cluster or capture manufacturing foreign direct investment external economies and agglomeration phelps n a cluster or capture manufacturing foreign direct investment external economies and agglomeration regional studies this paper reviews the nature and significance of external economies associated with multinational enterprise mne participation in the manufacturing industries of host economies it argues that the balance of forces of internalization and externalization is currently skewed towards the former and the interests of mnes rather than the latter and the interests of local and national communities and governments a stylized comparison of developmental and competition state interventions in relation to mnes and their foreign direct investment fdi suggests that in the absence of co ordinated interventions by governments there will commonly be a failure of the logic of internalization to permit localized processes of externalization indeed the experiences of the competition states of the uk and the usa highlight the potential for the partial internalization or capture of loc

the private and social value of information exploration for exhaustible resources abstract in this paper i develop a model where exploration yields information about the size and location of the stock of an exhaustible resource this information is valuable in two ways first before production takes place reserves must be located through exploration the process of exploration changes unproven reserves which cannot be produced into proven reserves which can one value of exploration then is that it allows total production over time to expand the expansion effect second by exploring in an early time period a producer gains information about the true stock size prior to making a decision about how fast to exploit reserves with better information the extraction rate chosen by the producer will yield higher expected returns from the stock the timing effect i show that the expansion effect is undervalued by a firm relative to a social planner an increase in proven reserves increases production and lowers prices improving consumer welfare the timing effect however can be over or undervalued by a firm relative to a social planner if the exploring firm makes up a relatively small portion of industry and if consumers are not highly risk averse then the firm will overvalue the timing effect as a result firms may not explore some tracts where it is efficient to do so if however a firm finds it valuable to explore a tract it may explore earlier in time than is optimal

preconditions windows of opportunity and innovation strategies successive leadership changes in the regional jet industry abstract we analyse the drivers of two successive leadership changes in the regional or mid sized jet market a particularly dynamic segment of the commercial aircraft industry in the first instance bombardier a canadian newcomer assumed leadership over the incumbents bae and fokker in 1995 in 2005 the brazilian firm embraer became the market leader in terms of number of regional jet deliveries our theoretical framework considers discontinuities in the building blocks of sectoral innovation systems as windows of opportunity for which challenger firms can devise strategic responses allowing them to assume market leadership it also considers preconditions as necessary capabilities limiting the number of potential challenger companies the analysis of leadership change shows that more efficient engines and technological improvements in subsystems changing oil prices business cycles liberalization of air transport services scope clauses and government interventions provided technological demand and regulatory windows of opportunity launching new aircraft families an architectural innovation targeting the 50 and the 100 120 seat niche markets gave first bombardier s crj family and later embraer s e jet family the leadership the fate of failed challengers and incumbents point to the importance of incumbent traps technological and financial capabilities the timing of windows of opportunity speedy strategic response a proper evaluation of future demand and sheer luck as long lead times and sunk costs entrap incumbents and other inadequately responding companies

foreign investment and spillover efficiency in an underdeveloped economy evidence from the mexican manufacturing industry abstract in this paper we consider the question whether differences in technical efficiency of mexican plants in part derive from spillover efficiency associated with foreign direct investment we use labour productivity as a measure of technical efficiency and relate this to capital intensity labour quality and scale of production we measure the degree of competition by different concentration indices and the final factor determining efficiency is the presence of foreign subsidiaries if there is a positive relation between efficiency of domestic plants and the foreign participation of various industries we conclude that there is a spillover of technical efficiency the empirical evidence from the study indicates that this is the case

do institutions matter for regional development rodriguez pose a do institutions matter for regional development regional studies this paper discusses whether institutions matter for regional development and how to integrate them in regional development strategies it is found that while institutions are crucial for economic development generating an institution based regional development strategy is likely to be undermined by the lack of definition of what are efficient institutions problems related to the measurement of institutions to their space and time variability to the difficulties in establishing the right mix of formal and informal institutions and to the endogeneity between institutions and economic development make one size fits all approaches to operationalizing institutions difficult the paper posits that in order to overcome these problems it is crucial to distinguish between the institutional environment and institutional arrangements that is to target not the institutions which shape the unique character of any territ

