structural price model for coupled electricity markets abstract we propose a new structural model that can compute the electricity spot and forward prices in two coupled markets with limited interconnection and multiple fuels we choose a structural approach in order to represent some key characteristics of electricity spot prices such as their link to fuel prices consumption level and production fleet with this model explicit formulas are also available for forward prices and other derivatives we give some illustrative results of the behaviour of spot forward and transmission rights prices

the dark side of the sun how solar power production affects the market value of solar and gas sources abstract using daily data for the italian wholesale day ahead power market over the period 2008 2013 we assess the impact of solar production on the market value of solar and gas sources defined using the concepts of value factor and unit revenues we find that on average solar generation negatively affects the solar source market value causing a departure from the grid parity condition and mining their competitiveness once public incentives are removed this negative relation is not constant over time and becomes stronger for increasing solar penetration in the energy mix interestingly the opposite is found when looking at gas while the relation between solar production and the gas market value is negative or not significant when the former is low it turns positive for higher levels of solar production this is the result of a change in gas producers bidding strategies indeed in the italian power market the highest hourly price has shifted from the peak daytime when solar production is concentrated to the off peak nighttime when solar is absent from the market and gas can exploit temporary market power

some issues in the measurement of comparative advantage this paper examines measurement of revealed comparative advantage in the light of recent evidence that such measures appear to yield poor results and of recent theoretical developments evidence is presented that the poor performance of these measures is not likely to be attributable to problems predominantly associated with measurement itself recent theoretical developments make clearer what can be expected of observed trade flows a measure based on theory s ex antepredictions measures the behaviour of the measure is evaluated for a sample of uk industries in 1979

the theoretical effects of farm policies on optimal leverage and the probability of equity losses the degree to which the use of debt is increased in response to risk reducing and income augmenting farm policies is studied theoretically a mean variance model is used to determine the optimal leverage adjustment then the effects of policies on the cumulative probability of earning very low rates of return on equity are examined the evidence suggests that farm policies induce a large enough increase in financial leverage to increase the probability of farmers having negative returns to equity

the impact of wind power generation on the electricity price in germany abstract this paper investigates the relationship between intermittent wind power generation and electricity price behaviour in germany using a garch model i evaluate the effect of wind electricity generation on the level and the volatility of the electricity price in an integrated approach the results show that variable wind power reduces the price level but increases its volatility this paper s results also indicate that regulatory change has stabilised the wholesale price the electricity price volatility has decreased in germany after a modification of the marketing mechanism of renewable electricity this gives confidence that further adjustments to regulation and policy may foster a better integration of renewables into the power system

the international competitiveness of ceec agriculture the paper surveys the price competitiveness of agricultural production in central and east european countries ceecs it draws together empirical work conducted by the authors and other studies that have estimated domestic resource cost drc ratios for agriculture in various ceecs the paper identifies that in general ceec crop production is more internationally competitive than livestock farming during the mid1990s wheat production in bulgaria the czech republic hungary romania and slovakia was internationally competitive in contrast during the same period milk production was not internationally competitive however there is also a considerable degree of variation from country to country very little of slovenia s agricultural production is internationally competitive in the livestock sector the greatest problems lie where large herds have been broken up resulting in fragmented production this has particularly affected beef and milk production considering variations in drcs by farm type larger private farms in hungary and the czech republic are more internationally competitive than smaller private farms in crop production if ceec producers faced average eu prices for their traded inputs and output most could be price competitive however the conclusions should be treated with caution due to sensitivity of drc ratios to changes in international prices and the choice of the shadow prices for non tradable inputs

the composition of u s east asia trade and changing comparative advantage abstract this paper examines the composition of trade between the united states and eight asian pacific economies from 1962 to 1992 analysis of the time series pattern of individual commodities at the sitc four digit level reveals economically significant changes in the pattern of trade reflecting changing comparative advantage based on changing factor proportions technology transfer and product cycles the composition of the eight bilateral trade relationships shows both increasing specialization over time and a sequence from japan to the four tigers korea taiwan singapore and hong kong and then to the remaining three east asian economies malaysia indonesia and thailand

