corruption trade and resource conversion abstract recent evidence suggests that special interest groups significantly affect tropical deforestation through lobbying we develop an open economy model in which resource conversion is determined by a self interested government that is susceptible to the influences of the political contributions it receives from the profit maximizing economic agent responsible for land conversion we investigate the effects of lobbying on the cumulative level of resource conversion and examine how trade policy influences the distortions created by political corruption we derive testable predictions that are analyzed through a panel analysis of cumulative agricultural land expansion over 1960 99 for low and middle income tropical countries our findings suggest that increased corruption and resource dependency directly promote land conversion whereas rising terms of trade reduce conversion

bargaining around cost benefit standards abstract injurers often purchase the property of potential victims to avoid liability or to comply with regulations this paper shows that injurers subject to cost benefit standards could profit from buying out victims even if they attach no value to the victims property because buyouts allow injurers to take fewer precautions a buyout of one victim produces a negative externality for the remaining victims injurers can consequently exploit victims and thereby reduce social welfare by adopting a divide and conquer strategy or by negotiating with victims sequentially perhaps surprisingly buyouts may reduce social welfare and victims joint profits even if victims make simultaneous or sequential take it or leave it buyout demands to the injurer

legislative organization and pollution taxation the role of political institutions in shaping public policy has been analyzed in isolation from corruption and legislative organization specifically bicameralism has received minimal attention we analyze pollution taxation when decisions are influenced by several veto players such as legislative chambers our theory predicts that an increase in the number of veto players e g moving from uni to bi cameralism pushes the pollution tax towards the social optimum with the effect being conditional on corruption as such dispersion around the optimal tax is lower under bicameralism empirical tests using data from 86 countries support the theory

innovation and productivity across four european countries nber working paper seriesinnovation and productivity across four european countriesrachel griffithelena huergojacques mairessebettina petersworking paper 12722http www nber org papers w12722national bureau of economic research1050 massachusetts avenuecambridge ma 02138december 2006we would like to thank laura abramovsky manuel arellano rupert harrison jordi jaumandreu elizabeth kremp pierre mohnen helen simpson the analysis contained in this paper was fundedby the european commission the esrc and esf under grant res 000 23 0901 and the advancedinstitute of management research aim all errors and omissions remain the responsibility of theauthors the views expressed herein are those of the author s and do not necessarily reflect the viewsof the national bureau of economic research 2006 by rachel griffith elena huergo jacques mairesse and bettina peters all rights reserved short sections of text not to exceed two paragraphs may be quoted without explicit permission providedthat full credit including notice is given to the source

the toxic intensity of industrial production global patterns trends and trade policy this paper exploits a newly developed data set to investigate recent changes in the international distribution of industrial pollution in particular the authors examine three issues 1 the relationship between the toxic intensity of industrial production and the level of economic development 2 the impact of oecd environmental regulation on global changes in toxic intensity and 3 the relationship between trade policy and the toxic intensity of industrial production in ldc s 10 refs

large investors regulatory taking and investor state dispute settlement abstract this paper offers an economic analysis of an international investor state dispute settlement regime isds in markets with large investors it identifies a reason for strategic overinvestment by the domestic industry leading to permissive regulation in the absence of isds an ideal investor state dispute settlement arrangement efficiency oriented transaction cost free with untouchable fully reliable and unbiased judges has positive and negative effects in this framework it generates an equal level playing field for domestic and foreign investors but it magnifies an existing overinvestment problem and may reduce world welfare the results explain anecdotal evidence according to which isds that protects foreign investors is liked by the domestic industry and disliked by other interest groups in the host country