do oil producers act as oil igopolists in this paper the author analyzes an oligopoly model of exhaustible resource extraction and develop predictions about relative extraction patterns of different producers using the open quote oil close quote igopoly model of loury one can show that producers with large stocks produce a larger amount but a smaller percentage of their stocks than producers with small stocks the authors extend loury s model to cases where extraction costs differ among producers and where costs are a function of cumulative extraction an increase in extraction costs for a producer causes it to produce less relative to its rivals when extraction costs rise with cumulative extraction producers with large reserves tend to have lower extraction costs and a smaller ratio of cumulative production to initial reserves than producers with small reserves the authors test the predictions of the model using oil industry data and find that the empirical results are consistent with the predictions of open quotes oil close quotes igopoly theory producers with larger reserves extract a smaller share of their reserves and have lower production costs than producers with smaller reserves this pattern holds for 73 countries with oil reserves during the time period 1970 1989 and for approximately 400 us oil companies in 1983 and 1984 more the observed pattern of production for both opec and non opec producers is consistent with open quote oil close quote igopoly theory opec producers do not appear to restrain production given their level of reserves relative to non opec producers thus viewing the oil market as containing one dominant firm opec with a competitive fringe may be misleading further the pattern of extraction observed in oil markets is inconsistent with the pattern predicted by competitive theory 29 refs 5 figs 6 tabs less

dynamic cournot duopoly with intertemporal capacity constraints this paper studies a dynamic cournot duopoly in which suppliers have a limited amount of products available for two consecutive periods we derive optimal sales strategies and analyze welfare effects with and without commitment under commitment strategies do not depend on the rival s realized sales in this case there is a unique nash equilibrium for any allocation of initial supplies and prices increase over time absent commitment sellers can adjust their supply decision after the first period in this case a subgame perfect nash equilibrium does not always exist and prices may decline over time a more asymmetric allocation of stocks generally leads to higher first period prices whereas the impact on second period prices is ambiguous the larger firm typically prefers not to commit whereas the smaller firm is better off under commitment commitment generates a higher total surplus and almost always a higher consumer surplus our findings thus suggest that market transparency or flexible supply contracts can adversely affect welfare in situations where production precedes sales and firms face an intertemporal capacity constraint

oligopoly equilibria in nonrenewable resource markets abstract most nash cournot oligopoly models of nonrenewable resources apply open loop equilibrium concepts and are based on physical resource depletion this paper studies feedback equilibria and economic depletion assuming affine quadratic functional forms the existence uniqueness and explicit solutions for the equilibria are derived for duopoly and n player oligopoly with multiple resource stocks for the cases of nonquadratic criteria we develop a numeric solution scheme for the nash feedback equilibrium this scheme is an application of a discrete time discrete state controlled markov chain approximation method originally developed for solving deterministic and stochastic dynamic optimization problems in our nash cournot equilibrium the degree of concentration in supply declines over time whereas the previous models with physical depletion and open loop equilibrium concepts predict that a nash cournot resource market will develop in the direction of monopoly supply

the innovation potential of new infrastructure development an empirical study of heathrow airport s t5 project abstract we propose a conceptual framework to analyze technology adoption in mega infrastructure projects and assess their potential to innovating large socio technical systems drawing on an in depth empirical analysis of heathrow airport s terminal 5 project we find that innovation hinges on technology adoption decisions that are governed systematically by two intertwined determinants assessment of expected profitability and development of absorptive capacity both of which are distributed across various interdependent actors on an ad hoc basis technological decisions are also affected by other factors namely attitudes toward risk politics and lack of established standards we reveal how a schedule driven project framing creates an underlying boundary condition that constrains the longitudinal process of building a whole collective with capacity to absorb new technologies the innovation potential of mega projects is thus subjected to a fundamental unifying tension on the one hand they offer a one off opportunity to invest in cutting edge technologies and innovate socio technical systems on the other hand project stakeholders have limited time to develop capacity to absorb novel technologies and negotiate differences on assessments of profitability and risk stakeholders may therefore be compelled to agree to adopt proven technologies upfront to reduce uncertainty and mitigate risks thus limiting the innovation potential of new infrastructure development

on the concept of territorial competitiveness sound or misleading in an era of globalisation the issue of territorial competitiveness is of increasingly central importance for regional development policies this paper aims to deal directly with the issue from a theoretical viewpoint in particular examining two related questions more thoroughly the question of the soundness of the concept of territorial competitiveness itself in terms of economic theory and the question of the new foundations on which this competitiveness is based using a cognitive evolutionary type approach

dynamically consistent oil import tariffs the standard solution of the open loop optimal import tariff is normally time inconsistent the paper shows why and derives the dynamically consistent markov perfect tariff the two tariffs are compared they differ except for a special class of import demands the time paths of tariffs and the welfare cost of an inability to commit are calculated for a dominant importer the welfare costs of the inability to commit are small if its market share