the efficiency cost of protective measures in climate policy despite recent achievements towards a global climate agreement climate action to reduce greenhouse gas emissions remains quite heterogeneous across countries energy intensive and trade exposed eite industries in industrialized countries are concerned on stringent domestic emission pricing that puts them at a competitive disadvantage against producers of similar goods in other countries with more lenient emission regulation this paper focuses on climate policy design in the united states of america us and compares the economic implications of four alternative protective measures for us eite industries i output based rebates ii exemptions from emission pricing iii energy intensity standards and iv carbon intensity standards using a large scale computable general equilibrium model we quantify how these protective measures affect competitiveness of us eite industries we find that protective measures can improve common trade related competitiveness indicators such as revealed comparative advantage or relative world trade shares but at the same time may lead to a decline in the output value for eite industries because of negative income effects the economy wide cost of emission abatement under protective measures increase as compared to uniform emission pricing stand alone such that the gains of protective measures for eite exports may be more than compensated through losses in domestic eite demand

greener more integrated and less volatile a quantile regression analysis of italian wholesale electricity prices abstract this paper provides estimates of quantile regression models of the relationship between italian day ahead electricity prices the supply of renewables and the inception of a new cable sapei linking sardinia with the italian peninsula in the 2006 2015 time window the results confirm the merit order effects detected in the existing literature both for photovoltaics and wind power more strongly in market conditions characterised by moderately low price levels and with some implied increase in volatility the new cable has apparently challenged the ability of power generating companies to extract value through price spikes has mitigated volatility and its effects have been complementary with those of renewables effects from photovoltaics are more sensitive to robustness checks differences across zonal markets are nonetheless detected

toward a positive economic theory of hedging the hedging models developed over the last half century are evaluated for their ability to explain the actual hedging behavior of the various economic agents this evaluation shows a total lack of a reasonable positive model of hedging behavior while each class of existing models predicts some observed behavior none is able to predict the broad range of actions that is easily observed in the real world in this paper i develop such a model and include a plausible and coldly rational economic explanation for why farmers don t hedge at all while merchandisers with identical risk attitudes will fully hedge

cointegration analysis of spot electricity prices insights on transmission efficiency in the western us abstract the us energy policy act of 1992 promoted the development of spot markets for electric power by requiring utilities to open their transmission systems to wholesale power sales in this paper we specify and estimate a vector error correction model using peak and off peak electricity spot prices during 1994 1996 covering 11 regional markets in the western united states and test these prices for evidence of market integration the results show evidence of an efficient and stable wholesale power market

does eu enlargement increase agro food export duration this paper examines the impact of eu enlargement on agro food export performance across 12 new eu member states and five newly independent states in the eu markets covering the period 1999 to 2007 the performance is examined by duration of export and hazard model we find larger duration for the agro food exports from the new eu member states the results confirm gains from the eastward eu enlargement and governance on export increases and longer duration for exporting higher value added specialized consumer ready food and more competitive niche agro food products

dynamic granger causal networks of electricity spot prices a novel approach to market integration this study uses network theory to analyze the interactions of a representative sample of 13 european eu electricity spot prices during the period 2007 2012 we construct 7651 dynamic multivariate networks where the nodes correspond to different eu countries and the links weight the granger causality between the variations of the respective electricity prices global connectivity is then characterized by the system s density or the total quantity of causal interactivity sustained by the network system which informs about the occurrence of abnormal changes in connectivity we report a considerably large peak lasting from october 2011 to april 2012 where the graph s density over basal jump reached a magnitude of 2 4 times suggesting an improved degree of connectivity of electricity markets during this period by applying the markov regime switching model on the network density we find that this change coincides with the implementation of the european commission s third energy package at the local level the in strength values quantifying the dependence of the electricity price variation of an eu country on other countries validate the reliability of our technique by verifying historical events such as the occurrence of interconnectors commissioning and market coupling on the path to full market integration market networks should be periodically monitored our model which is able to create a time varying network describing the evolving influences between the european electricity prices is able to detect important changes in market integration and can be considered a suitable and promising approach for this task