sources procedures and microeconomic effects of innovation fabio arcangeli paul david frank engelman christopher freeman massimo moggi richard nelson luigi orsenigo nathan rosenberg michele salvati g n von tunzelman two anonymous referees and the participants at the meeting of the committee on distribution growth and technical progress of the italian national research council cnr rome november 16 1985 have helped with various redraftings a particularly grateful acknowledgment is for the insightful and patient help of moses abramovitz this work has been undertaken at the science policy research unit spru university of sussex as part of the research program of the designated research centre sponsored by the economic and social research council esrc earlier support to the research that led to this paper by the italian national research council cnr is also gratefully acknowledged the statistical research has been undertaken with the assistance of stephano brioschi ilaria fornari and giovannu prennushi

simple solutions to the initial conditions problem in dynamic nonlinear panel data models with unobserved heterogeneity i study a simple widely applicable approach to handling the initial conditions problem in dynamic nonlinear unobserved effects models rather than attempting to obtain the joint distribution of all outcomes of the endogenous variables i propose finding the distribution conditional on the initial value and the observed history of strictly exogenous explanatory variables the approach is flexible and results in simple estimation strategies for at least three leading dynamic nonlinear models probit tobit and poisson regression i treat the general problem of estimating average partial effects and show that simple estimators exist for important special cases copyright 2005 john wiley sons ltd

the missing link between innovation and performance in brazilian firms a panel data approach abstractthis study aims to verify if there is a positive relationship between innovation and productivity and or profit in brazil using a recursive model in line with the crepon duguet and mairess

r d and internal finance a panel study of small firms in high tech industries since joseph schumpeter economists have argued that internal finance should be an important determinant of r d expenditures yet almost without exception previous empirical studies have not found evidence of such a relation using newly available data the authors investigate this puzzle with a panel of 179 small firms in high tech industries under each estimation strategy they employ the authors find an economically large and statistically significant relationship between r d investment and internal finance their results are consistent with the view that because of capital market imperfections the flow of internal finance is the principal determinant of the rate at which small high tech firms acquire technology through r d copyright 1994 by mit press

r d appropriability opportunity and market structure new evidence on some schumpeterian hypotheses one of the largest bodies of literature in the field of industrial organization is devoted to the interpretation and testing of several hypotheses advanced by joseph schumpeter 1950 concerning innovation and industrial market structure one set of hypotheses focuses on the role of firm size as a determinant of r d spending and the rate of technological advance another set focuses on the effect of market concentration on r d and technological advance in this paper we reexamine the latter set of hypotheses at the industry level using new data on r d appropriability and technological opportunity collected by levin et al 1984 in a survey of r d executives in 130 industries

toward a new conception of the environment competitiveness relationship accepting a fixed trade off between environmental regulation and competitiveness unnecessarily raises costs and slows down environmental progress studies finding high environmental compliance costs have traditionally focused on static cost impacts ignoring any offsetting productivity benefits from innovation they typically overestimated compliance costs neglected innovation offsets and disregarded the affected industry s initial competitiveness rather than simply adding to cost properly crafted environmental standards can trigger innovation offsets allowing companies to improve their resource productivity shifting the debate from pollution control to pollution prevention was a step forward it is now necessary to make the next step and focus on resource productivity

the multiplier effect of globalization abstract this study uses a three stage common agency model to explore the linkages between trade policy corruption and environmental policy in an imperfect market setting we show that the effect of trade liberalization on the stringency of environmental policy depends critically on the level of corruption in relatively corrupt countries trade openness leads to more stringent environmental policy in such countries this interaction therefore lends trade liberalization a type of multiplier effect raising both economic growth and environmental policy stringency

redistributive politics and economic efficiency the political process often compensates the losers from technical change or international competition in an economically inefficient way namely by subsidizing or protecting declining industries instead of encouraging the movement of resources to other more productive uses we find that a dynamic inconsistency in the game of redistributive politics contributes to this outcome to achieve economically efficient outcomes it is necessary that those making economically inefficient choices not be given offsetting transfers but the political process distributes income on the basis of political characteristics which are in general different from the economic characteristics that are rewarded by the market we identify circumstances in which the inefficient choosers have desirable political characteristics and are therefore immune from threats of having to face the economic consequences of their choices