wind energy deployment in the u s an empirical analysis of the role of federal and state policies abstract using a 50 state panel dataset covering the years 1990 2011 we empirically examine the effectiveness of national and state level policies that encourage wind energy deployment in the u s this study is the first to use econometric techniques to examine both the impact of the flagship federal policy the production tax credit and the influence of the production tax credit on the effectiveness of state level policies first we show that the national production tax credit alone has been effective in promoting wind energy deployment 1 4 gw per year on average in the u s second we show that production tax credit influences the effectiveness of state level policies in promoting wind deployment for example in the presence of the production tax credit mandatory green power option increases wind deployment in a state by 200 mw per year on average third we show that the array of renewable energy resources within a given state positively influences the responsiveness to state and national wind policies

imperfect competition in the international energy market a computerized nash cournot model this paper describes the conceptual structure properties and solution approach of a computerized model of the international energy market the model treats energy producers as players in a multistage noncooperative game the goal of each player or cartel of players is assumed to be maximization of discounted profit subject to technical political and resource constraints the model calculates that collection of intertemporal extraction and price paths from which a player can unilaterally deviate only at a loss the open loop nash equilibrium the model integrates the theory of exhaustible resources due to hotelling and the theory of oligopoly due to nash and cournot although useful as a teaching device to illustrate theoretical results its main function is to facilitate analysis of real world resource problems the model is flexible allowing the user to specify not only cost demand and reserve information but also assumptions about who belongs to what coalition two shortcomings deserve note t

a review on global wind energy policy with the increasing negative effects of fossil fuel combustion on the environment in addition to limited stock of fossil fuel have forced many countries to inquire into and change to environmentally friendly alternatives that are renewable to sustain the increasing energy demand energy policy plays a vital role to mitigate the impacts of global warming and crisis of energy availability this paper explores the wind energy industry from the point of view of the wind energy policy it is noticed that energy policy could help increasing wind power generation as well as stimulating the energy industry it may be stated that without specific energy policy a country would not be able to solve the acute problems like reducing greenhouse gases ghgs emission scarcity of energy etc this paper discussed the existing successful energy policies for few selected countries based on literatures it has been found that fit rps incentives pricing law and quota system are the most useful energy policies practiced by many countries around the world then status of wind energy policy for malaysia was investigated and compared with few selected countries around the world

strategic resource dependence we consider a situation where an exhaustible resource seller faces demand from a buyer who has a substitute but there is a time to build delay for the substitute we find that in this simple framework the basic implications of the hotelling model 1931 are reversed over time the stock declines but supplies increase up to the point where the buyer decides to switch under such a threat of demand change the supply does not reflect the current resource scarcity but it compensates the buyer for delaying the transition to the substitute the analysis suggests a perspective on costs of oil dependence

natural resource economics under the rule of hotelling abstract natural resource stocks held in situ are physical assets equilibrium in the assets market requires that their rates of return be such that their owners are just willing to hold on to them rather than invest elsewhere i discuss a number of factors relating to the evolution of extraction costs to the durability of the resource to market structure and to uncertainty that are important in correctly characterizing the rate of return on holding exhaustible natural resource stocks the emphasis is put on how those factors can potentially help bridge the gap between the basic hotelling s rule of natural resource exploitation and the historical behaviour of the flow price of a number of resources i also highlight some theoretical and empirical issues that need further attention

knowledge flows externalities and innovation networks abstractknowledge flows externalities and innovation networks regional studies this editorial introduces the articles addressing the multifaceted and composite phenomenon of knowledge flows and externalities within innovation networks the papers offer a diversity of country contexts as well as analytical approaches and methods starting with methods they contain econometric analysis as well as social network analysis and combinations of the two while most of the papers use econometric analysis the level of analysis ranges from firm and individual level to aggregate analyses at the sectoral and regional level moreover patents are the main starting point but the proposed contributions show once more how different the approaches can be when using the same variables the country context is diverse and includes data sources from us and european regions

r d offshoring and the productivity growth of european regions the recent increase in r d offshoring has raised fears that knowledge and competitiveness in advanced countries may be at risk of hollowing out at the same time economic research has stressed that this process is also likely to allow some reverse technology transfer and foster growth at home this paper addresses this issue by investigating the extent to which r d offshoring is associated with productivity dynamics of european regions we find that offshoring regions have higher productivity growth but this positive effect fades with the number of investment projects carried out abroad a large and positive correlation emerges between the extent of r d offshoring and the home region productivity growth supporting the idea that carrying out r d abroad strengthens european competitiveness

