cost reduction competition and industry performance in many markets firms compete over time by expending resources with the purpose of reducing their costs sometimes the cost reducing investments operate directly on costs in many instances they take the form of developing new products that deliver what customers need more cheaply therefore product development can have the same ultimate effect as direct cost reduction in fact if one thinks of the product as the services it delivers to the customer in the way that lancaster pioneered then product development often is just cost reduction

cooperative and noncooperative r d in duopoly with spillovers contrary to the usual assumption made in most oligopoly models relations among firms are seldom of a wholly cooperative or noncooperative type in many situations they compete in some fields while they cooperate in others an important example is the case of cooperative research efforts bringing fierce competitors together two types of agreement are observed first r d cooperation can take place at the so called precompetitive stage companies share basic information and efforts in the r d stage but remain rivals in the market place 1 a second type of agreement involves an extended collusion between partners creating common policies at the product level the usual justifications of this extension are the difficulties of protecting intellectual property the idea is then to allow partners who have achieved inventions together to also control together the processes and products which embody the results of their collaboration in order to recuperate jointly their r d investments 2 what could be expected from these types of agreement is a reduction in r d expenditures because of less wasteful duplication and a reduction of total production because of more reprinted from the american economic review 78 5 1133 1137 1988 center for operations research econometrics 1348 louvain la neuve belgium we are grateful to jean

r d policies trade and process innovation we set up a simple trade model with two countries hosting one firm each the firms invest in cost reducing r d and each government may grant r d subsidies to the domestic firm we show that it is optimal for a government to provide higher r d subsidies the lower the level of trade costs even if the firms are independent monopolies if firms produce imperfect substitutes policy competition may become so fierce that only one of the firms survives international policy harmonization eliminates policy competition and ensures a symmetric outcome however it is shown that harmonization is not necessarily welfare maximizing the optimal coordinated policies may imply an asymmetric outcome with r d subsidies to only one of the firms

breaking up a research consortium inter firm r d collaborations through contractual arrangements have become increasingly popular but in many cases they are broken up without any joint discovery we provide a rationale for the breakup date in r d collaboration agreements more specifically we consider a research consortium initiated by a firm a with a firm b b has private information about whether it is committed to the project or a free rider we show that under fairly general conditions a breakup date in the contract is a second best optimal screening device for firm a to screen out free riders with the additional constraint of renegotiation proofness a can only partially screen out free riders entry by some free riders makes sure that a does not have an incentive to renegotiate the contract ex post we also propose empirical strategies for identifying the three likely causes of a breakup date adverse selection moral hazard and project non viability

social discounting and incentive compatible fiscal policy abstract this paper considers a representative agent model of linear capital and labor income taxation in which the government cannot commit ex ante to a sequence of policies for the future in this setup if the government is more impatient than the households the capital income tax will be positive in steady state thus impatience and lack of commitment are able to generate positive capital taxes in the long run although each of these characteristics individually was not furthermore the steady state to which the economy converges is independent of initial conditions

concubinage or marriage informal and formal cooperations for innovation based on a sample of german inno innovating firms that contains information on formal and informal innovation cooperation between customers and suppliers we state that firms perceive informal cooperation as being more important than formal cooperation modes we then investigate the determinants of firms decisions to engage into the respective cooperation modes in line with previous empirical work we do not find much empirical evidence for the relevance of incoming spillovers in addition our results suggest that this finding holds as well for informal cooperations a firms ability to protect its proprietary innovations however seems to be a key determinant of formal as well as informal cooperations furthermore absorptive capacity and the organizational structure of in house r d play an important role another relevant driver of vertical cooperations are the innovation dynamics at the he industry level firms who operate an r d department and firms who are involved in costly r d projects tend to cooperate formally rather than informally

optimal taxes without commitment abstract in the problem of optimal taxation in an economy with labor and capital the optimal solution when the government can commit to a sequence of tax rates entails that the tax on capital tends to zero in the limit with all the tax burden on labor it is well known however that this solution is time inconsistent so if the commitment power is not perfect this second best tax plan will not be sustainable we model explicitly the trade off between the cost of revising the tax plan and the benefit of the revision as a result when commitment is not possible both the limit tax rate and the steady state capital are different from their levels in the second best solution limit taxes on capital may be strictly positive but it may also be the case that the only sustainable plan has subsidies to capital the subsidies induce an overaccumulation of capital which becomes a commitment device against revisions of the tax plan journal of economic literature classification numbers h21 c73