responsibility boundaries in global value chains supplier audit prioritizations and moral disengagement among swedish firms to address substandard working conditions in global value chains companies have adopted private regulatory systems governing worker rights scholars agree that without onsite factory audits this private regulation has limited impact at the point of production companies however audit only a subset of their suppliers severely restricting their private regulatory attempts despite the significance of the placement of suppliers inside or outside firms responsibility boundaries and despite scholars having called for more research into how firms prioritize what suppliers to audit few if any systematic studies have examined the topic this is problematic as the placement of firms responsibility boundaries determines what suppliers and workers are included in firms private regulatory attempts based on a study of 12 swedish firms and the theory of moral disengagement this paper starts to fill this research gap by exploring how firms responsibility boundaries are placed the paper illustrates how firms responsibility boundary placement is best described as a patchwork with firms defining and delimiting their responsibilities differently the paper also demonstrates that three supplier types i e the worst morally justified and immediate suppliers are particularly likely to be placed inside firms responsibility boundaries while a fourth type i e disregarded suppliers is likely be placed outside

taxes and subsidies for pollution intensive industries as trade policy abstract this paper constructs a model of international oligopoly with negative externalities in production in which optimal environmental policy responses to foreign emission tax and subsidy programs can be calculated it is shown that by granting subsidies for abatement efforts or for a heavily taxed polluting input domestic net welfare is improved by capturing a greater share of the world market since the subsidy programs are supposed to improve the quality of the global environment they can be justified on environmental grounds in addition we show that a pigouvion emission tax restores efficiency in natural resource allocation whereas subsidy programs are in principle used as instruments in imperfectly competitive international markets

lobbying incentives and the pattern of protection in rich and poor countries in seeking to explain why poor countries tend to choose policies that tax agriculture relative to manufacturing while rich countries do the opposite archetypical parameters for a poor agrarian economy and a rich industrial one are inserted in a computable general equilibrium model to simulate the medium term effects on income distribution of policies that distort the relative prices of tradables the model includes a non tradables sector and intermediate inputs realistic features that ensure even greater skewness in the distributional effects of protection than simpler models suggest the magnitude of the results helps explain the tendency for countries to change gradually from taxing to subsidizing agriculture relative to manufacturing as their economies develop the paper draws out the implications of the analysis for agricultural and trade policy reform in the 1990s this abstract was borrowed from another version of this item

suppliers compliance with mncs codes of conduct behind the scenes at chinese toy suppliers despite increased academic and practitioner interest in codes of conduct there has been little research into the actual compliance of suppliers in developing countries with the codes of conduct of multinational corporations mncs this paper addresses this lack by analysing chinese suppliers level of compliance with swedish toy retailers codes of conduct based on unannounced and unofficial interviews with employees of chinese suppliers the study shows that all of the nine studied suppliers breached some of the standards in the toy retailers codes with over two thirds of the suppliers not complying with the majority of the studied standards while there are different explanations of this lack of compliance the main explanation seems to be that chinese suppliers successfully deceive toy retailers monitoring organisations by decoupling the formal monitored part of their organisation from the actual operational part of their organisation the paper concludes with a discussion of how to increase compliance with mncs codes of conduct

the political economy of refunded emissions payment programs abstract we study the effects on the equilibrium tax of refunding firms pollution tax payments can lobbying yield stricter environmental policy do imperfect property rights affect policy clean firms may favor higher pollution levies but insecure property rights reduce this incentive

does history matter for the relationship between r d innovation and productivity this paper analyzes the relationship between r d expenditures innovation and productivity growth taking into account the possibility of persistence in firms behaviour we study this relationship for a sample of spanish manufacturing firms between 1990 and 2005 estimating a model with four equations participation in technological activities r d intensity the generation of innovations and the impact of these technological outputs on total factor productivity growth our results reflect the existence of true state dependence both in the decision of r d investment and in the production of innovations the omission of this persistence leads to an overestimation of the current impact of innovations on productivity growth however the presence of persistence in technological inputs and outputs entails current r d activities having long run effects on a firm s productivity