exhaustible resources non convexity and competitive equilibrium theoretical underpinnings of competitive equilibrium in an exhaustible resource market with non convex u shaped costs are proposed the analysis extends to intertemporal production novshek and sonnenschein s approximation of static competitive equilibrium by limits of cournot equilibria a problem with using novshek and sonnenschein s method is that oligopolistic equilibrium even an open loop equilibrium to which limits might be applied does not exist when there is a non convex technology using epsilon equilibrium as the equilibrium concept finesses this problem there are two types of limiting competitive equilibrium a third type of competitive equilibrium that has been prominent in the literature is found to be inconsistent with limiting approximations

linking the insights of smith marx young and hirschman on the division of labour implications for economic integration and uneven development this article distinguishes between two types of division of labour discussed by smith the final product specialisation type has been adopted as the basis of mainstream trade models that champion the benefits of free trade the division of production operations type can be extended through the works of marx transition to modern industry based on forms of manufacture young industrial differentiation and hirschman linkages through this some countries started reaping more benefits from increasing returns engendering incipient uneven development that aggravates under unrestricted economic integration between them and the trailing countries in the modern era the leading countries trans national corporations have further shaped the international division of production operations resulting in different forms of enclave development when their activities are unregulated under recently reached multi lateral agreements that limit the use of subsidies and investment measures and strengthen the protection of intellectual property rights uneven development would be sustained some future research directions are considered

on price taking behavior in a nonrenewable resource cartel fringe game abstract we consider a nonrenewable resource game with one cartel and a set of fringe members we show that i the outcomes of the closed loop and the open loop nonrenewable resource game with the fringe members as price takers the cartel fringe game a la salant 1976 coincide and ii when the number of fringe firms becomes arbitrarily large the equilibrium outcome of the closed loop nash game does not coincide with the equilibrium outcome of the closed loop cartel fringe game thus the outcome of the cartel fringe open loop equilibrium can be supported as an outcome of a subgame perfect equilibrium however the interpretation of the cartel fringe model where from the outset the fringe is assumed to be price taker as a limit case of an asymmetric oligopoly with the agents playing nash cournot does not extend to the case where firms can use closed loop strategies

global investments and regional development trajectories the missing links abstractglobal investments and regional development trajectories the missing links regional studies regional economic development has been long conceptualized as a non linear interactive and socially embedded process these features were traditionally regarded as spatially mediated and highly localized however unprecedentedly fast technological change coupled with the intensification of global economic integration has spurred the need to place regional development in a truly open and interdependent framework despite substantial progress in the academic literature rethinking regional development in this perspective still presents a number of challenges in terms of concepts empirical evidence and policy approaches following an interdisciplinary assessment of how openness and connectivity proxied by one of the many cross border flows i e global investments interact with regional economic development trajectories this paper presents a picture of the geography of foreign investments from and

the dynamic capabilities of firms an introduction an expanded paradigm is needed to explain how competitive advantage is gained and held firms resorting to resource bas ed strategy attempt to accumulate valuable technology assets and employ an aggressive intellectual property stance however winners in the global marketplace have been firms demonstrating timely responsiveness and rapid and flexible product innovation along with the management capability to effectively coordinate and redeploy internal and external competences this source of competitive advantage dynamic capabilities emphasizes two aspects first it refers to the shifting character of the environment second it emphasizes the key role of strategic management in appropriately adapting integrating and re configuring internal and external organizational skills resources and functional competences toward changing environment 3 only recently have researchers begun to focus on the specifics of developing firm specific capabilities and the manner in which competences are renewed to respond to shifts in the business environment the dynamic capabilities approach provides a coherent framework to integrate existing conceptual and empirical knowledge and facilitate prescription this paper argues that the competitive advanis tage of firms stems from dynamic capabilities rooted in high performance routines z operating inside the firm embedded in the firm s processes and conditioned by its history it offers dynamic capabilities as an emerging paradigm of the modern business j firm that draws on multiple disciplines and advances with the help of industry studies in the usa and elsewhere

a theory of oil igopoly cournot equilibrium in exhaustible resource markets with fixed supplies the emergence of an effective and powerful cartel in the international petroleum market has stimulated considerable effort among economists to develop models of pricing and supply behavior for this industry 2 this modeling task poses two basic difficulties first as in the standard oligopoly problem one must characterize the behavior of several sellers in a market aware of each other and of their effect on market price second there is here the added difficulty of treating the explicitly intertemporal nature of suppliers decision wherein a limited stock must be optimally allocated over time this paper studies the implications of the simplest non trivial postulates about these two aspects of the problem it is assumed that suppliers are non cooperative cournot nash players each of whom is imagined to select an optimal supply strategy taking as given the strategies of the others moreover it is hypothesized that the feasible strategies are limited to open loop paths chosen at the initial date to maximize the present value of profits in light of the paths of supply which the others have chosen 3 these basic postulates together with a few technical assumptions concerning the structure of resource demand permit one to demonstrate the existence of at least one non cooperative equilibrium concerning thisequilibrium we show that 1 the average and marginal return on resource stocks is inversely related to the size of a player s initial endowment 2 aggregate production decreases over time until all stocks are exhausted while firms with smaller stocks exhaust their supplies no later than firms with larger stocks do 3 the present value of price net of extraction cost declines over time 4 industry production maximizes a weighted average of intertemporal consumer s surplus and producers profits