the elementary economics of social dilemmas a social dilemma is in essence a prisoners dilemma in a continuous strategy space i discuss a number of social dilemmas that have caught my attention offer an elementary diagrammatic synthesis of them and discuss some of the economic insights that the diagrams capture including incentives for pre commitment finally i model pre commitment via delegation and link results to the literature on the evolution of preferences l economie elementaire des dilemmes sociaux un dilemme social est essentiellement un dilemme du prisonnier dans un espace continu de strategie l auteur discute d un certain nombre de dilemmes sociaux qui ont retenu son attention il en propose une synthese graphique elementaire et discute certaines des suggestions economiques qui decoulent de ces diagrammes comme par exemple les incitations a se pre engager finalement l auteur construit un modele de pre engagement par delegation et relie ses resultats a la litterature sur l evolution des references

dependence distorted development and fertility trends in noncore nations a structural analysis of cross national data to evaluate the hypothesis that dependence on developed nations distorts demographic development in less developed countries ldcs a researcher used panel regression analysis to study variables from 62 nations multinational corporate penetration an estimate of the shares of both a nations capital and its labor that are controlled by developed country based transnational corporations was used as a measure of the level of dependence the analysis demonstrated that school enrollment was highly correlated with level of development social insurance program history and both family planning effort fpe measures in addition countries that underwent the most economic growth the most concerted fpes etc had the most rapid decline in fertility rates conversely those with high levels of multinational corporate penetration dependency experienced either an increase in fertility or a slow decline for example south koreas 1965 cbr was 36 below the population mean of 45 in 1984 the cbr dropped to 20 even further below the population mean of 39 a dramatic absolute and relative fertility decline south korea also had the highest rate of economic growth and its increase in family planning program effort was dramatic from no measurable effect in 1972 to the nation with the highest fpe score in 1982 in addition the level of multinational penetration was modest in conclusion this research supports the view that intranational economic phenomena such as rate of economic growth and concerted fpes contribute significantly to fertility decline on the other hand multinational corporate penetration distorts development and impedes fertility reduction

on the organization of cooperative research and development theory and evidence abstract it has become increasingly prevalent that business firms often rival firms join forces in cooperative r and d to develop new technologies that they can use in their downstream business equity research joint ventures and non equity co development are the two major modes of organization and they differ in how ownership rights over newly developed technologies are assigned this paper addresses the question of when cooperative r and d should be carried out in a research joint venture as opposed to a co development program in a setting of contractual incompleteness the nature of the downstream business of participating firms is shown to determine the organization of cooperative r and d empirical evidence that is consistent with the theoretical analysis is also presented

networks of collaboration in oligopoly abstract in an oligopoly prior to competing in the market firms have an opportunity to form pair wise collaborative links with other firms these pair wise links involve a commitment of resources and lead to lower costs of production of the collaborating firms we study the incentives of firms to form links and the architecture of the resulting collaboration network we find that incentives to form links are intimately related to the nature of market competition our analysis also suggests that collaborations are used by firms to generate competitive advantage and that strategically stable networks are often asymmetric with some firms having many links while others have few links or are isolated specifically we show that networks with the dominant group architecture stars and inter linked stars are stable we also present some results on the architecture of socially efficient networks

bad investments and missed opportunities postwar capital flows to asia and latin america since 1950 the economies of east asia grew rapidly but received little inter national capital while latin america received considerable international capitaleven as their economies stagnated the literature typically explains the failureof capital to flow to high growth regions as resulting from international capitalmarket imperfections this paper proposes a broader thesis that country specificdistortions such as domestic labor and capital market distortions also impactcapital flows we develop a dsge model of asia latin america and the rest ofthe world that features an open economy business cycle accounting framework tomeasure these domestic and international distortions and to quantify their con tributions to international capital flows we find that domestic distortions havebeen the predominant drivers of international capital flows and that the generalequilibrium effects of these distortions are very large international capital market distortions also matter but less

debt constrained asset markets we develop a theory of general equilibrium with endogenous debt limits in the form of individual rationality constraints similar to those in the dynamic consistency literature if an agent defaults on a contract he can be excluded from future contingent claims markets trading and can have his assets seized he cannot be excluded from spot markets trading however and he has some private endowments that cannot be seized all information is publicly held and common knowledge and there is a complete set of contingent claims markets since there is complete information an agent cannot enter into a contract in which he would have an incentive to default in some state in general there is only partial insurance variations in consumption may be imperfectly correlated across agents interest rates may be lower than they would be without constraints and equilibria may be pareto ranked

