total factor productivity and the environmental kuznets curve a comment and some intuition abstract chimeli and braden chimeli ariaster b braden john b 2005 total factor productivity and the environmental kuznets curve journal of environmental economics and management 49 366 380 derive a necessary and sufficient condition under which inter country differences in total factor productivity can yield an environmental kuznets curve they argue that their results emphasize the importance of differences in total factor productivity across countries as well as the need for decreasing returns to scale in pollution abating technologies for the existence of an environmental kuznets curve we show that their proposition 1 is equivalent to proposition 2 in lieb lieb christoph m 2002 the environmental kuznets curve and satiation a simple static model environment and development economics 7 429 448 this implies that even in chimeli and braden s model contemporaneous changes in the marginal rate of substitution between environmental quality and consumption on the demand side and the marginal rate of transformation between these goods on the supply side drive the pollution income relationship this is a very general condition that does not rely on either differences in total factor productivity or decreasing returns to scale in abatement and which is widely applicable

an econometric analysis of u s foreign direct investment this paper constructs a theoretical model of foreign direct investment and examines the extent to which the model can explain the level of outward direct investment by u s companies over the last two decades the authors find that market size and factor costs both labor and capital are important factors in the investment decision instrumental variable estimation is used to demonstrate that the expectation of short run fluctuations in the dollar also influences the timing of investment copyright 1996 by mit press

limit cycles in intertemporal adjustment models theory and applications this paper starts from well behaved i e concave one state variable optimal control models the crucial feature is that indigenous growth is present the replacement of the control by an adjustment process and presumably penalizing these adjustments may convert stable and only stable fixed point equilibria into limit cycles indeed given positive growth and proper externalities such that discounting exceeds growth one can generate stable limit cycles with ease e g for a separable framework examples from such diverse fields as renewable resources optimal saving and public choice highlight the economic applicability

international taxation and the direction and volume of cross border m as we show that the parent subsidiary structure of multinational firms created by cross border mergers and acquisitions is affected by the prospect of international double taxation specifically the likelihood of parent firm location in a country following a cross border takeover is reduced by high international double taxation of foreign source income at the same time countries with high international double taxation attract smaller numbers of parent firms a unilateral elimination of worldwide taxation by the united states is simulated to increase the proportion of parent firms locating in the united states following cross border mergers and acquisitions from 53 to 58

factors determining the location decisions of spanish mnes an analysis based on the investment development path on the basis of theoretical assumptions approached via the investment development path idp this study examines the most important factors for and against the location decisions in foreign direct investment taken by multinational enterprises considering host countries at very different stages of economic development latin american and european union countries we carry out different kinds of analysis on a sample of 103 firms belonging to a medium sized country that has recently achieved the status of developed country the results reveal that the importance that home country firm managers give to diverse location factors depends to a certain extent on the stage that each group of host countries has reached in the idp in line with prior research we find that firm managers consider mainly the group of factors associated with strategic asset seeking when deciding to locate their investments in the group of more developed countries european union in contrast our results show that when these firm managers choose the group of less developed countries latin america social and cultural factors play a more determinant role thus suggesting the importance of historical and cultural ties between the home and host countries

beyond trade the impact of preferential trade agreements on fdi inflows summary this paper investigates the effects of preferential trade agreements ptas on net fdi inflows of member countries using a comprehensive database of ptas in a panel setting pta membership is associated with a positive change in net fdi inflows and fdi gains increase with the market size of pta partners and their proximity to the host country the estimated relationship is driven by the developing countries in the sample and agreements signed in the late 1990s early 2000s a period when the majority of deep integration ptas have been advanced

determinants of foreign direct investment in spain this study utilizes panel data as a means of examining the determinants of foreign direct investment fdi in spain data that are taken in the period 1993 2002 are used in order to estimate the determinants of fdi at the sectoral level by differentiating the manufacturing sectors and at the regional level the analysis investigates the sectoral regional and macroeconomic variables that have successfully attracted fdi inflows from those that have not empirical results suggest that the differential between labour productivity and the cost of labour has been an important determinant of fdi in spain during the period 1993 2002 factors related to demand the evolution of human capital the export potential of the sectors and certain macroeconomic determinants that measure the differential between spain and the european union average also play a very important role in attracting flows of fdi certain policy issues that are relevant to the results are also discussed