export performance in transition economies trade performance export reorientation in the transition we examine export performance in the transition economies of europe and central asia we conclude that early success in exporting required the simultaneous pursuit of stabilization and liberalization neither liberalizing the foreign trade regime alone nor drastic devaluations of domestic currencies will improve trade performance unless domestic prices are decontrolled inflationary expectations lowered and administrative controls over the economy relaxed within the foreign trade regime removing export controls appears a more immediate priority than relaxing import controls export controls induce undervaluation and high levels of protection that insulate domestic producers and consumers from international markets bartlomiej kaminski zhen kun wang and l alan winters

three decades of italian comparative advantages he structure of italian exports its characteristics its changes over time its causes and implications in terms of income and growth employment and fragility with respect to domestic and international shocks has been the issue around which at least three generations of italian economists have discussed and disagreed over the last 30 years if one has to attribute to one single cause the origin of this multi faceted debate that very cause would be the perplexity associated with the evidence of italy being on the one hand a large industrialised country with per capita income comparable to the top high income oecd members world bank 2004 and on the other hand being characterised by an export composition where traditional low skilled labour intensive sectors oecd 2001 and peneder 2003 such as textiles wearing apparel leather products furniture and footwear still play a relevant role this anomaly in the italian trade structure with respect to one of its fellow members of the g7 and its high level of persistence is what makes of italy a case in the international trading system this paper describes the primary feature giving rise to this debate the italian export composition and its evolution over time the analysis makes use of the revealed comparative advantage rca index associated with the name of bela balassa and through non parametric statistical techniques estimates the empirical the author is very grateful to miur prin pie 2003 and jetro for the financial support and to giancarlo spagnolo for his encouragement discussions with matteo bugamelli giuliano conti davide castellani sergio de nardis paolo guerrieri fabrizio onida and lucia tajoli are gratefully acknowledged the author thanks riccardo faini for sharing his work on the topic and lucia piscitello for making her districts taxonomy available he also benefited from the comments of two anonymous referees that largely influenced the restructuring of the paper many of the arguments of this paper come from the inspiring discussions the author had over the years with massimo tamberi all remaining errors and omissions are the author s own responsibility the data sets and the rscript used in the paper can be downloaded from the webpage http www economiamc org debenedictis

revisiting long run relations in power markets with high res penetration abstract electricity generation from renewable energy resources res has become increasingly significant to reach eu and emissions reduction targets at the same time one of the main eu policy goals has been the creation of a common internal energy market for europe in this paper we focus on these two issues previously studied separately considering their possible interactions we first analyze the long run relationship between day ahead electricity prices and fuel prices natural gas and coal looking at two samples of years characterized by low and high res penetration then we explore the integration of eu markets we show that the electricity fuel nexus found over 2006 2008 changed dramatically over 2010 2014 for the majority of countries considered in particular the long run dependence of electricity from gas and coal prices is much lower in recent years furthermore our results confirm that the considered eu countries are becoming less integrated as res e increases our findings suggest that nationally implemented policies to support renewables are successful in increasing res penetration but they have lessened the linkage among eu markets then making integration more difficult to obtain

complementarities of trade advantage and trade competitiveness measures the complementarities of trade advantage and trade competitiveness measures for agro food trade of five central european ce 5 countries with the european union are analysed the stability and duration of the trade measures over time is investigated by the survival analysis using the nonparametric kaplan meier product limit estimator and the consistency test between the trade measures is conducted by the stratified cox proportional hazard model the ce 5 countries experienced a greater number of products with relative trade disadvantages and greater significance of one way imports unlike the czech republic poland slovakia and slovenia hungary experienced relative trade advantages rtas for bulk raw commodities processed intermediates and horticulture with the greatest significance of successful quality competition and one way exports and the lowest significance of unsuccessful price and unsuccessful quality competition the duration of rtas is longer than the duration for the successful trade co