transparency and value chain sustainability the rise of transparency on the public and political agendas is not an accident or fad soon to be replaced by another timely topic in sustainability politics and governance transparency will remain a key topic in global value chains and will further develop as it piggy backs on wider social developments such as globalization the information age and the shifting role of states in environmental governance transparency in value chains is bound up with positive connotations the more transparency the better it is for the sustainability of chains and for the empowerment of consumers and civil society but an overall positive past assessment of value chain transparency does not automatically extend into the future as new challenges lie ahead this paper investigates the new challenges for value chain transparency and their consequences due to the growing importance attached to transparency in value chains it becomes a central object of power struggles with uncertain outcomes markets and states seek to capture transparency arrangements for their own goals which may not be in line with the assumed normative linkages between value chain transparency and increased power for consumers and civil society in that sense transparency is losing its innocence more transparency is no longer always the best for citizen consumer empowerment and for the sustainability of value chains but value chain secrecy is not an attractive alternative this opens a new research agenda on how transparency should be organized and arranged in value chains to live up to the promises of democracy and sustainability

comparative politics and environmental taxation abstract in this paper we take a step towards understanding the role of democratic institutions on the level of pollution taxation persson et al j polit economy 108 2000 1121 argue that presidential congressional regimes set lower taxes than parliamentary regimes this conclusion results from the checks and balances built into the former and the higher degree of legislative cohesion in the latter we test this prediction on gasoline and diesel prices using the method of propensity score matching along with data from 86 democratic countries the empirical evidence is consonant with the theory we find that ceteris paribus the average price of super gasoline is 0 14 0 20 less per liter in presidential congressional systems the average price of diesel gasoline is 0 11 0 14 less per liter

cooperative strategies for sustainability in a decentralized supply chain with competing suppliers abstract in today s global market organizations increasingly recognize that they must address the issue of sustainability in their operations in addition the decision making processes surrounding sustainable supply chain management are raising a wide range of theories and claims about how best to address the issue in this study mathematical modeling is used to analyze managerial decision making in terms of improving sustainability in a decentralized supply chain with two competing suppliers firstly the concept of managerial decision making for competing suppliers is introduced next the mechanism used in the selection of cooperative strategies is described and the decisions related to demand energy efficiency and profits are analyzed in different scenarios of cooperative strategy combinations also lump sum transfer contracts are designed for supply chain coordination an experimental test of an automobile supply chain in china illustrates the impacts of competition intensity on profits the energy efficiency of environmentally friendly products and consumer surplus the analysis indicates that the sustainability of the supply chain can be efficiently enhanced through cooperative strategies and parameter adjustments while tradeoffs should be made by the policy maker before any cooperative strategy combination is advocated this study extends and complements existing literature with regard to how it is possible to improve sustainability in a competitive environment through cooperative supply chain strategies and parameter adjustments i e enhancing the price of environmentally friendly products lowering the supplier s share of instinct demand potential and lowering the manufacturer s fixed cost related to energy efficiency

cost efficiency in bangladesh banking does financial reform matter abstractthis article estimates the cost efficiency of the commercial banks of bangladesh in the context of financial reform employing the single stage stochastic frontier analysis sfa model the study uses a unique balanced panel data set comprising bank level annual data from the dominant commercial banks in bangladesh for the period 1983 2012 the results show that bank cost has fallen due to financial deregulation our results from the data envelopment analysis do not vary significantly that we obtained from the sfa in addition the presence of politically linked directors on the bank board has an adverse effect on efficiency these findings suggest that further reforms aiming at removing all sorts of political influence should continue to ensure competitive environment in order to achieve cost efficiency in the financial sector of the country