adaptation and mitigation in long term climate policies the paper analytically explores the optimal allocation of investments into mitigation and environmental adaptation against climate change damages at a macroeconomic level the economic environmental model is formulated as a social planner problem where adaptation and abatement investments are separate decision variables the existence of a unique steady state is proven a comparative static analysis of optimal investments leads to essential implications for associated long term environmental policies it is shown that the optimal policy mix between adaptation and mitigation is lower for countries with higher economic efficiency for all applicable parameter ranges data calibration and numerical simulations are provided to estimate practical validity of theoretical outcomes

the locational determinants of direct investments among industrialized countries abstract market size and growth rate as well as tariff barriers have already been shown to influence u s direct investments in the eec the present paper enlarges the field of observation to all bilateral flows of direct investments among six industrialized countries the united states germany france the united kingdom the netherlands and belgium over the years 1969 1982 it also tests the impact of two other would be locational determinants of foreign direct investments namely unit labour costs and export flows moreover a new and alternative specification is put forward and tested which assumes that in the investment decision process foreign locations are in competition not only with each other but also with the home country of the investor

firm specific assets and the gains from direct foreign investment it is widely held that multinational enterprises arise as a consequence of the existence of knowledge based firm specific assets such as superior technology or management know how these assets are much like public goods within the firm in that they can be costlessly supplied to additional plants thus leading to the efficiency of multiplant production foreign direct investment then consists of supplying the services of the assets to foreign operations and repatriated earnings are payments for these services these notions are formalized in a simple model of the multinational enterprise and welfare implications are analyzed copyright 1989 by the london school of economics and political science

exchange rate regimes and fdi in developing countries a propensity score matching approach abstract theory suggests that regimes of relatively fixed exchange rates encourage inward foreign direct investment fdi relative to regimes of more flexible exchange rates we use propensity score matching psm to investigate the relationship between the exchange rate regimes of 70 developing countries and fdi into such countries using de facto regime classifications we include a large number of variables in the logit equation that estimates the propensity score the probability of regime choice we also use general to specific modeling to get alternative parsimonious versions based on four matching procedures the average treatment effects suggest with overall modest statistical significance that relatively fixed de facto regimes do encourage fdi compared with relatively floating regimes in addition the estimated effects are sometimes economically large

the determinants of fdi location choice in china a discrete choice analysis this study addresses two questions what are the determinants of foreign direct investment fdi location choice in china what are the factors that determine investors choice between economic zo

who cares about biodiversity optimal conservation and transboundary biodiversity externalities the convention on biological diversity s 2010 target to reduce the rate of biodiversity loss was achieved by very few countries why we use the theory of conservation implicit in the hotelling model of non renewable resource pricing to analyze the problem distinguishing between the benefits to countries where conservation takes place and to other countries we estimate models for three taxonomic groups and find that while individual countries value conservation within their borders in poor countries this effect is dominated by the negative impact of income growth international concessional financial contributions to conservation in poor countries are found to be statistically insignificant we conclude that countries care about the biodiversity within their national borders but only when development priorities permit and only when it becomes scarce enough that its value grows more rapidly than the return on alternative assets there is little evidence that high income countries yet care sufficiently about biodiversity in the places where it is most threatened to affect conservation outcomes there

neoclassical growth the j curve for abatement and the inverted u curve for pollution abstract this paper reexamines the neoclassical environmental growth model of forster to gain insights into the dynamic relationships among pollution abatement effort and economic development whereas the model has heretofore been used to examine steady state levels of capital consumption and environmental quality it also provides a theoretical basis for recent empirical research on j curves for abatement effort and inverted u curves for pollution

the demand for environmental quality and the environmental kuznets curve hypothesis abstract household demand for better environmental quality is the key factor in the long term global applicability of the environmental kuznets curve ekc hypothesis we argue that for given consumer preferences the threshold income level at which the ekc turns downwards or the equilibrium income elasticity changes sign from positive to negative depends on the ability to spatially separate production and consumption we test our hypothesis by estimating the equilibrium income elasticities of five pollutants using 1990 data for the united states we find that the change in sign occurs at lower income levels for pollutants for which spatial separation is relatively easy as compared to pollutants for which spatial separation is difficult our results suggest that even high income households in the united states have not yet reached the income level at which their demand for better environmental quality is high enough to cause the income pollution relationship to turn downwards for all the pollutants that we analyzed