unilateral climate policy and competitiveness economic implications of differential emission pricing unilateral emission reduction commitments raise concerns on international competitiveness and emission leakage that result in preferential regulatory treatment of domestic energy intensive and trade exposed industries our analysis illustrates the potential pitfalls of climate policy design which narrowly focuses on competitiveness concerns about energy intensive and trade exposed eite branches the sector specific gains of preferential regulation in favour of these branches must be traded off against the additional burden imposed on other industries beyond burden shifting between industries differential emission pricing bears the risk for substantial excess cost in emission reduction as policy concedes too low carbon prices to eite industries and thereby foregoes relatively cheap abatement options in these sectors from the perspective of global cost effectiveness we find that differential emission pricing of eite industries hardly reduces emission leakage since the latter is driven through robust international energy market responses to emission constraints as a consequence the scope for efficiency compared to uniform pricing is very limited only towards stringent emission reduction targets will a moderate price differentiation achieve sufficient gains from leakage reduction to offset the losses of diverging marginal abatement cost

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

reassessing the integration of european electricity markets a fractional cointegration analysis this study extends existing literature on the assessment of electricity market integration in europe by developing and testing hypotheses on the convergence of electricity wholesale prices and adopting a time varying fractional cointegration analysis in addition the potential impacts of some special events that may affect system capacity new interconnection market coupling increase in share of intermittent generation on spot and forward markets are considered and evaluated daily spot prices from february 2000 to march 2013 of nine european electricity spot markets apx uk apx nl belpex epex fr epex de ipex nordpool omel and ote and month ahead prices in four markets french british german and dutch from november 2007 to december 2012 are investigated results show that unit root tests which are generally used in the literature to test market integration are inadequate for assessing electricity spot market convergence because spot prices are found to be fractionally integrated and mean reverting time series furthermore spot price behaviour and their association with different markets change over time reflecting changes in the eu electrical system one month ahead prices by contrast were found to have become more resilient to shocks and to follow more stable trends

modeling extreme dependence between european electricity markets electricity spot prices are characterized by sudden large movements followed a few days later by an equally large movement in the opposite direction these phenomena are called spikes upward movements and drops downward movements recent research has suggested that the dynamics of the electricity spot prices can be accurately described by hidden markov regime switching mrs models regime switch models separate the ordinary dependence and the extreme spike or drop dependence this is a crucial point since it is the extreme dependence that is of interest when computing risks we fit a large number of mrs models to six european electricity markets eex powernext apx power uk nl nord pool system sweden in order to analyze the nature of the prices the estimated regimes are then used to analyze the probability of an extreme event and the conditional probability for one market to experience an extreme event conditional that another market is experiencing the same event we find that the frequency of extreme events is positively related to the amount of renewable energy sources in the power system it can be argued that the dependence results in this paper give an indication of what future dependence for even more integrated markets with more renewable energy will be the integration of markets will lead to efficient sharing of reserves while the additional renewable energy will increase the need for reserves the results are of interest when computing financial risks e g var or expected shortfall when designing reserves but also as an indication of the degree of integration between markets

the effect of a new power cable on energy prices volatility spillovers abstract in this paper we estimate volatility spillovers before and after the introduction of a new cable linking different electricity market zones using wholesale electricity prices for sardinia and two neighbouring italian market zones for the period 2005 2015 we focus on the effects of the sapei cable fully operational since march 2011 var garch estimates indicate that the sapei cable allowed for stronger volatility transmission towards sardinia a smaller zone and a net importer from its new neighbour the central southern zone albeit the effect was significant only off peak higher conditional correlations between zonal prices are also observed after the cable was introduced some implications are drawn about the interaction between market size export positions congestion and volatility transmission

vertical and horizontal intra industry trade a cross industry analysis for the united kingdom a large theoretical literature has emerged directed at explaining the presence of intra industry trade iit one of the distinctions which comes out of these models is that between horizontal iit where goods are differentiated by attributes and vertical iit where goods are differentiated by quality in this paper horizontal and vertical iit in u k trade are disentangled using a unit value dispersion criterion and a range of industry characteristics the paper not only points up the relative importance of vertical and horizontal iit in the united kingdom it also demonstrates how a failure to separate them out can impact on the interpretation of empirical results copyright 1995 by royal economic society