optimal abatement technology adoption based upon learning by doing with spillover effect abstract we specify a general model of the dynamic abatement technology adoption process and show how the accumulated experience among them can alter the adoption timing learning by doing lbd effect is considered to describe the reduction of the costly price to the adoption moreover spillovers effect which reflects how accumulated experience can be shared among different technologies is integrated into the learning process to ensure the specification convincing some reasonable assumptions are considered such as one abatement technology must conduct its own experience in order to realize the spillover besides to investigate how the abatement process is influenced by the technology allocation under the spillovers effect an endogenous emission path is considered to necessitate a meaningful optimization problem finally apart from obtaining some basic properties of the model we implement an empirical study to verify the effectiveness of the model data from the iron industry in china is used to specify the process which can highlight the spillovers effect among different technologies from a sector angle in the results we find that intrinsic mechanism in the model results in the interplay among abatement coefficient spillover factor and the growing rate of the emission etc collaborative relationships between variables are discussed as well

credible signals of the release of new versions i introduction many products are marketed some time after they have been developed for instance a new smartphone may be developed and tested well before it is available for purchase a new car might be prototyped and driven months before it comes to the market indeed a firm will often have several products concurrently in a development pipeline consumers may know a product is in that pipeline without knowing its progress towards the market because the outcome of such development and testing is not visible to outsiders the firm knows whether it can market a product before consumers do consumers are uninformed about when and if the new product will be marketed to them economists have long recognized that the present demand for durable goods depends on future prospects such as the future price or the introduction of an improved version 1 the existence of such an improved version is often the seller s private information if consumers anticipate a new version some will defer purchases until the new version is available and the seller will face low demand for the present version disclosing the new version is not in a monopoly seller s interest a seller whose good does not have a new version would also like to communicate that fact to consumers while a firm with a successful product innovation can credibly disclose the new version with relative ease a firm that has failed to develop a new product could have great difficulty convincing consumers that the product has no new version in such situations it is important to examine whether prices can inform consumers whether a new version will be marketed in the near future in a recent paper choi et al 2010 developed a model with a risky product development process in which reputation effects allow cheap talk announcements to signal successful product development to consumers an announcement induces consumers to delay or divert purchases to the announcer s coming product which increases the announcer s profit and can improve welfare 2 in their model the announcer and her non innovative rivals supply the original good competitively because of this an announcement does not reduce profit on the current version this paper will focus on markets where the seller has substantial market power before innovating so announcing a successful product development has a cost in terms of current revenue further because we attend to prices as signals this model may also apply to markets where a long run relationship between consumers and firms may not be sustainable another objective of this paper is to examine the welfare effects of mandatory disclosure a government policy mandating disclosure of any new version is an alternative means of informing consumers 3 as long as firms are not willing to lie to the government such a policy would credibly communicate whether a new version of a durable is coming mandatory disclosure would bring about full information as consumers are informed about any improved future version before observing the price of the current version in this paper we explore a two period model of a durable good monopoly in which consumers are initially uninformed about whether there will be a new version of the current good the monopoly seller is privately informed if he will be able to market an improved version in the second period in the first period consumers must decide whether to purchase the good now or wait for an upgraded version they may be able to infer from the price of the current version whether the seller will bring a new version to the market it is important to see first whether prices can serve as signals and second how welfare compares between any signaling outcome and a full information benchmark corresponding to mandatory disclosure we will show that there is a unique equilibrium supported by intuitive beliefs in this equilibrium the seller s private information about an improved version is completely revealed to consumers

redistributive taxation in a simple perfect foresight model abstract we investigate the redistributive potential of capital taxation in an intertemporal maximizing model of capital formation first even unanticipated redistributive capital taxation is severely limited in its effectiveness since it depresses wages second under any convergent redistributive tax policy which maximizes a paretian social objective the capital income tax will converge to zero independent of the factor supply elasticities these results are independent of workers holdings of capital

optimal taxation without state contingent debt in an economy studied by lucas and stokey tax rates inherit the serial correlation structure of government expenditures belying barro s earlier result that taxes should be a random walk for any stochastic process of government expenditures to recover a version of barro s random walk tax smoothing outcome we modify lucas and stokey s economy to permit only risk free debt having only risk free debt confronts the ramsey planner with additional constraints on equilibrium allocations beyond one imposed by lucas and stokey s assumption of complete markets the ramsey outcome blends features of barro s model with lucas and stokey s in our model the contemporaneous effects of exogenous government expenditures on the government deficit and taxes resemble those in lucas and stokey s model but incomplete markets put a near unit root component into government debt and taxes an outcome like barro s however we show that without ad hoc limits on the government s asset holdings outcomes can diverge in importa