foreign direct investment and factor demand elasticities abstract this paper argues that the liberalisation of foreign direct investment fdi has made labour costs more important to domestic investment and long run labour demand it provides evidence from british and german data that is consistent with this view first high unit labour costs increase fdi outflows and lower fdi inflows second the effect of unit labour costs on domestic manufacturing investment was more negative in the high fdi 1980s than in the low fdi 1970s and this change was concentrated in high fdi industries the estimates suggest that the long run labour demand elasticity may have risen substantially

nonhomothetic growth models for the environmental kuznets curve we show the role of the elasticity of substitution between general consumption and the environment in environmental degradation specifically our numerical experiments demonstrate for a wide range of models exponential utility generates the environmental kuznets curve without adding any special assumptions with exponential utility the elasticity of substitution and hence the substitution effect between consumption and the environment are both decreasing in income hence when income is low society the government readily gives up environmental quality in return for more consumption but it does not want to substitute consumption for the environment anymore once it becomes wealthy enough

the impact of u s tax reform on foreign direct investment in the united states abstract this study empirically examines how taxes shape foreign direct investment and finds that increased taxes spur inward foreign investment this finding conforms with theories that recognize that foreign investor response is critically shaped by the tax provisions faced by the foreign investor in his home country and by the effects of tax reform on pre tax asset returns we demonstrate that average tax rates may better proxy tax effects than do effective tax rates our findings are more robust than previous results since we utilize the entire 1980s tax history consider a fuller set of industry distinctions and estimate the tax responsiveness in the context of exchange rate fluctuations

firm specific assets and the link between exchange rates and foreign direct investment foreign direct investment fdi theory and empirical studies have generated mixed support for a link between exchange rates and fdi this paper argues that exchange rate movements may affect acquisition fdi because acquisitions involve firm specific assets which can generate returns in currencies other than that used for purchase using data on japanese acquisitions in the united states across three digit sic industries from 1975 to 1992 maximum likelihood estimates from discrete dependent variable models support the hypothesis that real dollar depreciations make japanese acquisitions more likely in u s industries particularly those which more likely have firm specific assets copyright 1997 by american economic association

relationships between water pollutant discharges per capita pdcs and indicators of economic level water supply and sanitation in developing countries abstract water pollutant discharges per capita pdcs as indicators to evaluate quantitatively domestic wastewater pollutant discharges to the ambient water were applied to eight international coastal zones and lakeside regions statistical analyses were conducted to find the relationships between pdcs and water sanitation and economic parameters including purchase power parity based gross national income ppp gni per capita proportions of access to safe drinking water and appropriate sanitation domestic water usage amount and integrated parameters of water sanitation and economic indicators wsei1 2 two of the important findings from the regression analyses results were pdc bod correlated with ppp gni per capita with 3rd order regression and pdc tp correlated with wsei1 positively with 10 significance besides smaller adjusted regression coefficients t values of partial regression coefficients between pdc tp and wsei2 increased in the most analyses cases compared to those between pdc tp and wsei1 which showed improvement of the indices empirical estimations were also conducted based on the regression analyses results and distributions of pdcs and ppp gni per capita on the graphs six components generated by the principle component analysis pca contributed 99 of the parameters the first component represented access to sanitation second one represented household connection of safe drinking water third one represented areal equipment of water supply in urban area fourth one represented domestic water usage amount fifth one represented areal equipment of water supply and sixth one represented income per capita and sanitation although some statistically significances of the multiple linear regression analysis were observed the relationships between pdcs and the water supply parameters were considered as complicated in regards to areal equipment and household connection and in whole country and in urban area possible chronological relationships between pdc bod and water supply equipment were considered based on the results of the multiple linear regression analyses and pca based on the considerations of the water pollutant discharges and the economic related parameters relationships domestic wastewater treatment facility deployments and improvements on pollutant discharges reduction for the water quality improvement in the receiving water bodies were recommended which would lead the relationship curves between the water sanitation and economic related indicators and pdcs to move downward