long run relations in european electricity prices this paper analyses the interdependencies existing in wholesale electricity prices in six major european countries the results of a robust multivariate long run dynamic analysis reveal the presence of four highly integrated central european markets france germany the netherlands and austria the trend shared by these four electricity markets appears to be common also to gas prices but not to oil prices the existence of a common long term dynamics among electricity prices and between electricity prices and gas prices can be explained by the similarity of the market design across europe and by the same marginal generation technology since standard unit root and cointegration tests are not robust to the peculiar characteristics of electricity prices time series we also develop a battery of robust inference procedures that should assure the reliability of our results copyright 2009 john wiley sons ltd

effects of large scale penetration of renewables the italian case in the years 2008 2015 abstract italy has experienced a revolution in the electricity production mix in the years 2008 2015 when a large scale deployment of intermittent renewables caused a high volatility of electricity prices stopped the investments in both fossil and renewable power plants and caused a high degree of uncertainty in matching electricity demand and supply the current legislation gives renewable energy the priority of dispatchment producing a significant decrease of the operational hours of all kinds of power plants which caused economic problems to utilities that had started investments in new high efficiency combined cycles before 2008 and reduced the overall efficiency of fossil fired power generation in order to restore the opportunities for further investments in renewable energy systems it is very important to develop long term policies and interventions to improve the capacity to balance the electricity demand and supply

cross border integration in the european electricity market evidence from the pricing behavior of norwegian and swiss exporters abstract this paper examines the electricity market integration process in two european areas based on the pricing behavior of norwegian and swiss exporters the aim is to gain evidence for the period after the adoption of the second legislative package 2003 the pricing behavior of norwegian exporters indicates that the wholesale markets for denmark and sweden are highly integrated moreover results are fully compatible with the existence of a very competitive marketplace for electricity this clearly contrasts with the evidence provided by swiss exporters in this last case analysis revealed differences in pricing to market behavior between italy france and germany which indicates that exporters take advantage of international market segmentation and divergences between market structures this outcome provides a reasonable explanation as to why price differences between countries cannot be fully attributed to transmission costs as has been claimed in previous research we also found cross country convergence in levels of markups and in pricing to market behavior of the swiss exporters for the first part of the period that was analyzed the evidence is fully consistent with an initial impulse toward market integration originated by reforms implemented at the beginning of the last decade

expected utility debt equity structure and risk balancing the potential effects of agricultural policy on the financial structure of farms is often not fully considered although it has been recognized that policies that reduce business risk may induce farmers to increase financial risk the effects of income policies on farm leverage have not been investigated this paper explores the relationship between farm policy and debt equity structure for a risk averse expected utility maximizer agricultural economists have demonstrated considerable theoretical interest in the futility of agricultural policy many have suggested that policies increasing farm revenues may well result in higher land prices such that landowners receive a windfall gain but incomes of tenant farmers and new entrants are unchanged gabriel and baker added to this nihilism by suggesting that policies that reduce business risk might induce choices that increase financial risk although this important hypothesis is difficult to test gabriel and baker s empirical results appear to be consistent with their hypothesis this paper suggests an alternative to the gabriel and baker model for analysis of the risk balancing hypothesis that is a structural model of the overall debt equity decision for agricultural proprietors structural variables include not only business risk but also expected return from farm operations expected capital gains from land and interest cost the primary assumptions of the model are that a the proprietor s objective is to maximize the expected utility of the rate of return on equity b the utility function of wealth is negative exponential c a normal distribution exists for the rate of return on assets and d taxes are ignored risk concepts and leverage

empirical relevance of the hillman condition for revealed comparative advantage 10 stylized facts the theoretically necessary and sufficient condition for the correspondence between revealed comparative advantage and pre trade relative prices derived by hillman 1980 is analysed empirically for virtually all countries of the world over an extended period of time this yields 10 stylized facts including that i violations of the hillman condition are small as a share of the number of observations but substantial as a share of the value of world exports ii violations occur relatively frequently in the period 1970 1984 and more rarely in the period 1985 1997 and iii violations occur foremost in primary product and natural resource intensive sectors and for countries in africa the middle east latin america and central and eastern europe an additional bonus of verifying the hillman condition in empirical research is its ability to identify erroneously classified trade flows