r d cooperation in smes the direct effect and the moderating role of human capital abstractwe analyse the determinants of r d cooperation for smes in italy we introduce in the literature human capital as one of the main determinants of r d cooperation concentrating on its moder

an analysis of cooperative research and development i analyze the effects of cooperative research whereby member firms agree to share the costs andfruits of a research project before they undertake it in this model industrywide agreements tend to have socially beneficial effects when the degree ofproduct market competition is low when there are r d spillovers in the absence of cooperation when a high degree of sharing is technologically feasible and when the agreement concerns basic research rather than development activities i show that a royalty free cross licensing agreement among any number offirms lowers the equilibrium level of innovation even though it increases the efficiency of r d through sharing

political economy of debt and growth abstract a theory of endogenous fiscal policy and growth is developed fiscal policy debt income tax spending on local public goods and public investment is determined through legislative bargaining economic growth depends directly on public investment private investment in human capital and via learning by doing labor supply the model economy converges to a balanced growth path during the transition to the balanced growth path public debt grows faster than gdp provisions of public goods and infrastructure grow slower than gdp and the tax rate declines the model is used to assess welfare implications of austerity programs

the impact of classes of innovators on technology financial fragility and economic growth in this article we study innovation processes and technological change in an agent based model by including a behavioral switching among heterogeneous innovative firms the model is able to replicate via simulations well known industrial dynamic and growth type stylized facts the main original element of the model is that firms are allowed to endogenously change among three different classes namely single innovators collaborative innovators and imitators moreover our analysis focuses on the impact of these three innovation categories on micro meso and macro aggregates we find that collaborative companies are those having the highest positive impact on the economic system furthermore we have paid particular attention to the role of credit market in promoting smart growth for this purpose we analyze the role of banks as sources of external funds for innovative entrepreneurs our results suggest a trade off between short term profit maximization and long term efficiency which prevents banks to foster investment in r d and technological progress the model is then used to study the effect that different innovation policies have on macroeconomic performance

modelling imperfectly appropriable r d via spillovers abstract we provide an extensive comparison of the well known r d models of d aspremont jacquemin and kamien muller zang exposing full or partial conflict in key conclusions and policy prescriptions using a mix of formal and or intuitive criteria we argue that the first model is of questionable validity for large spillover values the latter being characterized by jointly increasing returns to scale in the r d process an argument leading to equivalence between the two r d processes but not to agreement on some key conclusions is exposited in conclusion the models emerge as fundamentally different although a unilateral shift in the cost function of the first leads to agreement in all equilibrium outcomes

optimal fiscal and monetary policy in an economy without capital abstract this paper is concerned with the structure and time consistency of optimal fiscal and monetary policy in an economy without capital in a dynamic context optimal taxation means distributing tax distortions over time in a welfare maximizing way for a barter economy our main finding is that with debt commitments of sufficiently rich maturity structure an optimal policy if one exists is time consistent in a monetary economy the idea of optimal taxation must be broadened to include an inflation tax and we find that time consistency does not carry over an optimal inflation tax requires commitment by rules in a sense that has no counterpart in the dynamic theory of ordinary excise taxes the reason time consistency fails in a monetary economy is that nominal assets should from a welfare maximizing point of view always be taxed away via an immediate inflation in a kind of capital levy this emerges as a new possibility when money is introduced into an economy without capital

opportunity and social mobility the fact that the children of rich parents have better economic prospects than the children of poor parents unequal opportunity is generally thought to be one of the weak points of modem capitalist societies the ability of the descendants of poor families to eventually become rich and the descendants of rich families to eventually become poor social mobility is commonly considered to be one of the strong points of these societies here i argue that both of these characteristics are in fact necessary implications of an efficient societal arrangement when incentives to work hard must be provided i argue this point using a generational version of the model of phelan and townsend 1991 an infinitely repeated general equilibrium economy with incentive constraints in my model each household s stochastic output is a function of its level of effort since effort is assumed to be costly and privately observed households can shirk higher than minimal effort levels must be induced by making a household s present or future consumption dependent on the household s observed output history a large literature considers models similar to this including green 1987 atkeson and lucas 1992 phelan 1994 1995 wang 1995 hopenhayn and nicolini 1997 khan and ravikumar 2002 the main difference between the economies in that literature and here is that here instead of a household consisting of a single infinitely lived individual a household consists of a sequence of altruistically linked individuals a familial dynasty each of whom lives for one period this difference affects the appropriate societal ranking of allocations when households consist of a single infinitely lived individual allocations can be ranked according to their implied distributions of ex ante lifetime utilities if one allocation delivers a distribution of ex ante utilities dominated by another allocation then the first allocation is inefficient however if a household consists of a sequence of altruistically linked individuals then the appropriate ranking of allocations is no longer obvious how those in the first generation rank allocations will in general differ from how their descendants rank allocations this paper addresses this conflict between generations by ranking allocations according to a rawlsian veil of ignorance criterion rawls 1971 that is here society seeks to maximize the expected dynastic utility utility including altruism toward descendants of an individual who does not know into which generation he will be born and the identity or output levels of his ancestors 1 i argue that this corresponds to a societal ranking which does