the boundaries of multinational enterprises and the theory of international trade this paper begins with a review of empirical evidence on multinational firms conceptual underpinnings of a theory are developed relying in particular on the notion of knowledge capital as a mobile joint input into geographically separated production facilities this idea is embedded in a simple two country general equilibrium model that supports multinational production in equilibrium under conditions consistent with the empirical evidence the final section examines internalization and shows why certain properties of knowledge capital also imply a preference for transferring technologies internally within the firm rather than through arm s length markets

demand for collective food safety standards in 2007 leading members of the u s fresh tomato industry responded to pressure from the u s food and drug administration regarding the industry s long history of poor food safety outcomes and adopted a set of standards for production practices related to food safety at all levels of the fresh tomato supply chain adherence to these standards was required under a federal marketing order that applied to essentially all tomatoes grown in florida the california tomato farmers cooperative whose members produced the vast majority of fresh tomatoes grown in california also required that its members adopt these standards the collective food safety standards for fresh tomatoes closely resemble the requirements of the u s food safety modernization act fsma produce safety rule so the collective adoption of these standards provides an excellent case study to illustrate the possible effects of fsma implementation on demand i assess the hypothesis that demand for tomatoes from florida and california increased following the adoption of standards for food safety practices by growers in those states relative to demand for tomatoes from other regions my analysis demonstrates essentially no evidence that demand for fresh tomatoes responded positively to the implementation of collective food safety practices

troubled banks impaired foreign direct investment the role of relative access to credit during the 1980 s theories were developed to explain the striking correlation between real exchange rates and foreign direct investment fdi however this relationship broke down for japanese fdi in the 1990 s as the real exchange rate appreciated while fdi plummeted we propose the relative access to credit hypothesis and show that unequal access to credit by japanese firms contributes to the explanation of declining japanese fdi using bank level and firm level data sets we find that financial difficulties at banks were economically and statistically important in reducing the number of fdi projects by japanese firms into the united states jel g21 f36

multinationals multi plant economies and the gains from trade a general equilibrium model of a multinational enterprise based on economies of multi plant operation is developed these economies are modelled as arising from the existence of a joint input whose productivity in each production facility is independent of the number of facilities maintained by a firm the multinational thus offers the world increased technical efficiency by eliminating the duplication of the joint input that would occur with independent national firms since this technical efficiency may come at the expense of increased market power the full determinants of home country host country and world welfare are considered

the economics of foreign direct investment and trade with an application to the u s food processing industry this article investigates the determinants of foreign direct investment and its relationship to trade in the u s food industry a multinational corporation maximizes profits by choosing between production at home which is exported and production in a host country this introduces the possibility that foreign affiliate sales can substitute and or complement exports the empirical framework consists of a four equations system with foreign affiliate sales exports affiliate employment and fdi as endogenous variables the results confirm small substitution between foreign sales and exports and that the host country s protection policies affect the decision to invest abroad

are there limits to growth a simple theoretical model of pollution is developed that generates an inverted u shape relationship between per capita income and environmental quality this model is then used to study long run growth the same inverted u shape is shown to appear in time series and the prospects for sustained growth are shown to hinge on whether increasingly strict environmental regulation is compatible with a constant rate of return on capital implementation is also studied tax and voucher schemes are shown to have an advantage over direct regulation because they provide the correct incentives for capital accumulation copyright 1998 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

investment climate and fdi in developing countries firm level evidence this paper uses firm level data across 77 developing countries to show that constraints related to investment climate hamper foreign direct investment fdi the main results show that physical infrastructure problems financing constraints and institutional problems discourage fdi these results are robust to an alternative definition of fdi introduction of additional explanatory variables and some breakdown analyses different sectors of activity and comparison between sub saharan africa and other developing countries the results also highlight that exporter foreign firms are more constrained in their activity by physical infrastructure hurdles and the lack of skilled workers compared to firms supplying the domestic market

direct foreign investment in the united states abstract cross section analysis of direct foreign investment in the united states provides some support for market structure and transaction cost explanations of dfi a time series country by country analysis suggests the importance of profitability differences the desire to avoid trade barriers and a shift in investment patterns related to world oil shocks