trade offs in supply chain transparency the case of nudie jeans co though transparency is increasingly central to corporate sustainability and sustainable supply chains the scholarly conversation about supply chain transparency is limited as it defines supply chain transparency inconsistently and lacks an empirical basis we address these shortcomings by developing a multidimensional definition of supply chain transparency and studying the swedish garment retailer nudie jeans attempt to become the most transparent company in the world we extend the scholarly conversation by analyzing how a company in practice attempts to work with supply chain transparency and how to explain the transparency outcomes of such attempts we argue that three underlying tradeoffs i e threat vs collaboration standardization vs differentiation and means vs ends shape a firm s transparency outcomes we question whether more supply chain transparency is always desirable and argue that managers must choose between a compliance or cooperation approach to supply chain transparency

incentives for advanced pollution abatement technology at the industry level an evaluation of policy alternatives abstract in this research we evaluate the incentive effects of five environmental policy instruments to promote the development and adoption of advanced pollution abatement technology in a heterogenous industry from most to least incentive the policy instruments can be rank ordered as follows i auctioned permits ii emissions taxes and subsidies iii issued marketable permits iv performance standards including performance standards in this list necessitates the assumption that they are differentiated between heterogeneous firms before the technology adoption in a way which replicates the initial emissions control distribution of the efficient incentive based instruments with the starting point normalized in this fashion the instrument rankings are invariant with respect to the size of firms the size of the industry or the industry s abatement cost structure

the political economy of pollution taxes in a small open economy abstract this paper develops a positive theory explaining pollution tax policy outcomes in a small open economy the equilibrium tax rate depends on lobby group membership the relative importance of lobbying activities and the tax elasticity of pollution the equilibrium properties are investigated the model is extended to incorporate pollution abatement and a pollution abatement subsidy we show that total pollution may be increasing in the pollution abatement subsidy rate this effect arises because the equilibrium pollution tax rate may be decreasing in the subsidy rate due to altered political influence of the lobby groups in the political equilibrium

sustainable and responsible supply chain governance challenges and opportunities this paper introduces the special volume on sustainable and responsible supply chain governance as globalized supply chains cross multiple regulatory borders the firms involved in these chains come under increasing pressure from consumers ngos and governments to accept responsibility for social and environmental matters beyond their immediate organizational boundaries governance arrangements for global supply chains are therefore increasingly faced with sustainability requirements of production and consumption our primary objectives for this introductory paper are to explore the governance challenges that globalized supply chains and networks face in becoming sustainable and responsible and thence to identify opportunities for promoting sustainable and responsible governance in doing so we draw on 16 articles published in this special volume of the journal of cleaner production as well as upon the broader sustainable supply chain governance literature we argue that the border crossing nature of global supply chains comes with six major challenges or gaps in sustainability governance and that firms and others attempt to address these using a range of tools including eco labels codes of conduct auditing procedures product information systems procurement guidelines and eco branding however these tools are not sufficient by themselves to bridge the geographical informational communication compliance power and legitimacy gaps that challenge sustainable global chains what else is required the articles in this special volume suggest that coalition and institution building on a broader scale is essential through for example the development of inclusive multi stakeholder coalitions flexibility to adapt global governance arrangements to local social and ecological contexts of production and consumption supplementing effective monitoring and enforcement mechanisms with education and other programs to build compliance capacity and integration of reflexive learning to improve governance arrangements over time

institutional emergence in an era of globalization the rise of transnational private regulation of labor and environmental conditions1 why have systems of transnational private regulation recently emerged to certify corporate social and environmental performance different conceptions of institutional emergence underlie different answers to this question many scholars argue that firms create certification systems to solve problems in the market a view rooted in a conception of institutions as solutions to collective action problems the author develops a different account by viewing institutions as the outcome of political contestation and by analyzing conflict and institutional entrepreneurship among a wide array of actors using a comparative case study design the analysis shows how these arguments explain the formation of social and environmental certification associations both theoretical approaches are needed but strong versions of the market based approach overlook an important set of dynamics that the author calls the political construction of market institutions the analysis shows how both problem solving in markets and