equilibrium and optimal size of a research joint venture in an oligopoly with spillovers this paper analyzes a simple oligopoly model with information spillovers firms spend on r d to affect their costs of production the main finding is that depending on the magnitude of the spillover the market may not provide enough incentives for the optimum degree of cooperation to take place it is shown that the equilibrium size of a research joint venture is usually less than the optimum size which requires all firms to participate in the research joint venture the policy implications of this result are that there should be encouragement for firms competing in high technology industries to form industry wide cooperative agreements copyright 1995 by blackwell publishing ltd

persistence of innovation in dutch manufacturing is it spurious this paper studies the persistence of innovation and the dynamics of innovation output in dutch manufacturing using firm data from three waves of the community innovation surveys cis pertaining to the periods 1994 1996 1996 1998 and 1998 2000 we estimate by maximum likelihood a dynamic panel data type 2 tobit model accounting for individual effects and handling the initial conditions problem we find that there is no evidence of true persistence in achieving technological product or process innovations while past shares of innovative sales condition albeit to a small extent current shares of innovative sales

positive long run capital taxation chamley judd revisited according to the chamley judd result capital should not be taxed in the long run in this paper we overturn this conclusion showing that it does not follow from the very models used to derive it for the main model in judd 1985 we prove that the long run tax on capital is positive and significant whenever the intertemporal elasticity of substitution is below one for higher elasticities the tax converges to zero but may do so at a slow rate after centuries of high tax rates the main model in chamley 1986 imposes an upper bound on capital taxes we provide conditions under which these constraints bind forever implying positive long run taxes when this is not the case the long run tax may be zero however if preferences are recursive and discounting is locally nonconstant e g not additively separable over time a zero long run capital tax limit must be accompanied by zero private wealth zero tax base or by zero labor taxes first best finally we explain why the equivalence of a positive capital tax with ever increasing consumption taxes does not provide a firm rationale against capital taxation

growth in the shadow of expropriation we propose a tractable variant of the open economy neoclassical growth model that emphasizes political economy and contracting frictions the political economy frictions involve a preference for immediate spending while the contracting friction is a lack of commitment regarding foreign debt and expropriation we show that the political economy frictions slow an economy s convergence to the steady state due to the endogenous evolution of capital taxation the model rationalizes why openness has different implications for growth depending on the political environment why institutions such as the treatment of capital income evolve over time why governments in countries that grow rapidly accumulate net foreign assets rather than liabilities and why foreign aid may not affect growth

fiscal policy in debt constrained economies abstract we study optimal fiscal policy in a small open economy soe with sovereign and private default risk and limited commitment to tax plans the soe s government uses linear taxation to fund exogenous expenditures and uses public debt to inter temporally allocate tax distortions we characterize a class of environments in which the tax on labor goes to zero in the long run while the tax on capital income may be non zero reversing the standard prediction of the ramsey tax literature the zero labor tax is an optimal long run outcome if the economy is subject to sovereign debt constraints and the domestic households are impatient relative to the international interest rate the front loading of tax distortions allows the economy to build a large aggregate debt position in the presence of limited commitment we show that a similar result holds in a closed economy with imperfect inter generational altruism providing a link with the closed economy literature that has explored disagreement between the government and its citizens regarding inter temporal tradeoffs

a dynamic theory of public spending taxation and debt this paper presents a dynamic political economy theory of public spending taxation and debt policy choices are made by a legislature consisting of representatives elected by geographically defined districts the legislature can raise revenues via a distortionary income tax and by borrowing these revenues can be used tofinance a national public good and district specific transfers interpreted as pork barrel spending the value of the public good is stochastic reflecting shocks such as wars or natural disasters in equilibrium policy making cycles between two distinct regimes business as usual in which legislators bargain over the allocation of pork and responsible policy making in which policies maximize the collective good transitions between the two regimes are brought about by shocks in the value of the public good in the long run equilibrium tax rates are too high and too volatile public good provision is too low and debt levels are too high in some environments a balanced budget requirement can improve citizen welfare

