggregate fluctuations a model of sectoral reallocation is constructed where intersectoral friction is not caused by search or mobility costs instead a sectoral disturbance has a negative effect on production possibilities because it reduces the value of previous sorting in the labor market in equilibrium a measure of sectoral dispersion is positively correlated with the unemployment rate an increase in the incidence of sectoral disturbances increases unemployment at cyclical peaks and at cyclical troughs copyright 1990 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

the effects of information voids on capital flows in emerging markets information voids reflect a lack of publicly available information about a country s investment climate and represent the information problems associated with institutional voids we argue that foreign investors differ in their sensitivity to information voids based on their own private information and their flexibility in responding rapidly to change we predict that foreign banks will be least hampered by information voids due to their privileged access to private information about local conditions and ability to adapt quickly to new information portfolio investors while impeded by information voids due to their severely limited access to local private information are able to quickly respond to new information foreign direct investors have moderate access to local private information yet their inability to adapt quickly creates problems dealing with information voids using time series cross sectional data on local public information and capital flows to the thirty largest emerging markets from 1994 to 2012 we find preliminary support for our hypotheses regarding the sensitivity of different investors to information voids we find that direct investors are most sensitive to information voids and banks are least sensitive while portfolio investors are moderately sensitive

the role of model uncertainty and learning in the u s postwar policy response to oil prices abstract this paper studies optimal monetary policy in a framework that explicitly accounts for policymakers uncertainty about the channels of transmission of oil prices into the economy more specifically using postwar us data i examine the evolution of the policy recommendations originating from an optimal linear regulator problem that encompasses model uncertainty and learning as proposed by cogley and sargent 2005b in this environment i find that one of the underlying models dominates the robust interest rate response to oil prices and i show that this result is due to the instability of this specification in the sample period under analysis