export propensities and intensities of small and medium manufacturing enterprises in south africa the basic premise of this study is that enterprise linkages export marketing and sunk costs significantly affect the propensities to export and intensities of exporting of small and medium manufacturing enterprises in south africa the hypothesis tested was that small and medium manufacturing enterprises break through into foreign markets with relative ease when involved in linkages because they facilitate information flows thereby easing the international marketing burden on the shoulders of individual enterprise units a theoretical perspective adopted by this study was that small and medium sized enterprises involved in enterprise linkages that have intermediaries are in a better position to enter and exit international markets empirical testing using survey data confirms this this study therefore recommends that export promotion initiatives should take these factors into account there are many possibilities discussed in this study the important point is that there is now clarity about the main hindrances to probabilities of exporting and export intensities of small and medium manufacturing enterprises in south africa by implication export market intelligence should be prioritized

the impacts of alignment with global product standards on exports of firms in developing countries complying with global standards and technical norms can be costly making them potential impediments to trade but it can also expand export opportunities two policies available to governments are alignment of domestic technical regulations with international standards and entry into mutual recognition agreements mras we study the effects of such decisions on the volume of exports to developed markets by firms in developing countries using data from a world bank firm level survey of awareness of global product norms both standards alignment and mras are associated with more exports to developed countries but only mras significantly promote exports this finding is consistent with theoretical predictions that mras should reduce the fixed costs of exporting more than standards alignment permitting more firms to enter export markets in higher volumes governments in developing countries hoping to encourage exports may wish to favour the negotiation of mutual recognition of testing and certification procedures with major trading partners as a more affirmative avenue to expanding international sales

trade liberalisation the effects of free trade agreements on the competitiveness of the dairy sector in recent years preferential trade agreements ptas free trade agreements ftas in particular have proliferated while wto negotiations have stagnated this paper contributes to the literature on trade liberalisation and the agricultural sector by analysing the effects of ftas on the competitiveness of the dairy sector across 76 countries and over a 20 year period from 1990 to 2009 with a longitudinal econometric model the results demonstrate that when a country has a revealed comparative advantage in the dairy sector ftas positively influence several indicators of competitiveness in the dairy sector such as production market share and trade balance the results also indicate that multilateral ftas are more beneficial than bilateral ftas there is strong empirical evidence that ftas are more beneficial to developed countries than to developing countries there is no statistical evidence to support the hypothesis about a relationship between ftas and farm gate price

revealed comparative advantage and competitiveness in hungarian agri food sectors we examine the competitiveness of hungarian agriculture and food processing in relation to that of the eu based on four indices of revealed comparative advantage using highly disaggregate data for the period 1992 to 1998 consistency tests suggest that the indices are less satisfactory as cardinal measures but are useful in identifying the demarcation between comparative advantage and comparative disadvantage hungary is shown to have a comparative advantage in a range of agri food products including animals and meat this complements the findings of those studies that have used price and cost based approaches in identifying competitiveness in cereals and crops results indicate that the rca indices when interpreted as a binary measure have remained surprisingly stable during the period of transition although there is evidence of a weakening in the level of comparative advantage as revealed in the balassa index

diagnostic checking of unobserved components time series models diagnostic checking of the specification of time series models is normally carried out using the innovations that is the one step ahead prediction errors in an unobserved components model other sets of residuals are available these auxiliary residuals are estimators of the disturbances associated with the unobserved components they can often yield information that is less apparent from the innovations but they suffer from the disadvantage that they are serially correlated even in a correctly specified model with known parameters this article shows how the properties of the auxiliary residuals may be obtained how they are related to each other and to the innovations and how they can be used to construct test statistics applications are presented showing how residuals can be used to detect and distinguish between outliers and structural change