public debt and optimal taxes without commitment abstract benhabib and rustichini optimal taxes without commitment j econ theory 77 1997 231 259 study the properties of optimal capital taxes in economies without commitment and no government debt they find that capital taxes may be different from zero at steady state this note shows that once governments have the possibility of issuing debt and smoothing taxes over time optimal steady state capital taxes turn out to be zero

on the optimal taxation of capital income abstract we show that in models in which labor services are supplied jointly with human capital the chamley and judd result on zero capital income taxation in the limit extends to labor taxes as long as accumulation technologies are constant returns to scale moreover for a class of widely used preferences consumption taxes are zero in the limit as well however we show by the construction of two examples that these results no longer hold for certains types of restrictions on tax rates or if there are profits generated journal of economic literatureclassification numbers e62 h21

innovative strategic groups in multinational industries abstract differences in innovative strategies between groups of domestic and multinational enterprises are analyzed within a two stage game model that incorporates the asymmetries in transaction costs between the two species of enterprises nash and cooperative behaviour is shown to result in different equilibrium r d strategies with the multinational companies doing typically more r d for larger markets and domestic companies focusing on specific market segments survey data from companies operating in eleven high tech multinational industries in belgium provide support for these strategic differences and show how they are related to company performance

the political economy of food the rise and fall of the postwar international food order the widespread perception of a food crisis since the early 1970s reflects a real turning point in the global structure of production and distribution of food grains scarcity is always an aspect of capitalist relations but its specific form is determined historically through the international food order the latter is a stable set of complementary state policies whose implicit coordination creates specific prices relative to other prices a specific pattern of specialization and resulting patterns of consumption and trade the social consequences of those orderly international arrangements make sense within a marxist conception of accumulation and class formation on a world scale i present a historical analysis of the rise of an international food order after world war ii whose principal axis was food aid from the united states to formerly self sufficient agrarian societies this order had contradictory effects both economic and political leading to a reorganization of aid and trade higher prices

structural blockage a cross national study of economic dependency state efficacy and underdevelopment this cross national study of the effects of dependency and state efficacy on development supports the structural blockage argument of dependency theory according to this argument international economic dependency impedes development in the more advanced countries of the periphery of the world capitalist system in support of this argument we show that two forms of participation in the world economy the export of a small number of commodities and the export of primary products obstruct development in advanced peripheral countries the argument that these forms of participation in trade pose internal structural obstacles to development is supported by evidence showing that state sponsored institutional transformations outweigh the development stunting influence of these forms of participation on the basis of these findings we argue against the divergent development thesis implied in some dependency arguments

urban bias dependence and economic stagnation in noncore nations this paper contributes to the growing body of research that assesses the effects of patterns of urbanization on economic growth in less developed countries ldcs regression analysis of data for 65 80 nations including analyses of influential cases suggests that both urban bias and dependency have independent simultaneous and negative effects on economic growth further analyses reveal a strong positive relationship between dependency and urban bias these findings show that understanding urbanization and development in the third world requires the consideration of both external international and internal intranational factors and a combination of the insights gained from dependency world system human ecology and modernization theories

european market integration through technology driven m as merger and acquisitions m as have been an important tool for reorganizing the european market since the establishment of european economic and monetary union this article suggests that european integration helped and encouraged european firms to source technology across national borders in europe establishing european innovative firms the figures confirm that once barriers impeding the free movement of capital goods and labour had fallen european firms used m as intensively to enter foreign european markets enhancing technology competencies is found to be one of the main motives for cross border acquisitions in the 1990s but is not a factor in domestic acquisitions over the same period

symmetric research joint ventures cooperative substitutes and complements we introduce the concepts of cooperative substitutes and complements and use them to explain when all firms in a research joint venture will choose equal levels of r d we show that the second order conditions for a symmetric optimum take a particularly simple form ruling out both excessive cooperative substitutability and excessive cooperative complementarity and nesting conditions already derived in the literature finally we apply our results to the comparison between cooperative and non cooperative r d and show in an important special case that asymmetric outcomes are only optimal for a very limited range of parameter values