mode size and location of foreign direct investments and industry markups abstract several studies find that inward foreign direct investment fdi raises host industries competition and productivity using aggregate fdi measures the monetary flows or the change in the industries foreign production share yet fdi flows are composed of many individual heterogeneous investments reflecting this heterogeneity i ask how the average traits of the individual investments that constitute the fdi flow further affect the host while the results show that inward fdi does heighten competition for us manufacturing industries in 1987 1991 price cost markups fall even more when foreign investments locate further away from incumbent industry which is consistent with endogenous location choice

corruption and the environmental kuznets curve empirical evidence for sulfur abstract we investigate how corruption influences the income level at the turning point of the relationship between sulfur emissions and income using a wide cross national panel of countries at different levels of development and with different degrees of corruption our results support the environmental kuznets curve hypothesis for sulfur we find evidence that the higher the country s degree of corruption the higher the per capita income at the turning point suggesting different income pollution paths across countries due to corruption we build upon a new specification for the ekc developed by bradford et al 2005 that avoids using nonlinear transformations of potentially nonstationary regressors in panel estimation also we account for the indirect impact of corruption on emissions through its impact on per capita income our main findings remain unchanged when we investigate additional heterogeneity allowing for different income slopes across richer and poorer countries

measuring the effect of economic growth on countries environmental efficiency a conditional directional distance function approach using a recently developed probabilistic approach of a conditional directional distance function we measure the effect of economic growth on countries environmental efficiency in carbon dioxide emissions for a sample of 99 countries over the period of 1980 2010 our approach directly accounts for the exogenous factors influencing countries environmental production therefore we do not impose the separability condition on the estimated environmental efficiencies when examining the entire sample as well as the sample of developed countries our results reveal an inverted u shaped relationship between countries gdp per capita and environmental efficiency however when examining the relationship for the sample of developing countries the results reveal an n shaped form moreover our results show that countries ratifying the kyoto protocol tend to have higher efficiency scores implying that their mitigation activity is less costly

volatility employment and the patterns of fdi in emerging markets abstract the purpose of this paper is to explore the implications of the deepening presence of multinationals in emerging markets on the cost of macroeconomic volatility there we find that macroeconomic volatility has a potentially large impact on employment and investment decisions of multinationals producing intermediate inputs in developing countries this is the case even for risk neutral multinationals as their profit function is non linear due to price and productivity effects for industries with costly capacity the multinationals would tend to invest in the more stable emerging market s higher volatility of productivity shocks in an emerging market producing the intermediate inputs reduces the multinationals expected profits high enough instability in such a market would induce the multinationals to diversify intermediate input production investing in several emerging markets this effect is stronger in lower margin industries we identify circumstances where this diversification is costly to emerging markets such a diversification increases the responsiveness of the multinationals employment in each country to productivity shocks channeling the average employment from the more to the less volatile location and reducing the multinationals total expected employment in emerging markets

effects of scale economies and production seasonality on optimal hub locations the case of regional fresh produce aggregation interest in supporting local and regional food systems is rising and food hubs have attracted considerable attention among federal state and local policymakers this study explores the problem of endogenous hub location in fresh produce value chains in the northeastern united states to overcome limitations in the literature we incorporate the effects of economies of scale and production seasonality into our models three experimental models are designed to examine the effects of alternatively applying yearly quarterly and monthly data on model solutions we explicitly assess how interactions of scale economies and seasonality influence the structure and spatial attributes of an optimal regional produce aggregation hub system the three models generate marketed different solutions and in many respects they lead to different conclusions about developing local regional supply chains the monthly model allows for production seasonality and actual hub operation cycle frequency and thus leads to more efficient hub solution with rich policy implications

self selection and the earnings of immigrants this paper analyzes the way in which the earnings of the immigrant population may be expected to differ from the earnings of the native population because of the endogeneity of the decision to migrate the empirical study shows that differences in the u s earnings of immigrants with the same measured skills but from different home countries are attributable to variations in political and economic conditions in the countries of origin at the time of migration excerpt