an ex post analysis of the effect of renewables and cogeneration on spanish electricity prices abstract growing concerns about climate change and energy dependence are driving specific policies to support renewable or more efficient energy sources such as cogeneration in many regions particularly in the production of electricity these policies have a non negligible cost and therefore a careful assessment of their impacts seems necessary in particular one of the most debated impacts is their effect on electricity prices for which there have been some ex ante studies but few ex post studies this article presents a full ex post empirical analysis by looking at use of technologies and hourly electricity prices for 2005 2009 in spain to study the effects that the introduction of renewable electricity and cogeneration has had on wholesale electricity prices it is particularly interesting to perform this study in spain where an active system of public support to renewables and cogeneration has led to a considerable expansion of these energy sources and electricity pricing is at the center of intense debate the paper reports that a marginal increase of 1 gwh of electricity production using renewables and cogeneration is associated with a reduction of almost 2 per mwh in electricity prices around 4 of the average price for the analyzed period

consistency tests of alternative measures of comparative advantage the commodity pattern of comparative advantage across countries is a central concept in international trade theory since the concept is based upon autarkic prices which are not observable in post trade equilibria its use in empirical research is most difficult the literature reports numerous alternative indices that purport to measure comparative advantage this paper examines the extent to which various measures are consistent using a large sample of trade flows the results have important implication for judging empirical studies based upon particular choices of a measure for comparative advantage

investing in electricity production under a reliability options scheme abstract reliability options ros are used to enhance the security of supply in electricity systems when a power producer writes a ro s he agrees to set a cap on the price of electricity that s he cashes in return the system operator i e the party that is buying the option pays to the option issuer a fixed premium in this paper we analyze how ros affect the timing and value of investments in the energy sector and we show under what conditions they can be used as investment stimuli we prove that contrarily to what is expected ros can potentially harm the security of supply by delaying the adoption of new capacity and by reducing the value of investing in it to avoid such a result a careful setting of the relevant parameters is needed

relative export competitiveness of agricultural commodities and its determinants some evidence from india abstract in this paper we derive time varying relative export competitiveness rec of india s top agricultural exports rice wheat cotton and sugar against india s share of world agricultural exports rec wa and world exports rec we from 1961 to 2012 we reveal that india s exports of all four commodities became relatively competitive over time but these were not as competitive as the top or selected emerging exporters of the four commodities we also examine the determinants of rec in these four commodities focusing on factors including crop specific and aggregate factor endowments domestic price export prices and gdp per capital preferential trade agreements export restrictions and bans and india s green revolution the regression analysis was mainly confined to the 1981 2012 due to data constraints we find that the time series regression results are similar in sign and significance for rec we and rec wa our key findings suggest the rec in wheat rice and cotton deteriorated as a result of export restrictions capital had negative effects on cotton rec labor and farm size did not influence the rec in the commodities the green revolution improved the rec in rice and cotton in phase 3 the wto had a positive effect on the rec in rice the south asian free trade area safta agreement adversely affected the rec in wheat and rice but strengthened the rec in cotton and sugar higher domestic price reduced the rec in cotton higher per capita income strengthens the rec in wheat with a lag we explain these results and suggest policy implications

determinants of the export structure of countries in central and eastern europe the growth in exports from central and eastern europe to western markets suggests that entrepreneurs have responded to changed incentives by restructuring their production to capture new markets the absence of change in the structure of exports however suggests that these restructuring efforts have not been significant this article analyzes the magnitude of the change in export structure across the central and eastern european countries in 1990 95 focusing in particular on trade with the european union it finds that imports of intermediate inputs and machinery are an important determinant of the changes in export structure sourcing of inputs from abroad is a major factor underlying the expansion of exports to the european union outward processing subcontracting arrangements and foreign direct investment have a smaller impact except for poland inflows of foreign direct investment are statistically insignificant or negatively associated with measures of revealed comparative advantage this suggests that foreign investors have chosen sectors in which the central and eastern european countries were not relatively specialized under central planning