collusion and dynamic under investment in quality in a dynamic game of investment in product quality i investigate whether collusive underinvestment equilibria can be supported by the threat of escalation in investment outlays when there are no spillovers underinvestment equilibria exist even though by deviating a firm can gain a persistent strategic advantage when there are strong spillovers underinvestment equilibria fail to exist a weakening of patent protection can thus lead to more investment in equilibrium a nonfragmentation result is shown to hold in all free entry equilibria industry concentration is bounded away from zero no matter how large the market and despite the existence of underinvestment equilibria

cooperation in r d the case of patent infringement agreements abstract this paper provides an insurance based argument behind patent infringement agreements pia such agreements constitute a form of cooperation in an otherwise non cooperative environment we develop a model where firms initially hold certain patents and undertake further r d by pursuing the latter they face a positive probability of infringing the patents held by the other a prior infringement agreement generates a binding contract so that such infringements would go unpunished if the infringing probability is not too low firms would have incentive to sign an agreement and sacrifice the monopoly option but this depends on the information structure about the patent infringement and search costs such a prior agreement is then compared and contrasted with a suitably designed ex post contract

cooperative r d between vertically related firms with spillovers abstract this paper analyzes the effects of cooperative r d in two vertically related duopolies which are two final good manufacturers and two input suppliers with horizontal and vertical spillovers vertical r d cartels yield a larger social welfare than non cooperative r d and if the horizontal spillover rate between the input suppliers is not sufficiently high than horizontal r d cartels technological improvement is accelerated by forming vertical research joint ventures rjvs whether or not their member firms r d decisions are coordinated vertical rjv cartels yield the largest social welfare when the vertically related firms can coordinate their r d decisions and or share useful knowledge fully

the sustainability and resilience of global water and food systems political analysis of the interplay between security resource scarcity political systems and global trade this article looks at the interrelationship between water and food security more specifically it examines the resilience and sustainability of water and food systems to shocks and stresses linked to different levels and intensity of conflict global trade and climate change the article makes four points 1 that resource scarcity as a driver of conflict is inconclusive especially at regional and national levels 2 most insecurities surrounding water and food are explained by political power social and gender relations 3 global trade has enabled national food and water security but that is now threatened by increasing food prices food sovereignty movements and land grabbing 4 and that water and food security will face major challenges under conditions of climate change

optimal r d levels when firm j benefits from firm i s inventive activity abstract we amend the static model of industry structure in dasgupta and stiglitz to include external benefits from a firm s r d now the market can be seen to underinvest in r d relative to the social optimum the work of mansfield suggests that such external benefits are pervasive

endogenous timing in the presence of non monotonicities the aim of this paper is to generalize the endogenous timing game proposed by hamilton and slutsky games and economic behavior 1990 2 pp 29 46 by allowing the payoff or the marginal payoff of a player to become non monotonic with respect to the strategy of the opponent we propose a taxonomy of the subgame perfect nash equilibria based on the characteristics of the payoff functions proposed by eaton canadian journal of economics 2004 37 pp 805 29 we determine under which conditions of the initial payoff functions commitment has a social value and when the simultaneous move nash equilibrium is commitment robust and discuss its pareto efficiency

optimal taxation of capital income in general equilibrium with infinite lives this paper analyzes the optimal tax on capital income in general equilibrium models of the second best agents have infinite lives and utility functions which are extensions from the koopmans form the population is heterogeneous the important property of the models is the equality between the social and the private discount rates in the long run i find that the optimal tax rate is zero in the long run for a special case of additively separable utility functions i then determine the tax rates along the dynamic path and conditions that are sufficient for the local stability of the steady state

r d spillovers and information exchange abstract we show that the spillover of r d can be endogenised in a sense that even without spillovers firms have an incentive to exchange the r d information after the investment costs are sunk

absorptive capacity and connectedness why competing firms also adopt identical r d approaches abstract this paper explores the endogenous determination of r d appropriability through the firms choice of r d approaches whereas identical broad r d approaches connect firms with their r d environment and maximize absorptive capacities the opposite holds for idiosyncratic r d approaches our model shows that competing firms choose identical r d approaches in order to maximize knowledge flows between each other in essence this frees firms from the prisoner s dilemma of aggressive investment in r d our analysis contrasts with kamien and zang s 2000 kamien m zang i 2000 meet me halfway research joint ventures and absorptive capacity international journal of industrial organization 18 995 1012 finding that competing firms chose idiosyncratic r d approaches we demonstrate that their model also yields a nash equilibrium for broad identical r d approaches