out of africa locational determinants of south african cross border mergers and acquisitions abstractsouth africa is the africa s biggest source of outward foreign direct investment this study examines the principal locational motives of cross border mergers and acquisitions cbma by south african firms for the 1990 2014 period the role of inter country cultural and economic linkages is also studied firm level data of south african merger and acquisition activities in 74 host countries are used to estimate a number of model specifications that control for host country economic geographical cultural and institutional characteristics estimations are carried out using random effects negative binomial panel model capturing the host economy market and enhancing efficiency are found to be the two major motives driving south african corporations cbma activities natural resources acquisition seems a less important motive while strategic assets such as patents and technology do not appear to be attractive the role of cultural and economic linkages between the home and the host country is found t

foreign direct investment in the uk evidence from a disaggregated panel of the uk food sector most empirical studies of foreign direct investment fdi typically use either a cross sectional capturing ownership specific and industry determinants or time series capturing the determinants of fdi over time approach panel data techniques however have the advantage of combining both aspects of the data using disaggregated panel data for the uk food sector a leading recipient of fdi in the uk the results in this paper highlight the predominance of ownership specific and industry characteristics in determining the presence of foreign owned firms in this sector while macro economic factors have a more marginal effect

the real exchange rate and foreign direct investment in the united states relative wealth vs relative wage effects abstract there has been a significant correlation between u s inward foreign direct investment and the united states real exchange rate since the 1970s in this paper we examine the determinants of four measures of inward foreign direct investment to the united states from seven industrial countries over the period 1979 1991 we find strong evidence that relative wealth significantly affects u s inward foreign direct investment we find no evidence that relative wages have a significant impact on the determination of u s foreign direct investment

a panel data heterogeneous bayesian estimation of environmental kuznets curves for co2 emissions this article investigates the environmental kuznets curves ekc for co2 emissions in a panel of 109 countries during the period 1959 to 2001 the length of the series makes the application of a heterogeneous estimator suitable from an econometric point of view the results based on the hierarchical bayes estimator show that different ekc dynamics are associated with the different sub samples of countries considered on average more industrialized countries show evidence of ekc in quadratic specifications which nevertheless are probably evolving into an n shape based on their cubic specification nevertheless it is worth noting that the eu and not the umbrella group led by us has been driving currently observed ekc like shapes the latter is associated to monotonic income co2 dynamics the eu shows a clear ekc shape evidence for less developed countries consistently shows that co2 emissions rise positively with income though there are some signs of an ekc analyses of future performance neverthe

total factor productivity and the environmental kuznets curve abstract empirical studies support the environmental kuznets curve hypothesis ekc for some pollutants as income increases pollution increases reaches a peak and eventually decreases while relying mostly on cross sectional data the interpretations assert that the ekc is a by product of economic growth over time in doing so and in neglecting the role of important country specific characteristics these studies overlook potential econometric problems and introduce policy misconceptions differences in total factor productivity tfps account for much of the variation in income across countries with important implications for environmental quality we develop a theoretical model where different tfps produce a cross sectional ekc even if the dynamic path of environmental quality to its steady state in individual countries suggest otherwise the cross sectional ekc depends on diminishing returns to scale in environmental protection on the curvatures of the utility function with respect to consumption and of the environmental protection function and the elasticities of steady state consumption and environmental expenditures with respect to variation in tfps

trade and environment an empirical analysis of the technology effect in the steel industry abstract the objective of this paper is to study the impact of free trade on global environmental quality by focusing on the technology effect that is the relationship between trade openness and the adoption diffusion of clean technologies the paper attempts to empirically verify the existence of the technology effect by looking at the relationship between trade policy regime or openness and the speed of clean technology diffusion in the steel industry focusing on a cleaner steel technology the electric arc furnace eaf in 30 steel producing countries over 25 years the results show that eaf technology is diffused faster in countries that have more open trade policy regimes thereby supporting the existence of the technology effect for the industry considered

investigating geography and institutions as determinants of foreign direct investment in africa using panel data this article uses a cross country econometric approach to identify the determinants for foreign direct investment fdi in africa the contribution is 3 fold firstly we recognize that the estimation techniques used elsewhere such as ordinary least squares may be flawed we therefore use a dynamic one step generalized method of moments gmm estimator due to arellano and bond 1991 the gmm estimates identified a number of robust determinants of fdi namely government consumption inflation rate investment governance political stability accountability regulatory burden rule of law and initial literacy it is concluded that geography does not seem to have a direct influence on fdi flows to africa neither market seeking nor re exporting motives of fdi seem to dominate with different policy instruments being significant in the different specifications this does not discount the importance of good policies but probably indicates the importance of good policies made by good institutions institu