when the weak win the role of investment in environmental lobbying abstract old and environmentally damaging industries often lobby effectively for less stringent regulations and are slow to adopt new and cleaner technologies this paper explains the lobbying success of these industries in terms of the strategic role of investment as a credible commitment device it is demonstrated that if governments are predisposed to special interest groups underinvestment in new technology enables firms to lobby more effectively such industries are shown to be better placed to extract policy concessions despite contributing less to the government in political donations the analysis therefore suggests that political considerations may provide a significant incentive for firms to reject environmentally beneficial investments even when these lower production costs

firms age process innovation and productivity growth abstract this paper looks directly at the impact of firms age and process innovations on productivity growth a model that specifies productivity growth as an unknown function of these variables is devised and estimated using semiparametric methods results show that firms enter the market experiencing high productivity growth and that above average growth rates tend to last for many years but also that productivity growth of surviving firms converges process innovations at some point then lead to extra productivity growth which also tends to persist somewhat attenuated for a number of years

cleaning up while cleaning up pollution abatement interest groups and contingent trade policies this paper analyzes the political economy of environmental policy formation in a trading economy with established rules for administered protection we argue that the social costs associated with the adoption of an inefficient environmental regime are likely to be compounded by induced restrictions on trade when the effected industries are import competing the preferences of interest groups for alternative environmental regimes tend to be linked to the legal institutional setting in which trade policy is conducted under existing rules and practices in the area of administered protection there is reason to believe that interest group preferences for an inefficient approach to pollution control will be strengthened because the adoption of such a regime is more likely to lead to a concomitant increase in trade barriers

csr transparency and the role of intermediate organisations transparency is a crucial condition to implement a csr policy based on the reputation mechanism the central question of this contribution is how a transparency policy ought to be organised in order to enhance the csr behaviour of companies governments endorsing csr as a new means of governance have different strategies to foster csr transparency in this paper we discuss the advantages and disadvantages of two conventional policy strategies the facilitation policy and the command and control strategy using three criteria efficiency freedom and virtue we conclude that both strategies are defective most attention is paid to the facilitation strategy since governments nowadays mainly use this in evaluating this strategy we analyse the dutch case as an alternative we introduce a third government policy the development of a self regulating sub system by construing an analogy with the historical development of corporate financial disclosure we point out that the vital step in the creation of a self regulating subsys tem is the creation of strong informational intermediate organisations

the role of sunk costs in the decision to invest in r d we present a dynamic empirical model of a firm s r d decisions that is consistent with the existence of sunk r d costs taking into account that these costs may differ between small and large firms and among different technological regimes we estimate a multivariate dynamic discrete choice model using firm level data of spanish manufacturing for 1990 2000 conditional on firm heterogeneity and serially correlated unobservable factors we find that r d history matters this true state dependence allows inferring the existence of sunk r d costs associated with performing r d sunk r d costs are found to be higher for large high tech firms

electoral competition with informed and uninformed voters i present a model of electoral competition in which candidates raise campaign contributions by choosing policies that benefit interest groups and then expend those contributions to influence voters who are uninformed about the policies informed voters however vote based on those policies so candidates face a trade off between choosing a policy to generate funds to attract the uninformed vote and choosing a policy to attract the informed vote electoral equilibria are characterized for two categories of policies particularistic and collective in the case of particularistic policies the equilibrium policies of the candidates are separated if the proportion of uninformed voters is sufficiently high and the degree of separation is an increasing function of that proportion the model is extended to include the public financing of elections and incumbency advantages for the case of collective policies the candidates locate at the median of the ideal points of the informed voters and contributions are zero

the role of investment in environmental lobbying contests this paper establishes that a lobbying stage following investment decisions regarding abatement technology may imply a positive strategic effect of investment pointing to relatively more investment in pollution abatement technologies than without lobbying the intuition is that polluting firms may choose to implement more advanced abatement technology as a credible commitment device in order to lower the investment of environmentalists in the lobbying contest that will ultimately determine whether or not an emissions tax is introduced