growth effects of foreign and domestic investment over tha past few years numerous studies in sociology have concluded that foreign investment harms poor nations these studies have focused on the coefficient for foreign capital stock controlling for flow new investment and defying logic have inferred that a negative coefficient for stock reflects dependency effects that retard economic growth since capital stock is the denominator for investment rate the greater the stock the lower the investment rate for a given level of new investment hence the negative coefficient for capital stock found in dependency studies indicates a beneficial investment effect not a harmful effect this point is demonstrated by reanalysis of the data used in dependency studies in these data foreign investment spurs growth earlier analysts have concluded otherwise only because their conclusions have belied their findings

women food security and development in less industrialized societies contributions and challenges for the new century summary in this paper i examine the links between women food security and development from a crossnational perspective i find that the proximity to gender equality constructed from the united nations human development and gender related development indices improves development in the form of both child hunger and child mortality extending these results other forms of female empowerment including female contraceptive prevalence significantly improve development outcomes in less industrialized societies findings are net of theoretical controls for economic development population pressure globalization democratization and region further strengthening the importance of gender considerations countries that incorporate gender into policy and program considerations benefit from such inclusion in the form of social and economic development outcomes findings are an important crossnational extension of existing research utilizing new measures that capture the important development dynamic

inequality and social discounting we explore steady state inequality in an intergenerational model with altruistically linked individuals who experience privately observed taste shocks when the welfare function depends only on the initial generation efficiency requires immiseration inequality grows without bound and everyone s consumption converges to zero we study other efficient allocations in which the welfare function values future generations directly placing a positive but vanishing weight on their welfare the social discount factor is then higher than the private one and for any such difference we find that consumption exhibits mean reversion and that a steady state cross sectional distribution for consumption and welfare exists with no one trapped at misery

food security in less developed countries 1970 to 1990 despite a global food surplus almost half of the worlds less developed countries suffer significant problems concerning food most social science and policy discussions of food security make the food availability assumption that increased food supply is the key to reducing hunger critics argue however that increased food supply has little impact on hunger and that the primary culprits are entrenched inequality and militarism a lagged panel analysis of food supply and child hunger rates 1970 90 shows that the food supply has only modest effects on child hunger rates and that food supply is structurally rooted in development processes domestic investment urban bias foreign capital penetration while child hunger is politically based in arms imports internal violence and political democratization population pressure tapped by increased age dependency undermines both the supply of food and the populations access to it and culturally dualism magnifies the effects of population pressure on child hunger the effects of economic growth trickle down to affect food both supply and child hunger and economic growth is also positively correlated with political democratization suggesting there is no short term trade off between growth democratization and social equity authors

political economy of mechanisms we study the optimal mirrlees taxation problem in a dynamic economy in contrast to the standard approach where the taxation mechanism is operated by a benevolent planner with full commitment power we focus on economies in which policy decisions are made by self interested politicians who cannot commit to policies the society controls politicians using elections we show that the provision of incentives to politicians can be partly separated from redistribution across agents and that political economy constraints can be modeled as introducing additional aggregate distortions in the dynamic mirrlees problem we provide conditions under which the political economy distortions persist or disappear in the long run if the politicians are as patient as the agents the best sustainable mechanism leads to an asymptotic allocation where the aggregate distortions arising from political economy disappear in contrast when politicians are less patient than the citizens positive aggregate labor and capital taxes remain even asymptotically we conclude by providing a brief comparison of centralized

political economy of ramsey taxation abstract we study the dynamic taxation of capital and labor in the ramsey model under the assumption that taxes and public good provision are decided by a self interested politician who cannot commit to policies we show that as long as the politician is as patient as the citizens the chamley judd result of zero long run taxes holds in contrast if the politician is less patient than the citizens the best subgame perfect equilibrium from the viewpoint of the citizens involves long run capital taxation

does adaptation to climate change provide food security a micro perspective from ethiopia we examine the driving forces behind farmers decisions to adapt to climate change and the impact of adaptation on farmers food production we investigate whether there are differences in the food production functions of farm households that adapted and those that did not adapt we estimate a simultaneous equations model with endogenous switching to account for the heterogeneity in the decision to adapt or not and for unobservable characteristics of farmers and their farm we compare the expected food production under the actual and counterfactual cases that the farm household adapted or not to climate change we find that the group of farm households that adapted has systematically different characteristics than the group of farm households that did not adapt the relationship between production and average temperature is inverted u shaped for farm households that adapted while it is u shaped for farm households that did not adapt and vice versa in the case of precipitation we find that adaptation increases food production however the impact of adaptation on food production is smaller for the farm households that actually did adapt than for the farm households that did not adapt in the counterfactual case that they adapted