optimal wholesale facilities location within the fruit and vegetables supply chain with bimodal transportation options an lp mip heuristic approach abstract population growth creates a challenge to food availability and access to balance supply with growing demand more food has to move from production to consumption sites moreover demand for locally grown food is increasing and the u s department of agriculture usda seeks to develop and strengthen regional and local food systems this article examines wholesale facility hub locations in food supply chain systems on a national scale to facilitate the efficient transfer of food from production regions to consumption locations it designs an optimal national wholesale or hub location network to serve food consumption markets through efficient connections with production sites the mathematical formulation is a mixed integer linear programming milp problem that minimizes total network costs which include costs of transporting goods and locating facilities a scenario study is used to examine the model s sensitivity to parameter changes including travel distance hub capacity transportation cost etc an application is made to the u s fruit and vegetable industry we demonstrate how parameter changes affect the optimal locations and number of wholesale facilities

real exchange rate risk expectations and the level of direct investment four models of direct investment are analyzed assuming various relationships between foreign and domestic production the direct effect of risk adjusted expected real foreign currency appreciation is to lower foreign capital cost thus stimulating direct investment however when costs of other inputs are also affected induced productivity changes or output price changes may offset the direct effect reducing direct investment pooled estimation results for u s annual bilateral direct investment flows to five industrialized countries show significant reductions associated with expected appreciation of real foreign currency and significant increases associated with risk these results are consistent with the model where in response to risk the multinational firm reduces exports to the foreign country but offsets this somewhat by increasing foreign capital input and production

the environment as a factor of production the authors develop a model of environmental resource use in production with an empirical analysis of how electric power companies consume and bank sulfur dioxide pollution permits the model considers emissions fuels and labor as variable inputs with quasi fixed inputs of permits and capital incorporating information from permit markets allows the authors to distinguish between user costs and asset shadow values their findings indicate that firms are holding stocks of pollution permits for reasons other than short term cost savings the results also reveal substantial substitution possibilities between emissions permits stocks and other factors of production the authors speculate that anticipated secondary markets for carbon offset inventories related to the flexibility mechanisms of the kyoto protocol will have similar effects for greenhouse gas emitting firms

growth and the environment are we looking at the right data abstract time series evidence on growth and the environment suggests an environmental kuznets curve ekc whereas longitudinal studies fail to produce robust estimates for the ekc this paper offers a theoretical explanation for these apparently contradicting findings and theoretical guidance for future empirical work

foreign and domestic multinational presence in the uk the determinants of multinational presence in uk manufacturing industry in 1979 are analysed it is argued that maultinational presence may result from strategic interaction as well as other firm and industry characteristics the determinants of both foreign and uk multinational presence are estimated using a dataset that enables both types of multinational to be indentified results show an important effect of both scale and concentration on multinational presence

income inequality and pollution a reassessment of the environmental kuznets curve abstract improvements in some measures of air and water quality can accompany rising per capita income as illustrated by the so called environmental kuznets curve for pollution variables which show such a relationship we hypothesize that a more equitable distribution of power contributes to these outcomes by enhancing the influence on policy of those who bear the costs of pollution relative to the influence of those who benefit from pollution generating activities an empirical analysis of international variations in seven indicators of air and water quality supports this hypothesis literacy political rights and civil liberties are found to have particularly strong effects on environmental quality in low income countries

repatriation taxes and outbound m as repatriation taxes reduce the competitiveness of multinational firms from tax credit countries when bidding for targets in low tax countries this comparative disadvantage with respect to bidders from exemption countries violates ownership neutrality which results in production inefficiencies due to second best ownership structures this paper empirically estimates the magnitude of these effects the abolishment of repatriation taxes in japan and in the u k in 2009 has increased the number of acquisitions abroad by japanese and british firms by 16 1 and 1 6 respectively a similar policy switch in the u s is simulated to increase the number of u s cross border acquisition by 11 0 the yearly gain in efficiency is estimated to be 108 9 million dollar due to the japanese reform and 3 9 million dollar due to the u k reform simulating such a reform for the u s results in a yearly efficiency gain of 537 0 million dollar