systems integration a core capability of the modern corporation many of the world s leading firms are developing a new model of industrial organization based on systems integration rather than performing all productive tasks in house companies are building the capabilities to design and integrate systems while managing networks of component and subsystem suppliers this article illustrates how systems integration evolved from its military engineering based origins in the 1940s and 1950s to a modern day strategic capability across a wide variety of sectors taking a resource based view of the firm the article shows how systems integration capabilities underpin the way high technology companies compete by moving selectively up and downstream in the marketplace through the simultaneous twin processes of vertical integration and disintegration systems integrators of capital goods move downstream into service intensive offerings to expand revenue streams and increase profitability by contrast producers of high volume components and consumer goods use systems integration capabilities to exploit upstream relationships with input suppliers in both cases strategic options and capabilities are shaped by the life cycle of each product the article develops a clearer understanding of systems integration arguing that it now represents a core capability of the modern high technology corporation

steady state growth in a hotelling model of resource extraction this paper re examines the hotelling model of optimal nonrenewable resource extraction in light of stock effects and technological progress we assume functional forms for cost and demand so that the solution to the hotelling problem is a steady state consistent with the empirical observation that the growth rates of market prices have remained zero over a long period of time we use data on 14 minerals from 1970 to 2004 to estimate the supply and demand functions using sur and 3sls and to test the model we validate the model for 8 of 14 minerals c 2007 elsevier inc all rights reserved

determinants of the internationalization of regions the role and effectiveness of public policy measures banno m piscitello l and varum c determinants of the internationalization of regions the role and effectiveness of public policy measures regional studies this paper assesses the role of public policy measures on outward internationalization of regions by including financial and non financial incentives among the determinants of the international competitiveness of regions it is found that the former are important to enhance their active internationalization but that variables related to the knowledge and competence base of regions are even more so financial incentives related to equity participation as well as non financial incentives related to the provision of information come out highly significant in stimulating outward internationalization the empirical analysis is conducted for the twenty italian nuts 2 regions over the period 2003 2008

learning and price volatility in duopoly models of resource depletion the aim of this paper is to provide a theoretical model that can account for price fluctuations in depletable resource markets we do so by introducing learning into a hotelling style duopoly model of optimal resource depletion before the depletable resource becomes scarce the self confirming equilibrium of the model mirrors noncooperative rational expectations equilibrium in that supply is high and price is low although learning does induce occasional upward price spikes that are followed by a long period of falling price once the depletable resource becomes scarce the dynamics of the market change significantly with the self confirming equilibrium mirroring the cooperative rather than noncooperative rational expectations equilibrium supply is low and price is high price spikes still occur but against a background of increasing prices when scarcity is sufficient then the market is permanently in a self confirming equilibrium that is equivalent to cooperative rational expectations equilibrium

the global business revolution the cascade effect and the challenge for firms from developing countries the global business revolution since the 1980s has witnessed an unprecedented degree of industrial consolidation and concentration of business power at a global level firms with powerful globally recognised technologies and or brands constitute the systems integrators at the apex of extended supply chains this paper examines the supply chains in four different sectors aerospace telecommunications automobiles and beverages it finds that these sectors have striking similarities in the way in which the core systems integrators have stimulated industrial concentration across the whole supply chain this cascade effect has profound implications for firms from developing countries in catching up at the firm level

multinational experience and the creation of linkages with local firms evidence from the electronics industry the paper focuses on the nature and determinants of multinational firms creation of linkages with local firms with specific reference to the electronics industry the study of the recent evolution of international operations in this sector seems to highlight a relevant and somewhat generalisable pattern of industrial organisation and dynamics it is argued that the nature and intensity of multinational companies involvement into linkages with local counterparts are strongly influenced by a combination of factors that are partially inter dependent but still rely on different decision making centres on the one hand host countries long term investment policies in the field of human capital training and accumulation and on the other hand firms decisions to take roots in local contexts through the creation of foreign subsidiaries it is further suggested that human capital and subsidiaries will particularly favour the development of collaborative linkages with local firms compared to previous work of the authors on this subject this paper utilises an expanded and updated data set covering international operations of the top european and us electronics companies over the 1984 1995 period and attempts a more detailed and in depth analysis concerning the nature determinants and evolution in time of international growth strategies