integration and shock transmissions across european electricity forward markets abstract new results are presented relating to the integration of the french german british dutch and spanish power markets at day ahead week ahead one month ahead and two month ahead lead times overall there is evidence of market integration increasing over time despite an underlying inefficiency in each market with respect to the forward and spot price convergence the spatial analysis on a financial dimension is undertaken using causality tests cointegration and impulse response techniques for both price levels and volatilities in general we find less influence of the size and proximity of neighbouring markets than other studies more integration at baseload than peak and surprisingly less integration in forwards than spot prices

the importance of financial leverage and risk aversion in risk management strategy selection the problem of choice among risk management strategies is addressed with the stochastic dominance with a risk free asset sdra criteria the sdra criteria consider all possible combinations of the strategies and financial leverage this allows for strategies with less business risk less expected return and greater leverage to dominate strategies with greater business risk and greater expected return results show that the inclusion of the risk free asset significantly improves the discriminatory power of the ordinary stochastic dominance criteria for the case of risk management strategies copyright 2002 oxford university press

germany s nuclear power plant closures and the integration of electricity markets in europe this paper examines the potential implications of national policies that lead to a sudden increase of wind power in the electricity mix for interconnected european electricity markets more specifically it examines market integration before and after the closures of eight nuclear power plants that occurred within a period of a few months in germany during 2011 the short and long run interrelationships of daily electricity spot prices from november 2009 to october 2012 in apx endex belpex epex de epex fr nordpool omel and swissix and wind power in the german system are analysed two mgarch multivariate generalized autoregressive conditional heteroscedasticity models with dynamic correlations are used to assess spot market behaviour in the short run and a fractional cointegration analysis is conducted to investigate changes in the long run behaviour of electricity spot prices results show positive time varying correlations between spot prices in markets with substantial shared interconnector capacity a negative association between wind power penetration in germany and electricity spot prices in the german and neighbouring markets and for most markets a decreasing speed in mean reversion

on integrating theories of international economics in the strategic planning of global supply chains and facility location abstract this paper relates three theories of international economics comparative advantage competitive advantage and competitiveness and formulates the thesis that incorporating them in the form of readily available individual competitiveness indicators in or ms models offers promise to enhance decision support for the strategic planning of global supply chains in general and for locating facilities in particular the purpose of this paper is to relate these theories from the field of international economics to give a roadmap of related measures that are provided by annual competitiveness reports and to pose several research questions as challenges to the or ms community as it seeks to improve models to support the strategic planning process accordingly specific objectives of this paper are to relate each of these theories and to describe their interrelationships to describe measures provided by two well known annual competitiveness reports and to illustrate application of the theories as a means of supporting the thesis of the paper and justifying the research questions we pose for future research while this paper discusses topics relative to the broader background of global supply chain design it illustrates applications associated with facility location a component of the global supply chain design since it has a rich history within the or ms community and since it is central to strategic planning in the global economy

a history of european electricity day ahead prices in this article we examine the development of day ahead prices in five european markets which became more connected over recent years where previous studies examined the convergence of price levels over time we focus on patterns in estimates for the parameters in a switching regimes model this makes it possible to distinguish between prices under normal market conditions and under non normal market conditions those market conditions that can cause extreme price spikes we expect that increased connectivity yields additional supply in the short term and therefore will reduce the impact of price spikes our results indicate that the impact of price spikes and volatility decreased over time that prices behave more random and that the parameter estimates between various connected markets seem to have converged between the belgian dutch french german and nordic day ahead markets over the years 2003 through 2010 these results can be explained by increased connectivity and improved liquidity

financial structure of farm businesses under imperfect capital markets recent finance studies have considered whether gaps between a firm s costs of internal and external sources of investment funds arising from capital market imperfections influence its investment behavior and funding preferences this study tests the applicability of the pecking order and partial adjustment theories of financial structure to farm businesses by fitting a set of simultaneous financial equations with farm panel data from illinois model results indicate that illinois farms adjust to long run financial targets for equity debt and leasing but that additional financing needs follow a pecking order that is stronger for farms with greater asymmetric information problems copyright 2000 oxford university press