climbing to the top foreign direct investment and property rights this article operates at the interface of the literature on the impact of foreign direct investment fdi on host countries and the literature on the determinants of institutional quality we argue that fdi contributes to economic development by improving institutional quality in the host country this proposition is tested within a large panel data set of 70 developing countries for the period 1981 2005 we show that fdi inflows have a positive and highly significant impact on property rights results are very robust and not affected by model specification different control variables or estimation technique to our knowledge this is the first article to empirically test the fdi property rights linkage jel f23 o43 p48

does the law of one price really hold for commodity prices in spite of the empirical failure of the law of one price it is usually assumed that commodity prices are perfectly arbitraged at least in the long run this paper argues that this assumption is counterfactual and that much of the empirical evidence provided to support it is flawed and affected by econometric shortcomings spurious regressions nonstationarity in the data inappropriate use of first differences an alternative methodology co integration by which a long run relationship between nonstationary series can be tested is proposed tests of nonstationarity and co integration for a group of commodities show quite uniformly that the law of one price as a long run relationship fails and that deviations from the pattern are permanent

an overlapping generations model of growth and the environment this article analyzes the potential conflict between economic growth and the maintenance of environmental quality in an overlapping generations model short lived individuals make decisions which have long lasting effects on both factor productivity and the environment the model provides a theoretical explanation of observed correlations between environmental quality and income whereby economic growth is associated first with declines then improvements in environmental quality it suggests circumstances in which multiple pareto ranked steady state equilibria may arise and in which sustained growth of both capital and environmental quality may occur overmaintenance of the environment analogous to dynamically inefficient overaccumulation of capital may emerge copyright 1994 by royal economic society

is there a long term relationship between agricultural ghg emissions and productivity growth a dynamic panel data approach the paper adopts a single country regional panel dataset to analyse the long term relationship between agricultural greenhouse gases ghg emissions and productivity growth and consequently to assess emissions sustainability the hypothesis of emission sustainability is assessed by estimating alternative panel model specifications with conventional and gmm estimators applied to the highly heterogeneous italian regional agriculture whose methane and nitrous oxide emissions are properly reconstructed for the periods 1951 2008 and 1980 2008 the modelling approach and the empirical specification include the environmental kuznets curve ekc as one of the possible outcomes results suggest that when a significant relationship between agricultural ghg emissions and productivity growth occurs it is often monotonic and though sustainability is accepted for some ghg no univocal robust evidence of the ekc emerges across the different specifications estimators and periods policy implications of this empirical evidence are finally drawn

which exchange rates matter for fdi evidence for japan using industry level data for japanese foreign direct investment fdi flows to five asian countries we investigate how the sensitivity of fdi to the exchange rate changes across different industry types and exchange rate indices key results are as follows i aggregated fdi data reported at the national level are insufficient for analysis and industry level data are required ii pooling industries by export orientation reveals heterogeneity in the response of different types of fdi to the exchange rates and iii alternative exchange rate measures particularly the competitor weighted exchange rate perform better for export oriented fdi we use our results to address key conflicts in the literature on exchange rates and fdi

the timing and probability of fdi an application to us multinational enterprises an option pricing model is employed to analyse the timing of fdi assuming that the firm s profits are determined by the attractiveness of both the home and foreign countries and that attractiveness follows a brownian motion an optimal trigger value of fdi is derived the model shows that contrary to the npv rule fdi entry should be delayed the greater the uncertainty of attractiveness in both locations another important result is that mnes do not regard fdi as a risk diversification tool the results of the model were then tested empirically with us fdi data using labour costs as a proxy for the reciprocal of attractiveness the results support the findings of the analytical model

preferences technology and the environment understanding the environmental kuznets curve hypothesis we derive a simple expression for the income pollution path using the standard static model of the environmental kuznets curve ekc this expression makes it straightforward to identify the general characteristics of utility and pollution functions that lead to such a curve we show that suitable preferences can always lead to an ekc while there is no technology that yields an ekc for all types of preferences and we derive a sufficient condition for technology that leads to an ekc for almost all types of preferences our results hold for a model with multiple goods with different pollution intensities and for a production economy with nonconstant relative price of consumption and environmental effort we derive our results without assuming specific functional forms and we encompass several other models as special cases