factors affecting university industry r d projects the importance of searching screening and signalling this paper presents an empirical analysis of the determinants of research cooperation between firms and public research organisations pros for a sample of innovating small and medium sized enterprises smes the econometric analysis is based on the results of the know survey carried out in seven eu countries during 2000 in contrast to earlier works that provide information about the importance of pros research we know the number of firm pro collaborative research and development r d projects this allows us to study the determinants of firm collaboration with pros in terms of both the propensity of a firm to undertake r d projects with a university do they cooperate or not and the extent of this collaboration number of r d projects two questions are addressed which firms cooperated with pros and what are the firm characteristics that might explain the number of r d projects with pros the results of our analysis point to two major phenomena first the propensity to forge an agreement with an academic partner depends on the absolute size of the industrial partner second the openness of firms to the external environment as measured by their willingness to search screen and signal significantly affects the development of r d projects with pros our findings suggest that acquiring knowledge through the screening of publications and involvement in public policies positively affects the probability of signing an agreement with a pro but not the number of r d projects developed in fact firms that outsource research and development and patent to protect innovation and to signal competencies show higher levels of collaboration

opec the seven sisters and oil market dominance an evolutionary game theory and agent based modeling approach abstract a methodological toolkit comprised of evolutionary game theory and agent based modeling is used to study opec and the seven sisters as they struggled for control over global petroleum markets during the 1960s and 1970s an evolutionary game theory model incorporates heterogeneous populations energy specific variables and behavioral considerations to capture the fundamentals of the applied problem an agent based model is used to provide detailed results and demonstrate the importance of the natural resource to the outcome of the model

opec and the u s oil import tariff open loop nash extraction plans of exhaustible resource producers in which producers take the plans of others as given are time consistent but proposed open loop oil import tariffs are almost always time inconsistent the paper derives a time consistent open loop nash tariff that can be readily computed for both competitive and a nash cournot specification of the oil market the authors illustrate the time sequence of the optimal import tariff for a simple model of the united states facing a duopolistic version of opec and a comparative fringe of oil producers and compare the outcome with the competitive equilibrium copyright 1991 by royal economic society

are renewable energy policies climate friendly the role of capacity constraints and market power abstract this paper studies the impacts of renewable energy support policies on energy prices fossil fuel supply and thus carbon emissions from fossil fuels such supports are climate friendly if the renewables are already competitive against fossil fuels but if the renewables are not yet competitive the climate change impacts are often ambiguous and are sensitive to capacity constraints of renewables production and to the fossil fuel market structure if the renewables do not have capacity constraints then the subsidies are subject to the green paradox under perfect competition but might be climate friendly under monopoly supports for capacity constrained renewables under perfect competition lead to more current fossil fuel supply but delay fossil fuel exhaustion time and these effects are reversed under monopoly our results highlight the importance of considering the long term effects on fossil fuel supply as well as capacity constraints and market power in designing renewable energy policies and evaluating their carbon footprints

policies and market factors driving wind power development in the united states abstract in the united states there has been substantial recent growth in wind energy generating capacity with growth averaging 24 percent annually during the past five years about 1700 mw of wind energy capacity was installed in 2001 while another 410 mw became operational in 2002 during 2003 development activity has remained strong with an estimated 1600 mw of capacity installed with this growth an increasing number of states are experiencing investment in wind energy projects currently about half of all states host at least one wind power project this paper explores the key factors at play in the 12 states in which a substantial amount of wind energy capacity has been developed or planned some of the factors that are examined include policy drivers such as renewable portfolio standards rps federal and state financial incentives as well as market drivers such as consumer demand for green power natural gas price volatility and wholesale market rules

two remarks on cournot equilibria abstract we describe two simple results in the theory of cournot equilibria the first has to do with the effect of taxation in a cournot industry and the second describes under what conditions a cournot equilibrium will implicity maximize an objective function these results are probably known but are not well known and they seem useful enough to be worth spelling out

on the effects of the distribution of initial endowments in a nonrenewable resource duopoly abstract this paper studies the effects on equilibrium output and profits of modifying the resource endowments in a nonrenewable resource duopoly when the firms equilibrium terminal dates may differ

did accelerated depreciation result in lower generation efficiencies for wind plants in india an empirical analysis abstract india ranks fifth in wind energy installations in the world with an installed wind capacity is 22 gw at the end of 2014 this has been made possible by a combination of federal financial incentives and state level feed in tariffs the federal policies are accelerated depreciation which allows for higher depreciations in earlier years and generation based incentive which provides a premium for each unit of generation accelerated depreciation appears to be more effective from deployment and cost perspectives whereas generation based incentive is said to be more effective in incentivizing generation in this paper using multivariable linear regressions on a sample of approximately 40 wind plants while controlling for wind regime and wind turbine technology we investigate the incremental impact of generation based incentive compared to accelerated depreciation we find that generation based incentive results in at least 3 percentage points higher plant load factors than accelerated depreciation this indicates that if higher generation is the goal of renewable policies generation based incentive should be preferred to accelerated depreciation this would be similar to the move from investment tax credit to production tax credit in the u s

capacity utilization revisited software control and the growth of large technical systems this paper explains how a class of it intensive capital goods called control systems are used to co ordinate the flow of goods traffic materials funds services or information through complex supply production or distribution systems the paper examines how they increase productivity by improving the utilization of installed capacity creating economies of system that are distinct from the traditional economies of scale speed and scope the paper explains which sectors they are important in and how innovation in control technologies relates to architectural changes in large technical systems it is illustrated by case studies of four very different sectors elevators retailing telecommunications and investment banking while control systems improve efficiency and enable product innovation they also create reliability problems and can alter the social distribution of risk

cost effectiveness of renewable electricity policies we analyze policies to promote renewable sources of electricity a portfolio standard rps raises electricity prices and primarily reduces gas fired generation a knee of the cost curve exists between 15 and 20 goals for 2020 in our central case and higher natural gas prices lower the cost of greater reliance on renewables a renewable energy production tax credit lowers electricity price at the expense of taxpayers which limits its effectiveness in reducing carbon emissions and it is less cost effective at increasing renewables than a portfolio standard neither policy is as cost effective as a cap and trade policy for achieving carbon emission reductions

offshoring of routine tasks and de industrialisation threat or opportunity and for whom abstract offshoring or overseas sourcing of routine tasks generates efficiency gains that benefit consumers and workers with skills similar to those whose very jobs are threatened by offshoring essentially the interaction between offshoring footloose capital and agglomeration economies locks the comparative advantage of advanced nations in complex or strategic functions while labour services in routine tasks the coordination of which is easily codified are provided by low wage developing nations through the fibre optic cable in this framework the partial equilibrium view that offshoring is necessarily detrimental to workers in advanced nations is misguided because the implicit counterfactual that keeping the off shored jobs would have no macroeconomic impact on the economy is not warranted in addition inasmuch as routine tasks create few positive feedbacks trade in tasks can be an impediment to income convergence unlike trade in goods in short this paper qualifies the views that offshoring hurts workers in the north and accelerates income convergence between the north and the south

exhaustible resources and alternative equilibrium concepts we compare the open loop and feedback nash equilibria that obtain in oligopolistic resource markets when the resource is exhaustible and privately owned when the resource is common property the two equilibrium concepts are known to yield significantly different results under the regime of private property the choice of equilibrium concept does not appear to be as important restricting our attention to the cases of iso elastic demand and zero extraction costs and linear demand and quadratic extraction costs we identify instances where the open loop and feedback nash equilibria coincide and demonstrate that in other cases the two equilibria do not differ significantly

dynamic demand and noncompetitive intertemporal output adjustments abstract this paper integrates dynamics on the demand and on the supply side which are characteristic for many goods in particular fuels due to costly adjustments furthermore firms often pursue a quantity strategy and decide on output adjustments additional capacities etc instead of fixing prices e g opec moved from posting prices to adjusting output in 1986 this paper provides a corresponding framework surprisingly ignored in the literature and derives intertemporal market equilibria cooperative and noncooperative in open loop and in markov strategies the equilibrium in markov strategies is different mostly opposite to the much discussed sticky price models the qualitative properties are non trivial and some of them are even surprising e g increased demand sluggishness can raise supply

on nonrenewable resource oligopolies the asymmetric case we give a full characterization of the open loop nash equilibrium of a nonrenewable resource game between two types of firms differing in extraction costs we show that i there almost always exists a phase where both types of firms supply simultaneously ii when the high cost mines are exploited by a number of firms that goes to infinity the equilibrium approaches the cartel versus fringe equilibrium with the fringe firms acting as price takers and iii the cheaper resource may not be exhausted first a violation of the herfindahl rule that may be detrimental to social welfare

when are nash equilibria independent of the distribution of agents characteristics author s bergstrom ted varian hal r abstract we present examples of nash equilibria that do not vary with the distribution of a parameter across agents and then offer a general theorem that characterizes this independence

oligopoly extraction of a common property natural resource the importance of the period of commitment in dynamic games the theory of noncooperative dynamic games has provided an extremely powerful framework for studying many of the classic questions in industrial organization for example questions about resource extraction advertising research and development investment in new capacity and barriers to entry where interactions over time among few firms are involved however an important methodological issue arises when economic competition over time is modeled as a dynamic game the issue is the appropriate formulation of the players strategy spaces

state renewable energy electricity policies an empirical evaluation of effectiveness over the past decade state governments have emerged as us energy policy leaders across the country states are adopting policy instruments aimed at carbon mitigation and renewable energy deployment one of the most prevalent and innovative policy instruments is a renewable portfolio standard rps which seeks to increase the share of renewable energy electrification in the electricity market this analysis evaluates the effectiveness of state energy programs with an empirical investigation of the linkage between state rps policy implementation and the percentage of renewable energy electricity generation across states we use a variant of a standard fixed effects model referred to as a fixed effects vector decomposition with state level data from 1998 to 2006 results indicate that rps implementation is not a significant predictor of the percentage of renewable energy generation out of the total generation mix yet for each additional year that a state has an rps policy they are found to increase the total amount of renewable energy generation these findings reveal a potentially significant shortcoming of rps policies political institutions natural resource endowments deregulation gross state product per capita electricity use per person electricity price and the presence of regional rps policies are also found to be significantly related to renewable energy deployment

regional worlds from related variety in regional diversification to strategic coupling in global production networks this annual lecture paper bridges two influential but parallel literature strands on evolutionary economic geography eeg and global production networks gpn it argues that both strands are prem

aggressive oil extraction and precautionary saving coping with volatility the effects of stochastic oil demand on optimal oil extraction paths and tax spending and government debt policies are analyzed when the oil demand schedule is linear and preferences quadratic without prudence optimal oil extraction is governed by the hotelling rule and optimal budgetary policies by the tax and consumption smoothing principle volatile oil demand brings forward oil extraction and induces a bigger government surplus with prudence the government depletes oil reserves even more aggressively and engages in additional precautionary saving financed by postponing spending and bringing taxes forward especially if it has substantial monopoly power on the oil market gives high priority to the public spending target is very prudent and future oil demand has high variance uncertain economic prospects induce even higher precautionary saving and if non oil revenue shocks and oil revenue shocks are positively correlated even more aggressive oil extraction in contrast prudent governments deliberately underestimate oil reserves which induce less aggressive oil depletion and less government saving but less so if uncertainty about reserves and oil demand are positively correlated

the oil reserves production relationship abstract this paper considers the relationship between the extraction rates and remaining reserves of oil a simple exhaustible resources model suggests a linear extraction rule with slope terms common to all extractors when discount rates are homogeneous differences in pricing behavior and costs determine the intercept panel data from the world oil industry exhibit a robust and stable extraction reserves relationship across countries and through time common slopes characterize extraction over large ranges of reserves although there is a concave relationship across non opec members and a significantly lower estimated slope within opec countries these findings may be explained by risk aversion differences in discount rates and measurement error in the reserves data

imperfect cartelization in opec a model of global oil production is applied to study cartelization by opec countries we define a measure for the degree of cooperation analogous to the market conduct parameter of cyert et al 1973 geroski et al 1987 lofaro 1999 and symeonidis 2000 this parameter is used to assess the incentives of different opec members to collude we find that heterogeneity in opec and the supplies of the non opec fringe create strong incentives against collusion more specifically opec s supply strategy although observed to be substantially more restrictive than that of a cournot nash oligopoly is found to still be more accommodative than that of a perfect cartel the strategy involves allocating larger than proportionate quotas to smaller and relatively costlier producers as if to bribe their participation in the cartel this is in contrast to predictions of the standard cartel model that such producers should be allocated relatively more stringent quotas furthermore we demonstrate that cartel collusion is more likely to be sustained for elastic than for inelastic demand since global oil demand is well known to be inelastic this observation provides another structural explanation for why opec behavior is inconsistent with that of a perfect cartel our study points to multiple headwinds that limit opec s ability to mark up the oil price 2016 elsevier b v

latecomer systems integration capability in complex capital goods the case of iran s electricity generation systems this article introduces the concept of latecomer systems integration capability lsic as a construct for theory development in the area of emergence and competitiveness of producers of complex capital goods from developing economies the study draws on three bodies of the literature to conceptualize lsic and then presents an in depth case study of the development of lsic in a major iranian firm engaged in producing electricity generation systems although an exploratory study the findings suggest that in this case lsic evolved in a fairly short period of time from simple low cost project management skills to innovative capabilities supported by some sophisticated engineering and design know how leading to successes in local and overseas markets the conclusion touches on the implications of the study for theory business strategy and policy